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 thebTransaction 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 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 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.
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
