Exhibit 10.3
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of December 18, 1996, is between XXXXX
CABLE COMMUNICATIONS, INC., a Texas corporation ("Debtor"), and FINOVA CAPITAL
CORPORATION, a Delaware corporation ("Secured Party), in its individual capacity
and as agent for all Lenders (as defined in Section 1 below).
Preliminary Statement:
A. Debtor and Secured Party have entered into a Loan Agreement of even
date herewith (as the same may be amended, modified, supplemented or restated
from time to time, the "Loan Agreement"), pursuant to which Lenders have agreed
to make loans and other financial accommodations (collectively, the "Loans") to
Debtor, subject to the terms and conditions set forth in the Loan Agreement.
B. One of the conditions precedent to Lenders' obligations under the Loan
Agreement is that Debtor shall have executed and delivered this Security
Agreement to secure the payment and performance of Borrower's Obligations.
NOW, THEREFORE, in order to induce Lenders to make the Loans, 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 Loan
Agreement.
2. Security Interests. In order to secure the performance and payment of
Borrower'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");
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 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.
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 7.12 of the Loan
Agreement and (B) from one location listed on Exhibit A to another
location listed on Exhibit A, any
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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 Borrower'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 Loan 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 6.6 of the Loan
Agreement.
4.3 Tangible Collateral.
4.3.1 Good Repair. Keep such of the Tangible Collateral as is
necessary to the operations of Borrower'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
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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 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, subject to the provisions of Section 6.2
of the Loan Agreement, 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.
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
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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, 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 Borrower's Obligations are paid and
performed in full, Debtor agrees that it shall not:
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 7.12 of the Loan
Agreement.
5.2 Modification. Materially and adversely change the terms of
payment or performance of any obligation with respect to the Intangible
Collateral without the prior written consent of Secured Party.
5.3 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.
5.4 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 Loan 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
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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 Loan
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. 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 at the Default Rate 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 Borrower'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 Loan Agreement.
8. Remedies Upon Default. Upon the occurrence of an Event of Default:
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 in Good Funds. Despite the consummation of any such sale,
Debtor shall remain liable for any deficiency on Borrower'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 8.4 of the Loan Agreement.
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
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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.
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.
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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 8.4 of
the Loan Agreement.
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:
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 Borrower'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 Loan Agreement, 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,
Borrower'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 subject to 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 Loan 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
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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 Loan 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 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 Loan Agreement 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 12.1 of the
Loan Agreement.
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.
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17. Survival of Security Agreement; Termination. All covenants,
agreements, representations and warranties made herein shall survive the
execution and delivery of the Loan Agreement and shall continue in full force
and effect until Borrower'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.
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 SUPERIOR COURT OF ARIZONA, MARICOPA
COUNTY DIVISION, OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
ARIZONA, 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 MARICOPA
COUNTY, ARIZONA OR THE DISTRICT OF ARIZONA 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
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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.
21. TIME OF THE ESSENCE. TIME FOR THE PERFORMANCE OF DEBTOR'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.
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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
FINOVA CAPITAL CORPORATION, a
Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Vice President
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