EXHIBIT 99.2
EXECUTION COPY
AMENDMENT NO. 2 TO LOAN AGREEMENT
This Amendment No. 2 to the Loan Agreement (this "AMENDMENT"), dated as of the 6
day of September, 2009, is made and entered into by Metalink Ltd., an Israeli
corporation (the "COMPANY"), and the Lender identified on the signature page
hereto ("LENDER" or "HOLDER").
WHEREAS, the parties have entered into a certain Loan Agreement dated as of
September 8, 2008 (as amended on December 31, 2008, the "LOAN AGREEMENT");
WHEREAS, as of the date hereof, the total outstanding principal amount under the
Loan Agreement and the current Note is $5,750,000 (the "ORIGINAL PRINCIPAL
AMOUNT");
WHEREAS, as of the date hereof, the Lender holds 1,165,000 warrants (consisting
of 1,000,000 warrants of Series A2 and 165,000 warrants of Series A 4) that were
issued under the Loan Agreement (the "WARRANTS") with an exercise price of $0.50
per share; and
WHEREAS, the parties have agreed to amend the Loan Agreement upon the terms and
conditions of this Amendment.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS. Capitalized terms not otherwise defined in this Amendment
are used with the definitions assigned to them in the Loan Agreement.
2. REPAYMENT. Upon the earlier of (i) five (5) business days following
the date hereof and (ii) September 9, 2009, the Company shall repay
the Lender, by wire transfer to the bank account designated in writing
by Lender on ANNEX A, a total sum of Two Million Dollars ($2,000,000,
reflecting a repayment of $2,000,000 out of the Original Principal
Amount and all accrued and unpaid interest on the full Original
Principal Amount as of the date hereof) (such $2,000,000, the
"REPAYMENT AMOUNT" and such repayment of the Repayment Amount, the
"REPAYMENT"), such that, immediately following the Repayment, the
aggregate outstanding principal amount of the Note shall be equal to
$3,750,000 (such remaining outstanding principal amount of $3,750,000,
the "OUTSTANDING PRINCIPAL AMOUNT"), subject to adjustment pursuant to
Section 3(b) herein, and all interest accrued through the repayment
shall be considered fully paid. Notwithstanding anything to the
contrary hereunder, should the Company fail to timely transfer the
said amount to Lender, this Amendment shall become null and void, AB
INITIO.
3. AMENDMENTS.
a. EXTENSION OF MATURITY DATE. The parties hereby amend the Loan
Agreement and the Note such that the Maturity Date will be
extended from September 9, 2009 to March 9, 2010 (the "EXTENDED
MATURITY DATE"). All references to the Maturity Date in the
Amended and Restated Note (as defined below) shall be amended to
reflect such new Maturity Date.
EXECUTION COPY
b. ADJUSTED PRINCIPAL AMOUNT. In consideration for the Extended
Maturity Date, the Company hereby agrees to issue to the Holder
in exchange for the Holder's Note, an amended and restated Note
(the "AMENDED AND RESTATED NOTE") with a principal amount equal
to (the "ADJUSTED PRINCIPAL AMOUNT") (i) as of the date hereof,
105% of the Outstanding Principal Amount (subject to reduction
pursuant to Section 2) or $3,937,500; (ii) as of the 45th
calendar day following the date hereof, 110% of the Outstanding
Principal Amount or $4,125,000; and (iii) as of January 1, 2010,
115% of the Outstanding Principal Amount or $4,312,500. Other
than as amended hereunder, the rights and obligations of the
Holder and the Company with respect to the Amended and Restated
Note shall be identical in all respects to the rights and
obligations of the Holder and the Company with respect to the
Note. Interest shall accrue on the Outstanding Principal Amount
and Repayment Amount without adjustment pursuant to this Section
3(b). For clarity, the Loan Agreement and all Transaction
Documents thereunder are hereby amended so that the term "NOTE"
includes the Amended and Restated Note and the term "TRANSACTION
DOCUMENTS" shall be amended to include this Amendment. The
Amended and Restated Note is being issued in substitution for and
not in satisfaction of the outstanding Note of each Holder. Upon
the written request of either the Holder or the Company, each
party shall use commercially reasonable efforts to deliver the
instruments representing the original Note to the Company in
exchange for the Holder's Amended and Restated Note that reflect
the revised terms of such securities as set forth in this
Amendment.
c. ADJUSTMENT TO EXERCISE PRICE OF WARRANTS. The parties hereby
amend the Warrants such that the exercise price shall be reduced
to be equal to $0.03 per share, subject to adjustment therein.
All references to the Exercise Price in the Warrants shall be
amended to reflect such adjusted Exercise Price.
d. INTEREST. The parties hereby amend the Note by adding the
following sentence at the end Section 3(a) of the Amended and
Restated Note:
"NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREUNDER, THE PARTIES
HEREBY AGREE THAT THE INTEREST ACCRUED ON THE OUTSTANDING
PRINCIPAL AMOUNT AND REPAYMENT AMOUNT (AS DEFINED IN THE
AMENDMENT AGREEMENT DATED AS OF SEPTEMBER 6, 2009 BY AND AMONG
THE COMPANY AND THE HOLDER) OF THIS NOTE SHALL ACCRUE ON THE
OUTSTANDING PRINCIPAL AMOUNT AND REPAYMENT AMOUNT NOT SUBJECT TO
ADJUSTMENT PURSUANT TO THE AMENDMENT AGREEMENT."
e. MANDATORY DEFAULT AMOUNT. The parties hereby amend the Notes such
that the term "Mandatory Default Amount" shall be modified and
read as follows:
"MANDATORY DEFAULT AMOUNT" MEANS THE SUM OF (A) THE GREATER OF
(I) 110% OF THE ORIGINAL PRINCIPAL AMOUNT (LESS THE REPAYMENT
AMOUNT) AND (II) 100% OF THE OUTSTANDING PRINCIPAL AMOUNT AS
ADJUSTED PURSUANT TO SECTION 3(B) OF THE AMENDMENT AGREEMENT, (B)
ALL ACCRUED AND UNPAID INTEREST HEREON, AND (C) ALL OTHER
AMOUNTS, COSTS, EXPENSES AND LIQUIDATED DAMAGES DUE AND UNPAID IN
RESPECT OF THIS NOTE.
f. AMENDED NOTICE OF EXERCISE FOR THE WARRANTS. The parties hereby
agree that the Warrants shall be amended such that the Notice of
Exercise attached thereto shall be replaced in its entirety with
the Notice of Exercise attached hereto as EXHIBIT A.
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4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
makes the representations and warranties set forth below to the Holder
as of the date of its execution of this Agreement:
a. AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by this Amendment and otherwise to
carry out its obligations hereunder. The execution and delivery
of this Amendment by the Company and the consummation by it of
the transactions contemplated hereby have been duly authorized by
all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the
Company's stockholders in connection therewith. This Amendment
has been duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company
in accordance with its terms except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may
be limited by applicable law.
b. NO CONFLICTS. The execution, delivery and performance of this
Amendment by the Company and the consummation by the Company of
the transactions contemplated hereby do not and will not: (i)
conflict with or violate any provision of the Company's or any
Subsidiary's certificate or articles of incorporation, memorandum
of association, bylaws or other organizational or charter
documents, 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, result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary, 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 a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party
or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) assuming the accuracy
of the representations made in Section 5 herein, conflict with or
result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is
subject (including federal and state and Israeli securities laws
and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case
of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse Effect.
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c. ISSUANCE OF THE AMENDED AND RESTATED NOTE. The Amended and
Restated Note is duly authorized and, upon the execution of this
Amendment by the Holder will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens imposed by
the Company other than restrictions on transfer provided for in
the Transaction Documents.
d. NO NOVATION. The Amended and Restated Note is being issued in
substitution for and not in satisfaction of the Note (other than
the repayment contemplated by Section 2). The Company hereby
acknowledges and agrees that the Amended and Restated Note shall
amend, restate, modify, extend, renew and continue the terms and
provisions contained in the Note and shall not extinguish or
release the Company or any of its Subsidiaries under any
Transaction Document (as defined in the Loan Agreement) or
otherwise constitute a novation of its obligations thereunder.
e. EQUAL CONSIDERATION. No consideration has been offered or paid to
any person to amend or consent to a waiver, modification,
forbearance or otherwise of any provision of any of the Amended
and Restated Note or Warrants or Transaction Documents.
f. SURVIVAL. All of the Company's representations and warranties
contained in this Amendment shall survive the execution, delivery
and acceptance of this Amendment by the parties hereto.
5. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder hereby makes
the following representations and warranties to the Company as of the
date of its execution of this Amendment: (a) the execution and
delivery of this Amendment by it and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
necessary action on its behalf, (b) this Amendment has been duly
executed and delivered by the Holder and constitutes the valid and
binding obligation of the Holder, enforceable against it in accordance
with its terms except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors'
rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions may
be limited by applicable law, and (c) Holder, either alone or together
with its representatives, (i) has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of this Amendment and the transactions
contemplated hereunder, and has so evaluated the merits and risks
thereof, (ii) is able to bear the economic risk of this Amendment and
the transactions contemplated hereunder and, at the present time, is
able to afford a complete loss of its investment and (iii) has been
given the opportunity to ask questions of, and receive answers from,
the Company concerning the business and financial status of the
Company and the transactions contemplated hereunder.
6. RE-ISSUANCE OF AMENDED AND RESTATED NOTE AND WARRANTS. Upon the
written request of either the Holder or the Company, each party shall
use commercially reasonable efforts to deliver the instruments
representing the original Note and Warrants to the Company in exchange
for replacement instruments that reflect the revised terms of such
securities as set forth in this Amendment.
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7. EFFECT ON TRANSACTION DOCUMENTS. Except as expressly set forth above,
all of the terms and conditions of the Loan Agreement, Note and
Warrants shall continue in full force and effect after the execution
of this Amendment and shall not be in any way changed, modified or
superseded by the terms set forth herein, including, but not limited
to, any other obligations the Company may have to the Holder under the
Loan Agreement, Note and Warrants. Notwithstanding the foregoing, this
Amendment shall be deemed for all purposes as an amendment to any and
all of the Loan Agreement, Note and Warrants as required to serve the
purposes hereof, and in the event of any conflict between the terms
and provisions of any other of the Loan Agreement, Note or Warrants,
on the one hand, and the terms and provisions of this Amendment, on
the other hand, the terms and provisions of this Amendment shall
prevail.
8. EXECUTION. This Amendment shall come into effect upon the signature of
the last signing party. This Amendment may be executed in two or more
counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts
have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a ".pdf" format data file, such signature
shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and
effect as if such facsimile or ".pdf" signature page were an original
thereof.
9. AMENDMENTS AND WAIVERS. The provisions of this Amendment, including
the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and the Holder.
10. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be delivered as
set forth in the Loan Agreement.
11. SUCCESSORS AND ASSIGNS. This Amendment shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of
the parties; PROVIDED, HOWEVER, that no party may assign this
Amendment or the obligations and rights of such party hereunder
without the prior written consent of the other parties hereto.
12. FEES AND EXPENSES. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Amendment.
13. GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of this Amendment shall be determined
pursuant to the Governing Law provision of the Loan Agreement.
14. SEVERABILITY. If any term, provision, covenant or restriction of this
Amendment 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.
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15. CONSTRUCTION. The parties agree that each of them and/or their
respective counsel has reviewed and had an opportunity to revise this
Amendment and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this Amendment or
any amendments hereto. In addition, each and every reference to share
prices in this Agreement shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.
16. ENTIRE AGREEMENT. This Amendment, 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 such
documents, exhibits and schedules.
17. HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Amendment and shall not be deemed to limit
or affect any of the provisions hereof
(SIGNATURE PAGES FOLLOW)
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EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
the Loan Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Metalink Ltd. Lender
By: ____________________________ By: ____________________________
Name: Name:
Title: Title:
Date: Date:
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