EXHIBIT 99.6
EXHIBIT C
U.S. SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of September 8, 2008 (this "AGREEMENT"),
is among Metalink Inc.,a Delaware corporation (the "Company"), a subsidiary of
Metalink Ltd, an Israeli corporation (("METALINK") and together with the
Company, the "DEBTORS") and the holders of the Company's 10% Senior Secured
Promissory Notes due September 9, 2009, in the original aggregate principal
amount of up to $8,000,000 (collectively, the "NOTES") signatory hereto, their
endorsees, transferees and assigns (collectively, the "SECURED PARTIES").
W I T N E S S E T H:
WHEREAS, pursuant to the Loan Agreement (as defined in the Notes), the
Secured Parties have severally agreed to extend the loans to the Debtors
evidenced by the Notes; and
WHEREAS, in order to induce the Secured Parties to extend the loans
evidenced by the Notes, the Company has agreed to execute and deliver to the
Secured Parties this Agreement and to grant the Secured Parties, PARI PASSU with
each other Secured Party and through the Agent (as defined in Section 18
hereof), a security interest in certain property of the Company to secure the
prompt payment, performance and discharge in full of all of the Company's
obligations under the Notes and the Guarantors' obligations under the Guarantee.
NOW, THEREFORE, in consideration of the agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "account", "chattel paper", "commercial tort claim", "deposit account",
"document", "equipment", "fixtures", "general intangibles", "goods",
"instruments", "inventory", "investment property", "letter-of-credit rights",
"proceeds" and "supporting obligations") shall have the respective meanings
given such terms in Article 9 of the UCC.
(a) "COLLATERAL" means the collateral in which the Secured Parties are
granted a security interest by this Agreement and which shall include the
following personal property of the Company, whether presently owned or
existing or hereafter acquired or coming into existence, wherever situated,
and all additions and accessions thereto and all substitutions and
replacements thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the sale or transfer of
the Collateral and of insurance covering the same and of any tort claims in
connection therewith, and all dividends, interest, cash, notes, securities,
equity interest or other property at any time and from time to time
acquired, receivable or otherwise distributed in respect of, or in exchange
for, any or all of the Pledged Securities (as defined below):
1
(i) All goods, including, without limitation, (A) all machinery,
equipment, computers, motor vehicles, trucks, tanks, boats, ships,
appliances, furniture, special and general tools, fixtures, test and
quality control devices and other equipment of every kind and nature
and wherever situated, together with all documents of title and
documents representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for any
of the foregoing and all other items used and useful in connection
with the Company's businesses and all improvements thereto; and (B)
all inventory;
(ii) All contract rights and other general intangibles,
including, without limitation, all partnership interests, membership
interests, stock or other securities, rights under any of the
Organizational Documents, agreements related to the Pledged
Securities, licenses, distribution and other agreements, computer
software (whether "off-the-shelf", licensed from any third party or
developed by the Company), computer software development rights,
leases, franchises, customer lists, quality control procedures, grants
and rights, goodwill, trademarks, service marks, trade styles, trade
names, patents, patent applications, copyrights, and income tax
refunds;
(iii) All accounts, together with all instruments, all documents
of title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks which any
of the same may represent, and all right, title, security and
guaranties with respect to each account, including any right of
stoppage in transit;
(iv) All documents, letter-of-credit rights, instruments and
chattel paper;
(v) All commercial tort claims;
(vi) All deposit accounts and all cash (whether or not deposited
in such deposit accounts);
(vii) All investment property;
(viii) All supporting obligations; and
(ix) All files, records, books of account, business papers, and
computer programs; and
(x) the products and proceeds of all of the foregoing Collateral
set forth in clauses (i)-(ix) above.
2
Without limiting the generality of the foregoing, the
"COLLATERAL" shall include all investment property and general
intangibles respecting ownership and/or other equity interests in each
Guarantor, including, without limitation, the shares of capital stock
and the other equity interests listed on SCHEDULE H hereto (as the
same may be modified from time to time pursuant to the terms hereof),
and any other shares of capital stock and/or other equity interests of
any other direct or indirect subsidiary of the Company obtained in the
future, and, in each case, all certificates representing such shares
and/or equity interests and, in each case, all rights, options,
warrants, stock, other securities and/or equity interests that may
hereafter be received, receivable or distributed in respect of, or
exchanged for, any of the foregoing and all rights arising under or in
connection with the Pledged Securities, including, but not limited to,
all dividends, interest and cash received on account thereof.
Notwithstanding the foregoing, nothing herein shall be deemed to
constitute an assignment of any asset which, in the event of an
assignment, becomes void by operation of applicable law or the
assignment of which is otherwise prohibited by applicable law (in each
case to the extent that such applicable law is not overridden by
Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar
applicable law); PROVIDED, HOWEVER, that to the extent permitted by
applicable law, this Agreement shall create a valid security interest
in such asset and, to the extent permitted by applicable law, this
Agreement shall create a valid security interest in the proceeds of
such asset.
(b) "INTELLECTUAL PROPERTY" means the collective reference to all
rights, priorities and privileges relating to intellectual property of the
Company, whether arising under United States, multinational or foreign laws
or otherwise, including, without limitation, (i) all copyrights arising
under the laws of the United States, any other country or any political
subdivision thereof, whether registered or unregistered and whether
published or unpublished, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the United States Copyright
Office, (ii) all letters patent of the United States, any other country or
any political subdivision thereof, all reissues and extensions thereof, and
all applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part thereof,
(iii) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade dress, service marks, logos, domain
names and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all applications in connection therewith,
whether in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common
law rights related thereto, (iv) all trade secrets arising under the laws
of the United States, any other country or any political subdivision
thereof, (v) all rights to obtain any reissues, renewals or extensions of
the foregoing, (vi) all licenses for any of the foregoing, and (vii) all
causes of action for infringement of the foregoing.
(c) "MAJORITY IN INTEREST" means, at any time of determination, the
majority in interest (based on then-outstanding principal amounts of Notes
at the time of such determination) of the Secured Parties.
3
(d) "NECESSARY ENDORSEMENT" means undated stock powers endorsed in
blank or other proper instruments of assignment duly executed and such
other instruments or documents as the Agent (as that term is defined below)
may reasonably request.
(e) "OBLIGATIONS" means all of the liabilities and obligations
(primary, secondary, direct, contingent, sole, joint or several) due or to
become due, or that are now or may be hereafter contracted or acquired, or
owing to, of the Debtors and/or the Guarantors to the Secured Parties under
any of the Transaction Documents, including, without limitation, all
obligations under this Agreement, the Notes, the Guarantee and any other
instruments, agreements or other documents executed and/or delivered in
connection herewith or therewith, in each case, whether now or hereafter
existing, voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from any of the
Secured Parties as a preference, fraudulent transfer or otherwise as such
obligations may be amended, supplemented, converted, extended or modified
from time to time. Without limiting the generality of the foregoing, the
term "Obligations" shall include, without limitation: (i) principal of, and
interest on the Notes and the loans extended pursuant thereto; (ii) any and
all other fees, indemnities, costs, obligations and liabilities of the
Debtors and/or the Guarantors from time to time under or in connection with
this Agreement, the Notes, the Guarantee and any other instruments,
agreements or other documents executed and/or delivered in connection
herewith or therewith; and (iii) all amounts (including but not limited to
post-petition interest) in respect of the foregoing that would be payable
but for the fact that the obligations to pay such amounts are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or
similar proceeding involving the Debtors.
(f) "ORGANIZATIONAL DOCUMENTS" means with respect to the Company, the
documents by which the Company was organized (such as a certificate of
incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates of
designation for preferred stock or other forms of preferred equity) and
which relate to the internal governance of the Company (such as bylaws, a
partnership agreement or an operating, limited liability or members
agreement).
(g) "PLEDGED INTERESTS" shall have the meaning ascribed to such term
in Section 4(j).
(h) "PLEDGED SECURITIES" shall have the meaning ascribed to such term
in Section 4(i).
(i) "PORTFOLIO SECURITIES" means, collectively, portfolio securities
(i) designated as "trading investments" on the Company's consolidated
financial statements, (ii) designated as "available for sale investments"
on the Company's consolidated financial statements or (iii) otherwise
designated as investments on the Company's consolidated financial
statements, in each case valued at fair value in accordance with GAAP.
4
(j) "UCC" means the Uniform Commercial Code of the State of New York
and or any other applicable law of any state or states which has
jurisdiction with respect to all, or any portion of, the Collateral or this
Agreement, from time to time. It is the intent of the parties that defined
terms in the UCC should be construed in their broadest sense so that the
term "Collateral" will be construed in its broadest sense. Accordingly if
there are, from time to time, changes to defined terms in the UCC that
broaden the definitions, they are incorporated herein and if existing
definitions in the UCC are broader than the amended definitions, the
existing ones shall be controlling.
2. GRANT OF SECURITY INTEREST IN COLLATERAL.
(a) As an inducement for the Secured Parties to extend the loans as
evidenced by the Notes and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby unconditionally and irrevocably pledges,
grants and hypothecates to the Secured Parties a security interest in and
to, a lien upon and a right of set-off against all of their respective
right, title and interest of whatsoever kind and nature in and to, the
Collateral (a "SECURITY INTEREST" and, collectively, the "SECURITY
INTERESTS").
(b) Notwithstanding the foregoing, nothing herein shall be deemed to
constitute an assignment of any asset which, in the event of an assignment,
becomes void by operation of applicable law or the assignment of which is
otherwise prohibited by applicable law; PROVIDED, HOWEVER, that to the
extent permitted by applicable law, this Agreement shall create a valid
security interest in such asset and, to the extent permitted by applicable
law, this Agreement shall create a valid security interest in the proceeds
of such asset. In addition, in no event shall Collateral include, and
Secured Parties shall not be deemed to have an interest in, any of the
Company's right, title or interest in: (a) any Intellectual Property if the
grant of such interest shall constitute or result in the abandonment,
invalidation or rendering unenforceable any right, title or interest of the
Company therein, (b) any license, contract or agreement to which the
Company is a party or any of its rights or interests thereunder to the
extent, but only to the extent, that such a grant would, under the terms of
such license, contract or agreement, or otherwise, result in a breach or
termination of the terms or, constitute a default under or termination of,
any such license, agreement or contract (other than to the extent that any
such term would be rendered ineffective pursuant to any applicable law or
principles of equity); provided that immediately upon the ineffectiveness,
lapse or termination of any such provision, the Collateral shall include,
and the Company shall be deemed to have granted a security interest in, all
such rights and interests as if such provision had never been in effect;
and (c) the authorized share capital of the Company (including treasury
shares); PROVIDED, HOWEVER, that the Company shall promptly notify the
Agent in the event that subsections (a) or (b) above are, or become,
relevant.
(c) Notwithstanding anything to the contrary hereunder, the Security
Interests will be subordinated in right of payment to all indebtedness of
the Company set forth in SCHEDULE 2(C) attached hereto.
5
3. DELIVERY OF CERTAIN COLLATERAL. Contemporaneously or prior to the
execution of this Agreement, the Company shall deliver or cause to be delivered
to the Agent (a) any and all certificates and other instruments representing or
evidencing the Pledged Securities, and (b) any and all certificates and other
instruments or documents representing any of the other Collateral, in each case,
together with all Necessary Endorsements. The Company is, contemporaneously with
the execution hereof, delivering to Agent, or have previously delivered to
Agent, a true and correct copy of each Organizational Document governing any of
the Pledged Securities.
4. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE COMPANY.
Except as set forth under the corresponding section of the disclosure schedules
delivered to the Secured Parties concurrently herewith (the "DISCLOSURE
SCHEDULES"), which Disclosure Schedules shall be deemed a part hereof, the
Company represents and warrants to, and covenants and agrees with, the Secured
Parties as follows:
(a) The Company has the requisite corporate, partnership, limited
liability company or other power and authority to enter into this Agreement
and otherwise to carry out its obligations hereunder. The execution,
delivery and performance by the Company of this Agreement and the filings
contemplated therein have been duly authorized by all necessary corporate
action on the part of the Company and no further action is required by the
Company. This Agreement has been duly executed by the Company. This
Agreement constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws of general application relating
to or affecting the rights and remedies of creditors and by general
principles of equity.
(b) The Company has no place of business or offices where its books of
account and records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored or located,
except as set forth on SCHEDULE A attached hereto. Except as disclosed on
SCHEDULE A, none of such Collateral is in the possession of any consignee,
bailee, warehouseman, agent or processor.
(c) Except for Permitted Liens (as defined in the Notes) and except as
set forth on SCHEDULE B attached hereto, the Company is the sole owner of
the Collateral (except for non-exclusive licenses granted by the Company in
the ordinary course of business or Collateral held under leases or licenses
from third parties), free and clear of any liens, security interests,
encumbrances, rights or claims, and are fully authorized to grant the
Security Interests. Except as set forth on SCHEDULE C attached hereto,
there is not on file in any governmental or regulatory authority, agency or
recording office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other than those
that will be filed in favor of the Secured Parties pursuant to this
Agreement) covering or affecting any of the Collateral. Except as set forth
on SCHEDULE C attached hereto and except pursuant to this Agreement, as
long as this Agreement shall be in effect, the Company shall not execute
and shall not knowingly permit to be on file in any such office or agency
any other financing statement or other document or instrument (except to
the extent filed or recorded in favor of the Secured Parties pursuant to
the terms of this Agreement).
6
(d) No written claim has been received that any Collateral or the
Company's use of any Collateral violates the rights of any third party.
There has been no adverse decision to the Company's claim of ownership
rights in or exclusive rights to use the Collateral in any jurisdiction or
to the Company's right to keep and maintain such Collateral in full force
and effect, and there is no proceeding involving said rights pending or, to
the best knowledge of the Company, threatened before any court, judicial
body, administrative or regulatory agency, arbitrator or other governmental
authority.
(e) The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and
its Collateral at the locations set forth on SCHEDULE A attached hereto and
may not relocate such books of account and records or tangible Collateral
(other than dispositions in the ordinary course of business) unless it
delivers to the Secured Parties at least 30 days prior to such relocation
(i) written notice of such relocation and the new location thereof (which
must be within the United States or Israel) and (ii) evidence that
appropriate financing statements under the UCC and other necessary
documents have been filed and recorded and other steps have been taken to
perfect the Security Interests to create in favor of the Secured Parties a
valid, perfected and continuing perfected first priority lien in the
Collateral.
(f) This Agreement creates in favor of the Secured Parties a valid
security interest in the Collateral, subject only to Permitted Liens (as
defined in the Notes) securing the payment and performance of the
Obligations. Upon making the filings described in the immediately following
paragraph, all security interests created hereunder in any Collateral which
may be perfected by filing Uniform Commercial Code financing statements
shall have been duly perfected. Except for the filing of the Uniform
Commercial Code financing statements referred to in the immediately
following paragraph, the recordation of the Intellectual Property Security
Agreement (as defined in Section 4(p) hereof) with respect to copyrights
and copyright applications in the United States Copyright Office referred
to in paragraph (m), the execution and delivery of deposit account control
agreements satisfying the requirements of Section 9-104(a)(2) of the UCC
with respect to each deposit account of the Company, and the delivery of
the certificates and other instruments provided in Section 3, no action is
necessary to create or perfect the Security Interests created hereunder.
Without limiting the generality of the foregoing, except for the filing of
said financing statements, the recordation of said Intellectual Property
Security Agreement, and the execution and delivery of said deposit account
control agreements, no consent of any third parties and no authorization,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for (i) the
execution, delivery and performance of this Agreement, (ii) the creation or
perfection of the Security Interests created hereunder in the Collateral or
(iii) the enforcement of the rights of the Agent and the Secured Parties
hereunder.
7
(g) The Company hereby authorizes the Agent to file one or more
financing statements under the UCC, with respect to the Security Interests,
with the proper filing and recording agencies in any jurisdiction deemed
proper by it.
(h) The execution, delivery and performance of this Agreement by the
Company does not (i) violate any of the provisions of any Organizational
Documents of the Company or any judgment, decree, order or award of any
court, governmental body or arbitrator or any applicable law, rule or
regulation applicable to the Company or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become
a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, credit facility, debt or other instrument
(evidencing the Company's debt or otherwise) or other understanding to
which the Company is a party or by which any property or asset of the
Company is bound or affected. If any, all required consents (including,
without limitation, from stockholders or creditors of the Company)
necessary for the Company to enter into and perform its obligations
hereunder have been obtained.
(i) The capital stock and other equity interests listed on SCHEDULE H
hereto (the "PLEDGED SECURITIES") represent all of the capital stock and
other equity interests of the Guarantors, and represent all capital stock
and other equity interests owned, directly or indirectly, by the Company
other than Portfolio Securities. All of the Pledged Securities are validly
issued, fully paid and nonassessable, and the Company is the legal and
beneficial owner of the Pledged Securities, free and clear of any lien,
security interest or other encumbrance except for the security interests
created by this Agreement and other Permitted Liens (as defined in the
Notes).
(j) The ownership and other equity interests in partnerships and
limited liability companies (if any) included in the Collateral (the
"PLEDGED INTERESTS") by their express terms do not provide that they are
securities governed by Article 8 of the UCC and are not held in a
securities account or by any financial intermediary.
(k) Except for Permitted Liens (as defined in the Notes), the Company
shall at all times maintain the liens and Security Interests provided for
hereunder as valid and perfected first priority liens and security
interests in the Collateral in favor of the Secured Parties until this
Agreement and the Security Interest hereunder shall be terminated pursuant
to Section 14 hereof. The Company hereby agrees to defend the same against
the claims of any and all persons and entities. The Company shall safeguard
and protect all Collateral for the account of the Secured Parties. At the
request of the Agent, the Company will sign and deliver to the Agent on
behalf of the Secured Parties at any time or from time to time one or more
financing statements pursuant to the UCC in form reasonably satisfactory to
the Agent and will pay the cost of filing the same in all public offices
wherever filing is, or is deemed by the Agent to be, necessary or desirable
to effect the rights and obligations provided for herein. Without limiting
the generality of the foregoing, the Company shall pay all fees, taxes and
other amounts necessary to maintain the Collateral and the Security
Interests hereunder, and the Company shall obtain and furnish to the Agent
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 Interests hereunder.
8
(l) Except for Permitted Liens (as defined in the Notes), no Debtor
will transfer, pledge, hypothecate, encumber, license, sell or otherwise
dispose of any of the Collateral (except for non-exclusive licenses granted
by a Debtor in its ordinary course of business and sales of inventory and
other Collateral by a Debtor in its ordinary course of business) without
the prior written consent of a Majority in Interest.
(m) The Company shall keep and preserve its equipment, inventory and
other tangible Collateral in good condition, repair and order (ordinary
wear and tear excepted) and shall not operate or locate any such Collateral
(or cause to be operated or located) in any area excluded from insurance
coverage other than in the ordinary course of business and consistent with
past practices.
(n) The Company shall maintain with financially sound and reputable
insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts
customarily insured against by entities having similar properties similarly
situated and in such amounts as are customarily carried under similar
circumstances by other such entities and otherwise as is prudent for
entities engaged in similar businesses but in any event sufficient to cover
the full replacement cost thereof. The Company shall use its best efforts
to cause each insurance policy issued in connection herewith to provide,
and the insurer issuing such policy to certify to the Agent, that (a) the
Agent will be named as lender loss payee and additional insured under each
such insurance policy; (b) if such insurance be proposed to be cancelled or
materially changed for any reason whatsoever, such insurer will promptly
notify the Agent and such cancellation or change shall not be effective as
to the Agent for at least thirty (30) days after receipt by the Agent of
such notice, unless the effect of such change is to extend or increase
coverage under the policy; and (c) the Agent will have the right (but no
obligation) at its election to remedy any default in the payment of
premiums within thirty (30) days of notice from the insurer of such
default. If no Event of Default (as defined in the Notes) exists and if the
proceeds arising out of any claim or series of related claims do not exceed
$100,000, loss payments in each instance will be applied by the applicable
Debtor to the repair and/or replacement of property with respect to which
the loss was incurred to the extent reasonably feasible, and any loss
payments or the balance thereof remaining, to the extent not so applied,
shall be payable to the applicable Debtor; PROVIDED, HOWEVER, that payments
received by the Company after an Event of Default occurs and is continuing
or in excess of $100,000 for any occurrence or series of related
occurrences shall be paid to the Agent on behalf of the Secured Parties
and, if received by the Company, shall be held in trust for the Secured
Parties and immediately paid over to the Agent unless otherwise directed in
writing by the Agent. Copies of such policies or the related certificates,
in each case, naming the Agent as lender loss payee and additional insured
shall be delivered to the Agent at least annually and at the time any new
policy of insurance is issued.
9
(o) The Company shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Parties promptly, in sufficient detail, of any
material adverse change in the Collateral, and of the occurrence of any
event which would have a material adverse effect on the value of the
Collateral or on the Secured Parties' security interest, through the Agent,
therein.
(p) The Company shall promptly execute and deliver to the Agent such
further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and
take such further action as the Agent may from time to time reasonably
request and may in its sole discretion deem necessary to perfect, protect
or enforce the Secured Parties' security interest in the Collateral
including, without limitation, if applicable, the execution and delivery of
a separate security agreement with respect to the Company's Intellectual
Property ("INTELLECTUAL PROPERTY SECURITY AGREEMENT") in which the Secured
Parties have been granted a security interest hereunder, substantially in a
form reasonably acceptable to the Agent, which Intellectual Property
Security Agreement, other than as stated therein, shall be subject to all
of the terms and conditions hereof.
(q) The Company shall permit the Agent and its representatives and
agents to inspect the Collateral during normal business hours and upon
reasonable prior notice, and to make copies of records pertaining to the
Collateral as may be reasonably requested by the Agent from time to time.
(r) The Company shall take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights,
claims, causes of action and accounts receivable in respect of the
Collateral.
(s) The Company shall promptly notify the Secured Parties in
sufficient detail upon becoming aware of any attachment, garnishment,
execution or other legal process levied against any Collateral and of any
other information received by the Company that may materially adversely
affect the value of the Collateral, the Security Interest or the rights and
remedies of the Secured Parties hereunder.
(t) All information heretofore, herein or hereafter supplied to the
Secured Parties by or on behalf of the Company with respect to the
Collateral is accurate and complete in all material respects as of the date
furnished.
(u) The Company shall at all times preserve and keep in full force and
effect their respective valid existence and good standing and any rights
and franchises material to its business.
(v) No Debtor will change its name, type of organization, jurisdiction
of organization, organizational identification number (if it has one),
legal or corporate structure, or identity, or add any new fictitious name
unless it provides at least 30 days prior written notice to the Secured
Parties of such change and, at the time of such written notification, the
Company provides any financing statements or fixture filings necessary to
perfect and continue the perfection of the Security Interests granted and
evidenced by this Agreement.
10
(w) Except in the ordinary course of business, the Company may consign
any of its inventory or sell any of its inventory on xxxx and hold, sale or
return, sale on approval, or other conditional terms of sale without the
consent of the Agent which shall not be unreasonably withheld.
(x) No Debtor may relocate its chief executive office to a new
location without providing 30 days prior written notification thereof to
the Secured Parties and so long as, at the time of such written
notification, the Company provides any financing statements or fixture
filings necessary to perfect and continue the perfection of the Security
Interests granted and evidenced by this Agreement.
(y) The Company was organized and remains organized solely under the
laws of the state set forth next to the Company's name in SCHEDULE D
attached hereto, which SCHEDULE D sets forth the Company's organizational
identification number or, if the Company does not have one, states that one
does not exist.
(z) (i) The actual name of the Company is the name set forth in
SCHEDULE D attached hereto; (ii) the Company has no trade names except as
set forth on SCHEDULE E attached hereto; (iii) the Company has not used any
name other than that stated in the preamble hereto or as set forth on
SCHEDULE E for the preceding five years; and (iv) no entity has merged into
the Company or been acquired by the Company within the past five years
except as set forth on SCHEDULE E.
(aa) At any time and from time to time that any Collateral consists of
instruments, certificated securities or other items that require or permit
possession by the secured party to perfect the security interest created
hereby, the applicable Debtor shall deliver such Collateral to the Agent.
(bb) The Company, in its capacity as issuer, hereby agrees to comply
with any and all reasonable orders and instructions of Agent regarding the
Pledged Interests consistent with the terms of this Agreement without the
further consent of the Company as contemplated by Section 8-106 (or any
successor section) of the UCC. Further, the Company agrees that it shall
not enter into a similar agreement (or one that would confer "control"
within the meaning of Article 8 of the UCC) with any other person or
entity.
(cc) The Company shall cause all tangible chattel paper constituting
Collateral to be delivered to the Agent, or, if such delivery is not
possible, then to cause such tangible chattel paper to contain a legend
noting that it is subject to the security interest created by this
Agreement. To the extent that any Collateral consists of electronic chattel
paper, the applicable Debtor shall cause the underlying chattel paper to be
"marked" within the meaning of Section 9-105 of the UCC (or successor
section thereto).
(dd) If there is any investment property or deposit account included
as Collateral that can be perfected by "control" through an account control
agreement, the Company shall cause such an account control agreement, in
form and substance in each case satisfactory to the Agent, to be entered
into and delivered to the Agent for the benefit of the Secured Parties.
11
(ee) To the extent that any Collateral consists of letter-of-credit
rights, the Company shall cause the issuer of each underlying letter of
credit to consent to an assignment of the proceeds thereof to the Secured
Parties.
(ff) To the extent that any Collateral is in the possession of any
third party, the Company shall join with the Agent in notifying such third
party of the Secured Parties' security interest in such Collateral and
shall use its best efforts to obtain an acknowledgement and agreement from
such third party with respect to the Collateral, in form and substance
reasonably satisfactory to the Agent.
(gg) If the Company shall at any time hold or acquire a commercial
tort claim, the Company shall promptly notify the Secured Parties in a
writing signed by the Company of the particulars thereof and grant to the
Secured Parties in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing
to be in form and substance satisfactory to the Agent.
(hh) The Company shall promptly provide written notice to the Secured
Parties of any and all accounts which arise out of contracts with any
governmental authority and, to the extent necessary to perfect or continue
the perfected status of the Security Interests in such accounts and
proceeds thereof, shall execute and deliver to the Agent an assignment of
claims for such accounts and cooperate with the Agent in taking any other
steps required, in its reasonable judgment, under the Federal Assignment of
Claims Act or any similar federal, state or local statute or rule to
perfect or continue the perfected status of the Security Interests in such
accounts and proceeds thereof.
(ii) The Company shall cause each subsidiary of the Company, if any,
to immediately become a party hereto (an "Additional Debtor"), by executing
and delivering an Additional Debtor Joinder in substantially the form of
ANNEX A attached hereto and comply with the provisions hereof applicable to
the Company. Concurrent therewith, the Additional Debtor shall deliver
replacement schedules for, or supplements to all other Schedules to (or
referred to in) this Agreement, as applicable, which replacement schedules
shall supersede, or supplements shall modify, the Schedules then in effect.
The Additional Debtor shall also deliver such opinions of counsel,
authorizing resolutions, good standing certificates, incumbency
certificates, organizational documents, financing statements and other
information and documentation as the Agent may reasonably request. Upon
delivery of the foregoing to the Agent, the Additional Debtor shall be and
become a party to this Agreement with the same rights and obligations as
the Company, for all purposes hereof as fully and to the same extent as if
it were an original signatory hereto and shall be deemed to have made the
representations, warranties and covenants set forth herein as of the date
of execution and delivery of such Additional Debtor Joinder, and all
references herein to the "Company" shall be deemed to include each
Additional Debtor.
12
(jj) The Company shall vote the Pledged Securities to comply with the
covenants and agreements set forth herein and in the Notes.
(kk) The Company shall register the pledge of the applicable Pledged
Securities on the books of the Company. The Company shall notify each
issuer of Pledged Securities to register the pledge of the applicable
Pledged Securities in the name of the Secured Parties on the books of such
issuer. Further, except with respect to certificated securities delivered
to the Agent, the applicable Debtor shall deliver to Agent an
acknowledgement of pledge (which, where appropriate, shall comply with the
requirements of the relevant UCC with respect to perfection by
registration) signed by the issuer of the applicable Pledged Securities,
which acknowledgement shall confirm that: (a) it has registered the pledge
on its books and records; and (b) at any time directed by Agent during the
continuation of an Event of Default, such issuer will transfer the record
ownership of such Pledged Securities into the name of any designee of
Agent, will take such steps as may be necessary to effect the transfer, and
will comply with all other instructions of Agent regarding such Pledged
Securities without the further consent of the Company.
(ll) In the event that, upon an occurrence of an Event of Default,
Agent shall sell all or any of the Pledged Securities to another party or
parties (herein called the "TRANSFEREE") or shall purchase or retain all or
any of the Pledged Securities, the Company shall, to the extent applicable:
(i) deliver to Agent or the Transferee, as the case may be, the articles of
incorporation, bylaws, minute books, stock certificate books, corporate
seals, deeds, leases, indentures, agreements, evidences of indebtedness,
books of account, financial records and all other Organizational Documents
and records of the Company and its direct and indirect subsidiaries; (ii)
use its best efforts to obtain resignations of the persons then serving as
officers and directors of the Company and its direct and indirect
subsidiaries, if so requested; and (iii) use its best efforts to obtain any
approvals that are required by any governmental or regulatory body in order
to permit the sale of the Pledged Securities to the Transferee or the
purchase or retention of the Pledged Securities by Agent and allow the
Transferee or Agent to continue the business of the Company and its direct
and indirect subsidiaries.
(mm) Without limiting the generality of the other obligations of the
Company hereunder, the Company shall promptly (i) cause to be registered at
the United States Copyright Office all of its material copyrights, (ii)
cause the Security Interest contemplated hereby with respect to all
Intellectual Property registered at the United States Copyright Office or
United States Patent and Trademark Office to be duly recorded at the
applicable office, and (iii) give the Agent notice whenever it acquires
(whether absolutely or by license) or creates any additional material
Intellectual Property.
(nn) The Company will from time to time, at the expense of the
Company, promptly execute and deliver all such further instruments and
documents, and take all such further action as may be necessary or
desirable, or as the Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or
to enable the Secured Parties to exercise and enforce their rights and
remedies hereunder and with respect to any Collateral or to otherwise carry
out the purposes of this Agreement.
13
(oo) SCHEDULE F attached hereto lists all of the patents, patent
applications, trademarks, trademark applications, registered copyrights,
and domain names owned by any of the Company as of the date hereof.
SCHEDULE F lists all material licenses in favor of the Company for the use
of any patents, trademarks, copyrights and domain names as of the date
hereof. All material patents and trademarks of the Company have been duly
recorded or are in the process of recording at the United States Patent and
Trademark Office and all material copyrights of the Company have been duly
recorded or are in the process of recording at the United States Copyright
Office.
(pp) Except as set forth on SCHEDULE G attached hereto, none of the
account debtors or other persons or entities obligated on any of the
Collateral is a governmental authority covered by the Federal Assignment of
Claims Act or any similar federal, state or local statute or rule in
respect of such Collateral.
5. EFFECT OF PLEDGE ON CERTAIN RIGHTS. (a) If any of the Collateral subject
to this Agreement consists of nonvoting equity or ownership interests
(regardless of class, designation, preference or rights) that may be converted
into voting equity or ownership interests upon the occurrence of certain events
(including, without limitation, upon the transfer of all or any of the other
stock or assets of the issuer), it is agreed that the pledge of such equity or
ownership interests pursuant to this Agreement or the enforcement of any of
Agent's rights hereunder shall not be deemed to be the type of event which would
trigger such conversion rights notwithstanding any provisions in the
Organizational Documents or agreements to which the Company is subject or to
which the Company is party.
(b) The Secured Parties acknowledge and agree that certain of the
Collateral may have been developed with the assistance of funds received
from the Israeli Office of the Chief Scientist and consequently the use,
transfer, sale and foreclosure of such Collateral is subject to the Law for
the Encouragement of Industrial Research and Development, 5744-1984, as
amended or supplemented from time to time and all rules and regulations
issued thereunder (the "R&D LAW") and, in enforcing their rights hereunder,
the Secured Parties undertake to comply with the R&D Law.
6. DEFAULTS. The following events shall be "EVENTS OF DEFAULT":
(a) The occurrence of an Event of Default (as defined in the Notes)
under the Notes;
(b) Any representation or warranty of the Company in this Agreement or
of Metalink in the Israeli Security Agreement shall prove to have been
incorrect in any material respect when made;
(c) The failure by the Company to observe or perform any of its
obligations hereunder for five (5) days after delivery to the Company of
notice of such failure by or on behalf of a Secured Party unless such
default is capable of cure but cannot be cured within such time frame and
the Company is using best efforts to cure same in a timely fashion; or
14
(d) If any provision of this Agreement shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by the Company, or a proceeding shall be
commenced by the Company, or by any governmental authority having
jurisdiction over the Company, seeking to establish the invalidity or
unenforceability thereof, or the Company shall deny that the Company has
any liability or obligation purported to be created under this Agreement.
7. DUTY TO HOLD IN TRUST.
(a) Upon the occurrence of any Event of Default and at any time
thereafter until such Event of Default is cured, the Company shall, upon
receipt of any revenue, income, dividend, interest or other sums subject to
the Security Interests, whether payable pursuant to the Notes 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
the Secured Parties and shall forthwith endorse and transfer any such sums
or instruments, or both, to the Secured Parties, pro-rata in proportion to
their respective then-currently outstanding principal amount of Notes for
application to the satisfaction of the Obligations (and if any Note is not
outstanding, pro-rata in proportion to the initial purchases of the
remaining Notes).
(b) If the Company shall become entitled to receive or shall receive
any securities or other property (including, without limitation, shares of
Pledged Securities or instruments representing Pledged Securities acquired
after the date hereof, or any options, warrants, rights or other similar
property or certificates representing a dividend, or any distribution in
connection with any recapitalization, reclassification or increase or
reduction of capital, or issued in connection with any reorganization of
the Company or any of its direct or indirect subsidiaries) in respect of
the Pledged Securities (whether as an addition to, in substitution of, or
in exchange for, such Pledged Securities or otherwise), the Company agrees
to (i) accept the same as the agent of the Secured Parties; (ii) hold the
same in trust on behalf of and for the benefit of the Secured Parties; and
(iii) to deliver any and all certificates or instruments evidencing the
same to Agent on or before the close of business on the fifth business day
following the receipt thereof by the Company, in the exact form received
together with the Necessary Endorsements, to be held by Agent subject to
the terms of this Agreement as Collateral.
8. RIGHTS AND REMEDIES UPON DEFAULT.
(a) Upon the occurrence of any Event of Default and at any time
thereafter until such Event of Default is cured, the Secured Parties,
acting through the Agent, shall have the right to exercise all of the
remedies conferred hereunder and under the Notes, and the Secured Parties
shall have all the rights and remedies of a secured party under the UCC.
Without limitation, the Agent, for the benefit of the Secured Parties,
shall have the following rights and powers:
15
(i) The Agent shall have the right to take possession of the
Collateral and, for that purpose, enter, with the aid and assistance
of any person, any premises where the Collateral, or any part thereof,
is or may be placed and remove the same, and the Company shall
assemble the Collateral and make it available to the Agent at places
which the Agent shall reasonably select, whether at the Company's
premises or elsewhere, and make available to the Agent, without rent,
all of the Company's respective premises and facilities for the
purpose of the Agent taking possession of, removing or putting the
Collateral in saleable or disposable form.
(ii) Upon notice to the Company by Agent, all rights of the
Company to exercise the voting and other consensual rights which it
would otherwise be entitled to exercise and all rights of the Company
to receive the dividends and interest which it would otherwise be
authorized to receive and retain, shall cease. Upon such notice, Agent
shall have the right to receive, for the benefit of the Secured
Parties, any interest, cash dividends or other payments on the
Collateral and, at the option of Agent, to exercise in such Agent's
discretion all voting rights pertaining thereto. Without limiting the
generality of the foregoing, Agent shall have the right (but not the
obligation) to exercise all rights with respect to the Collateral as
it were the sole and absolute owner thereof, including, without
limitation, to vote and/or to exchange, at its sole discretion, any or
all of the Collateral in connection with a merger, reorganization,
consolidation, recapitalization or other readjustment concerning or
involving the Collateral or the Company or any of its direct or
indirect subsidiaries.
(iii) The Agent shall have the right to operate the business of
the Company using the Collateral and shall have the right to assign,
sell, lease or otherwise dispose of and deliver all or any part of the
Collateral, at public or private sale or otherwise, either with or
without special conditions or stipulations, for cash or on credit or
for future delivery, in such parcel or parcels and at such time or
times and at such place or places, and upon such terms and conditions
as the Agent may deem commercially reasonable, 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 a debtor, which are hereby expressly waived. Upon each
such sale, lease, assignment or other transfer of Collateral, the
Agent, for the benefit of the Secured Parties, may, unless prohibited
by applicable law 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.
(iv) The Agent shall have the right (but not the obligation) to
notify any account debtors and any obligors under instruments or
accounts to make payments directly to the Agent, on behalf of the
Secured Parties, and to enforce the Company' rights against such
account debtors and obligors.
16
(v) The Agent, for the benefit of the Secured Parties, may (but
is not obligated to) direct any financial intermediary or any other
person or entity holding any investment property to transfer the same
to the Agent, on behalf of the Secured Parties, or its designee.
(vi) The Agent may (but is not obligated to) transfer any or all
Intellectual Property registered in the name of the Company at the
United States Patent and Trademark Office and/or Copyright Office into
the name of the Secured Parties or any designee or any purchaser of
any Collateral, subject to Section 5(b) above.
(b) The Agent shall comply with any applicable law in connection with
a disposition of Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the
Collateral. The Agent may sell the Collateral without giving any warranties
and may specifically disclaim such warranties. If the Agent sells any of
the Collateral on credit, the Company will only be credited with payments
actually made by the purchaser. In addition, the Company waives any and all
rights that it may have to a judicial hearing in advance of the enforcement
of any of the Agent's rights and remedies hereunder, including, without
limitation, its right following an Event of Default to take immediate
possession of the Collateral and to exercise its rights and remedies with
respect thereto.
(c) For the purpose of enabling the Agent to further exercise rights
and remedies under this Section 8 or elsewhere provided by agreement or
applicable law, the Company hereby grants to the Agent, for the benefit of
the Agent and the Secured Parties, an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to the
Company) to use, license or sublicense following an Event of Default, any
Intellectual Property now owned or hereafter acquired by the Company, and
wherever the same may be located, and including in such license access to
all media in which any of the licensed items may be recorded or stored and
to all computer software and programs used for the compilation or printout
thereof.
9. APPLICATIONS OF PROCEEDS. The proceeds of any such sale, lease or other
disposition of the Collateral hereunder or from payments made on account of any
insurance policy insuring any portion of the Collateral shall be applied first,
to the expenses of retaking, holding, storing, processing and preparing for
sale, selling, and the like (including, without limitation, any taxes, fees and
other costs incurred in connection therewith) of the Collateral, to the
reasonable attorneys' fees and expenses incurred by the Agent in enforcing the
Secured Parties' rights hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the Obligations pro
rata among the Secured Parties (based on then-outstanding principal amounts of
Notes at the time of any such determination), and to the payment of any other
amounts required by applicable law, after which the Secured Parties shall pay to
the applicable Debtor any surplus proceeds. If, upon the sale, license or other
disposition of the Collateral, the proceeds thereof are insufficient to pay all
amounts to which the Secured Parties are legally entitled, the Company will be
liable for the deficiency, together with interest thereon, at the rate of 18%
per annum or the lesser amount permitted by applicable law (the "DEFAULT RATE"),
and the reasonable fees of any attorneys employed by the Secured Parties to
collect such deficiency. To the extent permitted by applicable law, the Company
waives all claims, damages and demands against the Secured Parties arising out
of the repossession, removal, retention or sale of the Collateral, unless due
solely to the gross negligence or willful misconduct of the Secured Parties as
determined by a final judgment (not subject to further appeal) of a court of
competent jurisdiction.
17
10. SECURITIES LAW PROVISION. The Company recognizes that Agent may be
limited in its ability to effect a sale to the public of all or part of the
Pledged Securities by reason of certain prohibitions in the Securities Act of
1933, as amended, or other federal or state securities laws (collectively, the
"SECURITIES LAWS"), and may be compelled to resort to one or more sales to a
restricted group of purchasers who may be required to agree to acquire the
Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof. The Company agrees that sales so made may be
at prices and on terms less favorable than if the Pledged Securities were sold
to the public, and that Agent has no obligation to delay the sale of any Pledged
Securities for the period of time necessary to register the Pledged Securities
for sale to the public under the Securities Laws. The Company shall cooperate
with Agent in its attempt to satisfy any requirements under the Securities Laws
(including, without limitation, registration thereunder if requested by Agent)
applicable to the sale of the Pledged Securities by Agent.
11. COSTS AND EXPENSES. The Debtors agree to pay all reasonable
out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements
pursuant to the UCC, continuation statements, partial releases and/or
termination statements related thereto or any expenses of any searches
reasonably required by the Agent. The Debtors shall also pay all other claims
and charges which in the reasonable opinion of the Agent is reasonably likely to
prejudice, imperil or otherwise affect the Collateral or the Security Interests
therein. The Debtors will also, upon demand, pay to the Agent the amount of any
and all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which the Agent, for the benefit of the
Secured Parties, may incur in connection with the perfection, protection,
satisfaction, foreclosure, collection or enforcement of the Security Interest
and the preparation, administration, continuance, amendment or enforcement of
this Agreement and pay to the Agent the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of any
experts and agents, which the Agent, for the benefit of the Secured Parties, and
the Secured Parties may incur in connection with (i) the enforcement of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, or (iii) the exercise or
enforcement of any of the rights of the Secured Parties under the Notes. Until
so paid, any fees payable hereunder and not paid within 7 days following written
demand therefor, shall be added to the principal amount of the Notes and shall
bear interest at the Default Rate.
18
12. RESPONSIBILITY FOR COLLATERAL. The Company assume all liabilities and
responsibility in connection with all Collateral, and the Obligations 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. Without
limiting the generality of the foregoing, (a) neither the Agent nor any Secured
Party (i) has any duty (either before or after an Event of Default) to collect
any amounts in respect of the Collateral or to preserve any rights relating to
the Collateral, or (ii) has any obligation to clean-up or otherwise prepare the
Collateral for sale, and (b) the Company shall remain obligated and liable under
each contract or agreement included in the Collateral to be observed or
performed by the Company thereunder. Neither the Agent nor any Secured Party
shall have any obligation or liability under any such contract or agreement by
reason of or arising out of this Agreement or the receipt by the Agent or any
Secured Party of any payment relating to any of the Collateral, nor shall the
Agent or any Secured Party be obligated in any manner to perform any of the
obligations of the Company under or pursuant to any such contract or agreement,
to make inquiry as to the nature or sufficiency of any payment received by the
Agent or any Secured Party in respect of the Collateral or as to the sufficiency
of any performance by any party under any such contract or agreement, to present
or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to the Agent or to which
the Agent or any Secured Party may be entitled at any time or times.
13. SECURITY INTERESTS ABSOLUTE. All rights of the Secured Parties 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 Notes or 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 Notes or any other agreement entered into in connection with the
foregoing; (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 guarantee, or any other security, for all or any of the
Obligations; (d) any action by the Secured Parties 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 a Debtor, or a
discharge of all or any part of the Security Interests granted hereby (except if
attributable to the Secured Parties' gross negligence or willful misconduct).
Until the Obligations shall have been paid and performed in full, the rights of
the Secured Parties shall continue even if the Obligations are barred for any
reason, including, without limitation, the running of the statute of limitations
or bankruptcy. The Debtors expressly waives presentment, protest, notice of
protest, demand, notice of nonpayment and demand for performance except as
otherwise expressly provided in the Transaction Documents. In the event that at
any time any transfer of any Collateral or any payment received by the Secured
Parties 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 the Secured Parties, then, in any such
event, the Debtors' 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
Debtors waive all right to require the Secured Parties to proceed against any
other person or entity or to apply any Collateral which the Secured Parties may
hold at any time, or to marshal assets, or to pursue any other remedy. The
Debtors waive any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.
19
14. TERM OF AGREEMENT. This Agreement and the Security Interests shall
terminate on the date on which all payments under the Notes have been
indefeasibly paid in full and all other Obligations have been paid or discharged
(other than indemnity and other contingent obligations); provided, however, that
(i) all indemnities of the Debtors contained in this Agreement (including,
without limitation, Annex B hereto) shall survive and remain operative and in
full force and effect regardless of the termination of this Agreement and (ii)
the Secured Parties and the Agent shall, at their expense, return all property,
documents and the like to the Debtor and cooperate with the Debtor to cancel any
such Security Interests, including without limitation, execution of all
reasonably requested documents and termination statements to effect such
cancellation and release of the Security Interests.
15. POWER OF ATTORNEY; FURTHER ASSURANCES.
(a) The Company authorizes the Agent, and does hereby make, constitute
and appoint the Agent and its officers, agents, successors or assigns with
full power of substitution, as the Company's true and lawful
attorney-in-fact, with power, in the name of the Agent or the Company, to,
after the occurrence and during the continuance of an Event of Default, (i)
endorse any note, checks, drafts, money orders or other instruments of
payment (including payments payable under or in respect of any policy of
insurance) in respect of the Collateral that may come into possession of
the Agent; (ii) to sign and endorse any financing statement pursuant to the
UCC or any invoice, freight or express xxxx, xxxx of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and
notices in connection with accounts, and other documents relating to the
Collateral; (iii) to pay or discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on or threatened against
the Collateral; (iv) to demand, collect, receipt for, compromise, settle
and xxx for monies due in respect of the Collateral; (v) to transfer any
Intellectual Property or provide licenses respecting any Intellectual
Property; and (vi) generally, at the option of the Agent, and at the
expense of the Company, at any time, or from time to time, to execute and
deliver any and all documents and instruments and to do all acts and things
which the Agent deems necessary to protect, preserve and realize upon the
Collateral and the Security Interests granted therein in order to effect
the intent of this Agreement and the Notes all as fully and effectually as
the Company might or could do; and 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. The designation set forth herein shall be deemed to
amend and supersede any inconsistent provision in the Organizational
Documents or other documents or agreements to which the Company is subject
or to which the Company is a party. Without limiting the generality of the
foregoing, after the occurrence and during the continuance of an Event of
Default, each Secured Party is specifically authorized to execute and file
any applications for or instruments of transfer and assignment of any
patents, trademarks, copyrights or other Intellectual Property with the
United States Patent and Trademark Office and the United States Copyright
Office.
20
(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, with the proper
filing and recording agencies in any jurisdiction, including, without
limitation, the jurisdictions indicated on SCHEDULE C attached hereto, all
such instruments, and take all such action as may reasonably be deemed
necessary or advisable, or as reasonably requested by the Agent, to perfect
the Security Interests granted hereunder and otherwise to carry out the
intent and purposes of this Agreement, or for assuring and confirming to
the Agent the grant or perfection of a perfected security interest in all
the Collateral under the UCC.
(c) The Company hereby irrevocably appoints the Agent as the Company's
attorney-in-fact, with full authority in the place and instead of the
Company and in the name of the Company, from time to time in the Agent's
discretion, to take any action and to execute any instrument which the
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative to
any of the Collateral without the signature of the Company where permitted
by law, which financing statements may (but need not) describe the
Collateral as "all assets" or "all personal property" or words of like
import, and ratifies all such actions taken by the Agent. 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.
16. NOTICES. All notices, requests, demands and other communications
hereunder shall be subject to the notice provision of the Loan Agreement (as
such term is defined in the Notes).
17. 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 the
Agent 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 the Secured Parties' rights and remedies
hereunder.
18. APPOINTMENT OF AGENT. The Secured Parties hereby appoint Enable Growth
Partners LP to act as their agent ("ENABLE" or "AGENT") for purposes of
exercising any and all rights and remedies of the Secured Parties hereunder. By
executing the signature page hereto, Enable accepts such appointment. Such
appointment shall continue until revoked in writing by a Majority in Interest,
at which time a Majority in Interest shall appoint a new Agent, provided that
Enable may not be removed as Agent unless Enable shall then hold less than
$200,000 in principal amount of Notes; PROVIDED, FURTHER, that such removal may
occur only if each of the other Secured Parties shall then hold not less than an
aggregate of $200,000 in principal amount of Notes. The Agent shall have the
rights, responsibilities and immunities set forth in ANNEX B hereto.
21
19. MISCELLANEOUS.
(a) No course of dealing between the Debtors and the Secured Parties,
nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Parties, any right, power or privilege hereunder or under the
Notes 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.
(b) All of the rights and remedies of the Secured Parties with respect
to the Collateral, whether established hereby or by the Notes or by any
other agreements, instruments or documents or by law shall be cumulative
and may be exercised singly or concurrently.
(c) This Agreement, together with the exhibits and schedules hereto,
contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral
or written, with respect to such matters, which the parties acknowledge
have been merged into this Agreement and the exhibits and schedules hereto.
Except as expressly set forth herein, no provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Majority in
Interest or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought. In the event of any conflict
between this Agreement and the Israeli Security Agreement, the Israeli
Security Agreement shall control.
(d) If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ
an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(e) No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.
(f) This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and permitted assigns. The Company and the
Guarantors may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Secured Party (other
than by merger). Any Secured Party may assign any or all of its rights
under this Agreement to any Person (as defined in the Loan Agreement) to
whom such Secured Party assigns or transfers any Obligations, provided such
transferee agrees in writing to be bound, with respect to the transferred
Obligations, by the provisions of this Agreement that apply to the "Secured
Parties."
22
(g) Each party shall take such further action and execute and deliver
such further documents as may be necessary or appropriate in order to carry
out the provisions and purposes of this Agreement.
(h) GOVERNING LAW, ARBITRATION. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with, and any
dispute between the parties relating to or arising from this Agreement
shall be governed by, the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees
that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or
agents), as well as any dispute between the parties relating to the
Transaction Documents, shall be resolved by binding arbitration in San
Francisco, California before an arbitrator with experience in commercial
disputes relating to securities. The arbitration shall be administered by
JAMS pursuant to its Comprehensive Arbitration Rules and Procedures, or, if
for any reason JAMS refuses to administer such arbitration or JAMS is no
longer in business, by the American Arbitration Association ("AAA") in
accordance with its rules and procedures. Unless the arbitrator determines
that there is exceptional need for additional discovery, discovery in the
arbitration shall be limited as follows: (1) the parties shall exchange
non-privileged relevant documents including, without limitation, all
documents that the parties intend to use as evidence in the arbitration;
and (2) each party shall be entitled to take one deposition of seven hours
duration of either an opposing party or a non-party. If one party fails to
respond within 20 days after the other party mails a written list of
proposed arbitrators to that party by either agreeing to one of the
proposed arbitrators or suggesting 3 or more alternate arbitrators, the
proposing party may select the arbitrator from among its initial list of
proposed arbitrators and JAMS (or AAA if it is administering the
arbitration) shall then appoint that arbitrator to preside over the
arbitration. If the parties are unable to agree on an arbitrator, the
parties shall select an arbitrator pursuant to the rules of JAMS (or AAA if
it is administering the arbitration). Where reasonable, the arbitrator
shall schedule the arbitration hearing within four (4) months after being
appointed. The arbitrator must render a decision in writing, explaining the
legal and factual basis for decision as to each of the principal
controverted issues. The arbitrator's decision will be final and binding
upon the parties. A judgment upon any award may be entered in any court of
competent jurisdiction. This clause shall not preclude the parties from
seeking provisional remedies in aid of arbitration, such as injunctive
relief, from any court of competent jurisdiction. Each party shall be
responsible for advancing one-half of the costs of arbitration, including
all JAMS (or AAA) fees; provided that, in the award, the prevailing party
shall be entitled to recover all of its costs and expenses, including
reasonable attorneys' fees and costs, arbitrator fees, JAMS (or AAA) fees
and costs, and any attorneys' fees and costs incurred in compelling
arbitration. The parties are not waiving, and expressly reserve, any rights
they may have under federal securities laws, rules, and regulations, and
any such rights shall be determined in the arbitration provided for herein.
Each party hereby irrevocably agrees and submits to the jurisdiction of the
federal and state courts located in the City of San Francisco, California,
for any suit, action or proceeding enforcing this arbitration provision or
entering judgment upon any arbitral award made pursuant to this arbitration
provision, and each party hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such courts, or that such suit,
action or proceeding is an inconvenient venue. Each party hereby
irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to
it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in
any other manner permitted by law. This provision will be interpreted,
construed and governed according to the Federal Arbitration Act (9 U.S.C.
Sections 1 et seq.).
23
(i) This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the
event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing
(or on whose behalf such signature is executed) the same with the same
force and effect as if such facsimile signature were the original thereof.
(j) Each Debtor shall jointly and severally be liable for the
obligations of the Company to the Secured Parties hereunder.
(k) The Debtors shall indemnify, reimburse and hold harmless the Agent
and the Secured Parties and their respective partners, members,
shareholders, officers, directors, employees and agents (and any other
persons with other titles that have similar functions) (collectively,
"INDEMNITEES") from and against any and all losses, claims, liabilities,
damages, penalties, suits, costs and expenses, of any kind or nature,
(including fees relating to the cost of investigating and defending any of
the foregoing) imposed on, incurred by or asserted against such Indemnitee
in any way related to or arising from or alleged to arise from this
Agreement or the Collateral, except any such losses, claims, liabilities,
damages, penalties, suits, costs and expenses which result from the gross
negligence or willful misconduct of the Indemnitee as determined by a
final, nonappealable decision of a court of competent jurisdiction. This
indemnification provision is in addition to, and not in limitation of, any
other indemnification provision in the Notes, the Loan Agreement (as such
term is defined in the Notes) or any other agreement, instrument or other
document executed or delivered in connection herewith or therewith.
24
(l) Nothing in this Agreement shall be construed to subject Agent or
any Secured Party to liability as a partner in the Company or any if its
direct or indirect subsidiaries that is a partnership or as a member in the
Company or any of its direct or indirect subsidiaries that is a limited
liability company, nor shall Agent or any Secured Party be deemed to have
assumed any obligations under any partnership agreement or limited
liability company agreement, as applicable, of any the Company or any of
its direct or indirect subsidiaries or otherwise, unless and until any such
Secured Party exercises its right to be substituted for the Company as a
partner or member, as applicable, pursuant hereto.
(m) To the extent that the grant of the security interest in the
Collateral and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of the Company
or any direct or indirect subsidiary of the Company or compliance with any
provisions of any of the Organizational Documents, the Company hereby grant
such consent and approval and waive any such noncompliance with the terms
of said documents.
[SIGNATURE PAGES FOLLOW]
25
IN WITNESS WHEREOF, the parties hereto have caused this U.S. Security
Agreement to be duly executed on the day and year first above written.
METALINK LTD.
By:__________________________________________
Name:
Title:
METALINK INC.
By:__________________________________________
Name:
Title:
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
26
[SIGNATURE PAGE OF HOLDERS TO MTLK U.S. SA]
Name of Investing Entity: __________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: _________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
27
SCHEDULE A
Principal Place of Business of Company:
Locations Where Collateral is Located or Stored:
SCHEDULE B
SCHEDULE C
SCHEDULE D
Legal Names and Organizational Identification Numbers
SCHEDULE E
Names; Mergers and Acquisitions
SCHEDULE F
Intellectual Property
SCHEDULE G
Account Debtors
SCHEDULE H
Pledged Securities
28
ANNEX A
TO
SECURITY
AGREEMENT
FORM OF ADDITIONAL DEBTOR JOINDER
Security Agreement dated as of September ___, 2008 made by
Metalink Ltd.
and its subsidiaries party thereto from time to time, as Debtors
to and in favor of
the Secured Parties identified therein (the "SECURITY AGREEMENT")
Reference is made to the Security Agreement as defined above; capitalized
terms used herein and not otherwise defined herein shall have the meanings given
to such terms in, or by reference in, the Security Agreement.
The undersigned hereby agrees that upon delivery of this Additional Debtor
Joinder to the Secured Parties referred to above, the undersigned shall (a) be
an Additional Debtor under the Security Agreement, (b) have all the rights and
obligations of the Debtors under the Security Agreement as fully and to the same
extent as if the undersigned was an original signatory thereto and (c) be deemed
to have made the representations and warranties set forth therein as of the date
of execution and delivery of this Additional Debtor Joinder. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE
SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH IN
THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL
PROVISIONS SET FORTH THEREIN.
Attached hereto are supplemental and/or replacement Schedules to the
Security Agreement, as applicable.
An executed copy of this Joinder shall be delivered to the Secured Parties,
and the Secured Parties may rely on the matters set forth herein on or after the
date hereof. This Joinder shall not be modified, amended or terminated without
the prior written consent of the Secured Parties.
IN WITNESS WHEREOF, the undersigned has caused this Joinder to be executed
in the name and on behalf of the undersigned.
[Name of Additional Debtor]
By:
Name:
Title:
Address:
Dated:
ANNEX B
TO
SECURITY
AGREEMENT
THE AGENT
1. APPOINTMENT. The Secured Parties (all capitalized terms used herein and
not otherwise defined shall have the respective meanings provided in the
Security Agreement to which this Annex B is attached (the "AGREEMENT")), by
their acceptance of the benefits of the Agreement, hereby designate Enable
Growth Partners LP ("ENABLE" or "AGENT") as the Agent to act as specified herein
and in the Agreement. Each Secured Party shall be deemed irrevocably to
authorize the Agent to take such action on its behalf under the provisions of
the Agreement and any other Transaction Document (as such term is defined in the
Loan Agreement) and to exercise such powers and to perform such duties hereunder
and thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. The Agent may perform any of its duties hereunder by or through its
agents or employees.
2. NATURE OF DUTIES. The Agent shall have no duties or responsibilities
except those expressly set forth in the Agreement. Neither the Agent nor any of
its partners, members, shareholders, officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such under the
Agreement or hereunder or in connection herewith or therewith, be responsible
for the consequence of any oversight or error of judgment or answerable for any
loss, unless caused solely by its or their gross negligence or willful
misconduct as determined by a final judgment (not subject to further appeal) of
a court of competent jurisdiction. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of the
Agreement or any other Transaction Document a fiduciary relationship in respect
of the Company or any Secured Party; and nothing in the Agreement or any other
Transaction Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of the
Agreement or any other Transaction Document except as expressly set forth herein
and therein or as imposed by applicable law.
3. LACK OF RELIANCE ON THE AGENT. Independently and without reliance upon
the Agent, each Secured Party, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of the Company and its subsidiaries in connection with
such Secured Party's investment in the Company, the creation and continuance of
the Obligations, the transactions contemplated by the Transaction Documents, and
the taking or not taking of any action in connection therewith, and (ii) its own
appraisal of the creditworthiness of the Company and its subsidiaries, and of
the value of the Collateral from time to time, and the Agent shall have no duty
or responsibility, either initially or on a continuing basis, to provide any
Secured Party with any credit, market or other information with respect thereto,
whether coming into its possession before any Obligations are incurred or at any
time or times thereafter. The Agent shall not be responsible to the Company or
any Secured Party for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith, or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the
Agreement or any other Transaction Document, or for the financial condition of
the Company or the value of any of the Collateral, or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of the Agreement or any other Transaction Document, or
the financial condition of the Company, or the value of any of the Collateral,
or the existence or possible existence of any default or Event of Default under
the Agreement, the Notes or any of the other Transaction Documents.
4. CERTAIN RIGHTS OF THE AGENT. The Agent shall have the right to take any
action with respect to the Collateral, on behalf of all of the Secured Parties.
To the extent practical, the Agent shall request instructions from the Secured
Parties with respect to any material act or action (including failure to act) in
connection with the Agreement or any other Transaction Document, and shall be
entitled to act or refrain from acting in accordance with the instructions of a
Majority in Interest; if such instructions are not provided despite the Agent's
request therefor, the Agent shall be entitled to refrain from such act or taking
such action, and if such action is taken, shall be entitled to appropriate
indemnification from the Secured Parties in respect of actions to be taken by
the Agent; and the Agent shall not incur liability to any person or entity by
reason of so refraining. Without limiting the foregoing, (a) no Secured Party
shall have any right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting hereunder in accordance with the terms of
the Agreement or any other Transaction Document, and the Company shall have no
right to question or challenge the authority of, or the instructions given to,
the Agent pursuant to the foregoing and (b) the Agent shall not be required to
take any action which the Agent believes (i) could reasonably be expected to
expose it to personal liability or (ii) is contrary to this Agreement, the
Transaction Documents or applicable law.
5. RELIANCE. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by the proper person
or entity, and, with respect to all legal matters pertaining to the Agreement
and the other Transaction Documents and its duties thereunder, upon advice of
counsel selected by it and upon all other matters pertaining to this Agreement
and the other Transaction Documents and its duties thereunder, upon advice of
other experts selected by it. Anything to the contrary notwithstanding, the
Agent shall have no obligation whatsoever to any Secured Party to assure that
the Collateral exists or is owned by the Company or is cared for, protected or
insured or that the liens granted pursuant to the Agreement have been properly
or sufficiently or lawfully created, perfected, or enforced or are entitled to
any particular priority.
6. INDEMNIFICATION. To the extent that the Agent is not reimbursed and
indemnified by the Company, the Secured Parties will jointly and severally
reimburse and indemnify the Agent, in proportion to their initially respective
principal amounts of Notes, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in performing its duties hereunder
or under the Agreement or any other Transaction Document, or in any way relating
to or arising out of the Agreement or any other Transaction Document except for
those determined by a final judgment (not subject to further appeal) of a court
of competent jurisdiction to have resulted solely from the Agent's own gross
negligence or willful misconduct. Prior to taking any action hereunder as Agent,
the Agent may require each Secured Party to deposit with it sufficient sums as
it determines in good faith is necessary to protect the Agent for costs and
expenses associated with taking such action.
7. RESIGNATION BY THE AGENT.
(a) The Agent may resign from the performance of all its functions and
duties under the Agreement and the other Transaction Documents at any time
by giving 30 days' prior written notice (as provided in the Agreement) to
the Company and the Secured Parties. Such resignation shall take effect
upon the appointment of a successor Agent pursuant to clauses (b) and (c)
below.
(b) Upon any such notice of resignation, the Secured Parties, acting
by a Majority in Interest, shall appoint a successor Agent hereunder.
(c) If a successor Agent shall not have been so appointed within said
30-day period, the Agent shall then appoint a successor Agent who shall
serve as Agent until such time, if any, as the Secured Parties appoint a
successor Agent as provided above. If a successor Agent has not been
appointed within such 30-day period, the Agent may petition any court of
competent jurisdiction or may interplead the Company and the Secured
Parties in a proceeding for the appointment of a successor Agent, and all
fees, including, but not limited to, extraordinary fees associated with the
filing of interpleader and expenses associated therewith, shall be payable
by the Company on demand.
8. RIGHTS WITH RESPECT TO COLLATERAL. Each Secured Party agrees with all
other Secured Parties and the Agent (i) that it shall not, and shall not attempt
to, exercise any rights with respect to its security interest in the Collateral,
whether pursuant to any other agreement or otherwise (other than pursuant to
this Agreement), or take or institute any action against the Agent or any of the
other Secured Parties in respect of the Collateral or its rights hereunder
(other than any such action arising from the breach of this Agreement) and (ii)
that such Secured Party has no other rights with respect to the Collateral other
than as set forth in this Agreement and the other Transaction Documents. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations under the Agreement.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of the Agreement including this Annex B shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Agent.
