PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as of
August 18, 2000 by and between MERLIN SOFTWARE TECHNOLOGIES INTERNATIONAL INC.,
a Nevada corporation (the "Pledgor") and the Holders (as set forth in Exhibit A
hereto) of the Notes (as defined herein) (collectively, the "Lender" or "Secured
Party") now or hereafter party to the Purchase Agreement (as defined below). All
capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned thereto in the Purchase Agreement.
W I T N E S S E T H :
WHEREAS, The Pledgor has entered into the Notes and Warrant Purchase
Agreement with the Holders dated as of even date hereof (the "PURCHASE
AGREEMENT"), for the purchase 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 Pledge Agreement (the "Pledge Agreement") be executed, delivered and in
effect;
WHEREAS, pursuant to the Purchase Agreement, the Pledgor has agreed to
enter into this Pledge Agreement providing for the pledge of all the stock of
(the "Pledged Stock") Merlin Software Technologies, Inc., a Nevada corporation
(the "Subsidiary"), to secure, among other things, the prompt payment of all
obligations of the Pledgor under the Notes;
NOW, THEREFORE, in consideration of the foregoing premises, and intending
to be legally bound hereby, the undersigned, agrees as follows:
1. PLEDGE OF STOCK; OTHER COLLATERAL.
(a) As collateral security for the payment and performance of all
debts, obligations or liabilities now or hereafter existing, absolute or
contingent, of the Pledgor's and/or the Subsidiary's obligations under the
Purchase Agreement, the Notes and the Related Documents (collectively, the
"Secured Obligations"), the Pledgor hereby pledges and collaterally assigns to
the Lender, and grants to the Lender pursuant to the New York Uniform Commercial
Code (the "UCC") a first priority security interest in the Pledged Stock and all
of the following:
(A) all cash, securities, dividends, rights, and other property at any
time and from time to time declared or distributed in respect of or in exchange
for any or all of the Pledged Stock; and
(B) all other property hereafter delivered to the Lender in substitution
for or in addition to any of the foregoing, all certificates and instruments
representing or evidencing such
property and all cash, securities, interest, dividends, rights, and other
property at any time and from time to time declared or distributed in respect of
or in exchange for any or all of the Pledged Stock.
All such Pledged Stock, certificates, instruments, cash, securities, interest,
dividends, rights and other property referred to in this Section 1, are herein
collectively referred to as the "Collateral." All of the Pledged Stock is
currently owned by the Pledgor and represented by the stock certificates listed
on Schedule I hereto.
(b) The Pledgor agrees to: (i) execute and deliver an Escrow Agreement
at the First Tranche Closing (as defined in the Purchase Agreement), in the form
attached as Exhibit B hereto, appointing ▇▇▇▇ ▇▇▇▇▇▇▇, P.C., as escrow agent
(the "Escrow Agent") for the Pledged Stock; (ii) deliver to the Escrow Agent in
accordance with the Escrow Agreement a stock certificate representing the
Pledged Stock, together with a stock transfer Power of Attorney form with
respect to the Pledged Stock duly executed by the Pledgor in blank; and (iii)
deliver all the Collateral to the Lender at such location as the Lender shall
from time to time designate by written notice pursuant to Section 19 hereof for
its custody at all times until termination of this Agreement, together with such
instruments of assignment and transfer as requested by the Lender.
(c) All advances, charges, costs and expenses, including reasonable
attorneys' fees, incurred or paid by the Lender in exercising any right, power
or remedy conferred by this Agreement, or in the enforcement thereof, shall
become a part of the Secured Obligations secured hereunder and shall be paid to
the Lender by the Pledgor immediately upon demand therefor, with interest
thereon until paid in full at the rate provided for in the Purchase Agreement.
2. STATUS OF PLEDGED STOCK. Pledgor hereby represents and warrants to the
Lender that (a) all of the shares of the Pledged Stock are validly issued and
outstanding, fully paid and nonassessable and constitute 100% of the issued and
outstanding shares of capital stock of Merlin Software Technologies, Inc.; (b)
Pledgor is the registered record and beneficial owner of the Pledged Stock, free
and clear of all Liens, charges, equities, encumbrances and restrictions on
pledge or transfer (other than the pledge hereunder and under the Related
Documents and applicable restrictions pursuant to federal and state securities
laws); (c) it has full power, legal right and lawful authority to execute this
Agreement and to pledge, assign and transfer its Pledged Stock in the manner and
form hereof; (d) the pledge, assignment and delivery of the Pledged Stock to the
Lender pursuant to this Agreement creates or continues, as applicable, a valid
and perfected first priority security interest in such Pledged Stock, securing
the payment of the Secured Obligations, assuming continuous and uninterrupted
possession thereof by the Lender; (e) the pledge, assignment and delivery of the
Pledged Stock to the Lender pursuant to this Agreement does and will not
contravene or conflict with any contractual agreement, law or regulation binding
upon the Pledgor; and (f) this Pledge Agreement is legal, valid, binding and
enforceable against the Pledgor 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. Except as otherwise expressly
provided herein or in the Purchase Agreement, Notes or Related Documents none of
the Pledged Stock (nor any interest therein or thereto) shall be sold,
transferred or assigned without the Lender's prior written consent, which may be
withheld for any reason. Pledgor covenants
with the Lender that it shall at all times cause its Pledged Stock to be
represented by the certificates now and hereafter delivered to the Lender in
accordance with Section 1 hereof and that it shall cause the Subsidiary not to
issue any capital stock, or securities convertible into capital stock, at any
time during the term of this Agreement. Pledgor hereby agrees not to enter into
any agreement requiring that any voting rights associated with the Pledged Stock
be exercised in any particular manner nor grant any interest in or permit to
exist any Lien, charge, encumbrance or restriction with respect to the Pledged
Stock (other than applicable restrictions pursuant to federal and state
securities laws).
3. PRESERVATION AND PROTECTION OF COLLATERAL.
(a) Lender shall be under no duty or liability with respect to the
collection, protection or preservation of the Collateral, or otherwise, beyond
the use of reasonable care in the custody and preservation thereof while in its
possession.
(b) Pledgor agrees to pay when due all taxes, charges, Liens and
assessments against the Collateral, unless being contested in good faith by
appropriate proceedings diligently conducted and against which adequate reserves
have been established in accordance with generally accepted accounting
principals applied on a consistent basis. Upon the failure of Pledgor to so pay
or contest such taxes, charges, Liens or assessments, the Lender at its option
may pay or contest any of them (the Lender having the sole right to determine
the legality or validity and the amount necessary to discharge such taxes,
charges, Liens or assessments).
4. DEFAULT. Should Pledgor fail to pay the Lender any of the Secured
Obligations as of the end of the Business Day on which such Secured Obligations
become due and payable and after the expiration of all grace or cure periods, if
any, and all extensions or waivers, if any, and should such failure continue, or
should any other Event of Default set forth in the Notes occur and be
continuing, or should such Pledgor fail otherwise to comply with the terms
hereof (any of the foregoing an "Event of Default"), the Lender is given full
power and authority, then or at any time thereafter, to sell, assign and deliver
or collect the whole or any part of the Collateral, or any substitute therefor
or any addition thereto, in one or more sales, with or without any previous
demands or demand of performance or, to the extent permitted by law, notice or
advertisement, in such order as the Lender may elect; and any such sale may be
made either at public or private sale at the Lender's place of business or
elsewhere, either for cash or upon credit or for future delivery, at such price
as the Lender may reasonably deem fair; and the Lender may be the purchaser of
any or all Collateral so sold and hold the same thereafter in its own right free
from any claim of Pledgor or right of redemption. Demands of performance,
advertisements and presence of property and sale and notice of sale are hereby
waived to the extent permissible by law; provided, however, that the Lender
shall give to Pledgor five days' notice prior to any sale permitted under this
Agreement, and Pledgor agrees that such notice shall constitute commercially
reasonable notice. Any sale hereunder may be conducted by an auctioneer or any
officer or agent of the Lender. Pledgor recognizes that the Lender may be
unable to effect a public sale of the Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state law, and may be otherwise delayed or
adversely affected in effecting any sale by reason of present or future
restrictions thereon imposed by governmental authorities, and that as a
consequence of such prohibitions and
restrictions the Lender may be compelled (i) to resort to one or more
private sales to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire the stock for their own account, for investment
and not with a view to the distribution or resale thereof, or (ii) to seek
regulatory approval of any proposed sale or sales, or (iii) to limit the amount
of Collateral sold to any Person or group. Pledgor agrees and acknowledges that
private sales so made may be at prices and upon terms less favorable to Pledgor
than if such Collateral was sold either at public sales or at private sales not
subject to other regulatory restrictions, and that the Lender has no obligation
to delay the sale of any of the Collateral for the period of time necessary to
permit the issuer of such Collateral to register or otherwise qualify them, even
if such issuer would agree to register or otherwise qualify such Collateral for
public sale under the Securities Act or applicable state law. Pledgor further
agrees, to the extent permitted by applicable law, that the use of private sales
made under the foregoing circumstances to dispose of the Collateral shall be
deemed to be dispositions in a commercially reasonable manner. Pledgor hereby
acknowledges that a ready market may not exist for the Pledged Stock if they are
not traded on a national securities exchange or quoted on an automated quotation
system and agrees and acknowledges that in such event the Pledged Stock may be
sold for an amount less than a pro rata share of the fair market value of the
issuer's assets minus its liabilities. In addition to the foregoing, the Secured
Party may exercise such other rights and remedies as may be available under the
Purchase Agreement, Notes and Related Documents, at law (including without
limitation the UCC) or in equity.
5. PROCEEDS OF SALE. The proceeds of the sale of any of the Collateral
and all sums received or collected from or on account of such Collateral shall
be applied to the payment of expenses incurred or paid by the Lender in
connection with any sale, transfer or delivery of the Collateral, to the payment
of any other costs, charges, reasonable attorneys' fees or expenses mentioned
herein, and to the payment of the Secured Obligations or any part thereof, all
in such order and manner as the Lender may determine and as permitted by
applicable law and regulation. The Lender shall, upon satisfaction in full of
all such Secured Obligations, pay or cause to be paid any balance to Pledgor.
6. PRESENTMENTS, ETC. The Lender shall not be under any duty or
obligation whatsoever to make or give any presentments, demands for
performances, notices of non-performance, protests, notice of protest or notice
of dishonor in connection with any obligations or evidences of indebtedness held
thereby as collateral, or in connection with any obligations or evidences of
indebtedness which constitute in whole or in part the Secured Obligations
secured hereunder.
7. ATTORNEY-IN-FACT. Pledgor hereby appoints the Lender as such Pledgor's
attorney-in-fact for the purposes of carrying out the provisions of this
Agreement and taking any action and executing any instrument which the Lender
may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest; provided, that the
Lender shall have and may exercise rights under this power of attorney only upon
the occurrence and during the continuance of a Default or an Event of Default.
Without limiting the generality of the foregoing, upon the occurrence and during
the continuance of a Default or an Event of Default, the Agent shall have the
right and power to receive, endorse and collect all checks and other orders for
the payment of money made payable to such Pledgor representing any dividend,
interest payment,
principal payment or other distribution payable or distributable in respect
to the Collateral or any part thereof and to give full discharge for the same.
8. ABSOLUTE RIGHTS AND OBLIGATIONS. All rights of the Secured Party,
and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Purchase Agreement or
any other agreement or instrument relating to any of the Secured Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Purchase Agreement, the Notes or the
Related Documents or any other agreement or instrument relating to any of the
Secured Obligations;
(c) any exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to departure from the
Subsidiary Guaranty Agreement, or any guaranty, for all or any of the Secured
Obligations; or
(d) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the Secured
Obligations or of this Agreement.
9. WAIVER BY PLEDGOR. Pledgor waives (to the extent permitted by
applicable law) any right to require Secured Party or any other obligee of the
Secured Obligations to (a) proceed against the Subsidiary or any other Person or
entity, (b) proceed against or exhaust any Collateral, or (c) pursue any other
remedy in its power; and waives (to the extent permitted by applicable law) any
defense arising by reason of any disability or other defense of the Subsidiary
or any other Person, or by reason of the cessation from any cause whatsoever of
the liability of the Subsidiary or any other Person or entity. Pledgor shall
not have the right of subrogation, and Pledgor waives any right to enforce any
remedy which the Secured Party or any other obligee of the Secured Obligations
now has or may hereafter have against any other Person and waives (to the extent
permitted by applicable law) any benefit of and any right to participate in any
collateral or security whatsoever now or hereafter held by the Lender. Pledgor
authorizes the Secured Party and any other obligee of the Secured Obligations
without notice (except notice required by applicable law) or demand and without
affecting its liability hereunder or under the Purchase Agreement, Notes, and
the Related Documents from time to time to: (i) take and hold security, other
than the Collateral herein described, for the payment of such Secured
Obligations or any part thereof, and exchange, enforce, waive and release the
Collateral herein described or any part thereof or any such other security; and
(ii) apply such Collateral or other security and direct the order or manner of
sale thereof as the Secured Party or obligee in its discretion may determine.
The Lender may at any time deliver or cause to be delivered (without
representation, recourse or warranty) the Collateral or any part thereof to
Pledgor and the receipt thereof by Pledgor shall be a complete and full
acquittance for the Collateral so delivered, and the Secured Party shall
thereafter be discharged from any liability or responsibility therefor.
10. DIVIDENDS AND VOTING RIGHTS.
(a) All dividends and other distributions with respect to any of the
Pledged Stock shall be subject to the pledge hereunder. All dividends shall be
promptly delivered to the Escrow Agent (together, if the Lender shall request,
with stock powers or instruments of assignment duly executed in blank affixed to
any capital stock or other negotiable document or instrument so distributed) to
be held, released or disposed of by it hereunder, subject to the terms and
conditions of the Escrow Agreement, or, at the option of the Lender, to be
applied to the Secured Obligations hereby secured as they become due.
(b) So long as no Default or Event of Default shall have occurred and
be continuing, the registration of the Collateral in the name of Pledgor shall
not be changed and Pledgor shall be entitled to exercise all voting and other
rights and powers pertaining to the Collateral for all purposes not inconsistent
with the terms hereof.
(c) Upon the occurrence and during the continuance of any Default or
Event of Default, at the option of the Lender, all rights of Pledgor to exercise
the voting or consensual rights and powers which it is authorized to exercise
pursuant to subsection (b) above shall cease and the Lender may thereupon (but
shall not be obligated to), at its request, cause such Collateral to be
registered in the name of the Lender or its nominee or agent and exercise such
voting or consensual rights and powers as appertain to ownership of such
Collateral, and to that end Pledgor hereby appoints the Lender as its proxy,
with full power of substitution, to vote and exercise all other rights as a
shareholder with respect to such Pledged Stock hereunder upon the occurrence and
during the continuance of any Default or Event of Default, which proxy is
coupled with an interest and is irrevocable prior to termination of this
Agreement, and Pledgor hereby agrees to provide such further proxies as the
Lender may request; provided, however, that the Lender in its discretion may
from time to time refrain from exercising, and shall not be obligated to
exercise, any such voting or consensual rights or such proxy.
11. POWER OF SALE. Until the indefeasible payment in full of all
Secured Obligations, the power of sale and other rights, powers and remedies
granted to the Lender hereunder shall continue to exist and may be exercised by
the Lender at any time and from time to time, upon the occurrence and during the
continuance of an Event of Default, irrespective of the fact that any Secured
Obligations or any part thereof may have become barred by any statute of
limitations or that the liability of Pledgor may have ceased.
12. OTHER RIGHTS. The rights, powers and remedies given to the Lender by
this Agreement shall be in addition to all rights, powers and remedies given to
the Secured Party by virtue of any statute or rule of law. Any forbearance or
failure or delay by the Lender in exercising any right, power or remedy
hereunder shall not be deemed to be a waiver of such right, power or remedy, and
any single or partial exercise of any right, power or remedy hereunder shall not
preclude the further exercise thereof; and every right, power and remedy of the
Secured Party shall continue in full
force and effect until such right, power or remedy is specifically waived
by the Lender by an instrument in writing.
13. FURTHER ASSURANCES. Pledgor agrees at its own expense to do such
further acts and things, and to execute and deliver such additional conveyances,
assignments, financing statements, agreements and instruments, as the Lender may
at any time reasonably request in connection with the administration or
enforcement of this Agreement or related to the Collateral or any part thereof
or in order better to assure and confirm unto the Lender its rights, powers and
remedies hereunder. Pledgor hereby consents and agrees that the issuers of or
obligors in respect of the Collateral shall be entitled to accept the provisions
hereof as conclusive evidence of the right of the Lender, to exercise its rights
hereunder with respect to the Collateral, notwithstanding any other notice or
direction to the contrary heretofore or hereafter given by such Pledgor or any
other Person to any of such issuers or obligors.
14. BINDING AGREEMENT; ASSIGNMENT. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and to their respective successors and assigns, except
that Pledgor shall not be permitted to assign this Agreement or any interest
herein or in the Collateral, or any part thereof, or otherwise pledge, encumber
or grant any option with respect to the Collateral, or any part thereof, or any
cash or property held by the Lender as Collateral under this Agreement. All
references herein to the Lender shall include any successor thereof, and any
other obligees from time to time of the Obligations.
15. SEVERABILITY. In case any Lien, security interest or other right of
any Secured Party or any provision hereof shall be held to be invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability shall not
affect any other Lien, security interest or other right granted hereby or
provision hereof.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
17. TERMINATION. This Agreement and all obligations of the Pledgor
hereunder shall terminate without delivery of any instrument or performance of
any act by any party on the indefeasible payment in full of all Secured
Obligations. Upon such termination of this Agreement, the Lender shall, at the
sole expense of the Pledgor, deliver to Pledgor the certificates evidencing the
shares of Pledged Stock (and any other property received as a dividend or
distribution or otherwise in respect of such Pledged Stock), together with any
cash then constituting the Collateral, not then sold or otherwise disposed of in
accordance with the provisions hereof and take such further actions as may be
necessary to effect the same.
18. INDEMNIFICATION. Pledgor hereby covenants and agrees to pay, indemnify,
and hold the Lender harmless from and against any and all other out-of-pocket
liabilities, costs, expenses or disbursements of any kind or nature whatsoever
arising in connection with any claim or litigation by any Person resulting from
the execution, delivery, enforcement, performance and administration of this
Agreement, the Purchase Agreement, the Notes or the Related Documents, or the
transactions contemplated hereby or thereby, or in any respect relating to the
Collateral or any transaction pursuant
to which Pledgor has incurred any Secured Obligation (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, however, that the
Pledgor shall have no obligation hereunder with respect to Indemnified
Liabilities arising from the willful misconduct or gross negligence of the
Lender. The agreements in this subsection shall survive repayment of all Secured
Obligations and the termination or expiration of this Agreement.
19. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telefacsimile (where the receipt
of such message is verified by return) expressly provided for hereunder, when
received at such telephone or telefacsimile number as may from time to time be
specified in written notice to the other parties hereto or otherwise received),
or if sent prepaid by certified or registered mail return receipt requested on
the third Business Day after the day on which mailed, or if sent prepaid by a
national overnight courier service, on the first Business Day after the day on
which delivered to such service against receipt therefor, addressed to such
party at said address:
(a) if to Pledgor: Merlin Software Technologies International,
Inc.
▇▇▇▇▇ ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Lender: Narragansett Asset Management, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Managing Director
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
20. GOVERNING LAW; WAIVERS.
(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 ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ 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 IN SECTION 15.1 OF THE CREDIT
AGREEMENT OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE
LAWS IN EFFECT IN THE STATE NEW YORK.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL PRECLUDE
ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER RELATED DOCUMENTS IN THE COURTS OF ANY
PLACE WHERE ANY OTHER PARTY OR ANY OF SUCH PARTY'S PROPERTY OR ASSETS MAY BE
FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION, EACH PARTY 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.
IN WITNESS WHEREOF, the parties have duly executed this Stock Pledge
Agreement on the day and year first written above.
MERLIN SOFTWARE TECHNOLOGIES INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
NARRAGANSETT I., L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
NARRAGANSETT OFFSHORE LTD.
by its Investment Manager,
▇▇▇ Holding, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
PEQUOT SCOUT FUND, L.P.
By its Investment Advisor,
Pequot Capital Management, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Accounting Officer
SDS MERCHANT FUND, L.P.
By its Managing Member,
SDS Capital Partners, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Member
SCHEDULE I
NUMBER OF SHARES CERTIFICATE NUMBERS
------------------ --------------------
7,986,665 0180
EXHIBIT A
HOLDERS OF THE NOTES
Narragansett I, L.P.
Narragansett Offshore Ltd.
Pequot Scout Fund, L.P.
SDS Merchant Fund, L.P.