Exhibit 10.61

EXECUTION VERSION

 

PLEDGE AND SECURITY AGREEMENT

Dated as of October 15, 2010

among

KNOLOGY, INC.

as a Grantor

and

Each Other Grantor

From Time to Time Party Hereto

and

CREDIT SUISSE AG,

CAYMAN ISLANDS BRANCH

as Collateral Agent

WEIL, GOTSHAL & MANGES LLP

767 FIFTH AVENUE

NEW YORK, NEW YORK 10153-0119

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ANNEXES AND SCHEDULES

 

Annex 1      Form of Pledge Amendment Annex 2      Form of Joinder Agreement
Annex 3      Form of Short Form Intellectual Property Security Agreement
Schedule 1      Jurisdiction of Organization; Principal Executive Office
Schedule 2      Pledged Collateral Schedule 3      Filings Schedule 4     
Location of Inventory and Equipment Schedule 5      Intellectual Property
Schedule 6      Bank Accounts; Control Accounts Schedule 7      Commercial Tort
Claims

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PLEDGE AND SECURITY AGREEMENT, dated as of October 15, 2010, by KNOLOGY, INC., a
Delaware corporation (the “Borrower”) and each of the other entities listed on
the signature pages hereof or that becomes a party hereto pursuant to
Section 7.10 (Additional Grantors) (each a “Grantor” and, collectively with the
Borrower, the “Grantors”), in favor of CREDIT SUISSE AG, acting through one or
more of its branches (“CS”), as agent (in such capacity, the “Collateral Agent”)
for the Secured Parties (as defined in the Credit Agreement referred to below).

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, dated as of October 15, 2010 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the Borrower, the Lenders and Issuers party
thereto, the other parties thereto, and CS, as Administrative Agent and
Collateral Agent for the Lenders and Issuers, the Lenders and the Issuers have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;

WHEREAS, the Grantors other than the Borrower are party to the Guaranty pursuant
to which they have guaranteed the Obligations (as defined in the Credit
Agreement); and

WHEREAS, it is a condition precedent to the obligation of the Lenders and the
Issuers to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Collateral Agent;

NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the
Issuers and the Collateral Agent to enter into the Credit Agreement and to
induce the Lenders and the Issuers to make their respective extensions of credit
to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent
as follows:

ARTICLE I.     DEFINED TERMS

Section 1.1         Definitions

(a)         Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein have the meanings given to them in the Credit
Agreement.

(b)        Terms used herein without definition that are defined in the UCC have
the meanings given to them in the UCC, including the following terms (which are
capitalized herein):

“Account Debtor”

“Account”

“Certificated Security”

“Chattel Paper”

“Commercial Tort Claim”

“Commodity Account”

“Control Account”

“Deposit Account”

“Documents”

“Entitlement Holder”

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PLEDGE AND SECURITY AGREEMENT

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“Entitlement Order”

“Equipment”

“Financial Asset”

“General Intangible”

“Goods”

“Instruments”

“Inventory”

“Investment Property”

“Letter of Credit Right”

“Proceeds”

“Securities Account”

“Securities Intermediary”

“Security”

“Security Entitlement”

(c)         The following terms shall have the following meanings:

“Additional Pledged Collateral” means any Pledged Collateral acquired by any
Grantor after the date hereof and in which a security interest is granted
pursuant to Section 2.2 (Grant of Security Interest in Collateral), including,
to the extent a security interest is granted therein pursuant to Section 2.2
(Grant of Security Interest in Collateral), (i) all Stock and Stock Equivalents
of any Person that are acquired by any Grantor after the date hereof, together
with all certificates, instruments or other documents representing any of the
foregoing and all Security Entitlements of any Grantor in respect of any of the
foregoing, (ii) all additional Indebtedness from time to time owed to any
Grantor by any obligor on the Pledged Debt Instruments and the Instruments
evidencing such Indebtedness and (iii) all interest, cash, Instruments and other
property or Proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any of the foregoing. “Additional
Pledged Collateral” may be General Intangibles, Instruments or Investment
Property.

“Agent” has the meaning specified in the recitals to this Agreement.

“Agreement” means this Pledge and Security Agreement.

“Borrower” has the meaning specified in the preamble to this Agreement.

“Collateral” has the meaning specified in Section 2.1 (Collateral).

“Collateral Agent” has the meaning specified in the preamble to this Agreement.

“Copyright Licenses” means any written agreement naming any Grantor as licensor
or licensee granting any right under any Copyright, including the grant of any
right to copy, publicly perform, create derivative works, manufacture,
distribute, exploit or sell materials derived from any Copyright.

“Copyrights” means (a) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof, and
(b) the right to obtain all renewals thereof.

 

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“Deposit Account Control Agreement” means a letter agreement in form and
substance reasonably satisfactory to Collateral Agent executed by the relevant
Grantor, the Collateral Agent and the relevant financial institution at which
such Grantor maintains the applicable Deposit Account.

“Excluded Equity” means any Voting Stock in excess of 66% of the total
outstanding Voting Stock of any direct Subsidiary of any Grantor that is a
Non-U.S. Person. For the purposes of this definition, “Voting Stock” means, as
to any issuer, the issued and outstanding shares of each class of capital stock
or other ownership interests of such issuer entitled to vote (within the meaning
of Treasury Regulations § 1.956-2(c)(2)).

“Excluded Property” means, collectively, (a) Excluded Equity, (b) any permit,
lease, license, contract, instrument or other agreement held by any Grantor that
prohibits or requires the consent of any Person other than the Borrower and its
Affiliates as a condition to the creation by such Grantor of a Lien thereon, or
any permit, lease, license contract or other agreement held by any Grantor
(including any Communications License, CATV Franchise or PUC Authorization) to
the extent that any Requirement of Law applicable thereto prohibits the creation
of a Lien thereon, but only, in each case, to the extent, and for so long as,
such prohibition is not terminated or rendered unenforceable or otherwise deemed
ineffective by the UCC or any other Requirement of Law, (c) any “intent to use”
Trademark applications for which a statement of use has not been filed (but only
until such statement is filed) and (d) property owned by any Grantor that is
subject to a purchase money Lien or a Capital Lease if the contract or other
agreement in which such Lien is granted (or in the documentation providing for
such Capital Lease) prohibits or requires the consent of any Person other than
the Borrower and its Affiliates as a condition to the creation of any other Lien
on such Equipment; provided, however, “Excluded Property” shall not include any
Proceeds, substitutions or replacements of Excluded Property (unless such
Proceeds, substitutions or replacements would constitute Excluded Property).

“Intellectual Property” means, collectively, all rights, priorities and
privileges of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses, trade secrets and Internet domain names, and all rights to sue at law
or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.

“Intercompany Note” means any promissory note evidencing loans made by any
Grantor or any of its Subsidiaries to any of its Subsidiaries or another Grantor
or to any Subsidiary of the Borrower.

“LLC” means each limited liability company in which a Grantor has an interest,
including those set forth on Schedule 2 (Pledged Collateral).

“LLC Agreement” means each limited liability company agreement, operating
agreement or similar governing document with respect to a LLC, as each agreement
has heretofore been, and may hereafter be, amended, restated, supplemented or
otherwise modified from time to time.

“Material Intellectual Property” means Intellectual Property owned by or
licensed to a Grantor and material to the conduct of any Grantor’s business.

 

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“Partnership” means each partnership in which a Grantor has an interest,
including those set forth on Schedule 2 (Pledged Collateral).

“Partnership Agreement” means each partnership agreement governing a
Partnership, as each such agreement has heretofore been, and may hereafter be,
amended, restated, supplemented or otherwise modified.

“Patents” means (a) all letters patent of the United States, any other country
or any political subdivision thereof and all reissues and extensions thereof,
(b) all applications for letters patent of the United States or any other
country and all divisionals, continuations and continuations-in-part thereof and
(c) all rights to obtain any reissues, continuations or continuations-in-part of
the foregoing.

“Patent License” means all agreements, whether written or oral, providing for
the grant by or to any Grantor of any right to manufacture, have manufactured,
use, import, sell or offer for sale any invention covered in whole or in part by
a Patent.

“Pledged Certificated Stock” means all Certificated Securities and any other
Stock and Stock Equivalent of a Person evidenced by a certificate, Instrument or
other equivalent document, in each case owned by any Grantor, including all
Stock listed on Schedule 2 (Pledged Collateral).

“Pledged Collateral” means, collectively, the Pledged Stock, Pledged Debt
Instruments, any other Investment Property of any Grantor, all chattel paper,
certificates or other Instruments representing any of the foregoing and all
Security Entitlements of any Grantor in respect of any of the foregoing. Pledged
Collateral may be General Intangibles, Instruments or Investment Property. For
purposes of this Agreement, the term “Pledged Collateral” shall not include any
Excluded Property.

“Pledged Debt Instruments” means all right, title and interest of any Grantor in
Instruments evidencing any Indebtedness owed to such Grantor, including all
Indebtedness described on Schedule 2 (Pledged Collateral), issued by the
obligors named therein.

“Pledged Stock” means all Pledged Certificated Stock and all Pledged
Uncertificated Stock. For purposes of this Agreement, the term “Pledged Stock”
shall not include any Excluded Equity.

“Pledged Uncertificated Stock” means any Stock or Stock Equivalent of any Person
that is not a Pledged Certificated Stock, including all right, title and
interest of any Grantor as a limited or general partner in any Partnership or as
a member of any LLC and all right, title and interest of any Grantor in, to and
under any Partnership Agreement or LLC Agreement to which it is a party.

“Securities Account Control Agreement” means a letter agreement, in form and
substantive reasonably satisfactory to Collateral Agent, executed by the
relevant Grantor, the Collateral Agent and the relevant Approved Securities
Intermediary.

“Securities Act” means the Securities Act of 1933, as amended.

“Trademark License” means any agreement, whether written or oral, providing for
the grant by or to any Grantor of any right to use any Trademark.

 

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“Trademarks” means (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and, in each case, all goodwill
associated therewith, whether now existing or hereafter adopted or acquired, all
registrations and recordings thereof and all applications in connection
therewith, in each case whether in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise, and all
common-law rights related thereto, and (b) the right to obtain all renewals
thereof.

“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of Delaware; provided, however, that, in the event that, by reason of
mandatory provisions of law, any of the attachment, perfection or priority of
the Collateral Agent’s and the Secured Parties’ security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Delaware, 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.

“Vehicles” means all vehicles covered by a certificate of title law of any
state.

Section 1.2        Certain Other Terms

(a)        In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding” and the
word “through” means “to and including.”

(b)        The terms “herein,” “hereof,” “hereto” and “hereunder” and similar
terms refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in this Agreement.

(c)        References herein to an Annex, Schedule, Article, Section, subsection
or clause refer to the appropriate Annex or Schedule to, or Article, Section,
subsection or clause in this Agreement.

(d)        The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

(e)        Where the context requires, provisions relating to any Collateral,
when used in relation to a Grantor, shall refer to such Grantor’s Collateral or
any relevant part thereof.

(f)        Any reference in this Agreement to a Loan Document shall include all
appendices, exhibits and schedules thereto, and, unless specifically stated
otherwise all amendments, restatements, supplements or other modifications
thereto, and as the same may be in effect at any time such reference becomes
operative.

(g)        The term “including” means “including without limitation” except when
used in the computation of time periods.

(h)        The terms “Lender,” “Issuer,” “Administrative Agent,” “Collateral
Agent,” “Agent,” and “Secured Party” include their respective successors.

 

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(i)        References in this Agreement to any statute shall be to such statute
as amended or modified and in effect from time to time.

ARTICLE II.   GRANT OF SECURITY INTEREST

Section 2.1         Collateral

For the purposes of this Agreement, all of the following property now owned or
at any time hereafter acquired by a Grantor or in which a Grantor now has or at
any time in the future may acquire any right, title or interests is collectively
referred to as the “Collateral”:

 

  (a) all Accounts;

 

  (b) all Chattel Paper;

 

  (c) all Deposit Accounts;

 

  (d) all Documents;

 

  (e) all Equipment;

 

  (f) all General Intangibles;

 

  (g) all Instruments;

 

  (h) all Inventory;

 

  (i) all Investment Property;

 

  (j) all Letter-of-Credit Rights;

 

  (k) all Vehicles;

(l)       the Commercial Tort Claims described on Schedule 7 (Commercial Tort
Claims) and on any supplement thereto received by the Collateral Agent pursuant
to Section 4.10 (Notice of Commercial Tort Claims);

(m)      all books and records pertaining to the other property described in
this Section 2.1;

(n)       all property of any Grantor held by the Collateral Agent or any other
Secured Party, including all property of every description, in the possession or
custody of or in transit to the Collateral Agent or such Secured Party for any
purpose, including safekeeping, collection or pledge, for the account of such
Grantor or as to which such Grantor may have any right or power;

(o)       all other Goods, fixtures and personal property of such Grantor,
whether tangible or intangible and wherever located; and

(p)       to the extent not otherwise included, all Proceeds of the foregoing;

 

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provided, however, that “Collateral” shall not include any Excluded Property;
and provided, further, that if and when any property shall cease to be Excluded
Property, such property shall be deemed at all times from and after the date
hereof to constitute Collateral.

Section 2.2        Grant of Security Interest in Collateral

Each Grantor, as collateral security for the full, prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges
and hypothecates to the Collateral Agent for the benefit of the Secured Parties,
and grants to the Collateral Agent for the benefit of the Secured Parties a lien
on and security interest in, all of its right, title and interest in, to and
under the Collateral of such Grantor; provided, however, that if and when any
property that at any time constituted Excluded Property becomes Collateral, the
Collateral Agent shall have, and at all times from and after the date hereof be
deemed to have had, a security interest in such property.

Section 2.3         Cash Collateral Accounts

The Collateral Agent may establish a Deposit Account at any bank or financial
institution (including any of its Affiliates) which shall be designated as “CS —
Knology, Inc. Cash Collateral Account”. Such Deposit Account shall be a Cash
Collateral Account.

ARTICLE III. REPRESENTATIONS AND WARRANTIES

To induce the Lenders, the Issuers and the Collateral Agent to enter into the
Credit Agreement, each Grantor hereby represents and warrants each of the
following to the Collateral Agent, the Lenders, the Issuers and the other
Secured Parties:

Section 3.1         Title; No Other Liens

Except for the Lien granted to the Collateral Agent pursuant to this Agreement
and the other Liens permitted to exist on the Collateral under the Credit
Agreement, such Grantor (a) is the record and beneficial owner of the Pledged
Collateral pledged by it hereunder constituting Instruments or Certificated
Securities, (b) is the Entitlement Holder of all such Pledged Collateral
constituting Investment Property held in a Securities Account and (c) has rights
in or the power to transfer each other item of Collateral in which a Lien is
granted by it hereunder, free and clear of any other Lien.

Section 3.2         Perfection and Priority

The security interest granted pursuant to this Agreement shall constitute a
valid and continuing perfected security interest in favor of the Collateral
Agent in the Collateral for which perfection is governed by the UCC or filing
with the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, upon (a) in the case of all Collateral in which
a security interest may be perfected by filing a financing statement under the
UCC, the completion of the filings and other actions specified on Schedule 3
(Filings) (which, in the case of all filings and other documents referred to on
such schedule, have been delivered to the Collateral Agent in completed and duly
executed form), (b) the delivery to the Collateral Agent of all Collateral
consisting of Instruments and Certificated Securities, in each case properly
endorsed for transfer to the Collateral Agent or in blank, (c) the execution of
Securities Account Control Agreements with respect to Investment Property named
therein not in certificated form, (d) the

 

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execution of Deposit Account Control Agreements with respect to all Deposit
Accounts named therein of a Grantor and (e) with respect to Intellectual
Property arising under the laws of the United States, to the extent that any
Requirement of Law for a security interest’s obtaining priority over the rights
of a lien creditor with respect to Intellectual Property preempts
Section 9-310(4) of the UCC, all appropriate filings having been made with the
United States Copyright Office and the USPTO, as applicable. Such security
interest shall be prior to all other Liens on the Collateral except for
Customary Permitted Liens having priority over the Collateral Agent’s Lien by
operation of law or otherwise as permitted under the Credit Agreement.

Section 3.3         Jurisdiction of Organization; Chief Executive Office

Such Grantor’s jurisdiction of organization, legal name, organizational
identification number, if any, and the location of such Grantor’ s chief
executive office or sole place of business, in each case as of the date hereof,
is specified on Schedule 1 (Jurisdiction of Organization; Principal Executive
Office) and such Schedule 1 (Jurisdiction of Organization; Principal Executive
Office) also lists all jurisdictions of incorporation, legal names and locations
of such Grantor’ s chief executive office or sole place of business for the five
years preceding the date hereof.

Section 3.4         Inventory and Equipment

On the date hereof, such Grantor’s Inventory and Equipment (other than mobile
goods and Inventory or Equipment in transit) are kept at the locations listed on
Schedule 4 (Location of Inventory and Equipment) and such Schedule 4 (Location
of Inventory and Equipment) also lists the locations of such Inventory and
Equipment for the five years preceding the date hereof.

Section 3.5         Pledged Collateral

(a)         The Pledged Stock pledged hereunder by such Grantor is listed on
Schedule 2 (Pledged Collateral) and constitutes that percentage of the issued
and outstanding equity of all classes of each issuer thereof as set forth on
Schedule 2 (Pledged Collateral).

(b)         All of the Pledged Stock (other than Pledged Stock in limited
liability companies and partnerships) has been duly authorized, validly issued
and is fully paid and nonassessable.

(c)         Each of the Pledged Debt Instruments constitutes the legal, valid
and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).

(d)         All Pledged Collateral and, if applicable, any Additional Pledged
Collateral, consisting of Certificated Securities or Instruments has been
delivered to the Collateral Agent in accordance with Section 4.4(a) (Pledged
Collateral) hereof and Section 7.11 (Additional Collateral and Guaranties) of
the Credit Agreement.

 

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(e)         Except to the extent otherwise permitted by the Credit Agreement,
all Pledged Collateral held by a Securities Intermediary in a Securities Account
is in a Control Account.

(f)         Other than Pledged Stock constituting General Intangibles, there is
no Pledged Collateral other than that represented by Certificated Securities or
Instruments in the possession of the Collateral Agent or that consist of
Financial Assets held in a Control Account, in each case, except to the extent
otherwise permitted by the Credit Agreement.

Section 3.6         Accounts

No amount payable to such Grantor under or in connection with any Account is
evidenced by any Instrument or Chattel Paper that has not been delivered to the
Collateral Agent, properly endorsed for transfer, to the extent delivery is
required by Section 4.4 (Pledged Collateral).

Section 3.7         Intellectual Property

(a)         Schedule 5 (Intellectual Property) lists all Material Intellectual
Property of such Grantor on the date hereof, separately identifying that owned
by such Grantor and that licensed to such Grantor. The Material Intellectual
Property set forth on Schedule 5 (Intellectual Property) for such Grantor
constitutes all of the intellectual property rights necessary to conduct its
business.

(b)         All Material Intellectual Property owned by such Grantor is valid,
subsisting, unexpired and enforceable, has not been adjudged invalid and has not
been abandoned and the use thereof in the business of such Grantor does not
infringe, misappropriate, dilute or violate the intellectual property rights of
any other Person.

(c)         Except as set forth in Schedule 5 (Intellectual Property), none of
the Material Intellectual Property owned by such Grantor is the subject of any
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor.

(d)         To such Grantor’s knowledge, no holding, decision or judgment has
been rendered by any Governmental Authority that would limit, cancel or question
the validity of, or such Grantor’s rights in, any Material Intellectual
Property.

(e)         No action or proceeding seeking to limit, cancel or question the
validity of any Material Intellectual Property owned by such Grantor or such
Grantor’s ownership interest therein is pending or, to the knowledge of such
Grantor, threatened. There are no claims, judgments or settlements to be paid by
such Grantor relating to the Material Intellectual Property.

Section 3.8         Deposit Accounts; Securities Accounts

The only Deposit Accounts or Securities Accounts maintained by any Grantor on
the date hereof are those listed on Schedule 6 (Bank Accounts; Control
Accounts), which sets forth such information separately for each Grantor.

 

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Section 3.9         Commercial Tort Claims

The only Commercial Tort Claims of any Grantor existing on the date hereof
(regardless of whether the amount, defendant or other material facts can be
determined and regardless of whether such Commercial Tort Claim has been
asserted, threatened or has otherwise been made known to the obligee thereof or
whether litigation has been commenced for such claims) are those listed on
Schedule 7 (Commercial Tort Claims), which sets forth such information
separately for each Grantor.

ARTICLE IV. COVENANTS

Each Grantor agrees with the Collateral Agent to the following, as long as any
Obligation or Commitment remains outstanding and, in each case, unless the
Collateral Agent otherwise consents in writing:

Section 4.1         Generally

Such Grantor shall (a) except for the security interest created by this
Agreement not create or suffer to exist any Lien upon or with respect to any
Collateral, except Liens permitted under Section 8.2 (Liens, Etc.) of the Credit
Agreement, (b) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any other Loan Document, (c) not
enter into any agreement or undertaking restricting the right or ability of such
Grantor or the Collateral Agent to sell, assign or transfer any Collateral if
such restriction would have a Material Adverse Effect.

Section 4.2         Maintenance of Perfected Security Interest; Further
Documentation

(a)         Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in Section 3.2 (Perfection and Priority) and shall defend such
security interest and such priority against the claims and demands of all
Persons.

(b)         Such Grantor shall furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request in writing, all in reasonable detail and in form and
substance satisfactory to the Collateral Agent.

(c)         At any time and from time to time, upon the reasonable written
request of the Collateral Agent, and at the sole expense of such Grantor, such
Grantor shall promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further action as the Collateral
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including the filing of any financing or continuation statement under the UCC
(or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby and the execution and delivery of Deposit
Account Control Agreements and Securities Account Control Agreements.

 

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Section 4.3         Changes in Locations, Name, Etc.

(a)         Except upon 30 days’ prior written notice to the Collateral Agent
and delivery to the Collateral Agent of (i) all additional financing statements
and other documents reasonably requested by the Collateral Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (ii) if applicable, a written supplement to Schedule 4 (Location of
Inventory and Equipment) showing (A) any additional locations at which Inventory
or Equipment shall be kept or (B) any changes in any location where Inventory or
Equipment shall be kept that would require the Collateral Agent to take any
action to maintain a perfected security interest in such Collateral, such
Grantor shall not do any of the following:

  (i)         permit any Inventory or Equipment to be kept at a location other
than those listed on Schedule 4 (Location of Inventory and Equipment), except
for Inventory or Equipment in transit;

  (ii)         change its jurisdiction of organization or its location, in each
case from that referred to in Section 3.3 (Jurisdiction of Organization; Chief
Executive Office); or

  (iii)         change its legal name or any trade name used to identify it in
the conduct of its business or ownership of its properties or organizational
identification number, if any, or corporation, limited liability company or
other organizational structure to such an extent that any financing statement
filed in connection with this Agreement would become misleading.

(b)         Such Grantor shall keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, including a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings with the Collateral.

Section 4.4        Pledged Collateral

(a)         Such Grantor shall (i) deliver to the Collateral Agent, all
certificates and Instruments representing or evidencing any Pledged Collateral
(including Additional Pledged Collateral), whether now existing or hereafter
acquired, in suitable form for transfer by delivery or, as applicable,
accompanied by such Grantor’s endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent, together, in respect of any Additional
Pledged Collateral, with a Pledge Amendment, duly executed by the Grantor, in
substantially the form of Annex 1 (Form of Pledge Amendment), an acknowledgment
and agreement to a Joinder Agreement duly executed by the Grantor, in
substantially the form in the form of Annex 2 (Form of Joinder Agreement), or
such other documentation acceptable to the Collateral Agent and (ii) maintain
all other Pledged Collateral constituting Investment Property in a Control
Account. Such Grantor authorizes the Collateral Agent to attach each Pledge
Amendment to this Agreement. After the incurrence and continuation of an Event
of Default, the Collateral Agent shall have the right, at any time in its
discretion and without notice to the Grantor, to transfer to or to register in
its name or in the name of its nominees any Pledged Collateral. The Collateral
Agent shall have the right, upon the reasonable request to the Grantor, to
exchange any certificate or instrument representing or evidencing any Pledged
Collateral for certificates or instruments of smaller or larger denominations.

(b)         Such Grantor shall be entitled to receive all cash dividends paid in
respect of the Pledged Collateral (other than liquidating or distributing
dividends) with respect to

 

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the Pledged Collateral. Any sums paid upon or in respect of any Pledged
Collateral upon the liquidation or dissolution of any issuer of any Pledged
Collateral, any distribution of capital made on or in respect of any Pledged
Collateral or any property distributed upon or with respect to any Pledged
Collateral pursuant to the recapitalization or reclassification of the capital
of any issuer of Pledged Collateral or pursuant to the reorganization thereof
shall, unless otherwise subject to a perfected security interest in favor of the
Collateral Agent, be delivered to the Collateral Agent to be held by it
hereunder as additional collateral security for the Secured Obligations. If any
sum of money or property so paid or distributed in respect of any Pledged
Collateral shall be received by such Grantor, such Grantor shall, until such
money or property is paid or delivered to the Collateral Agent, hold such money
or property in trust for the Collateral Agent, segregated from other funds of
such Grantor, as additional security for the Secured Obligations.

(c)         Such Grantor shall be entitled to exercise all voting, consent and
corporate, partnership, limited liability company and similar rights with
respect to the Pledged Collateral; provided, however, that no vote shall be
cast, consent given or right exercised or other action taken by such Grantor
that would impair the Collateral, be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document or, without prior notice to the Collateral Agent, enable or permit
any issuer of Pledged Collateral to issue any Stock or other equity Securities
of any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any Stock or other equity Securities of any
nature of any issuer of Pledged Collateral, except for in connection with any
issuance permitted under Section 8.3(e) of the Credit Agreement.

(d)         Such Grantor shall not grant “control” (within the meaning of such
term under Article 9-106 of the UCC) over any Investment Property to any Person
other than the Collateral Agent.

(e)         In the case of each Grantor that is an issuer of Pledged Collateral,
such Grantor agrees to be bound by the terms of this Agreement relating to the
Pledged Collateral issued by it and shall comply with such terms insofar as such
terms are applicable to it. In the case of any Grantor that is a holder of any
Stock or Stock Equivalent in any Person that is an issuer of Pledged Collateral,
such Grantor consents to (i) the exercise of the rights granted to the
Collateral Agent hereunder (including those described in Section 5.3 (Pledged
Collateral)), and (ii) the pledge by each other Grantor, pursuant to the terms
hereof, of the Pledged Stock in such Person and to the transfer of such Pledged
Stock to the Collateral Agent or its nominee and to the substitution of the
Collateral Agent or its nominee as a holder of such Pledged Stock with all the
rights, powers and duties of other holders of Pledged Stock of the same class
and, if the Grantor having pledged such Pledged Stock hereunder had any right,
power or duty at the time of such pledge or at the time of such substitution
beyond that of such other holders, with all such additional rights, powers and
duties. Such Grantor agrees to execute and deliver to the Collateral Agent such
certificates, agreements and other documents as may be necessary to evidence,
formalize or otherwise give effect to the consents given in this clause (e).

(f)         Such Grantor shall not, without the consent of the Collateral Agent,
agree to any amendment of any Constituent Document that in any way materially
and adversely affects the perfection of the security interest of the Collateral
Agent in the Pledged Collateral pledged by such Grantor hereunder, including any
amendment electing to treat any membership interest or partnership interest that
is part of the Pledged Collateral as a “security” under Section 8-103 of the
UCC, or any election to turn any previously uncertificated Stock that is part of
the Pledged Collateral into certificated Stock.

 

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Section 4.5         Accounts

(a)         Except with respect to any Account that is more than ninety
(90) days past-due, such Grantor shall not, other than in the ordinary course of
business consistent with its past practice, (i) grant any extension of the time
of payment of any Account, (ii) compromise or settle any Account for less than
the full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Account, (iv) allow any credit or discount on any Account
or (v) amend, supplement or modify any Account in any manner that could
adversely affect the value thereof.

(b)         The Collateral Agent shall have the right to make test verifications
of the Accounts in any manner and through any medium that it reasonably
considers advisable, and such Grantor shall furnish all such assistance and
information as the Collateral Agent may reasonably require in connection
therewith; provided, however, that unless a Default or Event of Default shall be
continuing, the Collateral Agent shall make no more than four such test
verifications of the Accounts during any calendar year. At any time and from
time to time, upon the Collateral Agent’s request and at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Collateral Agent to furnish to the Collateral Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Accounts; provided, however, that unless a Default or Event of
Default shall be continuing, the Collateral Agent shall request no more than
four such reports during any calendar year.

Section 4.6         Delivery of Instruments and Chattel Paper

If any amount in excess of $1,000,000 payable under or in connection with any
Collateral owned by such Grantor shall be or become evidenced by an Instrument
or Chattel Paper, such Grantor shall deliver, within five Business Days, such
Instrument or Chattel Paper to the Collateral Agent, duly indorsed in a manner
satisfactory to the Collateral Agent, or, if consented to by the Collateral
Agent, shall mark all such Instruments and Chattel Paper with the following
legend: “This writing and the obligations evidenced or secured hereby are
subject to the security interest of Credit Suisse AG, Cayman Islands Branch, as
Collateral Agent” or such other substantially similar legend.

Section 4.7         Intellectual Property

(a)         Such Grantor (either itself or through licensees) shall (i) continue
to use each Trademark that is Material Intellectual Property in order to
maintain such Trademark in full force and effect with respect to each class of
goods for which such Trademark is currently used, free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the
appropriate notice of registration and all other notices and legends required by
applicable Requirements of Law, (iv) not adopt or use any mark that is
confusingly similar or a colorable imitation of such Trademark unless the
Collateral Agent shall obtain a perfected security interest in such mark
pursuant to this Agreement and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark (or any goodwill associated therewith) may become destroyed,
invalidated, impaired or harmed in any way.

(b)         Such Grantor (either itself or through licensees) shall not do any
act, or omit to do any act, whereby any Patent that is Material Intellectual
Property may become forfeited, abandoned or dedicated to the public.

 

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(c)         Such Grantor (either itself or through licensees) (i) shall not (and
shall not permit any licensee or sublicensee thereof to) do any act or omit to
do any act whereby any portion of the Copyrights that is Material Intellectual
Property may become invalidated or otherwise impaired and (ii) shall not (either
itself or through licensees) do any act whereby any portion of the Copyrights
that is Material Intellectual Property may fall into the public domain.

(d)         Such Grantor (either itself or through licensees) shall not do any
act, or omit to do any act, whereby any trade secret that is Material
Intellectual Property may become publicly available or otherwise unprotectable.

(e)         Such Grantor (either itself or through licensees) shall not do any
act that knowingly uses any Material Intellectual Property to infringe,
misappropriate, or violate the intellectual property rights of any other Person.

(f)         Such Grantor shall notify the Collateral Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any Material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor’ s
ownership of, right to use, interest in, or the validity of, any Material
Intellectual Property or such Grantor’s right to register the same or to own and
maintain the same.

(g)         Whenever such Grantor, either by itself or through any agent,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency within or outside
the United States or register any Internet domain name, such Grantor shall
report such filing to the Collateral Agent within five Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon request of the
Collateral Agent, such Grantor shall execute and deliver, and have recorded, all
agreements, instruments, documents and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent’ s security interest in any
Copyright, Patent, Trademark or Internet domain name and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.

(h)         Such Grantor shall take all reasonable actions necessary or
requested by the Collateral Agent with respect to any Material Intellectual
Property, including in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency and any Internet domain name registrar, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of any Copyright, Trademark, Patent or Internet domain name that is
Material Intellectual Property, including filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition and
interference and cancellation proceedings.

(i)         In the event that any Material Intellectual Property is or has been
infringed upon or misappropriated or diluted by a third party, such Grantor
shall notify the Collateral Agent promptly after such Grantor learns thereof.
Such Grantor shall take appropriate action in response to such infringement,
misappropriation of dilution, including promptly bringing suit for infringement,
misappropriation or dilution and to recover all damages for such infringement,
misappropriation of dilution, and shall take such other actions as may be
appropriate in its reasonable judgment under the circumstances to protect such
Material Intellectual Property.

 

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(j)         Unless otherwise agreed to by the Collateral Agent, such Grantor
shall execute and deliver to the Collateral Agent for filing (i) in the United
States Copyright Office a short-form copyright security agreement in the form
attached hereto as Annex 3 (Form of Short Form Intellectual Property Security
Agreement), (ii) in the United States Patent and Trademark Office and with the
Secretary of State of all appropriate States of the United States a short-form
patent security agreement in the form attached hereto as Annex 3 (Form of Short
Form Intellectual Property Security Agreement), (iii) in the United States
Patent and Trademark Office a short-form trademark security agreement in form
attached hereto as Annex 3 (Form of Short Form Intellectual Property Security
Agreement) and (iv) with the appropriate Internet domain name registrar, a duly
executed form of assignment of such Internet domain name to the Collateral Agent
(together with appropriate supporting documentation as may be requested by the
Collateral Agent) in form and substance reasonably acceptable to the Collateral
Agent. In the case of clause (iv) above, such Grantor hereby authorizes the
Collateral Agent to file such assignment in such Grantor’s name and to otherwise
perform in the name of such Grantor all other necessary actions to complete such
assignment, and each Grantor agrees to perform all appropriate actions deemed
necessary by the Collateral Agent for the Collateral Agent to ensure such
Internet domain name is registered in the name of the Collateral Agent.

Section 4.8         Payment of Obligations

Such Grantor shall pay and discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all taxes, assessments and
governmental charges or levies imposed upon the Collateral or in respect of
income or profits therefrom, as well as all claims of any kind (including claims
for labor, materials and supplies) against or with respect to the Collateral,
except that no such charge need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings, reserves in
conformity with GAAP with respect thereto have been provided on the books of
such Grantor and such proceedings could not reasonably be expected to result in
the sale, forfeiture or loss of any material portion of the Collateral or any
interest therein.

Section 4.9         [Reserved]

Section 4.10         Notice of Commercial Tort Claims

Such Grantor agrees that, if it shall acquire any interest in any Commercial
Tort Claim (whether from another Person or because such Commercial Tort Claim
shall have come into existence) in an amount (taking the greater of the
aggregate claimed damages thereunder or the reasonably estimated value thereof)
in excess of $5,000,000, (a) it shall, within five Business Days of such
acquisition, deliver to the Collateral Agent, in each case in form and substance
satisfactory to the Collateral Agent, a notice of the existence and nature of
such Commercial Tort Claim and deliver a supplement to Schedule 7 (Commercial
Tort Claims) containing a reasonable description of such Commercial Tort Claim,
(b) the provision of Section 2.1 (Collateral) shall apply to such Commercial
Tort Claim and (c) it shall execute and deliver to the Collateral Agent, in each
case in form and substance satisfactory to the Collateral Agent, any
certificate, agreement and other document, and take all other action, deemed by
the Collateral Agent to be reasonably necessary or appropriate for the
Collateral Agent to obtain, on behalf of the Lenders, a first-priority,
perfected security interest in all such Commercial Tort Claims. Any supplement
to Schedule 7 (Commercial Tort Claims) delivered pursuant to this Section 4.10
(Notice of Commercial Tort Claims) shall, after the receipt thereof by the
Collateral Agent, become part of Schedule 7 (Commercial Tort Claims) for all
purposes hereunder other than in respect of representations and warranties made
prior to the date of such receipt.

 

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ARTICLE V.   REMEDIAL PROVISIONS

Section 5.1         Code and Other Remedies

During the continuance of an Event of Default, the Collateral Agent may
exercise, in addition to all other rights and remedies granted to it in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the UCC or any other applicable law. Without limiting the generality of
the foregoing, during the continuance of an Event of Default, the Collateral
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 any 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 any
Collateral, and may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver any Collateral (or contract to do
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker’s board or office of the Collateral Agent or any
Lender 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 Collateral Agent shall have the right
upon any such public sale or sales, and, to the extent permitted by the UCC and
other applicable 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
of any Grantor, which right or equity is hereby waived and released. Each
Grantor further agrees, during the continuance of an Event of Default, at the
Collateral Agent’s request, to assemble the Collateral and make it available to
the Collateral Agent at places that the Collateral Agent shall reasonably
select, whether at such Grantor’s premises or elsewhere. The Collateral Agent
shall apply the net proceeds of any action taken by it pursuant to this
Section 5.1, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any
Collateral or in any way relating to the Collateral or the rights of the
Collateral Agent and any other Secured Party hereunder, including reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Secured Obligations, in such order as the Credit Agreement shall prescribe, and
only after such application and after the payment by the Collateral Agent of any
other amount required by any provision of law, need the Collateral Agent account
for the surplus, if any, to any Grantor. To the extent permitted by applicable
law, each Grantor waives all claims, damages and demands it may acquire against
the Collateral Agent or any other Secured Party arising out of the exercise by
them of any rights hereunder, except where such claims, damages or demands have
resulted primarily from the gross negligence or willful misconduct of the
Collateral Agent or any other Secured Party, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order. If any
notice of a proposed sale or other disposition of 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.

Section 5.2         Accounts and Payments in Respect of General Intangibles

(a)         In addition to, and not in substitution for, any similar requirement
in the Credit Agreement, if required by the Collateral Agent at any time during
the continuance of an Event of Default, any payment of Accounts or payment in
respect of General Intangibles, when collected by any Grantor, shall be
forthwith (and, in any event, within five Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent, in an Approved Deposit Account or a Cash Collateral Account,
subject to withdrawal by the Collateral Agent as provided in Section 5.4
(Proceeds to be Turned Over To

 

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Collateral Agent). Until so turned over, such payment shall be held by such
Grantor in trust for the Collateral Agent, segregated from other funds of such
Grantor. At the Collateral Agent’s written request, each such deposit of
Proceeds of Accounts and payments in respect of General Intangibles shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.

(b)         At the Collateral Agent’s request, during the continuance of an
Event of Default, each Grantor shall deliver to the Collateral Agent all
original and other documents evidencing, and relating to, the agreements and
transactions that gave rise to the Accounts or payments in respect of General
Intangibles, including all orders, invoices and shipping receipts.

(c)         The Collateral Agent may, without notice, at any time during the
continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under General Intangibles or any
portion thereof.

(d)         The Collateral Agent in its own name or in the name of others may at
any time during the continuance of an Event of Default, after giving notice to
the relevant Grantor or Grantors, communicate with Account Debtors to verify
with them to the Collateral Agent’s satisfaction the existence, amount and terms
of any Account or amounts due under any General Intangible.

(e)         Upon the request of the Collateral Agent at any time during the
continuance of an Event of Default, each Grantor shall notify Account Debtors
that the Accounts or General Intangibles have been collaterally assigned to the
Collateral Agent and that payments in respect thereof shall be made directly to
the Collateral Agent. In addition, the Collateral Agent may at any time during
the continuance of an Event of Default enforce such Grantor’s rights against
such Account Debtors and obligors of General Intangibles.

(f)         Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Accounts and payments in respect of General
Intangibles to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. Neither the Collateral Agent nor any other
Secured Party shall have any obligation or liability under any agreement giving
rise to an Account or a payment in respect of a General Intangible by reason of
or arising out of this Agreement or the receipt by the Collateral Agent nor any
other Secured Party of any payment relating thereto, nor shall the Collateral
Agent nor any other Secured Party be obligated in any manner to perform any
obligation of any Grantor under or pursuant to any agreement giving rise to an
Account or a payment in respect of a General Intangible, to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts that may have been assigned to it or to which
it may be entitled at any time or times.

Section 5.3         Pledged Collateral

(a)         During the continuance of an Event of Default, upon notice by the
Collateral Agent to the relevant Grantor or Grantors, (i) the Collateral Agent
shall have the right to receive any Proceeds of the Pledged Collateral and make
application thereof to the Obligations in the order set forth in the Credit
Agreement and (ii) the Collateral Agent or its nominee may exercise (A) any
voting, consent, corporate and other right pertaining to the Pledged Collateral
at any meeting of shareholders, partners or members, as the case may be, of the
relevant issuer or

 

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issuers of Pledged Collateral or otherwise and (B) any right of conversion,
exchange and subscription and any other right, privilege or option pertaining to
the Pledged Collateral as if it were the absolute owner thereof (including the
right to exchange at its discretion any of the Pledged Collateral upon the
merger, amalgamation, consolidation, reorganization, recapitalization or other
fundamental change in the corporate or equivalent structure of any issuer of
Pledged Stock, the right to deposit and deliver any Pledged Collateral with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it; provided,
however, that the Collateral Agent shall have no duty to any Grantor to exercise
any such right, privilege or option and shall not be responsible for any failure
to do so or delay in so doing.

(b)         In order to permit the Collateral Agent to exercise the voting and
other consensual rights that it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions that it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Collateral Agent all such proxies, dividend
payment orders and other instruments as the Collateral Agent may from time to
time reasonably request and (ii) without limiting the effect of clause
(i) above, each Grantor hereby grants to the Collateral Agent an irrevocable
proxy to vote all or any part of the Pledged Collateral and to exercise all
other rights, powers, privileges and remedies to which a holder of the Pledged
Collateral would be entitled (including giving or withholding written consents
of shareholders, partners or members, as the case may be, calling special
meetings of shareholders, partners or members, as the case may be, and voting at
such meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Collateral on the
record books of the issuer thereof) by any other person (including the issuer of
such Pledged Collateral or any officer or agent thereof) solely during the
continuance of an Event of Default and which proxy shall only terminate upon the
payment in full of the Secured Obligations.

(c)         Each Grantor hereby expressly authorizes and instructs each issuer
of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with
any instruction received by it from the Collateral Agent in writing that
(A) states that an Event of Default has occurred and is continuing and (B) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that such issuer
shall be fully protected in so complying and (ii) unless otherwise expressly
permitted hereby, pay any dividend or other payment with respect to the Pledged
Collateral directly to the Collateral Agent.

Section 5.4         Proceeds to be Turned Over To Collateral Agent

Unless otherwise expressly provided in the Credit Agreement, all Proceeds
received by the Collateral Agent hereunder in cash or Cash Equivalents shall be
held by the Collateral Agent in a Cash Collateral Account. All Proceeds while
held by the Collateral Agent in a Cash Collateral Account (or by such Grantor in
trust for the Collateral Agent) shall continue to be held as collateral security
for the Secured Obligations and shall not constitute payment thereof until
applied as provided in the Credit Agreement.

Section 5.5         Registration Rights

(a)         If the Collateral Agent shall determine to exercise its right to
sell any of the Pledged Collateral pursuant to Section 5.1 (Code and Other
Remedies) during the continuance

 

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of an Event of Default, and if in the opinion of the Collateral Agent it is
necessary or advisable to have the Pledged Collateral, or any portion thereof,
to be registered under the provisions of the Securities Act, the relevant
Grantor shall cause the issuer thereof to (i) execute and deliver, and cause the
directors and officers of such issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Collateral Agent, necessary or advisable to register
the Pledged Collateral, or that portion thereof to be sold, under the provisions
of the Securities Act, (ii) use its best efforts to cause the registration
statement relating thereto to become effective and to remain effective for a
period of one year from the date of the first public offering of the Pledged
Collateral, or that portion thereof to be sold and (iii) make all amendments
thereto or to the related prospectus that, in the opinion of the Collateral
Agent, are necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause such issuer to
comply with the provisions of the securities or “Blue Sky” laws of any
jurisdiction that the Collateral Agent shall designate and to make available to
its security holders, as soon as practicable, an earnings statement (which need
not be audited) satisfying the provisions of Section 11(a) of the Securities
Act.

(b)         Each Grantor recognizes that the Collateral Agent may be unable to
effect a public sale of any Pledged Collateral by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise or may determine that a public sale is impracticable or not
commercially reasonable and, accordingly, may resort to one or more private
sales thereof to a restricted group of purchasers that shall be obliged 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. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any Pledged Collateral for
the period of time necessary to permit the issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such issuer would agree to do so.

(c)         During the continuance of an Event of Default, each Grantor agrees
to use its best efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the Pledged
Collateral pursuant to this Section 5.5 valid and binding and in compliance with
all other applicable Requirements of Law. Each Grantor further agrees that a
breach of any covenant contained in this Section 5.5 will cause irreparable
injury to the Collateral Agent and other Secured Parties, that the Collateral
Agent and the other Secured Parties have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this Section 5.5 shall be specifically enforceable against such Grantor, and
such Grantor hereby waives and agrees not to assert any defense against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.

Section 5.6         Deficiency

Each Grantor shall remain liable for any deficiency if the proceeds of any sale
or other disposition of the Collateral are insufficient to pay the Secured
Obligations and the fees and disbursements of any attorney employed by the
Collateral Agent or any other Secured Party to collect such deficiency.

 

21

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PLEDGE AND SECURITY AGREEMENT

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Section 5.7         Approvals

Without limiting the generality of the foregoing, during the continuance of an
Event of Default, each Grantor shall take any action which the Collateral Agent
may reasonably request in order to assign, or to transfer control of the holder
of, to the Collateral Agent, or such one or more third parties as the Collateral
Agent may designate, or to a combination of the foregoing, each Communications
License, CATV Franchise or PUC Authorization or other approval from a
Governmental Authority and the Collateral Agent is empowered to request the
appointment of a receiver from any court of competent jurisdiction to enforce
such obligations. Such receiver shall be instructed to seek from the
Governmental Authority approval for an involuntary assignment of, or transfer of
control of the holder of, each such Communications License, CATV Franchise or
PUC Authorization or other approval for the purpose of seeking a bona fide
purchaser to whom control will ultimately be transferred. Each Grantor hereby
agrees to authorize and make application for such an involuntary assignment or
transfer of control upon the request of the receiver so appointed and, if such
Grantor shall refuse to authorize and make application for the assignment or
transfer of control, its approval may be required by the court. Furthermore,
each Grantor shall use its best efforts to assist in obtaining approval of any
Governmental Authority, if required, for any action or transaction contemplated
by this Agreement, including, without limitation, the preparation, execution and
filing with any Governmental Authority of the assignor’s or transferor’s portion
of any application or applications for consent to the assignment of any
Communications License, CATV Franchise or PUC Authorization or other approval,
or to the transfer of control of the holder thereof, necessary or appropriate
under the rules and regulations of any Governmental Authority for the approval
of the assignment of any portion of the assets of such Grantor, together with
any Communications License, CATV Franchise or PUC Authorization or other
approval, or the transfer of control of the holder thereof. Because each Grantor
agrees that the Collateral Agent’s remedy at law for failure of such Grantor to
comply with the provisions of this Section 5.7 would by inadequate and that such
failure would not be adequately compensable in damages, each Grantor agrees that
these covenants and agreements may be specifically enforced, and each Grantor
hereby waives, and agrees not to assert, any defenses against an action for
specific performance of such covenants. Notwithstanding the foregoing, the
Lenders and the Collateral Agent understand and agree that the assignment or
transfer of control of some of the Communications Licenses requires advance
approval by the FCC.

ARTICLE VI. THE COLLATERAL AGENT

Section 6.1         Collateral Agent’s Appointment as Attorney-in-Fact

(a)         Each Grantor hereby irrevocably constitutes and appoints the
Collateral Agent and any officer or agent thereof, 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 such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any appropriate action and to execute any document or
instrument that may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any of the
following:

  (i)         in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any check, draft, note, acceptance or
other instrument for the payment of moneys due under any Account or General
Intangible or

 

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PLEDGE AND SECURITY AGREEMENT

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with respect to any other Collateral and file any claim or take any other action
or proceeding in any court of law or equity or otherwise deemed appropriate by
the Collateral Agent for the purpose of collecting any such moneys due under any
Account or General Intangible or with respect to any other Collateral whenever
payable;

  (ii)        in the case of any Intellectual Property, execute and deliver, and
have recorded, any agreement, instrument, document or paper as the Collateral
Agent may request to evidence the Collateral Agent’s security interest in such
Intellectual Property and the goodwill and General Intangibles of such Grantor
relating thereto or represented thereby;

  (iii)        pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repair or pay any insurance called
for by the terms of this Agreement (including all or any part of the premiums
therefor and the costs thereof);

  (iv)        execute, in connection with any sale provided for in Section 5.1
(Code and Other Remedies) or 5.5 (Registration Rights), any endorsement,
assignment or other instrument of conveyance or transfer with respect to the
Collateral; or

  (v)        (A) direct any party liable for any payment under any Collateral to
make payment of any moneys due or to become due thereunder directly to the
Collateral Agent or as the Collateral Agent shall direct, (B) ask or demand for,
collect, and receive payment of and receipt for, any moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Collateral, (C) sign and indorse any invoice, freight or express bill, bill of
lading, storage or warehouse receipt, draft against debtors, assignment,
verification, notice and other document in connection with any Collateral,
(D) commence and prosecute any suit, action or proceeding at law or in equity in
any court of competent jurisdiction to collect any Collateral and to enforce any
other right in respect of any Collateral, (E) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral,
(F) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Collateral Agent
may deem appropriate, (G) assign any Copyright, Patent or Trademark (along with
the goodwill of the business to which any such Trademark pertains) throughout
the world for such term or terms, on such conditions, and in such manner as the
Collateral Agent shall in its sole discretion determine, including the execution
and filing of any document necessary to effectuate or record such assignment and
(H) generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and do, at
the Collateral Agent’s option and such Grantor’s expense, at any time, or from
time to time, all acts and things that the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and the Collateral Agent’s and
the other Secured Parties’ security interests therein and to effect the intent
of this Agreement, all as fully and effectively as such Grantor might do.

Anything in this clause (a) to the contrary notwithstanding, the Collateral
Agent agrees that it shall not exercise any right under the power of attorney
provided for in this clause (a) unless an Event of Default shall be continuing.

(b)         If any Grantor fails to perform or comply with any of its agreements
contained in this Agreement, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.

 

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PLEDGE AND SECURITY AGREEMENT

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(c)         The reasonable expenses of the Collateral Agent incurred in
connection with actions undertaken as provided in this Section 6.1, together
with interest thereon at a rate per annum equal to the rate of interest provided
in Sections 2.10(a)(i) and (c) (Rate of Interest; Default Interest) of the
Credit Agreement, shall be payable by such Grantor to the Collateral Agent on
demand.

(d)         Each Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

Section 6.2         Duty of Collateral Agent

The Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession shall be to deal with
it in the same manner as the Collateral Agent deals with similar property for
its own account. Neither the Collateral Agent, any other Secured Party nor any
of their respective officers, directors, employees or agents shall be liable for
failure to demand, collect or realize upon any 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 any Grantor or any other Person or to take any
other action whatsoever with regard to any Collateral. The powers conferred on
the Collateral Agent hereunder are solely to protect the Collateral Agent’s and
the Secured Parties’ interests in the Collateral and shall not impose any duty
upon the Collateral Agent or any other Secured Party to exercise any such
powers. The Collateral Agent and the other Secured Parties shall be accountable
only for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their respective officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.

Section 6.3         Authorization of Financing Statements

Each Grantor authorizes the Collateral Agent and its Affiliates, counsel and
other representatives, at any time and from time to time, to file or record
financing statements, amendments to financing statements, and other filing or
recording documents or instruments with respect to the Collateral in such form
and in such offices as the Collateral Agent reasonably determines appropriate to
perfect the security interests of the Collateral Agent under this Agreement, and
such financing statements and amendments may describe the Collateral covered
thereby as “all assets of the debtor”, “all personal property of the debtor” or
words of similar effect. Each Grantor hereby also authorizes the Collateral
Agent and its Affiliates, counsel and other representatives, at any time and
from time to time, to file continuation statements with respect to previously
filed financing statements. A photographic or other reproduction of this
Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.

Section 6.4         Authority of Collateral Agent

Each Grantor acknowledges that the rights and responsibilities of the Collateral
Agent under this Agreement with respect to any action taken by the Collateral
Agent or the exercise or non-exercise by the Collateral Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Collateral
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them,

 

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PLEDGE AND SECURITY AGREEMENT

KNOLOGY, INC.

 

but, as between the Collateral Agent and the Grantors, the Collateral Agent
shall be conclusively presumed to be acting as agent for the Collateral Agent
and the other Secured Parties with full and valid authority so to act or refrain
from acting, and no Grantor shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.

ARTICLE VII.         MISCELLANEOUS

Section 7.1         Amendments in Writing

None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except in accordance with Section 11.1
(Amendments, Waivers, Etc.) of the Credit Agreement; provided, however, that
annexes to this Agreement may be supplemented (but no existing provisions may be
modified and no Collateral may be released) through Pledge Amendments and
Joinder Agreements, in substantially the form of Annex 1 (Form of Pledge
Amendment) and Annex 2 (Form of Joinder Agreement) respectively, in each case
duly executed by the Collateral Agent and each Grantor directly affected
thereby.

Section 7.2         Notices

All notices, requests and demands to or upon the Collateral Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 11.8 (Notices,
Etc.) of the Credit Agreement; provided, however, that any such notice, request
or demand to or upon any Grantor shall be addressed to the Borrower’s notice
address set forth in such Section 11.8.

Section 7.3         No Waiver by Course of Conduct; Cumulative Remedies

Neither the Collateral Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 7.1 (Amendments in Writing),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the Collateral
Agent or any other Secured Party, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Collateral
Agent or any other Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that the
Collateral Agent or such other Secured Party would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

Section 7.4         Successors and Assigns

This Agreement shall be binding upon the successors and assigns of each Grantor
and shall inure to the benefit of the Collateral Agent and each other Secured
Party and their successors and assigns; provided, however, that no Grantor may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent.

Section 7.5         Counterparts

This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts (including by telecopy), each of which
when so executed

 

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PLEDGE AND SECURITY AGREEMENT

KNOLOGY, INC.

 

shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Signature pages may be detached from
multiple counterparts and attached to a single counterpart so that all signature
pages are attached to the same document. Delivery of an executed counterpart by
telecopy shall be effective as delivery of a manually executed counterpart.

Section 7.6         Severability

Any provision of this Agreement that 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.

Section 7.7         Section Headings

The Article and Section titles contained in this Agreement are, and shall be,
without substantive meaning or content of any kind whatsoever and are not part
of the agreement of the parties hereto.

Section 7.8         Entire Agreement

This Agreement together with the other Loan Documents represents the entire
agreement of the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof.

Section 7.9         Governing Law

This Agreement and the rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance with, the law of the
State of Delaware.

Section 7.10         Additional Grantors

If, pursuant to Section 7.11 (Additional Collateral and Guaranties) of the
Credit Agreement, the Borrower shall be required to cause any Subsidiary that is
not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and
deliver to the Collateral Agent a Joinder Agreement substantially in the form of
Annex 2 (Form of Joinder Agreement) and shall thereafter for all purposes be a
party hereto and have the same rights, benefits and obligations as a Grantor
party hereto on the Effective Date.

Section 7.11         Release of Collateral

(a)         At the time provided in Sections 10.8(b)(i) and (iii) (Concerning
the Collateral and the Collateral Documents) of the Credit Agreement and to the
extent required under such provisions, Collateral shall be released from the
Lien created hereby and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Collateral Agent and each
Grantor hereunder with respect to such Collateral shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to such Collateral (if any) shall revert to the Grantors. At the request
and sole expense of any Grantor following any such termination, the Collateral
Agent shall deliver to such Grantor any such Collateral of such Grantor held by
the Collateral Agent hereunder and execute and deliver to

 

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PLEDGE AND SECURITY AGREEMENT

KNOLOGY, INC.

 

such Grantor such documents as such Grantor shall reasonably request to evidence
such termination.

(b)         If the Collateral Agent shall be directed or permitted pursuant to
Section 10.8(b)(ii) or (iii) (Concerning the Collateral and the Collateral
Documents) of the Credit Agreement to release any Lien created hereby upon any
Collateral (including any Collateral sold or disposed of by any Grantor in a
transaction permitted by the Credit Agreement), such Collateral shall be
released from the Lien created hereby to the extent provided under, and subject
to the terms and conditions set forth in, Section 10.8(b)(ii) or
(iii) (Concerning the Collateral and the Collateral Documents) of the Credit
Agreement. In connection therewith, the Collateral Agent, at the request and
sole expense of the Borrower, shall execute and deliver to the Borrower all
releases or other documents, including, without limitation, UCC termination
statements, reasonably necessary or desirable for the release of the Lien
created hereby on such Collateral. At the request and sole expense of the
Borrower, a Grantor shall be released from its obligations hereunder in the
event that all the capital stock of such Grantor shall be so sold or disposed;
provided, however, that the Borrower shall have delivered to the Collateral
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Grantor and the terms of
the sale or other disposition in reasonable detail, including the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower in form and substance satisfactory to the Collateral Agent stating that
such transaction is in compliance with the Credit Agreement and the other Loan
Documents.

Section 7.12         Reinstatement

Each Grantor further agrees that, if any payment made by any Loan Party or other
Person and applied to the Obligations is at any time annulled, avoided, set
aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of Collateral are
required to be returned by any Secured Party to such Loan Party, its estate,
trustee, receiver or any other party, including any Grantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing
such liability shall be and remain in full force and effect, as fully as if such
payment had never been made or, if prior thereto the Lien granted hereby or
other Collateral securing such liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender), such Lien or other
Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

27

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IN WITNESS WHEREOF, each of the undersigned has caused this Pledge and Security
Agreement to be duly executed and delivered as of the date first above written.

 

Knology, Inc., By:  

/s/ M. Todd Holt

  Name: M. Todd Holt   Title: President and Chief Financial Officer

 

Knology Broadband, Inc. Knology of Central Florida, Inc. Knology Provider
Solutions Group, Inc. KNOLOGY of Alabama, Inc. KNOLOGY of Augusta, Inc. KNOLOGY
of Charleston, Inc. Knology of Columbus, Inc. Knology of Florida, LLC KNOLOGY of
Georgia, Inc. KNOLOGY of Huntsville, Inc. Knology of Kansas, Inc., KNOLOGY of
Knoxville, Inc KNOLOGY of Montgomery, Inc. KNOLOGY of Nashville, Inc. KNOLOGY of
South Carolina, Inc. KNOLOGY of Tennessee, Inc. ITC Globe, Inc. Knology of the
Valley, Inc. Valley Telephone Co., LLC Knology of South Dakota, Inc. Knology of
the Plains, Inc. Knology Community Telephone, Inc. Knology Of The Black Hills,
LLC Black Hills Fiber Systems, Inc. BHFC PUBLISHING, LLC Knology Total
Communications, Inc. Knology of the Wiregrass, Inc. Wiregrass Telcom, Inc.
COMMUNICATIONS ONE, INC. West Georgia Broadband, Inc. GLOBE TELECOMMUNICATIONS,
INC.

 

By:  

/s/ M. Todd Holt

Name:   M. Todd Holt Title:     President and Chief Financial Officer

[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]

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ACCEPTED AND AGREED

as of the date first above written:

CREDIT SUISSE AG,

CAYMAN ISLANDS BRANCH,

as Collateral Agent

By:  

/s/ Bill O’Daly

Name:   Bill O’Daly Title: Director By:  

/s/ Christopher Reo Day

Name:   Christopher Reo Day Title: Associate

[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]

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ANNEX 1

TO

PLEDGE AND SECURITY AGREEMENT

FORM OF PLEDGE AMENDMENT

This PLEDGE AMENDMENT, dated as of                  , 20    , is delivered
pursuant to Section 4.4(a) (Pledged Collateral) of the Pledge and Security
Agreement, dated as of October [    ], 2010 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Pledge and
Security Agreement”), by Knology, Inc. (the “Borrower”), the [undersigned
Grantor and the other] Subsidiaries of the Borrower from time to time party
thereto as Grantors in favor of Credit Suisse AG, Cayman Islands Branch, as
agent for the Secured Parties referred to therein (the “Collateral Agent”) and
the undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge and Security Agreement and that the Pledged Collateral listed on this
Pledge Amendment shall be and become part of the Collateral referred to in the
Pledge and Security Agreement and shall secure all Secured Obligations of the
undersigned. Capitalized terms used herein but not defined herein are used
herein with the meaning given them in the Pledge and Security Agreement.

 

[GRANTOR] By:  

 

  Name:   Title:

Pledged Stock

 

ISSUER

 

CLASS

 

CERTIFICATE

NO(S).

 

PAR VALUE

 

NUMBER OF

SHARES,

UNITS OR

INTERESTS

 

Pledged Debt Instruments

 

ISSUER

 

DESCRIPTION OF

DEBT

 

CERTIFICATE

NO(S).

 

FINAL

MATURITY

 

PRINCIPAL

AMOUNT

 

A1-1

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ACKNOWLEDGED AND AGREED

as of the date first above written:

CREDIT SUISSE AG,

Cayman Islands Branch,

as Collateral Agent

 

By:  

 

  Name:   Title:

 

A1-2

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ANNEX 2

TO

PLEDGE AND SECURITY AGREEMENT

FORM OF JOINDER AGREEMENT

This JOINDER AGREEMENT, dated as of                  , 20    , is delivered
pursuant to Section 7.10 (Additional Grantors) of the Pledge and Security
Agreement, dated as of October [    ], 2010, by Knology, Inc. (the “Borrower”)
and the Subsidiaries of the Borrower listed on the signature pages thereof in
favor of the Credit Suisse AG, Cayman Islands Branch, as agent for the Secured
Parties referred to therein (the “Pledge and Security Agreement”). Capitalized
terms used herein but not defined herein are used with the meanings given them
in the Pledge and Security Agreement.

By executing and delivering this Joinder Agreement, the undersigned, as provided
in Section 7.10 (Additional Grantors) of the Pledge and Security Agreement,
hereby becomes a party to the Pledge and Security Agreement as a Grantor
thereunder with the same force and effect as if originally named as a Grantor
therein and, without limiting the generality of the foregoing, hereby grants to
the Collateral Agent, as collateral security for the full, prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations of the undersigned, hereby collaterally
assigns, mortgages, pledges and hypothecates to the Collateral Agent and grants
to the Collateral Agent a Lien on and security interest in, all of its right,
title and interest in, to and under the Collateral of the undersigned and
expressly assumes all obligations and liabilities of a Grantor thereunder.

The information set forth in Annex I-A is hereby added to the information set
forth in Schedules 1 through 6 to the Pledge and Security Agreement. [By
acknowledging and agreeing to this Joinder Agreement, the undersigned hereby
agree that this Joinder Agreement may be attached to the Pledge and Security
Agreement and that the Pledged Collateral listed on Annex 1-A to this Pledge
Amendment shall be and become part of the Collateral referred to in the Pledge
and Security Agreement and shall secure all Secured Obligations of the
undersigned.]1

The undersigned hereby represents and warrants that each of the representations
and warranties contained in Article III (Representations and Warranties) of the
Pledge and Security Agreement applicable to it is true and correct on and as the
date hereof as if made on and as of such date.

 

 

1 Insert to pledge Stock of the new Subsidiary without doing a Pledge Amendment.

 

A2-1

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IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of the date first above written.

 

[EACH GRANTOR PLEDGING

ADDITIONAL COLLATERAL]

By:  

 

  Name:   Title:

ACKNOWLEDGED AND AGREED

as of the date first above written:

CREDIT SUISSE AG,

Cayman Islands Branch,

as Collateral Agent

 

By:  

 

  Name:   Title:

 

A2-2

[SIGNATURE PAGE TO JOINDER AGREEMENT]

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Annex 3

to

Pledge and Security Agreement

Form of Short Form Intellectual Property Security Agreement2

[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of             
    , 20    , by each of the entities listed on the signature pages hereof [or
that becomes a party hereto pursuant to Section 7.10 (Additional Grantors) of
the Security Agreement referred to below] (each a “Grantor” and, collectively,
the “Grantors”), in favor of Credit Suisse AG, Cayman Islands Branch, as agent
(in such capacity, the “Collateral Agent”) for the Secured Parties (as defined
in the Credit Agreement referred to below).

W i t n e s s e t h:

WHEREAS, pursuant to the Credit Agreement, dated as of October [    ], 2010(as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among KNOLOGY, INC. (the “Borrower”), the
Lenders and Issuers party thereto, the other parties thereto and Credit Suisse
AG, as Administrative Agent and Credit Suisse AG, Cayman Islands Branch, as
Collateral Agent for the Lenders and Issuers, the Lenders and the Issuers have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;

WHEREAS, the Grantors other than the Borrower are party to the Guaranty pursuant
to which they have guaranteed the Obligations; and

WHEREAS, all the Grantors are party to a Pledge and Security Agreement of even
date herewith in favor of the Collateral Agent (the “Security Agreement”)
pursuant to which the Grantors are required to execute and deliver this
[Copyright] [Patent] [Trademark] Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the
Issuers and the Collateral Agent to enter into the Credit Agreement and to
induce the Lenders and the Issuers to make their respective extensions of credit
to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent
as follows:

Section 1.        Defined Terms

Unless otherwise defined herein, terms defined in the Credit Agreement or in the
Security Agreement and used herein have the meaning given to them in the Credit
Agreement or the Security Agreement.

Section 2.        Grant of Security Interest in [Copyright] [Trademark] [Patent]
Collateral

Each Grantor, as collateral security for the full, prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or
otherwise) of the

 

2

Separate short form agreements should be filed relating to each Grantor’s
respective copyrights, patents and trademarks.

 

A3-1

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Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates
to the Collateral Agent for the benefit of the Secured Parties, and grants to
the Collateral Agent for the benefit of the Secured Parties a lien on and
security interest in, all of its right, title and interest in, to and under the
following Collateral of such Grantor (the “[Copyright] [Patent] [Trademark]
Collateral”):

[(a)        all of its Copyrights and Copyright Licenses to which it is a party,
including, without limitation, those referred to on Schedule I hereto;

(b)        all extensions of the foregoing; and

(c)        all Proceeds of the foregoing, including, without limitation, any
claim by Grantor against third parties for past, present or future infringement
of any Copyright or Copyright licensed under any Copyright License.]

or

[(a)        all of its Patents and Patent Licenses to which it is a party,
including, without limitation, those referred to on Schedule I hereto;

(b)        all reissues, continuations or continuations-in-part of the
foregoing; and

(c)        all Proceeds of the foregoing, including, without limitation, any
claim by Grantor against third parties for past, present or future infringement
of any Patent or any Patent licensed under any Patent License.]

or

[(a)        all of its Trademarks and Trademark Licenses to which it is a party,
including, without limitation, those referred to on Schedule I hereto;

(b)        all goodwill of the business connected with the use of, and
symbolized by, each Trademark; and

(c)        all Proceeds of the foregoing, including, without limitation, any
claim by Grantor against third parties for past, present, future
(i) infringement or dilution of any Trademark or Trademark licensed under any
Trademark License or (ii) injury to the goodwill associated with any Trademark
or any Trademark licensed under any Trademark License.]

Section 3.        Security Agreement

The security interest granted pursuant to this [Copyright] [Patent] [Trademark]
Security Agreement is granted in conjunction with the security interest granted
to the Collateral Agent pursuant to the Security Agreement and each Grantor
hereby acknowledges and affirms that the rights and remedies of the Collateral
Agent with respect to the security interest in the [Copyright] [Patent]
[Trademark] Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent]
[Trademark] Security Agreement to be executed and delivered by its duly
authorized offer as of the date first set forth above.

 

[GRANTOR],

as Grantor

By:

 

 

      Name:       Title:

ACCEPTED AND AGREED

as of the date first above written:

CREDIT SUISSE AG,

Cayman Islands Branch,

as Collateral Agent

 

By:

 

 

 

Name:

 

Title

 

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[SIGNATURE PAGE TO [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT]