SECOND AMENDED AND RESTATED SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED SECURITY AGREEMENT (the
"Agreement") is made and entered into, as of December 15th, 1998, by and between
JNC Strategic Fund Ltd., a Cayman Islands corporation ("JNC") and InnovaCom,
Inc., a Nevada corporation (the "Company").
RECITALS
WHEREAS, on June 29, 1998, JNC and the Company entered into a
Convertible Debenture Purchase Agreement (the "June 29th Purchase Agreement"),
and related documents, pursuant to which JNC purchased an aggregate principal
amount of $2,000,000 of the Company's 7% Convertible Debentures Due June 29,
2003 (the "June 29th Debentures"); and
WHEREAS, in connection with the June 29th Purchase Agreement, the
Company also executed and delivered to JNC a Security Agreement (the "June 29th
Security Agreement") to secure the payment and discharge of all of the Company's
obligations under the Debentures (as defined in the June 29th Purchase
Agreement) and to provide JNC with a continuing security interest, a first lien
upon, and a right of set-off against, all of the Company's right, title, and
interest in the Collateral (as defined in the June 29th Security Agreement), to
which any and all rights and claims of any other parties shall be subordinate;
and
WHEREAS, JNC and the Company subsequently agreed to amend and restate in
its entirety the June 29th Security Agreement (the "August 28th Security
Agreement") in connection with their entering into a Convertible Debenture
Purchase Agreement dated as of August 28th, 1998 (the "August 28th Purchase
Agreement") in order to provide that the obligations of the Company pursuant to
the Company's 7% Convertible Debentures Due August 28, 2003 (the "August 28th
Debentures") and other Transaction Documents (as defined in the August 28th
Purchase Agreement) would also be deemed to be part of the Obligations (as
defined in Section 2 of the June 29th Security Agreement) of the Company under
the June 29th Security Agreement; and
WHEREAS, JNC and the Company have now agreed to amend and restate in its
entirety the August 28th Security Agreement in connection with their entering
into a Convertible Debenture Purchase Agreement dated as of December 15th, 1998
(the "December 15th Purchase Agreement" and together with the June 29th Purchase
Agreement and the August 28th Purchase Agreement, the "Purchase Agreements") in
order to provide that the obligations of the Company pursuant to the Company's
7% Secured Convertible Debentures Due December 15, 2003 (the "December 15th
Debentures and collectively with the June 29th Debentures and the August 28th
Debentures, the "Debentures") and other Transaction Documents (as defined in
Section 2.1(a) of the December 15th Purchase Agreement) shall also be deemed to
be part of the Obligations (as defined in Section 2 of the June 29th Security
Agreement and the August 28th Security Agreement) of the Company under the June
29th Security Agreement and the August 28th Security Agreement;
NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
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 Transaction Documents (as defined in
Section 2.1(a) of the December 15th Purchase 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, and/or any
other applicable law of any jurisdiction (whether or not such
other Uniform Commercial Code applies to the Collateral, as
defined herein)(collectively, the "UCC"): 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 of the Company pursuant to all of the Transaction
Documents referenced in each of the Purchase Agreements (collectively, the "JNC
Transaction Documents"), as such obligations may be amended, supplemented, and
modified from time to time (the "Obligations"), the Company does hereby,
unconditionally and irrevocably, pledge, mortgage, assign, set over, convey,
grant, transfer, and deliver (collectively, "Transfer") to JNC a continuing
security interest, a first lien upon, and a right of set-off against, all of the
Company's right, title, and interest of whatsoever kind and nature in and to the
Collateral (as hereinafter defined)(the "Security Interest"). The Security
Interest granted hereby shall relate back to the date of the June 29th Security
Agreement.
3. 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 Loan 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.
4. Preservation and Perfection of Security Interests. In connection with
the June 29th Security Agreement, the Company delivered to JNC one or more
Uniform Commercial Code Form 1 Financing Statements (collectively, "UCC Form 1")
with respect to the Security Interest. In addition, the Company shall, as
required from time to time by JNC, 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 JNC may request in order to create, perfect, or continue the
Security Interest or which JNC may otherwise reasonably request in order to
secure, protect or enforce the Security Interest or the rights of JNC 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 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.
5. Representations and Warranties of the Company. The Company hereby
incorporates by reference those representations and warranties set forth in the
JNC Transaction Documents, and further represents and warrants to JNC:
a. Except for the rights granted hereunder and the related UCC
Form 1, and also except for that certain Writ of Attachment granted on
or about December 8, 1998 in favor of Cadence Design Systems, Inc., a
copy of which has been provided to JNC by the Company, the Company is
the sole owner of the Collateral, free and clear from any liens,
security interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and pledge the
Collateral, and the Collateral is not subject to any UCC financing
statement.
b. This Agreement is fully sufficient to create and transfer to
JNC, and shall create and transfer to JNC, 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 JNC.
c. This Agreement creates a valid and perfected security interest
in the Collateral, securing the performance of the Obligations. All
filings and other actions necessary to perfect and protect such
security interest have been made or taken by the Company.
d. Except for the consent of JNC, which is implicit pursuant to
this Agreement, 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.
6. Covenants of the Company. The Company hereby reaffirms and
incorporates those covenants set forth in the JNC Transaction Documents 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, against any persons whatsoever, and the Company shall obtain
and furnish to JNC 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 JNC, 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 JNC from time-to-time.
c. At all times, to maintain the liens and security interests
provided for hereunder as valid and perfected first priority liens and
security interests in the Collateral hereby granted to JNC.
d. 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, or as otherwise
consented to in writing by JNC.
e. 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 JNC, except in the ordinary course of
business.
f. 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.
g. To safeguard and protect all Collateral for the account of JNC
and make no disposition thereof other than in the ordinary course of
business. At the request of JNC, the Company will sign and deliver to
JNC, at any time or from time to time, one or more financing
statements pursuant to the UCC in form satisfactory to JNC and will
pay the cost of filing the same in all public offices wherever filing
is, or is deemed by JNC to be, necessary or desirable and with respect
to the Collateral.
h. To promptly notify JNC in sufficient detail 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, the Security Interest or the rights and
remedies of JNC hereunder.
i. 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.
7. Defaults. The following events shall be "Events of Default":
a. An Event of Default under any of the JNC Transaction Documents;or
b. The Company shall fail to observe or perform any of its
obligations hereunder for 20 days after receipt by the Company of
notice of such default from JNC; or
c. Any representation, warranty, certification or statement made by
the Company hereunder shall prove to have been incorrect in any
material respect when made.
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 Debentures 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 JNC and shall forthwith endorse and transfer any such
sums or instruments, or both, to JNC for application to the satisfaction of the
Obligations.
9. Rights and Remedies Upon Default. Upon occurrence of any of the above
Events of Default and at any time thereafter, as long as any such Event of
Default shall continue, JNC may exercise any and all of the rights and remedies
conferred hereunder and under any of the JNC Transaction Documents, including,
without limitation, the right, to accelerate payment under any or all
Debentures, and JNC shall have all the rights and remedies of a secured party
under the UCC and shall further have, in addition to all other rights and
remedies provided herein or by law, the following rights and powers:
a. JNC may 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 JNC 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. At JNC's request, the Company shall assemble the Collateral and
make it available to JNC at places which JNC shall reasonably
select, whether at the Company's premises or elsewhere, and make
available to JNC, without rent, all of the Company's premises and
facilities for the purpose of JNC taking possession of, removing
or putting the Collateral in saleable or disposable form; and/or
c. With or without taking possession, JNC may sell or cause to be
sold, at any time, and from time to time, as JNC 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 JNC
may deem best, at which sale JNC may bid and purchase to the
extent permitted by law, as now or hereinafter in effect, all
without (except as shall be required by applicable statute and
cannot be waived) advertisement or demand upon or notice to the
Company or right of redemption of the Company, which are hereby
expressly waived. The Company shall have no right of redemption
subsequent to any such sale, and hereby expressly waives any such
right. JNC 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 JNC 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 JNC) 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); and/or
i. Upon each such sale, JNC may, unless prohibited by applicable
statute which cannot be waived, purchase all or any part of the
Collateral being sold, free from and discharged of all trusts, claims,
right of redemption and equities of the Company, which are hereby
waived and released.
ii. The proceeds of any such sale, lease, or other disposition of
the Collateral shall be applied first, to the expenses of retaking,
holding, storing, processing, and preparing for sale, selling, and the
like, and to the reasonable attorneys' fees and expenses incurred by
JNC, and then to satisfaction of the Obligations, and to the payment
of any other amounts required by applicable law, after which JNC shall
pay to the Company any surplus proceeds. If, upon the sale, lease or
other disposition of the Collateral, the proceeds thereof are
insufficient to pay all amounts to which JNC is legally entitled, the
Company will be liable for the deficiency, together with interest
thereon, at the rate of 18% per annum (the "Default Rate"), and the
reasonable fees of any attorneys employed by JNC to collect such
deficiency. To the extent permitted by applicable law, the Company
waives all claims, damages and demands against JNC arising out of the
repossession, removal, retention or sale of the Collateral, unless due
to the gross negligence or willful misconduct of JNC.
d. Upon the occurrence and during the continuance of an Event of
Default, JNC shall have the right to send notice of the
assignment granted herein and the security interest created
hereunder to any account debtors of the Company or any other
persons obligated on, holding or otherwise concerned with, any of
the receivables, may demand that monies due or to become due be
paid to JNC and thereafter, JNC shall have the sole right to
collect the receivables and all books and records relating
thereto; and/or
e. JNC may 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 8. JNC may, in the exercise of its sole and absolute
discretion, from time to time, at any time and in 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
f. In its name or in the name of the Company or otherwise, JNC
may 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 JNC 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 JNC may otherwise have; and/or
g. JNC may, in the event JNC 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 JNC,
be assigned by the Company to, and become the sole property of JNC,
provided that the amount of any such unearned or prepaid premium is
thereupon applied to the payment or satisfaction of the Obligations.
10. Responsibility for Collateral. The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligation of the
Company hereunder or under any of the JNC Transaction Documents, and shall in no
way be affected or diminished by reason of the loss, destruction, damage, or
theft of any of the Collateral or its unavailability for any reason.
11. Security Interest Absolute. All rights of JNC 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
any of the JNC Transaction Documents or this 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 JNC Transaction Documents;
(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 JNC 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, JNC's rights shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of 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 JNC 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 JNC,
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 JNC to proceed
against any other person or to apply any Collateral which JNC may hold at any
time, or to marshal assets, or to pursue any other remedy. JNC may, at its
election, exercise any right or remedy it may have against any security held by
JNC, 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 JNC hereunder. The Company waives any defense arising by reason of the
application of the statute of limitations to any obligation secured hereby.
12. JNC Appointed Attorney-in-Fact. The Company hereby irrevocably makes,
nominates, constitutes and appoints JNC and each of its officers, agents,
successors, or assigns (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 JNC's use and benefit, all documents that shall be necessary to
accomplish the following on the occurrence of any Event of Default and at any
time thereafter, so long as such Event of Default shall continue:
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 JNC;
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;
c. To pay or discharge taxes, liens, security interests, or other
encumbrances at any time levied or placed on or threatened
against the Collateral; to demand, collect, receipt for,
compromise, settle, and xxx for monies due in respect of the
Collateral;
d. 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 JNC may deem necessary or
appropriate for the purpose of preserving, protecting or
maintaining the Collateral and the Security Interest granted to
JNC; and
e. Generally, to do, at the option of JNC and at the Company's
expense, at any time, or from time to time, all acts and things
which JNC deems necessary to protect, preserve, and realize upon
the Collateral and JNC's security interests therein in order to
effect the intent of this Agreement and of the Purchase
Agreements all as fully and effectually as the Company might or
could do.
The Company hereby ratifies all that said attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney is coupled
with an interest and shall be irrevocable for the term of this Agreement
and thereafter as long as any of the Obligations shall be outstanding.
13. Duties of JNC.
a. The powers conferred on JNC 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 JNC shall act
with reasonable care, JNC 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. JNC
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
JNC 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 JNC Transaction Documents, or to take any
other action necessary to preserve the priority and value of JNC's
rights under this Agreement, then JNC may (but shall not be obligated
to) make such payments and take all such actions as JNC deems
necessary to protect its security interest in or to protect and
preserve the value of the Collateral, and JNC 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 JNC 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 Default Rate 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.
14. Expenses. In addition to expenses payable under the Transaction
Documents, the Company agrees to pay all out of pocket fees, costs, and 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 JNC. The Company
shall also pay all other claims and charges which in the reasonable opinion of
JNC 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 JNC. The Company will also, upon demand, pay to JNC the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which JNC 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 JNC
hereunder or
under the JNC Transaction Documents, or (iv) the failure by the Company to
perform or observe any of the provisions contained herein or in the JNC
Transaction Documents. Until so paid, any fees payable hereunder shall be added
to the principal amount of the Obligations and shall bear interest at the
Default Rate.
15. Term of Agreement. This Agreement shall terminate when all payments
under any of the JNC Transaction Documents have been made in full and all other
Obligations have been paid or discharged. Upon such termination, JNC, at the
request and at the expense of the Company, will join in executing any
termination statement with respect to any financing statement executed and filed
pursuant to this Agreement.
16. Other Security. To the extent that the Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee, endorsement,
or property of any other person, firm, corporation, or other entity, then JNC
shall have the right, in its sole discretion, to pursue, relinquish,
subordinate, modify, or take any other action with respect thereto, without in
any way modifying or affecting any of JNC's rights and remedies hereunder.
17. Miscellaneous.
a. Indemnity. The Company agrees to defend, protect, indemnify,
and hold harmless JNC 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.
b. Course of Dealing. No course of dealing between the Company
and JNC, nor any failure to exercise, nor any delay in exercising, on
the part of JNC, any right, power, or privilege hereunder or under the
JNC Transaction Documents shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power, or privilege
hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
c. 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.
d. 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 to the parties at the following addresses:
If to JNC, to:
JNC Strategic Fund Ltd.
c/o Olympia Capital (Cayman) Ltd.
Xxxxxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Attn: Director
Fax: (000) 000-0000
with a copy to:
Encore Capital Management, LLC
00000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Managing Director
Fax: (000) 000-0000
and
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxx, Esq.
Fax: 000-000-0000
If to the Company, to:
InnovaCom, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxx, President
Fax: 000-000-0000
with a copy to:
Xxxxxx Eng Xxxx & 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.
e. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York, except to the extent the
validity, perfection or enforcement of a security interest hereunder
in respect of any particular Collateral are governed by a jurisdiction
other than the State of New York in which case such law shall govern.
The Company and JNC hereby irrevocably submit to the jurisdiction
of any New York State or United States Federal court sitting in
Manhattan county over any action or proceeding arising out of or
relating to this Agreement, and the Company and JNC hereby irrevocably
agree that all claims in respect of such action or proceeding may be
heard and determined in such New York State or Federal court. The
Company and JNC agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law. The Company and JNC further waive any objection to venue in
such State and any objection to an action or proceeding in such State
on the basis of forum non conveniens.
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 JNC and the Company.
g. Severability. In the event that any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction for any reason, unless such provision is narrowed by
judicial construction, this Agreement shall, as to such jurisdiction,
be construed as if such invalid, prohibited or unenforceable provision
had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in
any jurisdiction, such provision, as to such jurisdiction, shall be
ineffective to the extent of such invalidity, prohibition or
unenforceability without invalidating the remaining portion of such
provision or the other provisions of this Agreement and without
affecting the validity or enforceability of such provision or the
other provisions of this Agreement in any other jurisdiction.
x. Xxxxx, 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 part 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 one or more
counterparts, each of which may be deemed an original, but all of
which together, shall constitute one and the same instrument. This
Agreement may be executed by a party and sent to the other parties via
facsimile transmission and the facsimile transmitted copy shall have
the same integrity, force, and effect as an original document.
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, it being understood that the August 28th
Security Agreement is amended and restated in its entirety hereby, and
that this Agreement relates back to the date of the June 29th Security
Agreement.
[remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the Company has caused this Second Amended And
Restated Security Agreement to be duly executed and delivered by its officers
thereunto duly authorized effective as of December 15th, 1998.
INNOVACOM, INC.
By:_____________________________________
Xxxxx Xxxxxx
President
Accepted and agreed, effective
as of this 15th day of December, 1998
JNC STRATEGIC FUND LTD.
By:_______________________________
Its:______________________________
