EXHIBIT 10.1 (i)
AMENDED AND RESTATED INVESTMENT AGREEMENT
This Amended and Restated Investment Agreement (this "Agreement") is
entered into as of this 3rd day of January, 2002, by and between ADTRAN, Inc.
(the "Borrower"), a Delaware corporation, and FIRST UNION NATIONAL BANK
(successor-in-interest to First Union National Bank of Tennessee) (the
"Bondholder"), a national banking association.
WITNESSETH
WHEREAS, the State Industrial Development Authority for the State of
Alabama (the "Issuer") issued its Taxable Revenue Bond, Series 1995 (ADTRAN,
Inc. Project) in the principal amount of Fifty Million and No/100 Dollars
($50,000,000.00) (the "Bond") to the Bondholder pursuant to that certain First
Amended and Restated Financing Agreement (as amended from time to time, the
"Financing Agreement") dated as of April 25, 1997 among the Issuer, the
Bondholder and the Borrower; and
WHEREAS, the Borrower and the Issuer entered into that certain First
Amended and Restated Loan Agreement (as amended from time to time, the "Loan
Agreement") dated as of April 25, 1997, and the Issuer assigned to the
Bondholder all of the rights of the Issuer under the Loan Agreement with the
intention that the Bondholder enjoy the rights of the Issuer thereunder except
to the extent of certain rights reserved with respect to certain rights to
notice and "Additional Payments," as defined in the Financing Agreement; and
WHEREAS, as further evidence of its obligations to the Bondholder
arising under the Loan Agreement, the Borrower executed that certain First
Amended and Restated Note (as amended from time to time, the "Note") dated April
25, 1997 payable to the order of the Bondholder in the maximum principal amount
of Fifty Million and No/100 Dollars ($50,000,000.00); and
WHEREAS, one condition to the Bondholder's agreement to purchase the
Bond was that the Bondholder shall have a first priority lien upon certain
deposit accounts maintained with the Bondholder to secure the Note and
obligations under the Loan Agreement, with such deposits to be derived from
sources other than the proceeds of the Bond; and
WHEREAS, the Borrower, the Bondholder and AmSouth Bank of Alabama
("AmSouth") entered into that certain Investment Agreement (the "Original
Investment Agreement") dated as of April 25, 1997, pursuant to the terms and
conditions of which the Borrower granted to Bondholder a lien and security
interest upon certain Deposit Accounts (as defined therein) established with
Bondholder and AmSouth; and
WHEREAS, concurrently with the execution hereof, the Bondholder and
AmSouth are entering into an Assignment and Assumption Agreement, pursuant to
the terms and conditions of which AmSouth is irrevocably
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selling and assigning to the Bondholder, and the Bondholder is irrevocably
purchasing and assuming, AmSouth's participation and interest in the Bond, the
Note, the Loan Agreement and the collateral security thereof; and
WHEREAS, in connection with such sale and assignment from AmSouth to
the Bondholder, the Borrower and Bondholder desire to amend and restate the
Original Investment Agreement in its entirety, pursuant to the terms and
conditions hereinafter set forth.
NOW, THEREFORE, as an inducement to cause the Bondholder to purchase
the Bond, and for other valuable consideration, the receipt and sufficiency of
which are acknowledged, it is agreed as follows:
1. Establishment and Maintenance of Certificate of Deposit.
Prior to the execution of this Agreement, the Borrower
established a commercial money market deposit account with
the Bondholder bearing the account number 2000010106277 in
the amount of Thirty Million and No/100 Dollars
($30,000,000.00) (the "Deposit Account"). Prior or
concurrently with the execution of this Agreement, Borrower
shall apply the amounts on the deposit in the Deposit
Account, together with an additional Twenty Million and
No/100 Dollars ($20,000,000.00) for a total of Fifty
Million and No/100 Dollars ($50,000,000.00), toward the
purchase of a 5-year certificate of deposit with the
Bondholder (the "Certificate of Deposit"). The Certificate
of Deposit shall be established in the name of the Borrower
and is and shall be subject to the restriction that the
Borrower shall have no access to funds on deposit or
applied thereto absent the consent of the Bondholder. The
interest rate on the Certificate of Deposit shall be a
fixed rate throughout the term of the Certificate of
Deposit, pursuant to the Loan Agreement.
2. Source of Deposited Funds. Funds applied by the Borrower
toward the Certificate of Deposit shall not be funds that
are proceeds of the Bond.
3. Definition of Secured Indebtedness. As used herein, "Secured
Indebtedness" shall mean all present and future debts and
other obligations of the Borrower evidenced by the Bond, the
Note and the Loan Agreement, as they may hereafter from time
to time be amended, modified, extended, renewed or restated,
and all obligations arising hereunder.
4. Security Interest; Assignment. To secure the payment of the
Secured Indebtedness, the Borrower hereby assigns, pledges and
grants a continuing security interest in and lien on the
Certificate of Deposit to the Bondholder, together with all
replacement certificates of deposit, however denominated, and
all proceeds thereof (collectively, the "Account").
5. Representations and Warranties. The Borrower warrants and
represents to the Bondholder the following:
a. Title. The Borrower is the sole legal and equitable
owner of the Account.
b. No Encumbrances. The Account is not subject to any
assignment, lien or other encumbrance other than
rights in favor of the Bondholder pursuant to this
Agreement.
c. Valid Lien. This Agreement provides the Bondholder
with a valid first priority assignment of and lien
interest in the Certificate of Deposit.
d. Representations and Warranties in the Financing
Agreement and Loan Agreement. All of the
representations and warranties set
forth in Article 2 of the Financing Agreement and
set forth in Section 2.2 of the Loan Agreement are
true and correct as of the date hereof.
6. Covenants. The Borrower covenants with the Bondholder as
follows:
a. No Transfer. The Borrower shall not sell or assign
the Account in whole or in part and will not grant or
allow any other lien or encumbrance to attach thereto.
b. No Withdrawal. The Borrower shall not withdraw any
funds from or otherwise applied to the Account or
convert the Account to any other savings instruments
or account in whole
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or in part, without the prior specific written
approval of the Bondholder; provided, however, (i) in
the absence of the Event of Default hereunder the
Borrower shall be entitled to receive interest
accrued on the Account as such interest would
normally become payable under the terms and
conditions of the respective account contracts, and
(ii) the Borrower may at any time use funds from the
Account to prepay the Secured Indebtedness, in whole
or in part.
7. Perfection. The Borrower acknowledges and agrees that the
Certificate of Deposit is a bank deposit and that the
Bondholder's security interest therein is duly protected
against lien creditors of the Borrower, bona fide purchasers
from the Borrower and the rights of the Borrower or a Trustee
for Borrower under any filing under the Bankruptcy Code by the
absolute control of the Bondholder as to the right of
withdrawal from the Certificate of Deposit. Should the
Bondholder in the future determine that the filing of a
financing statement or other action is necessary or desirable
as further evidence of the perfection of the interest of the
Bondholder in the Account, the Borrower shall bear all costs of
the preparation and filing of such financing statements or the
taking of such other action, including the reasonable fees and
expenses of the Bondholder's attorneys.
8. The Bondholder's Right of Set-off. As a further inducement to
the Bondholder to purchase the Bond, the Borrower hereby
grants to the Bondholder (and acknowledges the existence of)
the right of set-off against the Account and grants to the
Bondholder (and acknowledges the existence of) a banker's lien
against the Account, both of which rights serve as additional
security for the Secured Obligations.
9. The Borrower's Right of Set-off Against the Bondholder. The
Bondholder hereby grants to the Borrower and acknowledges the
existence of the Borrower's right to set-off the balance of
the Account against and to the reduction of all or part of the
balance of the Secured Indebtedness in the event that the
Bondholder should fail to pay to the Borrower the funds in the
Account upon the tender of full payment of Secured
Indebtedness or upon the tender of partial payment thereof, to
the extent such partial payment is then allocated to the
Bondholder's interest in the Bond.
10. Warranty of the Bondholder. The Bondholder represents and
warrants that this Agreement constitutes a legal, valid, and
binding obligation of the Bondholder and is enforceable
against the Bondholder in accordance with its terms, except as
enforcement hereof may be limited by (i) bankruptcy,
insolvency, or other similar laws affecting the enforcement of
creditors' rights and (ii) general principles of equity,
including the exercise of judicial discretion in appropriate
cases.
11. Event of Default Defined. The occurrence of any one or more
of the following events shall constitute an Event of Default
under this Agreement:
a. Financing Agreements. The occurrence of an Event of
Default under the Financing Agreement, the Loan
Agreement of the Note.
b. Monetary Default. The Borrower's failure to pay any
amount due to the Bondholder under this Agreement
within five (5) days of demand.
c. Breach of Covenant. The Borrower's failure to perform
or observe any obligation or covenant made herein with
respect to the Secured Indebtedness.
d. Breach of Representation or Warranty. The Borrower's
making of any representation or warranty in connection
with this Agreement or the Secured Indebtedness that
is materially false.
12. Remedies Upon Event of Default. Upon the occurrence of an
Event of Default hereunder, the Bondholder may pursue any or
all of the following remedies without any notice to the
Borrower except as required below:
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a. Withdrawal from Account. The Bondholder may withdraw
some or all of the funds in the Account and apply the
proceeds thereof to the Secured Indebtedness. The
Borrower hereby appoints the Bondholder as the
Borrower's attorney-in-fact for the purpose of
withdrawing funds from the Account in such event.
b. Exercise of Set-off. The Bondholder may exercise its
right to set-off and lien against the Account.
c. Other Remedies. The Bondholder may pursue any other
remedy that may be available to it under any other
document pertaining to the Secured Indebtedness or
that may otherwise be available to the Bondholder
at law or equity.
d. Application of Proceeds. All amounts received by the
Bondholder for the Borrower's account by exercise of
its remedies hereunder shall be applied as follows:
First, to the payment of all expenses incurred by the
Bondholder in exercising its rights hereunder,
including attorney's fees, and any other expenses due
the Bondholder from the Borrower; Second, to the
payment of all interest included in the Secured
Indebtedness, in such order as the Bondholder may
elect; Third, to the payment of all principal
included in the Secured Indebtedness, in such order
as the Bondholder may elect; and Fourth, surplus to
the Borrower or other party entitled thereto.
13. Expenses. Upon demand, the Borrower will advance to the
Bondholder or, at the Bondholder's option, reimburse the
Bondholder for, the following expenses:
a. Taxes. All taxes that the Bondholder may be required
to pay because of the Secured Indebtedness (excluding
taxes based upon the net income of the Bondholder) or
because of the Bondholder's interest in any property
securing the payment of the Secured Indebtedness;
b. Administration. All expenses that the Bondholder may
incur in connection with the preparation, execution,
administration or enforcement of this Agreement or of
any other document pertaining to the Secured
Indebtedness;
c. Protection of Collateral. All costs of preserving
or disposing of any collateral securing the Secured
Indebtedness.
d. Costs of Collection. All court costs and other costs
of collecting any debt, overdraft or other obligation
included in the Secured Indebtedness, including
compensation for time spent by employees of the
Bondholder;
e. Litigation. All costs arising from any litigation,
investigation, or administrative proceeding (whether
or not the Bondholder is a party thereto) that the
Bondholder may incur as a result of the Secured
Indebtedness or as a result of the Bondholder's
association with the Borrower, including, but not
limited to, expenses incurred by the Bondholder in
connection with a cause or proceeding involving the
Borrower under any chapter of the Bankruptcy Code
or any successor statute thereto;
f. Attorneys' Fees. Reasonable attorneys' fees and costs
incurred in connection with any of the foregoing.
If the Bondholder pays any of the foregoing expenses, they shall become a part
of the Secured Indebtedness and shall bear interest at the highest rate
applicable to the Secured Indebtedness from time to time. This paragraph shall
remain in full effect regardless of the full payment of the Secured
Indebtedness, the purported termination of this Agreement, the delivery of the
executed original of this Agreement to the Borrower, or the content or accuracy
of any representation made by the Borrower to the Bondholder; provided, however,
the Bondholder may terminate this paragraph by executing and delivering to the
Borrower a written instrument of termination specifically referring to this
paragraph.
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14. Consent to Jurisdiction and Service of Process. The Borrower
hereby irrevocably consents to the jurisdiction of the federal
and state courts of the State of New Jersey, for the purpose
of any litigation to which the Bondholder may be a party and
which concerns this Agreement or the Secured Indebtedness. It
is further agreed that venue for any such action shall lie
exclusively with courts sitting in the State of New Jersey,
unless the Bondholder agrees to the contrary in writing. The
Borrower hereby further irrevocably consents to service of
process being served in any suit, action or proceeding
concerning this Agreement or the Secured Indebtedness by
mailing a copy thereof by registered mail or certified mail,
postage prepaid, return receipt requested, or by overnight
courier service, to it at its address set forth herein or in
the Loan Agreement.
15. Not Partners: No Third Party Beneficiaries. Nothing
contained herein or in any related document shall be deemed to
render the Bondholder a partner of the Borrower for any
purpose. This Agreement has been executed for the sole
benefit of the Bondholder and no third party is authorized to
rely upon the Bondholder's rights hereunder or to rely upon an
assumption that the Bondholder has or will exercise its
rights under this Agreement or under any document referred to
herein.
16. No Marshaling of Assets. The Bondholder may proceed against
collateral securing the Secured Indebtedness and against
parties liable therefore in such order as it may elect, and
neither the Borrower nor any creditor of the Borrower shall be
entitled to require the Bondholder to marshal assets. The
benefit of any rule of law or equity to the contrary is hereby
expressly waived.
17. Notices. Any communications concerning this Agreement or the
credit described herein shall be addressed as provided in the
Financing Agreement.
18. No Reliance on the Bondholder's Analysis. The Borrower
acknowledges and represents that, in connection with the
Secured Indebtedness, the Borrower has not relied upon any
financial projection, budget, assessment or other analysis by
the Bondholder or upon any representation by the Bondholder as
to the risks, benefits or prospects of the Borrower's business
activities or present or future capital needs incidental
thereto, all such considerations having been examined fully
and independently by the Borrower.
19. Legal and Binding Agreement. The Borrower warrants that the
execution and performance of this Agreement will not violate
any judicial or administrative order or government law or
regulation, and that this Agreement is valid, binding and
enforceable in every respect according to its terms, subject
to principles of equity and laws applicable to the rights of
creditors generally, including bankruptcy laws.
20. No Consent Required. The Borrower warrants that the Borrower's
execution, delivery and performance of this Agreement do not
require the consent of or the giving of notice to any third
party including, but not limited to, any other lender,
governmental body or regulatory authority, except for the
Issuer, to who such notice has been given.
21. Indulgence Not Waiver. The Bondholder's indulgence in the
existence of an Event of Default hereunder or any other
departure from the terms of this Agreement shall not prejudice
the Bondholder's rights to declare an Event of Default or
otherwise strict compliance with this Agreement
22. Cumulative Remedies. The remedies provided the Bondholder in
this Agreement are not exclusive of any other remedies that
may be available to the Bondholder under any other document or
at law or equity.
23. Amendment and Waiver in Writing. No provision of this
Agreement can be amended or waived, except by a statement
in writing signed by the party against which enforcement of
the amendment or waiver is sought.
24. Assignment. This Agreement shall be binding upon and inure to
the benefit of the respective heirs, successors and assigns of
the parties except that the Borrower shall not assign any
rights or delegate any obligations arising hereunder without
the prior written consent of the Bondholder.
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Any attempted assignment or delegation by the Borrower without
such required prior consent shall be void.
25. Entire Agreement; Termination of Existing Investing Agreement.
This Agreement and the other written agreements among the
parties represent the entire agreement among the parties
concerning the subject matter hereof, and all oral discussions
and prior agreements are merged herein. This Agreement is
intended to replace and supercede that certain Investment
Agreement dated as of April 25, 1997 among Borrower,
Bondholder (successor-in-interest to First Union National Bank
of Tennessee) and AmSouth Bank of Alabama.
26. Severability. Should any provision of this Agreement be
invalid or unenforceable for any reason, the remaining
provisions hereof shall remain in full effect.
27. Time of Essence. Time is of the essence of this Agreement,
and all dates and time periods specified herein shall be
strictly observed, except that the Bondholder may permit
specific deviations therefrom by its written consent.
28. Applicable Law. The validity, construction and enforcement of
this Agreement shall be determined according to the laws of
the State of New Jersey applicable to contracts executed and
performed entirely within the state. In this regard, it is
acknowledged that the Note, Loan Agreement and Financing
Agreement are governed by the substantive laws of the State of
Alabama, and the parties wish for New Jersey law to apply
hereto because the Bondholder has its places of business and
all payments on the Secured Indebtedness are due in the State
of New Jersey.
29. Gender and Number. Words used herein indicating gender or
number shall be read as context may apply.
30. Captions Not Controlling. Captions and headings have been
included in this Agreement for the convenience of the parties,
and shall not be construed as affecting the content of the
respective paragraphs.
31. Waivers Regarding Damages and Trial by Jury. The Borrower
agrees with the Bondholder, and the Bondholder agrees with the
Borrower, that they shall not have a remedy of punitive or
exemplary damages against the other in any dispute arising out
of this Agreement, and hereby waive any right or claim to
punitive or exemplary damages as they have not or which may
arise in the future in connection with any dispute arising out
of this Agreement. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
ITS RIGHT TO A TRAIL BY JURY IN ANY ACTION ARISING HEREUNDER.
32. Other Concurrent Deliveries to Bondholder. Concurrently with
the execution hereof, the Borrower shall have delivered to the
Bondholder a good standing certificate issued by the
Borrower's state of incorporation within the last thirty (30)
days and such Uniform Commercial Code lien, tax lien, judgment
and pending litigation search results (which results shall be
in form and substance satisfactory to the Bondholder) as may
be requested by the Bondholder.
33. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute
one and the same document.
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Duly executed and delivered as of the date first written above.
ATTEST: ADTRAN, Inc.
/s/ Xxx Xxxx By: /s/ Xxxxx X. Xxxxxxxx
------------ -------------------------
Xxx Xxxx Xxxxx X. Xxxxxxxx
Executive Assistant Senior Vice President/CFO
FIRST UNION NATIONAL BANK
By: /s/ Xxxxx X. Xxx
--------------------
Xxxxx X. Xxx
Vice President
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