Exhibit 6.8
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement"), dated as of
_______________, 1997, is made by and between Micro Technology, S.A. a
__________ company ("Micro Technology") and InnovaCom, Inc., a Nevada
corporation ("Company").
RECITALS
A. The Company and Micro Technology are, concurrently herewith,
entering into that certain credit facility agreement (the "Credit
Agreement"), dated of even date herewith, pursuant to which Micro
Technology has agreed to make certain advances (the "Advances") to the
Company.
B. It is a condition of Micro Technology's obligations under the
Credit Agreement that the Company enter into this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and as an inducement to Micro Technology to
enter into the Credit Agreement, the Company hereby agrees as follows:
1. DEFINITIONS. Unless otherwise defined, or unless the context
otherwise requires, capitalized terms used in this Agreement shall have the
same meaning given such terms in the Credit Agreement.
(a) The following terms shall have the same meaning given such
terms in Article 9 of the Uniform Commercial Code of the State of
California, as amended to the date of this Agreement: Chattel Paper,
Documents, Goods, Instruments, Accounts, Consumer Goods, Equipment,
Fixtures, Deposit Accounts, Proceeds, General Intangibles and Inventory.
2. GRANT OF SECURITY INTEREST. As security for the full and
punctual satisfaction, payment and performance of all of the obligations
(the "Obligations") of the Company pursuant to the Credit Agreement, the
Secured Promissory Note issued thereunder ("Note") and this Agreement, the
Company does hereby pledge, mortgage, assign, set over, convey, grant,
transfer and deliver (collectively, "Transfer") to Micro Technology a first
priority continuing security interest and lien (the "Security Interest") in
and to all of the Company's right, title and interest of whatsoever kind
and nature in and to the Collateral (as hereinafter defined), which
Security Interest shall be subject and subordinate only to the security
interests provided for in Section 3 hereof.
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3. PERMITTED INDEBTEDNESS. Notwithstanding Section 2 hereof, the
Security Interest shall be subordinate to any security interests (the
"Permitted Senior Indebtedness") to the extent that such security interests
are described on Schedule 3 hereto or Micro Technology consents in writing
to such subordination, which consent may be withheld in Micro Technology's
sole discretion.
4. COLLATERAL. The "Collateral" shall cover and include all right,
title and interest of the Company in, to and under all of the following,
whether now existing or hereafter acquired from time to time: (i) all
Accounts; (ii) all receivables; (iii) all General Intangibles; (iv) all
Goods, including, without limitation, all Equipment, and all Inventory,
whether now held or acquired in the future and wherever located, including,
but not limited to Inventory that is repossessed, returned or acquired as a
result of a "trade-in;" and (v) all letters of credit, notes, drafts, stock
and other debt and equity securities whether or not certificated, and all
instruments; (vi) all Chattel Paper and all Documents including without
limitation documents of title (vii) all Instruments; (viii) all contract
rights and all causes of action; (ix) all Deposit Accounts (general or
special) with, and all credits and other claims against, all-lenders or
other financial institutions; (x) all money; (xi) all property or interests
in property now or hereafter coming into the possession, custody or control
of the Company (whether for safekeeping, deposit, custody, pledge,
transmission, collection or otherwise); (xii) all Proceeds including,
without limitation, all proceeds of any loans, including the Advances and
all insurance proceeds of or relating to any of the foregoing; (xiii) all
books and records relating to any of the foregoing; (xiv) all Fixtures,
accessions and additions to, substitutions for, and replacements, products
and proceeds of any of the foregoing and (xv) all rights to payment
resulting from disposition or other Transfer of any of the foregoing.
5. PRESERVATION AND PERFECTION OF SECURITY INTERESTS. Concurrently
with the execution of this Agreement, the Company has executed and
delivered to Micro Technology a Uniform Commercial Code Form 1 Financing
Statement ("UCC Form 1") with respect to the Security Interest. In
addition, the Company shall, as required from time to time by Micro
Technology, execute and deliver or endorse any and all instruments,
documents, conveyances, assignments, security agreements, additional
financing statements, continuation statements and other agreements and
writings which Micro Technology may request in order to create, perfect or
continue the Security Interest or which Micro Technology may otherwise
reasonably request in order to secure, protect or enforce the Security
Interest or the rights of Micro Technology under this Agreement (but any
failure to request or assure that the Company execute, deliver or endorse
any such item shall not affect nor impair the validity, sufficiency or
enforceability of this Agreement or any security interests granted herein,
regardless of whether any such item was or was not executed, delivered or
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endorsed in a similar context or on a prior occasion). A carbon,
photographic or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby incorporates by reference those representations and warranties set
forth in the Credit Agreement, and further represents and warrants to Micro
Technology:
(a) The Company has full power, authority and legal right to
Transfer the Security Interest in the Collateral to Micro Technology.
(b) Subject to the Permitted Senior Indebtedness, this Agreement
is fully sufficient to, and shall create and transfer to Micro Technology a
Security Interest in and to all of the Company's right, title and interest
in the Collateral free and clear of any and all adverse liens, claims and
encumbrances of any kind or nature, and the Company has not Transferred,
and shall not Transfer any security interest in the Collateral to any other
person, without the prior written consent of Micro Technology.
(c) Subject to the Permitted Senior Indebtedness, this Agreement
creates a valid and perfected first priority security interest in the
Collateral, securing the performance of the Obligations. Except for the
filing of the UCC Form 1 delivered to Micro Technology pursuant to Section
5 hereof, all filings and other actions necessary to perfect and protect
such security interest have been made or taken.
(d) No consent of any person (including, without limitation,
stock holders or creditors of the Company) is required for the subjection
by the Company of the Collateral to the terms of this Agreement.
7. COVENANTS OF THE COMPANY. The Company hereby reaffirms and
incorporates those covenants set forth in the Credit Agreement and further
covenants and agrees:
(a) To appear and defend any and all actions and proceedings
affecting the Collateral, or otherwise affecting the Security Interest, and
the Company shall obtain and furnish to Micro Technology from time to time,
upon demand, such releases and/or subordinations of claims and liens which
may be required to maintain the priority of the Security Interest
hereunder.
(b) To permit Micro Technology, its representatives and its
agents to inspect the Collateral at any time, and to make copies of records
pertaining to the Collateral as may be requested by Micro Technology from
time-to-time.
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(c) That all Collateral shall, for the entire term of this
Agreement, be free and clear of any liens, mortgages, pledges, or any other
encumbrances of any kind or nature whatsoever, except only for the security
interests created by this Agreement and the Permitted Senior Indebtedness
or as otherwise consented to in writing by Micro Technology.
(d) Not to sell, lease, Transfer or remove the Collateral, or
any part thereof, from its present location without first obtaining the
express written consent of Micro Technology, except in the ordinary course
of business.
(e) With respect to that part of the Collateral which is
tangible, the Company will maintain such Collateral in good order and
repair and will not use any part of such Collateral in any manner injurious
or likely to be injurious or which will result in its unreasonable
deterioration or consumption or which will be in violation of any laws or
regulations or any policy of insurance. With respect to Collateral which
is not tangible, the Company will take all steps reasonably necessary to
preserve and protect the value of such Collateral, and the Company will
diligently pursue and seek to preserve, enforce and collect any rights,
claims, causes of action and accounts receivable.
(f) To promptly notify Micro Technology upon becoming aware of
any attachment, garnishment, execution or other legal process levied
against any or all of the Collateral and of any other information received
by the Company that may materially affect the value of the Collateral or
the rights and remedies of Micro Technology hereunder.
(g) To maintain insurance on the Collateral against loss or
damage by fire, perils commonly covered under the extended coverage
endorsement, malicious mischief and sprinkler leakage.
8. DUTY TO HOLD IN TRUST. Upon the occurrence of any Event of
Default, the Company shall, upon receipt by it of any revenue, income or
other sums (collectively, the "Sums") subject to the Security Interest,
whether payable pursuant to the Credit Agreement or otherwise, or of any
check, draft, note, trade acceptance or other instrument evidencing an
obligation to pay any such sum, hold the same in trust for Micro Technology
and shall forthwith endorse and transfer any such sums or instruments, or
both, to Micro Technology for application to the satisfaction of the
Obligations, (except for those Sums subject to the rights of the third
parties pursuant to this Agreement including Permitted Senior Indebtedness
under Section 3 hereof).
9. REMEDIES UPON DEFAULT. Upon the occurrence of any Event of
Default, as defined in the Credit Agreement, Micro Technology shall,
subject to the rights, if any, of parties under the Permitted Senior
Indebtedness, and in addition to all of its rights under the Credit
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Agreement, have all of the rights and remedies of a secured party under the
Uniform Commercial Code of the State of California, and all other rights
and remedies under any applicable laws, and, without limiting the
generality of the foregoing, Micro Technology may in its sole discretion:
(a) Enter upon the premises where any of the Collateral may be
located, and take possession of the Collateral, and demand and receive
reconveyance of the Collateral from any person who has possession thereof,
and Micro Technology may take such measures as may be necessary or proper
for the care or protection of the value thereof, including the right to
remove, keep and/or store all or any portion of the Collateral or put a
custodian in charge thereof; and/or
(b) Require the Company to assemble the Collateral and make it
and all records relating to the Collateral available to Micro Technology at
such times and in such places as is reasonably convenient to the Company
and Micro Technology; and/or
(c) With or without taking possession, sell or cause to be sold,
at any time, and from time to time, as Micro Technology may determine, any
of the Collateral in its entirety or in parcels, either at public or
private sale, at such price and on such terms as Micro Technology may deem
best, at which sale Micro Technology may bid and purchase to the extent
permitted by law, as now or hereinafter in effect. The Company agrees that
notice to the Company of a public or private sale, which notice is given
not less than ten (10) business days prior to such sale, shall constitute
"reasonable notice." The Company shall have no right of redemption
subsequent to any such sale, and hereby expressly waives any such right.
Micro Technology shall apply the proceeds of any such sale or sales first
to the expenses incident thereto, including reasonable attorneys' fees, and
next to the full and complete satisfaction of all of the Obligations. The
Company shall remain fully liable to Micro Technology for any deficiency
which may exist after any such sale or sales and the application of the
proceeds thereof in accordance herewith. Any purchaser at any such sale or
sales (including without limitation Micro Technology) shall thereafter hold
any of the Collateral so purchased absolutely free from any claim or right
of any nature whatsoever by any other person or entity (including without
limitation the Company) except only the claims and rights of the secured
parties under the Permitted Senior Indebtedness; and/or
(d) Institute any proceeding at law, in equity, or otherwise in
order to foreclose upon the Collateral or any part thereof. To the extent
permitted by law, any sale thereof shall be held in the same manner, with
the same effect and subject to the same terms and conditions as specified
in paragraph (c) of this Section 9. Micro Technology may, in the exercise
of its sole and absolute discretion, from time to time, at any time and in
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any order, choose to institute a proceeding for foreclosure on some portion
of the Collateral and/or a sale under paragraphs (c) or (d) on other
portions of the Collateral, without being deemed to have made an election
of remedies or to have waived any other rights or remedies, and without in
any other way limiting any remedies or rights which it may otherwise have;
and/or
(e) In its name or in the name of the Company or otherwise,
demand, xxx for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for or make any
compromise or settlement deemed desirable with respect to, any of the
Collateral, but shall be under no obligation to do so, and Micro Technology
may extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, or release, any of the Collateral, without
thereby incurring responsibility to, or discharging or otherwise affecting
any liability of, the Company or in any other way limiting any remedies or
rights which Micro Technology may otherwise have; and/or
(f) In the event Micro Technology takes possession of the
Collateral pursuant to the exercise of any right or remedy provided for
hereunder or by law, any insurance policy owned by the Company, together
with any unearned or prepaid premium thereon, shall, at the option of Micro
Technology, be assigned by the Company to, and become the sole property of
Micro Technology, provided that the amount of any such unearned or prepaid
premium is thereupon applied to the payment or satisfaction of the
Obligations.
10. SECURITY INTEREST ABSOLUTE. All rights of Micro Technology and
the security interest hereunder, and all Obligations of the Company
hereunder, shall be absolute and unconditional, irrespective of: (a) Any
lack of validity or enforceability of this Agreement, the Credit Agreement
and any agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement; (c) any exchange, release or
nonperfection of any of the Collateral, or any release or amendment or
waiver of or consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations; (d) any
action by Micro Technology to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in connection
with the Collateral; or (e) any other circumstance which might otherwise
constitute any legal or equitable defense available to the Company, or a
discharge of all or any part of the Security Interest granted hereby.
Until the Obligations shall have been paid and performed in full, Micro
Technology's rights shall continue even if the Obligations are barred for
any reason, including, without limitation, the running of the statute of
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limitations or bankruptcy. The Company expressly waives presentment,
protest, notice of protest, demand, notice of nonpayment and demand for
performance. This Agreement shall create a continuing security interest in
the Collateral and shall remain in full force and effect until the
Obligations shall have been paid and performed in full, and shall be
binding upon the Company and its successors and permitted transferees and
assigns. In the event that at any time any transfer of any Collateral or
any payment received by Micro Technology hereunder shall be deemed by final
order of a court of competent jurisdiction to have been a voidable
preference or fraudulent conveyance under the bankruptcy or insolvency laws
of the United States, or shall be deemed to be otherwise due to any party
other than Micro Technology, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this Agreement, and
shall not be discharged or satisfied by any prior payment thereof and/or
cancellation of this Agreement, but shall remain a valid and binding
obligation enforceable in accordance with the terms and provisions hereof.
The Company waives all right to require Micro Technology to proceed against
any other person or to apply any Collateral which Micro Technology may hold
at any time, or to marshal assets, or to pursue any other remedy. Micro
Technology may, at its election, exercise any right or remedy it may have
against any security held by Micro Technology, including, without
limitation, the right to foreclose any such security by judicial or
nonjudicial sale, without affecting or impairing in any way the rights of
Micro Technology hereunder. The Company waives any defense arising by
reason of the application of the statute of limitations to any obligation
secured hereby.
11. MICRO TECHNOLOGY APPOINTED ATTORNEY-IN-FACT. Subject to the
rights, if any, of the Permitted Senior Indebtedness, the Company hereby
irrevocably makes, nominates, constitutes and appoints Micro Technology and
each of its Agents (with full power of substitution and resubstitution), as
the Company's true and lawful attorney-in-fact with full power to take all
actions and sign, execute, acknowledge, record and file, in the Company's
name and for Micro Technology's use and benefit, all documents that shall
be necessary to accomplish the following upon the occurrence of any Event
of Default:
(a) To receive, open and dispose of all mail addressed to the
Company which relates to the Collateral, or to endorse and collect any
notes, checks, drafts, money orders or other evidences of payment that may
come into the possession of Micro Technology;
(b) To enforce all rights of the Company under and pursuant to
any agreements or other contractual arrangements relating to the
Collateral, and to enter into such other agreements as may be necessary to
exploit the Collateral;
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(c) To execute and perform such other and further agreements,
documents and instruments of any nature whatsoever, including, but not
limited to the execution and filing of a UCC Form 1 and to do any and all
other things as Micro Technology may deem necessary or appropriate for the
purpose of preserving, protecting or maintaining the Collateral and the
Security Interest granted to Micro Technology; and
(d) To do any and all other things necessary, advisable or
appropriate to carry out the intention and provisions of and transactions
contemplated by the Credit Agreement.
12. DUTIES OF MICRO TECHNOLOGY.
(a) The powers conferred on Micro Technology hereunder are
solely to protect its interests in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of
any Collateral in its actual possession and the accounting for monies
actually received by it hereunder with respect to which Micro Technology
shall act with reasonable care, Micro Technology shall have no duty as to
any Collateral or as to the taking of any steps necessary to preserve its
rights against prior parties or any other rights pertaining to any
Collateral. Micro Technology shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if
the Collateral is accorded treatment that is substantially equal to that
treatment which Micro Technology accords its own property in the ordinary
course of its business.
(b) If the Company fails to pay, before delinquency, any taxes
or other governmental charges which may be levied against the Collateral or
its operation or use, or any assessments made against the Collateral, or
fails to make any payment or to take any action required herein or in the
Credit Agreement, or to take any other action necessary to preserve the
priority and value of Micro Technology's rights under this Agreement, then
Micro Technology may (but shall not be obligated to) make such payments and
take all such actions as Micro Technology deems necessary to protect its
security interest in or to protect and preserve the value of the
Collateral, and Micro Technology is hereby authorized (without limiting the
general nature of the authority hereinabove conferred) to pay, purchase,
contest or compromise any encumbrances, charges or liens which in the
judgment of Micro Technology appear to be prior to or superior to, or of
equal priority with, the Security Interest. Any amount so paid shall be
included in the Obligations secured hereby and shall bear interest thereon
at the maximum rate permitted by law from date of payment until repaid, and
shall be secured pursuant to the terms of this Agreement by the Collateral
and shall be repayable by the Company on demand.
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13. EXPENSES. In addition to expenses payable under the Credit
Agreement, the Company agrees to pay all expenses incurred in the filing of
the UCC Form-1 or any other financing statements, continuation statements,
partial releases and/or termination statements related thereto or any
expenses of any searches reasonably required by Micro Technology. The
Company shall pay all other claims and charges which in the reasonable
opinion of Micro Technology might prejudice, imperil or otherwise affect
the Collateral or the Security Interest therein. All expenses so incurred
shall be immediately paid by the Company upon demand by Micro Technology.
The Company will upon demand pay to Micro Technology the amount of any and
all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which Micro Technology may incur in
connection with (i) the administration of this Agreement, (ii) the custody
or preservation of, or the sale of, collection from, or other realization
upon, any of the Collateral, (iii) the exercise or enforcement of any of
the rights of Micro Technology hereunder or under the Credit Agreement or
this Agreement, or (iv) the failure by the Company to perform or observe
any of the provisions contained herein or in the Credit Agreement.
14. MISCELLANEOUS.
(a) INDEMNITY. The Company agrees to defend, protect, indemnify
and hold harmless Micro Technology and each and all of its respective
officers, directors, employees, attorneys, and Agents (collectively called
the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for
such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a
party thereto), which may be imposed on, incurred by, or asserted against
such Indemnitees (whether direct, indirect or consequential and whether
based on any federal or state laws or other statutory regulations,
including, without limitation, securities and commercial laws and
regulations, common law or at equitable cause, or contract or otherwise) in
any manner relating to or arising out of this Agreement or the Obligations,
or any act, event or transaction related or attendant thereto, including,
without limitation, any and all costs and expenses incurred in the
enforcement of this Agreement (collectively, the "Indemnified Matters"). To
the extent that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Matters incurred by
the Indemnitees.
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(b) REMEDIES CUMULATIVE. Except as otherwise expressly provided
herein, no remedy conferred by any of the specific provisions of this
Agreement is intended to be exclusive of any other remedy which is
otherwise available at law, in equity, by statute or otherwise, and except
as otherwise expressly provided for herein, each and every other remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or otherwise. The election of any one or more of such remedies by
any of the parties hereto shall not constitute a waiver by such party of
the right to pursue any other available remedies.
(c) NOTICES. All notices, requests, demands, deliveries and
other communications hereunder shall be in writing and, except as otherwise
specifically provided in this Agreement, shall be deemed to have been duly
given, upon receipt, if delivered personally or via fax, or ten (10)
business days after deposit in the mail, if mailed, first class with
postage prepaid (confirmed by telex if the addressee is in a country other
than that of the sender) to the parties at the following addresses:
If to Micro Technology, to:
Micro Technology, S.A.
c/o Rhone Finance S.A.
World Trade Center
10, route de l'aeroport
X.X. Xxx 000
XX-0000 Xxxxxx 00
Xxxxxxxxxxx
Attn: Xxx XxXxxx, President
Fax: 000-00-00-000-0000
If to the Company, to:
InnovaCom, Inc.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attn: Xxxx Xxx, President
Fax: 000-000-0000
with a copy to:
Xxxxxx Eng Linn & Xxxxxxxx
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
(d) HEADINGS. The section headings contained in this Agreement
are for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
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(e) GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of California applicable
to Agreements to be entered into and entirely performed within such State.
(f) AMENDMENTS, ETC. Any of the terms and provisions of this
Agreement may be waived at any time by the party which is entitled to the
benefit thereof, but only by a written instrument executed by such party.
This Agreement may be amended only by an agreement in writing executed by
Micro Technology and the Company.
(g) SEVERABILITY. Any provision hereof which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
(h) DELAY, ETC. No delay or omission to exercise any right,
power or remedy accruing to any party hereto shall impair any such right,
power or remedy of such party nor be construed to be a waiver of any such
right, power or remedy nor constitute any course of dealing or performance
hereunder.
(i) COSTS AND ATTORNEYS' FEES. If any action, suit,
arbitration proceeding or other proceeding is instituted arising out of
this Agreement, the prevailing party shall recover all of such party's
costs, including, without limitation, the court costs and reasonable
attorneys' fees incurred therein, including any and all appeals or
petitions therefrom.
(j) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(k) ENTIRE AGREEMENT. This Agreement and the other agreements
referred to herein supersede all prior negotiations and agreements (whether
written or oral) and constitute the entire understanding among the parties
hereto.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered by its officers thereunto duly authorized as of the
date first above written.
INNOVACOM, INC.
By: __________________________
Xxxx Xxx, President
Accepted and Agreed to this
____ day of _________, 1997
MICRO TECHNOLOGY, S.A.
By: ________________________
Xxx XxXxxx, President
