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EXHIBIT 10.5
TRADEMARK SECURITY AGREEMENT
THIS
TRADEMARK SECURITY AGREEMENT ("Agreement"), dated October 25,
2005,
is by US LEC CORP., a Delaware corporation ("Debtor"), with its
principal office
at 6801 Morrison Boulevard, Charlotte, North Carolina 28211, to and
in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION, a National Banking Association
("Secured
Party"), having an office at 301 South College Street, Charlotte,
NC 28288-0479,
pursuant to the Loan Agreement (as hereinafter defined).
W I T N E S S E T H :
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WHEREAS,
except as set forth on the attached Exhibit A, Debtor has
adopted, used and is using, and is the owner of the entire right,
title, and
interest in and to the trademarks, trade names, terms, designs and
applications
therefor described in Exhibit A hereto and made a part hereof;
WHEREAS,
Debtor, certain affiliates of Debtor (together with Debtor,
each
individually a "Borrower" and, collectively, "Borrowers") and
Secured Party have
entered into or are about to enter into financing arrangements
pursuant to which
Secured Party may make loans and advances and provide other
financial
accommodations to Debtor as set forth in the Loan and Security
Agreement, dated
of even date herewith, by and among Debtor, certain affiliates of
Debtor and
Secured Party (as the same now exists or may hereafter be amended,
modified,
supplemented, extended, renewed, restated or replaced, the "Loan
Agreement") and
other agreements, documents and instruments referred to therein or
at any time
executed and/or delivered in connection therewith or related
thereto, including,
but not limited to, this Agreement (all of the foregoing, together
with the Loan
Agreement, as the same now exist or may hereafter be amended,
modified,
supplemented, extended, renewed, restated or replaced, being
collectively
referred to herein as the "Financing Agreements"); and
WHEREAS,
in order to induce Secured Party to enter into the Loan
Agreement
and the other Financing Agreements and to make loans and advances
and provide
other financial accommodations to Borrowers pursuant thereto,
Debtor has agreed
to grant to Secured Party certain collateral security as set forth
herein.
NOW,
THEREFORE, in consideration of the premises and for other good
and
valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, Debtor hereby agrees as follows:
1. GRANT
OF SECURITY INTEREST. As collateral security for the prompt
performance, observance and indefeasible payment in full of all of
the
Obligations (as hereinafter defined), Debtor hereby grants to
Secured Party a
continuing security interest in and a general lien upon, the
following (being
collectively referred to herein as the "Collateral"): (a) all of
Debtor's now
existing or hereafter acquired right, title, and interest in and
to: (i) all of
Debtor's
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trademarks, trade names, trade styles and service marks and all
applications,
registrations and recordings relating to the foregoing as may at
any time be
filed in the United States Patent and Trademark Office or in any
similar office
or agency of the United States, any State thereof, any political
subdivision
thereof or in any other country, including, without limitation, the
trademarks,
terms, designs and applications described in Exhibit A hereto,
together with all
rights and privileges arising under applicable law with respect to
Debtor's use
of any trademarks, trade names, trade styles and service marks, and
all and
renewals thereof (all of the foregoing being collectively referred
to herein as
the "Trademarks"); and (ii) all prints and labels on which such
trademarks,
trade names, trade styles and service marks appear, have appeared
or will
appear, and all designs and general intangibles of a like nature;
(b) the
goodwill of the business symbolized by each of the Trademarks,
including,
without limitation, all customer lists and other records relating
to the
distribution of products or services bearing the Trademarks; (c)
all income,
fees, royalties and other payments at any time due or payable with
respect
thereto, including, without limitation, payments under all licenses
at any time
entered into in connection therewith; (d) the right to sue for
past, present and
future infringements thereof; (e) all rights corresponding thereto,
if any,
throughout the world; and (f) any and all other proceeds of any of
the
foregoing, including, without limitation, damages and payments or
claims by
Debtor against third parties for past or future infringement of the
Trademarks.
2.
OBLIGATIONS SECURED The security interest, lien and other
interests
granted to Secured Party pursuant to this Agreement shall secure
the prompt
performance, observance and payment in full of any and all of the
Obligations,
as such term is defined in the Loan Agreement.
3.
REPRESENTATIONS, WARRANTIES AND COVENANTS Debtor hereby
represents,
warrants and covenants with and to Secured Party the following (all
of such
representations, warranties and covenants being continuing so long
as any of the
Obligations are outstanding):
(a) Debtor shall pay and perform all of the Obligations according
to
their terms.
(b) Except as set forth on the attached Exhibit A, all of the
existing
Collateral is valid and subsisting in full force and effect, and to
the best of
Debtor's knowledge, Debtor owns the sole, full and clear title
thereto, and the
right and power to grant the security interest granted hereunder.
Debtor shall,
at Debtor's expense, perform all acts and execute all documents
necessary to
maintain the existence of the Collateral consisting of registered
Trademarks as
registered trademarks and, except as set forth on the attached
Exhibit A and
permitted in clause (i) below, to maintain the existence of all of
the
Collateral as valid and subsisting, including, without limitation,
the filing of
any renewal affidavits and applications. The Collateral is not
subject to any
liens, claims, mortgages, assignments, licenses, security interests
or
encumbrances of any nature whatsoever, except: (i) the security
interests
granted hereunder and pursuant to the Loan Agreement, (ii) the
security
interests permitted under the Loan Agreement, and (iii) the
licenses permitted
under Section 3(e) below.
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(c) Debtor shall not assign, sell, mortgage, lease, transfer,
pledge,
hypothecate, grant a security interest in or lien upon, encumber,
grant an
exclusive or non-exclusive license relating to the Collateral, or
otherwise
dispose of any of the Collateral, in each case without the prior
written consent
of Secured Party, except as otherwise permitted herein or in the
Loan Agreement.
Nothing in this Agreement shall be deemed a consent by Secured
Party to any such
action, except as such action is expressly permitted hereunder.
(d) Debtor shall, at Debtor's expense, promptly perform all acts
and
execute all documents requested in good faith at any time by
Secured Party to
evidence, perfect, maintain, record or enforce the security
interest in the
Collateral granted hereunder or to otherwise further the provisions
of this
Agreement. Debtor hereby authorizes Secured Party to execute and
file one or
more financing statements (or similar documents) with respect to
the Collateral,
signed only by Secured Party or as otherwise determined by Secured
Party. Debtor
further authorizes Secured Party to have this Agreement or any
other similar
security agreement filed with the Commissioner of Patents and
Trademarks or any
other appropriate federal, state or government office.
(e) As of the date hereof, Debtor does not have any Trademarks
registered, or subject to pending applications, in the United
States Patent and
Trademark Office or any similar office or agency in the United
States, any State
thereof, any political subdivision thereof or in any other country,
other than
those described in Exhibit A hereto and has not granted any
licenses with
respect thereto other than as set forth in Exhibit B hereto.
(f) Debtor shall, concurrently with the execution and delivery of
this
Agreement, execute and deliver to Secured Party five (5) originals
of a Special
Power of Attorney in the form of Exhibit C annexed hereto for the
implementation
of the assignment, sale or other disposition of the Collateral
pursuant to
Secured Party's exercise of the rights and remedies granted to
Secured Party
hereunder.
(g) Secured Party may, in its discretion, pay any amount or do any
act
which Debtor fails to pay or do as required hereunder or as
requested by Secured
Party to preserve, defend, protect, maintain, record or enforce the
Obligations,
the Collateral, or the security interest granted hereunder,
including, but not
limited to, all filing or recording fees, court costs, collection
charges,
reasonable attorneys' fees and legal expenses. Debtor shall be
liable to Secured
Party for any such payment, which payment shall be deemed an
advance by Secured
Party to Borrower, shall be payable on demand together with
interest at the rate
then applicable to the Obligations set forth in the Loan Agreement
and shall be
part of the Obligations secured hereby.
(h) In the event
Debtor shall file any application for the registration
of a Trademark with the United States Patent and Trademark Office
or any similar
office or agency in the United States, any State thereof, any
political
subdivision thereof or in any other country, Debtor shall provide
Secured Party
with written notice of such action as soon as practicable but in no
event later
than 30 days after such action. If, after the date hereof, Debtor
shall (i)
obtain
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any registered trademark or trade name, or apply for any such
registration in
the United States Patent and Trademark Office or in any similar
office or agency
in the United States, any State thereof, any political subdivision
thereof or in
any other country, or (ii) become the owner of any trademark
registrations or
applications for trademark registration used in the United States,
any State
thereof, any political subdivision thereof or in any other country,
the
provisions of Section 1 hereof shall automatically apply thereto.
Upon the
request of Secured Party, Debtor shall promptly execute and deliver
to Secured
Party any and all agreements, instruments, documents and such other
papers as
may be requested by Secured Party to evidence the security interest
in such
Trademark in favor of Secured Party.
(i) Debtor has not abandoned any of the Trademarks and Debtor will
not
do any act, nor omit to do any act, whereby the Trademarks may
become abandoned,
invalidated, unenforceable, avoided, or avoidable; provided, that,
Debtor may,
after written notice to Secured Party, abandon, cancel, not renew
or otherwise
not maintain a Trademark so long as (i) such Trademark is no longer
used or
useful in the business of Debtor or any of its affiliates or
subsidiaries, (ii)
such Trademark has not been used in the business of Debtor or any
of its
affiliates or subsidiaries for a period of six (6) consecutive
months, (iii)
such Trademark is not otherwise material to the business of Debtor
or any of its
affiliates or subsidiaries in any respect, (iv) such Trademark has
little or no
value, and (v) no Event of Default (as hereinafter defined) shall
exist or have
occurred and be continuing as of such time. Debtor shall promptly
notify Secured
Party if it knows or has reason to know of any reason why any
application,
registration, or recording w
