EXHIBIT 10.52.13
Loan No. ML0883T1
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is made and entered
into as of November 6, 2002, by KNOLOGY OF KNOXVILLE, INC. a corporation formed
and existing under the laws of the State of Delaware ("Debtor"), having its
place of business (or chief executive office if more than one place of business)
located at 0000 X.X. Xxxxxxx Xxxxx, Xxxx Xxxxx, XX 00000, whose employer
identification number is 00-0000000, and whose state organization number is
3147428, in favor of COBANK, ACB ("Secured Party"), whose mailing address is
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000, and whose taxpayer
identification number is 00-0000000. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Master Loan
Agreement, dated as of June 29, 2001, among Globe Telecommunications, Inc.,
Interstate Telephone Company, Valley Telephone Co., Inc. and Secured Party.
SECTION 1. Grant of Security Interest. For valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Debtor hereby grants
to Secured Party a first superior continuing security interest in all of
Debtor's estate, right, title and interest in and to the following property,
wherever located and whether now existing or hereafter arising or acquired,
together with all increases, substitutions, replacements, attachments,
accessions and additions thereto, and all products and proceeds thereof,
including, without limitation, the proceeds of any insurance policies covering
any of the foregoing:
(i) accounts, receivables and accounts receivable (including, without
limitation, all right to payment for the provision of communications
services and related equipment sales and leasing or any other services or
goods and health-care insurance receivables), whether or not earned by
performance, and all guaranties and security and instruments therefor, and
all goods and rights represented thereby or arising therefrom, including
the rights of stoppage in transit, replevin and reclamation; (ii) goods,
inventory and supplies (including, without limitation, returned or
repossessed goods); (iii) chattel paper (including, without limitation,
electronic chattel paper); (iv) instruments (including, without limitation,
promissory notes); (v) investment property (including, without limitation,
certificated and uncertificated securities, security accounts, securities
entitlements, margin accounts, commodity contracts and commodity accounts),
letters of credit and letter-of-credit rights (in either case, whether or
not the letter of credit is evidenced by a writing); (vi) documents; (vii)
fixtures; (viii) general intangibles (including, without limitation,
payment intangibles, contracts and contract rights (including, without
limitation, construction contracts, subscriber contracts, customer lists
and marketing lists, customer service agreements, subscription agreements,
roaming agreements, franchise agreements, management agreements,
rights-of-
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Loan No. ML0883T1
ways, easements, pole and antenna attachment agreements, transmission
capacity agreements, tower attachment leases and public utility contracts),
leases of personal property, choses or things in action, litigation rights
and resulting judgments, goodwill, patents, trademarks, service marks,
websites, domain names and other intellectual property, tax refunds,
miscellaneous rights to payment, entitlements and investments, software and
computer programs, invoices, books, records and other information relating
to or arising out of Debtor's business, and all licenses and permits issued
by any federal or state governmental body or regulatory authority,
including, without limitation, any license issued by the Federal
Communications Commission (the "FCC") or any PUC); (ix) equipment
(including, without limitation, telecommunications and radio transmitting
and receiving equipment, antennae, towers, microwave communication
equipment, machinery, computers, parts, tools, implements, poles, posts,
cross-arms, conduits, ducts, lines (whether underground or overhead or
otherwise), wires, cables, exchanges, CODECs, switches (including, without
limitation, host switches and remote switches), testboards, amplifiers,
racks, frames, motors, generators, batteries, items of central office
equipment, pay-stations, protectors, subscriber equipment, instruments,
connections and appliances used, useful or acquired for use in the business
of Debtor or the operation of Debtor's properties); (x) supporting
obligations; (xi) commercial tort claims; and (xii) to the extent not
covered by the above, all other personal property of Debtor of every type
and description, including, without limitation, interests or claims in or
under any policy of insurance, tort claims, deposit accounts, deposits,
collection accounts, money, and judgments; provided, however, that no
security interest is granted in Debtor's licenses, permits, leases,
franchises, privileges, permissions and grants which by their terms or by
reason of applicable law would become void or voidable if a security
interest therein were granted or if the granting of a security interest
therein would violate any law, rule, regulation or order of any
governmental body or regulatory authority (collectively, the "Collateral").
Where applicable, and to the extent not otherwise defined herein, all terms used
herein shall have the same meaning as set forth in the Uniform Commercial Code
in effect in the State of Colorado, as amended from time to time (the "UCC").
Any of the foregoing terms which are defined in the UCC shall have the meaning
provided in the UCC, as amended and in effect from time to time, as supplemented
and expanded by the foregoing. For avoidance of doubt, it is expressly
understood and agreed that, to the extent the UCC is revised subsequent to the
date hereof such that the definition of any of the foregoing terms included in
the description of Collateral is changed, the parties hereto desire that any
property which is included in such changed definitions which would not otherwise
be included in the foregoing grant on the date hereof be included in such grant
immediately upon the effective date of such revision. Notwithstanding the
immediately preceding sentence, the foregoing grant is intended to apply
immediately on the date hereof to all Collateral to the fullest extent permitted
by applicable law regardless of whether any particular item of Collateral is
currently subject to the UCC.
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The security interests are granted as security only and shall not subject
Secured Party to, or transfer to Secured Party, or in any way affect or modify,
any obligation or liability of Debtor with respect to any of the Collateral or
any transaction in connection therewith. Debtor will perform and comply in all
material respects with all of its obligations in respect of the Collateral,
including, without limitation, accounts, contracts, leases and other general
intangibles, and the exercise by Secured Party of any of its rights hereunder
shall not release Debtor from any of its duties or obligations. Secured Party
shall not have any obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall Secured Party
be obligated to perform any of the obligations or duties of Debtor thereunder or
to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 2. Obligations. The grant of the security interest hereunder shall
secure the following obligations (the "Obligations"): (i) the "Obligations" of
the Debtor as defined in that certain Continuing Guaranty, dated as of even date
herewith, by and between Debtor and Secured Party (as the same may be amended,
modified, supplemented, extended or restated from time to time, the "Guaranty");
and (ii) the payment of all other indebtedness and the performance of all other
obligations of Debtor to Secured Party of every type and description, whether
now existing or hereafter arising, fixed or contingent, as primary obligor or as
guarantor or surety, acquired directly or by assignment or otherwise, liquidated
or unliquidated, regardless of how they arise or by what agreement or instrument
they may be evidenced, including, without limitation, all loans, advances and
other extensions of credit and all covenants, agreements, and provisions
contained in all loan and other agreements between the parties.
SECTION 3. Representations and Warranties. Debtor represents and warrants
to Secured Party on the date hereof that the following statements are true,
correct and complete:
(A) Title to Collateral. Debtor has good and marketable title to the
Collateral, free of all adverse claims, interests, liens or encumbrances, other
than those permitted pursuant to Section 8(B) of the MLA. The security interest
created under this Security Agreement constitutes a valid and perfected security
interest in the Collateral, prior to all other liens and rights of others
therein, except as permitted pursuant to Section 8(B) of the MLA, and all
filings and other actions necessary or desirable to perfect and protect such
security interest have been duly taken.
(B) Validity of Security Agreement; Authority. This Security Agreement is
the legally valid and binding obligation of Debtor, enforceable against Debtor
in accordance with its terms, subject only to limitations on enforceability
imposed by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and (ii) general equitable
principles. Debtor has the power and authority to execute, deliver, perform its
obligations under, and to grant the security interest provided for, in this
Security Agreement and the other Loan Documents, and has taken all necessary
action to authorize the execution, delivery and performance of, and grant of a
security interest pursuant to, this Security Agreement and the other Loan
Documents.
(C) Location of Debtor; Employer Identification and State Organization
Numbers; State of Incorporation. Debtor's place of business (or chief executive
office if
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more than one place of business) is located at the address shown above, and
Debtor's employer identification number and state organization number are as
shown above. Debtor's state of incorporation is Delaware.
(D) Location of Collateral. All locations at which the Collateral is
located are specified on Schedule A attached hereto and made a part hereof.
(E) Name, Identity, and Structure. During the past five (5) years, Debtor's
business has not been conducted under any name other than Debtor's name as set
forth above, nor has it changed its structure through incorporation, merger,
consolidation, joint venture or otherwise or purchased all or substantially all
of the assets of any person or entity.
(F) Insurance. The Collateral currently is insured consistent with the
requirements of the MLA.
(G) Taxes, Levies, Etc. Debtor has filed or caused to be filed all federal,
state and local tax returns that are required to be filed, and has paid and
shall continue to pay when due all taxes as shown on such returns.
(H) Condition of Collateral. All Collateral and each and every part and
parcel thereof necessary to or useful in the proper conduct of Debtor's business
is in good repair, working order and condition, ordinary wear and tear excepted.
SECTION 4. Covenants. Debtor will comply with all covenants in this Section
4, unless Debtor has received the written consent of Secured Party:
(A) Title to Collateral. Debtor shall not create or permit the existence of
claims, interests, liens, or other encumbrances against any of the Collateral
not permitted pursuant to Section 8(B) of the MLA. Debtor shall provide prompt
written notice to Secured Party of any future claims, interests, liens or
encumbrances against any of the Collateral, and shall defend diligently Debtor's
and Secured Party's interests (including the priority of such interests) in all
Collateral.
(B) Change in Location, Name, Etc. Debtor agrees not to (i) change the
location of its place of business or chief executive office; (ii) keep or hold
any Collateral or any records related thereto at any location other than the
locations described on Schedule A; or (iii) change its name, identity, state
organizational number or employer identification number, unless it shall have
given Secured Party thirty (30) days' prior written notice of its intention to
take any action described in clauses (i) through (iii), and executed and
delivered to Secured Party all financing statements and financing statement
amendments which Secured Party may request in connection therewith and, if
requested by Secured Party, prior to the date on which Debtor proposes to take
any such action, Debtor will, at its own cost and expense, cause to be delivered
to Secured Party an opinion of counsel, in form and content satisfactory to
Secured Party, as to the continued perfection and priority of the security
interests created hereunder.
(C) Change in Structure. Debtor agrees not to change its structure in any
manner except as permitted pursuant to the MLA and the Guaranty and, if
requested by Secured Party,
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prior to the date on which Debtor proposes to take any such action, Debtor will,
at its own cost and expense, cause to be delivered to Secured Party an opinion
of counsel, in form and content satisfactory to Secured Party, as to the
continued perfection and priority of the security interests created hereunder.
Debtor shall give Secured Party thirty (30) days' prior written notice of its
intention to take any action described in this Section 4(C).
(D) Further Assurances. Upon the request of Secured Party, Debtor shall do
all acts and things as Secured Party may from time to time deem necessary or
advisable to enable it to perfect, maintain and continue the perfection and
priority of the security interest of Secured Party in the Collateral, or to
facilitate the exercise by Secured Party of any rights or remedies granted to
Secured Party hereunder or provided by law. Without limiting the foregoing,
Debtor agrees to execute, in form and substance satisfactory to Secured Party,
such financing statements, continuation statements, amendments thereto,
supplemental agreements, assignments, notices of assignments, and other
instruments and documents as Secured Party may from time to time request. In
addition, in the event the Collateral or any part thereof consists of
instruments, documents, chattel paper or money (whether or not proceeds of the
Collateral), Debtor shall, upon the request of Secured Party, deliver possession
thereof to Secured Party (or to a designee of Secured Party retained for that
purpose), together with any appropriate endorsements or assignments or both.
Without limiting the generality of the foregoing, Debtor shall take such action
as Secured Party may request from time to time to create and perfect a security
interest in favor of Secured Party in any and all leases, rights of way,
easements, franchises, licenses and permits relating to the location of antennae
and other transmission and receiving equipment on the towers or other property
of third parties, including, without limitation, using its best efforts in good
faith to amend such leases, rights of way, easements, franchises, licenses and
permits to allow the creation and perfection of such security interest and
obtain the consent of all third parties whose consents may be necessary to the
creation and perfection of such security interest. Secured Party shall use
reasonable care in the custody and preservation of any Collateral in its
possession, but shall not be required to take any steps necessary to preserve
rights against prior parties. All costs and expenses incurred by Secured Party
to establish, perfect, maintain, determine the priority of, or release the
security interest granted hereunder (including the cost of all filings,
recordings, and taxes thereon and the fees and expenses of any designee of
Secured Party) shall become part of the Obligations secured hereby and be paid
by Debtor on demand.
(E) Insurance. Debtor shall maintain such insurance with such insurance
companies, in such amounts, and covering such risks, as are at all times
required pursuant to the MLA and the Guaranty. So long as no Default (as
hereinafter defined) has occurred and is continuing hereunder, any and all
insurance proceeds due under such policies may be paid solely to Debtor for
individual losses not exceeding $25,000 and aggregate annual losses not
exceeding $100,000 for application of such proceeds to the repair or replacement
of such Collateral, which repaired or replaced Collateral shall continue to be
subject to the security interests and liens of Secured Party to the same extent
as the destroyed or damaged Collateral.
(F) Disposition and Use of Collateral by Debtor. Without the prior written
consent of Secured Party, Debtor shall not at any time sell, transfer, lease,
abandon or otherwise dispose of any Collateral other than in accordance with the
provisions of the MLA and the Guaranty; provided, however, that no dispositions
shall be made if a Default shall have occurred and be
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continuing hereunder. Debtor shall not use any of the Collateral in any manner
which violates any applicable law.
(G) Receivables. Debtor shall preserve, enforce, and collect all accounts,
chattel paper, instruments, documents and general intangibles, whether now owned
or hereafter acquired or arising (the "Receivables"), in a diligent fashion and,
if a Default shall have occurred and be continuing hereunder, upon the request
of Secured Party, Debtor shall execute an agreement in form and content
satisfactory to Secured Party by which Debtor shall direct all account debtors
and obligors on instruments to make payment to a lock box deposit account under
the exclusive control of Secured Party.
(H) Collateral Maintenance. Maintain and preserve all Collateral and each
and every part and parcel thereof that is necessary to or useful in the proper
conduct of its business in good repair, working order, and condition, ordinary
wear and tear excepted, and make all alterations, replacements, and improvements
thereto as may from time to time be necessary in order to ensure that its
properties remain in good working order and condition. At Secured Party's
request, but not more than once a year, Debtor will furnish to Secured Party a
report on the condition of the Collateral prepared by a professional engineer
satisfactory to Secured Party.
(I) Condition of Books and Records. Debtor shall maintain complete,
accurate and up-to-date books, records, accounts, and other information relating
to all Collateral in such form and in such detail as may be satisfactory to
Secured Party, and shall allow Secured Party or its representatives to examine
and copy such books, records, accounts and other information upon reasonable
notice and during normal business hours, or at such other times as the parties
may agree. Debtor shall furnish to Secured Party statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as Secured Party may reasonably request, all in
reasonable detail.
(J) Right of Inspection. Debtor shall permit Secured Party or its
representatives, upon reasonable notice and during normal business hours or at
such other times as the parties may agree, to examine any of Debtor's properties
or locations and to discuss Debtor's affairs, finances and accounts with
Debtor's officers, directors, employees and independent certified public
accountants so that Secured Party or its representatives may confirm, inspect
and appraise any of the Collateral.
SECTION 5. Default. The breach of or failure to pay or perform any of the
Obligations secured hereby in accordance with their respective terms, which
breach or failure continues beyond any applicable cure period, the breach of or
failure to perform or observe any representation, warranty, covenant or
agreement contained in this Security Agreement or the existence of any Event of
Default under the MLA or the Guaranty shall constitute a "Default" hereunder;
provided that any breach of the terms of this Security Agreement which shall
also constitute a breach of the MLA or the Guaranty shall be subject to the same
notice and cure right applicable to such breach under the MLA and the Guaranty.
Once a Default exists, it shall be deemed to continue, notwithstanding any
curative action by Debtor, unless and until Secured Party, in its sole
discretion, shall state in writing that the Default no longer exists or has been
cured.
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SECTION 6. Rights and Remedies. Upon the occurrence of any Default
hereunder, Secured Party may declare all Obligations to be immediately due and
payable and proceed against Debtor directly for payment, and, to the extent
permitted by applicable law, may exercise any and all rights and remedies of a
secured party in the enforcement of its security interest under the UCC, this
Security Agreement, or any other Applicable Law. Without limiting the foregoing:
(A) Disposition of Collateral. Secured Party may sell, lease, or otherwise
dispose of all or any part of the Collateral, in its then condition or following
any commercially reasonable preparation or processing thereof, whether by
public, judicial or private sale or at any brokers' board, in lots or in bulk,
for cash, on credit or otherwise, with or without representations or warranties,
and upon such other terms as may be acceptable to Secured Party, and Secured
Party may purchase such Collateral at any public or judicial sale, if such
Collateral is of a type customarily sold on a recognized market or is of a type
which is the subject of widely distributed standard price quotations, at any
private sale. To the extent permitted by law, Debtor hereby specifically waives
all rights of redemption, stay or appraisal which it has or may have under any
law now existing or hereafter adopted. At any time when advance notice of sale
is required, Debtor agrees that twenty (20) days' prior written notice shall be
reasonable. In connection with the foregoing, Secured Party may:
(1) require Debtor to assemble the Collateral and all records
pertaining thereto and make such Collateral and records available to Secured
Party at a place to be designated by Secured Party which is reasonably
convenient to both parties;
(2) enter the premises of Debtor or premises under Debtor's control
and take possession of the Collateral;
(3) without charge by Debtor, use or occupy the premises of Debtor or
premises under Debtor's control, including, without limitation, warehouse and
other storage facilities;
(4) without charge by Debtor, use or sublicense the use of any patent,
trademark, service xxxx, trade name or other intellectual property or technical
process used by Debtor in connection with any of the Collateral, (and such use
or right of use shall inure to the benefit of all successors, assigns and
transferees of Secured Party and their respective successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise);
(5) rely conclusively upon the advice or instructions of any one or
more brokers or other experts selected by Secured Party to determine the method
or manner of disposition of any of the Collateral and, in such event, any
disposition of the Collateral by Secured Party in accordance with such advice or
instructions shall be deemed to be commercially reasonable; and
(6) compromise and settle or sell, assign or transfer or ask, collect,
receive or issue any and all claims possessed by Debtor which constitute a
portion of the Collateral, all in the name of Debtor.
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(B) Collection of Receivables. Secured Party may, but shall not be
obligated to, take all actions reasonable or necessary to preserve, enforce or
collect the Receivables, including, without limitation, the right to notify
account debtors and obligors on instruments to make direct payment to Secured
Party, to permit any extension, compromise or settlement of any of the
Receivables for less than face value, or to xxx on any Receivable, all without
prior notice to Debtor.
(C) Proceeds. Secured Party may collect and apply all proceeds of the
Collateral, and may endorse the name of Debtor in favor of Secured Party on any
and all checks, drafts, money orders, notes, acceptances, or other instruments
of the same or a different nature, constituting, evidencing, or relating to the
Collateral which may come into the possession of Secured Party. Secured Party
may receive and open all mail addressed to Debtor and remove therefrom any cash
or non-cash items of payment constituting proceeds of the Collateral.
(D) Insurance Adjustments. Secured Party may adjust, settle, and cancel any
and all insurance covering any Collateral, endorse the name of Debtor in favor
of Secured Party on any and all checks or drafts drawn by any insurer, whether
representing payment for a loss or a return of unearned premium, and execute any
and all proofs of claim and other documents or instruments of every kind
required by any insurer in connection with any payment by such insurer.
(E) Appointment of Receiver. Secured Party shall have the right to the
appointment of a receiver for the properties and assets of Debtor and Debtor
hereby consents to such right and to such appointment and hereby waives any
objection Debtor may have thereto and hereby waives the right to have a bond or
other security posted by Secured Party or any other person in connection
therewith. The net proceeds of any disposition of the Collateral may be applied
by Secured Party, after deducting its reasonable expenses incurred in such
disposition, including, but not limited to, the reasonable attorneys' fees and
legal expenses incurred by the Secured Party, to the extent not prohibited by
law to the payment in whole or in part of the Obligations in the manner provided
in the MLA and the Guaranty. The enumeration of the foregoing rights and
remedies is not intended to be exhaustive, and the exercise of any right or
remedy or both shall not preclude the exercise of any other rights or remedies,
all of which are cumulative and non-exclusive.
SECTION 7. State Regulatory Matters. Notwithstanding any other provision of
this Security Agreement:
(A) Any foreclosure on, sale, transfer or other disposition of, or the
exercise or relinquishment of any right to vote or consent with respect to, any
of the Collateral by Secured Party shall, to the extent required, be in
conformance with Sections 214 and 310(d) of the Communications Act of 1934, as
amended, and the applicable rules and regulations thereunder.
(B) If a Default shall have occurred and be continuing, Debtor shall take
any action which Secured Party may reasonably request in order to transfer or
assign, or both, to Secured Party, or to such one or more third parties as
Secured Party may designate, or to a combination of the foregoing, any PUC
license, permit, certificate or other authorization held by Debtor, subject to
the prior approval of any PUC, if required. Alternatively, Secured Party is
empowered, to the
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extent permitted by applicable law, to request the appointment of a receiver
from any court of competent jurisdiction. Such receiver may be instructed by
Secured Party to seek from any PUC consent to an involuntary transfer of control
of Debtor or assignment, or both, of each PUC license, permit, certificate or
other authorization for the purpose of seeking a bona fide purchaser to whom
control of assets used in the provision of telecommunications or related
services will ultimately be transferred or assigned. Debtor hereby agrees to
authorize such an involuntary transfer of control or assignment, or both, upon
the request of the receiver so appointed and, if Debtor shall refuse to
authorize the transfer, its approval may be required by the court. Upon the
occurrence and during the continuance of a Default, Debtor shall further use its
best efforts to assist in obtaining approval of any PUC and any other state
regulatory bodies, if required, for any action or transactions contemplated by
this Security Agreement, including, without limitation, the preparation,
execution and filing with any PUC and any other state regulatory bodies of the
assignor's or transferor's portion of any application or applications for
consent to the assignment of any PUC license or permit or transfer of control
necessary or appropriate under the rules and regulations of any PUC or any other
state regulatory body for approval or non-opposition of the transfer or
assignment of any portion of the Collateral, together with any PUC license,
permit, certificate or other authorization.
(C) Debtor acknowledges that the assignment or transfer of each PUC
license, permit, certificate or other authorization (subject to the prior
approval of any PUC, if required) is integral to Secured Party's realization of
the value of the Collateral, that there is no adequate remedy at law for failure
by Debtor to comply with the provisions of this Section 7 and that such failure
would not be adequately compensable in damages, and therefore agrees, without
limiting the right of Secured Party to seek and obtain specific performance of
other obligations of Debtor contained in this Security Agreement, that the
agreements contained in this Section 7 may be specifically enforced.
SECTION 8. Other Provisions.
(A) Amendment and Waiver. Without the prior written consent of Secured
Party, no amendment or waiver of, or consent to any departure by Debtor from,
any provision hereunder shall be effective. Any such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No delay or failure by Secured Party to exercise any
remedy hereunder shall be deemed a waiver thereof or of any other remedy
hereunder. A waiver on any one occasion shall not be construed as a bar to or
waiver of any remedy on any subsequent occasion.
(B) Costs and Attorneys' Fees. Except as prohibited by law, if at any time
Secured Party employs counsel in connection with the creation, perfection,
preservation, or release of the security interest of Secured Party in the
Collateral or the enforcement of any of Secured Party's rights or remedies
hereunder, all of Secured Party's reasonable attorneys' fees arising from such
services and all other reasonable expenses, costs, or charges relating thereto
shall become part of the Obligations secured hereby and be paid by Debtor on
demand.
(C) No Obligation to Make Loans. Nothing contained herein or in any
financing statement or other collateral document executed or filed in connection
herewith shall be
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construed to obligate Secured Party to make any loan or advance to Debtor,
whether pursuant to a commitment or otherwise.
(D) Performance by Secured Party. Upon the occurrence of a Default
hereunder, Secured Party may, at its option and without notice to or demand upon
Debtor, without obligation and without waiving or diminishing any of its other
rights or remedies hereunder, fully perform or discharge any of such duties. All
costs and expenses incurred by Secured Party in connection therewith, together
with interest thereon at 4% per annum in excess of the highest interest rate
applicable to any loan or advance secured hereby, shall become part of the
Obligations secured hereby and be paid by Debtor upon demand.
(E) Indemnification, Etc. Debtor hereby expressly indemnifies and holds
Secured Party harmless from any and all claims, causes of action, or other
proceedings, and from any and all liability, loss, damage, and expense of every
nature, arising by reason of Secured Party's enforcement of its rights and
remedies hereunder, or by reason of Debtor's failure to comply with any
environmental or other law or regulation, other than any such claim, cause of
action or other proceeding, liability, loss, damage or expense arising by reason
of gross negligence, willful misconduct or violation of law on the part of
Secured Party. In any suit, proceeding or action brought by Secured Party under
any account for any sum owing thereunder, or to enforce any provisions of any
account, Debtor will save, indemnify and keep Secured Party harmless from and
against all expense, loss or damage suffered by reason of any defense, set off,
counterclaim, recoupment or reduction or liability whatsoever of the account
debtor or any other obligor thereunder, arising out of a breach by Debtor 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 Debtor (except to the extent any such expense, loss or
damage results from the gross negligence or willful misconduct of Secured
Party). The obligations of Debtor under this Section 8(E) shall survive the
termination of the other provisions of this Security Agreement.
(F) Power of Attorney. Debtor hereby constitutes and appoints Secured Party
or Secured Party's designee during the term of any Obligations secured by this
Security Agreement as its attorney-in-fact, effective upon the occurrence of a
Default, which appointment is an irrevocable, durable agency, coupled with an
interest, with full power of substitution. This power of attorney and mandate is
for the purpose of taking, whether in the name of Debtor or in the name of
Secured Party, any action which Debtor is obligated to perform hereunder or
which Secured Party may deem necessary or advisable to accomplish the purposes
of this Security Agreement. The powers conferred upon Secured Party in this
Section are solely to protect its interest in the Collateral and shall not
impose any duty upon Secured Party to exercise any such powers. Secured Party
shall exercise its power of attorney only upon occurrence of a Default.
(G) Continuing Effect. This Security Agreement, the security interest of
Secured Party, in the Collateral, and all other documents or instruments
contemplated hereby shall continue in full force and effect until all of the
Obligations have been satisfied in full and each of the MLA, First Supplement
and the Note has been terminated in accordance with its respective terms.
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Security Agreement/Knology of Knoxville
Loan No. ML0883T1
(H) Binding Effect. This Security Agreement shall be binding upon and inure
to the benefit of Secured Party and its successors and assigns (as permitted by
the MLA), and in the event of an assignment of all or any of the Obligations,
the rights hereunder, to the extent applicable to the indebtedness so assigned,
may be transferred with such indebtedness. This Security Agreement shall be
binding upon and inure to the benefit of Debtor and its successor and assigns;
provided, that Debtor may not assign any of its rights or obligations hereunder
without the prior written consent of Secured Party.
(I) Security Agreement as Financing Statement. A photographic copy or other
reproduction of this Security Agreement may be used as a financing statement.
(J) Governing Law. Except to the extent governed by applicable federal law,
this Security Agreement shall be governed by and construed in accordance with
the laws of the State of Colorado without reference to choice of law doctrine.
(K) Notices. All notices hereunder shall be delivered to the Secured Party
in accordance with the terms and conditions set forth in Section 7(e) of the
Guaranty.
(L) Severability. The determination that any term or provision of this
Security Agreement is unenforceable or invalid shall not affect the
enforceability or validity of any other term or provision hereof.
(M) Entire Agreement. This Security Agreement, together with all documents
referred to herein, constitute the entire agreement between Debtor and Secured
Party with respect to the matters addressed herein.
(N) Changes in Applicable Law. The parties acknowledge their intent that,
upon the occurrence and during the continuation of a Default, Secured Party
shall receive, to the fullest extent permitted by applicable law and government
policy (including, without limitation, the rules, regulations and policies of
the FCC or any PUC), all rights necessary or desirable to obtain, use or sell
the Collateral and to exercise all remedies available to it under this Security
Agreement, the UCC as in effect in any applicable jurisdiction or other
applicable law. The parties further acknowledge and agree that, in the event of
changes in the law or governmental law occurring subsequent to the date hereof
that affect in any manner Secured Party's rights of access to, or use or sale
of, the Collateral, or the procedures necessary to enable Secured Party to
obtain such rights of access, use or sale, Secured Party and Debtor shall amend
this Security Agreement in such manner as Secured Party shall reasonably request
in order to provide Secured Party such rights to the greatest extent possible
consistent with applicable law and governmental policy.
(O) Termination; Reinstatement. This Security Agreement shall remain in
full force and effect until (i) Secured Party has no further commitment or
obligation to make advances to be secured hereby with respect to the
Obligations, (ii) all Obligations have been paid in full and (iii) Secured Party
has executed and delivered a written statement of termination. To the extent
Debtor or any third party makes a payment or payments to Secured Party or
Secured Party enforces its security interest or exercises any right of set off,
and such payment or payments or the proceeds thereof are subsequently
invalidated, declared to be fraudulent or
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Security Agreement/Knology of Knoxville
Loan No. ML0883T1
preferential, set aside, or required to be repaid to a trustee, receiver, or any
other party under any bankruptcy, insolvency or other law or in equity, or any
combination of the foregoing, then, to the extent of such recovery, the
Obligations or any part thereof originally intended to be satisfied shall be
revived and continued in full force and effect, and this Security Agreement, if
earlier terminated, shall be revived and continued in full force and effect, as
if such payment or payments had not been made, or such enforcement or set off
had not occurred.
(P) Marshaling; Secured Party's Duties. Secured Party shall not be required
to marshal any present or future security for (including but not limited to this
Security Agreement and the Collateral subject to the security interest created
hereby), or guarantees of, the Obligations or any of them, or to resort to such
security or guarantees in any particular order; and all of its rights hereunder
and in respect of such securities and guaranties shall be cumulative and in
addition to all other rights, however existing or arising. To the extent that it
lawfully may, Debtor hereby agrees that it will not invoke any law relating to
the marshaling of collateral, and to the extent that it lawfully may do so
Debtor hereby irrevocably waives the benefits of all such laws. Except as
otherwise provided by applicable law, Secured Party shall have no duty as to the
collection or protection of the Collateral or any income thereon, nor as to the
preservation of rights against prior parties, nor as to the preservation of any
rights pertaining thereto beyond the sole custody thereof.
[Signatures follow on next page.]
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Security Agreement/Knology of Knoxville
Loan No. ML0883T1
IN WITNESS WHEREOF, Debtor has caused this Security Agreement to be
executed and delivered and attached under seal, and Secured Party has caused
this Security Agreement to be executed and delivered, each by their duly
authorized officer(s) as of the date shown above.
KNOLOGY OF KNOXVILLE, INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Attest:
------------------------------
Name:
-------------------------
Title:
------------------------
[CORPORATE SEAL]
COBANK, ACB
By:
----------------------------------
Xxxx Xxxxxxx, Vice President
Security Agreement/Knology of Knoxville
Loan No. ML0883T1
SCHEDULE A
Set forth below are the current locations (by parish or county and state) of
Debtor's inventory and equipment:
Xxxxxxxx County, Tennessee
Xxxx County, Tennessee
Xxxxx County, Georgia
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