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EXHIBIT 10.2
SECURITY AND HYPOTHECATION AGREEMENT
SECURITY AND HYPOTHECATION AGREEMENT, dated as of July 30,
1996, made by InterMedia Partners of West Tennessee, L.P., a California limited
partnership (the "Grantor"), in favor of The Bank of New York in its capacity as
Agent for the benefit of the Lenders (as defined in the Credit Agreement
described below) (the "Agent"). Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them on the date hereof in the
Revolving Credit and Term Loan Agreement, dated as of July 30, 1996, among
InterMedia Partners IV, L.P., a California limited partnership (the "Borrower"),
the Lenders party thereto, The Bank of New York, in its capacity as
Administrative Agent, The Bank of New York, NationsBank of Texas, N.A. and
Toronto Dominion (Texas), Inc. in their capacity as Arranging Agents (the
"Arranging Agents"), and NationsBank of Texas, N.A., and Toronto Dominion
(Texas), Inc. in their capacity as Syndication Agents (the "Syndication Agents")
(as the same may from time to time be amended, modified or supplemented, the
"Credit Agreement").
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make Loans to the Borrower; and
WHEREAS, the Grantor, as a subsidiary of the Borrower, is
willing to secure all of the Secured Obligations by hypothecating and granting a
security interest to the Creditors in the collateral described below;
NOW THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. The following terms shall have the following meanings
(such meanings being equally applicable to both the singular and plural forms of
the terms defined):
"Collateral" shall have the meaning assigned to such term in
Section 2 of this Hypothecation Agreement.
"Credit Documents" shall mean the Credit Documents (as defined
in the Credit Agreement).
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"Creditors" shall mean collectively the Agent, the Arranging
Agents, the Syndication Agents, and the Lenders.
"Default" shall mean any Default (as defined in the Credit
Agreement).
"Event of Default" shall mean any Event of Default (as defined
in the Credit Agreement).
"FCC" shall mean the Federal Communications Commission (or any
successor agency of the federal government).
"Franchising Authority" shall mean each of the franchising
authorities which granted the Franchises held by the Borrower.
"Guarantor" shall mean any Guarantor (as defined in the Credit
Agreement)
"hereby," "herein," "hereof," "hereunder" and words of similar
import refer to this Hypothecation Agreement as a whole (including,
without limitation, any schedules hereto) and not merely to the
specific section, paragraph or clause in which the respective word
appears.
"Hypothecation Agreement" shall mean this Security and
Hypothecation Agreement, as the same may from time to time be amended,
modified or supplemented and shall refer to this Security and
Hypothecation Agreement as in effect on the date such reference becomes
operative.
"Liens" shall have the definition ascribed to such term in the
Credit Agreement.
"Intercompany Loan Agreement" shall have the definition
ascribed to such term in the Credit Agreement.
"Intercompany Notes" shall mean the Intercompany Notes (as
defined in the Credit Agreement) which are made payable to the order of
the Grantor.
"New Collateral" shall mean New Collateral (as defined in each
Security Supplement).
"Proceeds" shall mean "proceeds," as such term is defined in
section 9-306(1) of the UCC and, in any
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event, shall include, without limitation, (i) any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to the Grantor
from time to time with respect to any of the Collateral, (ii) any and
all payments (in any form whatsoever) made or due and payable to the
Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of
the Collateral by any governmental body, authority, bureau or agency
(or any person acting under color of any governmental authority), and
(iii) any and all other amounts from time to time paid or payable under
or in connection with any of the Collateral.
"Secured Obligations" shall mean (i) all of the unpaid
principal amount of, and accrued interest on, the Loans, (ii) all fees
or premiums owing by the Borrower under or in connection with the
Credit Agreement, (iii) all other liabilities and obligations of the
Borrower to the Agent or any Lender, whether now existing or hereafter
incurred, under or in connection with the Credit Agreement or any of
the other Credit Documents, and (iv) all of the obligations of the
Grantor to the Agent or any other Creditor under this Hypothecation
Agreement.
"UCC" shall mean the Uniform Commercial Code as the same may,
from time to time, be in effect in the State of New York; provided,
however, in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority of the Creditors'
security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
2. Grant of Security Interest.
As collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of all the Secured Obligations, to induce the Lenders to enter into the Credit
Agreement and to make the Loans and other extensions of credit in accordance
with the terms thereof, the Grantor hereby grants, assigns and hypothecates to
the Agent, for the ratable benefit of the Agent and the other Creditors, a
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first priority security interest in all of the Grantor's right, title and
interest in, to and under the following (all of which being hereinafter
collectively called the "Collateral"):
(i) the Intercompany Notes and any Intercompany Loan
Agreements with respect to such Intercompany Notes;
(ii) all New Collateral pledged, assigned, conveyed,
granted, hypothecated or transferred pursuant to any Security
Supplement Agreement; and
(iii) to the extent not otherwise included, all
Proceeds of the foregoing and all accessions to, substitutions
and replacements for, and rents, profits and products of the
foregoing.
3. [Reserved]
4. Representations and Warranties. The Grantor hereby represents and
warrants that:
(a) Except for the security interest granted to the Agent for
the benefit of the Agent and the other Creditors pursuant to this
Hypothecation Agreement, the Grantor is the sole owner of each item of
the Collateral in which it purports to grant a security interest
hereunder, having good and marketable title thereto, free and clear of
any and all Liens.
(b) No effective security agreement, financing statement,
equivalent security or lien instrument or continuation statement
covering all or any part of the Collateral is on file or of record in
any public office, except such as may have been filed by the Grantor in
favor of the Agent for the benefit of the Agent and the other Creditors
pursuant to this Hypothecation Agreement.
(c) The Grantor's principal place of business and the place
where its records concerning the Collateral are kept is located at 235
Montgomery Street, Suite 420, San Francisco, California 94104, and the
Grantor will not change such principal place of business, remove such
records or change the location of its Collateral unless it has taken
such action as is neces-
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sary to cause the security interest of the Agent on behalf of the Agent
and the other Creditors in the Collateral to continue to be perfected.
The Grantor will not change its principal place of business or the
place where its records concerning the Collateral are kept or keep
Collateral at any other location without giving thirty (30) days' prior
written notice thereof to the Agent.
(d) Each of the Intercompany Notes has been delivered to the
Agent and has been duly endorsed in blank by the Grantor and the
Grantor has delivered to the Agent a copy of the Intercompany Loan
Agreement and the letter from the Maker of the Intercompany Note
substantially in the form of Exhibit K to the Credit Agreement.
(e) Assuming that any financing statements which were
delivered to the Agent in respect of this Hypothecation Agreement have
been filed in the Office of the Secretary of State of California, this
Hypothecation Agreement is effective to create a valid and continuing
first priority lien on and first priority perfected security interest
in the Collateral with respect to which a security interest may be
perfected by filing pursuant to the UCC in favor of the Agent for the
benefit of the Agent and the other Creditors, prior to all other Liens,
and is enforceable as such as against creditors of and purchasers from
the Grantor. Assuming that the actions described in the previous
sentence have been taken, all action necessary to perfect such security
interest in each item of the Collateral has been duly taken.
(f) The Grantor has full power and authority to execute,
deliver and perform this Hypothecation Agreement and to incur the
obligations provided for herein, all of which have been duly authorized
by all proper and necessary action. No consent or approval of
shareholders or partners, as applicable, is required as a condition to
the validity or performance of, or the exercise by the Agent or the
other Creditors of any of their rights and remedies under, this
Hypothecation Agreement.
(g) This Hypothecation Agreement constitutes the valid and
legally binding obligation of the Grantor, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization and
similar laws
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of general applicability relating to or affecting creditors' rights and
to general equity principles.
(h) There is no statute, regulation, rule, order or judgment,
and no provision of any agreement or instrument binding on the Grantor
or affecting its properties and no provision of the certificate of
incorporation or by-laws or partnership agreement, as applicable to the
Grantor, which would prohibit, conflict with or in any way be
inconsistent with or prevent the execution, delivery, or performance of
this Hypothecation Agreement or result in or require the creation or
imposition of any material Lien on any of the properties of the Grantor
as a consequence of the execution, delivery and performance of this
Hypothecation Agreement or the consummation of the transactions
contemplated hereby; and the execution, delivery and performance by the
Grantor of this Hypothecation Agreement and the consummation of the
transactions contemplated hereby do not (i) violate any provision of
law applicable to the Grantor or its charter documents or any order,
judgment or decree of any court or other agency of government binding
on the Grantor, (ii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any material
agreement or instrument binding on the Grantor or affecting its
properties or (iii) require any approval of stockholders or partners,
as applicable, or any approval or consent of any Person under any
agreement or instrument binding on the Grantor or affecting its
properties.
5. Covenants. The Grantor covenants and agrees with the Agent and the
other Creditors that from and after the date of this Hypothecation Agreement and
until the Secured Obligations are fully satisfied:
(a) Further Assurances. At any time and from time to time,
upon the written request of the Agent, and at the sole expense of the
Grantor, the Grantor will promptly and duly execute and deliver any and
all such further instruments and documents and take such further action
as the Agent may reasonably deem necessary to obtain the full benefits
of this Hypothecation Agreement and of the rights and powers herein
granted, such action to include, without limitation, the filing of any
financing or continuation statements under the UCC with respect to the
liens and security interests granted hereby, and transferring
Collateral to the Agent's possession (if a security interest in such
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Collateral can be perfected by possession). The Grantor also hereby
authorizes the Agent to file any such financing or continuation
statement without the signature of the Grantor to the extent permitted
by applicable law. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any instrument
(other than checks representing payments received in the ordinary
course of business), such instrument shall be immediately pledged to
the Agent hereunder, and shall be duly endorsed in a manner
satisfactory to the Agent and delivered to the Agent.
(b) Maintenance of Records. The Grantor will keep and maintain
at its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to the Collateral and all
other dealings with the Collateral. The Grantor will mark its books and
records pertaining to the Collateral or otherwise make appropriate
provisions in its books and records to evidence this Hypothecation
Agreement and the security interest granted hereby in the Collateral.
At the Agent's request, the Grantor agrees that upon the occurrence and
during the continuation of any Default or Event of Default, the Grantor
shall deliver and turn over any such books and records and other
documents to the Agent or to its representatives.
(c) Indemnification. In any suit, proceeding or action brought
by the Agent or any other Creditor relating to any Collateral, the
Grantor will save, indemnify and keep the Agent and such Creditor
harmless from and against all expense, loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or reduction of
liability whatsoever of the obligor thereunder, arising out of a breach
by the Grantor of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to, or in favor
of, such obligor or its successors from the Grantor, and all such
obligations of the Grantor shall be and remain enforceable against and
only against the Grantor and shall not be enforceable against the Agent
or any other Creditor.
(d) Compliance with Laws, etc. The Grantor will comply, in all
material respects, with all acts, rules, regulations, orders, decrees
and directions of any governmental authority, applicable to the
Collateral or
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any part thereof; provided, however, that the Grantor may contest any
act, regulation, order, decree or direction in any reasonable manner
which shall not, in the reasonable opinion of the Agent, materially
adversely affect the rights of the Agent or any other Creditor
hereunder or adversely affect the first priority of their security
interest in the Collateral taken as a whole.
(e) Payment of Obligations. The Grantor will pay promptly when
due, or make adequate provision for the payment of, all taxes,
assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom and all
claims of any kind related to the Collateral (including, without
limitation, claims for labor, materials and supplies), except to the
extent the same are being contested in good faith and reserves which
are adequate under GAAP have been established.
(f) Limitation on Liens on Collateral. The Grantor will not
create, permit or suffer to exist, and will defend the Collateral
against and take such other action as is necessary to remove, any Lien
on the Collateral, and will defend the right, title and interest of the
Agent on behalf of itself and the other Creditors in and to any of the
Grantor's rights under the Collateral against the claims and demands of
all Persons whomsoever.
(g) Limitations on Disposition. The Grantor will not sell,
assign, lease, transfer or otherwise dispose of any of the Collateral,
or contract to do so.
(h) Further Identification of Collateral. The Grantor will, if
so requested by the Agent, furnish to the Agent, as often as the Agent
reasonably requests, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable
detail.
(i) Notices. The Grantor will advise the Agent promptly, in
reasonable detail, (i) of any Lien, security interest, encumbrance or
claim made or asserted against any of the Collateral, (ii) of any
material change in the composition of the Collateral, and (iii) of the
occurrence of any other event which would have a material adverse
effect on the security interests created hereunder.
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(j) Right of Inspection. Upon reasonable prior notice to the
Grantor (unless an Event of Default has occurred and is continuing, in
which case no notice is necessary), the Agent shall at all times have
full and free access during normal business hours to all the books and
records and correspondence of the Grantor and the Borrower relating to
the Collateral, and the Agent or its representatives may examine the
same, take extracts therefrom and make photocopies thereof. Upon
reasonable prior notice to the Grantor (unless an Event of Default has
occurred and is continuing, in which case no notice is necessary), the
Agent and its representatives shall also have the right to enter into
and upon any premises where any of the Collateral is located or any
premises owned, leased or otherwise occupied by the Borrower for the
purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.
(k) Continuous Perfection. The Grantor will not change its
name, identity or corporate structure in any manner which might make
any financing or continuation statement filed in connection herewith
seriously misleading within the meaning of section 9-402(7) of the UCC
(or any other then applicable provision of the UCC) unless the Grantor
shall have given the Agent at least thirty (30) days' prior written
notice thereof and shall have taken all action (or made arrangements to
take such action substantially simultaneously with such change if it is
impossible to take such action in advance) necessary or reasonably
requested by the Agent to amend such financing statement or
continuation statement so that it is not seriously misleading.
6. The Agent's Appointment as Attorney-in-Fact.
(a) The Grantor hereby irrevocably constitutes and appoints
the Agent and any executive officer of the Agent and any agent
designated by such executive officer, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Grantor and in the name of the
Grantor or in its own name, from time to time in the Agent's
discretion, for the purpose of carrying out the terms of this
Hypothecation Agreement, to take any and all appropriate action and to
execute and deliver any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Hypothecation
Agreement
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and, without limiting the generality of the foregoing, hereby gives the
Agent the power and right, on behalf of the Grantor, without notice to
or assent by the Grantor to do the following:
(i) to ask, demand, collect, receive and give
acquittances and receipts for any and all moneys due and to
become due under any Collateral, to demand performance of any
covenants under, and to give any notice in connection with,
any Intercompany Loan Agreement, and in the name of the
Grantor or its own name or otherwise, to take possession of
and endorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due under any
Collateral and to file any claim or to take any other action
or proceeding in any court of law or equity or otherwise
deemed appropriate by the Agent for the purpose of collecting
any and all such moneys due under any Collateral whenever
payable and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Agent for the purpose of collecting any and
all such moneys due under any Collateral whenever payable;
(ii) to pay or discharge taxes, Liens, security
interests or other encumbrances levied or placed on or
threatened against the Collateral; and
(iii) (A) to direct any party liable for any payment
under any of the Collateral to make payment of any and all
moneys due, and to become due thereunder, directly to the
Agent or as the Agent shall direct; (B) to receive payment of
and receipt for any and all moneys, claims and other amounts
due, and to become due at any time, in respect of or arising
out of any Collateral; (C) to sign and endorse any invoices,
freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and
other documents constituting or relating to the Collateral;
(D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and
to enforce any other right in respect of any Collateral; (E)
to defend any suit, action or proceeding brought against the
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Grantor with respect to any Collateral; (F) to settle,
compromise or adjust any suit, action or proceeding described
above and, in connection therewith, to give such discharges or
releases as the Agent may deem appropriate; and (G) generally
to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof
for all purposes, and to do, at the Agent's option and the
Grantor's expense, at any time, or from time to time, all acts
and things which the Agent reasonably deems necessary to
protect, preserve or realize upon the Collateral and the
Creditors' Lien thereon, in order to effect the intent of this
Hypothecation Agreement, all as fully and effectively as the
Grantor might do.
(b) The Agent agrees that, except upon the occurrence and
during the continuation of an Event of Default, it will forebear from
exercising the power of attorney or any rights granted to the Agent
pursuant to this Section 6. The Grantor hereby ratifies, to the extent
permitted by law, all that said attorneys shall lawfully do or cause to
be done by virtue hereof. The power of attorney granted pursuant to
this Section 6 is a power coupled with an interest and shall be
irrevocable until the Secured Obligations are indefeasibly paid in
full.
(c) The powers conferred on the Agent hereunder are solely to
protect the Creditors' interests in the Collateral and shall not impose
any duty upon it to exercise any such powers. The Agent shall be
accountable only for amounts that it actually receives as a result of
the exercise of such powers and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Grantor for
any act or failure to act, except for its own gross negligence or
willful misconduct.
(d) The Grantor also authorizes the Agent, at any time and
from time to time upon the occurrence and during the continuation of an
Event of Default, to execute, in connection with the sale provided for
in Section 13 hereof, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
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7. Pledge of Additional Collateral.
(a) Subject to the terms and conditions hereof, the Grantor
may from time to time during the term of this Hypothecation Agreement
pledge additional property as Collateral hereunder.
(b) The Grantor may pledge additional property as Collateral
hereunder by delivering to the Collateral Agent a security supplement
substantially in the form attached hereto as Exhibit A (a "Security
Supplement") together with:
(i) with respect to additional certificated
securities to be pledged, certificates evidencing the same;
(ii) with respect to additional uncertificated
securities to be pledged, evidence satisfactory to the Agent
of the registration thereof;
(iii) such executed copies of financing statements on
Form UCC-1 and Form UCC-3 under the UCC as may be required and
other financing and assignment documents as may be required
hereunder;
(iv) such other evidence, including but not limited
to appropriate representations, warranties, covenants, and any
other documentation reasonably requested by the Agent,
satisfactory to the Agent, on behalf of itself and ratably on
behalf of the Lenders, first priority security interest in the
Collateral described therein; and
(c) Upon the receipt of any Security Supplement, together with
any certificates, statements and other evidence required by this
Section 7, the Security Supplement shall be added as a supplement to
this Hypothecation Agreement and the collateral identified herein shall
become Collateral.
8. Performance by the Agent of Grantor's Obligations. If the Grantor
fails to perform or comply with any of its agreements contained herein and the
Agent, as provided for by the terms of this Hypothecation Agreement, shall
itself perform or comply, or otherwise cause performance or compliance, with
such agreement, the reasonable expenses of the Agent incurred in connection with
such performance or compliance, shall be payable by the Grantor to the Agent on
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demand and shall constitute Secured Obligations secured hereby.
9. Limitation on the Creditor's Obligation. It is expressly agreed by
the Grantor that, anything herein to the contrary notwithstanding, neither the
Agent nor any other Creditor shall have any obligation or liability for the
performance by the Grantor of its obligations under any Intercompany Loan
Agreement by reason of or arising out of this Hypothecation Agreement or the
granting to the Agent for the benefit of the Agent and the other Creditors, of
the security interests provided for herein or the receipt by the Creditors of
any payment relating thereto.
10. Payments. Unless an Event of Default shall have occurred and be
continuing, the Grantor shall be permitted to receive all payments made to the
extent permitted in the Credit Documents in respect of the Collateral.
11. Rights of Agent; Further Appointment as Attorney-in-Fact.
(a) During the continuation of an Event of Default, the Agent
shall have the right to receive any and all payments made in respect of
the Intercompany Collateral and to make application thereof to the
Secured Obligations, and the Agent or its nominee may thereafter (i)
notify the maker of any Intercompany Note to make payment to the Agent
of any amounts due or to become due thereunder, (ii) make demand for
payment on the Intercompany Notes, (iii) enforce collection of any of
the Intercompany Notes by suit or otherwise, (iv) surrender, release or
exchange all or any part of any Intercompany Note, or compromise or
extend or renew for any period the obligations of any maker of a
Intercompany Note thereunder, (v) exercise all other rights of the
Grantor in any of the Intercompany Notes, and (vi) take possession or
control of any proceeds of the Intercompany Notes, in each case without
liability except to account for property actually received by it, but
the Agent shall have no duty to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay
in so doing. The Grantor hereby irrevocably constitutes and appoints
the Agent and any executive officer of the Agent and any agent
designated by such executive officer, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Grantor and in the name of the
Grantor or in its own name, from time to time in
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the Agent's discretion, for the purpose of carrying out the terms of
this Hypothecation Agreement, to take any and all appropriate action
and to execute and deliver all documents and instruments which may be
necessary or desirable to exercise such rights. The Grantor hereby
ratifies, to the extent permitted by law, all that said attorneys shall
lawfully do or cause to be done by virtue hereof. The power of attorney
granted pursuant to this Section 11 is a power coupled with an interest
and shall be irrevocable until the Secured Obligations are indefeasibly
paid in full.
(b) The Agent agrees to release promptly to the Grantor any
cash payments on the Collateral which it may receive hereunder (and any
Proceeds of such cash distributions) during the continuation of any
Event of Default, to the extent not applied to the Secured Obligations,
following the waiver or curing of such Event of Default.
(c) The Grantor authorizes the Agent, without notice to,
demand of, or consent from the Borrower, any Guarantor, or any other
Person, and without affecting its liability to the Agent and the other
Creditors hereunder, from time to time (i) to renew, extend, accelerate
or otherwise change the time or place for payment of, or otherwise
change the terms of, the Secured Obligations or any part thereof
including, without limitation, increase or decrease of the rate of
interest thereon; (ii) to take and hold any other security for the
payment or performance of the Secured Obligations by the Borrower or
any Guarantor, and exchange, enforce, waive, surrender, modify, impair,
change, alter, renew, continue, compromise or release in whole or in
part any such security, or fail to perfect its interest in any such
security or to establish its priority with respect thereto; (iii) to
apply such security and direct the order or manner of sale thereof as
the Agent in its sole discretion may determine; (iv) to release any
Guarantor, in whole or in part, from any or all of the Secured
Obligations or substitute any or all of the obligations of any other
guarantor; (v) to settle or compromise any or all of the Secured
Obligations with any Guarantor or any endorser of the Secured
Obligations; and (vi) to subordinate any or all of the Secured
Obligations to any other obligations of or claim against the Borrower
or any Guarantor, whether owing to or existing in favor of the Agent or
any other Creditor or any other party. The Grantor shall be and remain
bound hereunder
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notwithstanding any such renewal, extension, acceleration, change,
taking, holding, exchange, enforcement, waiver, surrender,
modification, impairment, alteration, continuation, compromise,
release, failure, application, direction, settlement or subordination.
12. Waivers. The Grantor waives any and all statutory or other rights
which the Grantor may otherwise have to require the Agent or any other Creditor
to (i) proceed against the Borrower or any Guarantor; (ii) proceed against or
exhaust any other security for the Secured Obligations; or (iii) pursue any
other remedy in their power whatsoever. The Agent and the other Creditors may,
at their election, exercise any right or remedy they may have against the
Borrower, any Guarantor, any other Person, or any other security now or
hereafter held by or for their benefit including, without limitation, the right
to foreclose upon any such security by judicial or nonjudicial sale, without
affecting or impairing in any way the liability of the Grantor hereunder except
to the extent the Secured Obligations may thereby be paid. Only the net proceeds
from any such foreclosure, after deduction of all reasonable costs and expenses
authorized to be deducted pursuant to the documents under which such other
security is held or by law, shall be applied against the Secured Obligations.
The Agent and any of the other Creditors may at their discretion purchase all or
any part of such security so sold or offered for sale for their own account and
may apply against the amount bid therefor all or any part of the Secured
Obligations for which such security is held; and in such case, only that portion
of the proceeds realized, after deduction of all costs and expenses authorized
to be deducted pursuant to the documents under which such other security is held
or pursuant to law, shall be applied against the Secured Obligations. The
Grantor waives any defense arising out of the absence, impairment or loss of any
right of reimbursement or subrogation or other right or remedy against the
Borrower, any Guarantor, any other Person, or any other security, whether
resulting from the election by the Agent or any other Creditor to exercise any
right or remedy it may have against the Borrower, any Guarantor, or any other
Person, any defect in, failure of, or loss or absence of priority with respect
to the interest of the Agent and the other Creditors in such other security, or
otherwise. In the event that any foreclosure sale is deemed to be not
commercially reasonable, the Grantor waives any right that it may have to have
any portion of the Secured Obligations discharged except to the extent of the
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amount actually bid and received by the Agent or any other Creditor at any such
sale.
The Grantor acknowledges that repeated and successive demands
may be made and payments or performance made hereunder in response to such
demands as and when, from time to time, the Borrower or any Guarantor may
default in performance of the Secured Obligations. Notwithstanding any such
performance hereunder, this Hypothecation Agreement shall remain in full force
and effect and shall apply to any and all subsequent defaults by the Borrower or
any Guarantor in payment or performance of the Secured Obligations.
The Grantor waives any setoff, defense or counterclaim which
the Grantor may have or claim to have against the Agent or any other Creditor.
13. Remedies; Rights on Default. If an Event of Default has occurred
and is continuing, in addition to all other rights and remedies granted in this
Hypothecation Agreement and in any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, the Agent shall have all
rights and remedies of a secured party under the UCC. Without limiting the
generality of the foregoing, the Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon the Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase or otherwise dispose
of and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, in the
over-the-counter market, at any exchange, broker's board or office of the Agent
or elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any other Creditor shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Grantor,
which right or equity is hereby waived or released. The Agent shall apply any
Proceeds from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein
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or incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Agent hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Secured Obligations, and only after such application
and after the payment by the Agent of any other amount required by any provision
of law, including, without limitation, section 9-504(l)(c) of the UCC, need the
Agent account for the surplus, if any, to the Grantor. To the extent permitted
by applicable law, the Grantor waives all claims, damages and demands it may
acquire against the Agent arising out of the exercise by the Agent of any of its
rights hereunder. If any notice of a proposed sale or other disposition of the
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition. The
Grantor further waives and agrees not to assert any rights or privileges which
it may acquire under section 9-112 of the UCC.
The Proceeds of any sale, disposition or other realization
upon all or any part of the Collateral shall be distributed by the Agent in the
following order of priorities:
First, to the Agent in an amount sufficient to pay in full the
reasonable expenses of the Agent in connection with such sale,
disposition or other realization, including all reasonable expenses,
liabilities and advances incurred or made by the Agent in connection
therewith, including, without limitation, reasonable attorneys' fees;
Second, to the Creditors in an amount equal to the aggregate
amount of Secured Obligations which are then unpaid in such order as
the Agent and the other Creditors may elect; and
Finally, upon payment in full of all of the Secured
Obligations, to the Grantor, or its representatives or as a court of
competent jurisdiction may direct, any surplus then remaining from such
Proceeds.
The Grantor recognizes that the Agent may be unable to effect
a public sale of any or all of the Collateral, by reason of certain prohibitions
in the Securities Act of 1933, as amended (the "Securities Act"), and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obligated
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to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the Agent than if such sale were a public sale
and agrees that such circumstances shall not, in and of themselves, result in a
determination that such sale was not made in a commercially reasonable manner.
The Agent shall be under no obligation to delay a sale of any Collateral for the
period of time necessary to permit the registration thereof under the Securities
Act, or under applicable state securities laws.
The Agent hereby acknowledges that certain actions which may
be taken by the Agent pursuant to the provisions of this Hypothecation Agreement
may be subject to receipt of consent of the FCC and Franchising Authorities
which may be required by applicable law or regulation or the terms of any
Franchises. Anything in this Hypothecation Agreement (including any
representations and warranties of the Grantor) to the contrary notwithstanding,
the security interest granted hereunder shall not be deemed to be an assignment,
transfer or change of beneficial or record ownership of the Collateral or the
cable television systems owned by the Grantor or the Borrower, and neither the
Agent nor any other Creditor shall have any right to own or control such cable
television systems, without the prior written consent or approval of the FCC and
the Franchising Authorities whose consent or approval is required by law or
regulation or the terms of their respective Franchises.
14. Limitation on the Agent's Duty in Respect of Collateral. The
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under section 9-207 of the UCC
or otherwise, shall be to deal with it in the same manner as the Agent deals
with similar securities and property for its own account. Neither the Agent nor
any of its directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Grantor or otherwise.
15. Reinstatement. This Hypothecation Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by or
against the Borrower or any Guarantor for liquidation or reorganization, should
the Borrower or any Guarantor become insolvent or make an assignment for the
benefit of creditors or should a receiver
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or trustee be appointed for all or any significant part of the assets of the
Borrower or any Guarantor, and shall continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Secured
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Secured Obligations, whether as a "voidable preference", "fraudulent
conveyance", or otherwise, all as though such payment or performance had not
been made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Secured Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
16. Subrogation. Until all Secured Obligations shall have been
satisfied, the Grantor shall not have any right of subrogation and waives any
right to enforce any remedy which the Agent or any other Creditor now has or may
hereafter have against the Borrower or any Guarantor, and waives any and all
statutory or other rights to participate in any other security now or hereafter
held by the Agent or any other Creditor.
17. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give or
serve upon any other party any communication with respect to this Hypothecation
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and either shall be delivered in person
with receipt acknowledged or sent by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If to the Agent, at
One Wall Street
New York, New York 10286
Attention: Wade E. Layton
Vice President
(b) If to the Grantor, at its principal business address
specified in Section 4(c)
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required
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hereunder may be waived in writing by the party entitled to receive such notice.
Every notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly given or served on the
date on which delivered. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to the
persons designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
18. Severability. Any provision of this Hypothecation Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
19. No Waiver; Cumulative Remedies. Neither the Agent nor any other
Creditor shall by any act, delay, omission or otherwise be deemed to have waived
any of its rights or remedies hereunder, and no waiver shall be valid unless in
writing, signed by the Agent, and then only to the extent therein set forth. A
waiver by the Agent or any other Creditor of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Agent or such other Creditor would otherwise have had on any future
occasion. No failure to exercise nor any delay in exercising on the part of the
Agent or any other Creditor, any right, power or privilege hereunder, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by law.
None of the terms or provisions of this Hypothecation Agreement may be waived,
altered, modified or amended except by an instrument in writing, duly executed
by the Agent and, where applicable, by the Grantor.
20. Successors and Assigns; Governing Law; Consent to Jurisdiction.
(a) This Hypothecation Agreement and all obligations of the
Grantor hereunder shall be binding upon the successors and assigns of
the Grantor, and
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shall, together with the rights and remedies of the Agent hereunder,
inure to the benefit of the Agent and the other Creditors and their
respective successors and assigns. No sales of participations, other
sales, assignments, transfers or other dispositions of any agreement
governing or instrument evidencing the Secured Obligations or any
portion thereof or interest therein shall in any manner affect the
security interest granted to the Agent and the other Creditors
hereunder.
(b) THIS HYPOTHECATION AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
(c) The Grantor hereby irrevocably submits to the
non-exclusive jurisdiction of any state or federal court in The City of
New York located in the Borough of Manhattan for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Hypothecation Agreement. The Grantor hereby appoints CT Corporation
System, with offices on the date hereof at 1633 Broadway, New York, New
York 10019, as its authorized agent on whom process may be served in
any action which may be instituted against it by the Agent or any other
Creditor in any state or federal court in The City of New York located
in the Borough of Manhattan, arising out of or relating to this
Hypothecation Agreement. Service of process upon such authorized agent
and written notice of such service to the Grantor shall be deemed in
every respect effective service of process upon the Grantor, and the
Grantor hereby irrevocably consents to the jurisdiction of any such
court in any such action and to the laying of venue in New York City.
The Grantor hereby irrevocably waives any objection to the laying of
the venue of any such suit, action or proceeding brought in the
aforesaid courts and hereby irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. Notwithstanding the foregoing, nothing herein
shall in any way affect the right of the Agent or any other Creditor to
bring any action arising out of or relating to this Hypothecation
Agreement in any competent court elsewhere having jurisdiction over the
Grantor or its property.
21. Further Indemnification. The Grantor agrees to pay, and to save the
Agent and each other Creditor harmless from, any and all liabilities with
respect to, or resulting
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from any delay in paying, any and all excise, sales or other similar taxes which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Hypothecation
Agreement.
22. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS HYPOTHECATION AGREEMENT.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Hypothecation Agreement to be executed and delivered by its duly authorized
officer on the date first set forth above.
INTERMEDIA PARTNERS OF WEST TENNESSEE
By: InterMedia Capital Management
IV, L.P.
By: InterMedia Management,
Inc.
By:
----------------------------
Name:
Title:
Accepted and Acknowledged by:
THE BANK OF NEW YORK,
As Agent
By:
----------------------------
Name:
Title:
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Hypothecation Agreement to be executed and delivered by its duly authorized
officer on the date first set forth above.
INTERMEDIA PARTNERS OF WEST TENNESSEE, L.P.
By: InterMedia Partners of Tennessee
By: InterMedia Capital Management IV, L.P.
By: InterMedia Management, Inc.
By: /s/ Leo J. Hindery, Jr.
________________________________________
Name:
Title:
Accepted and Acknowledged by:
THE BANK OF NEW YORK,
As Agent
By: /s/ Wade Layton
____________________
Name:
Title:
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EXHIBIT ___
Form of Security Supplement
[DATE]
The Bank of New York, as Agent
One Wall Street
New York, New York 10286
Attention:
Facsimile:
Re: Security Supplement Agreement
Ladies and Gentlemen:
Reference is made to the Security and Hypothecation Agreement,
dated as of July 30, 1996 (the "Hypothecation Agreement"), between (the
"Grantor") and The Bank of New York, as Agent. All capitalized terms used but
not otherwise defined herein shall have the meanings ascribed to them in the
Hypothecation Agreement.
As additional collateral security for the prompt and complete
payment and performance of the Obligations and to induce the Lenders as set
forth in the Hypothecation Agreement, the Grantor, upon the acceptance hereof by
the Agent, hereby assigns, conveys, mortgages, pledges, hypothecates, grants,
transfers and sets over to the Agent, for its benefit and for the ratable
benefit of the Creditors, a first security interest in all of the Grantor's
right, title and interest in, to and under the property listed on Annex A
hereto, whether now owned or hereafter acquired by the Grantor (all of which
being hereinafter collectively called the "New Collateral"). Upon the acceptance
hereof by the Agent, the New Collateral shall become Collateral, and the Grantor
is and the Agent's interests therein shall be governed in all respects by the
terms of the Hypothecation Agreement.
The Grantor hereby certifies that, upon the delivery of this
Security Supplement and the accompanying certificates, statements,
representations, warranties, covenants and other evidence, if any, the Grantor
shall have complied with all requirements for the pledge of the New Collateral
as additional Grantor Collateral under the Hypothecation Agreement. The Grantor
further certifies that on a pro-forma basis, after giving effect to such New
Collateral as Collateral, the representations and warranties
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of the Grantor in the Hypothecation Agreement and the Revolving Credit and Term
Loan Agreement shall be true and correct as if made on the date hereof and the
Grantor shall be in compliance with all of its covenants and agreements in the
Hypothecation Agreement.
Very truly yours,
INTERMEDIA PARTNERS OF WEST TENNESSEE, L.P.
By: InterMedia Partners of Tennessee
By: InterMedia Capital Management IV, L.P.
By: InterMedia Management, Inc.
By:________________________________________
Name:
Title:
Accepted by:
THE BANK OF NEW YORK,
as Agent
By: ______________________
Name:
Title:
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