Exhibit 10.8
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of December 18, 1996, is between XXXXX
CABLE COMMUNICATIONS, INC., a Texas corporation ("Debtor"), and FLEET NATIONAL
BANK, a National Banking Association ("Secured Party"), not in its individual
capacity, but solely as Trustee for the holders (the "Holders") of all 15%
Senior Subordinated Pay-in-Kind Notes due March 18, 2002 issued pursuant to the
Indenture (as defined below).
Preliminary Statement:
A. Debtor and Secured Party have entered into an Indenture of even date
herewith (as the same may be amended, modified, supplemented or restated from
time to time, the "Indenture"), pursuant to which Debtor has agreed to issue
securities to Holders, subject to the terms and conditions set forth in the
Indenture.
B. One of the conditions precedent to Secured Party's obligations under
the Indenture is that Debtor shall have executed and delivered this Security
Agreement to secure the performance of Issuer's Obligations thereunder.
NOW, THEREFORE, in order to induce Trustee to perform its obligations
under the Indenture, and for other good and valuable consideration, the receipt
and sufficiency of which hereby are acknowledged, Debtor hereby agrees as
follows:
1. Definitions. All terms used herein which are defined in the New York
Uniform Commercial Code (the "Code") shall have the same meaning herein as in
the Code unless the context in which such terms are used herein indicates
otherwise. All capitalized terms used but not elsewhere defined in this Security
Agreement shall have the respective meanings ascribed to such terms in the
Indenture.
2. Security Interests. In order to secure the performance and payment of
Issuer's Obligations, Debtor hereby grants to Secured Party a security interest
in all Property of Debtor, except to the extent limited below, whether now owned
or hereafter acquired, and all additions and accessions thereto, including,
without limitation, the Property described below:
2.1 Goods, Machinery, Equipment and Inventory. All of Debtor's
goods, machinery, equipment, inventory and other goods, wherever located,
and all additions and accessions thereto or replacements thereof,
including, but not limited to, all machinery, inventory and equipment of
any and every kind and description comprising, belonging to or used in
connection with the operation of the Cable Business of Debtor
(collectively, the "Tangible Collateral");
SECURITY AGREEMENT
2.2 Accounts, General Intangibles. All of Debtor's accounts,
contract rights, chattel paper, instruments, investment property,
documents and general intangibles, and all additions and accessions
thereto and replacements thereof, including, but not limited to, all
franchises, permits, authorizations and licenses heretofore or hereafter
granted or issued to Debtor under federal, state or local laws (excluding,
however, franchises, permits, authorizations and licenses issued by the
FCC or any other Governmental Body to the extent, and only to the extent,
it is unlawful to grant a security interest in such franchises, permits,
authorizations and licenses, but including, without limitation, the right
to receive all proceeds derived or arising from or in connection with the
assignment of such franchises, permits, authorizations and licenses) which
permit or pertain to the operation of the Cable Business of Debtor, and
all of Debtor's advertising revenue contracts, programming distribution
agreements, pole attachment agreements, access and right of entry
agreements, equipment leases, office leases, site leases, video
programming distribution agreements, supply and distributorship
agreements, non-competition agreements, employment contracts, consulting
agreements, collective bargaining agreements, service agreements,
maintenance agreements, other Operating Agreements, income tax refunds,
copyrights, patents, patent rights, trademarks, trade names, trade styles,
goodwill and going concern value, except to the extent the grant of a
security interest in any such agreement or contract without the consent of
the other party thereto would create a default thereunder in which event,
such agreement or contract shall not be included unless and until such
consent shall have been obtained (collectively, the "Intangible
Collateral");
2.3 Proceeds. All proceeds (including proceeds of insurance, eminent
domain and other governmental taking and tort claims) and products of the
Property described in Sections 2.1 and 2.2 above; and
2.4 Books and Records. All of the books and records pertaining to
the Property described in Sections 2.1, 2.2 and 2.3 above.
All of the Property described above hereinafter is referred to collectively as
the "Collateral." The security interest of Secured Party in the Collateral shall
be superior and prior to all other Liens except Permitted Prior Liens.
3. Representations and Warranties. Debtor hereby represents and warrants
to Secured Party as follows:
3.1 Ownership of Collateral. Debtor is the owner of all of the
Collateral, except the portion thereof consisting of after-acquired
Property, and Debtor will be the owner of such after-acquired Property,
free from any Lien except for Permitted Liens.
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SECURITY AGREEMENT
3.2 Places of Business. There is listed on Exhibit A hereto the
location of the chief executive office of Debtor, all of the other places
of business of Debtor and all locations where the Tangible Collateral and
the books and records of Debtor are kept. Debtor shall not, without 30
days' prior written notice to Secured Party, change the location of (i)
its chief executive office, (ii) its books and records or (iii) except (A)
in connection with dispositions permitted by Section 4.18 of the Indenture
and (B) from one location listed on Exhibit A to another location listed
on Exhibit A, any Tangible Collateral.
3.3 Trade or Assumed Names. All trade or assumed names under which
Debtor is doing business are listed in Exhibit B.
3.4 Financing Statements. Except for the financing statements of
Secured Party and the financing statements pertaining to the Permitted
Senior Indebtedness, no financing statement covering any Collateral or any
proceeds thereof is on file in any public office (other than financing
statements for which termination statements are being delivered to Secured
Party at Closing).
3.5 Intangible Collateral. The Intangible Collateral represents bona
fide and existing indebtedness, obligations, liabilities, rights and
privileges owed or belonging to Debtor to which, to the best of Debtor's
knowledge, there is no valid defense, set-off or counterclaim against
Debtor and in connection with which there is no default with respect to
any payment or performance on the part of Debtor, or, to the best of
Debtor's knowledge, of any other party which would have a Material Adverse
Effect.
3.6 Tangible Collateral-Personal Property. All Tangible Collateral
at all times shall be considered personal property.
4. Affirmative Covenants. Until all of Issuer's Obligations are paid and
performed in full, Debtor shall:
4.1 Taxes. Pay promptly when due all taxes, levies, assessments and
governmental charges upon and relating to any of the Property, income or
receipts of Debtor or otherwise for which Debtor is or may be liable,
except to the extent that the failure to pay any of such taxes, levies,
assessments or charges is permitted by the Indenture.
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SECURITY AGREEMENT
4.2 Insurance. At its sole expense, keep the Collateral insured
against loss or damage by insurance policies which shall be in such form,
with such companies and in such amounts as may be satisfactory to Secured
Party and otherwise comply with the provisions of Section 4.8 of the
Indenture.
4.3 Tangible Collateral.
4.3.1 Good Repair. Keep such of the Tangible Collateral as is
necessary to the operations of Debtor's Cable Business in good
working order and repair and make all necessary replacements thereof
and renewals thereto so that the value and operating efficiency
thereof at all times shall be maintained and preserved.
4.3.2 Insurance Requirements. Maintain the Tangible Collateral
at all times in accordance with the requirements of all insurance
carriers which provide insurance with respect to such Tangible
Collateral so that such insurance shall remain in full force and
effect.
4.3.3 Certificates of Title. Upon the request of Secured
Party, promptly deliver to Secured Party all certificates of title
pertaining to the Tangible Collateral, together with such
endorsements, assignments and other agreements as Secured Party may
request in order to perfect the security interest of Secured Party
in such Tangible Collateral.
4.3.4 Use of Collateral. Use the Tangible Collateral in
compliance with all statutes, regulations, ordinances, requirements
and regulations and all judgments, orders, injunctions and decrees
applicable thereto, and all other federal, state and local laws,
except where the failure to comply would not have a Material Adverse
Effect.
4.4 Intangible Collateral.
4.4.1 Payments. Make all payments and perform all acts
necessary to maintain and preserve the Intangible Collateral,
including, without limitation, filing of documents, renewals or
other information with any Governmental Body or any other Person.
4.4.2 Delivery of Instruments. Upon the request of Secured
Party, promptly deliver to Secured Party the original executed
copies of all instruments which constitute part of the Intangible
Collateral, together with such endorsements, assignments and other
agreements as Secured Party may
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SECURITY AGREEMENT
request in order to perfect the security interest of Secured Party
in such instruments.
4.4.3 Accurate Records. At all times keep accurate and
complete records of payment and performance by Debtor and other
Persons of their respective obligations with respect to the
Intangible Collateral and permit Secured Party or any of its agents
to call at Debtor's place of business without hindrance or delay to
inspect, audit, check or make extracts from the books, records,
correspondence or other data relating to the Intangible Collateral
at reasonable times and upon reasonable notice, provided, however,
if an Event of Default exists, such activities may be conducted at
any time without notice.
4.4.4 Verification of Indebtedness. Upon request of Secured
Party after the occurrence and during the continuance of an Event of
Default, permit Secured Party itself, at any time, in the name of
Secured Party or Debtor, to verify directly with the obligors the
indebtedness due Debtor on any account or other item of Intangible
Collateral.
4.4.5 Defaults, Other Claims. Immediately inform Secured Party
of any default in payment or performance by Debtor or any other
Person of any obligation with respect to the Intangible Collateral
or of claims made by others in regard to the Intangible Collateral,
if either of which could have a Material Adverse Effect.
4.5 Collection of Proceeds. Collect the proceeds of indebtedness
owing to Debtor by any Person under any instrument or by any account
debtor with respect to any account, contract right, chattel paper or
general intangible.
4.6 Financing Statements, Further Assurances. Concurrently with the
execution of this Security Agreement, and from time to time hereafter as
requested by Secured Party, at the direction of the Holders, execute and
deliver to Secured Party such financing statements, continuation
statements, termination statements, amendments to any of the foregoing and
other documents, in form satisfactory to Secured Party, as Secured Party
may require to perfect and continue in effect the security interest of
Secured Party granted pursuant to this Security Agreement, to carry out
the purposes of this Security Agreement and to protect Secured Party's
rights hereunder. Debtor, upon demand, shall pay the cost of filing all
such financing statements, continuation statements, termination
statements, amendments to any of the foregoing and other documents.
5. Negative Covenants. Until all of Issuer's Obligations are paid and
performed in full, Debtor agrees that it shall not:
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SECURITY AGREEMENT
5.1 Sales and Transfer of Collateral. Sell, lease, assign or
otherwise dispose of any of the Collateral, except as may be permitted by
and in accordance with the provisions of Section 4.18 of the Indenture.
5.2 Installation of Tangible Collateral. Permit any of the Tangible
Collateral to be installed, affixed or attached to the real estate or
Leasehold Property of Debtor or any other Person so as to become a part
thereof or become in any sense a fixture.
5.3 Valuation of Licenses. Contest the value attributed by Secured
Party to any FCC License of Debtor in any insolvency, bankruptcy,
receivership, custodianship, liquidation, reorganization, assignment for
the benefit of creditors or other similar proceeding.
6. Protection of Collateral. In the event of any failure of Debtor to (i)
maintain in force and pay for any insurance or bond which Debtor is required to
provide pursuant to this Security Agreement or the other Indenture Instruments,
(ii) keep the Tangible Collateral in good repair and operating condition, (iii)
keep the Collateral free from all Liens except for Permitted Liens, (iv) pay
when due all taxes, levies and assessments on or in respect of the Collateral,
except as permitted pursuant to the terms of Section 4.1 above, (v) make all
payments and perform all acts on the part of Debtor to be paid or performed with
respect to any of the Collateral, including, without limitation, all expenses of
protecting, storing, warehousing, insuring, handling and maintaining the
Collateral, and (vi) keep fully and perform promptly any other of the
obligations of Debtor under this Security Agreement or the other Indenture
Instruments, Secured Party, at its option, may (but shall not be required to)
procure and pay for such insurance, place such Collateral in good repair and
operating condition, pay or contest or settle such Liens or taxes or any
judgments based thereon or otherwise make good any other aforesaid failure of
Debtor, provided it gives Debtor prompt notice of such action. Debtor shall
reimburse Secured Party immediately upon demand for all sums paid or advanced on
behalf of Debtor for any such purpose, together with all costs, expenses and
reasonable attorneys' fees paid or incurred by Secured Party in connection
therewith and interest on all sums so paid or advanced from the date of such
payment or advancement until repaid to Secured Party. All such sums paid or
advanced by Secured Party, with interest thereon, immediately upon payment or
advancement thereof, shall be deemed to be part of Issuer's Obligations secured
hereby.
7. Event of Default. Debtor shall be in default under this Security
Agreement upon the occurrence of an Event of Default under the Indenture.
8. Remedies Upon Default. Upon the occurrence of an Event of Default:
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SECURITY AGREEMENT
8.1 Rights of Secured Party. Secured Party shall have all of the
rights and remedies of a secured party under the Code and all other rights
and remedies accorded to Secured Party at equity or law, including,
without limitation, the right to apply for and have a receiver appointed
by a court of competent jurisdiction to manage, protect and preserve the
Collateral, to continue operating the business of Debtor and to collect
all revenues and profits thereof. Any notice of sale or other disposition
of Collateral given not less than 10 Business Days' prior to such proposed
action shall constitute reasonable and fair notice of such action. To the
extent permitted by applicable law, Secured Party may postpone or adjourn
any such sale from time to time by announcement at the time and place of
sale stated in the notice of sale or by announcement of any adjourned
sale, without being required to give a further notice of sale. Any such
sale may be for cash or, unless prohibited by applicable law, upon such
credit or installment terms as Secured Party shall determine. To the
extent permitted by applicable law, Debtor shall be credited with the net
proceeds of such sale only when such proceeds actually are received by
Secured Party. Despite the consummation of any such sale, Debtor shall
remain liable for any deficiency on Issuer's Obligations which remains
outstanding following any such sale. All net proceeds received pursuant to
a sale shall be applied in the manner set forth in Section 5.10 of the
Indenture.
8.2 Assembly of Collateral. Upon the request of Secured Party,
Debtor shall assemble and make the Collateral available to Secured Party
at a place designated by Secured Party.
8.3 Proceeds. Debtor shall hold all proceeds of the Collateral
collected by Debtor in trust for Secured Party, and promptly upon receipt
thereof, turn over such proceeds to Secured Party in the exact form in
which they were received.
8.4 Other Rights. Secured Party, at its election, and without notice
to Debtor, may:
8.4.1 Terminate Right of Collection. Terminate the right of
Debtor to collect the proceeds described in Section 8.3.
8.4.2 Notification. Notify the obligors under any instruments
and the account debtors of any account, contract right, chattel
paper or general intangible to make all payments directly to Secured
Party.
8.4.3 Collection of Payments. Demand, xxx for, collect or
receive, in the name of Debtor or Secured Party, any money or
Property payable or receivable on any item of Collateral.
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SECURITY AGREEMENT
8.4.4 Settlement. Settle, release, compromise, adjust, xxx
upon or otherwise enforce any item of Collateral as Secured Party
may determine.
8.4.5 Mail of Debtor; Endorsement of Checks. For the purpose
of enforcing Secured Party's rights under this Security Agreement,
receive and open mail addressed to Debtor, and endorse notes,
checks, drafts, money orders, documents of title or other forms of
payment on behalf and in the name of Debtor.
8.5 Applications to Governmental Bodies. Debtor, at its own cost and
expense, shall take any action that Secured Party may request in order to
enable Secured Party to obtain and enjoy the full rights and benefits
granted to Secured Party hereunder, including, without limitation, all
rights necessary or desirable to obtain, use, sell or assign the Licenses
and Franchises of Debtor and the other Collateral of Debtor hereunder, and
to exercise all remedies available to Secured Party hereunder and under
applicable law. Without limiting the generality of the foregoing, at the
request of Secured Party at any time following the occurrence of any Event
of Default, Debtor, at its sole cost and expense, shall assist Secured
Party in obtaining any required approval of any Governmental Body
(including the FCC and any Franchisor) to the transfer of Debtor's
Licenses and Franchises to Secured Party or its designee or any receiver,
trustee or similar official or purchaser by preparing, signing and filing
with the appropriate Governmental Body any application or document and
taking all other actions deemed necessary or appropriate by Secured Party
(i) for consent to the assignment of any such License or Franchise
necessary or appropriate under applicable Cable Laws, (ii) for approval of
any sale, assignment or transfer of any such License or Franchise and
(iii) to enable Secured Party or its designee or any receiver, trustee or
similar official or purchaser to obtain from such Governmental Body or any
other Person any required authority necessary to operate the Cable
Business of Debtor.
8.6 Transfer of Control to Other Persons. Debtor acknowledges and
agrees that a transfer of control of the Collateral or an assignment of
Licenses or Franchises of such Debtor may be made to a receiver, trustee,
or similar official or to any purchaser of all or any part of the other
Collateral hereunder, pursuant to any court order, public or private sale,
judicial sale, foreclosure or the exercise of any other remedies available
to Secured Party hereunder or under applicable law.
All monies received by Secured Party pursuant to this Section 8 shall be applied
by Secured Party in accordance with the applicable provisions of Section 5.10 of
the Indenture.
9. Power of Attorney. To effectuate the rights and remedies of Secured
Party under this Security Agreement, Debtor hereby irrevocably appoints Secured
Party its attorney-in-fact, in the name of Debtor or in the name of Secured
Party, to:
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SECURITY AGREEMENT
9.1 Execution of Financing Statements. Execute and file from time to
time financing statements, continuation statements, termination statements
and amendments thereto, covering the Collateral, in form satisfactory to
Secured Party.
9.2 Execution of Other Documents. Take all actions and execute all
documents referred to in Section 8.5 above to the extent permitted by law.
The power of attorney granted pursuant to this Section 9 is coupled with an
interest and shall be irrevocable until all of Issuer's Obligations shall have
been paid and performed in full.
10. Certain Agreements of Debtor.
10.1 Waiver of Notice. Debtor hereby waives notice of the acceptance
of this Security Agreement and, except as otherwise specifically provided
in Section 8.1 above or in the Indenture, all other notices, demands or
protests to which Debtor otherwise might be entitled by law (and which
lawfully may be waived) with respect to this Security Agreement, Issuer's
Obligations and the Collateral.
10.2 Rights of Secured Party. Debtor agrees that Secured Party (i)
shall have no duty as to the collection or protection of the Collateral or
any income thereon, except as provided by applicable law, (ii) may
exercise the rights and remedies of Secured Party with respect to the
Collateral without resort or regard to other security or sources for
payment and (iii) shall not be deemed to have waived any of the rights or
remedies granted to Secured Party hereunder unless such waiver shall be in
writing and shall be signed by Secured Party. Debtor and Secured Party
acknowledge their intent that, upon the occurrence of an Event of Default,
Secured Party shall receive, to the fullest extent permitted by law and
governmental policy (including, without limitation, the rules, regulations
and policies of the FCC), all rights necessary or desirable to obtain, use
or sell the Collateral, and to exercise all remedies available to Secured
Party under the Indenture Instruments, the Code or other applicable law.
Debtor and Secured Party further acknowledge and agree that, in the event
of changes in law or governmental policy 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 the Indenture Instruments, in such manner as
Secured Party reasonably shall request, in order to provide Secured Party
such rights to the greatest extent possible consistent with then
applicable law and governmental policy.
10.3 No Delay; Single or Partial Exercise Permitted. No delay or
omission on the part of Secured Party in exercising any rights or remedies
contained herein shall operate as a waiver of such right or remedy or of
any other right or remedy, and no single or partial exercise of any right
or remedy shall preclude any
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SECURITY AGREEMENT
other or further exercise thereof, or the exercise of any other right or
remedy. A waiver of any right or remedy on any one occasion shall not be
construed as a bar or waiver of any right or remedy on future occasions,
and no delay, omission, waiver or single or partial exercise of any right
or remedy shall be deemed to establish a custom or course of dealing or
performance between the parties hereto.
11. Rights Cumulative. All rights and remedies of Secured Party pursuant
to this Security Agreement, the Indenture or otherwise, shall be cumulative and
non-exclusive, and may be exercised singularly or concurrently.
12. Severability. In the event that any provision of this Security
Agreement is deemed to be invalid by reason of the operation of any law,
including, but not limited to, the rules, regulations and policies of the FCC,
or by reason of the interpretation placed thereon by any court, the FCC or any
other Governmental Body, this Security Agreement shall be construed as not
containing such provision and the invalidity of such provision shall not affect
the validity of any other provisions hereof, and any and all other provisions
hereof which otherwise are lawful and valid shall remain in full force and
effect.
13. Notices. All notices and communications under this Security Agreement
shall be in writing and delivered in the manner set forth in Section 12.2 of the
Indenture.
14. Successors and Assigns. This Security Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of Secured Party and Debtor.
15. Captions. The headings in this Security Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
16. Counterparts. This Security Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which,
when taken together, shall be one and the same instrument.
17. Survival of Security Agreement; Termination. All covenants,
agreements, representations and warranties made herein shall survive the
execution and delivery of the Indenture and shall continue in full force and
effect until Issuer's Obligations are paid and performed in full.
18. APPLICABLE LAW. THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS AND DECISIONS OF THE STATE OF NEW YORK.
FOR PURPOSES OF THIS SECTION 18, THIS SECURITY AGREEMENT SHALL BE DEEMED TO BE
PERFORMED AND MADE IN THE STATE OF NEW YORK.
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SECURITY AGREEMENT
19. JURISDICTION AND VENUE. DEBTOR HEREBY AGREES THAT ALL ACTIONS OR
PROCEEDINGS INITIATED BY DEBTOR AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS
SECURITY AGREEMENT SHALL BE LITIGATED IN THE SUPREME COURT, NEW YORK COUNTY
DIVISION, OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, OR, IF SECURED PARTY INITIATES SUCH ACTION, IN ADDITION TO THE FOREGOING
COURTS, ANY COURT IN WHICH SECURED PARTY SHALL INITIATE OR TO WHICH SECURED
PARTY SHALL REMOVE SUCH ACTION, TO THE EXTENT SUCH COURT HAS JURISDICTION.
DEBTOR HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR PROCEEDING COMMENCED IN OR REMOVED BY SECURED PARTY TO ANY OF SUCH
COURTS, AND HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR
OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS
AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO DEBTOR AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT
TO SECTION 13. DEBTOR WAIVES ANY CLAIM THAT NEW YORK COUNTY, OR THE SOUTHERN
DISTRICT OF NEW YORK IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK
OF VENUE. SHOULD DEBTOR, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY
SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS
PRESCRIBED BY LAW AFTER THE MAILING THEREOF, DEBTOR SHALL BE DEEMED IN DEFAULT
AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY SECURED PARTY AGAINST DEBTOR AS
DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE
EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS SECTION 19 SHALL NOT BE DEEMED TO
PRECLUDE THE ENFORCEMENT, BY SECURED PARTY, OF ANY JUDGMENT OBTAINED IN ANY
OTHER FORUM OR THE TAKING, BY SECURED PARTY, OF ANY ACTION TO ENFORCE THE SAME
IN ANY OTHER APPROPRIATE JURISDICTION AND DEBTOR HEREBY WAIVES ANY RIGHT TO
ATTACK ANY SUCH JUDGMENT OR ACTION COLLATERALLY.
20. WAIVER OF RIGHT TO JURY TRIAL. SECURED PARTY AND DEBTOR ACKNOWLEDGE
AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS SECURITY AGREEMENT
WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND THEREFORE, SECURED PARTY
AND DEBTOR AGREE THAT ANY COURT PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY
WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A
JURY.
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SECURITY AGREEMENT
21. TIME OF THE ESSENCE. TIME FOR THE PERFORMANCE OF ISSUER'S OBLIGATIONS
UNDER THIS SECURITY AGREEMENT IS OF THE ESSENCE.
22. Secured Party's Right to Specific Performance. Debtor acknowledges
that FCC authorization is integral to Secured Party's realization of the value
of all of the Collateral, that Debtor's FCC Licenses are unique assets, that
there is no adequate remedy at law for failure by Debtor to comply with the
provisions of Section 8.5 and that such failure would not be adequately
compensable in monetary damages; therefore, Debtor agrees that, in addition to
all other remedies available at law or in equity, Secured Party shall be
entitled to obtain decree(s) of specific performance entitling it to temporary
restraining order(s), preliminary injunction(s), or permanent injunction(s) to
specifically enforce and require specific performance of the provisions of
Section 8.5. Debtor agrees that notice shall be adequate for the entry of a
decree of specific performance in respect of any such matter (i) in the case of
a temporary restraining order, upon twenty-four (24) hours' prior notice of the
hearing thereof and (ii) in the case of any other proceeding, upon five (5)
days' prior notice of the hearing thereof, and hereby waives all requirements
and demands that the Secured Party give any greater notice of such hearings and
further waives all requirements and demands that the Secured Party post a bond
or other surety arrangement in connection with the issuance of such decree.
23. FCC and Franchisor Approval. Notwithstanding anything to the contrary
contained herein, no party hereto shall take any action, including, but not
limited to, the operation of Debtor's Cable Business that would constitute or
result in the transfer or assignment of any License or Franchise issued to or
held by Debtor, or a transfer of control over any such License or Franchise,
whether de jure or de facto, if such assignment or transfer would require under
then existing law the prior approval of and/or any notice to the FCC or any
Franchisor, without such party first having notified the FCC or such Franchisor
of any such assignment or transfer and, if required under then existing law,
obtaining the approval of the FCC or such Franchisor therefor, notifying the FCC
or such Franchisor of the consummation thereof and complying with all other
applicable provisions of the Cable Act. The parties hereto intend that the
powers of Secured Party hereunder, in all relevant aspects, shall be governed by
the Cable Act and all other applicable statutory requirements and rules and
regulations, including, without limitation, those of the FCC.
24. Subordination. The security interests, rights and remedies granted to
Secured Party herein are subject and subordinate to those granted to the
holder(s) of the Permitted Liens, as more particularly set forth in the
Subordination Agreement (Senior) of even date herewith.
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SECURITY AGREEMENT
IN WITNESS WHEREOF, this Security Agreement has been executed and
delivered by each of the parties hereto by a duly authorized officer of each
such party on the date first set forth above.
XXXXX CABLE COMMUNICATIONS,
INC., a Texas corporation
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Chief Executive Officer
FLEET NATIONAL BANK, a National
Banking Association, not in its individual
capacity, but solely in its capacity as
Trustee
By: /s/ Xxxxxx X. Xxxx, XX
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Name: Xxxxxx X. Xxxx, XX
Title: Vice President
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