SECTION 3.6(C), TO (I) RESCIND SUCH NOTICE OF BORROWING OR NOTICE
OF CONVERSION/CONTINUATION BY GIVING NOTICE (BY FACSIMILE OR BY TELEPHONE
CONFIRMED IN WRITING) TO BANK OF SUCH RESCISSION ON THE DATE ON WHICH BANK GIVES
NOTICE OF ITS DETERMINATION AS DESCRIBED ABOVE, OR (II) MODIFY SUCH NOTICE OF
BORROWING OR NOTICE OF CONVERSION/CONTINUATION TO OBTAIN A PRIME RATE ADVANCE OR
TO HAVE OUTSTANDING ADVANCES CONVERTED INTO OR CONTINUED AS PRIME RATE ADVANCES
BY GIVING NOTICE (BY FACSIMILE OR BY TELEPHONE CONFIRMED IN WRITING) TO BANK OF
SUCH MODIFICATION ON THE DATE ON WHICH BANK GIVES NOTICE OF ITS DETERMINATION AS
DESCRIBED ABOVE.
4
CREATION OF SECURITY INTEREST
4.1
GRANT OF SECURITY INTEREST.
(A)
BORROWER HEREBY GRANTS BANK, TO SECURE THE PAYMENT AND PERFORMANCE
IN FULL OF ALL OF THE OBLIGATIONS, A CONTINUING SECURITY INTEREST IN, PLEDGES
AND CHARGES BY WAY OF SECURITY, TO BANK, THE COLLATERAL, WHEREVER LOCATED,
WHETHER NOW OWNED OR HEREAFTER ACQUIRED OR ARISING, AND ALL PROCEEDS AND
PRODUCTS THEREOF.
BORROWER REPRESENTS, WARRANTS, AND COVENANTS THAT THE
SECURITY INTEREST GRANTED HEREIN IS AND SHALL AT ALL TIMES CONTINUE TO BE A
FIRST PRIORITY PERFECTED SECURITY INTEREST IN THE COLLATERAL (SUBJECT ONLY TO
PERMITTED LIENS THAT MAY HAVE SUPERIOR PRIORITY TO BANK'S LIEN UNDER THIS
AGREEMENT).
IF BORROWER SHALL ACQUIRE A MATERIAL COMMERCIAL TORT CLAIM,
BORROWER SHALL PROMPTLY NOTIFY BANK IN A WRITING SIGNED BY BORROWER OF THE
GENERAL DETAILS THEREOF AND GRANT TO BANK IN SUCH WRITING A SECURITY INTEREST
THEREIN AND IN THE PROCEEDS THEREOF, ALL UPON THE TERMS OF THIS AGREEMENT, WITH
SUCH WRITING TO BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO BANK.
(B)
BORROWER HEREBY RATIFIES THAT CERTAIN INTELLECTUAL PROPERTY
SECURITY AGREEMENT, DATED AS OF DECEMBER 30, 2002 BY AND AMONG BY AND BORROWER
AND LENDER, AND SUCH INTELLECTUAL PROPERTY SECURITY AGREEMENT REMAINS IN FULL
FORCE AND EFFECT.
(C)
THIS AGREEMENT MAY BE TERMINATED PRIOR TO THE REVOLVING LINE
MATURITY DATE BY BORROWER, EFFECTIVE THREE (3) BUSINESS DAYS AFTER WRITTEN
NOTICE OF TERMINATION IS GIVEN TO BANK.
NOTWITHSTANDING ANY SUCH TERMINATION,
BANK'S LIEN AND SECURITY INTEREST IN THE COLLATERAL SHALL CONTINUE UNTIL
BORROWER FULLY SATISFIES ITS OBLIGATIONS ARISING OUT OF THE LOAN DOCUMENTS.
IF
SUCH TERMINATION IS AT BORROWER'S ELECTION OR AT BANK'S
8
ELECTION DUE TO THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT, BORROWER
SHALL PAY TO BANK, IN ADDITION TO THE PAYMENT OF ANY OTHER EXPENSES OR FEES
THEN-OWING, A TERMINATION FEE IN AN AMOUNT EQUAL TO (I) FOR ANY TERMINATION
WITHIN SIX (6) MONTHS OF THE EFFECTIVE DATE, ONE PERCENT (1%) OF $35,000,000,
AND (II) FOR ANY TERMINATION DURING THE PERIOD FROM SIX (6) MONTHS AFTER THE
EFFECTIVE DATE UP TO BUT NOT INCLUDING THE FIRST ANNIVERSARY OF THE EFFECTIVE
DATE, ONE-HALF OF ONE PERCENT (0.50%) OF $35,000,000, PROVIDED THAT NO
TERMINATION FEE SHALL BE CHARGED IF (I) THE CREDIT FACILITY HEREUNDER IS
REPLACED WITH A NEW FACILITY FROM SILICON VALLEY BANK, (II) THE CREDIT FACILITY
HEREUNDER IS TERMINATED FOR ANY REASON AFTER THE FIRST ANNIVERSARY OF