SUBSIDIARY GUARANTY AGREEMENT
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THIS SUBSIDIARY GUARANTY AGREEMENT (the "Guaranty Agreement" or the
"Guaranty"), dated as of August 18, 2000, is made by MERLIN SOFTWARE
TECHNOLOGIES, INC., a Nevada corporation (the "Guarantor") to the Holders (as
set forth in Exhibit A hereto) of the Notes (as defined herein) (collectively
referred to as the "Lender"). Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Purchase Agreement (as
hereinafter defined)
W I T N E S S E T H:
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WHEREAS, Merlin Software Technologies International Inc., a Nevada
corporation (the "COMPANY"), has entered into a Note and Warrant Purchase
Agreement with the Holders dated as of even date hereof (the "PURCHASE
AGREEMENT"), for the purchase by the Holders of up to an aggregate of Two
Million One Hundred Thousand Dollars ($2,100,000) principal amount of Series A
10% Senior Secured Convertible Notes (the "NOTES") from the Company. Terms not
specifically defined herein are used as defined in the Purchase Agreement and
the Notes. It is a condition to the purchase of the Notes under the Purchase
Agreement that this guaranty (the "Guaranty") be executed, delivered and in
effect;
WHEREAS, the Guarantor will benefit from the availability of credit to the
Company under the terms and conditions of the Purchase Agreement and the Notes;
and
WHEREAS, to induce the Lender to execute and deliver the Purchase Agreement
and perform their obligations thereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor is willing to guarantee the payment when due and timely performance of
all of the obligations of the Company under the Purchase Agreement, the Notes
and the Related Documents;
NOW, THEREFORE, in consideration of the foregoing premises, and intending
to be legally bound hereby, the undersigned, agrees as follows:
1. GUARANTY. The Guarantor hereby unconditionally, absolutely, continually
and irrevocably guarantees to the Lender the payment and performance in full of
the Liabilities (as defined below). For all purposes of this Guaranty
Agreement, "Liabilities" means: (a) the Company's prompt payment in full, when
due or declared due and at all such times, of all obligations and all other
amounts pursuant to the terms of the Purchase Agreement, the Notes and each of
the other Related Documents (as the same may be amended, supplemented, modified
or extended from time to time), heretofore, now or at any time or times
hereafter owing, arising, due or payable, whether direct or contingent, joint,
several or independent of the Company to the Lender, including without
limitation principal, interest, premium or fee (including, but not limited to,
attorneys' fees and expenses); and (b) the Company's prompt, full and faithful
performance, observance and discharge of each and every agreement, undertaking,
covenant and provision to be performed, observed or discharged by
the Company under the Notes, the Purchase Agreement and each of the Related
Documents and any other documents executed in connection therewith. The
Guarantor's obligations to the Lender under this Guaranty Agreement are
hereinafter collectively referred to as the "Obligations." The Guarantor agrees
that it is directly and primarily liable for the Liabilities and that there are
no conditions whatsoever to the effectiveness of this Guaranty.
2. PAYMENT. If the Company shall default in payment or performance
of any Liabilities, whether principal, interest, premium, fee (including, but
not limited to, attorneys' fees and expenses), or otherwise, when and as the
same shall become due, whether according to the terms of the Notes, the Purchase
Agreement or the Related Documents by acceleration, or otherwise, or upon the
occurrence of any other Event of Default (as defined in the Notes) under the
Notes that has not been cured or waived, then the Guarantor, upon demand thereof
by the Lender or its successors or assigns, will, within three (3) business days
of such demand, fully pay to the Lender an amount equal to all Guarantor's
Obligations then due and owing.
3. GRANT OF SECURITY INTEREST.
(a) In order to further secure the payment of said Liabilities, Guarantor
does hereby grants the Lender a security interest in all assets, rights,
property and interest of every kind and nature therein and thereto including,
without limitation, all intellectual property, goods, accounts receivable,
contracts, contract rights, inventory, security interests, equipment, machinery,
motor vehicles, furniture, fixtures, leasehold improvements, investment
property, financial assets, chattel papers, documents, instruments, general
intangibles, rights to proceeds of written letters of credit and all products
and proceeds of the foregoing, whether now or hereafter existing or acquired and
belonging to the Guarantor or in which the Guarantor has any interest and any
and all proceeds and products thereof, as well as a continuing security interest
and lien for the amount of all such Liabilities upon any and all moneys,
securities and any and all other property of Guarantor and the proceeds thereof,
now or hereafter actually or constructively held or received by or in transit in
any manner to or from the Lender, its correspondents or agents, from or for
Guarantor, whether for safekeeping, custody, pledge, transmission, collection or
otherwise or coming into the possession of Lender in any way, or placed in any
safe deposit box leased by Lender to Guarantor (all of the foregoing, together
with any property, now or hereafter, pledged, assigned, and transferred to or
deposited with Lender or its agents by or for Guarantor or in which Lender shall
otherwise be granted a security interest by or for Guarantor to secure said
Liabilities, are hereinafter individually and collectively called "Collateral
Security").
(b) If Guarantor, as registered holder of Collateral Security, shall become
entitled to receive or does receive any stock certificate, option or right,
whether as an addition to, in substitution of, or in exchange for, such
Collateral Security, or otherwise, Guarantor agrees to accept same as Lender's
agent and to hold same in trust for Lender, and to forthwith
deliver the same to Lender in the exact form received, with Guarantor's
indorsement when necessary, to be held by Lender as Collateral Security.
(c) Guarantor consents that the Obligations or the liability of any other
guarantor, surety, indemnitor, indorser, or any other party for or upon said
Obligations or said Collateral Security may, from time to time, in whole or in
part, be renewed, extended, modified, accelerated, compromised, settled or
released by Lender, and that any Collateral Security or liens for said
Obligations may, from time to time, in whole or in part, be exchanged, sold,
released, surrendered or otherwise dealt with by Lender, and that Lender may
refuse payment, in whole or in part, from any party to the Obligations, all
without any notice to, or further assent by, or any reservation of rights
against, Guarantor and without in any way affecting or releasing the liability
of Guarantor hereunder.
4. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and not of
collection. The Guarantor's Obligations under this Guaranty Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Notes, and shall not be affected by any action taken under
the Notes or any other agreement between the Lender and the Company or any other
person, in the exercise of any right or power therein conferred, or by any
failure or omission to enforce any right conferred thereby, or by any waiver of
any covenant or condition therein provided, or by any acceleration of the
maturity of any of the Liabilities, or any transfer or disposition of any assets
of the Company or by any extension or renewal of the Notes, in whole or in part,
or by any modification, alteration, amendment or addition of or to the Notes, or
any other agreement between the Lender and the Company or any other person, or
by any other circumstance whatsoever (with or without notice to or knowledge of
the Guarantor) which may or might in any manner or to any extent vary the risks
of the Guarantor, or might otherwise constitute a legal or equitable discharge
of a surety or guarantor; it being the purpose and intent of the parties hereto
that this Guaranty Agreement and the Guarantor's Obligations hereunder shall be
absolute and unconditional under any and all circumstances and shall not be
discharged except by payment as herein provided. This Guaranty shall continue
in full force and effect and Lender may continue to act in reliance thereon
notwithstanding the termination or revocation of any other guaranty of
Obligations, the death, disability, incompetence or incapacity of the Guarantor,
and shall be binding upon Guarantor and Guarantor's estate and the personal
representatives, heirs and successors and assigns of Guarantor, who shall,
nevertheless, remain liable with respect to Obligations and any renewals or
extensions thereof or liabilities arising out of same, and the Lender shall have
all the rights herein provided for as if no such event has occurred.
5. CURRENCY AND FUNDS OF PAYMENT. The Guarantor hereby guarantees that the
Guarantor's Obligations will be paid in lawful currency of the United States of
America and in immediately available funds, regardless of any law, regulation or
decree now or hereafter in effect that might in any manner affect the
Liabilities, or the rights of the Lender with respect thereto as against the
Company, or cause or permit to be invoked any alteration in
the time, amount or manner of payment by the Company of any or all of the
Company's Liabilities.
6. EVENTS OF DEFAULT. In the event that (a) the Guarantor shall file a
petition to take advantage of any insolvency statute, (b) the Guarantor shall
commence or suffer to exist a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of all of or substantially all of its
property; (c) the Guarantor shall file a petition or answer seeking
reorganization or arrangement or similar relief under the Federal bankruptcy
laws or any other applicable law or statute of the United States of America or
any state or similar law of any other country; (d) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of the Guarantor of all or
substantially all of its properties, or approve a petition filed against the
Guarantor seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country, or if, under
the provisions of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of the Guarantor of all
or substantially all of its properties and such order, judgment, decree,
approval or assumption remains unstayed or undismissed for a period of thirty
(30) days; (e) there is commenced against the Guarantor any proceeding or
petition seeking reorganization, arrangement or similar relief under the Federal
bankruptcy laws or any other applicable law or statute of the United States of
America or any state, which proceeding or petition remains unstayed or
undismissed for a period of thirty (30) days; (f) the Guarantor shall fail to
perform any agreement herein or contained in the Purchase Agreement, Subsidiary
Security Agreement, Subsidiary Intellectual Property Security Agreement and
Assignment or other agreement delivered by Guarantor to Lender; (g) a default
occurs in the punctual payment of any sum payable upon any of the Obligations or
the Liabilities (h) the Guarantor grants a security interest in any property,
including without limitation, in the rights of any of the Collateral Security;
(i) entry of a judgment or issuance of a warrant of attachment or an injunction
against, or against any of the property of the Guarantor; (j) failure of the
Guarantor or the Company at any time to comply with the Margin Regulations of
the Federal Reserve Board or any amendments thereto; (k) there shall occur an
Event of Default under the Notes, the Purchase Agreement, or any Related
Document; (l) any default shall occur in the payment of amounts due hereunder;
or (m) any other default shall occur hereunder which remains uncured or unwaived
for a period of ten (10) days (each of the foregoing an "Event of Default"
hereunder); then at the Lender's election and without notice thereof or demand
therefor, so long as such Event of Default shall be continuing, the Guarantor's
Obligations shall immediately become due and payable.
7. SUITS. The Guarantor from time to time shall pay to Lender, within three
(3) business days of demand by the Lender therefor, at the Lender's place of
business set forth in the Notes, the Guarantor's Obligations as they become or
are declared due, and in the event such payment is not so made, the Lender may
proceed to suit against the Guarantor. At the Lender's election, one or more
and successive or concurrent suits may be brought hereon
by the Lender against the Guarantor, whether or not suit has been commenced
against the Company, and whether or not the Lender has taken or failed to take
any other action to collect all or any portion of the Company's Liabilities.
8. SET-OFF AND WAIVER. The Guarantor waives any right to assert
against the Lender as a defense, counterclaim, set-off or cross claim, any
defense (legal or equitable) or other claim which such Guarantor may now or at
any time hereafter have against the Company or the Lender. If at any time
hereafter the Lender employs counsel for advice or other representation to
enforce the Guarantor's Obligations that arise out of an Event of Default, then,
in any of the foregoing events, all of the attorneys' fees and disbursements
arising from such services and all expenses, costs and charges in any way or
respect arising in connection therewith or relating thereto shall be paid by the
Guarantor to the Lender, on demand.
9. WAIVER; SUBROGATION.
(a) The Guarantor hereby waives notice of the following events or
occurrences: (i) the Lender's acceptance of this Guaranty Agreement; (ii) the
Lender heretofore, now or from time to time hereafter loaning monies or giving
or extending credit to or for the benefit of the Company, whether pursuant to
the Notes or any amendments, modifications, or supplements thereto, or
replacements or extensions thereof; (iii) the Lender or the Company heretofore,
now or at any time hereafter, obtaining, amending, substituting for,
releasing, waiving or modifying the Notes; (iv) presentment, demand, notices of
default, non-payment, partial payment, notice of dishonor, suit, protest or
taking other action by the Lender; (v) the Lender heretofore, now or at any time
hereafter granting to the Company (or any other party liable to the Lender on
account of the Liabilities) any indulgence or extensions of time of payment of
the Liabilities; and (vi) the Lender heretofore, now or at any time hereafter
accepting from the Company or any other person, any partial payment or payments
on account of the Liabilities or any collateral securing the payment thereof or
the Lender settling, subordinating, compromising, discharging or releasing the
same. The Guarantor agrees that the Lender may heretofore, now or at any time
hereafter do any or all of the foregoing in such manner, upon such terms and at
such times as the Lender, in its sole and absolute discretion, deems advisable,
without in any way or respect impairing, affecting, reducing or releasing such
Guarantor from the Guarantor's Obligations, and the Guarantor hereby consents to
each and all of the foregoing events or occurrences.
(b) The Guarantor hereby agrees that payment or performance by such
Guarantor of the Guarantor's Obligations under this Guaranty Agreement may be
enforced by the Lender upon demand by the Lender to such Guarantor without the
Lender being required, the Guarantor expressly waiving any right it may have to
require the Lender, to prosecute collection or seek to enforce or resort to any
remedies against the Company, IT BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND
AGREED TO BY THE GUARANTOR THAT DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE
MADE BY THE LENDER, AND THE PROVISIONS HEREOF ENFORCED BY THE LENDER,
EFFECTIVE AS OF THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS CONTINUING
UNDER THE NOTES. The Guarantor's Obligations shall in no way be impaired,
affected, reduced, or released by reason of the Lender's failure or delay to do,
take or enforce any of the acts, actions or things described in this Guaranty
including, without limiting the generality of the foregoing, those acts,
actions and things described in this Section 9.
(c) The Guarantor further agrees with respect to this Guaranty that
such Guarantor shall have no right of subrogation, reimbursement or indemnity
until such time as all of the Company's Liabilities have been fully, finally and
indefeasibly paid in full.
10. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date hereof, and shall continue in full force and effect
until the Company's Liabilities have been fully, finally and indefeasibly paid
in full. This Guaranty Agreement shall be binding upon and inure to the benefit
of the Guarantor and the Lender and their respective successors and assigns.
Notwithstanding the foregoing, Guarantor may not, without the prior written
consent of the Lender, assign any rights, powers, duties or obligations
hereunder. Any claim or claims that the Lender may at any time hereafter have
against the Guarantor under this Guaranty Agreement may be asserted by the
Lender by written notice directed to the Guarantor at the address specified
herein.
11. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby makes the
following representations and warranties to the Lender:
(a) the Guarantor is duly authorized to execute, deliver and perform
this Guaranty Agreement;
(b) this Guaranty Agreement is legal, valid, binding and enforceable
against such Guarantor in accordance with its terms except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles;
(c) such Guarantor's execution, delivery and performance of this
Guaranty Agreement does not violate or constitute a breach of any agreement to
which such Guarantor is a party, or any applicable laws;
(d) Guarantor makes each of the representations and warranties
contained in Article III of the Purchase Agreement as if set forth in their
entirety herein with respect and reference to the Guarantor and this Guaranty
Agreement;
(e) the financial information of the Guarantor previously provided to
the Lender is true and correct in all respects; and
(f) no representation or warranty made the Guarantor in this Agreement,
the Purchase Agreement or any Related Document nor in any document, written
information, financial statement, certificate, schedule or exhibit prepared and
furnished or to be prepared and furnished by Guarantor in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make the statements or facts contained herein or therein not misleading in light
of the circumstances under which they were furnished.
12. NEGATIVE COVENANTS. The Guarantor agrees that until the Notes,
together with interest and all other Obligations of the Company or the Guarantor
to the Lender (whether under the Purchase Agreement, the Related Documents, or
otherwise) are paid in full, the Guarantor shall not, without the prior written
consent of the Lender:
(a) Create, incur, assume or suffer to exist any Lien upon or defect in
title to or restriction upon the use of any of the Collateral Security,
Collateral or Pledged Stock, or the property or assets of the Guarantor of any
character, whether owned at the date hereof or hereafter acquired, or hold or
acquire any property or assets of any character under conditional sales, finance
lease or other title retention agreements, except Liens in favor of the Lender.
(b) Create, incur, assume or suffer to exist, contingently or
otherwise, any Indebtedness, except Indebtedness to the Lender.
(c) Lend or advance money, credit or property to any person, or invest
in or purchase or repurchase the stock or Indebtedness, or all or a substantial
part of the assets or properties, of any Person, or guarantee, assume, endorse
or otherwise become responsible for (directly or indirectly or by any instrument
having the effect of assuring any person's payment or performance or capability)
the Indebtedness, performance, obligations, stock or dividends of any person, or
agree to do any of the foregoing, except endorsement of negotiable instruments
for deposit or collection all and investments in readily marketable securities
in the ordinary course of business.
(d) Make any prepayment of Indebtedness or agree to do any of the
foregoing.
(e) Enter into any agreement which prohibits or limits the ability of
the Guarantor to create, incur, assume or suffer to exist any Lien, upon any of
its property, assets or revenues, whether now owned or hereafter acquired.
(f) Change the address of its principal place of business without
giving 30 days' prior written notice to the Lender.
13. AFFIRMATIVE COVENANTS. The Guarantor covenants and agrees that,
until the Notes together with interest and all other Obligations of the Company
and the Guarantor to the Lender under the Purchase Agreement, the Notes and the
Related Documents are otherwise paid in full:
(a) Comply with all statutes and governmental regulations if
noncompliance therewith would have a Material Adverse Effect on the Guarantor
and pay all taxes, assessments, governmental charges, claims for labor,
supplies, rent and any other obligation which, if unpaid, might become a Lien
against any of its properties that constitute Collateral Security, the
Collateral and the Pledged Stock or a Lien on any other property, except any of
the foregoing being contested in good faith by appropriate proceedings
diligently conducted and against which adequate reserves have been established;
(b) It will allow any representative of the Lender to visit and inspect
the books of account and other records and files of the Guarantor, to make
copies thereof and to discuss the affairs, business, finances and accounts of
the Company and the Guarantor with its employees, all during normal business
hours and as often as the Lender may reasonably request;
(c) It will duly comply with all the terms and covenants contained
herein and in each of the instruments and documents given to the Lender in
connection with or pursuant to this Agreement, the Purchase Agreement, the Notes
and the other Related Documents, all at the times and places and in the manner
set forth herein or therein, and (ii) at all times maintain the liens and
security interests provided for under or pursuant to this Agreement, the
Purchase Agreement , the Notes and any Related Document as valid and perfected
liens and security interests on the property covered thereby;
(d) It will keep the Collateral Security, the Collateral and the
Pledged Stock and Pledged Stock and other properties of the Guarantor, whether
real, personal or mixed, free and clear of all Liens, other than (i) the Liens
created by the Related Documents and (ii) Permitted Liens. The Guarantor shall
keep all Collateral Security, the Collateral and the Pledged Stock free of any
and restrictions and, in the case of stock, certificates representing the same
free of all restrictive legends;
(e) (i) It will keep all of its insurable properties adequately insured
at all times with responsible insurance carriers against loss or damage by fire
and other hazards as are customarily insured against by similar businesses
owning such properties similarly situated and (ii) maintain general public
liability insurance at all times with responsible insurance carriers against
liability on account of damage to persons and property such insurance policies
to be in form reasonably satisfactory to the Lender. Each of the policies
of insurance described in this Section 13(e) shall provide that the Lender
shall be an additional insured and loss payee and that the insurer shall give
the Lender not less than thirty (30) days'
prior written notice before any such policy shall lapse or be terminated,
canceled or materially amended;
(f) It will keep true books of record and account which full, true and
correct entries shall be made of all of its dealings and transactions in
accordance with customary business practices, and set up on its books such
reserves as may be required by GAAP with respect to doubtful accounts and all
taxes, assessments, charges, levies and claims and with respect to its business
in general, and include such reserves in interim as well as year-end financial
statements; and
(g) Upon the Guarantor obtaining knowledge of any litigation or other
proceedings being instituted against the Guarantor, any of the Company or any
Subsidiary of the Company, or any attachment, levy, execution or other process
being instituted against any assets of the Guarantor or the Company or any
Subsidiary, in an aggregate amount in respect of all such proceedings and
processes greater than $50,000 not otherwise covered by insurance, it will
promptly deliver to the Lender written notice thereof stating the nature and
status of such litigation, dispute, proceeding, levy, execution or other
process.
14. EXPENSES. The Guarantor agrees to be liable for the payment of all
fees and expenses, including attorney's fees and expenses, incurred by the
Lender in connection with the enforcement of this Guaranty Agreement.
15. REINSTATEMENT. The Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment received by the Lender under the Notes or this Guaranty Agreement is
rescinded or must be restored for any reason. The execution and delivery
hereafter to Lender by Guarantor of a new instrument of guaranty shall not
terminate, supersede or cancel this instrument, unless expressly provided
therein, and all rights and remedies of Lender hereunder or under any instrument
of guaranty hereafter executed and delivered to Lender by Guarantor shall be
cumulative and may be exercised singly or concurrently.
16. COUNTERPARTS. This Guaranty Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute one and the same instrument.
17. RELIANCE. The Guarantor represents and warrants to Lender that: (a)
such Guarantor has adequate means to obtain from the Company, on a continuing
basis, information concerning the Company's financial condition and affairs and
has full and complete access to Company's books and records; (b) such Guarantor
is not relying on the Lender, its agents or other representatives, to provide
such information, now or in the future; (c) such Guarantor is executing this
Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) such Guarantor has relied solely on the Guarantor's own
independent investigation, appraisal and analysis of the Company's financial
condition and affairs in deciding to provide this Guaranty and is fully aware of
the same; and (e) such Guarantor has not depended or relied on the Lender, its
agents or other representatives, for any information whatsoever concerning the
Company's financial condition and affairs or other matters material to such
Guarantor's decision to provide this Guaranty or for any counseling, guidance,
or special consideration or any promise therefor with respect to such decision.
The Guarantor agrees that the Lender has no duty or responsibility whatsoever,
now or in the future, to provide to the Guarantor any information concerning the
Company's financial condition and affairs, other than as expressly provided
herein, and that, if such Guarantor receives any such information from the
Lender, its agents or other representatives, such Guarantor will independently
verify the information and will not rely on the Lender, its agents or other
representatives, with respect to such information.
18. COMPLETE AGREEMENT. This guaranty embodies the whole agreement of
the parties and may not be modified unless in writing and signed by Lender and
no course of dealing between Guarantor and Lender shall be effective to change
or modify or to discharge in whole or in part this guaranty. No Waiver of any
right or power of Lender or consent by it shall be valid unless in writing
signed by an authorized officer.
19. TERMINATION. This Guaranty Agreement and all obligations of the
Guarantor hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the date when all of the Liabilities have
been fully, finally and indefeasibly paid in full.
20. GOVERNING LAW.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEVADA APPLICABLE TO CONTRACTS EXECUTED, AND TO
BE FULLY PERFORMED, IN SUCH STATE.
(B) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL
COURT SITTING IN THE XXXXXX XX XXX XXXX, XXXXX XX XXX XXXX, XXXXXX XXXXXX OF
AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE OR TO
THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS
GENERALLY AND UNCONDITIONALLY TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL
SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY
SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF SUCH PARTY PROVIDED HEREIN OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW
YORK.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL PRECLUDE
THE LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN THE COURTS OF ANY PLACE WHERE THE GUARANTOR OR ANY
OF THE GUARANTOR'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE GUARANTOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES,
IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, THE JURISDICTION OF ANY OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE
DOMICILE, OR OTHERWISE, MAY BE AVAILABLE TO IT.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION WITH THE FOREGOING, EACH PARTY HEREBY AGREES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
21. NOTICES. Any notice hereunder shall be in writing, and shall be
delivered by overnight courier service or by certified mail, postage prepaid,
return receipt requested, addressed as follows:
If to the Guarantor:
Merlin Software Technologies, Inc.
Xxxxx 000-0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxx
000-000 Xxxx Xxxxxxx Xxxxxx
Attn: Xxxxxx X. Xxxx, Esq.
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
If to the Lender:
Narragansett Asset Management, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Managing Director
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Notices sent by overnight courier service shall be deemed delivered on the
next business day, and notices sent by certified mail, postage prepaid, return
receipt requested, shall be deemed delivered two business days after the date of
mailing thereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
day and year first written above.
GUARANTOR:
MERLIN SOFTWARE TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------
Name: Xxxxxx Xxxxxx
Title: President
LENDER:
NARRAGANSETT I., L.P.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Member
NARRAGANSETT OFFSHORE LTD.
by its Investment Manager,
Xxx Holding, L.L.C.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Member
PEQUOT SCOUT FUND, L.P.
by its Investment Advisor,
Pequot Capital Management, Inc.
By: /s/ Xxxxx X. Xxxxx
---------------------
Name: Xxxxx X. Xxxxx
Title: Chief Accounting Officer
SDS MERCHANT FUND, L.P.
By its Managing Member,
SDS Capital Partners, L.L.C.
By: /s/ Xxxxxx Xxxxx
------------------
Name: Xxxxxx Xxxxx
Title: Managing Member
EXHIBIT A
HOLDERS OF THE NOTES
Narragansett I, L.P.
Narragansett Offshore Ltd.
Pequot Scout Fund, L.P.
SDS Merchant Fund, L.P.
