ACQUIRED OR
ARISING AND REGARDLESS OF WHERE LOCATED AND ALL ADDITIONS AND ACCESSIONS
THERETO, SUBSTITUTIONS AND REPLACEMENTS THEREFOR, AND ALL PROCEEDS THEREOF (THE
"COLLATERAL"), INCLUDING, WITHOUT LIMITATION, THE FOLLOWING PROPERTY: ALL
TANGIBLE AND INTANGIBLE ASSETS OF ACC, INCLUDING, BUT NOT LIMITED TO, ALL
EXISTING AND FUTURE INVENTORY, ACCOUNTS, DEPOSIT ACCOUNTS, ACCOUNTS RECEIVABLE,
FURNITURE, FIXTURES, EQUIPMENT, GENERAL INTANGIBLES, BOOKS AND RECORDS, PATENTS,
PATENT APPLICATIONS, TRADEMARKS, COPYRIGHTS, TRADE SECRETS, AND ANY OTHER
PROPERTY INTEREST OR PROPRIETARY RIGHT, AS WELL AS ANY DOCUMENT, INSTRUMENT OR
DRAWINGS EMBODYING THE SAME.
3.
SECURITY FOR OBLIGATIONS.
THE
OBLIGATIONS SECURED BY THIS SECURITY AGREEMENT (THE "OBLIGATIONS") SHALL MEAN
AND INCLUDE ALL OBLIGATIONS OF BORROWER AS PROVIDED IN (I) THE SUBORDINATED
CONTINGENT NOTES, (II)
THE STOCK PURCHASE AGREEMENT, AND (III) ALL OF THE OTHER
RELATED AGREEMENTS (AS SUCH TERM IS DEFINED IN THE STOCK PURCHASE AGREEMENT).
4.
POSSESSION AND LOCATION OF COLLATERAL.
UNLESS AND UNTIL ANY DEFAULT OCCURS HEREUNDER AS SET FORTH IN SECTION 11 HEREOF,
ACC SHALL HAVE POSSESSION OF THE COLLATERAL FOR ITS USE AND ENJOYMENT IN ANY
LAWFUL MANNER NOT INCONSISTENT WITH THIS SECURITY AGREEMENT OR THE SUBORDINATED
CONTINGENT NOTES.
THE COLLATERAL WILL BE KEPT AT ACC'S PLACE OF BUSINESS AT 611
INDUSTRIAL WAY, EATONTOWN, NEW JERSEY 07724 (OR SUCH OTHER PLACES AS ACC
CUSTOMARILY KEEPS THE COLLATERAL) WITH RESPECT TO SUCH COLLATERAL AND WILL NOT
BE MOVED THEREFROM WITHOUT THE PRIOR WRITTEN CONSENT OF COLLATERAL AGENT, EXCEPT
THAT ACC MAY MAKE SALES OF INVENTORY ITEMS IN THE ORDINARY COURSE OF BUSINESS.
ACC SHALL NOT REPLACE OR MAKE MATERIAL ALTERATIONS IN THE COLLATERAL WITHOUT THE
PRIOR WRITTEN CONSENT OF COLLATERAL AGENT.
THE CONSENT OF COLLATERAL AGENT
REQUIRED HEREBY SHALL NOT BE UNREASONABLY WITHHELD.
5.
FINANCING STATEMENTS.
CONCURRENTLY
WITH THE EXECUTION OF THIS SECURITY AGREEMENT, ACC SHALL EXECUTE AND DELIVER TO
COLLATERAL AGENT THE UCC-1 FINANCING STATEMENT PROVIDED BY COLLATERAL AGENT.
6.
TRANSFER, TAXES, LIENS AND
ENCUMBRANCES.
ACC HAS TITLE TO THE COLLATERAL FREE AND CLEAR OF ANY LIEN,
SECURITY INTEREST OR ENCUMBRANCE, EXCEPT FOR THE SECURITY INTERESTS OF THE
HOLDER OF THE SENIOR INDEBTEDNESS AND THE SECURITY INTEREST CREATED BY THIS
SECURITY AGREEMENT.
TITLE TO THE COLLATERAL WILL REMAIN IN AND CONTINUE TO BE
VESTED IN ACC.
ACC WILL DEFEND THE COLLATERAL AND WILL NOT SELL, OFFER TO SELL
OR OTHERWISE TRANSFER THE COLLATERAL, ANY PORTION THEREOF, OR ANY INTEREST
THEREIN, WITHOUT THE PRIOR WRITTEN CONSENT OF COLLATERAL AGENT, EXCEPT THAT ACC
MAY MAKE SALES OF INVENTORY ITEMS IN THE ORDINARY COURSE OF BUSINESS.
THE
CONSENT OF COLLATERAL AGENT REQUIRED HEREBY SHALL NOT BE UNREASONABLY WITHHELD.
ACC SHALL PAY ALL TAXES, ASSESSMENTS AND OTHER CHARGES MADE AGAINST THE
COLLATERAL.
7.
RISK OF LOSS AND INSPECTION OF
COLLATERAL.
ACC SHALL HAVE ALL RISK OF LOSS OF THE COLLATERAL, AND ACC WILL
KEEP THE COLLATERAL IN GOOD ORDER AND REPAIR.
COLLATERAL AGENT SHALL
HAVE THE RIGHT, AT ANY REASONABLE TIME, TO ENTER UPON THE PREMISES WHERE THE
COLLATERAL IS LOCATED TO EXAMINE AND INSPECT THE COLLATERAL IN PERSON OR BY
AGENT.
ANY REFUSAL TO PERMIT SUCH