Exhibit 4.5
EXECUTION COPY
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED LOAN AGREEMENT
THIS FOURTH AMENDMENT to the SECOND AMENDED AND RESTATED LOAN AGREEMENT
dated as of October 31, 2003 between EMS TECHNOLOGIES, INC. (formerly
Electromagnetic Sciences, Inc.), a Georgia corporation (the "Borrower"), and
SUNTRUST BANK (f/k/a SunTrust Bank, Atlanta), a Georgia banking corporation (the
"Lender").
WITNESSETH:
WHEREAS, the Borrower and the Lender have entered into the Second
Amended and Restated Loan Agreement dated as of November 9, 1998, as amended by
the First Amendment and Consent dated as of January 29, 1999, by the Second
Amendment to the Second Amended and Restated Loan Agreement dated as of February
24, 1999 and by the Third Amendment to the Second Amended and Restated Loan
Agreement dated as of July 31, 2001 (as so amended, the "Agreement");
WHEREAS, the Borrower and the Lender have agreed on the terms and
conditions as hereinafter set forth, to amend the Agreement (a) to extend the
Commitment Termination Date to August 31, 2004, (b) to amend certain definitions
therein and (c) to make certain other changes to the Agreement in connection
with the execution and delivery of the Security Agreement; and
WHEREAS, pursuant to Section 4.12 of the Agreement, the Lender is
requiring the Borrower and each Domestic Subsidiary Guarantor, which on the date
of this Fourth Amendment is only LXE Inc., to enter into a Security Agreement
substantially in the form of Exhibit A attached to this Amendment.
NOW, THEREFORE, for and in consideration of the mutual premises,
covenants and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms which are used herein without
definition and which are defined in the Agreement shall have the same meanings
herein as in the Agreement.
SECTION 2. AMENDMENTS TO AGREEMENT. The Agreement is hereby amended as follows:
(A) Section 1.1(a) is hereby amended by deleting in the first
sentence thereof "November 30, 2003 (the " Commitment
Termination Date")" and substituting "August 31, 2004 (the
"Commitment Termination Date")" therefor. It shall be
understood and agreed by all parties hereto that hereafter all
references to "Commitment Termination Date" in the Agreement,
the Facility B Note and all other Loan Documents shall mean
August 31, 2004.
(B) Section 7.1(j) is hereby amended by deleting the existing
language in its entirety and substituting the following
therefor:
(j) Any Loan Document, at any time after its
execution and delivery, for any reason shall cease to
be in full force and effect or shall be declared null
and void, or the validity or enforceability thereof
shall be contested by the Borrower or any Subsidiary
Guarantor, or the Borrower or any Subsidiary
Guarantor shall deny that it has any further
liability or obligation, or shall fail to perform its
obligations, under any Loan Document to which the
Borrower or any Subsidiary Guarantor is a party
(except in each case where a Subsidiary Guarantor
party to any Loan Document is permitted to be merged
into another Person without being the
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surviving corporation pursuant to Section 5.2
hereof);
(C) Section 8.1 is amended by:
(1) Deleting the existing definition of "Applicable
Margin" and substituting the following therefor:
"Applicable Margin" shall mean (a) with
respect to LIBOR Advances, 3.00% per annum
and (b) with respect to Base Rate Advances,
0.00% per annum..
(2) Adding a new definition in the appropriate
alphabetical order:
"Security Agreements" shall mean, collectively, (a)
that certain Commercial Security Agreement dated as
of October 31, 2003 between the Borrower and the
Lender, and (b) that certain Commercial Security
Agreement dated as of October 31, 2003 between LXE
Inc. and the Lender, each as amended, supplemented or
otherwise modified.
SECTION 3. ACKNOWLEDGMENT OF SUBSIDIARY GUARANTORS. The Domestic Subsidiary
Guarantor under the Domestic Subsidiary Guaranty and EMS Technologies Canada,
Ltd. under the CAL Corporation Guaranty, by their execution of this Fourth
Amendment, hereby acknowledge and agree to the terms and conditions hereof and
hereby confirm that each of the Domestic Subsidiary Guaranty and the CAL
Corporation Guaranty dated November 9, 1998 remains in full force and effect.
SECTION 4. CONDITIONS PRECEDENT. This Fourth Amendment shall become effective
upon the receipt by the Lender of (i) this Fourth Amendment duly executed by the
Borrower and acknowledged by the Subsidiary Guarantors pursuant to Paragraph 3
of this Fourth Amendment, (ii) the Security Agreements, duly executed by each of
the Borrower and LXE Inc., respectively, and (iii) a certificate of the
Secretary or Assistant Secretary of each of the Borrower and LXE Inc. attaching
and certifying copies of the resolutions of its respective boards of directors,
authorizing the execution, delivery and performance of this Amendment in the
case of the Borrower only and in each case, the Security Agreement to which it
is a party, and certifying the name, title and true signature of each officer of
each of the Borrower and LXE Inc. executing this Amendment, in the case of the
Borrower and in each case, the Security Agreement to which it is a party.
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants,
on and as of the date of this Fourth Amendment, that:
(a) The execution and delivery by Borrower of this Fourth
Amendment and the Security Agreement to which it is a party are within the
corporate authority of Borrower, have been duly authorized by all requisite
shareholder and corporate action on the part of Borrower and do not and will not
(i) violate any provision of any law, rule or regulation, any judgment, order or
ruling of any court or governmental agency, the organizational papers or by-laws
of Borrower, or any indenture, material agreement or other material instrument
to which Borrower is a party or by which Borrower or any of its properties is
bound, or (ii) be in conflict with, result in a breach of, or constitute with
notice or lapse of time or both a default under any such indenture, material
agreement or other material instrument. Each of this Fourth Amendment and the
Security Agreement to which it is a party has been duly executed by the
Borrower.
(b) The Agreement, as amended by this Fourth Amendment, remains in
full force and effect and constitutes the legal, valid and binding obligations
of the Borrower, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting generally the enforcement of creditor's rights.
(c) After giving effect to this Fourth Amendment, no Default or
Event of Default exists.
SECTION 6. MISCELLANEOUS PROVISIONS.
(a) RATIFICATION. The Borrower hereby restates, ratifies and
reaffirms each and every term, covenant and
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condition set forth in the Agreement, as hereby amended, effective as of the
date hereof.
(b) COUNTERPARTS. This Fourth Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
and all counterparts, taken together, shall constitute but one and the same
document.
(c) GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF GEORGIA.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this
Fourth Amendment as of the date first above written.
EMS TECHNOLOGIES, INC.
By_____/s/_________________________________________
Name: Xxx X. Xxxxxx
Title: Executive Vice President and Chief
Financial Officer
SUNTRUST BANK
By_________________________________________________
Name: Xxxxx X. Xxxxxx
Title: Managing Director
Acknowledged and agreed to this
31st day of October, 2003.
"SUBSIDIARY GUARANTOR"
LXE Inc.
By___/s/__________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
EMS Technologies Canada, Ltd. f/k/a CAL Corporation
By __/s/__________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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[SUN TRUST LOGO] COMMERCIAL SECURITY AGREEMENT
INVENTORY, ACCOUNTS, EQUIPMENT, GENERAL INTANGIBLES, ETC.
This Security Agreement dated as of 31 , 2003 , by LXE INC.
________________(the "Owner") for the use and benefit of SunTrust Bank, its
present and future affiliates and their successors and assigns ("SunTrust")
provides:
In order to induce SunTrust from time to time to enter into agreements with and
to extend or continue to extend credit to
EMS TECHNOLOGIES, INC.
(and any one or more and any combination if more than one, the "Borrower"), the
Owner (which may include the Borrower) hereby grants, sells, assigns, transfers
and conveys to SunTrust, a security interest in the Collateral and all Proceeds
(as such term is defined in the Uniform Commercial Code), products, rents and
profits thereof and all substitutions and replacements therefore and all
revenues from the right to use the Collateral to secure the prompt payment and
performance of any and all liabilities, obligations, agreements and undertakings
of Borrower to SunTrust (and, in addition, all liabilities, obligations,
agreements and undertakings of Owner, or any one or more of them, to SunTrust if
Owner and Borrower are not the same person or entity) in any amount, whether now
existing or hereafter arising, including those owed by Borrower or Owner to
others and acquired by SunTrust through purchase, assignment or otherwise,
however created, evidenced or arising, whether individually or jointly with
others, and whether absolute or contingent, direct or indirect, as maker,
endorser, guarantor, surety or otherwise, liquidated or unliquidated, matured or
unmatured, whether or not secured by other collateral, and including, without
limitation, (a) all obligations and liabilities of the Borrower under the Second
Amended and Restated Loan Agreement dated as of November 9, 1998 (as amended,
supplemented or otherwise modified thereafter, the "Loan Agreement"), (b) all
obligations and liabilities of the Borrower under the Demand Note dated June 27,
2000 (as amended, supplemented or otherwise modified thereafter, the "Demand
Note"), (c) all obligations to perform or forbear from performing any acts, (d)
all overdrafts on deposits or accounts maintained by Borrower or Owner with
SunTrust, (e) all liabilities, obligations, agreements and undertakings of
Borrower or Owner to SunTrust pursuant to any interest rate hedge agreement or
other derivative transaction agreement or application or other agreement
requesting SunTrust to issue any letter of credit including, without limitation,
the obligation of Borrower or Owner to reimburse SunTrust for all amounts funded
by SunTrust pursuant to any such letter of credit and (f) all costs of
collection and protection of SunTrust's rights, including attorneys' fees (in
the amount of 15% of the principal and interest secured hereby if this agreement
is governed by the laws of Georgia), whether such collection or protection
occurs prior to, during, or after any bankruptcy proceedings filed by or against
any Obligor (as such term is defined below) (all the foregoing being hereinafter
collectively referred to as the "Obligations").
COLLATERAL. As used in this Security Agreement, the term "Collateral" shall mean
the following, whether now existing or hereafter acquired:
Check all that are applicable (IF THE COLLATERAL IS NOT SPECIFICALLY DESIGNATED
BY A CHECK XXXX, THE OWNER GRANTS SUNTRUST A BLANKET SECURITY INTEREST):
[ ] Blanket ALL ASSETS of Owner, as more particularly described
Security herein, and including but not limited to, all
Interest Covering "Accounts," "Inventory," furniture, fixtures and
All Assets "Equipment," goods, deposit accounts, instruments,
documents, commercial tort claims, letter of credit
rights, investment property, chattel paper,
"General Intangibles" and all supporting
obligations relating to Accounts, chattel paper,
documents, "General Intangibles", instruments and
investment property (as all such terms are defined
herein and in the Uniform Commercial Code).
[ ] All or a portion of the Collateral will be
attached as a fixture to real property located at:
_________________________________________________
and such real property is owned by ____________.
[ ] Accounts and All of the Owner's "Accounts," , supporting chattel
General paper, documents, instruments and money, returned
Intangibles and unearned insurance premiums, tax refunds,
contract rights, returned goods, reclaimed and
repossessed goods, all "General Intangibles" and
all supporting obligations related to Accounts and
General Intangibles (as all such terms are defined
herein and in the Uniform Commercial Code).
[X] Inventory, All of the Owner's "Inventory", all returned goods,
Accounts, reclaimed and repossessed goods, whether or not in
Payment the Owner's possession or control, in transit, in
Intangibles, etc. storage, or hereafter acquired by way of
replacement, substitution, addition or otherwise,
"Accounts", chattel paper, documents, instruments
and money, returned and unearned insurance
premiums, tax refunds, contract rights, software,
all "Payment Intangibles" and all supporting
obligations related to Accounts, chattel paper,
documents, instruments and Payment Intangibles (as
all such terms are used herein and in the Uniform
Commercial Code).
[ ] Furniture, All of the Owner's furniture, fixtures and
Fixtures "Equipment," and leasehold improvements, and
and including but not limited to, all leases, rental
Equipment agreements, chattel paper, rental payments and
insurance proceeds together with all accessories,
accessions, attachments, parts, replacements,
substitutions, improvements, repairs installed in
or affixed thereto (as all such terms are used
herein and in the Uniform Commercial Code).
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[ ] All or a portion of the Collateral will be
attached as a fixture to real property located at:
__________________________________________________
and such real property is owned by _____________ .
REPRESENTATIONS AND WARRANTIES. The Owner represents and warrants to SunTrust as
follows:
a. The Owner is and will continue to be the absolute owner of the
Collateral and there are no other liens or security interests
affecting the Collateral other than the security interest
granted in this Security Agreement except those previously
disclosed to SunTrust in writing by the Owner; This Security
Agreement has been duly executed and delivered by Owner and
constitutes a valid and binding obligation of Owner and is
enforceable against Owner in accordance with its terms; If the
Owner is acting in the capacity of trustee, administrator or
executor of an estate, such fact shall be disclosed and
satisfactory evidence of capacity and authorization shall be
provided to SunTrust;
b. The Owner will defend the Collateral against the claims and
demands of all parties. The Owner will not, without prior
written consent of SunTrust, grant any security interest in
the Collateral and will keep it free from any lien,
encumbrance or security interest;
c. Check and complete the section which applies.
[ ]The Owner is an individual above the age of majority and
has the legal capacity to enter into this Security Agreement
and the Owner's principal residence is located in the state of
_____________ ;
[ ]The Owner is a corporation duly organized and existing
under the laws of the state of Georgia; and the Owner's
Organizational Identification Number is K638969 . The Owner is
duly qualified and in good standing as a foreign corporation
in every jurisdiction where such qualification is necessary;
the execution and performance of this Security Agreement have
been duly authorized by action of its Board of Directors, no
action of its shareholders being necessary; the execution and
performance of this Security Agreement will not violate or
contravene any provisions of law or regulation or its Articles
of Incorporation, Shareholder Agreement, By-Laws or other
agreements to which it is a party or by which it is bound; and
no consent or approval of any governmental agency or authority
is required in making or performing the obligations under this
Security Agreement;
[ ] The Owner is a registered partnership, limited liability
company or other registered entity organized under the laws of
the state of and the Owner's Organizational Identification
Number is__________ . The Owner is duly qualified and in good
standing to do business in every jurisdiction where
qualification is necessary; the execution and performance of
this Security Agreement have been duly authorized by its
partners/ members/managers as applicable and no further action
of any party is necessary; the execution and performance of
this Security Agreement will not violate or contravene any
provisions of law or regulation or any partnership agreement,
articles of organization, operating agreement or other
agreement to which it is a party or by which it is bound; and
no consent or approval of any governmental agency or authority
is required in making or performing the obligations under this
Security Agreement;
[ ] The Owner is an entity which is not registered; the
execution and performance of this Security Agreement have been
duly authorized by all necessary party/ies and no further
action of any party is necessary; the execution and
performance of this Security Agreement will not violate or
contravene any provisions of law or regulation or agreement to
which Owner is a party or by which it is bound; and no consent
or approval of any governmental agency or authority is
required in making or performing the obligations under this
Security Agreement; the Owner's place of business (if only one
place of business) or chief executive office (if more than one
place of business) is located in the state of ____________ ;.
d. All information supplied and statements made to SunTrust in
any financial or credit statement or application are true,
correct, complete, valid and genuine in all material respects;
e. [ ] (Check ,if applicable) The Owner further represents that
the Collateral is being acquired with funds simultaneously
advanced to the Borrower by SunTrust, and such funds will be
used for no other purpose;
f. No part of the Collateral has been, and never will be so long
as this Security Agreement remains a lien on the Collateral,
used for the generation, collection, manufacture, storage,
treatment, disposal, release or threatened release of any
hazardous substance, as those terms are defined in the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C., Section 9601, et
seq. ("CERCLA"), Superfund Amendments and Reauthorization Act
("XXXX"), applicable state laws, or regulations adopted
pursuant to either of the foregoing, except in the ordinary
course of manufacturing and repair operations that are
performed in full compliance with applicable provisions of all
such laws and regulations. The Owner agrees to comply with any
federal, state or local law, statute, ordinance or regulation,
court or administrative order or decree or private agreement
regarding materials which require special handling in
collection, storage, treatment or disposal because of their
impact on the environment ("Environmental Requirements"). The
Owner agrees to indemnify and hold SunTrust harmless against
any and all claims, losses and expenses resulting from a
breach of this provision of this Security Agreement and the
Owner will pay or reimburse SunTrust for all costs and expense
for expert opinions or investigations required or requested by
SunTrust which, in SunTrust's sole discretion, are necessary
to ensure compliance with this provision of this Security
Agreement. The obligation to indemnify shall survive the
payment of the Obligations and the satisfaction of this
Security Agreement; and
g. All Collateral has been produced in compliance with the Fair
Labor Standards Act or other applicable wage and employee law,
rule, regulation or order, and that no existing or future
liability shall occur as a result thereof. The Owner may
contest, in good faith, the
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applicability of any such law, rule, regulation or order,
including prosecuting any appeals, so long as SunTrust's
interest in the Collateral, in the opinion of SunTrust, is not
jeopardized as a result.
CHOICE OF LAW. Owner agrees that certain material events and occurrences
relating to this Security Agreement bear a reasonable relationship to the laws
of Georgia. To the extent permitted by applicable law, the validity, terms,
performance, construction and enforcement of this Security Agreement shall be
governed by the laws of such jurisdiction. Unless otherwise specified, "Uniform
Commercial Code" as used herein shall refer to the Uniform Commercial Code of
such jurisdiction, both current and as it may be amended or revised from time to
time in the future.
COVENANTS.
a. The Owner shall furnish to SunTrust such financial and
business information and reports in form and content
satisfactory to SunTrust as and when SunTrust may from time to
time require.
b. The Owner, if a corporation, shall maintain its corporate
existence, and if another entity shall maintain such entity
standing, in each case in good standing and shall not
consolidate or merge with or acquire the stock or other
ownership interest of any other corporation or entity without
the prior written consent of SunTrust; the Owner shall, at the
request of SunTrust, qualify as a foreign corporation or other
applicable entity and obtain all requisite licenses and
permits in each jurisdiction where the Owner does business.
c. The Owner shall notify SunTrust in writing at least 30 days
prior to any change of its name or structure or change in its
state of residence, jurisdiction of registration or
organization, principal place of business or chief executive
office.
d. The following shall apply if the Collateral consists of
tangible personal property: The Owner shall maintain all of
the Collateral in good condition and repair. SunTrust shall
have the right to inspect the Collateral at any reasonable
time and shall have the right to obtain such appraisals,
reappraisals, appraisal updates or environmental inspections
as SunTrust, in its sole discretion, may deem necessary from
time to time. Owner will not use or permit any person or
entity to use the Collateral (i) in any manner inconsistent
with the provisions of this Security Agreement; or (ii) in
violation of any policy of insurance issued with respect to
the Collateral; or (iii) in violation of any local, state or
federal law or regulation, including but not limited to any
such law or regulation pertaining to the protection of the
environment or the protection of the health or safety of
persons or animals, and any such law or regulation pertaining
to the control of drugs, narcotics or other controlled
substances. If the Collateral has been used or is hereafter
used in violation of the covenants and agreements contained
herein, Owner shall indemnify SunTrust and hold SunTrust
harmless against all claims, actions, causes of action, costs,
expenses, fees and penalties in connection with such use. All
such obligations and liabilities of Owner shall be included in
the Obligations secured by the Collateral and shall survive
payment of the Obligations and termination of this Security
Agreement. Without the express prior written consent of
SunTrust, Owner shall not cause or permit all or any part of
the Collateral to be affixed to real property so as to become
a fixture as that term is defined or interpreted in the state
in which the Collateral is at any time located.
e. The Owner will not pledge or grant any security interest in
any of the Collateral to anyone except SunTrust, or permit any
lien or encumbrance to attach to any of the Collateral, or any
levy to be made on the Collateral, or any financing statement
(except financing statements in favor of SunTrust) to be on
file against the Collateral, except liens that are permitted
under Section 5.1 of the Loan Agreement.
f. Owner hereby constitutes and appoints any officer or employee
of SunTrust as its true and lawful attorney-in-fact (i) to
transfer the Collateral into SunTrust's name or the name of
its nominee, but SunTrust's failure to do so shall not be
interpreted to be a waiver of any interest, and (ii) to do and
perform all other acts and things necessary, proper and
requisite to carry out the intent of this Security Agreement.
The power herein granted shall be deemed to be coupled with an
interest and may not be revoked until the Obligations have
been paid in full, including all expenses payable by Owner and
no amounts may be re-borrowed.
g. The Owner agrees to pay on demand all legal expenses and
reasonable attorneys' fees (in the amount of 15% of the
principal and interest secured hereby if this agreement is
governed by the laws of Georgia), as permitted by applicable
law, any appraisal fees and all expenses incurred or paid by
SunTrust in protecting and enforcing the rights of SunTrust
under this Security Agreement, including SunTrust's right to
take possession of the Collateral and its proceeds, and to
hold, prepare for sale, sell and dispose of the Collateral.
h. This Security Agreement shall be a continuing agreement and
shall remain in full force and effect irrespective of any
interruptions in the business relations of the Borrower with
SunTrust and shall apply to any ultimate balance which shall
remain due by the Borrower to SunTrust; provided, however,
that the Owner may by written notice terminate this Security
Agreement with respect to all Obligations of the Borrower
incurred or contracted by the Borrower or acquired by SunTrust
after the date on which such notice is personally delivered to
or mailed via registered mail to the SunTrust address set
forth below and accepted by SunTrust.
Definitions. AS USED IN THIS SECURITY AGREEMENT:
a. "Account" shall mean a right to payment of a monetary
obligation, whether or not earned by performance (i) for
property that has been or is to be sold, leased, licensed,
assigned or otherwise disposed of (ii) for services rendered
or to be rendered (iii) for a policy of insurance issued or to
be issued, (iv) for a secondary obligation incurred or to be
incurred, (v) for energy provided or to be provided (vi) for
the use or hire of a vessel under a charter or other contract
or (vii) arising out of the use of a credit or charge card or
information on or for use with the card. Account shall include
rights to payment for real estate sold and health care
insurance receivables.
b. "Equipment" shall mean all of the Owner's tangible
personal property, goods, manuals, books, records, data files,
storage media, furniture, apparatus, furnishings, fittings,
fixtures, machinery, motor vehicles, appliances, computer
hardware, software and operating systems, and equipment,
wherever located or however used, which are now owned or
hereafter acquired by the Owner or in which the Owner now has
or hereafter acquires any right, title or interest together
with all proceeds thereof;
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c. "General Intangibles" shall mean all Payment
Intangibles, choses in action, things in action, suits,
actions, causes of actions, commercial tort claims and claims
of every kind and nature, whether at law or in equity and all
condemnation awards, insurance proceeds, customer lists, trade
secrets, servicing rights, computer software and technology
(including, but not limited to, all embedded software, all
source and object codes and all updates of any software
technology), patents and patent rights (whether or not
registered), patent applications, all trade secrets relating
to the inventions protected by all patents disclosed to the
United States Patent and Trademark Office or otherwise known
by the inventors during the examination of such patents, all
information and other materials necessary to fully exploit any
technology, licenses, certificated and uncertificated
securities, investment property, rights to proceeds of letters
of credit, letter-of-credit rights, supporting obligations of
every nature, trademarks and trademark applications (whether
or not registered), trade names, domain name registrations and
web site designs, copyrights and copyright applications
(whether or not registered), logos, engineering drawings,
goodwill, all claims for income tax refunds and other payments
from any local, state or federal governmental authority or
agency, all licenses, permits and agreements of any kind or
nature pursuant to which (i) Owner operates or has authority
to operate, (ii) Owner possesses, uses or has authority to
possess or use property (whether tangible or intangible) of
others or (iii) others possess, use or have authority to
possess or use property (whether tangible or intangible) of
Owner, and all recorded data of any kind or nature, regardless
of the medium of recording, including, without limitation, all
software, writings, plans, specifications, schematics and
documents of the Owner which are now owned or hereafter
acquired by the Owner or in which the Owner now has or
hereafter acquires any right, title or interest, together with
all proceeds thereof
d. "Inventory" shall mean all goods which are leased or
held for sale or lease or to be furnished under a contract of
service or are furnished under a contract of service, all
finished goods, raw materials, work in process, supplies and
materials used or consumed in the Owner's business, and all
contractual rights of the Owner pertaining to the Inventory,
together with all proceeds thereof.
e. "Payment Intangible" shall mean a General Intangible
under which the account debtor's principal obligation is a
monetary obligation.
BLANKET SECURITY INTEREST. If the Collateral is identified a Blanket Security
Interest, Owner acknowledges and agrees that this Security Agreement and any
financing statement filed in connection with this Security Agreement is intended
to cover and does cover all assets of the Owner, wherever located, whether now
owned or subsequently acquired or arising and all proceeds and products thereof
and includes, but is not limited to all of the Owner's:
a. Accounts, insurance refund claims and all other insurance
claims and proceeds, tax refund claims, license fees, rents,
contract rights, instruments, certificates of deposit,
documents, tangible chattel paper, electronic chattel paper,
promissory notes, drafts, acceptances and other forms of
obligations and receivables, whether or not earned by
performance;
b. Inventory;
c. Equipment;
d. General Intangibles;
e. Demand, time, savings, passbook and other deposit accounts of
the Owner with all banks, credit unions, savings and loan
associations and other financial institutions which are now
owned or hereafter acquired by the Owner or in which the Owner
now has or hereafter acquires any right, title or interest
(Deposit Accounts); and
f. Commercial tort claims, letter of credit rights, awards and
other payments in respect of any taking and all insurance
proceeds in respect of any of the foregoing, and all monies
and claims for money due and to become due to Owner under all
its Accounts, contract rights, leases and General Intangibles,
all investment property and financial assets, all as said
terms are defined in the Uniform Commercial Code.
ACCOUNTS. If the Collateral includes Accounts, the following shall apply.
a. The Owner warrants that each and every Account, now owned or
hereafter acquired, is a bona fide existing obligation, valid
and enforceable against the account debtor, for goods sold or
leased and delivered or services rendered in the ordinary
course of business; it is subject to no dispute, defense or
offset, except as may be incidental to customer rights to
warranty repairs or replacements, or to completion of
deliveries or services in completion with specifications, in
amounts typically incurred in the ordinary course of Owner's
business; the Owner has good title to the Account and has full
right and power to grant SunTrust a security interest in the
Collateral and the Owner will immediately notify SunTrust of
any Account to which these warranties are or become untrue;
the Owner agrees that it will not permit any return of
merchandise, the sale of which gave rise to any of the
Accounts, except in the usual and regular course of business;
b. The Owner shall maintain complete and accurate books of
accounts and records, and its principal books of accounts and
records, including all records concerning Accounts and
contract rights, shall be kept and maintained at the place(s)
specified above. The Owner shall not move such books of
accounts and records without giving SunTrust at least 30 days
prior written notice. All accounting records and financial
reports furnished to SunTrust shall be maintained and prepared
in accordance with generally accepted accounting principles
consistently applied. It is specifically agreed that SunTrust
shall have and the Owner hereby grants to SunTrust a security
interest in all books of accounts and records of the Owner and
shall have access to them at any time for inspection,
verification, examination and audit;
c. The Owner will prepare and deliver to
SunTrust, at SunTrust's request from time to time, a listing and aging of all
Accounts and any further schedules or information that SunTrust may require;
- 4 -
d. SunTrust shall have the right at any time to notify account
debtors of its security interest in the Accounts and
supporting obligations and require payments to be made
directly to SunTrust. The Owner hereby appoints SunTrust and
any officer or employee of SunTrust, as SunTrust may from time
to time designate, as its attorneys-in-fact for the Owner, to
sign and endorse in the name of the Owner, to give notice in
the name of the Owner, and to perform all other actions
necessary or desirable in the reasonable discretion of
SunTrust to effect these provisions and carry out the intent
hereof, all at the cost and expense of the Owner. The Owner
hereby ratifies and approves all acts of such
attorneys-in-fact and neither SunTrust nor any other such
attorneys-in-fact will be liable for any acts of commission or
omission nor for any error of judgment. This power being
coupled with an interest is irrevocable so long as any Account
or General Intangible assigned to SunTrust remains unpaid and
the Borrower has any Obligations to SunTrust. The costs of
such collection and enforcement, including attorneys' fees and
out-of-pocket expenses, shall be borne solely by the Owner
whether the same are incurred by SunTrust or the Owner;
e. At the option of SunTrust, all payments on the Accounts
received by the Owner shall be remitted to SunTrust in their
original form on the day of receipt; all notes, checks, drafts
and other instruments so received shall be duly endorsed to
the order of SunTrust. At SunTrust's election, the payments
shall be deposited into a special deposit account ("Special
Account") maintained with SunTrust. SunTrust may designate
with each such deposit the particular Account upon which
payment was made. The Special Account shall be held by
SunTrust as additional security for the Obligations. Prior to
depositing payments on the Accounts into the Special Account,
the Owner agrees that it will not commingle such payments with
any of the Owner's funds or property, but will hold them
separate and apart and in trust for SunTrust. SunTrust will
have the power to withdraw from the Special Account. SunTrust
may at any time and from time to time, in its sole discretion,
apply any part of the funds in the Special Account to the
Obligations whether or not the same is due. Upon full and
final satisfaction of the Obligations (including without
limitation all fees and expenses owing to SunTrust or its
attorneys), plus termination of any commitment to extend
additional funds, SunTrust will pay to the Owner any excess
funds, whether received by SunTrust as a deposit in the
Special Account or as a direct payment on any of the
Obligations;
f. If any of the Owner's Accounts arise out of contracts with the
United States or any department, agency, or instrumentality
thereof and such Accounts equal at least 10% of the Owner's
aggregate Accounts, the Owner will immediately notify SunTrust
in writing and execute any instruments and take any steps
required by SunTrust in order that all moneys due and to
become due under such contracts shall be assigned to SunTrust
and in order that proper notice be given under the Federal
Assignment of Claims Act;
g. SunTrust shall not be liable and shall suffer no loss on
account of loss or depreciation of any Account due to acts or
omissions of SunTrust unless SunTrust's conduct is willful and
malicious, and SunTrust shall have no duty to take any action
to preserve the Collateral or collect Accounts;
h. Upon request by SunTrust, the Owner will note on its records
concerning the Collateral, a notation of the security interest
granted under this Security Agreement, which notation must be
satisfactory to SunTrust in both form and content;
i. SunTrust may enforce collection of any Account and supporting
obligation by suit or otherwise and may surrender, release or
exchange all or any part thereof, or compromise, extend or
renew the same for any period. All monies so received by
SunTrust may in SunTrust's sole discretion, be either (i)
applied by SunTrust directly toward payment of all or any part
of the Obligations, whether or not then due, in such order of
application as SunTrust may determine; or (ii) deposited to
the credit of Borrower or in an account with SunTrust as
security for payment of the Obligations and SunTrust may, from
time to time, in its sole discretion, (a) apply all or any
part of the available funds in said deposit account toward
payment of all or any part of the Obligations, whether or not
then due, in such order of application as SunTrust may
determine or (b) permit Borrower to use all or any part of the
funds on deposit in said account in the normal course of
business. Owner will promptly reimburse SunTrust for all
expenses, including attorneys' fees and legal expenses,
incurred by SunTrust in seeking to collect on or enforce
collection of such amounts; and
j. After notice from SunTrust, Owner will forthwith, upon
receipt, transmit and deliver to SunTrust, in the form
received, all cash, checks, drafts, items, chattel paper and
other instruments or writing for the payment of money
(properly endorsed, where required, so that such items may be
collected by SunTrust) which may be received by Owner at any
time in full or partial payment or otherwise as proceeds of
any of the Collateral. After such notice from SunTrust, Owner
will not commingle any such proceeds with any other of its
funds or property, but will hold them separate and apart from
Owner's own funds or property and in express trust for
SunTrust until delivery is made to SunTrust, and
k. To protect SunTrust's rights hereunder, Owner hereby
constitutes any officer or employee of SunTrust its true and
lawful attorney-in-fact with full power of substitution to
endorse or sign the name of Owner upon any invoice, freight or
express xxxx, or xxxx of lading relating to any Collateral
covered hereby and to notify the post office authorities to
change the address for delivery of mail Owner's mail to an
address designated by SunTrust and to receive, open, and
dispose of all mail addressed to Owner and to do and perform
all other acts and things necessary, proper and requisite to
carry out the intent of this Security Agreement. This power
shall be deemed to be coupled with an interest and may not be
revoked by Owner until the Obligations have been paid in full.
INVENTORY. If the Collateral includes Inventory, the following shall apply:
a. The Owner agrees to maintain books and
records pertaining to the Inventory in such detail, form and scope as SunTrust
shall require. The Owner shall promptly advise SunTrust of any substantial
changes relating to the type, quantity of the Inventory or any event which would
have a material effect on the value of the Inventory or on the security interest
granted to SunTrust.
- 5 -
b. If the Inventory remains in the possession or control of any
of the Owner's agents or processors, the Owner shall notify
such agents or processors of SunTrust's security interest, and
upon request, instruct them to hold such Inventory for
SunTrust's account and subject to SunTrust's instruction.
c. The Owner will prepare and deliver to SunTrust, at SunTrust's
request from time to time, a listing of all Inventory and such
information regarding the Inventory as SunTrust may require.
d. SunTrust may require the Owner to assemble the Collateral and
make it available to SunTrust at a place to be designated by
SunTrust which is reasonably convenient. SunTrust may take
possession of the Collateral without a court order.
e. Until Default hereunder, Owner may, unless otherwise provided
in this Security Agreement, in the ordinary course of
business, at its own expense, sell, lease or furnish under
contract of service any of the Inventory normally held by
Owner for such purpose.
INSURANCE, TAXES AND ASSESSMENTS. The Owner shall at all times keep insurable
Collateral insured against any and all risks, including, without limitation,
fire, and such other insurance, including but not limited to flood insurance, as
may be required by SunTrust from time to time, and in such amounts as may be
satisfactory to SunTrust. Insurance may be purchased from an insurer of the
Owner's choice, except as otherwise required by law. All such insurance policies
are to be made payable to SunTrust, in the event of loss, under a standard
non-contributory "mortgagees", "lenders", or "secured party" clause and shall
contain a breach of warranty provision acceptable to SunTrust which shall
establish SunTrust's right to be paid the insurance proceeds irrespective of any
action, inaction, breach of warranty or conditions, or negligence of Owner or
any other person or entity with respect to such policies. All such insurance
policies shall provide for a minimum of thirty days written notice to SunTrust
prior to cancellation. Upon the occurrence and continuation of an Event of
Default under the Loan Agreement, Owner appoints SunTrust attorney-in-fact to
file claims under any insurance policies, to receive, receipt and give
acquittance for any payments that may be payable to Owner hereunder, and to
execute any and all endorsements, receipts, releases, assignments,
reassignments, or other documents that may be necessary to effect the
collection, compromise or settlement of any claims under any such insurance
policies, which power of attorney shall be deemed coupled with an interest and
irrevocable so long as SunTrust has a security interest in any of the
Collateral. Owner shall provide proof of such insurance as requested by
SunTrust. The Owner shall pay and discharge all taxes, assessments and charges
of every kind prior to the date when such taxes, assessments or charges shall
become delinquent and provide proof of such payments to SunTrust, upon request.
However, nothing contained in this Security Agreement shall require the Owner to
pay any such taxes, assessments and charges so long as it shall contest its
validity in good faith and shall post any bond or security required by SunTrust
against the payment. Upon the failure of the Owner to purchase required
insurance or to pay such required amounts, SunTrust, at its option, and at the
Owner's expense, may obtain such insurance or pay such taxes, assessments, and
charges. In addition, SunTrust may from time to time, in its sole discretion,
perform any undertakings of the Owner which the Owner shall fail to perform and
take any other action which SunTrust deems necessary for the maintenance or
preservation of any of the Collateral. Any amounts so paid shall be included in
the Obligations secured by the Collateral. At SunTrust's request, the Owner
agrees to promptly reimburse SunTrust on demand for all such expenses incurred
by SunTrust, together with interest thereon from the date paid by SunTrust at
the highest rate payable on the Obligations. Any insurance obtained by SunTrust,
at its option, may be single or dual interest, protecting its rights, rights of
the Owner or joint rights. Any insurance obtained by SunTrust may provide, at
its option, that such insurance will pay the lesser of the unpaid balance of the
Obligations or the repair or replacement value of the Collateral. SunTrust may
use the proceeds of any insurance obtained by Owner or by SunTrust to repair or
replace the Collateral or, if SunTrust elects to do so, to repay part or all of
the Obligations, whether or not then due, and in such order as SunTrust may
determine, and the Borrower will still be responsible to repay any remaining
unpaid balance of the Obligations. The whole or partial loss or destruction of
all or any part of the Collateral shall not affect or impair the obligation of
any person or entity liable under the Obligations.
ADDITIONAL COVENANTS AND AGREEMENTS IF BORROWER IS DIFFERENT THAN OWNER. If
Borrower is different than Owner, then so long as any of the Obligations remain
outstanding or so long as this Security Agreement shall remain in effect Owner
covenants and agrees as follows: (a) Owner hereby expressly consents to and
adopts any agreements which Borrower has entered into or will enter into with
SunTrust regarding any of the Obligations or the Collateral; (b) Owner hereby
agrees that the Collateral shall be subject to disposition in accordance with
the terms and conditions of this Security Agreement and any agreements executed
by Borrower in connection with any of the Obligations or the Collateral; (c)
Owner will not be subrogated to SunTrust's rights to any other collateral and
any proceeds thereof in which SunTrust holds a security interest to secure
payment of any of the Obligations; (d) Owner agrees that SunTrust may at any
time and from time to time, without notice to, or the consent of, Owner: (i)
retain any of the Collateral in satisfaction of any of the Obligations to the
extent permitted by applicable law, (ii) retain or obtain a security interest or
lien in any property in addition to the Collateral to secure payment or
performance of any of the Obligations, (iii) allow or cause any Obligations to
be incurred, (iv) retain or obtain persons or entities that are primarily or
secondarily obligated upon any of the Obligations other than the Borrower, (v)
extend or renew any of the Obligations for any period (whether or not longer
than the original term), (vi) release, compromise or modify any of the
Obligations, (vii) release, in whole or in part, any person or entity primarily
or secondarily obligated upon any of the Obligations or enter into any
compromise with respect to the obligation of any such person or entity relative
to any of the Obligations, (viii) release, with or without consideration,
SunTrust's security interest or lien in any property other than the Collateral
which may at any time secure payment or performance of any of the Obligations,
(ix) accept substitutions or exchanges for any property other than the
Collateral which may at any time secure payment or performance of any of the
Obligations, (x) exercise its rights as a secured party and dispose of the
Collateral without having first resorted to any property securing any of the
Obligations other than the Collateral and without having first proceeded against
or demanded payment from any person or entity primarily or secondarily obligated
upon any of the Obligations; and (e) Owner specifically waives any and all
rights pursuant to O.C.G.A. Sec. 10-7-24 or T.C.A. Sec. 00-00-000 et seq. if
this Security Agreement is governed by the laws of Georgia or Tennessee and the
same or similar provision contained in the Uniform Commercial Code of any other
state or states which may govern this Security Agreement.
- 6 -
EVENTS OF DEFAULT. As used herein the term "Obligor" shall individually,
collectively, jointly and severally refer to Borrower, Owner and any other
person or entity that is primarily or secondarily liable upon all or any part of
the Obligations secured hereby and any person or entity that has conveyed or may
hereafter convey any security interest or lien to SunTrust in any real or
personal property to secure payment of all or any part of the Obligations. An
"Event of Default" shall occur hereunder upon the occurrence of any one or more
of the following events or conditions:
a. the occurrence of an "Event of Default" under Section 7.1 of
the Loan Agreement; or
b. a demand by SunTrust is made pursuant to the Demand Note; or
c should the state of organization or registration of Owner (if
an entity) change or
d. any other act or circumstance occurs or exists which leads
SunTrust to deem itself insecure.
REMEDIES UPON DEFAULT; ACCELERATION OF OBLIGATIONS. The Obligations secured
hereby shall automatically and simultaneously mature and become due and payable,
without notice or demand, upon the filing of any petition or the commencement of
any proceeding by or against an Obligor for relief under any bankruptcy or
insolvency law, or any law relating to the relief of debtors, readjustment of
indebtedness, debtor reorganization, or composition or extension of debt. Upon
the occurrence of any one or more of the other Events of Default described
above, the Obligations secured hereby shall, at the option of SunTrust,
immediately mature and become due and payable, without notice or demand. If all
or any part of the Obligations secured hereby are not paid as and when due and
payable, whether by acceleration or otherwise, then SunTrust may, at its option,
without notice or demand of any kind: (a) transfer all or any part of the
Collateral into the name of SunTrust or its nominee, at Owner's expense, with or
without disclosing that such Collateral is subject to SunTrust's security
interest; (b) enter upon premises upon which the Collateral is located and, to
the extent permitted by law without legal process, take exclusive possession of
the Collateral, and redeem the Collateral, or any part thereof (irrespective of
redemption penalty); (c) appropriate and apply toward payment of such of the
Obligations, and in such order of application, as SunTrust may from time to time
elect, all or any part of any balances, credits, items or monies in any bank
deposit or deposit account constituting a part of the Collateral; (d) sell the
Collateral at public or private sale, either in whole or in part, and SunTrust
may purchase the Collateral at any such public sale and at any private sale as
permitted by law. Such sale shall result in the sale, conveyance and disposition
of all right, title and interest of Owner in all or any part of the Collateral
which is the subject of such a disposition and SunTrust is authorized as
attorney-in-fact for Owner to sign and execute any transfer, conveyance or
instrument in writing that may be necessary or desirable to effectuate any such
disposition of the Collateral, which power shall be coupled with an interest;
and (e) exercise all other rights of a secured party under the Uniform
Commercial Code and all other rights under law or pursuant to this Security
Agreement, all of which shall be cumulative. If any notification of intended
disposition of any Collateral is required by law, reasonable notification shall
be deemed given if written notice is deposited in the U.S. Mail, first class or
certified postage prepaid, addressed to Owner and such other persons or entities
as SunTrust deems to be appropriate, stating the time and place of any public
sale or the time after which any private sale or disposition is to be made, at
least ten (10) days prior thereto. The proceeds of any disposition of the
Collateral shall be applied in the following order (i) First, to pay all costs
and expenses associated with the retaking, holding, preparation and disposition
of the Collateral; (ii) Then to pay attorneys' fees; (iii) Next, to pay all
accrued but unpaid interest upon the Obligations in such order as SunTrust may
determine in its discretion; and (iv) Finally, to all unpaid principal
outstanding upon the Obligations, whether or not due and payable, in such order
as SunTrust may determine in its discretion. Any remaining surplus shall be paid
to Owner or otherwise in accordance with law. If the proceeds of such
disposition are insufficient to pay the Obligations in full, Borrower and all
other persons or entities liable thereon shall remain fully obligated to
SunTrust for the unpaid balance thereof.
EXECUTION BY MORE THAN ONE PARTY. The term "Owner" as used in this Security
Agreement shall, if this instrument is signed by more than one party, mean the
"Owner and each of them" and each shall be jointly and severally obligated and
liable. If any party is a partnership or limited liability company, the
agreements and obligations on the part of the Owner shall remain in force and
applicable regardless of any changes in the parties composing the partnership or
limited liability company and the term "Owner" shall include any altered or
successive partnership or limited liability company and the predecessor
partnership or limited liability company and its partners or members/managers
shall not be released from any obligation or liability.
WAIVERS BY THE OWNER. The Owner hereby waives (a) notice of acceptance of this
Agreement and of any extensions or renewals of credit by SunTrust to the
Borrower; (b) presentment and demand for payment of the Obligations; (c) protest
and notice of dishonor or default to the Owner or to any other party with
respect to the Obligations; (d) all other notices to which the Owner might
otherwise be entitled; and (e) if for business purposes, the benefit of any
homestead exemption. To the extent permitted by applicable law, the Owner
further waives any right to require that any action be brought against the
Borrower or any other party, the right to require that resort be had to any
security or to any balance of any deposit account or credit on the books of
SunTrust in favor of the Borrower or any other party, the right to redeem the
Collateral and to object to SunTrust's proposal to retain the Collateral in
satisfaction of any of Obligations and any right to obtain injunctive or other
relief relative to SunTrust's sale or other disposition of the Collateral and to
recover losses caused by SunTrust's failure to approve or correct any list of
Collateral provided to SunTrust for any purpose by any person or entity. Owner
waives all rights, claims and defenses based on principles of suretyship.
NO OBLIGATION TO EXTEND CREDIT. This Security Agreement shall not be construed
to impose any obligation on SunTrust to extend or continue to extend any credit
at any time.
INDEMNITY. The Owner agrees to indemnify and hold harmless SunTrust, its
subsidiaries, successors, and assigns and their respective agents, directors,
employees, and officers from and against any and all complaints, claims,
defenses, demands, actions, bills, causes of action (including, without
limitation, costs and attorneys' fees), and losses of every nature and kind
whatsoever, which may be raised or sustained by any directors, officers,
employees, shareholders, creditors, regulators, successors in interest, or
receivers of the Borrower or any third party as a result of or arising out of,
directly or indirectly, SunTrust extending credit as evidenced by the
Obligations to the Borrower, and taking the Collateral as security for the
Obligations, and the Owner agrees to be liable for any and all judgments which
may be recovered in any such action, claim, proceeding, suit, or xxxx,
- 7 -
including any compromise or settlement thereof, and defray any and all expenses,
including, without limitation, costs and attorneys' fees, that may be incurred
in or by reason of such actions, claims, proceedings, suits, or bills.
FINANCING STATEMENTS AND ADDITIONAL DOCUMENTATION. SunTrust is authorized to
file such financing statements and amendments as SunTrust deems necessary to
perfect, continue or assure its security interest in the Collateral and the
Owner hereby ratifies any financing statement filed previously by SunTrust. The
Owner will deliver such instruments of future assignment or assurance, and such
other agreements, as SunTrust may from time to time request to carry out the
intent of this Security Agreement, and will join with SunTrust in executing any
documents in form satisfactory to SunTrust, and hereby authorizes SunTrust to
sign for Owner, or to file without signature, any financing statements,
amendments and other documents and instruments from time to time as SunTrust may
deem advisable, and pay any cost of filing the same, including all recordation,
transfer, indebtedness and other taxes and fees, deemed advisable by SunTrust.
SUCCESSOR IN INTEREST: SUNTRUST AS COLLATERAL AGENT. This Security Agreement
shall be binding upon the Owner, its successors and assigns, and the benefits
hereof shall inure to SunTrust, its successors and assigns. Notwithstanding the
foregoing, Owner shall not assign Owner's rights or obligations under this
Security Agreement without SunTrust's prior written consent. SunTrust Bank shall
serve as collateral agent on behalf of itself and present and future affiliates.
MISCELLANEOUS. (a) Each and every power given herein is coupled with an interest
and is irrevocable by death or otherwise. (b) The captions of the paragraphs of
this Security Agreement are for convenience only and shall not be deemed to
constitute a part hereof or used in construing the intent of the parties. (c) If
any part of any provision of this Security Agreement shall be invalid or
unenforceable under applicable law, such part shall be ineffective to the extent
of such invalidity only, without in any way affecting the remaining parts of
such provision or the remaining provisions of this Security Agreement. (d) This
Security Agreement shall not be modified or amended except in a writing signed
by Owner and SunTrust. (e) All representations, warranties, covenants and
agreements contained herein or made in writing by Owner in connection herewith
shall survive the execution and delivery of this Security Agreement and any and
all notes, other agreements, documents and writings relating to or arising out
of any of the foregoing or any of the Obligations. (f) All rights and remedies
of SunTrust expressed herein are in addition to all other rights and remedies
possessed by SunTrust under applicable law or other agreements, including rights
and remedies under any other agreement or instrument relating to any of the
Obligations or any security therefor. (g) No waiver by SunTrust of any of its
rights or remedies or of any default shall operate as a waiver of any other
right or remedy or of any other default or of the same right or remedy or of the
same default on a future occasion. No delay or omission on the part of SunTrust
in exercising any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by SunTrust of any right or remedy shall preclude any
other or further exercise thereof or the exercise of any other right or remedy.
No action of SunTrust permitted hereunder or under any agreement or instrument
relating to any of the Obligations or any security therefor shall impair or
affect the rights of SunTrust in and to the Collateral. (h) All terms as defined
herein shall include both the plural and singular, where applicable. (i) All
notices or communications given to Owner or SunTrust pursuant to the terms of
this Security Agreement shall be in writing and given to Owner and SunTrust at
the address set forth below. Unless otherwise specifically provided herein to
the contrary, such written notices and communications shall be delivered by hand
or overnight courier service, or mailed by first class mail, postage prepaid,
addressed to the parties hereto at the addresses referred to herein or to such
other addresses as either party may designate to the other party by a written
notice given in accordance with the provisions of this Security Agreement. Any
written notice delivered by hand or by overnight courier service shall be deemed
given or received upon receipt. Any written notice delivered by U.S. Mail shall
be deemed given or received on the third (3rd) business day after being
deposited in the U.S. Mail. (j) SunTrust shall not be responsible or liable for
its failure to give notice to Owner of any default in the payment of any amounts
that might become due and owing with respect to the Collateral nor shall
SunTrust be responsible or liable for SunTrust's failure to collect any amounts
payable with respect to the Collateral. (k) SunTrust shall be under no
obligation to monitor the market value of any Collateral, to advise the Owner of
such market value, or to take any action whatsoever to preserve the value of any
Collateral by selling, exchanging or otherwise disposing of such Collateral in
order to avoid any loss to the Owner resulting from a decline in the market
value of such Collateral. (l) SunTrust shall be under no obligation to pay any
amounts owing with respect to any Collateral. (m) This Agreement is in addition
to and not in replacement of any other agreement between Owner and SunTrust.
WAIVER OF JURY TRIAL. OWNER AND SUNTRUST HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, BASED
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY AGREEMENT
AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
WITH THIS SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR SUNTRUST ENTERING INTO OR ACCEPTING THIS
SECURITY AGREEMENT. FURTHER, OWNER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR
AGENT OF SUNTRUST, NOR SUNTRUST'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUNTRUST WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
The undersigned have executed this Security Agreement as of the date first
written above.
Signature(s) of Individual Owner(s) Signature(s) of Non-Individual Owner(s)
- 8 -
____________________________(Seal) LXE INC.
Owner's Signature Owner
____________________________(Seal) By: /s/ ____________________________
Owner's Signature
____________________________(Seal) Xxxxxxx X. Xxxxxx, Vice President
Owner's Signature Name and title, printed or typed
____________________________(Seal) ____________________________________
Owner's Signature Owner
By: ________________________________
____________________________________
Name and title, printed or typed
ADDRESSES
Owner Address for Purpose of Notice: 000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
SunTrust Address for Purpose of Notice: 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
- 9 -
[SUN TRUST LOGO] COMMERCIAL SECURITY AGREEMENT
INVENTORY, ACCOUNTS, EQUIPMENT, GENERAL INTANGIBLES, ETC.
This Security Agreement dated as of 31, 2003, by EMS TECHNOLOGIES, INC.
_______________________(the "Owner") for the use and benefit of SunTrust Bank,
its present and future affiliates and their successors and assigns ("SunTrust")
provides:
In order to induce SunTrust from time to time to enter into agreements with and
to extend or continue to extend credit to
EMS TECHNOLOGIES, INC.(and any one or more and any combination if more than one,
the "Borrower"), the Owner (which may include the Borrower) hereby grants,
sells, assigns, transfers and conveys to SunTrust, a security interest in the
Collateral and all Proceeds (as such term is defined in the Uniform Commercial
Code), products, rents and profits thereof and all substitutions and
replacements therefore and all revenues from the right to use the Collateral to
secure the prompt payment and performance of any and all liabilities,
obligations, agreements and undertakings of Borrower to SunTrust (and, in
addition, all liabilities, obligations, agreements and undertakings of Owner, or
any one or more of them, to SunTrust if Owner and Borrower are not the same
person or entity) in any amount, whether now existing or hereafter arising,
including those owed by Borrower or Owner to others and acquired by SunTrust
through purchase, assignment or otherwise, however created, evidenced or
arising, whether individually or jointly with others, and whether absolute or
contingent, direct or indirect, as maker, endorser, guarantor, surety or
otherwise, liquidated or unliquidated, matured or unmatured, whether or not
secured by other collateral, and including, without limitation, (a) all
obligations and liabilities of the Borrower under the Second Amended and
Restated Loan Agreement dated as of November 9, 1998 (as amended, supplemented
or otherwise modified thereafter, the "Loan Agreement"), (b) all obligations and
liabilities of the Borrower under the Demand Note dated June 27, 2000 (as
amended, supplemented or otherwise modified thereafter, the "Demand Note"), (c)
all obligations to perform or forbear from performing any acts, (d) all
overdrafts on deposits or accounts maintained by Borrower or Owner with
SunTrust, (e) all liabilities, obligations, agreements and undertakings of
Borrower or Owner to SunTrust pursuant to any interest rate hedge agreement or
other derivative transaction agreement or application or other agreement
requesting SunTrust to issue any letter of credit including, without limitation,
the obligation of Borrower or Owner to reimburse SunTrust for all amounts funded
by SunTrust pursuant to any such letter of credit and (f) all costs of
collection and protection of SunTrust's rights, including attorneys' fees (in
the amount of 15% of the principal and interest secured hereby if this agreement
is governed by the laws of Georgia), whether such collection or protection
occurs prior to, during, or after any bankruptcy proceedings filed by or against
any Obligor (as such term is defined below) (all the foregoing being hereinafter
collectively referred to as the "Obligations").
COLLATERAL. As used in this Security Agreement, the term "Collateral" shall mean
the following, whether now existing or hereafter acquired:
Check all that are applicable (IF THE COLLATERAL IS NOT SPECIFICALLY DESIGNATED
BY A CHECK XXXX, THE OWNER GRANTS SUNTRUST A BLANKET SECURITY INTEREST):
[ ] Blanket ALL ASSETS of Owner, as more particularly described
Security herein, and including but not limited to, all
Interest Covering "Accounts," "Inventory," furniture, fixtures and
All Assets "Equipment," goods, deposit accounts, instruments,
documents, commercial tort claims, letter of credit
rights, investment property, chattel paper,
"General Intangibles" and all supporting
obligations relating to Accounts, chattel paper,
documents, "General Intangibles", instruments and
investment property (as all such terms are defined
herein and in the Uniform Commercial Code).
[ ] All or a portion of the Collateral will be
attached as a fixture to real property located at:
______________________________________
and such real property is owned by _______________.
[ ] Accounts and All of the Owner's "Accounts," , supporting chattel
General paper, documents, instruments and money, returned
Intangibles and unearned insurance premiums, tax refunds,
contract rights, returned goods, reclaimed and
repossessed goods, all "General Intangibles" and
all supporting obligations related to Accounts and
General Intangibles (as all such terms are defined
herein and in the Uniform Commercial Code).
[X] Inventory, All of the Owner's "Inventory", all returned goods,
Accounts, reclaimed and repossessed goods, whether or not in
Payment the Owner's possession or control, in transit, in
Intangibles, etc. storage, or hereafter acquired by way of
replacement, substitution, addition or otherwise,
"Accounts", chattel paper, documents, instruments
and money, returned and unearned insurance
premiums, tax refunds, contract rights, software,
all "Payment Intangibles" and all supporting
obligations related to Accounts, chattel paper,
documents, instruments and Payment Intangibles (as
all such terms are used herein and in the Uniform
Commercial Code).
[ ] Furniture, All of the Owner's furniture, fixtures and
Fixtures "Equipment," and leasehold improvements, and
and including but not limited to, all leases, rental
Equipment agreements, chattel paper, rental payments and
insurance proceeds together with all accessories,
accessions, attachments, parts, replacements,
substitutions, improvements, repairs installed in
or affixed thereto (as all such terms are used
herein and in the Uniform Commercial Code).
[ ] All or a portion of the Collateral will be
attached as a fixture to real property located at:
___________________________________________________
and such real property is owned by _______________.
1
REPRESENTATIONS AND WARRANTIES. The Owner represents and warrants to SunTrust as
follows:
h. The Owner is and will continue to be the absolute owner of the
Collateral and there are no other liens or security interests
affecting the Collateral other than the security interest
granted in this Security Agreement except those previously
disclosed to SunTrust in writing by the Owner; This Security
Agreement has been duly executed and delivered by Owner and
constitutes a valid and binding obligation of Owner and is
enforceable against Owner in accordance with its terms; If the
Owner is acting in the capacity of trustee, administrator or
executor of an estate, such fact shall be disclosed and
satisfactory evidence of capacity and authorization shall be
provided to SunTrust;
i. The Owner will defend the Collateral against the claims and
demands of all parties. The Owner will not, without prior
written consent of SunTrust, grant any security interest in
the Collateral and will keep it free from any lien,
encumbrance or security interest;
j. Check and complete the section which applies.
[ ] The Owner is an individual above the age of majority and
has the legal capacity to enter into this Security Agreement
and the Owner's principal residence is located in the state of
_______;
[X] The Owner is a corporation duly organized and existing
under the laws of the state of Georgia; and the Owner's
Organizational Identification Number is J906681. The Owner is
duly qualified and in good standing as a foreign corporation
in every jurisdiction where such qualification is necessary;
the execution and performance of this Security Agreement have
been duly authorized by action of its Board of Directors, no
action of its shareholders being necessary; the execution and
performance of this Security Agreement will not violate or
contravene any provisions of law or regulation or its Articles
of Incorporation, Shareholder Agreement, By-Laws or other
agreements to which it is a party or by which it is bound; and
no consent or approval of any governmental agency or authority
is required in making or performing the obligations under this
Security Agreement;
[ ] The Owner is a registered partnership, limited liability
company or other registered entity organized under the laws of
the state of _________ and the Owner's Organizational
Identification Number is ______. The Owner is duly qualified
and in good standing to do business in every jurisdiction
where qualification is necessary; the execution and
performance of this Security Agreement have been duly
authorized by its partners/ members/managers as applicable and
no further action of any party is necessary; the execution and
performance of this Security Agreement will not violate or
contravene any provisions of law or regulation or any
partnership agreement, articles of organization, operating
agreement or other agreement to which it is a party or by
which it is bound; and no consent or approval of any
governmental agency or authority is required in making or
performing the obligations under this Security Agreement;
[ ] The Owner is an entity which is not registered; the
execution and performance of this Security Agreement have been
duly authorized by all necessary party/ies and no further
action of any party is necessary; the execution and
performance of this Security Agreement will not violate or
contravene any provisions of law or regulation or agreement to
which Owner is a party or by which it is bound; and no consent
or approval of any governmental agency or authority is
required in making or performing the obligations under this
Security Agreement; the Owner's place of business (if only one
place of business) or chief executive office (if more than one
place of business) is located in the state of ___________;.
k. All information supplied and statements made to SunTrust in
any financial or credit statement or application are true,
correct, complete, valid and genuine in all material respects;
l. [ ] (Check ,if applicable) The Owner further represents that
the Collateral is being acquired with funds simultaneously
advanced to the Borrower by SunTrust, and such funds will be
used for no other purpose;
m. No part of the Collateral has been, and never will be so long
as this Security Agreement remains a lien on the Collateral,
used for the generation, collection, manufacture, storage,
treatment, disposal, release or threatened release of any
hazardous substance, as those terms are defined in the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C., Section 9601, et
seq. ("CERCLA"), Superfund Amendments and Reauthorization Act
("XXXX"), applicable state laws, or regulations adopted
pursuant to either of the foregoing, except in the ordinary
course of manufacturing and repair operations that are
performed in full compliance with applicable provisions of all
such laws and regulations. The Owner agrees to comply with any
federal, state or local law, statute, ordinance or regulation,
court or administrative order or decree or private agreement
regarding materials which require special handling in
collection, storage, treatment or disposal because of their
impact on the environment ("Environmental Requirements"). The
Owner agrees to indemnify and hold SunTrust harmless against
any and all claims, losses and expenses resulting from a
breach of this provision of this Security Agreement and the
Owner will pay or reimburse SunTrust for all costs and expense
for expert opinions or investigations required or requested by
SunTrust which, in SunTrust's sole discretion, are necessary
to ensure compliance with this provision of this Security
Agreement. The obligation to indemnify shall survive the
payment of the Obligations and the satisfaction of this
Security Agreement; and
n. All Collateral has been produced in compliance with the Fair
Labor Standards Act or other applicable wage and employee law,
rule, regulation or order, and that no existing or future
liability shall occur as a result thereof. The Owner may
contest, in good faith, the applicability of any such law,
rule, regulation or order, including prosecuting any appeals,
so long as SunTrust's interest in the Collateral, in the
opinion of SunTrust, is not jeopardized as a result.
CHOICE OF LAW. Owner agrees that certain material events and occurrences
relating to this Security Agreement bear a reasonable relationship to the laws
of . To the extent permitted by applicable law, the validity, terms,
performance, construction and enforcement of this Security Agreement shall be
governed by the laws of such jurisdiction. Unless otherwise specified, "Uniform
Commercial Code" as used herein shall refer to the Uniform Commercial Code of
such jurisdiction, both current and as it may be amended or revised from time to
time in the future.
COVENANTS.
i. The Owner shall furnish to SunTrust such financial and
business information and reports in form and content
satisfactory to SunTrust as and when SunTrust may from time to
time require.
j. The Owner, if a corporation, shall maintain its corporate
existence, and if another entity shall maintain such entity
standing, in each case in good standing and shall not
consolidate or merge with or acquire the stock or other
ownership interest of any other corporation or entity without
the prior written consent of SunTrust; the Owner shall, at the
request of SunTrust, qualify as a foreign corporation or other
applicable entity and obtain all requisite licenses and
permits in each jurisdiction where the Owner does business.
k. The Owner shall notify SunTrust in writing at least 30 days
prior to any change of its name or structure or change in its
state of residence, jurisdiction of registration or
organization, principal place of business or chief executive
office.
l. The following shall apply if the Collateral consists of
tangible personal property: The Owner shall maintain all of
the Collateral in good condition and repair. SunTrust shall
have the right to inspect the Collateral at any reasonable
time and shall have the right to obtain such appraisals,
reappraisals, appraisal updates or environmental inspections
as SunTrust, in its sole discretion, may deem necessary from
time to time. Owner will not use or permit any person or
entity to use the Collateral (i) in any manner inconsistent
with the provisions of this Security Agreement; or (ii) in
violation of any policy of insurance issued with respect to
2
the Collateral; or (iii) in violation of any local, state or
federal law or regulation, including but not limited to any
such law or regulation pertaining to the protection of the
environment or the protection of the health or safety of
persons or animals, and any such law or regulation pertaining
to the control of drugs, narcotics or other controlled
substances. If the Collateral has been used or is hereafter
used in violation of the covenants and agreements contained
herein, Owner shall indemnify SunTrust and hold SunTrust
harmless against all claims, actions, causes of action, costs,
expenses, fees and penalties in connection with such use. All
such obligations and liabilities of Owner shall be included in
the Obligations secured by the Collateral and shall survive
payment of the Obligations and termination of this Security
Agreement. Without the express prior written consent of
SunTrust, Owner shall not cause or permit all or any part of
the Collateral to be affixed to real property so as to become
a fixture as that term is defined or interpreted in the state
in which the Collateral is at any time located.
m. The Owner will not pledge or grant any security interest in
any of the Collateral to anyone except SunTrust, or permit any
lien or encumbrance to attach to any of the Collateral, or any
levy to be made on the Collateral, or any financing statement
(except financing statements in favor of SunTrust) to be on
file against the Collateral, except liens that are permitted
under Section 5.1 of the Loan Agreement.
n. Owner hereby constitutes and appoints any officer or employee
of SunTrust as its true and lawful attorney-in-fact (i) to
transfer the Collateral into SunTrust's name or the name of
its nominee, but SunTrust's failure to do so shall not be
interpreted to be a waiver of any interest, and (ii) to do and
perform all other acts and things necessary, proper and
requisite to carry out the intent of this Security Agreement.
The power herein granted shall be deemed to be coupled with an
interest and may not be revoked until the Obligations have
been paid in full, including all expenses payable by Owner and
no amounts may be re-borrowed.
o. The Owner agrees to pay on demand all legal expenses and
reasonable attorneys' fees (in the amount of 15% of the
principal and interest secured hereby if this agreement is
governed by the laws of Georgia), as permitted by applicable
law, any appraisal fees and all expenses incurred or paid by
SunTrust in protecting and enforcing the rights of SunTrust
under this Security Agreement, including SunTrust's right to
take possession of the Collateral and its proceeds, and to
hold, prepare for sale, sell and dispose of the Collateral.
p. This Security Agreement shall be a continuing agreement and
shall remain in full force and effect irrespective of any
interruptions in the business relations of the Borrower with
SunTrust and shall apply to any ultimate balance which shall
remain due by the Borrower to SunTrust; provided, however,
that the Owner may by written notice terminate this Security
Agreement with respect to all Obligations of the Borrower
incurred or contracted by the Borrower or acquired by SunTrust
after the date on which such notice is personally delivered to
or mailed via registered mail to the SunTrust address set
forth below and accepted by SunTrust.
Definitions. AS USED IN THIS SECURITY AGREEMENT:
a. "Account" shall mean a right to payment of a monetary
obligation, whether or not earned by performance (i) for
property that has been or is to be sold, leased, licensed,
assigned or otherwise disposed of (ii) for services rendered
or to be rendered (iii) for a policy of insurance issued or to
be issued, (iv) for a secondary obligation incurred or to be
incurred, (v) for energy provided or to be provided (vi) for
the use or hire of a vessel under a charter or other contract
or (vii) arising out of the use of a credit or charge card or
information on or for use with the card. Account shall include
rights to payment for real estate sold and health care
insurance receivables.
b. "Equipment" shall mean all of the Owner's tangible
personal property, goods, manuals, books, records, data files,
storage media, furniture, apparatus, furnishings, fittings,
fixtures, machinery, motor vehicles, appliances, computer
hardware, software and operating systems, and equipment,
wherever located or however used, which are now owned or
hereafter acquired by the Owner or in which the Owner now has
or hereafter acquires any right, title or interest together
with all proceeds thereof;
c. "General Intangibles" shall mean all Payment
Intangibles, choses in action, things in action, suits,
actions, causes of actions, commercial tort claims and claims
of every kind and nature, whether at law or in equity and all
condemnation awards, insurance proceeds, customer lists, trade
secrets, servicing rights, computer software and technology
(including, but not limited to, all embedded software, all
source and object codes and all updates of any software
technology), patents and patent rights (whether or not
registered), patent applications, all trade secrets relating
to the inventions protected by all patents disclosed to the
United States Patent and Trademark Office or otherwise known
by the inventors during the examination of such patents, all
information and other materials necessary to fully exploit any
technology, licenses, certificated and uncertificated
securities, investment property, rights to proceeds of letters
of credit, letter-of-credit rights, supporting obligations of
every nature, trademarks and trademark applications (whether
or not registered), trade names, domain name registrations and
web site designs, copyrights and copyright applications
(whether or not registered), logos, engineering drawings,
goodwill, all claims for income tax refunds and other payments
from any local, state or federal governmental authority or
agency, all licenses, permits and agreements of any kind or
nature pursuant to which (i) Owner operates or has authority
to operate, (ii) Owner possesses, uses or has authority to
possess or use property (whether tangible or intangible) of
others or (iii) others possess, use or have authority to
possess or use property (whether tangible or intangible) of
Owner, and all recorded data of any kind or nature, regardless
of the medium of recording, including, without limitation, all
software, writings, plans, specifications, schematics and
documents of the Owner which are now owned or hereafter
acquired by the Owner or in which the Owner now has or
hereafter acquires any right, title or interest, together with
all proceeds thereof
d. "Inventory" shall mean all goods which are leased or
held for sale or lease or to be furnished under a contract of
service or are furnished under a contract of service, all
finished goods, raw materials, work in process, supplies and
materials used or consumed in the Owner's business, and all
contractual rights of the Owner pertaining to the Inventory,
together with all proceeds thereof.
e. "Payment Intangible" shall mean a General Intangible
under which the account debtor's principal obligation is a
monetary obligation.
BLANKET SECURITY INTEREST. If the Collateral is identified a Blanket Security
Interest, Owner acknowledges and agrees that this Security Agreement and any
financing statement filed in connection with this Security Agreement is intended
to cover and does cover all assets of the Owner, wherever located, whether now
owned or subsequently acquired or arising and all proceeds and products thereof
and includes, but is not limited to all of the Owner's:
g. Accounts, insurance refund claims and all other insurance
claims and proceeds, tax refund claims, license fees, rents,
contract rights, instruments, certificates of deposit,
documents, tangible chattel paper, electronic chattel paper,
promissory notes, drafts, acceptances and other forms of
obligations and receivables, whether or not earned by
performance;
h. Inventory;
i. Equipment;
j. General Intangibles;
3
k. Demand, time, savings, passbook and other deposit accounts of
the Owner with all banks, credit unions, savings and loan
associations and other financial institutions which are now
owned or hereafter acquired by the Owner or in which the Owner
now has or hereafter acquires any right, title or interest
(Deposit Accounts); and
l. Commercial tort claims, letter of credit rights, awards and
other payments in respect of any taking and all insurance
proceeds in respect of any of the foregoing, and all monies
and claims for money due and to become due to Owner under all
its Accounts, contract rights, leases and General Intangibles,
all investment property and financial assets, all as said
terms are defined in the Uniform Commercial Code.
ACCOUNTS. If the Collateral includes Accounts, the following shall apply.
c. The Owner warrants that each and every Account, now owned or
hereafter acquired, is a bona fide existing obligation, valid
and enforceable against the account debtor, for goods sold or
leased and delivered or services rendered in the ordinary
course of business; it is subject to no dispute, defense or
offset, except as may be incidental to customer rights to
warranty repairs or replacements, or to completion of
deliveries or services in completion with specifications, in
amounts typically incurred in the ordinary course of Owner's
business; the Owner has good title to the Account and has full
right and power to grant SunTrust a security interest in the
Collateral and the Owner will immediately notify SunTrust of
any Account to which these warranties are or become untrue;
the Owner agrees that it will not permit any return of
merchandise, the sale of which gave rise to any of the
Accounts, except in the usual and regular course of business;
d. The Owner shall maintain complete and accurate books of
accounts and records, and its principal books of accounts and
records, including all records concerning Accounts and
contract rights, shall be kept and maintained at the place(s)
specified above. The Owner shall not move such books of
accounts and records without giving SunTrust at least 30 days
prior written notice. All accounting records and financial
reports furnished to SunTrust shall be maintained and prepared
in accordance with generally accepted accounting principles
consistently applied. It is specifically agreed that SunTrust
shall have and the Owner hereby grants to SunTrust a security
interest in all books of accounts and records of the Owner and
shall have access to them at any time for inspection,
verification, examination and audit;
c. The Owner will prepare and deliver to
SunTrust, at SunTrust's request from time to time, a listing and aging of all
Accounts and any further schedules or information that SunTrust may require;
d. SunTrust shall have the right at any time to notify account
debtors of its security interest in the Accounts and
supporting obligations and require payments to be made
directly to SunTrust. The Owner hereby appoints SunTrust and
any officer or employee of SunTrust, as SunTrust may from time
to time designate, as its attorneys-in-fact for the Owner, to
sign and endorse in the name of the Owner, to give notice in
the name of the Owner, and to perform all other actions
necessary or desirable in the reasonable discretion of
SunTrust to effect these provisions and carry out the intent
hereof, all at the cost and expense of the Owner. The Owner
hereby ratifies and approves all acts of such
attorneys-in-fact and neither SunTrust nor any other such
attorneys-in-fact will be liable for any acts of commission or
omission nor for any error of judgment. This power being
coupled with an interest is irrevocable so long as any Account
or General Intangible assigned to SunTrust remains unpaid and
the Borrower has any Obligations to SunTrust. The costs of
such collection and enforcement, including attorneys' fees and
out-of-pocket expenses, shall be borne solely by the Owner
whether the same are incurred by SunTrust or the Owner;
e. At the option of SunTrust, all payments on the Accounts
received by the Owner shall be remitted to SunTrust in their
original form on the day of receipt; all notes, checks, drafts
and other instruments so received shall be duly endorsed to
the order of SunTrust. At SunTrust's election, the payments
shall be deposited into a special deposit account ("Special
Account") maintained with SunTrust. SunTrust may designate
with each such deposit the particular Account upon which
payment was made. The Special Account shall be held by
SunTrust as additional security for the Obligations. Prior to
depositing payments on the Accounts into the Special Account,
the Owner agrees that it will not commingle such payments with
any of the Owner's funds or property, but will hold them
separate and apart and in trust for SunTrust. SunTrust will
have the power to withdraw from the Special Account. SunTrust
may at any time and from time to time, in its sole discretion,
apply any part of the funds in the Special Account to the
Obligations whether or not the same is due. Upon full and
final satisfaction of the Obligations (including without
limitation all fees and expenses owing to SunTrust or its
attorneys), plus termination of any commitment to extend
additional funds, SunTrust will pay to the Owner any excess
funds, whether received by SunTrust as a deposit in the
Special Account or as a direct payment on any of the
Obligations;
f. If any of the Owner's Accounts arise out of contracts with the
United States or any department, agency, or instrumentality
thereof and such Accounts equal at least 10% of the Owner's
aggregate Accounts, the Owner will immediately notify SunTrust
in writing and execute any instruments and take any steps
required by SunTrust in order that all moneys due and to
become due under such contracts shall be assigned to SunTrust
and in order that proper notice be given under the Federal
Assignment of Claims Act;
l. SunTrust shall not be liable and shall suffer no loss on
account of loss or depreciation of any Account due to acts or
omissions of SunTrust unless SunTrust's conduct is willful and
malicious, and SunTrust shall have no duty to take any action
to preserve the Collateral or collect Accounts;
m. Upon request by SunTrust, the Owner will note on its records
concerning the Collateral, a notation of the security interest
granted under this Security Agreement, which notation must be
satisfactory to SunTrust in both form and content;
n. SunTrust may enforce collection of any Account and supporting
obligation by suit or otherwise and may surrender, release or
exchange all or any part thereof, or compromise, extend or
renew the same for any period. All monies so received by
SunTrust may in SunTrust's sole discretion, be either (i)
applied by SunTrust directly toward payment of all or any part
of the Obligations, whether or not then due, in such order of
application as SunTrust may determine; or (ii) deposited to
the credit of Borrower or in an account with SunTrust as
security for payment of the Obligations and SunTrust may, from
time to time, in its sole discretion, (a) apply all or any
part of the available funds in said deposit account toward
payment of all or any part of the Obligations, whether or not
then due, in such order of application as SunTrust may
determine or (b) permit Borrower to use all or any part of the
funds on deposit in said account in the normal course of
business. Owner will promptly reimburse SunTrust for all
expenses, including attorneys' fees and legal expenses,
incurred by SunTrust in seeking to collect on or enforce
collection of such amounts; and
o. After notice from SunTrust, Owner will forthwith, upon
receipt, transmit and deliver to SunTrust, in the form
received, all cash, checks, drafts, items, chattel paper and
other instruments or writing for the payment of money
(properly endorsed, where required, so that such items may be
collected by SunTrust) which may be received by Owner at any
time in full or partial payment or otherwise as proceeds of
any of the Collateral. After such notice from SunTrust, Owner
will not commingle any such proceeds with any other of its
funds or property, but will hold them separate and apart from
Owner's own funds or property and in express trust for
SunTrust until delivery is made to SunTrust, and
4
p. To protect SunTrust's rights hereunder, Owner hereby
constitutes any officer or employee of SunTrust its true and
lawful attorney-in-fact with full power of substitution to
endorse or sign the name of Owner upon any invoice, freight or
express xxxx, or xxxx of lading relating to any Collateral
covered hereby and to notify the post office authorities to
change the address for delivery of mail Owner's mail to an
address designated by SunTrust and to receive, open, and
dispose of all mail addressed to Owner and to do and perform
all other acts and things necessary, proper and requisite to
carry out the intent of this Security Agreement. This power
shall be deemed to be coupled with an interest and may not be
revoked by Owner until the Obligations have been paid in full.
INVENTORY. If the Collateral includes Inventory, the following shall apply:
a. The Owner agrees to maintain books and
records pertaining to the Inventory in such detail, form and scope as SunTrust
shall require. The Owner shall promptly advise SunTrust of any substantial
changes relating to the type, quantity of the Inventory or any event which would
have a material effect on the value of the Inventory or on the security interest
granted to SunTrust.
b. If the Inventory remains in the possession or control of any
of the Owner's agents or processors, the Owner shall notify
such agents or processors of SunTrust's security interest, and
upon request, instruct them to hold such Inventory for
SunTrust's account and subject to SunTrust's instruction.
f. The Owner will prepare and deliver to SunTrust, at SunTrust's
request from time to time, a listing of all Inventory and such
information regarding the Inventory as SunTrust may require.
g. SunTrust may require the Owner to assemble the Collateral and
make it available to SunTrust at a place to be designated by
SunTrust which is reasonably convenient. SunTrust may take
possession of the Collateral without a court order.
h. Until Default hereunder, Owner may, unless otherwise provided
in this Security Agreement, in the ordinary course of
business, at its own expense, sell, lease or furnish under
contract of service any of the Inventory normally held by
Owner for such purpose.
INSURANCE, TAXES AND ASSESSMENTS. The Owner shall at all times keep insurable
Collateral insured against any and all risks, including, without limitation,
fire, and such other insurance, including but not limited to flood insurance, as
may be required by SunTrust from time to time, and in such amounts as may be
satisfactory to SunTrust. Insurance may be purchased from an insurer of the
Owner's choice, except as otherwise required by law. All such insurance policies
are to be made payable to SunTrust, in the event of loss, under a standard
non-contributory "mortgagees", "lenders", or "secured party" clause and shall
contain a breach of warranty provision acceptable to SunTrust which shall
establish SunTrust's right to be paid the insurance proceeds irrespective of any
action, inaction, breach of warranty or conditions, or negligence of Owner or
any other person or entity with respect to such policies. All such insurance
policies shall provide for a minimum of thirty days written notice to SunTrust
prior to cancellation. Upon the occurrence and continuation of an Event of
Default under the Loan Agreement, Owner appoints SunTrust attorney-in-fact to
file claims under any insurance policies, to receive, receipt and give
acquittance for any payments that may be payable to Owner hereunder, and to
execute any and all endorsements, receipts, releases, assignments,
reassignments, or other documents that may be necessary to effect the
collection, compromise or settlement of any claims under any such insurance
policies, which power of attorney shall be deemed coupled with an interest and
irrevocable so long as SunTrust has a security interest in any of the
Collateral. Owner shall provide proof of such insurance as requested by
SunTrust. The Owner shall pay and discharge all taxes, assessments and charges
of every kind prior to the date when such taxes, assessments or charges shall
become delinquent and provide proof of such payments to SunTrust, upon request.
However, nothing contained in this Security Agreement shall require the Owner to
pay any such taxes, assessments and charges so long as it shall contest its
validity in good faith and shall post any bond or security required by SunTrust
against the payment. Upon the failure of the Owner to purchase required
insurance or to pay such required amounts, SunTrust, at its option, and at the
Owner's expense, may obtain such insurance or pay such taxes, assessments, and
charges. In addition, SunTrust may from time to time, in its sole discretion,
perform any undertakings of the Owner which the Owner shall fail to perform and
take any other action which SunTrust deems necessary for the maintenance or
preservation of any of the Collateral. Any amounts so paid shall be included in
the Obligations secured by the Collateral. At SunTrust's request, the Owner
agrees to promptly reimburse SunTrust on demand for all such expenses incurred
by SunTrust, together with interest thereon from the date paid by SunTrust at
the highest rate payable on the Obligations. Any insurance obtained by SunTrust,
at its option, may be single or dual interest, protecting its rights, rights of
the Owner or joint rights. Any insurance obtained by SunTrust may provide, at
its option, that such insurance will pay the lesser of the unpaid balance of the
Obligations or the repair or replacement value of the Collateral. SunTrust may
use the proceeds of any insurance obtained by Owner or by SunTrust to repair or
replace the Collateral or, if SunTrust elects to do so, to repay part or all of
the Obligations, whether or not then due, and in such order as SunTrust may
determine, and the Borrower will still be responsible to repay any remaining
unpaid balance of the Obligations. The whole or partial loss or destruction of
all or any part of the Collateral shall not affect or impair the obligation of
any person or entity liable under the Obligations.
ADDITIONAL COVENANTS AND AGREEMENTS IF BORROWER IS DIFFERENT THAN OWNER. If
Borrower is different than Owner, then so long as any of the Obligations remain
outstanding or so long as this Security Agreement shall remain in effect Owner
covenants and agrees as follows: (a) Owner hereby expressly consents to and
adopts any agreements which Borrower has entered into or will enter into with
SunTrust regarding any of the Obligations or the Collateral; (b) Owner hereby
agrees that the Collateral shall be subject to disposition in accordance with
the terms and conditions of this Security Agreement and any agreements executed
by Borrower in connection with any of the Obligations or the Collateral; (c)
Owner will not be subrogated to SunTrust's rights to any other collateral and
any proceeds thereof in which SunTrust holds a security interest to secure
payment of any of the Obligations; (d) Owner agrees that SunTrust may at any
time and from time to time, without notice to, or the consent of, Owner: (i)
retain any of the Collateral in satisfaction of any of the Obligations to the
extent permitted by applicable law, (ii) retain or obtain a security interest or
lien in any property in addition to the Collateral to secure payment or
performance of any of the Obligations, (iii) allow or cause any Obligations to
be incurred, (iv) retain or obtain persons or entities that are primarily or
secondarily obligated upon any of the Obligations other than the Borrower, (v)
extend or renew any of the Obligations for any period (whether or not longer
than the original term), (vi) release, compromise or modify any of the
Obligations, (vii) release, in whole or in part, any person or entity primarily
or secondarily obligated upon any of the Obligations or enter into any
compromise with respect to the obligation of any such person or entity relative
to any of the Obligations, (viii) release, with or without consideration,
SunTrust's security interest or lien in any property other than the Collateral
which may at any time secure payment or performance of any of the Obligations,
(ix) accept substitutions or exchanges for any property other than the
Collateral which may at any time secure payment or performance of any of the
Obligations, (x) exercise its rights as a secured party and dispose of the
Collateral without having first resorted to any property securing any of the
Obligations other than the Collateral and without having first proceeded against
or demanded payment from any person or entity primarily or secondarily obligated
upon any of the Obligations; and (e) Owner specifically waives any and all
rights pursuant to O.C.G.A. Sec. 10-7-24 or T.C.A. Sec. 00-00-000 et seq. if
this Security Agreement is governed by the laws of Georgia or Tennessee and the
same or similar provision contained in the Uniform Commercial Code of any other
state or states which may govern this Security Agreement.
EVENTS OF DEFAULT. As used herein the term "Obligor" shall individually,
collectively, jointly and severally refer to Borrower, Owner and any other
person or entity that is primarily or secondarily liable upon all or any part of
the Obligations secured hereby and any person or entity that has conveyed or may
hereafter convey any security interest or lien to SunTrust in any real or
personal property to secure payment of all or any part of the Obligations. An
"Event of Default" shall occur hereunder upon the occurrence of any one or more
of the following events or conditions:
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a. the occurrence of an "Event of Default" under Section 7.1 of
the Loan Agreement; or
b. a demand by SunTrust is made pursuant to the Demand Note; or
c should the state of organization or registration of Owner (if
an entity) change or
e. any other act or circumstance occurs or exists which leads
SunTrust to deem itself insecure.
REMEDIES UPON DEFAULT; ACCELERATION OF OBLIGATIONS. The Obligations secured
hereby shall automatically and simultaneously mature and become due and payable,
without notice or demand, upon the filing of any petition or the commencement of
any proceeding by or against an Obligor for relief under any bankruptcy or
insolvency law, or any law relating to the relief of debtors, readjustment of
indebtedness, debtor reorganization, or composition or extension of debt. Upon
the occurrence of any one or more of the other Events of Default described
above, the Obligations secured hereby shall, at the option of SunTrust,
immediately mature and become due and payable, without notice or demand. If all
or any part of the Obligations secured hereby are not paid as and when due and
payable, whether by acceleration or otherwise, then SunTrust may, at its option,
without notice or demand of any kind: (a) transfer all or any part of the
Collateral into the name of SunTrust or its nominee, at Owner's expense, with or
without disclosing that such Collateral is subject to SunTrust's security
interest; (b) enter upon premises upon which the Collateral is located and, to
the extent permitted by law without legal process, take exclusive possession of
the Collateral, and redeem the Collateral, or any part thereof (irrespective of
redemption penalty); (c) appropriate and apply toward payment of such of the
Obligations, and in such order of application, as SunTrust may from time to time
elect, all or any part of any balances, credits, items or monies in any bank
deposit or deposit account constituting a part of the Collateral; (d) sell the
Collateral at public or private sale, either in whole or in part, and SunTrust
may purchase the Collateral at any such public sale and at any private sale as
permitted by law. Such sale shall result in the sale, conveyance and disposition
of all right, title and interest of Owner in all or any part of the Collateral
which is the subject of such a disposition and SunTrust is authorized as
attorney-in-fact for Owner to sign and execute any transfer, conveyance or
instrument in writing that may be necessary or desirable to effectuate any such
disposition of the Collateral, which power shall be coupled with an interest;
and (e) exercise all other rights of a secured party under the Uniform
Commercial Code and all other rights under law or pursuant to this Security
Agreement, all of which shall be cumulative. If any notification of intended
disposition of any Collateral is required by law, reasonable notification shall
be deemed given if written notice is deposited in the U.S. Mail, first class or
certified postage prepaid, addressed to Owner and such other persons or entities
as SunTrust deems to be appropriate, stating the time and place of any public
sale or the time after which any private sale or disposition is to be made, at
least ten (10) days prior thereto. The proceeds of any disposition of the
Collateral shall be applied in the following order (i) First, to pay all costs
and expenses associated with the retaking, holding, preparation and disposition
of the Collateral; (ii) Then to pay attorneys' fees; (iii) Next, to pay all
accrued but unpaid interest upon the Obligations in such order as SunTrust may
determine in its discretion; and (iv) Finally, to all unpaid principal
outstanding upon the Obligations, whether or not due and payable, in such order
as SunTrust may determine in its discretion. Any remaining surplus shall be paid
to Owner or otherwise in accordance with law. If the proceeds of such
disposition are insufficient to pay the Obligations in full, Borrower and all
other persons or entities liable thereon shall remain fully obligated to
SunTrust for the unpaid balance thereof.
EXECUTION BY MORE THAN ONE PARTY. The term "Owner" as used in this Security
Agreement shall, if this instrument is signed by more than one party, mean the
"Owner and each of them" and each shall be jointly and severally obligated and
liable. If any party is a partnership or limited liability company, the
agreements and obligations on the part of the Owner shall remain in force and
applicable regardless of any changes in the parties composing the partnership or
limited liability company and the term "Owner" shall include any altered or
successive partnership or limited liability company and the predecessor
partnership or limited liability company and its partners or members/managers
shall not be released from any obligation or liability.
WAIVERS BY THE OWNER. The Owner hereby waives (a) notice of acceptance of this
Agreement and of any extensions or renewals of credit by SunTrust to the
Borrower; (b) presentment and demand for payment of the Obligations; (c) protest
and notice of dishonor or default to the Owner or to any other party with
respect to the Obligations; (d) all other notices to which the Owner might
otherwise be entitled; and (e) if for business purposes, the benefit of any
homestead exemption. To the extent permitted by applicable law, the Owner
further waives any right to require that any action be brought against the
Borrower or any other party, the right to require that resort be had to any
security or to any balance of any deposit account or credit on the books of
SunTrust in favor of the Borrower or any other party, the right to redeem the
Collateral and to object to SunTrust's proposal to retain the Collateral in
satisfaction of any of Obligations and any right to obtain injunctive or other
relief relative to SunTrust's sale or other disposition of the Collateral and to
recover losses caused by SunTrust's failure to approve or correct any list of
Collateral provided to SunTrust for any purpose by any person or entity. Owner
waives all rights, claims and defenses based on principles of suretyship.
NO OBLIGATION TO EXTEND CREDIT. This Security Agreement shall not be construed
to impose any obligation on SunTrust to extend or continue to extend any credit
at any time.
INDEMNITY. The Owner agrees to indemnify and hold harmless SunTrust, its
subsidiaries, successors, and assigns and their respective agents, directors,
employees, and officers from and against any and all complaints, claims,
defenses, demands, actions, bills, causes of action (including, without
limitation, costs and attorneys' fees), and losses of every nature and kind
whatsoever, which may be raised or sustained by any directors, officers,
employees, shareholders, creditors, regulators, successors in interest, or
receivers of the Borrower or any third party as a result of or arising out of,
directly or indirectly, SunTrust extending credit as evidenced by the
Obligations to the Borrower, and taking the Collateral as security for the
Obligations, and the Owner agrees to be liable for any and all judgments which
may be recovered in any such action, claim, proceeding, suit, or xxxx, including
any compromise or settlement thereof, and defray any and all expenses,
including, without limitation, costs and attorneys' fees, that may be incurred
in or by reason of such actions, claims, proceedings, suits, or bills.
FINANCING STATEMENTS AND ADDITIONAL DOCUMENTATION. SunTrust is authorized to
file such financing statements and amendments as SunTrust deems necessary to
perfect, continue or assure its security interest in the Collateral and the
Owner hereby ratifies any financing statement filed previously by SunTrust. The
Owner will deliver such instruments of future assignment or assurance, and such
other agreements, as SunTrust may from time to time request to carry out the
intent of this Security Agreement, and will join with SunTrust in executing any
documents in form satisfactory to SunTrust, and hereby authorizes SunTrust to
sign for Owner, or to file without signature, any financing statements,
amendments and other documents and instruments from time to time as SunTrust may
deem advisable, and pay any cost of filing the same, including all recordation,
transfer, indebtedness and other taxes and fees, deemed advisable by SunTrust.
SUCCESSOR IN INTEREST: SUNTRUST AS COLLATERAL AGENT. This Security Agreement
shall be binding upon the Owner, its successors and assigns, and the benefits
hereof shall inure to SunTrust, its successors and assigns. Notwithstanding the
foregoing, Owner shall not assign Owner's rights or obligations under this
Security Agreement without SunTrust's prior written consent. SunTrust Bank shall
serve as collateral agent on behalf of itself and present and future affiliates.
MISCELLANEOUS. (a) Each and every power given herein is coupled with an interest
and is irrevocable by death or otherwise. (b) The captions of the paragraphs of
this Security Agreement are for convenience only and shall not be deemed to
constitute a part hereof or used in construing the intent of the parties. (c) If
any part of any provision of this Security Agreement shall be invalid or
unenforceable under applicable law, such part shall be ineffective to the extent
of such invalidity only, without in any way affecting the remaining parts of
such provision or the remaining provisions of this Security Agreement. (d) This
Security Agreement shall not be modified or
6
amended except in a writing signed by Owner and SunTrust. (e) All
representations, warranties, covenants and agreements contained herein or made
in writing by Owner in connection herewith shall survive the execution and
delivery of this Security Agreement and any and all notes, other agreements,
documents and writings relating to or arising out of any of the foregoing or any
of the Obligations. (f) All rights and remedies of SunTrust expressed herein are
in addition to all other rights and remedies possessed by SunTrust under
applicable law or other agreements, including rights and remedies under any
other agreement or instrument relating to any of the Obligations or any security
therefor. (g) No waiver by SunTrust of any of its rights or remedies or of any
default shall operate as a waiver of any other right or remedy or of any other
default or of the same right or remedy or of the same default on a future
occasion. No delay or omission on the part of SunTrust in exercising any right
or remedy shall operate as a waiver thereof, and no single or partial exercise
by SunTrust of any right or remedy shall preclude any other or further exercise
thereof or the exercise of any other right or remedy. No action of SunTrust
permitted hereunder or under any agreement or instrument relating to any of the
Obligations or any security therefor shall impair or affect the rights of
SunTrust in and to the Collateral. (h) All terms as defined herein shall include
both the plural and singular, where applicable. (i) All notices or
communications given to Owner or SunTrust pursuant to the terms of this Security
Agreement shall be in writing and given to Owner and SunTrust at the address set
forth below. Unless otherwise specifically provided herein to the contrary, such
written notices and communications shall be delivered by hand or overnight
courier service, or mailed by first class mail, postage prepaid, addressed to
the parties hereto at the addresses referred to herein or to such other
addresses as either party may designate to the other party by a written notice
given in accordance with the provisions of this Security Agreement. Any written
notice delivered by hand or by overnight courier service shall be deemed given
or received upon receipt. Any written notice delivered by U.S. Mail shall be
deemed given or received on the third (3rd) business day after being deposited
in the U.S. Mail. (j) SunTrust shall not be responsible or liable for its
failure to give notice to Owner of any default in the payment of any amounts
that might become due and owing with respect to the Collateral nor shall
SunTrust be responsible or liable for SunTrust's failure to collect any amounts
payable with respect to the Collateral. (k) SunTrust shall be under no
obligation to monitor the market value of any Collateral, to advise the Owner of
such market value, or to take any action whatsoever to preserve the value of any
Collateral by selling, exchanging or otherwise disposing of such Collateral in
order to avoid any loss to the Owner resulting from a decline in the market
value of such Collateral. (l) SunTrust shall be under no obligation to pay any
amounts owing with respect to any Collateral. (m) This Agreement is in addition
to and not in replacement of any other agreement between Owner and SunTrust.
WAIVER OF JURY TRIAL. OWNER AND SUNTRUST HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, BASED
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY AGREEMENT
AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
WITH THIS SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR SUNTRUST ENTERING INTO OR ACCEPTING THIS
SECURITY AGREEMENT. FURTHER, OWNER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR
AGENT OF SUNTRUST, NOR SUNTRUST'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUNTRUST WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
The undersigned have executed this Security Agreement as of the date first
written above.
Signature(s) of Individual Owner(s) Signature(s) of Non-Individual Owner(s)
______________________________(Seal) EMS TECHNOLOGIES, INC.
Owner's Signature Owner
______________________________(Seal) By: /s/ _______________________________
Owner's Signature
______________________________(Seal) Xxx X. Xxxxxx, Executive Vice President
Owner's Signature Name and title, printed or typed
______________________________(Seal) _______________________________________
Owner's Signature Owner
By: ___________________________________
_______________________________________
Name and title, printed or typed
ADDRESSES
Owner Address for Purpose of Notice: 000 Xxxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
SunTrust Address for Purpose of Notice: 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
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