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ACCOUNTS RECEIVABLES LIEN AGREEMENT
ACCOUNTS RECEIVABLES LIEN AGREEMENT (as amended, supplemented or otherwise
modified from time to time, the "AGREEMENT"), dated as of June 12, 2006 by and
among Kraft Elektronikai Zartkoruen Mukodo Reszvenytarsasag, a corporation
formed under the laws of the Republic of Hungary, whose registered office is at
X-0000 Xxxxxxxx, Xxxxxxxxx ut 36., registered by the Metropolitan Court of
Budapest acting as Court of Registration under registration No. 00-00-000000
(the "CHARGOR"), the lenders signatory hereto (each lender including their
respective successors, endorsees, transferees and assigns, a "SECURED PARTY",
and collectively, the "SECURED PARTIES") and Smithfield Fiduciary LLC (as
defined, as collateral agent for the Secured Parties (in such capacity, the
"COLLATERAL AGENT").
WITNESSETH:
WHEREAS, pursuant to a Securities Purchase Agreement ("SECURITIES PURCHASE
AGREEMENT") dated as of on or around the date hereof, by and among the American
United Global, Inc., with headquarters located at 000 Xxxxxxx Xxxxxx #000,
Xxxxxx, Xxx Xxxx 00000, X.X.X. whose U.S. Federal Tax Identification Number is
00-0000000 (the "BORROWER"), the Secured Parties referred to above and Alpha
Capital Aktiengesellschaft with headquarters at c/o Alpha Capital, AG 000
Xxxxxxx Xxxx Xxxxx #0000 Xxx Xxxx, Xxx Xxxx 00000, and certain ancillary
agreements (collectively the "TRANSACTION DOCUMENTS") the Secured Parties
severally, but not jointly, agrees to grant a loan facility ("LOAN") in a total
principal amount equal to USD 5,700,000 to the Borrower which shall be evidenced
by the issuance by the Borrower to such Secured Parties of the Borrower's senior
secured convertible notes ("NOTES").
WHEREAS, the Borrower is an affiliate of the Chargor and the Chargor
acknowledges that it will derive substantial benefit from the making of an
inter-company loan to be made from the Loan under the Securities Purchase
Agreement to finance the purchasing of equipment for the Chargor.
WHEREAS, in order to induce the Secured Parties to enter into the
transactions contemplated by the Securities Purchase Agreement and other
Transaction Documents, the Chargor has agreed to create the Liens on all of its
Accounts Receivables (each as defined below) in favor of the Secured Parties by
execution of this Agreement.
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.
(a) As used in this Agreement, the following terms have the meanings
specified below:
"ACCOUNTS RECEIVABLES" means all claims on any legal ground existing
in the present, as specifically set forth in Schedule B, or arising in the
future in favor of the Chargor, including inter-company loans, demands on
bank accounts and any right to payment of a monetary obligation for
property that has been or is to be sold, leased or otherwise disposed of,
for services rendered or to be rendered, policies of insurance, deposit
accounts, letters of credit etc.
"AGGREGATE LOAN AMOUNTS" means the aggregate of the Loan Amounts
owing to all Secured Parties set out in Schedule A.
"BUSINESS DAYS" means any day other than Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized or
required by law to remain closed.
"CIVIL CODE" means Act IV of 1959 of the Civil Code of the Republic
of Hungary, as amended.
"GOOD INDUSTRY PRACTICE" means at any time, in respect of any
person, the exercise of that degree of skill, diligence, prudence,
foresight and operating practice which would reasonably and ordinarily be
expected from a skilled and experienced operator in the same type of
business and undertaking as such person at such time.
"LOAN AMOUNT" means the amount set opposite the name of each Secured
Party in Schedule A.
"OBLIGATIONS" means, with respect to each Secured Party, the due and
punctual payment of (i) the Loan Amount owing to such Secured Party,
having a maturity date of June 12, 2009 as may be extended at the option
of the respective Secured Party in accordance with the provisions of
Section 1 (Maturity) of the Notes and (ii) interest on overdue amounts at
a rate of 18% (eighteen percent) per annum from the date such amount was
due, whether at maturity by acceleration or otherwise, until the same is
paid in full, and (iii) all other monetary obligations, including without
limitation in respect of fees, commissions, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or
otherwise (including monetary obligations incurred during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the
Borrower to such Secured Party under any of the Transaction Documents.
"PERMITTED LIENS" means the following:
(i) Liens in favor of the Secured Parties and/or the
Collateral Agent pursuant to the Transaction Documents; and
(ii) Liens arising by mandatory provisions of applicable laws.
"SALE VALUE" means, with respect to any Accounts Receivables, the
value thereof (expressed in U.S. Dollars) as proposed by the Collateral
Agent and agreed to by the Chargor, provided that in the event that the
Chargor shall not have agreed to any such proposal within five (5) days
thereof, the maximum value thereof (expressed in U.S. Dollars) determined
by any independent valuation expert of recognized standing selected by the
Collateral Agent using any reasonable method as would, in the reasonable
judgment of such expert, allow for either of the following to occur, in
accordance with the other terms and conditions of this Agreement, within
no more than three (3) months of the date such expert sends notice of the
amount of such valuation to each of the Collateral Agent and the Chargor:
(i) the assignment of such Accounts Receivables, or (ii) the entry by the
Collateral Agent into an agreement with a reputable and financially sound
third party for the assignment of such Accounts Receivables by such third
party within no more than three months of the date of such agreement.
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(b) Terms used in this Agreement but not otherwise defined in this
Agreement that are defined in the Transaction Documents shall have the
respective meanings given such terms in the Transaction Documents as in effect
on the date hereof and, by signing this Agreement, the Chargor acknowledges
having received and reviewed a copy of each Transaction Document.
2. Granting of Lien on Accounts Receivables. As an inducement for
each Secured Party to enter into the transactions contemplated by the
Transaction Documents and to secure the complete and timely payment, performance
and discharge in full, as the case may be, of the Obligations owing to such
Secured Party, each Secured Party and the Chargor hereby create in favor of such
Secured Party in accordance with Section 267 (1) of the Civil Code a lien (each
a "LIEN" and collectively the "LIENS") in and to all of the Chargor's right,
title and interest in the Accounts Receivables.
3. Registration; Notification to the Obligors. (a) Each Lien shall
be effective from the date hereof or, in case of any Accounts Receivables
arising hereafter, from such time as the Chargor acquires the right of disposal
over such Accounts Receivables. The Chargor shall, immediately after the date
hereof, register in its accounting system and indicate in all of its financial
reports the fact that the Liens are created over its Accounts Receivables.
(b) The Chargor shall execute and deliver to the Collateral
Agent, substantially in the form attached hereto as Schedule D, the
notifications addressed to each obligor of the Accounts Receivables existing as
of the date hereof about the creation of the Liens over such Accounts
Receivables, stating that after the receipt of such notification the obligors
shall only be entitled to pay any and all amounts payable under the Accounts
Receivables to the Collateral Agent. The Chargor shall, immediately after an
Accounts Receivables having arisen, execute and deliver such notification to the
Collateral Agent. The notifications may be delivered by the Collateral Agent to
the obligors only after the occurrence of an Event of Default in accordance with
the provisions of Section 8 (Rights and Remedies Upon Default).
4. Ranking. Each Lien shall rank pari passu with each other Lien.
The Liens shall not be subject to any other lien that would rank ahead of the
Liens.
5. Representations, Warranties, Covenants and Agreements of the
Chargor. The Chargor represents and warrants to, and covenants and agrees with,
each of the Secured Parties as follows:
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(a) The Chargor has the requisite corporate power and authority to
enter into this Agreement and to otherwise perform its obligations thereunder.
The execution, delivery and performance by the Chargor of this Agreement have
been duly authorized by all necessary action on the part of the Chargor and no
further action is required by the Chargor.
(b) The Chargor is the sole legal owner of the existing Accounts Receivables and
the Accounts Receivables are free from any liens, encumbrances, third party
rights and third party claims that would impede the Chargor's right to fully
dispose of the title to the Accounts Receivables, except for Permitted Liens. So
long as this Agreement shall be in effect, the Chargor shall not enter into any
lien agreement covering the Accounts Receivables or any portion thereof without
the prior consent of the Collateral Agent.
(c) This Agreement creates in favor of each Secured Party a valid,
perfected and effective first priority security interest in the Accounts
Receivables. No authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either: (i) for the grant
by the Chargor of, or the effectiveness of, the Liens granted hereby or for the
execution, delivery and performance of this Agreement by the Chargor or (ii) for
the perfection of or exercise by such Secured Party of its rights and remedies
hereunder.
(d) Schedule B attached hereto is a complete and correct list of the
Accounts Receivables existing as of April 30, 2006.
(e) The Chargor has no knowledge of any claim that any Lien violates
the rights of any third party. There has been no adverse decision of which the
Chargor is aware as to the Chargor's exclusive rights to the Accounts
Receivables in any jurisdiction, and, to the knowledge of the Chargor there is
no proceeding involving said rights pending or threatened before any court,
judicial body, administrative or regulatory agency, arbitrator or other
governmental authority.
(f) No counter-claim challenging the Accounts Receivables exists.
(g) The Chargor shall at all times maintain its books of account and
records relating to the Accounts Receivables at its principal place of business
and may not relocate such books of account and records unless it delivers to the
Collateral Agent at least thirty (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 the Republic of Hungary).
(h) The execution, delivery and performance of this Agreement does
not conflict with or cause a breach or default, or an event that with or without
the passage of time or notice, shall constitute a breach or default, under any
agreement to which the Chargor is a party or by which the Chargor is bound.
(i) The Chargor shall at all times maintain the Liens as valid and
perfected first priority security interests in the Accounts Receivables in favor
of each Secured Party and insure that such Liens remain senior to all existing
and hereafter created liens. The Chargor hereby agrees to defend the same
against any and all persons.
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(j) The Chargor shall, within ten (10) days of obtaining knowledge
thereof, advise the Collateral Agent, in sufficient detail, of any claim, event,
physical or legal fact that may adversely impact any material portion of the
Accounts Receivables.
(k) The Chargor shall promptly execute and deliver to the Secured
Parties such further deeds, assignments, security agreements or other
instruments, documents, certificates and assurances and take such further action
as necessary to perfect or protect any Lien.
(l) The Chargor shall permit the Collateral Agent and its
representatives and agents, upon prior written notice by the Collateral Agent
(acting upon instruction of any Secured Party), to monitor whether the Chargor
operates its business in accordance with Good Industry Practice, including the
right to enter the Chargor's premises to inspect the books and records at any
time during normal business hours, and to make copies of books and records
pertaining to any material item of the Accounts Receivables as may be reasonably
requested by the Collateral Agent (acting upon instruction of any Secured Party)
from time to time, all of which shall be at the sole cost and expense of (i) if
an Event of Default shall have occurred and be continuing at the inception of
such inspection, the Chargor, or (ii) in all other events, the Secured Party
initiating such inspection.
(m) The Chargor shall promptly notify the Collateral Agent in
reasonable detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Accounts Receivables and of any other
information received by the Chargor that reasonably would be expected to have an
adverse impact on the Accounts Receivables as a whole, any Lien or the rights
and remedies of the Secured Parties hereunder.
(n) The Chargor shall not cause or suffer to exist any charge on the
Accounts Receivables other than Permitted Liens without the prior written
consent of the Collateral Agent.
(o) The Chargor shall notify the Collateral Agent of any change in
the Chargor's name, identity, chief place of business, chief executive office or
residence within thirty (30) days of such change.
6. Information Covenant. (a) The Chargor hereby covenants that
within fifteen (15) days after the end of each calendar quarter, it will (i)
deliver to the Collateral Agent a restatement of Schedule B hereto (which
delivery may be effected by attaching the same to the Officer's Certificate
referred to in Section 6 (b) below setting forth a list in detail consistent
with that set forth in Schedule B) of any agreements or instruments that are
subject to the Liens under this Agreement (which list, in the case of a
restatement of Schedule B, shall also include all such agreements and
instruments previously listed in Schedule B).
(b) The Chargor hereby covenants that within fifteen (15) days after
the end of each calendar quarter, it will provide to the Collateral Agent a
certificate of the director of the Chargor substantially in the form attached
hereto as Schedule C stating that as of the date of such certificate all
documents required to be delivered, and actions required to be taken, by the
Chargor under Section 6 (a) hereof to pledge such agreements and instruments in
favor of the Secured Parties under this Agreement have been delivered and taken
(and attaching copies of any of such documents to such certificate and evidence
of any such required actions).
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7. Defaults. Each of the following events shall be an "EVENT OF DEFAULT":
(a) the failure by the Borrower to perform any of the Obligations;
(b) the occurrence of an Event of Default under and as defined in
any Note; and
(c) the Chargor breaches any representation, warranty, covenant or
obligation under this Agreement, except in the case of a breach of a covenant or
obligation which is curable, only if such breach continues for a period of at
least ten (10) consecutive Business Days.
8. Rights and Remedies Upon Default. Upon the occurrence and during the
continuation of any Event of Default and the delivery to the Borrower of an
Event of Default Redemption Notice (as defined in each Note), the Collateral
Agent (on behalf of, and for the benefit of each Secured Party) shall become
entitled to seek satisfaction from the Accounts Receivables on the third
Business Day following the date of delivery of the Event of Default Redemption
Notice and the Collateral Agent shall have the right to exercise all of the
remedies conferred hereunder, under the Notes, and the Collateral Agent shall
have all the rights and remedies of a secured creditor under the Civil Code.
Without limitation, the Collateral Agent shall have the following rights and
powers:
(a) After the occurrence of an Event of Default which is continuing,
the Collateral Agent may notify the obligors of the Accounts Receivables about
the creation of the Liens by giving the notification delivered by the Chargor in
accordance with Section 3 (b) (Registration; Notification to the Obligors).
Simultaneously, the Collateral Agent shall inform the Chargor by giving a copy
of such notification. After the earlier of the Chargor's receipt of such copy of
notification and the Chargor becoming aware of an Event of Default, the Chargor
shall procure that the obligors of the Accounts Receivables pay any and all
amounts payable under the Accounts Receivables to the Collateral Agent.
(b) The Collateral Agent shall have the right to seek satisfaction
of all of the Obligations owing to the Secured Parties from the Accounts
Receivables via court execution, as provided under Section 255 (1) of the Civil
Code.
(c) The Collateral Agent shall have the right to assign all or any
part of the Accounts Receivables (or designate a person who officially deals
with granting loans against security and/or organizing public sales to do so) as
provided under Sections 257 and 258 of the Civil Code, at public or private sale
or otherwise, for a consideration not less than the Sale Value, in U.S. Dollars
(or an equivalent amount in any other currency selected by the Collateral
Agent), for cash or on credit or for future delivery, in such portion or
portions and at such time or times within a maximum period of fifteen (15)
months from the date of the Event of Default Redemption Notice giving rise
thereto, and at such place or places, and upon such terms and conditions as the
Collateral Agent may deem commercially reasonable and as are in compliance with
any applicable laws. Upon each such assignment of the Accounts Receivables, the
Collateral Agent and/or any Secured Party may acquire all or any part of the
Accounts Receivables being assigned, free from and discharged of all trusts,
claims, right of redemption and equities of the Chargor, which are hereby waived
and released.
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(d) The Collateral Agent shall have the right to seek satisfaction
from the Accounts Receivables in such other manner as shall be permitted by the
applicable laws at time of exercising such right.
(e) The Collateral Agent may, in order to implement the assignment
of any of the Accounts Receivables pursuant to this Section, execute and deliver
(pursuant to the authority provided for in Section 12 (Power of Attorney;
Further Assurances)) on behalf of the Chargor one or more instruments of
assignment of the Accounts Receivables in form as the Secured Parties may
determine advisable.
9. Applications of Proceeds; Expenses. (a) The proceeds of any such
assignment of the Accounts Receivables hereunder shall be applied first, to the
reasonable expenses of retaking, holding, and preparing for assignment, and the
like (including, without limitation, any taxes, fees and other costs incurred in
connection therewith) of the Accounts Receivables, to the reasonable attorneys'
fees and expenses incurred by the Collateral Agent and/or Secured Parties in
enforcing its rights hereunder and in connection with collecting and transfer of
the Accounts Receivables, and then to satisfaction of the Obligations, and to
the payment of any other amounts required by applicable law, after which the
Secured Parties shall pay to the Chargor any surplus proceeds. If, upon the
assignment of the Accounts Receivables, the proceeds thereof are insufficient to
pay all amounts to which the Secured Parties are legally entitled, the Chargor,
in its capacity of charger under this Agreement, will not be liable for the
deficiency. To the extent permitted by applicable law, the Chargor waives all
claims, damages and demands against the Secured Parties arising out of the
assignment of the Accounts Receivables, unless due to the gross negligence or
willful misconduct of the Collateral Agent and/or Secured Parties.
(b) The Chargor shall pay all claims and charges (other than
Permitted Liens) which in the reasonable opinion of the Collateral Agent and/or
Secured Parties would reasonably be expected to prejudice, imperil or otherwise
affect the Accounts Receivables or any Liens therein. Without prejudice to the
provisions of Section 5(l) above, the Chargor will also, upon demand, pay to the
Collateral 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 Collateral Agent and/or Secured Parties may incur in connection with the
inspection, preservation of, or the assignment of, collection from, or other
realization upon, any of the Accounts Receivables.
10. Responsibility for the Accounts Receivables. The Chargor shall ensure,
during the term of this Agreement, that the aggregate amount of the Accounts
Receivables shall be at any time not less than USD 100,000.
11. Term of the Liens. Each Lien shall terminate on the date on which all
payments under the respective Notes have been made in full or otherwise
converted pursuant to the terms thereof and the respective Obligations have been
paid or discharged in full. Upon such termination, the respective Secured Party
shall, at the request of the Chargor to be delivered to the Collateral Agent, at
the expense of the Chargor, execute and deliver to the Chargor statements and
such other documentation as shall be reasonably requested by the Chargor to
effect the termination and release of the Lien on the Accounts Receivables.
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12. Power of Attorney; Further Assurances. (a) The Chargor hereby
authorizes the Collateral Agent (acting on behalf of each Secured Party), and
its respective officers, agents, successors or assigns with full power of
substitution, as the Chargor's true and lawful attorney-in-fact, with power, in
the name of the Chargor, to, after the occurrence and during the continuance of
an Event of Default, execute and deliver such documents to perfect such
interests and take such actions in accordance with this Agreement which the
attorney may consider to be reasonably required to accomplish the provisions of
this Agreement, including (i) carrying out any obligation imposed on the Chargor
by this Agreement (including the execution and delivery of any deeds, charges,
assignments or other security and any transfers of the Accounts Receivables);
and (ii) enabling the Collateral Agent (acting on behalf of the Secured Parties)
to exercise, or delegate the exercise of, any of the rights, powers and
authorities conferred on it by or pursuant to this Agreement or by law
(including, the exercise of any right of a legal or beneficial owner of the
Accounts Receivables); and generally, to do, at the option of the Collateral
Agent (acting on behalf of the Secured Parties), as the case may be, and at the
Chargor's expense, at any time, or from time to time, all acts and things which
the Collateral Agent, as the case may be, deems necessary to protect, preserve
and realize upon the Accounts Receivables and the Liens granted therein, in
order to effect the provisions of this Agreement and the Notes, all as fully and
effectually as the Chargor might or could do; and the Chargor hereby ratifies
all that said attorney shall lawfully do or cause to be done by virtue hereof.
(b) The Chargor shall (i) execute and deliver and cause to be filed,
at Chargor's expense, such documents and instruments, and do such other acts and
things, as may be necessary to maintain the perfection and first priority of the
Liens; and (ii) without limiting the effect of the preceding clause (i), the
Chargor shall at any time and from time to time, upon written request of the
Collateral Agent delivered to the Chargor after an Event of Default has occurred
and is continuing, execute and deliver and cause to be filed, at Chargor's
expense, such documents and instruments, and do such other acts and things, as
the Collateral Agent may reasonably deem desirable in obtaining the full
benefits of this Agreement and of the rights and powers herein granted.
(c) The Chargor shall, upon the occurrence of any Event of Default
which is continuing, upon request of the Collateral Agent, promptly notify (and
the Chargor hereby authorizes the Collateral Agent so to notify) each obligor of
any Accounts Receivables that such has been pledged in favor of the Secured
Parties, and that any payments due or to become due in respect thereof are to be
made directly to the Collateral Agent.
13. Collateral Agent. (a) The Collateral Agent shall give prompt notice to
each Secured Party of each notice or request required or permitted to be given
to the Collateral Agent by the Chargor pursuant to the terms of this Agreement.
The Collateral Agent will distribute to each Secured Party each instrument and
other agreement received for its account and copies of all other communications
received by the Collateral Agent from the Chargor for distribution to the
Secured Parties by the Collateral Agent in accordance with the terms of this
Agreement. Notwithstanding anything herein contained to the contrary, all
notices to and communications with the Chargor under this Agreement shall be
effected by the Secured Party through the Collateral Agent.
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(b) All Cash Proceeds received by the Collateral Agent in respect of any
sale of or collection from, or other realization upon, all or any part of the
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent) in whole
or in part by the Collateral Agent against, all or any part of the Obligations
in such order as the Collateral Agent shall elect, consistent with the
provisions of the Securities Purchase Agreement.
14. Notices. (a) Any and all notices or other communications or deliveries
hereunder (including without limitation any Event of Default Redemption Notice)
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 12:00 p.m.
(New York City time) on a Business Day, or (ii) the next Business Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section on a day that is not a
Business Day or later than 12:00 p.m. (New York City time) on any Business Day,
or (iii) the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given, in each case if delivered to the
following addresses:
If to the Borrower (this address being set forth solely for the purposes of
evidencing the date of deemed receipt by the Borrower of an Event of Default
Redemption Notice in the application of Section 8 (Rights and Remedies Upon
Default) hereunder):
American United Global, Inc.
000 Xxxxxxx Xxxxxx #000
Xxxxxx, Xxx Xxxx 00000 XXX
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxxx, CEO
With a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 XXX
Telephone: 000-000-0000
Facsimile: 212-930-9725
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
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If to the Chargor:
Kraft Elektronikai Zartkoruen Mukodo Reszvenytarsasag,
H-1112 Budapest
Koerberki ut 36.
Hungary
Mailing address: X-0000 Xxxxxxxx, P. O. Box: 89, Hungary
Telephone: x00 0 000 0000
Facsimile: x00 0 000 0000
With a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 XXX
Telephone: 000-000-0000
Facsimile: 212-930-9725
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
If to any
Secured Party: To the address set forth under such Secured Party's name on
its signature page hereto.
If to the
Collateral
Agent: To the address set forth under the Collateral Agent's name on
its signature page hereto.
(b) All notices, communications and deliveries hereunder to or from
the Chargor must be sent through the Collateral Agent. Any and all notices or
other communications or deliveries made by the Chargor through the Collateral
Agent shall be deemed to be properly sent by the Chargor to each Secured Party.
15. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Accounts Receivables or by the
guarantee, endorsement or property of any other person, firm, corporation or
other entity, then the Secured Parties shall have the right, in their 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.
16. Miscellaneous. (a) No course of dealing between the Chargor and the
Collateral Agent or any Secured Party, nor any failure to exercise, nor any
delay in exercising, on the part of the Collateral Agent or any Secured Party,
any right, power or privilege hereunder, under the Notes or under this Agreement
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.
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(b) All of the rights and remedies of the Secured Parties with
respect to the Accounts Receivables, whether established hereby, by the Notes or
by any other agreements, instruments or documents or by law shall be cumulative
and may be exercised through the Collateral Agent singly or concurrently.
(c) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement signed by the parties hereto.
(d) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.
(e) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.
(f) 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 of this Agreement.
(g) This Agreement shall be construed in accordance with the laws of
the Republic of Hungary. The parties hereto irrevocably agree that the Hungarian
courts shall have jurisdiction to settle any dispute, suit, action or
proceedings which may arise out of or in connection with this Agreement.
(h) 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.
11
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
KRAFT ELEKTRONIKAI ZARTKORUEN MUKODO
RESZVENYTARSASAG
By:_____________________________________
Name:
Title: managing director
12
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
SMITHFIELD FIDUCIARY LLC, as Collateral Agent
Company Registration No.: 94284 (registered by the
Registrar of Companies for the Cayman Islands)
Registered Office:
c/x Xxxxxx and Xxxxxx Attorneys-at-Law
Xxxxxx House, P.O. Box 309
Xxxxxx Town, Grand Cayman
Cayman Islands
British West Indies
Address for Notice:
Smithfield Fiduciary LLC
c/o Highbridge Capital Management, LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxx X. Xxxxxx/Xxxx X. Chill
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
13
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
SMITHFIELD FIDUCIARY LLC, as Secured Party
Company Registration No.: 94284 (registered by the
Registrar of Companies for the Cayman Islands)
Registered Office:
c/x Xxxxxx and Xxxxxx Attorneys-at-Law
Xxxxxx House, P.O. Box 309
Xxxxxx Town, Grand Cayman
Cayman Islands
British West Indies
Address for Notice:
Smithfield Fiduciary LLC
c/o Highbridge Capital Management, LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxx X. Xxxxxx/Xxxx X. Chill
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
14
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
IROQUOIS MASTER FUND LTD., as Secured Party
Registered Office:
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 10022 U.S.A
Address for Notice:
Iroquois Master Fund Ltd.
000 Xxxxxxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
15
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
XXXXXXXX INVESTMENT MASTER FUND, LTD., as Secured
Party
Registered Office:
000 Xxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 U.S.A.
Address for Notice:
Xxxxxxxx Investment Master Fund, Ltd.
000 Xxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
16
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
CRANSHIRE CAPITAL, L.P., as Secured Party
Registered Office:
000 Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000 X.X.X.
Address for Notice:
Cranshire Capital, L.P.
000 Xxxxxx Xxxx Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
17
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
XXXXX XXXXXXXX, LTD., as Secured Party
Registered Office:
0000 Xxxxxxx Xxx Xxxxxxxx
Xxxxxxxx 00000 X.X.X.
Address for Notice:
Xxxxx Xxxxxxxx, Ltd.
0000 Xxxxxxx Xxx
Xxxxxxxx, Xxxxxxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
18
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
RAQ, LLC, as Secured Party
Registered Office:
787 7th Avenue 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 X.X.X.
Address for Notice:
RAQ LLC
000 0xx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: J. Xxx Xxxxxx
Xxxxx Xxxxxxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
19
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
PARAGON CAPITAL, L.P., as Secured Party
Registered Office:
000 Xxxx 00xx Xx
Xxx Xxxx, Xxx Xxxx 00000 X.X.X.
Address for Notice:
Paragon Capital, L.P.
000 Xxxx 00xx Xx
Xxx Xxxx, Xxx Xxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
20
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
NITE CAPITAL, L.P., as Secured Party
Registered Office:
000 X Xxxx Xxxxxx #000
Xxxxxxxxxxxx, Xxxxxxxx 00000 U.S.A.
Address for Notice:
Nite Capital, L.P.
000 X Xxxx Xxxxxx #000
Xxxxxxxxxxxx, Xxxxxxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
21
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
BRISTOL INVESTMENT FUND, LTD., as Secured Party
Registered Office:
00000 Xxxxxxxx Xxxx #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000 X.X.X.
Address for Notice:
c/o Bristol Investment Fund, Ltd.
00000 Xxxxxxxx Xxxx #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxx Xxxxxxx
Xxx Xxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
22
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
GLOBAL HUNTER HOLDINGS, L.P., as Secured Party
Registered Office:
0000 Xxxxx xx Xxx Xxxxx 0000
Xx Xxxxx, Xxxxx 00000 X.X.X.
Address for Notice:
Global Hunter Holdings, L.P.
0000 Xxxxx xx Xxx Xxxxx 0000
Xx. Xxxxx, Xxxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
23
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
XXXXXX BAY FUND L.P., as Secured Party
Registered Office:
000 Xxxxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 U.S.A.
Address for Notice:
Xxxxxx Bay Fund L.P.
000 Xxxxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxx Xxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
24
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
XXXXXX XXXX, as Secured Party
Permanent Address:
0000 Xxxxxxxxx Xxxxx Xxxxxx Xxxx
Xxxxxxxx 00000 X.X.X.
Address for Notice:
Xxxxxx Xxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000 XXX
Telephone: (000) 000-0000
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
25
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
KUEKENHOF CAPITAL MANAGEMENT, LLC, as Secured Party
Registered Office:
00 Xxxxxx Xx Xxxxx #0
Xxxxxx, Xxx Xxxxxx 00000 U.S.A.
Address for Notice:
Kuekenhof Capital Management, LLC
00 Xxxxxx Xx Xxxxx #0
Xxxxxx, Xxx Xxxxxx 00000 XXX
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
26
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
XXXXX XXXXXXXX, as Secured Party
Permanent Address:
0 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000 X.X.X.
Address for Notice:
Xxxxx Xxxxxxxx
0 Xxxxxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000 XXX
Telephone: (000) 000-0000
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
27
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
XXXXX XXXXXXXX, as Secured Party
Permanent Address:
00 Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000 X.X.X.
Address for Notice:
Xxxxx Xxxxxxxx
0 Xxxxxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000 XXX
Telephone: (000) 000-0000
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
28
IN WITNESS WHEREOF, the parties hereto have caused this Accounts
Receivables Lien Agreement to be duly executed on the day and year first above
written.
XXXXXX XXXXXXXX, as Secured Party
Permanent Address:
00 Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000 X.X.X.
Address for Notice:
Xxxxxx Xxxxxxxx
0 Xxxxxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000 XXX
Telephone: (000) 000-0000
By:_____________________________________
Name: xx. Xxxxx Xxxxx
Title: proxy
29
SCHEDULE A
LOAN AMOUNTS
-------------------------------------------------------------------------
NAME OF THE SECURED PARTIES LOAN AMOUNTS
-------------------------------------------------------------------------
Smithfield Fiduciary LLC USD 1,000,000
-------------------------------------------------------------------------
Iroquois Master Fund, Ltd. USD 600,000
-------------------------------------------------------------------------
Xxxxxxxx Investment Master Fund, USD 500,000
Ltd.
-------------------------------------------------------------------------
Cranshire Capital, L.P. USD 500,000
-------------------------------------------------------------------------
Xxxxx Xxxxxxxx, Ltd. USD 1,250,000
-------------------------------------------------------------------------
RAQ, LLC USD 250,000
-------------------------------------------------------------------------
Paragon Capital L.P. USD 350,000
-------------------------------------------------------------------------
Nite Capital, L.P. USD 250,000
-------------------------------------------------------------------------
Bristol Investment Fund, Ltd. USD 250,000
-------------------------------------------------------------------------
Global Hunter Holdings, L.P. USD 250,000
-------------------------------------------------------------------------
Xxxxxx Bay Fund L.P. USD 250,000
-------------------------------------------------------------------------
Xxxxxx Xxxx USD 50,000
-------------------------------------------------------------------------
Kuekenhof Capital Management, LLC USD 100,000
-------------------------------------------------------------------------
Xxxxx Xxxxxxxx USD 50,000
-------------------------------------------------------------------------
Xxxxx Xxxxxxxx USD 25,000
-------------------------------------------------------------------------
Xxxxxx Xxxxxxxx USD 25,000
-------------------------------------------------------------------------
AGGREGATE LOAN AMOUNTS USD 5,700,000
-------------------------------------------------------------------------
30
SCHEDULE B
LIST OF ACCOUNTS RECEIVABLES
31
SCHEDULE C
OFFICER'S CERTIFICATE
Reference is made to (i) the Accounts Receivables Lien Agreement
dated as of June 12, 2006 (the "AGREEMENT") by and among Kraft Elektronikai
Zartkoruen Mukodo Reszvenytarsasag (the "CHARGOR"), the lenders signatory
thereto (the "SECURED PARTIES") and Smithfield Fiduciary LLC (the "COLLATERAL
AGENT"). Terms used but not defined herein are used as defined in the Accounts
Receivables Lien Agreement.
I, [___________], a Director of the Chargor, hereby certify to each
Secured Party under the Accounts Receivables Lien Agreement that:
(i) the Chargor has entered into no agreements or instruments that
is subject to the Liens under the Accounts Receivables Lien Agreement ,
other than the agreements or instruments listed on the restatement of
Schedule B of the Accounts Receivables Lien Agreement attached to this
certificate;
(ii) such restatement has been appropriately completed and is in the
form, and specifies such agreements and instruments in the detail,
required by Section 6 (a) of the Accounts Receivables Lien Agreement; and
(iii) the Chargor has taken all actions necessary to create valid
and enforceable Liens in the agreements and instruments set forth in such
restatement.
IN WITNESS WHEREOF, I have executed this certificate in my capacity
as a Director of the Chargor this [__] day of ______, 200[__].
By
---------------------------
Name:
Title:
32
SCHEDULE D
FORM OF
NOTIFICATION ABOUT THE ENFORCEMENT OF THE LIENS
[on the letter headed paper of the Chargor]
FAO: [Obligor]
Date: [date]
Dear Sirs,
REF: NOTIFICATION
We refer to the Accounts Receivables Lien Agreement ("AGREEMENT") concluded on
June 12 2006, by and among Kraft Elektronikai Zartkoruen Mukodo Reszvenytarsasag
(the "CHARGOR"), the lenders signatory thereto (the "SECURED PARTIES") and
Smithfield Fiduciary LLC (the "COLLATERAL AGENT") (the Chargor, the Secured
Parties and the Collateral Agent hereinafter collectively the "PARTIES").
We hereby inform You, that pursuant to the provisions of the above mentioned
Agreement, the Parties have created in favor of each Secured Party a lien on
each and every right, title and interest (hereinafter collectively:
"RECEIVABLES") of the Chargor vis-a-vis You, arising at present or in the future
from the following contract/order ("CONTRACT").
Contract: [___]
Date: [___]
Subject: [___]
After the receipt of the present Notification the Receivables shall be paid to
the following bank account: [___].
WE KINDLY INFORM YOU THAT YOU SHALL BEAR THE RISK OF NOT ACTING IN CONFORMITY
WITH THE PRESENT NOTIFICATION AND THE SECURED PARTIES SHALL HAVE THE RIGHT TO
CLAIM PAYMENT FROM YOU INDEPENDENTLY OF THE FACT THAT YOU MADE A PAYMENT TO THE
CHARGOR.
YOURS FAITHFULLY:
KRAFT ELEKTRONIKAI ZARTKORUEN MUKODO RESZVENYTARSASAG
[corporate signature]
33
