EXHIBIT 4.16
INDEMNITY AND SECURITY AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 14th day of December, 2001.
BETWEEN:
CEDARA SOFTWARE CORP.,
a corporation existing under the laws of the
Province of Ontario,
(hereinafter referred to as the "Cedera")
- and -
ANALOGIC CORPORATION,
a corporation existing under the laws of the State of
Massachusetts,
(hereinafter referred to as "Analogic").
WHEREAS the Cedera is indebted to Analogic pursuant to the terms
of a promissory note in the principal amount of US $ 1 million dated the
date of this agreement (the "Promissory Note");
AND WHEREAS National Bank of Canada (the "Bank") has agreed to
provide credit facilities to Cedara subject to the condition that Analogic
provide the Bank with a letter of credit in the amount of Cdn. $ 10 million
(the "Letter of Credit") entitling the Bank to drawdown amounts thereunder
representing indebtedness owing by Cedara to the Bank;
NOW THEREFORE this agreement witnesses that, in consideration of
the provision by Analogic of the Letter of Credit and of the indebtedness
evidenced by the Promissory Note and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged
by Cedara), Cedara covenants and agrees as follows, and acknowledges and
agrees that Analogic is relying on such covenants and agreements in
providing the Letter of Credit and advancing the amounts evidenced by the
Promissory Note:
1. Cedara covenants and agrees to indemnify and save harmless
Analogic from any and all Losses suffered or incurred as a result
of or arising directly or indirectly out of or in connection with:
(a) the Letter of Credit, including, without limitation, all
amounts drawn by the Bank under the Letter of Credit and all
fees and other expenses incurred by Analogic in connection
with the issuance and maintenance of the Letter of Credit;
(b) all debts, liabilities, expenses, fees and other amounts
owing by Cedara to Analogic under or in connection with the
Promissory Note;
(c) all Taxes (as defined below) imposed in connection with the
Promissory Note or the Letter of Credit and any liability
(including penalties, interest and expenses) arising
therefrom or with respect thereto; and
(d) the registration of the security granted below and the
exercise by Analogic of its rights thereunder.
"Losses" means all claims, demands, proceedings, losses, damages,
liabilities, deficiencies, costs and expenses (including, without
limitation, all reasonable legal and other professional fees and
disbursements, interest and penalties) arising directly or indirectly as a
consequence of any of the matters referred to in (a) to (d) above.
2. Cedara covenants to pay the amount of all Losses within five days'
written notice from Analogic specifying the amount of such Losses.
The amount of Losses specified in any such notice from Analogic
shall be prima facie evidence of the amount of such Losses, and
Cedara agrees not to dispute the amount of such Losses in the
absence of evidence to the contrary. Cedara covenants and agrees
to pay interest on the amount of any Losses not paid within the
foregoing five-day period at an annual rate of interest equal to
the prime rate of interest announced from time to time by National
Bank of Canada plus 4 %, such interest to be calculated and
compounded daily on the amount of such unpaid Losses to the date
of payment.
3. Any and all payments by Cedera to Analogic hereunder or under the
Promissory Note shall be made without deduction for any present or
future taxes, deductions, charges, withholdings, including any
Canadian federal withholding tax, levies, imposts or other
assessments ("Taxes"), provided that, if Cedara shall be required
by law to deduct any Taxes from any such payments, (i) the sum
payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional
sums payable under this paragraph) Analogic receives an amount
equal to the sum it would have received had no such deductions
been made, (ii) Cedera shall make such deductions, (iii) Cedera
shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and
(iv) Cedera shall furnish to Analogic the original or certified
copy of a receipt evidencing payment thereof.
4. If, for the purpose of calculating the amount of any judgement in
any court, it is necessary to convert the currency of any
obligation giving rise to the judgment (the "First Currency") into
another currency (the "Other Currency"), the rate of exchange used
shall be that at which Analogic could purchase the First Currency
with the Other Currency determined at the close of business on the
banking day in Boston, Massachusetts immediately preceding the day
on which judgment is rendered. The obligation of Cedera on account
of any judgment shall, notwithstanding any judgement in such Other
Currency, be discharged only to the extent that, on the banking
day following receipt of any sum paid on account of the judgment
in the Other Currency, Analogic could purchase the First Currency
from Sovereign Bank New England at 12:00 noon (Boston time) on
such date. If the value of the First Currency so purchased or
capable of being purchased is less than the sum due to Analogic in
the First Currency before conversion into the Other Currency,
Cedera, as a separate and distinct obligation and notwithstanding
such judgment or payment, shall indemnify Analogic against any
loss and, if the value of the First Currency so purchased or
capable of being purchased exceeds the sum originally due to
Analogic in the First Currency before the conversion in the Other
Currency, Analogic shall remit such excess to Cedara.
5. As general and continuing security for the payment of all
obligations, indebtedness and liabilities of Cedara to Analogic
whether incurred prior to, at the time of or subsequent to the
execution hereof, including extensions or renewals, and all other
present and future liabilities of Cedara to Analogic, direct or
indirect, wheresoever and howsoever incurred and any ultimate
unpaid balance thereof, including, without restricting the
generality of the foregoing, all obligations, indebtedness and
liabilities of Cedara under this agreement or under the Promissory
Note (the "Obligations"), Cedara hereby grants to Analogic a
continuing security interest in, and mortgages, charges and
assigns to Analogic as and by way of a fixed and specific mortgage
and charge, all of Cedara's present and after-acquired property,
assets, and undertaking, including, without limitation, all
accounts, goods, equipment, intangibles and all other personal
property of any nature whatsoever, together with all proceeds (the
"Collateral").
Unless otherwise limited herein, all terms used in this agreement
that are defined in the Personal Property Security Act (Ontario), as
amended or replaced from time to time (the "PPSA") shall have the
respective meaning assigned thereto in the PPSA. Any reference herein to
"Collateral" shall, unless the context otherwise requires, be deemed a
reference to "Collateral or any part thereof." Collateral will not include
any consumer goods of Cedara.
Cedara acknowledges that value has been given and that the parties
have not agreed to postpone the time for attachment of the mortgages,
charges, assignments and security interests provided for in this agreement.
6. This agreement and the security afforded hereby is in addition to
and not in substitution for any other security now or hereafter
held by Analogic, and is intended to be a continuing security
agreement and shall remain in full force and effect until all
Obligations together with interest accruing thereon shall be paid
and satisfied in full.
7. The happening of any of the following events or conditions shall
constitute default hereunder and thereupon the security hereby
constituted shall become enforceable:
(a) the non-payment when due, whether by demand, acceleration or
otherwise, of any Losses, principal, interest or other
amounts forming part of the Obligations or the failure of
Cedara to perform any term, condition, obligation, or
covenant in favour of Analogic, whether or not contained
herein, including default in making any payment referred to
herein;
(b) if any order shall be made or a resolution passed for the
winding-up of Cedara, or if a petition shall be filed under
the Bankruptcy and Insolvency Act by or against Cedara or an
authorized assignment made by it or a receiver or agent
appointed under the Bankruptcy and Insolvency Act or by or
on behalf of a secured creditor of Cedara or an application
made under the Companies' Creditors Arrangement Act or any
other relief is sought under any similar legislation in any
jurisdiction or a proposal is made by Cedara to its
creditors under the Bankruptcy and Insolvency Act or Cedara
files a Notice of Intention to file such a proposal;
(c) the institution by or against Cedara of any formal or
informal proceeding for the discussion, liquidation of,
settlement of claims against or winding up of the affairs of
Cedara;
(d) if an encumbrancer, whether permitted or otherwise, shall
take possession of any part of the Collateral, or if any
process of a Court, execution, or distress becomes
enforceable or is enforced against any of the Collateral;
(e) if Cedara ceases or threatens to cease to carry on business,
makes or agrees to make a bulk sale of assets without
complying with applicable law or commits an act of
bankruptcy, or otherwise acknowledges its insolvency;
(f) if any execution, sequestration or other process of any
court becomes enforceable against Cedara or if a distress or
analogous process is levied upon the Collateral or any part
thereof; or
(g) if any of the property of Cedara is seized by or on behalf
of a creditor pursuant to security or otherwise.
8. At any time after the occurrence of any default, Analogic may
declare any or all of the Obligations not then payable to become
immediately due and payable and the security hereby constituted
will immediately become enforceable. To enforce and realize on the
security hereby constituted, Analogic may exercise any one or more
of its remedies available at law or otherwise, including, without
limitation, all remedies provided for in the PPSA and the
appointment by instrument in writing of a receiver,
receiver-manager, or receiver and manager (the "Receiver") of the
Collateral, with or without bond, and may from time to time remove
the Receiver and appoint another in its stead.
9. A Receiver appointed by Analogic as aforesaid will be deemed to be
the agent of Cedara and not of Analogic, and Cedara shall be
solely responsible for the Receiver's acts or defaults and
Analogic shall not be in any way be responsible therefor, and
Analogic shall not be liable to the Receiver for its remuneration,
costs, charges or expenses. It is further specifically understood
and agreed that the Receiver appointed pursuant to the provisions
of this agreement by Analogic shall have, subject to any
limitations in the instrument in writing or any order of a court
of competent jurisdiction appointing it, all of the rights and
powers of Analogic hereunder and the following additional rights
and powers:
(a) to carry on or concur in carrying on all or any part of the
business of Cedara; and
(b) to borrow money, upon the security of the whole or any part
of the Collateral for the purpose of carrying on all or any
part of the business of Cedara and for the preservation and
realization of the Collateral, or to maintain the whole or
any part of the Collateral in a manner that will be
sufficient to obtain the amounts from time to time required
in the opinion of the Receiver, and in so doing the Receiver
may issue certificates (each herein called a "Receiver's
Certificate") that may be payable as the Receiver considers
expedient and bear interest as stated therein, and the
amounts from time to time payable under any Receiver's
Certificate shall charge the Collateral in priority to this
agreement and Cedara hereby charges the Collateral with the
debts, if any, owing from time to time under any Receiver's
Certificate.
In exercising its powers hereunder, any Receiver will be free to
deal with the Collateral and any assets of Cedera related thereto in such
order or manner as it may be directed by Analogic, any rule of law or
equity to the contrary notwithstanding, including, without limitation, the
equitable principle or doctrine of marshalling.
10. Cedara shall pay to Analogic on demand any and all costs, charges
and expenses, including without limitation legal costs on a
solicitor and client basis incurred or paid by Analogic in
protecting or enforcing its rights upon or under Collateral. After
the payment of the expenses of retaking and disposing of the
Collateral, Cedara shall remain liable to Analogic for any
deficiency remaining to be paid on moneys owing under this
agreement after the application of the proceeds of disposition of
the Collateral.
11. This agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of
Canada applicable therein. Any provision hereof prohibited by such
law shall be ineffective to the extent of such prohibition without
invalidating the remaining provisions hereof.
12. Cedara shall from time to time forthwith on Analogic's request do,
make and execute all such financing statements, financing change
statements, further assignments, documents, acts, matters and
things as may be required by Analogic of or with respect to the
Collateral or any part thereof or as may be required to give
effect to these presents.
13. This agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14. No failure to exercise, nor any delay in exercising, on the part
of Analogic, any right or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise thereof or
the exercise of any other right or remedy. The rights and remedies
herein provided are cumulative and not exclusive of any rights or
remedies provided by law.
15. Neither this agreement nor any of the rights granted herein, nor
any of the other interests and obligations created hereunder, may
be transferred, assigned or delegated by Cedera without the prior
written consent of Analogic, and any purported transfer,
assignment or delegation without such consent shall be void.
IN WITNESS WHEREOF the parties have executed this agreement as of the
date first written.
ANALOGIC CORPORATION
by /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President and CEO
CEDARA SOFTWARE CORP.
by /s/ XXXXXX XXXXXXXX
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Name: XXXXXX XXXXXXXX
Title: CFO and Corporate Secretary
