Exhibit 10-29
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this
"Agreement"), dated as of January 14, 1997 by and between ACC CORP., a
corporation organized under the laws of Delaware ("ACC"), certain
Domestic Subsidiaries of ACC listed on the signature pages hereto (the
"Subsidiary Grantors" and, collectively with ACC Corp., the "Grantors")
and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking
association organized under the laws of the United States, as
Administrative Agent (the "Administrative Agent") for the benefit of
itself, and the financial institutions (the "Lenders") as are, or may
from time to time become, parties to the Amended and Restated Credit
Agreement (as defined below).
STATEMENT OF PURPOSE
ACC and certain of its Subsidiaries have previously executed
and delivered to the Administrative Agent a Security Agreement dated as
of July 21, 1995 (the "Original Security Agreement") in connection with
the Original Credit Agreement.
Pursuant to the Amended and Restated Credit Agreement dated as
of even date herewith (together with all amendments and other
modifications, if any, from time to time hereafter made thereto, the
"Amended and Restated Credit Agreement"), between the Grantors and
certain Canadian Subsidiaries and U.K. Subsidiaries of ACC as Borrowers
thereunder (collectively, the "Borrowers"), the Lenders and the
Administrative Agent, the Lenders will provide Extensions of Credit to
the Borrowers as more specifically described in the Amended and Restated
Credit Agreement. In order to induce the Lenders and the Administrative
Agent to enter into the Amended and Restated Credit Agreement, and as a
condition to the provision of Extensions of Credit thereunder, the
Lenders require that the Grantors amend and restate the Original
Security Agreement in order to grant a continuing security interest in
and to the "Collateral" (as hereinafter defined) to secure the "Secured
Obligations" (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. Terms defined in the Amended and
Restated Credit Agreement and not otherwise defined herein, when used in
this Agreement including its preamble and recitals, shall have the
respective meanings provided for in the Amended and Restated Credit
Agreement. The following additional terms, when used in this Agreement,
shall have the following meanings:
"Account Debtor" means any Person who is or may become
obligated to any Grantor under, with respect to, or on account of, an
Account.
"Accounts" means all "accounts" (as defined in the UCC) now or
hereafter owned or acquired by any Grantor or in which any Grantor now
or hereafter has or acquires any right or interest, and, in any event,
shall also include, without limitation, all accounts receivable,
contract rights, book debts, notes, drafts and other obligations or
indebtedness owing to any Grantor arising from the sale, lease or
exchange of goods or other property by it or property to be sold, leased
or exchanged, or the performance of services by it, or to be performed
(including, without limitation, any such obligation which might be
characterized as an account, contract right or general intangible under
the Uniform Commercial Code in effect in any jurisdiction) and all of
any Grantor's rights in, to and under all purchase orders for goods,
services or other property, and all of any Grantor's rights to any
goods, services or other property represented by any of the foregoing
(including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and rights to stoppage in transit) and
all monies due to or to become due to any Grantor under all contracts
for the sale, lease or exchange of goods or other property or the
performance of services by it (whether or not yet earned by performance
on the part of such Grantor), in each case whether now in existence or
hereafter arising or acquired, including, without limitation, the right
to receive the proceeds of said purchase orders and contracts and all
collateral security and guarantees of any kind given by any Person with
respect to any of the foregoing.
"Accounts Aging Report" means a detailed aged trial balance of
all Accounts existing as of a specified date, specifying the name,
addresses, account number, face value and dates of invoices of each
Account Debtor obligated on any Accounts so listed, which report may be
requested from time to time by the Administrative Agent.
"Collateral" means the collective reference to:
(i) Accounts;
(ii) Inventory;
(iii) Documents;
(iv) Equipment;
(v) Fixtures;
(vi) Instruments;
(vii) General Intangibles;
(viii) The Collateral Account, all cash deposited
therein from time to time, the investments made
pursuant to Section 6 and other monies and
property of any kind of any Grantor in the
possession or under the control of the
Administrative Agent or any Lender;
(ix) All books and records (including, without
limitation, customer lists, credit files,
computer programs, printouts and other computer
materials and records) of any Grantor pertaining
to any of the Collateral;
(x) All other goods and personal property of any
Grantor, whether tangible or intangible; and
(xi) All products and Proceeds of all or any of the
Collateral described in clauses (i) through (x)
hereof.
"Collateral Account" means a cash collateral account
established by the Grantors with the Administrative Agent, in the name
and under the exclusive dominion and control of the Administrative
Agent, pursuant to Section 6.
"Copyright License" means any written agreement now or
hereafter in existence granting to any Grantor any right to use any
Copyright.
"Copyrights" means, collectively, all of the following now
owned or hereafter created or acquired by any Grantor: (a) all
copyrights, rights and interests in copyrights, works protectable by
copyright, copyright registrations and copyright applications; (b) all
renewals of any of the foregoing; (c) all income, royalties, damages and
payments now or hereafter due and/or payable under any of the foregoing
or with respect to any of the foregoing, including, without limitation,
damages or payments for past or future infringements of any of the
foregoing; (d) the right to xxx for past, present and future
infringements of any of the foregoing; and (e) all rights corresponding
to any of the foregoing throughout the world.
"Documents" means all "documents" (as defined in the UCC) or
other receipts covering, evidencing or representing goods or services,
now or hereafter owned or acquired by any Grantor or in which any
Grantor now or hereafter has or acquires any right or interest.
"Equipment" means all "equipment" (as defined in the UCC) of
any Grantor, wherever located, and all other machinery, equipment and
goods (other than Inventory) of any Grantor used or bought for use
primarily in the business of such Grantor, including all accessions,
additions, attachments, improvements, substitutions and replacements
thereto and therefor, in all such cases whether now owned or hereafter
acquired by any Grantor or in which any Grantor now has or hereafter
acquires any right or interest.
"Financing Statements" means the Uniform Commercial Code Form
UCC-1 Financing Statements executed by each Grantor with respect to the
Collateral and to be filed in the jurisdictions set forth in the
Perfection Certificate.
"Fixtures" means all "fixtures" (as defined in the UCC) of any
Grantor, whether now owned or hereafter acquired, or in which any
Grantor now has or hereafter acquires any right or interest.
"General Intangibles" means all "general intangibles" (as
defined in the UCC) now or hereafter owned or acquired by any Grantor or
in which any Grantor now or hereafter has or acquires any right or
interest, and, in any event, shall mean and include, without limitation,
all rights to indemnification, and all rights, title and interest which
any Grantor may now or hereafter have in or under all contracts (other
than contracts described in the definition of Accounts), agreements,
permits, licenses (which contracts, agreements, permits and licenses may
be pledged pursuant to the terms thereof) causes of action, franchises,
tax refund claims, customer lists, Intellectual Property, license
royalties, goodwill, trade secrets, data bases, business records and all
other intangible property of every kind and nature.
"Instruments" means all "instruments", "chattel paper" or
"letters of credit" (each as defined in the UCC), including, without
limitation, instruments, chattel paper and letters of credit evidencing,
representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the Accounts,
including (but not limited to) promissory notes, drafts, bills of
exchange and trade acceptances, now or hereafter owned or acquired by
any Grantor or in which any Grantor now or hereafter has or acquires any
right or interest.
"Intellectual Property" means, collectively, (a) all systems
software and applications software, including, but not limited to,
screen displays and formats, program structures, sequence and
organization, all documentation for such software, including, but not
limited to, user manuals, flowcharts, programmer's notes, functional
specifications, and operations manuals, all formulas, processes, ideas
and know-how embodied in any of the foregoing, and all program
materials, flowcharts, notes and outlines created in connection with any
of the foregoing, whether or not patentable or copyrightable, (b)
concepts, discoveries, improvements and ideas, (c) any useful
information relating to the items described in clause (a) or (b),
including know-how, technology, engineering drawings, reports, design
information, trade secrets, practices, laboratory notebooks,
specifications, test procedures, maintenance manuals, research,
development, manufacturing, marketing, merchandising, selling,
purchasing and accounting, (d) Patents, Patent rights and Patent
applications, Copyrights and Copyright applications, Trademarks,
Trademark rights, trade names, trade name rights, service marks, service
xxxx rights, applications for registration of Trademarks, trade names
and service marks, and Trademark, trade name and service xxxx
registrations and Patent Licenses, Trademark Licenses and Copyright
Licenses, and (e) other licenses to use any of the items described in
the foregoing clauses (a), (b), (c) and (d) or any other similar items
of any Grantor necessary for the conduct of its business.
"Inventory" means all "inventory" (as defined in the UCC) now
or hereafter owned or acquired by any Grantor or in which any Grantor
now or hereafter has or acquires any right or interest, wherever located
and, in any event, shall mean and include, without limitation, all raw
materials, inventory and other materials and supplies, work-in-process,
finished goods, all accessions thereto, documents therefor and any
products made or processed therefrom and all substances, if any,
commingled therewith or added thereto.
"Patent License" means any written agreement now or hereafter
in existence granting to any Grantor any right to use any invention on
which a Patent is in existence.
"Patents" means, collectively, all of the following now owned
or hereafter created or acquired by any Grantor: (a) all patents and
patent applications including all patentable inventions; (b) all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any of the foregoing; (c) all income,
royalties, damages or payments now or hereafter due and/or payable under
any of the foregoing or with respect to any of the foregoing, including,
without limitation, damages or payments for past or future infringements
of any of the foregoing; (d) the right to xxx for past, present and
future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.
"Perfection Certificate" means a certificate dated as of even
date herewith, setting forth the corporate names, chief executive office
or principal place of business in each state and other current locations
of Collateral of each Grantor and such other information as the
Administrative Agent deems pertinent to the perfection of security
interests, completed and supplemented with the schedules and attachments
contemplated thereby to the satisfaction of the Administrative Agent,
and duly certified by the chief executive or chief financial officer of
each Grantor so authorized to act.
"Permitted Investments" means investments described in
Section 10.4 of the Amended and Restated Credit Agreement.
"Permitted Liens" means all such Liens respecting the
Collateral permitted pursuant to Section 10.3 of the Amended and
Restated Credit Agreement.
"Proceeds" means all proceeds of, and all other profits,
rentals or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition of, or
realization upon, Collateral, including, without limitation, all claims
of any Grantor against third parties for loss of, damage to or
destruction of, or for proceeds payable under, or unearned premiums with
respect to, policies of insurance in respect of, any Collateral, and any
condemnation or requisition payments with respect to any Collateral and
the following types of property acquired with cash proceeds: Accounts,
Inventory, Documents, Fixtures, Instruments, General Intangibles and
Equipment.
"Secured Obligations" means the Obligations as defined in the
Amended and Restated Credit Agreement and any renewals or extensions of
any of the Obligations.
"Security Interests" means the security interests granted
pursuant to Section 2, as well as all other security interests created
or assigned as additional security for the Secured Obligations pursuant
to the provisions of this Agreement.
"Trademark License" means any written agreement now or
hereafter in existence granting to any Grantor any right to use any
Trademark.
"Trademarks" means, collectively, all of the following now
owned or hereafter created or acquired by any Grantor: (a) all
Trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, all registrations and recordings thereof, and
all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision of any
thereof, including without limitation any thereof referred to on
Schedule I hereto; (b) all reissues, extensions and renewals of any of
the foregoing; (c) all income, royalties, damages and payments now or
hereafter due and/or payable under any of the foregoing or with respect
to any of the foregoing, including, without limitation, damages or
payments for past or future infringements of any of the foregoing; (d)
the right to xxx for past, present and future infringements of any of
the foregoing; and (e) all rights corresponding to any of the foregoing
throughout the world.
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of North Carolina; provided that if by reason
of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the Security Interests in any Collateral
is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than North Carolina, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
SECTION 2. The Security Interests.
(a) In order to secure the Amended and Restated Credit
Agreement in accordance with the terms thereof, and to secure the
payment and performance of all of the Secured Obligations, each Grantor
hereby grants to the Administrative Agent, for the ratable benefit of
itself and the Lenders, a continuing security interest in and to all of
such Grantor's estate, right, title and interest in and to all
Collateral whether now or hereafter owned or acquired by such Grantor or
in which such Grantor now has or hereafter has or acquires any rights,
and wherever located.
(b) The Security Interests are granted as security only and
shall not subject the Administrative Agent or any Lender to, or transfer
to the Administrative Agent or any Lender, or in any way affect or
modify, any obligation or liability of any Grantor with respect to any
of the Collateral or any transaction in connection therewith.
SECTION 3. Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) Such Grantor has the corporate power and authority and
the legal right to execute and deliver, to perform its obligations
under, and to grant the Security Interests in the Collateral pursuant
to, this Agreement and has taken all necessary corporate action to
authorize its execution, delivery and performance of, and grant of the
Security Interests in the Collateral pursuant to, this Agreement.
(b) This Agreement constitutes a legal, valid and binding
obligation of such Grantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
(c) The execution, delivery and performance of this Agreement
will not violate any provision of any Applicable Law or contractual
obligation of such Grantor and will not result in the creation or
imposition of any Lien on any of the properties or revenues of such
Grantor pursuant to any Applicable Law or contractual obligation of such
Grantor, except as contemplated hereby.
(d) No consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any
stockholder or creditor of such Grantor), is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement.
(e) No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge
of such Grantor after due inquiry, threatened by or against such Grantor
or against any of its properties or revenues with respect to this
Agreement or any of the transactions contemplated hereby.
(f) Such Grantor has good and marketable title to all of its
respective Collateral, free and clear of any Liens other than the
Permitted Liens.
(g) Such Grantor has not performed or failed to perform any
acts that would prevent or hinder the Administrative Agent from
enforcing any of the terms of this Agreement. Other than financing
statements or other similar or equivalent documents or instruments with
respect to Permitted Liens, no financing statement, mortgage, security
agreement or similar or equivalent document or instrument covering all
or any part of the Collateral of such Grantor is on file or of record in
any jurisdiction. No Collateral of such Grantor is in the possession of
any Person (other than such Grantor) asserting any claim thereto or
security interest therein, except that the Administrative Agent or its
designee may have possession of the Collateral as contemplated hereby.
(h) All of the information set forth in the Perfection
Certificate with respect to such Grantor is true and correct as of the
date hereof.
(i) Such Grantor has, contemporaneously herewith, delivered
to the Administrative Agent possession of all originals of all
negotiable Instruments, documents and chattel paper constituting
Collateral currently owned or held by such Grantor, if any (duly
endorsed in blank, if requested by the Administrative Agent).
(j) With respect to any Intellectual Property of Grantor the
loss, impairment or infringement of which might have a Material Adverse
Effect:
(i) such Intellectual Property is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;
(ii) such Intellectual Property is valid and
enforceable;
(iii) such Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual
Property, including, without limitation, recordations of all
of its interests in the Patents and Trademarks included in
such Intellectual Property in the United States Patent and
Trademark Office and its claims to the Copyrights included in
such Intellectual Property in the United States Copyright
Office;
(iv) such Grantor is the exclusive owner of the entire
and unencumbered right, title and interest in and to such
Intellectual Property and no claim has been made that the use
of such Intellectual Property does or may violate the asserted
rights of any third party; and
(v) such Grantor has performed and will continue to
perform all acts and has paid and will continue to pay all
required fees and taxes to maintain each and every such item
of Intellectual Property in full force and effect.
(k) The Financing Statements executed by such Grantor
are in appropriate form and when filed in the offices specified in the
Perfection Certificate, the Security Interests will constitute valid and
perfected security interests in the Collateral of such Grantor, prior to
all other Liens and rights of others therein except for the Permitted
Liens (to the extent that a security interest therein may be perfected
by filing pursuant to the UCC) and all filings and other actions
necessary or desirable to perfect and protect such Security Interests
have been duly taken.
(l) The Inventory, Fixtures and Equipment of such Grantor are
insured in accordance with the requirements hereof and of the Amended
and Restated Credit Agreement.
SECTION 4. Further Assurances; Covenants.
(a) General.
(i) Each Grantor agrees not to change the location of
its chief executive office or principal place of business in
any state unless it shall have given the Administrative Agent
thirty (30) days prior written notice thereof, executed and
delivered to the Administrative Agent all financing statements
and financing statement amendments which the Administrative
Agent may request in connection therewith. Each Grantor
agrees not to change the locations where it keeps or holds any
Collateral or any records relating thereto from the applicable
location described in the Perfection Certificate unless such
Grantor shall have given the Administrative Agent thirty (30)
days prior written notice of such change of location and
executed and delivered to the Administrative Agent all
financing statements and financing statement amendments which
the Administrative Agent may request in connection therewith;
provided, that such Grantor may keep Inventory at, or in
transit to, any location described in the Perfection
Certificate. Each Grantor agrees not to, in any event, change
the location of any Collateral if such change would cause the
Security Interests in such Collateral to lapse or cease to be
perfected.
(ii) Each Grantor agrees not to change its name,
identity or corporate structure in any manner unless it shall
have given the Administrative Agent thirty (30) days prior
written notice thereof, executed and delivered to the
Administrative Agent all financing statements and financing
statement amendments which the Administrative Agent may
request in connection therewith.
(iii) Each Grantor will, from time to time, at its
expense, execute, deliver, file and record any statement,
assignment, instrument, document, agreement or other paper and
take any other action (including without limitation any
filings of financing or continuation statements under the UCC)
that from time to time may be necessary, or that the
Administrative Agent may reasonably request, in order to
create, preserve, upgrade in rank (to the extent required
hereby), perfect, confirm or validate the Security Interests
or to enable the Administrative Agent and the Lenders to
obtain the full benefits of this Agreement, or to enable the
Administrative Agent to exercise and enforce any of its
rights, powers and remedies hereunder with respect to any of
the Collateral (other than any filings with the United States
Patent and Trademark Office or the United States Copyright
Office). Prior to the irrevocable payment in full of the
Secured Obligations, each Grantor hereby authorizes the
Administrative Agent, upon the failure of such Grantor to so
do within three Business Days after receipt of notice from the
Administrative Agent, to execute and file financing
statements, financing statement amendments or continuation
statements without such Grantor's signature appearing thereon.
Each Grantor agrees that a carbon, photographic, photostatic
or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement. Each
Grantor shall pay the costs of, or incidental to, any
recording or filing of the Financing Statements and any other
financing statements, financing statement amendments or
continuation statements concerning the Collateral.
(iv) If any Collateral exceeding in value $500,000 in
the aggregate is at any time in the possession or control of
any warehouseman, bailee (other than a carrier transporting
Inventory to a purchaser in the ordinary course of business),
or any Grantor's agents or processors, such Grantor shall
notify in writing such warehouseman, bailee, agent or
processor of the Security Interests created hereby, shall
obtain such warehouseman's, bailee's, agent's or processor's
agreement in writing to hold all such Collateral for the
Administrative Agent's account subject to the Administrative
Agent's instructions, and shall cause such warehouseman,
bailee, agent or processor to issue and deliver to the
Administrative Agent warehouse receipts, bills of lading or
any similar documents relating to such Collateral in the
Administrative Agent's name and in form and substance
acceptable to the Administrative Agent.
(v) Each Grantor will cause the Administrative Agent,
for the ratable benefit of itself and the Lenders, to be named
as loss payee on each insurance policy covering risks relating
to any of its Inventory, Fixtures and Equipment, as reasonably
requested by the Administrative Agent. Each Grantor will
deliver to the Administrative Agent, upon request of the
Administrative Agent, the insurance policies for such
insurance. Each such insurance policy shall include effective
waivers by the insurer of subrogation, provide that all
insurance proceeds shall be adjusted with and payable to the
Administrative Agent and provide that no cancellation or
termination thereof shall be effective until at least thirty
(30) days have elapsed after receipt by the Administrative
Agent of written notice thereof. Each Grantor shall arrange
for appropriate certifications that the requirements of this
Section 4(a)(v) have been satisfied, to be made to the
Administrative Agent and each insured party, as soon as
practicable, by each insurer or its authorized representative
with respect thereto.
(vi) Each Grantor will, promptly upon request, provide
to the Administrative Agent all information and evidence the
Administrative Agent may reasonably request concerning the
Collateral, and in particular the Accounts, to enable the
Administrative Agent to enforce the provisions of this
Agreement.
(vii) Each Grantor will comply in all material respects
with all Applicable Laws applicable to the Collateral or any
part thereof or to the operation of such Grantor's business.
(viii) Each Grantor will pay promptly when due all
taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of its income or profits
therefrom, as well as all claims of any kind (including,
without limitation, claims for labor, materials and supplies)
against or with respect to the Collateral, except that no such
charge need be paid if (A) the validity thereof is being
contested in good faith by appropriate proceedings, (B) such
proceedings do not involve any danger of the sale, forfeiture
or loss of or creation of a Lien on any of the Collateral or
any interest therein and (C) such charge is adequately
reserved against on such Grantor's books in accordance with
GAAP.
(ix) No Grantor shall
(A) sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral,
except as permitted by the Amended and Restated Credit
Agreement; or
(B) create or suffer to exist any Lien or other
charge or encumbrance upon or with respect to any of the
Collateral to secure indebtedness of any Person or
entity, except as permitted by the Amended and Restated
Credit Agreement.
(b) Accounts, Etc.
(i) Each Grantor shall use all reasonable efforts to
cause to be collected from its Account Debtors, as and when
due, any and all amounts owing under or on account of each
Account (including, without limitation, Accounts which are
delinquent, such Accounts to be collected in accordance with
lawful collection procedures) and to apply forthwith upon
receipt thereof all such amounts as are so collected to the
outstanding balance of such Account. The costs and expenses
(including, without limitation, attorney's fees), of
collection of Accounts incurred by such Grantor or the
Administrative Agent shall be borne by such Grantor.
(ii) Upon the occurrence and during the continuance of
any Event of Default, upon request of the Administrative Agent
or the Required Lenders, each Grantor will promptly notify
(and each Grantor hereby authorizes the Administrative Agent
so to notify) each Account Debtor in respect of any Account
that such Account has been assigned to the Administrative
Agent hereunder and that any payments due or to become due in
respect of such Account are to be made directly to the
Administrative Agent or its designee.
(iii) Each Grantor will perform and comply in all
material respects with all of its obligations in respect of
Accounts and General Intangibles and the exercise by the
Administrative Agent of any of its rights hereunder shall not
release any Grantor from any of its duties or obligations.
(iv) No Grantor will (A) amend, modify, terminate or
waive any material provision of any agreement giving rise to
an Account in any manner which could reasonably be expected to
materially adversely affect the value of such Account as
Collateral, (B) fail to exercise promptly and diligently each
and every material right which it may have under each
agreement giving rise to an Account (other than any right of
termination) or (C) fail to deliver to the Administrative
Agent a copy of each material demand, notice or document
received by it relating in any way to any agreement giving
rise to an Account.
(v) Other than in the ordinary course of business as
generally conducted by such Grantor over a period of time, no
Grantor will grant any extension of the time of payment of any
of the Accounts to any one Account Debtor with an aggregate
face amount in excess of $25,000 or compromise, compound or
settle the same for less than the full amount thereof,
release, wholly or partially, any Person liable for the
payment thereof, or allow any credit or discount whatsoever
thereon.
(c) Inventory, Etc. Each Grantor hereby represents,
warrants, covenants and agrees as follows: (i) all Inventory is, and
shall be at all times, located at places of business listed in the
Perfection Certificate or as to which such Grantor has complied with the
provisions of Section 4(a)(i) hereof, except Inventory in transit from
one such location to another such location; (ii) no Inventory is, nor
shall at any time or times be, subject to any Lien whatsoever, except
for Permitted Liens; and (iii) no Inventory in aggregate value exceeding
$500,000 at any time is, nor shall at any time or times be, kept, stored
or maintained with a bailee, warehouseman, carrier or similar party
(other than a carrier delivering Inventory to a purchaser in the
ordinary course of such Grantor's business) unless the Required Lenders
have given their prior written consent and Grantor has complied with the
provisions of Section 4(a)(iv) hereof.
(d) Equipment, Etc. Each Grantor will maintain each item of
Equipment in the same condition, repair and working order as when
acquired, ordinary wear and tear and immaterial impairments of value and
damage by the elements excepted, and in accordance with any
manufacturer's manual, and will as quickly as practicable provide all
maintenance, service and repairs necessary for such purpose and will
promptly furnish to the Administrative Agent a statement respecting any
material loss or damage to any of the Equipment.
(e) Intellectual Property.
(i) Each Grantor shall notify the Administrative Agent
promptly (A) of its acquisition after the Closing Date of any
Patent, Patent License, Trademark or Trademark License and (B)
if it knows, or has reason to know of any adverse
determination or development (including, without limitation,
the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark
Office or any court) regarding such Grantor's ownership of any
Patent or Trademark, its right to register the same, or to
keep and maintain the same. In the event that any Patent,
Patent License, Trademark or Trademark License is infringed,
misappropriated or diluted by a third party, each Grantor
shall notify the Administrative Agent promptly after it learns
thereof and shall, unless such Grantor and the Administrative
Agent shall jointly determine that any such action would be of
immaterial economic value, promptly xxx for infringement,
misappropriation or dilution and to recover any and all
damages for such infringement, misappropriation or dilution,
and take such other actions as may be appropriate under the
circumstances to protect such Patent, Patent License,
Trademark or Trademark License. In no event shall any
Grantor, either itself or through any agent, employee or
licensee, file an application for the registration of any
Patent or Trademark with the United States Patent and
Trademark Office or any similar office or agency in any other
country or any political subdivision thereof, unless
simultaneously therewith it informs the Administrative Agent,
and, upon issuance of such Patent or Trademark, executes and
delivers any and all agreements, instruments, documents and
papers the Administrative Agent may reasonably request to
evidence the Security Interests in such Patent or Trademark
and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby. Each Grantor hereby
constitutes the Administrative Agent its attorney-in-fact to
execute and file all such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed,
and such power, being coupled with an interest, shall be
irrevocable until the Commitments have terminated and the
Secured Obligations are paid in full.
(ii) Each Grantor shall: (A) preserve and maintain in
all material respects rights in the Intellectual Property; and
(B) upon and after the occurrence of an Event of Default, use
its best efforts to obtain any consents, waivers or agreements
necessary to enable Administrative Agent to exercise its
remedies with respect to the Intellectual Property. No
Grantor shall abandon any right to file a Copyright, Patent or
Trademark application that is material to the business of such
Grantor nor shall any Grantor abandon any such pending
Copyright, Patent or Trademark application, or Copyright,
Copyright License, Patent, Patent License, Trademark or
Trademark License without the prior written consent of
Administrative Agent.
(iii) Each Grantor hereby assigns, transfers and conveys
to Administrative Agent, effective upon the occurrence and
during the continuance of any Event of Default, the
nonexclusive right and license to use all Intellectual
Property owned or used by such Grantor, together with any
goodwill associated therewith, all to the extent necessary to
enable Administrative Agent to realize on the Collateral
(including, without limitation, completing production of,
advertising for sale and selling the Collateral) and any
successor or assign to enjoy the benefits of the Collateral.
This right and license shall inure to the benefit of all
successors, assigns and transferees of Administrative Agent
and its successors, assigns and transferees, whether by
voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such
right and license is granted free of charge, without
requirement that any monetary payment whatsoever be made to
any Grantor by Administrative Agent.
(f) Indemnification. Each Grantor agrees to pay, and to save
the Administrative Agent and the Lenders harmless from, any and all
liabilities, costs and expenses (including, without limitation, legal
fees and expenses) (i) with respect to, or resulting from, any and all
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral, (ii) with respect to, or
resulting from, complying with any Applicable Law applicable to any of
the Collateral or (iii) in connection with any of the transactions
contemplated by this Agreement (except to the extent any such
liabilities, costs and expenses result from the gross negligence or
willful misconduct of the Administrative Agent or Lenders). In any
suit, proceeding or action brought by the Administrative Agent under any
Account for any sum owing thereunder, or to enforce any provisions of
any Account, each Grantor will save, indemnify and keep the
Administrative Agent and the Lenders harmless from and against all
expense, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction or liability whatsoever of the
Account Debtor or any other obligor thereunder, arising out of a breach
by such 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 Account Debtor or obligor or its successors from such Grantor
(except to the extent any such expense, loss or damage results from the
gross negligence or willful misconduct of the Administrative Agent or
Lenders). The obligations of each Grantor under this Section 4(f) shall
survive the termination of the other provisions of this Agreement.
Section 5. Reporting and Recordkeeping. Each Grantor
respectively covenants and agrees with the Administrative Agent and the
Lenders that from and after the date of this Agreement and until the
Commitments have terminated and all Secured Obligations have been fully
satisfied:
(a) Maintenance of Records Generally. Such Grantor will keep
and maintain at its own cost and expense complete and accurate records
of the Collateral, including, without limitation, a record of all
payments received and all credits granted with respect to the Collateral
and all other dealings with the Collateral. All chattel paper given to
such Grantor with respect to any Accounts will be marked with the
following legend: "This writing and the obligations evidenced or
secured hereby are subject to the security interest of First Union
National Bank of North Carolina, as Administrative Agent". For the
Administrative Agent's and the Lenders' further security, such Grantor
agrees that upon the occurrence and during the continuation of any Event
of Default, such Grantor shall deliver and turn over any such books and
records directly to the Administrative Agent or its designee. Such
Grantor shall permit any representative of the Administrative Agent to
inspect such books and records in accordance with Section 8.11 of the
Amended and Restated Credit Agreement and will provide photocopies
thereof to the Administrative Agent upon its reasonable request.
(b) Certain Provisions Regarding Maintenance of Records and
Reporting Re: Accounts.
(i) In the event any amounts due and owing in excess of
$250,000 are in dispute between any Account Debtor and such
Grantor, such Grantor shall provide the Administrative Agent
with written notice thereof promptly after such Grantor's
learning thereof, explaining in detail the reason for the
dispute, all claims related thereto and the amount in
controversy; provided, that a report of such items provided
within ten (10) days after the end of each fiscal quarter of
ACC shall be deemed to be prompt delivery of such notice.
(ii) Such Grantor will promptly notify the
Administrative Agent in writing if any Account arises out of
a contract with the United States of America, or any
department, agency, subdivision or instrumentality thereof, or
of any state (or department, agency, subdivision or
instrumentality thereof) where such state has a state
assignment of claims act or other law comparable to the
Federal Assignment of Claims Act, and will take any action
required or requested by the Administrative Agent or give
notice of the Administrative Agent's Security Interest in such
Accounts under the provisions of the Federal Assignment of
Claims Act or any comparable law or act enacted by any state
or local governmental authority.
(c) Further Identification of Collateral. Such Grantor will,
if so requested by the Administrative Agent, furnish to the
Administrative Agent statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
(d) Notices. In addition to the notices required by
Section 5(b) hereof, such Grantor will advise the Administrative Agent
promptly, in reasonable detail, (i) of any material Lien or claim made
or asserted against any of the Collateral, (ii) of any material adverse
change in the composition of the Collateral, and (iii) of the occurrence
of any other event which could have a material adverse effect on the
Collateral or on the validity, perfection or priority of the Security
Interests.
SECTION 6. Collateral Account.
(a) There is hereby established with the Administrative Agent
a Collateral Account in the name and under the exclusive dominion and
control of the Administrative Agent. There shall be deposited from time
to time into such account the cash proceeds of the Collateral required
to be delivered to the Administrative Agent pursuant to Section 6(b) or
any other provision of this Agreement. Any income received by the
Administrative Agent with respect to the balance from time to time
standing to the credit of the Collateral Account, including any interest
or capital gains on investments of amounts on deposit in the Collateral
Account, shall remain, or be deposited, in the Collateral Account
together with any investments from time to time made pursuant to
subsection (c) of this Section 6, shall vest in the Administrative
Agent, shall constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied thereto as
hereinafter provided.
(b) Upon the occurrence and during the continuance of an
Event of Default, if requested by the Administrative Agent, each Grantor
shall instruct all Account Debtors and other Persons obligated in
respect of all Accounts to make all payments in respect of the Accounts
either (i) directly to the Administrative Agent (by instructing that
such payments be remitted to a post office box which shall be in the
name and under the exclusive dominion and control of the Administrative
Agent) or (ii) to one or more other banks in any state in the United
States (by instructing that such payments be remitted to a post office
box which shall be in the name and under the exclusive dominion and
control of such bank) under a Lockbox Letter substantially in the form
of Annex I hereto duly executed by each Grantor and such bank or under
other arrangements, in form and substance satisfactory to the
Administrative Agent, pursuant to which such Grantor shall have
irrevocably instructed such other bank (and such other bank shall have
agreed) to remit all proceeds of such payments directly to the
Administrative Agent for deposit into the Collateral Account or as the
Administrative Agent may otherwise instruct such bank, and thereafter if
the proceeds of any Collateral shall be received by such Grantor, such
Grantor will promptly deposit such proceeds into the Collateral Account
and until so deposited, all such proceeds shall be held in trust by such
Grantor for and as the property of the Administrative Agent, for the
benefit of itself and the Lenders and shall not be commingled with any
other funds or property of such Grantor. At any time after the
occurrence and during the continuance of an Event of Default, the
Administrative Agent may itself so instruct such Grantor's Account
Debtors and each Grantor hereby constitutes and appoints the
Administrative Agent (and the president, any vice president or any
assistant vice president of the Administrative Agent from time to time)
as its attorney-in-fact with full power and authority to so instruct
such Grantor's Account Debtors. All such payments made to the
Administrative Agent shall be deposited in the Collateral Account.
(c) The balance from time to time standing to the credit of
the Collateral Account shall, except upon the occurrence and
continuation of an Event of Default, be distributed to the Grantors upon
the order of the Grantors. If immediately available cash on deposit in
the Collateral Account is not sufficient to make any distribution to the
Grantors referred to in the previous sentence of this Section 6(c), the
Administrative Agent shall liquidate as promptly as practicable such
investments as required to obtain sufficient cash to make such
distribution and, notwithstanding any other provision of this Section 6,
such distribution shall not be made until such liquidation has taken
place. Upon the occurrence and continuation of an Event of Default, the
Administrative Agent shall, if so instructed by the Required Lenders,
apply or cause to be applied (subject to collection) any or all of the
balance from time to time standing to the credit of the Collateral
Account in the manner specified in Section 10.
(d) Amounts on deposit in the Collateral Account shall be
invested and reinvested from time to time in Permitted Investments as
the Grantors shall determine, which investments shall be held in the
name and be under the control of the Administrative Agent; provided,
that if an Event of Default has occurred and is continuing, the
Administrative Agent may and, if instructed by the Required Lenders,
shall liquidate any such investments and apply or cause to be applied
the proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 10 hereof; and provided further, that
(i) each such investment shall mature within thirty (30) days after it
is acquired by the Administrative Agent and (ii) in order to provide the
Administrative Agent, for the ratable benefit of itself and the Lenders,
with a perfected security interest therein, each such investment shall
be either:
(A) evidenced by negotiable certificates or Instruments,
or if non-negotiable then issued in the name of the
Administrative Agent, which (together with any appropriate
instruments of transfer) are delivered to, and held by, the
Administrative Agent or any agent thereof (which shall not be
any of the Grantors or any of their Affiliates) in the State
of North Carolina; or
(B) in book-entry form and issued by the United States
and subject to pledge under applicable state law and Treasury
regulations and as to which (in the opinion of counsel to the
Administrative Agent) appropriate measures shall have been
taken for perfection of the Security Interests.
(e) Upon the occurrence of any Event of Default, the
Administrative Agent is authorized at any time and from time to time,
and during the continuance thereof, without notice to the Grantors, to
set off, appropriate and apply any and all amounts on deposit in the
Collateral Account, and the proceeds thereof, against all Secured
Obligations.
SECTION 7. General Authority.
(a) Each Grantor hereby irrevocably appoints the
Administrative Agent its true and lawful attorney, with full power of
substitution, in the name of such Grantor, the Administrative Agent, the
Lenders or otherwise, for the sole use and benefit of the Administrative
Agent and the Lenders, but at such Grantor's expense, to exercise, at
any time from time to time all or any of the following powers:
(i) to file the Financing Statements and any financing
statements, financing statement amendments and continuation
statements referred to in Sections 4(a)(i), 4(a)(ii), and
4(a)(iii) hereof,
(ii) to demand, xxx for, collect, receive and give
acquittance for any and all monies due or to become due with
respect to any Collateral or by virtue thereof,
(iii) to settle, compromise, compound, prosecute or
defend any action or proceeding with respect to any
Collateral,
(iv) to sell, transfer, assign or otherwise deal in or
with the Collateral and the Proceeds thereof, as fully and
effectually as if the Administrative Agent were the absolute
owner thereof, and
(v) to extend the time of payment and to make any
allowance and other adjustments with reference to the
Collateral;
provided that the Administrative Agent shall not take any of the actions
described in this Section 7 except those described in clause (i) above
unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall give such Grantor not less than ten
(10) days' prior written notice of the time and place of any sale or
other intended disposition of any of the Collateral, except any
Collateral which is perishable or threatens to decline speedily in value
or is of a type customarily sold on a recognized market. Each Grantor
agrees that any such notice constitutes "reasonable notification" within
the meaning of Section 9504(3) of the UCC (to the extent such Section is
applicable).
(b) Each Grantor hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of
attorney is a power coupled with an interest and shall be irrevocable.
(c) Each Grantor also authorizes the Administrative Agent at
any time and from time to time, to execute, in connection with the sale
provided for in Section 8 hereof, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
SECTION 8. Remedies Upon Event of Default.
(a) If any Event of Default has occurred and is continuing,
the Administrative Agent may exercise on behalf of itself and the
Lenders all rights of a secured party under the UCC (whether or not in
effect in the jurisdiction where such rights are exercised) and, in
addition, the Administrative Agent may (i) withdraw all cash, if any, in
the Collateral Account and investments made with amounts on deposit in
the Collateral Account, and apply such monies, investments and other
cash, if any, then held by it as Collateral as specified in Section 10
hereof and (ii) if there shall be no such monies, investments or cash or
if such monies, investments or cash shall be insufficient to pay all the
Secured Obligations in full, sell the Collateral or any part thereof at
public or private sale, for cash, upon credit or for future delivery,
and at such price or prices as the Administrative Agent may deem
satisfactory. The Administrative Agent or any Lender may be the
purchaser of any or all of the Collateral so sold at any public sale
(or, if the Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed
standard price quotations or if otherwise permitted under applicable
law, at any private sale) and thereafter hold the same, absolutely, free
from any right or claim of whatsoever kind. Each Grantor will execute
and deliver such documents and take such other action as the
Administrative Agent deems reasonably necessary or advisable in order
that any such sale may be made in compliance with law. Upon any such
sale the Administrative Agent shall have the right to deliver, assign
and transfer to the purchaser thereof the Collateral so sold (without
warranty). Each purchaser at any such sale shall hold the Collateral so
sold to it absolutely, free from any claim or right of whatsoever kind,
including any equity or right of redemption of any Grantor. To the
extent permitted by law, each Grantor hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under
any law now existing or hereafter adopted. The notice of such sale
shall be given to the applicable Grantor ten (10) days prior to such
sale and (A) in case of a public sale, state the time and place fixed
for such sale, and (B) in the case of a private sale, state the day
after which sale may be consummated. Any such public sale shall be held
at such time or times within ordinary business hours and at such place
or places as the Administrative Agent may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an
entirety or in separate parcels, as the Administrative Agent may
determine. The Administrative Agent shall not be obligated to make any
such sale pursuant to any such notice. The Administrative Agent may,
without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale of
all or any part of the Collateral on credit or for future delivery, the
Collateral so sold may be retained by the Administrative Agent until the
selling price is paid by the purchaser thereof, but the Administrative
Agent shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of
any such failure, such Collateral may again be sold upon like notice.
The Administrative Agent, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction. The Grantors shall remain liable for any deficiency.
(b) For the purpose of enforcing any and all rights and
remedies under this Agreement, the Administrative Agent may if an Event
of Default has occurred and is continuing (i) require each Grantor to,
and each Grantor agrees that it will, at its expense and upon the
request of the Administrative Agent, forthwith assemble all or any part
of the Collateral as directed by the Administrative Agent and make it
available at a place designated by the Administrative Agent which is, in
the Administrative Agent's opinion, reasonably convenient to the
Administrative Agent and such Grantor, whether at the premises of such
Grantor or otherwise, (ii) to the extent permitted by applicable law,
enter, with or without process of law and without breach of the peace,
any premise where any of the Collateral is or may be located and,
without charge or liability to the Administrative Agent, seize and
remove such Collateral from such premises, (iii) have access to and use
such Grantor's books and records relating to the Collateral and (iv)
prior to the disposition of the Collateral, store or transfer such
Collateral without charge in or by means of any storage or
transportation facility owned or leased by such Grantor, process, repair
or recondition such Collateral or otherwise prepare it for disposition
in any manner and to the extent the Administrative Agent deems
appropriate and, in connection with such preparation and disposition,
use without charge any Trademark, trade name, Copyright, Patent or
technical process used by such Grantor.
(c) Without limiting the generality of the foregoing, if any
Event of Default has occurred and is continuing,
(i) the Administrative Agent may license, or sublicense,
whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any Patents or Trademarks
included in the Collateral throughout the world for such term
or terms, on such conditions and in such manner as the
Administrative Agent shall in its sole discretion determine;
(ii) the Administrative Agent may (without assuming any
obligations or liability thereunder), at any time and from
time to time, enforce (and shall have the exclusive right to
enforce) against any licensee or sublicensee all rights and
remedies of any Grantor in, to and under any Patent Licenses
or Trademark Licenses and take or refrain from taking any
action under any thereof, provided, that no such actions shall
result in the failure of such Patent Licenses or Trademark
Licenses to remain in compliance with all Applicable Law, and
each Grantor hereby releases the Administrative Agent and each
of the Lenders from and against any claims arising out of, any
lawful action so taken or omitted to be taken with respect
thereto except with respect to the gross negligence or willful
misconduct of the Administrative Agent or the Lenders; and
(iii) upon request by the Administrative Agent, each
Grantor will execute and deliver to the Administrative Agent
a power of attorney, in form and substance satisfactory to the
Administrative Agent, for the implementation of any lease,
assignment, license, sublicense, grant or option, sale or
other disposition of a Patent or Trademark. In the event of
any such disposition pursuant to this Section, each Grantor
shall supply its know-how and expertise relating to the
manufacture and sale of the products bearing Trademarks or the
products or services made or rendered in connection with
Patents, and its customer lists and other records relating to
such Patents or Trademarks and to the distribution of said
products, to the Administrative Agent.
SECTION 9. Limitation on Duty of Administrative Agent in
Respect of Collateral. Beyond reasonable care in the custody thereof,
the Administrative Agent shall have no duty as to any Collateral in its
possession or control or in the possession or control of any agent or
bailee or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto. The
Administrative Agent shall be deemed to have exercised reasonable care
in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords its own
property, and the Administrative Agent shall not be liable or
responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other agent or
bailee selected by the Administrative Agent in good faith.
SECTION 10. Application of Proceeds. Upon the occurrence and
during the continuance of an Event of Default, the proceeds of any sale
of, or other realization upon, all or any part of the Collateral shall
be applied by the Administrative Agent as follows:
first, to payment of the out-of-pocket expenses of such
sale or other realization, including all reasonable
out-of-pocket expenses, liabilities and advances incurred or
made by the Administrative Agent in connection therewith, and
any other unreimbursed expenses for which the Administrative
Agent or any Lender is to be reimbursed pursuant to
Section 14.2 of the Amended and Restated Credit Agreement, or
Section 4(f) or 13 hereof or any corresponding provision of
any of the other Loan Documents;
second, to payment of any fees owing to the
Administrative Agent or any Lender under the Amended and
Restated Credit Agreement in accordance with the provisions of
the Amended and Restated Credit Agreement;
third, to ratable payment of accrued but unpaid interest
(including post-petition interest) on the Secured Obligations
and any termination payments due in respect of any Hedging
Agreement with any Lender (pro rata in accordance with all
such amounts due);
fourth, to the ratable payment of unpaid principal of the
Secured Obligations;
fifth, to the ratable payment of all other Secured
Obligations, until all Secured Obligations shall have been
paid in full; and
finally, to payment to the applicable Grantors or their
respective successor or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining from
such proceeds.
The Administrative Agent may make distribution hereunder in cash or in
kind or, on a ratable basis, in any combination thereof.
SECTION 11. Concerning the Administrative Agent. The
provisions of Article XIII of the Amended and Restated Credit Agreement
shall inure to the benefit of the Administrative Agent in respect of
this Agreement and shall be binding upon the parties to the Amended and
Restated Credit Agreement in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the
Administrative Agent therein set forth:
(a) The Administrative Agent is authorized to take all such
action as is provided to be taken by it as Administrative Agent
hereunder and all other action incidental thereto. As to any matters
not expressly provided for herein, the Administrative Agent may request
instructions from the Lenders and shall act or refrain from acting in
accordance with written instructions from the Required Lenders (or, when
expressly required by this Agreement or the Amended and Restated Credit
Agreement, all the Lenders) or, in the absence of such instructions, in
accordance with its discretion.
(b) The Administrative Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Security
Interests, whether impaired by operation of law or by reason of any
action or omission to act on its part (other than any such action or
inaction constituting gross negligence or willful misconduct. The
Administrative Agent shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement by
any Grantor.
SECTION 12. Appointment of Collateral Agents. At any time or
times, in order to comply with any legal requirement in any jurisdiction
or in order to effectuate any provision of the Loan Documents, the
Administrative Agent may appoint another bank or trust company or one or
more other Persons, either to act as collateral agent or agents, jointly
with the Administrative Agent or separately, on behalf of the
Administrative Agent and the Lenders with such power and authority as
may be necessary for the effectual operation of the provisions hereof
and specified in the instrument of appointment (which may, in the
discretion of the Administrative Agent, include provisions for the
protection of such collateral agent similar to the provisions of
Section 11 hereof).
SECTION 13. Expenses. In the event that any Grantor fails to
comply with the provisions of the Amended and Restated Credit Agreement,
this Agreement or any other Loan Document, such that the value of any
Collateral or the validity, perfection, rank or value of the Security
Interests are thereby diminished or potentially diminished or put at
risk, the Administrative Agent if requested by the Required Lenders may,
but shall not be required to, effect such compliance on behalf of such
Grantor, and such Grantor shall reimburse the Administrative Agent for
the reasonable costs thereof on demand. All insurance expenses and all
reasonable expenses of protecting, storing, warehousing, insuring,
handling, maintaining and shipping the Collateral, any and all excise,
stamp, intangibles, transfer, property, sales, and use taxes imposed by
any state, federal, or local authority or any other Governmental
Authority on any of the Collateral, or in respect of the sale or other
disposition thereof, shall be borne and paid by the Grantors; and if any
Grantor fails promptly to pay any portion thereof when due, the
Administrative Agent or any Lender may, at its option, but shall not be
required to, pay the same and charge such Grantor's account therefor,
and such Grantor agrees to reimburse the Administrative Agent or such
Lender therefor on demand. All sums so paid or incurred by the
Administrative Agent or any Lender for any of the foregoing and any and
all other sums for which any Grantor may become liable hereunder and all
costs and expenses (including reasonable attorneys' fees, legal expenses
and court costs) incurred by the Administrative Agent or any Lender in
enforcing or protecting the Security Interests or any of their rights or
remedies thereon shall be payable by the Grantors on demand and shall
bear interest (after as well as before judgment) until paid at the rate
then applicable to Base Rate Loans under the Amended and Restated Credit
Agreement and shall be additional Secured Obligations hereunder.
SECTION 14. Notices. All notices, communications and
distributions hereunder shall be given or made in accordance with
Section 14.1 of the Amended and Restated Credit Agreement.
SECTION 15. Waivers, Non-Exclusive Remedies. No failure on
the part of the Administrative Agent or any Lender to exercise, and no
delay in exercising and no course of dealing with respect to, any right
under the Amended and Restated Credit Agreement, this Agreement or any
other Loan Document shall operate as a waiver thereof or hereof; nor
shall any single or partial exercise by the Administrative Agent or any
Lender of any right under the Amended and Restated Credit Agreement,
this Agreement or any other Loan Document preclude any other or further
exercise thereof, and the exercise of any rights in this Agreement, the
Amended and Restated Credit Agreement and the other Loan Documents are
cumulative and are not exclusive of any other remedies provided by law.
This Agreement is a Loan Document executed pursuant to the Amended and
Restated Credit Agreement.
SECTION 16. Successors and Assigns. This Agreement is for
the benefit of the Administrative Agent and the Lenders and their
successors and assigns (as permitted by the Amended and Restated Credit
Agreement), and in the event of an assignment of all or any of the
Secured Obligations, the rights hereunder, to the extent applicable to
the indebtedness so assigned, may be transferred with such indebtedness.
This Agreement shall be binding on each Grantor and its successor and
assigns; provided, that such Grantor may not assign any of its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and the Lenders.
SECTION 17. Changes in Writing. Neither this Agreement nor
any provision hereof may be changed, waived, discharged or terminated
orally, but only in writing signed by each Grantor and the
Administrative Agent with the consent of the Required Lenders (or, when
expressly required by this Agreement or the Amended and Restated Credit
Agreement, all of the Lenders).
SECTION 18. Powers Coupled with an Interest. All
authorizations and agencies herein contained with respect to the
Collateral are irrevocable and powers coupled with an interest.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW
PRINCIPLES THEREOF.
SECTION 20. Consent to Jurisdiction. Each Grantor hereby
irrevocably consents to the personal jurisdiction of the state and
federal courts located in Mecklenburg County, North Carolina, in any
action, claim or other proceeding arising out of or any dispute in
connection with this Agreement, any rights or obligations hereunder, or
the performance of such rights and obligations. Each Grantor hereby
irrevocably consents to the service of a summons and complaint and other
process in any action, claim or proceeding brought by the Administrative
Agent or any Lender in connection with this Agreement, any rights or
obligations hereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner provided
in Section 14.1 of the Amended and Restated Credit Agreement. Nothing
in this Section 20 shall affect the right of the Administrative Agent or
any Lender to serve legal process in any other manner permitted by
Applicable Law or affect the right of the Administrative Agent or any
Lender to bring any action or proceeding against any Grantor or its
properties in the courts of any other jurisdictions.
SECTION 21. Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. If in the reasonable determination
of the Administrative Agent and its counsel, Section 21(b) is
unenforceable under North Carolina law unless paired with a binding
arbitration provision, then upon demand of any party made within ninety
(90) days after institution of any judicial proceeding, any dispute,
claim or controversy between a Lender (or group of Lenders) and a
Borrower (or group of Borrowers) (but not any dispute, claim or
controversy among any Lenders not involving any Borrower) arising out
of, connected with or relating to this Agreement ("Disputes"), between
or among parties to this Agreement shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions, claims arising from
supplements to this Agreement executed in the future, or claims
concerning any aspect of the past, present or future relationships
arising out of or connected with this Agreement. Arbitration shall be
conducted under and governed by the Commercial Financial Disputes
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. The expedited
procedures set forth in Rule 51, et seq. of the Arbitration Rules shall
be applicable to claims of less than $1,000,000. All applicable
statutes of limitation shall apply to any Dispute. A judgment upon the
award may be entered in any court having jurisdiction. The panel from
which all arbitrators are selected shall be comprised of licensed
attorneys. The single arbitrator selected for expedited procedure shall
be a retired judge from the highest court of general jurisdiction, state
or federal, of the state where the hearing will be conducted.
(b) Jury Trial. EACH AGENT, LENDER AND THE PLEDGOR HEREBY
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT
TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF
SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the
preceding binding arbitration provisions, the parties hereto preserve,
without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute.
Each such Person shall have and hereby reserves the right to proceed in
any court of proper jurisdiction or by self help to exercise or
prosecute the following remedies: (i) all rights to foreclose against
any real or personal property or other security by exercising a power of
sale granted in this Agreement or under applicable law or by judicial
foreclosure and sale, (ii) all rights of self help including peaceful
occupation of property and collection of rents, set off, and peaceful
possession of property, (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary
bankruptcy proceeding, and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit
the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute.
SECTION 22. Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (a) the other provisions hereof shall remain in full
force and effect in such jurisdiction and shall be liberally construed
in favor of the Administrative Agent and the Lenders in order to carry
out the intentions of the parties hereto as nearly as may be possible;
and (b) the invalidity or unenforceability of any provisions hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
SECTION 23. Headings. The various headings of this Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provisions hereof.
SECTION 24. Counterparts. This Agreement may be executed by
the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but
one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed under seal by their duly authorized officers,
all as of the day and year first written above.
[CORPORATE SEAL] ACC CORP.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President - Finance
[CORPORATE SEAL] ACC LONG DISTANCE CORP.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Controller
[CORPORATE SEAL] ACC NATIONAL TELECOM CORP.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
[CORPORATE SEAL] ACC LONG DISTANCE OF MASSACHUSETTS CORP.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
[CORPORATE SEAL] ACC RADIO CORP.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Controller
[CORPORATE SEAL] ACC GLOBAL CORP.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Controller
[CORPORATE SEAL] ACC NATIONAL LONG DISTANCE CORP.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
Administrative Agent:
[CORPORATE SEAL] FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Administrative Agent
By: /s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: SVP
SCHEDULE I
to
Security Agreement
Trademark Registrations
Registration
Xxxx Number Date Goods
Flying ACC 1,371,741 11/19/85 Telecommunications
Services
Circular Design 1,607,689 7/24/89 Telecommunications
Services
ACC with Circular Design 1,950,804 1/23/96 Telecommunications
Services
Call America 1,407,073 8/26/86 Telecommunications
Services
Trademark Applications
Xxxx Serial No. Goods
Telecommunications, Just 75/124052 Telecommunications
Your Size Services
ACC, The Answer Not Assigned Yet Telecommunications
Services
Trademark Licenses
None
ANNEX I
(to Security Agreement)
[FORM OF LOCKBOX LETTER]
_______________, 19___
[Name and Address of Lockbox Bank)
Re:[GRANTOR]
Ladies and Gentlemen:
We hereby notify you that effective __________, 19__, we
have transferred exclusive ownership and control of our lock-box
account(s) no[s]. _____________________ (the "Lockbox Account[s]")
maintained with you under the terms of the [Lockbox Agreement]
attached hereto as Exhibit A (the "Lockbox Agreement[s]") to First
Union National Bank of North Carolina, as Agent (the "Agent").
We hereby irrevocably instruct you to make all payments to
be made by you out of or in connection with the Lockbox Account(s)
(i) to the Agent for credit to account no. __________ maintained by it
at its office at ________________________ or (ii) as you may otherwise
be instructed by the Agent.
We also hereby notify you that the Agent shall be
irrevocably entitled to exercise any and all rights in respect of or
in connection with the Lockbox Account(s), including, without
limitation, the right to specify when payments are to be made out of
or in connection with the Lockbox Account(s).
All funds deposited into the Lockbox Account(s) will not be
subject to deduction, set-off, banker's lien or any other right in
favor of any other person than the Agent, except that you may set-off
against the Lockbox Account(s) the face amount of any check deposited
in and credited to such Lockbox Account(s) which is subsequently
returned for any reason. Your compensation for providing the service
contemplated herein shall be mutually agreed between you and us from
time to time and we will continue to pay such compensation.
Please confirm your acknowledgment of and agreement to the
foregoing instructions by signing in the space provided below.
Very truly yours,
___________________________________
By:________________________________
Name:___________________________
Title:__________________________
Acknowledged and agreed
to as of this _____ day of
__________________, 19___.
[LOCKBOX BANK]
By:_______________________
Name:_____________________
Title:____________________
ANNEX II
(to Security Agreement)
SECURITY AGREEMENT SUPPLEMENT
SECURITY AGREEMENT SUPPLEMENT, dated as of
_____________________, (the "Supplement"), made by [INSERT NAME OF NEW
SUBSIDIARY], a __________________ (the "New Grantor"), in favor of
First Union National Bank of North Carolina, as Administrative Agent
(in such capacity, the "Administrative Agent") under the Amended and
Restated Credit Agreement (as defined in the Security Agreement
referred to below) for the ratable benefit of itself and the Lenders
(as so defined).
1. Reference is hereby made to the Security Agreement
dated as of __________, 1995, made by ACC Corp. and certain
Subsidiaries of ACC Corp. (collectively, the "Grantors"), in favor of
the Administrative Agent (as amended, supplemented or otherwise
modified as of the date hereof, the "Security Agreement"). This
Supplement supplements the Security Agreement, forms a part thereof
and is subject to the terms thereof. Capitalized terms used and not
defined herein shall have the meanings given thereto or referenced in
the Security Agreement.
2. In order to secure the Amended and Restated Credit
Agreement, in accordance with the terms thereof, and to secure the
payment and performance of all of the Secured Obligations, the New
Grantor hereby grants to the Administrative Agent, for the ratable
benefit of itself and the Lenders, a continuing security interest in
and to all of the New Grantor's estate, right, title and interest in
and to all Collateral whether now or hereafter owned or acquired by
the New Grantor or in which the New Grantor now has or hereafter has
or acquires any rights, and wherever located (the "New Collateral").
3. The Security Interests are granted as security only and
shall not subject the Administrative Agent or any Lender to, or
transfer to the Administrative Agent or any Lender, or in any way
affect or modify, any obligation or liability of the New Grantor with
respect to any of the New Collateral or any transaction in connection
therewith.
4. The New Grantor hereby agrees that it is a party to the
Security Agreement as if a signatory thereto on the Closing Date of
the Amended and Restated Credit Agreement, and the New Grantor shall
comply with all of the terms, covenants, conditions and agreements and
hereby makes each representation and warranty, in each case set forth
therein. The New Grantor agrees that "Collateral" as used therein
shall include all New Collateral pledged pursuant hereto and the
Security Agreement and "Security Agreement" or "Agreement" as used
therein shall mean the Security Agreement as supplemented hereby.
5. Attached hereto are (i) a Perfection Certificate in the
form of the Perfection Certificate delivered to the Administrative
Agent on the Closing Date and (ii) updated Schedules to the Security
Agreement revised to include all required information with respect to
the New Grantor.
6. The New Grantor hereby acknowledges it has received a
copy of the Security Agreement and that it has read and understands
the terms thereof.
7. The New Grantor hereby agrees that it shall deliver to
the Administrative Agent such UCC Financing Statements and all other
certificates or other documents and take such action as the
Administrative Agent shall reasonably request in order to effectuate
the terms hereof and the Security Agreement.
IN WITNESS WHEREOF, the undersigned hereby causes this
Supplement to be executed and delivered as of the date first above
written.
[CORPORATE SEAL] [INSERT NAME OF NEW SUBSIDIARY]
By:________________________________
Name:___________________________
Title:__________________________
