EXHIBIT 4.9
GENERAL SECURITY AGREEMENT
THIS AGREEMENT is made as of December ______, 2004
BETWEEN:
EMS TECHNOLOGIES CANADA, LTD., a corporation incorporated under the
laws of Canada (hereinafter referred to as the "Debtor")
- and -
BANK OF AMERICA, NATIONAL ASSOCIATION (CANADA BRANCH), as Canadian
collateral agent for the Lenders (hereinafter referred to as the
"Secured Party").
WHEREAS the Debtor has entered into the Credit Agreement with the Lenders,
EMS Technologies, Inc. and the Bank of America, National Association (Canada
branch)(in its capacity as Canadian administrative agent, and funding agent for
the Lenders), pursuant to which the Lenders have agreed to extend certain credit
facilities to the Debtor;
AND WHEREAS the Debtor has agreed to grant a security interest and
assignment, mortgage and charge in the Collateral to the Secured Party in order
to secure the performance of its Obligations under the Credit Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the covenants and agreements herein contained the parties hereto
agree as follows:
ARTICLE 1 - INTERPRETATION
1.01 INTERPRETATION
Capitalized terms used and not defined in this Agreement shall have the
meanings attributed to them in the Credit Agreement. In this Agreement, unless
something in the subject matter or context is inconsistent therewith:
"AGREEMENT" means this agreement and all amendments made hereto by written
agreement between the Secured Party and the Debtor.
"COLLATERAL" has the meaning set out in Section 2.01.
"CREDIT AGREEMENT" means the credit agreement made as of December __, 2004
between the Debtor, EMS Technologies, Inc., the Secured Party (in its capacity
as Canadian administrative agent and funding agent for the Lenders) and the
Lenders, as the same may be amended from time to time.
"EVENT OF DEFAULT" means any of the events described as "events of default" in
the Credit Agreement.
"LENDERS" means the several banks and other financial institutions from time to
time party to the Credit Agreement.
"OBLIGATIONS" has the meaning attributed to such term in the Credit Agreement.
The terms "accessions", "accounts", "chattel paper", "documents of title",
"goods", "instruments", "intangibles", "inventory", "money", "proceeds" and
"securities" whenever used herein have the meanings given to those terms in the
Personal Property Security Act (Ontario), as now enacted or as the same may from
time to time be amended, re-enacted or replaced.
1.02 SECTIONS AND HEADINGS
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and will not affect
the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, reference herein to Articles and
Sections are to Articles and Sections of this Agreement.
1.03 EXTENDED MEANINGS
In this Agreement words importing the singular number only include the
plural and vice versa, words importing any gender include all genders and words
importing persons include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations.
ARTICLE 2 - GRANT OF SECURITY INTEREST
2.01 SECURITY INTEREST
As general and continuing security for the payment and performance of all
Obligations of the Debtor to the Secured Party, the Debtor hereby grants to the
Secured Party a security interest in, assigns to the Secured Party and mortgages
and charges as and by way of a fixed and specific mortgage and charge to the
Secured Party, all right, title and interest that the Debtor now has or may
hereafter have, be possessed of, be entitled to, or acquire, by way of
amalgamation or otherwise, now or hereafter or may hereafter have in the
following property (collectively, the "Collateral"):
(a) Receivables: all debts, accounts, claims and choses in action for
monetary amounts which are now or which may hereafter become due,
owing or accruing due to the Debtor (collectively, the
"Receivables");
(b) Inventory: all inventory of whatever kind and wherever situated
including, without limiting the generality of the foregoing, all
goods held for sale or lease or furnished or to be furnished under
contracts for service or used or consumed in the business of the
Debtor (collectively, the "Inventory");
(c) Equipment: all machinery, equipment, fixtures, furniture, plant,
vehicles and other tangible personal property which are not
Inventory (collectively, the "Equipment");
(d) Chattel Paper: all chattel paper;
(e) Documents of Title: all warehouse receipts, bills of lading and
other documents of title, whether negotiable or not;
(f) Securities and Instruments: all shares, stock, warrants, bonds,
debentures, debenture stock and other securities and all instruments
(collectively, the "Securities");
(g) Intangibles: all intangibles not otherwise described in this Section
2.01 including, without limiting the generality of the foregoing,
all goodwill, patents, trademarks, copyrights and other industrial
property;
(h) Money: all coins or bills or other medium of exchange adopted for
use as part of the currency of Canada or of any foreign government;
(i) Books, Records, Etc.: all books, papers, accounts, invoices,
documents and other records in any form evidencing or relating to
any of the property described in this Section 2.01 and all
contracts, securities, instruments and other rights and benefits in
respect thereof;
(j) Substitutions, Etc.: all replacements of, substitutions for and
increases, additions and accessions to any of the property described
in this Section 2.01; and
(k) Proceeds: all proceeds of any Collateral in any form derived
directly or indirectly from any dealing with the Collateral or that
indemnifies or compensates for the loss of or damage to the
Collateral;
provided that the said assignment and mortgage and charge will not (i) extend or
apply to the last day of the term of any lease or any agreement therefor now
held or hereafter acquired by the Debtor, but should the Secured Party enforce
the said assignment or mortgage and charge, the Debtor will thereafter stand
possessed of such last day and must hold it in trust to assign the same to any
person acquiring such term in the course of the enforcement of the said
assignment and mortgage and charge, or (ii) render the Secured Party liable to
observe or perform any term, covenant or condition of any agreement, document or
instrument to which the Debtor is a party or by which it is bound.
2.02 ATTACHMENT OF SECURITY INTEREST
The Debtor acknowledges that value has been given and agrees that the
security interest granted hereby will attach when the Debtor signs this
Agreement and the Debtor has any rights in the Collateral.
ARTICLE 3 - COVENANTS OF THE DEBTOR
3.01 COVENANTS
The Debtor covenants with the Secured Party that the Debtor will:
(a) maintain, use and operate the Collateral and carry on and conduct
its business in a lawful and business-like manner;
(b) not permit the Collateral to be affixed to real or personal property
so as to become a fixture or accession without the prior written
consent of the Secured Party;
(c) defend the Collateral against all claims and demands respecting the
Collateral made by all persons at any time and, except as otherwise
provided herein, will keep the Collateral free and clear of all
security interests, mortgages, charges, liens and other encumbrances
or interests except for Permitted Encumbrances (as defined in the
Credit Agreement) or those hereafter approved in writing by the
Secured Party prior to their creation or assumption;
(d) not change its chief executive office and the location of the office
where it keeps its records respecting the Receivables, or move any
of the Inventory, Securities or Equipment from the locations
specified in any schedule hereto, without the prior written consent
of the Secured Party;
(e) pay all rents, taxes, levies, assessments and government fees or
dues lawfully levied, assessed or imposed in respect of the
Collateral or any part thereof as and when the same become due and
payable, and will exhibit to the Secured Party, when required, the
receipts and vouchers establishing such payment;
(f) keep proper books of account in accordance with sound accounting
practice, will furnish to the Secured Party such financial
information and statements and such information and statements
relating to the Collateral as the Secured Party may from time to
time require, and the Debtor will permit the Secured Party or its
authorized agents at any time at the expense of the Debtor to
examine the books of account and other financial records and reports
relating to the Collateral and to make copies thereof and take
extracts therefrom;
(g) from time to time forthwith at the reasonable request of the Secured
Party furnish to the Secured Party in writing all information
requested relating to the Collateral;
(h) from time to time forthwith at the reasonable request of the Secured
Party execute and deliver all such financing statements, schedules,
assignments and documents,
and do all such further acts and things as may be reasonably
required by the Secured Party to effectively carry out the full
intent and meaning of this Agreement or to better evidence and
perfect the security interest, assignment and mortgage and charge
granted hereby, and the Debtor hereby irrevocably constitutes and
appoints the Secured Party, or any Receiver appointed by the court
or the Secured Party, the true and lawful attorney of the Debtor,
with full power of substitution, to do any of the foregoing in the
name of the Debtor whenever and wherever the Secured Party or any
such Receiver may consider it to be necessary or expedient;
(i) not change its name or, if the Debtor is a corporation, will not
amalgamate with any other corporation without first giving notice to
the Secured Party of its new name and the names of all amalgamating
corporations and the date when such new name or amalgamation is to
become effective; and
(j) pay to the Secured Party forthwith upon demand all reasonable costs
and expenses (including, without limiting the generality of the
foregoing, all reasonable legal, Receiver's and accounting fees and
expenses) incurred by or on behalf of the Secured Party in
connection with the preparation, execution and perfection of this
Agreement and the carrying out of any of the provisions of this
Agreement including, without limiting the generality of the
foregoing, protecting and preserving the security interest,
assignment and mortgage and charge granted hereby and enforcing by
legal process or otherwise the remedies provided herein; and all
such costs and expenses will be added to and form part of the
Obligations secured hereunder.
ARTICLE 4 - DEALING WITH COLLATERAL
4.01 DEALING WITH COLLATERAL BY THE DEBTOR
The Debtor must not sell, lease or otherwise dispose of any of the
Collateral except as permitted under the Credit Agreement.
4.02 RIGHTS AND DUTIES OF THE SECURED PARTY
(1) The Secured Party may perform any of its rights and duties hereunder
by or through agents and is entitled to retain counsel and to act in reliance
upon the advice of such counsel concerning all matters pertaining to its rights
and duties hereunder.
(2) In the holding of the Collateral, the Secured Party and any nominee on
its behalf is only bound to exercise the same degree of care as it would
exercise with respect to similar property of its own of similar value held in
the same place. The Secured Party and any nominee on its behalf will be deemed
to have exercised reasonable care with respect to the custody and preservation
of the Collateral if it takes such action for that purpose as the Debtor
reasonably requests in writing, but failure of the Secured Party or its nominee
to comply with any such request will not of itself be deemed a failure to
exercise reasonable care.
4.03 REGISTRATION OF SECURITIES
The Secured Party may have any Securities registered in its name or in the
name of its nominee and will be entitled but not bound or required to exercise
any of the rights that any holder of such Securities may at any time have,
provided that until an Event of Default has occurred and is continuing, the
Debtor will be entitled to exercise, in a manner not prejudicial to the
interests of the Secured Party or which would violate or be inconsistent with
this Agreement, all voting power from time to time exercisable in respect of the
Securities. The Secured Party will not be responsible for any loss occasioned by
its exercise of any of such rights or by failure to exercise the same within the
time limited for the exercise thereof. The Debtor must from time to time
forthwith upon the request of the Secured Party deliver to the Secured Party
those Securities requested by the Secured Party duly endorsed for transfer to
the Secured Party or its nominee to be held by the Secured Party subject to the
terms of this Agreement.
4.04 NOTIFICATION OF ACCOUNT DEBTORS
Before an Event of Default occurs, the Secured Party may give notice of
this Agreement and the security interest and assignment granted hereby to any
account debtors of the Debtor or to any other person liable to the Debtor and,
after the occurrence of an Event of Default, may give notice to any such account
debtors or other person to make all further payments to the Secured Party, and
any payment or other proceeds of Collateral received by the Debtor from account
debtors or from any other person liable to the Debtor whether before or after
any notice is given by the Secured Party must be held by the Debtor in trust for
the Secured
4.05 APPLICATION OF FUNDS
Except where the Debtor, when not in default hereunder, so directs in
writing at the time of payment, all money collected or received by the Secured
Party in respect of the Collateral may be applied on account of such parts of
the Obligations as the Secured Party in its sole discretion determines, or may
be held unappropriated in a collateral account, or in the discretion of the
Secured Party may be released to the Debtor, all without prejudice to the
Secured Party's rights against the Debtor.
ARTICLE 5 - REMEDIES
5.01 REMEDIES
(1) On or after the occurrence and during the continuance of any Event of
Default, (i) any or all of the Obligations will at the option of the Secured
Party become immediately due and payable or be subject to immediate performance,
as the case may be, without presentment, protest or notice of dishonour, all of
which are expressly waived; (ii) the obligation, if any, of the Secured Party to
extend further credit to the Debtor will cease; (iii) any or all security
granted hereby will, at the option of the Secured Party, become immediately
enforceable; and (iv) in addition to any right or remedy provided by law, the
Secured Party will have the rights and remedies set out below, all of which
rights and remedies will be enforceable successively, concurrently or both:
(a) the Secured Party may by appointment in writing appoint a receiver
or receiver and manager (each herein referred to as the "Receiver")
of the Collateral (which term when used in this Section 6.01 will
include the whole or any part of the Collateral) and may remove or
replace such Receiver from time to time or may institute proceedings
in any court of competent jurisdiction for the appointment of a
Receiver of the Collateral; and the term "Secured Party" when used
in this Section 6.01 will include any Receiver so appointed and the
agents, officers and employees of such Receiver; and the Secured
Party will not be in any way responsible for any misconduct or
negligence of any such Receiver;
(b) the Secured Party may take possession of the Collateral and require
the Debtor to assemble the Collateral and deliver or make the
Collateral available to the Secured Party at such place or places as
may be specified by the Secured Party acting reasonably;
(c) the Secured Party may take such steps as it considers desirable to
maintain, preserve or protect the Collateral;
(d) the Secured Party may carry on or concur in the carrying on of all
or any part of the business of the Debtor;
(e) the Secured Party may enforce any rights of the Debtor in respect of
the Collateral by any manner permitted by law;
(f) the Secured Party may sell, lease or otherwise dispose of the
Collateral at public auction, by private tender, by private sale or
otherwise either for cash or upon credit upon such terms and
conditions as the Secured Party may determine and without notice to
the Debtor unless required by law;
(g) the Secured Party may accept the Collateral in satisfaction of the
Obligations upon notice to the Debtor of its intention to do so in
the manner required by law;
(h) the Secured Party may, for any purpose specified herein, borrow
money on the security of the Collateral in priority to the security
interest, assignment and mortgage and charge granted by this
Agreement;
(i) subject to Applicable Law (as defined in the Credit Agreement), the
Secured Party may enter upon, occupy and use all or any of the
premises, buildings and plant occupied by the Debtor and use all or
any of the Equipment and other personal property of the Debtor for
such time as the Secured Party requires to facilitate the
realization of the Collateral, free of charge, and the Secured Party
will not be liable to the Debtor for any neglect in so doing or in
respect of any rent, charges, depreciation or damages in connection
with such actions;
(j) the Secured Party may charge on its own behalf and pay to others all
reasonable amounts for expenses incurred and for services rendered
in connection with the exercise of the rights and remedies of the
Secured Party hereunder, including, without limiting the generality
of the foregoing, reasonable legal, Receiver and
accounting fees and expenses, and in every such case the amounts so
paid together with all costs, charges and expenses incurred in
connection therewith, including interest thereon at such rate as the
Secured Party deems reasonable, will be added to and form part of
the Obligations hereby secured; and
(k) the Secured Party may discharge any claim, lien, mortgage, charge,
security interest, encumbrance or any rights of others that may
exist or be threatened against the Collateral, and in every such
case the amounts so paid together with costs, charges and expenses
incurred in connection therewith will be added to the Obligations
hereby secured.
(2) The Secured Party may (i) grant extensions of time, (ii) take and
perfect or abstain from taking and perfecting security, (iii) give up
securities, (iv) accept compositions or compromises, (v) grant releases and
discharges, and (vi) release any part of the Collateral or otherwise deal with
the Debtor, debtors of the Debtor, sureties and others and with the Collateral
and other security as the Secured Party sees fit without prejudice to the
liability of the Debtor to the Secured Party or the Secured Party's rights
hereunder.
(3) The Secured Party will not be liable or responsible for any failure to
seize, collect, realize, or obtain payment with respect to the Collateral and is
not bound to institute proceedings or to take other steps for the purpose of
seizing, collecting, realizing or obtaining possession or payment with respect
to the Collateral or for the purpose of preserving any rights of the Secured
Party, the Debtor or any other person, in respect of the Collateral.
(4) The Secured Party may apply any proceeds of realization of the
Collateral to payment of expenses in connection with the preservation and
realization of the Collateral as above described and the Secured Party may apply
any balance of such proceeds to payment of the Obligations in such order as the
Secured Party sees fit. If there is any surplus remaining, the Secured Party may
pay it to any person having a claim thereto in priority to the Debtor of whom
the Secured Party has knowledge and any balance remaining must be paid to the
Debtor. If the disposition of the Collateral fails to satisfy the Obligations
secured by this Agreement and the aforesaid expenses, the Debtor will be liable
to pay any deficiency to the Secured Party forthwith on demand.
ARTICLE 6 - GENERAL
6.01 BENEFIT OF THE AGREEMENT
This Agreement will enure to the benefit of and be binding upon the
successors and permitted assigns of the parties hereto.
6.02 ENTIRE AGREEMENT
This Agreement has been entered into pursuant to the provisions of the
Credit Agreement and is subject to all the terms and conditions thereof and, if
there is any conflict or inconsistency between the provisions of this Agreement
and the provisions of the Credit Agreement, the rights and obligations of the
parties will be governed by the provisions of the Credit Agreement. This
Agreement cancels and supersedes any prior understandings and
agreements between the parties hereto with respect thereto. There are no
representations, warranties, terms, conditions, undertakings or collateral
agreements, express, implied or statutory, between the Secured Party and the
Debtor with respect to the subject matter hereof except as expressly set forth
herein or in the Credit Agreement.
6.03 AMENDMENTS AND WAIVERS
No amendment to this Agreement will be valid or binding unless set forth
in writing and duly executed by all of the parties hereto. No waiver of any
breach of any provision of this Agreement will be effective or binding unless
made in writing and signed by the party purporting to give the same and, unless
otherwise provided in the written waiver, will be limited to the specific breach
waived.
6.04 ASSIGNMENT
The rights of the Secured Party under this Agreement may be assigned by
the Secured Party without the prior consent of the Debtor. The Debtor may not
assign its obligations under this Agreement without the prior written consent of
each Lender.
6.05 SEVERABILITY
If any provision of this Agreement is determined to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability will
attach only to such provision or part thereof and the remaining part of such
provision and all other provisions hereof will continue in full force and
effect.
6.06 NOTICES
Any demand, notice or other communication to be given in connection with
this Agreement must be given in accordance with Section 10.1 of the Credit
Agreement.
6.07 ADDITIONAL CONTINUING SECURITY
This Agreement and the security interest, assignment and mortgage and
charge granted hereby are in addition to and not in substitution for any other
security now or hereafter held by the Secured Party and this Agreement is a
continuing agreement and security that will remain in full force and effect
until discharged by the Secured Party.
6.08 FURTHER ASSURANCES
The Debtor must at its expense from time to time do, execute and deliver,
or cause to be done, executed and delivered, all such financing statements,
further assignments, documents, acts, matters and things as may be reasonably
requested by the Secured Party for the purpose of giving effect to this
Agreement or for the purpose of establishing compliance with the
representations, warranties and covenants herein contained.
6.09 POWER OF ATTORNEY
Upon the occurrence of an Event of Default that is continuing, the Debtor
hereby irrevocably constitutes and appoints any officer for the time being of
the Secured Party the true and lawful attorney of the Debtor, with full power of
substitution, to do, make and execute all such statements, assignments,
documents, acts, matters or things with the right to use the name of the Debtor
whenever and wherever the officer may deem necessary or expedient and from time
to time to exercise all rights and powers and to perform all acts of ownership
in respect to the Collateral in accordance with this Agreement.
6.10 INDEMNITY; EXPENSES
(1) The Debtor agrees to indemnify, reimburse and hold the Secured Party
and the Lenders, and their respective successors, assigns, employees, officers,
directors, affiliates, agents and servants (hereinafter in this Section referred
to individually as an "Indemnitee," and, collectively, as "Indemnitees")
harmless from any and all liabilities, obligations, losses, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys' fees and expenses)
(for the purposes of this Section the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any other Loan Documents or any other document executed in connection
herewith or therewith or in any other way connected with the administration of
the transactions contemplated hereby or thereby or the enforcement of any of the
terms of, or the preservation of any rights under any thereof, or in any way
relating to or arising out of the manufacture, ownership, ordering, purchase,
delivery, control, acceptance, lease, financing, possession, operation,
condition, sale, return or other disposition, or use of the Collateral
(including, without limitation, latent or other defects, whether or not
discoverable), including the violation by the Debtor of the laws of any country,
state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (i) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee or
(ii) result from a claim brought by the Debtor against an Indemnitee for a
material breach of such Indemnitee's obligations hereunder, if the Debtor has
obtained a final and nonappealable judgment in its favour on such claim as
determined by a court of competent jurisdiction. The Debtor agrees that upon
written notice by any Indemnitee of the assertion of such a liability,
obligation, loss, damage, injury, penalty, claim, demand, action, suit or
judgment, the Debtor shall assume full responsibility for the defense thereof.
Each Indemnitee agrees to use its commercially reasonable efforts to promptly
notify the Debtor of any such assertion of which such Indemnitee has knowledge.
(2) Without limiting the application of subsection (1) above, the Debtor
agrees to pay, or reimburse the Secured Party for any and all reasonable fees,
costs and expenses of whatever kind or nature incurred in connection with the
creation, preservation or protection of the Secured Party's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral, premiums for insurance with respect to the
Collateral and all other reasonable fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the Secured Party's
interest therein, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Collateral.
(3) Without limiting the application of subsections (1) or (2) above, the
Debtor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, costs, damages and expenses which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any material
misrepresentation by the Debtor in this Agreement, any other Loan Document or in
any writing contemplated by or made or delivered pursuant to or in connection
with this Agreement or any other Loan Document.
(4) If and to the extent that the obligations of the Debtor under this
Section are unenforceable for any reason, the Debtor hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. This Section 6.10 shall survive the
termination of this Agreement.
6.11 DISCHARGE
The Debtor will not be discharged from any of the Obligations or from this
Agreement except by a release or discharge signed in writing by the Secured
Party.
6.12 GOVERNING LAW
This Agreement will be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
6.13 COUNTERPARTS
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.
6.14 EXECUTED COPY
The Debtor acknowledges receipt of a fully executed copy of this
Agreement.
EXECUTION COPY
IN WITNESS WHEREOF the parties have executed this Agreement.
DEBTOR: EMS TECHNOLOGIES CANADA, LTD.
_________________________ Per: __________________________
Date of Execution (authorized signature)
ADDRESS OF DEBTOR c/s
(location of chief executive office and
location of business records)
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx X0X XX0
__________________________
(authorized signature)
SECURED PARTY: BANK OF AMERICA, NATIONAL
ASSOCIATION (CANADA BRANCH), as
Canadian collateral agent for
the Lenders
_________________________ Per: __________________________
Date of Execution (authorized signature)
