EXHIBIT 5.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of December __,
2004, among each of the parties listed on Schedule I hereto and each other
subsidiary of the Parent hereafter a party hereto (each a "Pledgor" and
collectively the "Pledgors"), in favor of BANK OF AMERICA, NATIONAL ASSOCIATION
(CANADA BRANCH), as Canadian Canadian Collateral Agent (the "Canadian Collateral
Agent"), for the benefit of the Secured Creditors (as defined below).
W I T N E S S E T H:
WHEREAS, EMS Technologies Canada, Ltd. (the "Borrower"), the lenders from
time to time party thereto (the "Lenders") and Bank of America, National
Association (Canada branch), as Canadian Administrative Agent, Funding Agent and
Canadian Collateral Agent (the "Agent") are all party to the Canadian Revolving
Credit Agreement (as amended, restated, modified, extended, renewed, replaced,
supplemented and/or refinanced from time to time, the "Credit Agreement"), dated
as of the date hereof pursuant to which, the Lenders have agreed to establish a
revolving credit facility on behalf of the Borrower and to provide for the
issuance of, and participation in, letters of credit for the account of the
Borrower;
WHEREAS, pursuant to that certain Guaranty Agreement dated as of the date
hereof (the "Guaranty Agreement"), the guarantors signatory thereto have jointly
and severally guaranteed the payment and performance when due of all
indebtedness and other obligations of the Borrower under the Credit Agreement;
WHEREAS, the Borrower and its Subsidiaries may at any time and from time
to time enter into one or more Hedging Transactions with one or more Lenders or
any Affiliate thereof (each such Lender or Affiliate, even if the respective
Lender subsequently ceases to be a Lender under the Credit Agreement for any
reason, in such capacity, together with its respective successors and assigns, a
"Swap Provider";
WHEREAS, it is a condition precedent to the obligations of the Canadian
Administrative Agent, the Issuing Bank, the Swingline Lender ( each as defined
in the Credit Agreement), and the Lenders (collectively the "Creditors") under
the Credit Agreement that each Pledgor grant to the Canadian Collateral Agent a
security interest in all of its Pledged Collateral (as defined below) to secure
all obligations of the Borrower under the Credit Agreement;
WHEREAS, it is a condition precedent to the Swap Providers entering into
the Hedging Transactions that the Pledgors enter into this Agreement to secure
the Hedging Obligations (as defined herein);
WHEREAS, the Pledgors are the record and beneficial owners of all of the
issued and outstanding shares, interests, participations or other equivalent
equity ownership (however designated) of capital stock or other equity
securities ("Equity Interests") listed on Schedule II attached hereto; and
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WHEREAS, each Pledgor desires to grant a security interest in its Pledged
Collateral (as defined herein) to the Secured Creditors to satisfy the
conditions precedent set forth above.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement.
2. Pledge. Each Pledgor hereby (i) pledges and grants to the Canadian
Canadian Collateral Agent, for the benefit of the Creditors, a first priority
continuing security interest in all of such Pledgor's right, title and interest
in, to and under the following property, whether now owned by or owing to, or
hereafter acquired by or arising in favor of such Pledgor, and (ii) pledges and
grants to the Canadian Canadian Collateral Agent for the benefit of the Swap
Providers, a first priority continuing security interest in all of such
Pledgor's right, title and interest in, to and under the following property,
whether now owned by or owing to, or hereafter acquired by or arising in favor
of such Pledgor:
(a) all issued and outstanding Equity Interests (other than Exempt
Collateral (as defined below)) listed on Schedule II attached hereto and all
Equity Interests from time to time acquired by any Pledgor or such Pledgor's
designees in any manner (together, the "Pledged Shares") and any and all
certificates representing the Pledged Shares, and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares;
(b) any stock or other securities acquired by any Pledgor or such
Pledgor's designees with respect to, incident to or in lieu of the Pledged
Shares or with respect to, incident to or in lieu of the Pledged Collateral (i)
due to any dividend, stock-split, stock dividend or distribution on dissolution,
or partial or total liquidation, or for any other reason, (ii) in connection
with a reduction of capital, capital surplus or paid-in-surplus or (iii) in
connection with any spin-off, split-off, reclassification, readjustment, merger,
consolidation, sale of assets, combination of shares or any other plan of
distribution affecting of the issuer of any Pledged Shares;
(c) any subscription or other rights or options issued in connection
with the Pledged Shares, and, if exercised by any Pledgor, all new shares or
other securities so acquired by such Pledgor, which shall promptly be assigned
and delivered to the Canadian Collateral Agent and held under the terms of this
Pledge Agreement in the same manner as the Pledged Shares originally pledged
hereunder; and
(d) Any and all proceeds, monies, income and benefits arising from
or by virtue of, and all dividends and distributions (cash or otherwise) payable
and/or distributable with respect to, all or any of the Pledged Shares or other
securities and rights and interests described in this Section 2;
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provided, that no Pledgor shall be required at any time to pledge hereunder (i)
more than 35% of the total combined voting power of all classes of equity
interests entitled to vote of any corporation, limited liability company,
partnership or other entity organized under the laws of a jurisdiction other
than the Untied States or any State or Territory thereof that, in any such case
is treated as a corporation or an association taxable as a corporation for U.S.
Federal income tax purposes, (ii) any Equity Interests of any corporation,
limited liability company, partnership or other entity organized under the laws
of a jurisdiction of the Untied States or any State or Territory thereof or
(iii) the limited partnership interest owned as of the date hereof by EMS
Investment Holdings, Inc. in Skybridge Limited Partnership ((i), (ii) and (iii)
together, the "Exempt Collateral").
As used herein, (a) through (d) hereinafter (excluding the Exempt
Collateral) shall be collectively referred to as the "Pledged Collateral".
Notwithstanding anything to the contrary contained in this Section or
elsewhere in this Pledge Agreement, each Pledgor and the Canadian Collateral
Agent (on behalf of the Secured Creditors) acknowledges and agrees that (i) the
Creditors' security interest in the Pledged Collateral and the Swap Providers'
security interests in the Pledged Collateral constitute security interests
separate and apart from each other, (ii) the grants of security interest
hereunder constitute two separate and distinct grants of security, one in favor
of the Canadian Collateral Agent for the benefit of the Creditors, and the
second in favor of the Canadian Collateral Agent for the benefit of the Swap
Providers and (iii) in the event of any conflict between the provisions of this
Agreement and the provisions of the Loan Documents or the Hedging Transactions,
the terms of this Agreement shall prevail.
3. Security For Secured Obligations. This Pledge Agreement and the Pledged
Collateral secure the prompt payment, in full when due, whether at stated
maturity, by acceleration or otherwise, and performance of (i) the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all Obligations (including Obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due),
indebtedness and liabilities (including, without limitation, indemnities, fees
and interest thereon and all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Pledgor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such case, proceeding or other action) of such Pledgor owing
to the Creditors, now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement and each Loan Document to which such
Pledgor is a party (including, in the case of each Pledgor that is a Guarantor,
all such obligations, indebtedness and liabilities under the Guaranty Agreement)
and the due performance and compliance by such Pledgor with the terms,
conditions and agreements of the Credit Agreement and each such Loan Document
(all such obligations, indebtedness and liabilities under this clause (i), being
herein collectively called the "Obligations"); (ii) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due), indebtedness and
liabilities (including, without limitation, indemnities, fees and interest
thereon and all interest that accrues after the commencement of any case,
proceeding or other action relating to
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the bankruptcy, insolvency, reorganization or similar proceeding of any
Pledgor at the rate provided for in the respective documentation, whether or not
a claim for post-petition interest is allowed in any such case, proceeding or
other action) of such Pledgor owing to the Swap Providers, now existing or
hereafter incurred under, arising out of or in connection with each Hedging
Transaction (including any buy back, reversal, termination or assignment of any
Hedging Transaction, any renewal, extension, modification of any Hedging
Transaction and any substitution for any Hedging Transaction), whether such
Hedging Transaction is now in existence or hereafter arising, and the due
performance and compliance by such Pledgor with all of the terms, conditions and
agreements contained in each such Hedging Transaction (all such obligations,
indebtedness and liabilities under this clause (ii) being herein collectively
called the "Hedging Obligations"); (iii) any and all sums advanced by the
Canadian Collateral Agent in order to preserve the Collateral or preserve its
security interest in the Collateral, and (iv) in the event of any proceeding for
the collection or enforcement of any indebtedness, obligations or liabilities of
each Pledgor referred to in preceding clauses (i) or (ii) after an Event of
Default (as defined in Section 9 hereof) shall have occurred and be continuing,
the expenses of re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any exercise by the
Canadian Collateral Agent of its rights hereunder, together with attorneys' fees
actually incurred and court costs (collectively, the "Secured Obligations").
4. Delivery Of Pledged Collateral. All certificates and instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of the Canadian Collateral Agent pursuant hereto, including,
without limitation, certificates or other instruments evidencing Pledged
Collateral acquired after the date hereof. All Pledged Shares shall be
accompanied by duly executed, undated stock powers or other instruments of
transfer or assignment endorsed in blank, all in form and substance satisfactory
to the Canadian Collateral Agent and, if the Canadian Collateral Agent so
requests, with signatures guaranteed by a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or
by a commercial bank or trust company having an office or correspondent in the
United States. The Canadian Collateral Agent shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged Shares
for certificates or instruments of smaller or larger denominations.
5. Representations and Warranties. Each Pledgor represents and warrants to
the Canadian Collateral Agent and the Secured Creditors as follows:
(a) Each Pledgor is, and at the time of delivery of the Pledged
Shares to the Canadian Collateral Agent pursuant to Section 4 hereof will be,
the sole holder of record and the sole beneficial owner of the Pledged
Collateral pledged by such Pledgor, free and clear of any Lien thereon or
affecting the title thereto except for Liens expressly permitted under Section
7.2 of the Credit Agreement.
(b) All of the Pledged Shares have been duly authorized, validly
issued and are fully paid and non-assessable and all documentary, stamp, or
other taxes or fees owing in connection with the issuance, transfer and/or
pledge thereof hereunder have been paid and will be hereafter paid by each
Pledgor as same becomes due and payable.
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(c) No dispute, counterclaim or defense exists with respect to all
or any part of the Pledged Collateral.
(d) Each Pledgor has the requisite corporate authority to pledge,
assign, transfer, deliver, deposit and set over its Pledged Collateral to the
Canadian Collateral Agent for the benefit of the Secured Creditors as provided
herein.
(e) There are no restrictions upon the transfer, hypothecation or
pledge of any of the Pledged Collateral other than such restrictions imposed by
applicable securities laws.
(f) None of the Pledged Shares have been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject.
(g) Schedule II hereto lists the authorized Equity Interests, the
par value thereof and the number of issued and outstanding Equity Interests of
each issuer of Pledged Shares. As of the date hereof, (i) no subscription,
warrant, option or other rights to purchase or acquire any Equity Interests of
any issuer of Pledged Shares is authorized and outstanding, and (ii) there is no
commitment by any issuer of Pledged Shares to issue any such shares, warrants,
options or other such rights or securities.
(h) The pledge by each Pledgor of its Pledged Collateral is not in
contravention of any law or of any agreement to which such Pledgor is party or
by which such Pledgor is otherwise bound, and no consent, approval,
authorization or other order of, or other action by, any Person or notice to or
filing with, any Person is required (i) for the pledge by such Pledgor of the
Pledged Collateral pursuant to this Pledge Agreement or for the execution,
delivery or performance of this Pledge Agreement by such Pledgor or (ii) for the
exercise by the Canadian Collateral Agent of the voting or other rights provided
for in this Pledge Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Pledge Agreement (except as may be required in
connection with any disposition of any portion of the Pledged Collateral by laws
affecting the offering and sale of securities generally).
(i) The pledge, assignment and delivery of the Pledged Collateral
together with duly executed, undated stock powers or other instruments of
transfer or assignment endorsed in blank pursuant to this Pledge Agreement will
create a valid first priority Lien on and a first priority perfected security
interest in the Pledged Collateral and the proceeds thereof, securing the
payment of the Secured Obligations and no filing or other action is necessary to
perfect or protect such security interest, except that (i) the filing of a
financing statement, the taking of possession or some other action may be
required under Section 9-315 of the Uniform Commercial Code as in effect in the
State of Georgia (the "UCC") to perfect a security interest in certain proceeds
of the Pledged Collateral that do not constitute Pledged Shares or other
securities or instruments and (ii) the filing of a financing statement under
Sections 9-312 and 9-314 of the UCC may be required to perfect a security
interest in any Pledged Collateral that constitutes "investment property" (other
than the
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Pledged Shares) with respect to which the Canadian Collateral Agent does not
have "control" (as such terms are defined in the UCC).
(j) All of the representations and warranties contained in the
Credit Agreement, the Guaranty Agreement and the other Loan Documents are true
and correct in all material respects, are incorporated herein by this reference
and are deemed to be made herein by each Pledgor for purposes of this Pledge
Agreement.
6. Covenants. Each Pledgor covenants and agrees that from and after the
date of this Pledge Agreement and until the payment and performance in full in
cash of all of the Secured Obligations:
(a) Such Pledgor shall not sell, assign, transfer, pledge or
otherwise encumber any of its rights in or to its Pledged Collateral or any
unpaid dividends or other distributions or payments with respect thereto except
pursuant to this Pledge Agreement.
(b) Such Pledgor will not cause or permit any issuer of Pledged
Shares to issue or grant any warrants, stock options of any nature or other
instruments convertible into shares of any class of capital stock or additional
shares of capital stock or sell or transfer any treasury stock.
(c) Such Pledgor will, at its own cost and expense, promptly
execute, acknowledge and deliver all such instruments and take all such action
as the Canadian Collateral Agent from time to time may request in order to
perfect and protect the Lien granted or purported to be granted hereby or to
enable the Canadian Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to the Pledged Collateral.
(d) Such Pledgor has defended and will, at its own cost and expense,
defend the title to its Pledged Collateral and the Liens of the Canadian
Collateral Agent thereon against the claim of any Person and will maintain and
preserve such Liens.
(e) Such Pledgor will pay all taxes, assessments and charges levied,
assessed or imposed upon its Pledged Collateral before the same become
delinquent or become Liens upon any of its Pledged Collateral except where the
same may be contested in good faith by appropriate proceedings and as to which
adequate reserves have been provided.
7. Adjustments and Distributions Concerning Pledged Collateral. Should the
Pledged Collateral, or any part thereof, ever be converted in any manner by any
Pledgor into another type of property or any money or other proceeds ever be
paid or delivered to any Pledgor as a result of such Pledgor's rights in the
Pledged Collateral, then in any such event (except as expressly provided in
Section 8 hereof), all such property, money and other proceeds shall promptly be
and become part of the Pledged Collateral, and each Pledgor covenants and agrees
to forthwith pay and deliver all money so received to the Canadian Collateral
Agent, for the benefit of the Secured Creditors, as Pledged Collateral hereunder
in accordance with the provisions of the Security Agreement; and, if the
Canadian Collateral Agent deems it necessary and so requests, to properly
endorse, assign or transfer any and all such other proceeds to the Canadian
Collateral Agent and to deliver to the
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Canadian Collateral Agent any and all such other proceeds which require
perfection by possession under the UCC. With respect to any of such property of
a kind requiring an additional security agreement, financing statement or other
writing to perfect a security interest therein in favor of the Canadian
Collateral Agent, each Pledgor will forthwith execute and deliver to the
Canadian Collateral Agent whatever the Canadian Collateral Agent shall deem
necessary or proper for such purposes.
8. Pledgors' Rights; Termination Of Rights.
(a) As long as no Event of Default shall have occurred and be
continuing:
(i) Each Pledgor shall have the right, from time to time, to
vote and give consents with respect to its Pledged Collateral or any part
thereof for all purposes permitted by the Secured Debt Documents;
provided, that, without limitation of the foregoing, no vote shall be
cast, and no consent shall be given or action taken by any Pledgor that
would authorize or effect (except if and to the extent expressly permitted
by the Credit Agreement): (A) the dissolution or liquidation, in whole or
in part, of any issuer of the Pledged Collateral, (B) the consolidation or
merger of any issuer of the Pledged Collateral with any other Person
(other than any Pledgor), (C) the sale, disposition or encumbrance of any
portion of the assets of any issuer of the Pledged Collateral or any
business or division thereof, (D) any change in the authorized number of
shares, the stated capital or the authorized shares of any issuer of the
Pledged Collateral or the issuance of any additional shares of capital
stock thereof, or (E) the alteration of the voting rights with respect to
the capital stock of any issuer of the Pledged Collateral;
(ii) Each Pledgor shall be entitled, from time to time, to
collect and receive for its own use all dividends, distributions, interest
and other amounts paid in respect of its Pledged Collateral to the extent
not in violation of the Loan Documents other than any and all: (A)
dividends and interest paid or payable other than in cash in respect of,
and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any of its Pledged
Collateral, (B) dividends and other distributions paid or payable in cash
in respect of any of its Pledged Collateral in connection with a partial
or total liquidation or dissolution, and (C) cash paid, payable or
otherwise distributed in redemption of, or in exchange for, any of its
Pledged Collateral; provided, that until actually paid all rights to such
dividends shall remain subject to the Lien created by this Pledge
Agreement.
(b) All dividends (other than such cash dividends as are permitted
to be paid to the Pledgors in accordance with Section 8(a)(ii) above) and all
other distributions in respect of any of the Pledged Collateral, whenever paid
or made, shall be delivered to the Canadian Collateral Agent to hold as Pledged
Collateral and shall, if received by any Pledgor, be received in trust for the
benefit of the Canadian Collateral Agent, be segregated from the other property
or funds of such Pledgor, and be forthwith delivered promptly to the Canadian
Collateral Agent as Pledged Collateral of such Pledgor in the same form as so
received (with any necessary endorsement or assignment).
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(c) Upon the occurrence of an Event of Default and during the
continuation thereof, all of Pledgors' rights to exercise voting and other
consensual rights pursuant to Section 8(a)(i) hereof and all of Pledgors' rights
to receive any cash dividends and distributions pursuant to Section 8(a)(ii)
hereof shall cease and all such rights shall thereupon become vested in the
Canadian Collateral Agent, for the benefit of the Secured Creditors, who shall
have the sole and exclusive right to exercise the voting and other consensual
rights which the Pledgors would otherwise be authorized to exercise pursuant to
Section 8(a)(i) hereof and to receive and retain the dividends and distributions
which the Pledgors would otherwise be authorized to receive and retain pursuant
to Section 8(a)(ii) hereof. Upon the occurrence of an Event of Default and
during the continuation thereof, each Pledgor shall pay over to the Canadian
Collateral Agent, for the benefit of the Secured Creditors, any dividends
received by such Pledgor with respect to its Pledged Collateral and any and all
money and other property paid over to or received by the Canadian Collateral
Agent shall be retained by the Canadian Collateral Agent, for the benefit of the
Secured Creditors, as Pledged Collateral hereunder and shall be applied in
accordance with the provisions hereof.
9. Default. The Pledgors shall be in default under this Pledge Agreement
upon the happening of any of the following events or conditions (hereinafter
referred to as an "Event of Default"):
(i) The occurrence of a Default or an Event of Default as
defined in the Credit Agreement;
(ii) The filing of any financing statement with regard to the
Pledged Collateral, other than relating to or permitted by this Pledge
Agreement, or the attachment of any additional lien or security interest to any
portion of the Pledged Collateral, for the benefit of any Person other than the
Canadian Collateral Agent; and
(iii) Failure of any Pledgor to observe any of its respective
covenants set forth in this Pledge Agreement.
10. Remedies Upon An Event Of Default.
(a) Upon the occurrence of an Event of Default and during the
continuation thereof, the Canadian Collateral Agent may exercise all rights of a
secured party under the UCC (whether or not the UCC applies to the affected
collateral). In addition, the Canadian Collateral Agent is hereby authorized and
empowered to transfer and register in its name or in the name of its nominee the
whole or any part of the Pledged Collateral, exercise the voting rights with
respect thereto, collect and receive all cash dividends and other distributions
made thereon, sell in one or more sales after ten (10) days' notice of the time
and place of any public sale or of the time after which a private sale is to
take place (which notice each Pledgor agrees is commercially reasonable), but
without any previous notice or advertisement, the whole or any part of the
Pledged Collateral and otherwise act with respect to the Pledged Collateral as
though the Canadian Collateral Agent was the legal and record owner thereof.
Each Pledgor hereby irrevocably constitutes and appoints the Canadian Collateral
Agent, for the benefit of the Secured Creditors, as the proxy and
attorney-in-fact of such Pledgor with respect to the Pledged Collateral, with
full power of substitution to exercise any of the rights provided in the
preceding sentence; provided, that the Canadian Collateral Agent shall not
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have any duty to exercise any such right or to preserve the same and shall not
be liable for any failure to do so or for any delay in doing so. Any sale shall
be made at a public or private sale at the Canadian Collateral Agent's offices
or elsewhere to be named in the notice of sale, either for cash or upon credit
or for future delivery at such price as the Canadian Collateral Agent may deem
fair, and the Canadian Collateral Agent or any Secured Party may be the
purchaser of the whole or any part of the Pledged Collateral so sold and hold
the same thereafter in its own right free from any claim of any Pledgor or any
right of redemption, which each Pledgor hereby waives to the extent permitted by
applicable law. Each sale shall be made to the highest bidder, but the Canadian
Collateral Agent reserves the right to reject any and all bids at such sale
which, in its discretion, it shall deem inadequate. Demands of performance,
except as otherwise herein specifically provided for, notices of sale,
advertisements and the presence of property at sale are hereby waived and any
sale hereunder may be conducted by an auctioneer or any officer or agent of the
Canadian Collateral Agent.
(b) If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral, the highest bid, if there be but
one sale, shall be inadequate to discharge in full all the Secured Obligations,
or if the Pledged Collateral be offered for sale in lots, if at any of such
sales, the highest bid for the lot offered for sale would indicate to the
Canadian Collateral Agent, in its discretion, the unlikelihood of the proceeds
of the sales of the whole of the Pledged Collateral being sufficient to
discharge all the Secured Obligations, the Canadian Collateral Agent may, on one
or more occasions and in its discretion, postpone any of said sales by public
announcement at the time of sale or the time of previous postponement of sale,
and no other notice of such postponement or postponements of sale need be given,
any other notice being hereby waived; provided, that any sale or sales made
after such postponement shall be after ten (10) days' notice from the Canadian
Collateral Agent to any such Pledgor.
(c) If, at any time that the Canadian Collateral Agent shall determine to
exercise its rights to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Securities Act of
1933, as amended (the "Act"), the Canadian Collateral Agent may, in its
discretion (subject only to applicable requirements of law), sell such Pledged
Collateral or part thereof by private sale in such manner and under such
circumstances as the Canadian Collateral Agent may deem necessary or advisable,
but subject to the other requirements of this Section 9, and shall not be
required to effect such registration or to cause the same to be effected.
Without limiting the generality of the foregoing, in any such event the Canadian
Collateral Agent in its discretion (i) may, in accordance with applicable
securities laws, proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Collateral or
part thereof could be or shall have been filed under said Act (or similar
statute), (ii) may approach and negotiate with a single possible purchaser to
effect such sale, (iii) may restrict such sale to a purchaser who will represent
and agree that such purchaser is purchasing for its own account, for investment
and not with a view to the distribution or sale of such Pledged Collateral or
part thereof, and (iv) may place all or any part of the Pledged Collateral with
an investment banking firm for private placement, which firm shall be entitled
to purchase all or any part of the Pledged Collateral for its own account. If
any of the Pledged Collateral shall not be freely distributable to the public
without registration under the Act (or similar statute), then the Canadian
Collateral Agent shall not be required to effect
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such registration or cause the same to be effected but, in its discretion
(subject to applicable requirements of law), may require that any sale hereunder
(including a sale at auction) be conducted subject to restrictions (i) as to the
financial sophistication and ability of any Person permitted to bid or purchase
at any such sale, (ii) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale, including
restrictions on future transfer thereof, (iii) as to the representations
required to be made by each Person bidding or purchasing at such sale relating
to that Person's access to financial information about any Pledgor or any of its
subsidiaries so sold and such Person's intentions as to the holding of the
Pledged Collateral so sold for investment, for its own account, and not with a
view to the distribution thereof, and (iv) as to such other matters as the
Canadian Collateral Agent may, in its discretion, deem necessary or appropriate
in order that such sale (notwithstanding any failure so to register) may be
effected in compliance with the UCC and other laws affecting the enforcement of
creditors' rights and the Act and all applicable state securities laws.
(d) Each Pledgor acknowledges that, notwithstanding the legal
availability of a private sale or a sale subject to the restrictions described
above in paragraph (c), the Canadian Collateral Agent may, in its discretion,
elect to register any or all the Pledged Collateral under the Act (or any
applicable state securities law). Each Pledgor, however, recognizes that the
Canadian Collateral Agent may be unable to effect a public sale of any or all
the Pledged Collateral and may be compelled to resort to one or more private
sales thereof. Each Pledgor also acknowledges that any such private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Canadian Collateral Agent shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time necessary to permit
the registrant to register such securities for public sale under the Act, or
under applicable state securities laws, even if each Pledgor would agree to do
so.
(e) Any cash held by the Canadian Collateral Agent as Pledged
Collateral and all cash proceeds received by the Canadian Collateral Agent in
respect of any sale of, collection from, or other realization upon all or any
part of the Pledged Collateral may, in the discretion of the Canadian Collateral
Agent, be held by the Canadian Collateral Agent as collateral for, and/or then
or at any time thereafter be applied in whole or in part by the Canadian
Collateral Agent for the benefit of the Secured Creditors against, all or any
part of the Secured Obligations in accordance with the terms of the Credit
Agreement.
(f) Each Pledgor agrees that following the occurrence and during the
continuation of an Event of Default it will not at any time plead, claim or take
the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Pledge Agreement, or the absolute sale of the whole or any
part of the Pledged Collateral or the possession thereof by any purchaser at any
sale hereunder, and each Pledgor waives the benefit of all such laws to the
extent it lawfully may do so. Each Pledgor agrees that it will not interfere
with any right, power and remedy of the Canadian Collateral Agent provided for
in this Pledge Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by the
Canadian Collateral Agent of any one or more of such rights, powers, or
remedies. No failure or delay on the part of the Canadian
- 11 -
Collateral Agent to exercise any such right, power or remedy and no notice or
demand which may be given to or made upon any Pledgor by the Canadian Collateral
Agent with respect to any such remedies shall operate as a waiver thereof, or
limit or impair the Canadian Collateral Agent's right to take any action or to
exercise any power or remedy hereunder, without notice or demand, or prejudice
its rights as against any Pledgor in any respect. Each Pledgor waives all
claims, damages and demands against the Canadian Collateral Agent arising out of
the repossession, retention or sale of the Pledged Collateral.
11. Power Of Attorney. Each Pledgor appoints the Canadian Collateral
Agent, or any other Person whom the Canadian Collateral Agent may designate, as
each Pledgor's true and lawful attorney-in-fact, with power to endorse each
Pledgor's name on any checks, notes, acceptances, money orders, drafts or other
form of payment or security representing a portion of the Pledged Collateral
that may come into the Canadian Collateral Agent's possession and to do all
things necessary to carry out the terms of this Pledge Agreement. Each Pledgor
ratifies and approves all such acts of such attorney-in-fact. Neither the
Canadian Collateral Agent nor any other Person designated by the Canadian
Collateral Agent as attorney-in-fact hereunder will be liable for any acts or
omissions, nor for any errors of judgment or mistakes of fact or law. This
power, coupled with an interest, is irrevocable until the payment if full of all
Secured Obligations of each Pledgor.
12. Canadian Collateral Agent's Right To Take Action.
(a) In the event that any Pledgor fails or refuses promptly to
perform any of its obligations set forth herein, including, without limitation,
its obligation pursuant to Section 6(c) hereof to pay taxes, assessments and
other charges levied, assessed or imposed on the Pledged Collateral, or
otherwise fails or refuses to pay any amount necessary for the preservation and
protection of the Pledged Collateral, the Canadian Collateral Agent shall have
the right, without obligation, to do all things it deems necessary or advisable
to discharge the same (including, without limitation, to pay any such taxes,
assessments, charges or other sums, together with interest and penalties
thereon) and any sums paid by the Canadian Collateral Agent, or the cost
thereof, including, without limitation, attorneys' fees, shall be reimbursed by
the Pledgors, to the Canadian Collateral Agent on demand and, until so
reimbursed, shall bear interest at the highest rate chargeable under Section
2.15(c) of the Credit Agreement.
(b) By accepting the benefits of this Pledge Agreement the Secured
Creditors expressly acknowledge and agree that this Agreement may be enforced
only by the action of the Canadian Collateral Agent and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies shall be exercised
exclusively by the Canadian Collateral Agent for the benefit of the Secured
Creditors upon the terms of this Agreement and the Intercreditor Agreement.
13. Indemnity; Expenses.
(a) Each Pledgor jointly and severally agrees to indemnify,
reimburse and hold the Canadian Collateral Agent, each other Secured Creditor,
and their respective successors, assigns,
- 12 -
employees, officers, directors, affiliates, agents and servants (hereinafter in
this Section referred to individually as an "Indemnitee," and, collectively, as
"Indemnitees") harmless from any and all liabilities, obligations, losses,
damages, injuries, penalties, claims, demands, actions, suits, judgments and any
and all costs, expenses or disbursements (including reasonable attorneys' fees
and expenses) (for the purposes of this Section the foregoing are collectively
called "expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any other Secured Debt Documents or any other document executed in
connection herewith or therewith or in any other way connected with the
administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the Pledged
Collateral (including, without limitation, latent or other defects, whether or
not discoverable), including the violation by an Pledgor of the laws of any
country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by a Pledgor against an Indemnitee for material
breach of such Indemnitee's obligations hereunder, if such Pledgor has obtained
a final and nonappealable judgment in its favor on such claim as determined by a
court of competent jurisdiction. Each Pledgor agrees that upon written notice by
any Indemnitee of the assertion of such a liability, obligation, loss, damage,
injury, penalty, claim, demand, action, suit or judgment, the relevant Pledgor
shall assume full responsibility for the defense thereof.
(b) Without limiting the application of subsection (a) above,
each Pledgor agrees, jointly and severally, to pay, or reimburse the Canadian
Collateral Agent for any and all reasonable fees, costs and expenses of whatever
kind or nature incurred in connection with the creation, preservation or
protection of the Canadian Collateral Agent's Liens on, and security interest
in, the Pledged Collateral, including, without limitation, all fees and taxes in
connection with the recording or filing of instruments and documents in public
offices, payment or discharge of any taxes or Liens upon or in respect of the
Pledged Collateral, including stamp, intangible or other taxes that may be
payable or determined in the future to be payable in connection with this Pledge
Agreement or any other document executed or delivered in connection herewith,
and all other reasonable fees, costs and expenses in connection with protecting,
maintaining or preserving the Pledged Collateral and the Canadian Collateral
Agent's interest therein, whether through judicial proceedings or otherwise, or
in defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Pledged Collateral.
(c) Without limiting the application of subsections (a) or (b)
above, each Pledgor agrees, jointly and severally, to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any material misrepresentation by any Pledgor in this Agreement,
- 13 -
any other Loan Document or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement or any other Loan Document.
(d) If and to the extent that the obligations of any Pledgor under
this Section are unenforceable for any reason, such Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. This Section 13 shall
survive the termination of this Agreement.
14. Limitation On the Canadian Collateral Agent's Duty In Respect Of
Pledged Collateral. The Canadian Collateral Agent shall use reasonable care with
respect to the Pledged Collateral in its possession or under its control. The
powers conferred on the Canadian Collateral Agent hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Canadian Collateral Agent shall have no duty as to any Pledged
Collateral or any income thereon, as to ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Collateral, whether or not the Canadian Collateral
Agent, or any other Secured Party has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Pledged Collateral. The
Canadian Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of any Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that which the
Canadian Collateral Agent accords its own property.
15. Security Interest Absolute. All rights of the Canadian Collateral
Agent and security interests hereunder, and all obligations of each Pledgor
hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any Loan Document;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations, or any other amendment or waiver
of or any consent to any departure from the Loan Documents including, without
limitation, any increase in the Secured Obligations resulting from the extension
of additional credit to any Pledgor or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any part of the Secured Obligations or
any other assets of any Pledgor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Pledgor or any of its Subsidiaries; or
- 14 -
(f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Pledgor or a third party pledgor.
16. Reinstatement. This Pledge Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Pledgor for liquidation or reorganization, should any Pledgor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Pledgor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a "voidable preference," "fraudulent conveyance,"
"fraudulent transfer" or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
17. Successors And Assigns. This Pledge Agreement and all obligations of
each Pledgor hereunder shall be binding upon the successors and assigns of such
Pledgor (including any debtor-in-possession on behalf of such Pledgor) and
shall, together with the rights and remedies of the Canadian Collateral Agent,
for the benefit of the Secured Creditors, hereunder, inure to the benefit of the
Canadian Collateral Agent, Secured Creditors, all future holders of any
instrument evidencing any of the Secured Obligations and their respective
successors and assigns. No sales of participations, other sales, assignments,
transfers or other dispositions of any agreement governing or instrument
evidencing the Secured Obligations or any portion thereof or interest therein
shall in any manner affect the Lien granted to the Canadian Collateral Agent,
for the benefit of the Secured Creditors, hereunder. No Pledgor may assign,
sell, hypothecate or otherwise transfer any interest in or obligation under this
Pledge Agreement.
18. Waivers. No failure or delay by any Secured Party in exercising any
right shall operate as a waiver of such right. The Secured Creditors expressly
reserve the right to require strict compliance with the terms of this Pledge
Agreement. Any waiver or indulgence granted by any Secured Party shall not
constitute a modification of this Pledge Agreement, except to the extent
expressly provided in such waiver or indulgence, or constitute a course of
dealing by any Secured Party at variance with the terms of this Pledge Agreement
such as to require further notice by them of their intent to require strict
adherence to the terms of this Pledge Agreement in the future. Any such actions
shall not in any way affect the ability of the Secured Creditors, in their
discretion, to exercise any rights available to them under this Pledge
Agreement.
19. Remedies Cumulative. The rights and remedies of the Secured Creditors
under this Pledge Agreement shall be cumulative and nonexclusive of any other
rights and remedies which any Secured Party may have under any other agreement,
including the Loan Documents, or by operation of law or otherwise. Recourse to
the Pledged Collateral shall not be required.
- 15 -
20. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
21. Notices. All notices, requests and other communications to the
Pledgors or Canadian Collateral Agent hereunder shall be delivered in the manner
required by the Credit Agreement and shall be sufficiently given to Canadian
Collateral Agent or any Pledgor if addressed or delivered to them at, in the
case of the Canadian Collateral Agent at the address set forth in the Credit
Agreement, in the case of the Borrower, its address and telecopier number
specified in the Credit Agreement and in the case of any other Pledgors, at
their respective addresses and telecopier numbers provided in the Guaranty
Agreement. All such notices and communications shall be deemed to have been duly
given at the times set forth in the Credit Agreement.
22. Limitation By Law. All rights, remedies and powers provided in this
Pledge Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Pledge Agreement are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to the extent
necessary so that they shall not render this Pledge Agreement invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.
23. Headings. Headings used in this Agreement are for convenience only and
shall not be used in connection with the interpretation of any provision hereof.
24. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
25. Governing Law; Waiver of Jury Trial.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND SECURED OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE
STATE OF GEORGIA, EXCEPT TO THE EXTENT THAT PERFECTION (AND THE EFFECT OF
PERFECTION AND NONPERFECTION) AND CERTAIN REMEDIES MAY BE GOVERNED BY THE LAWS
OF ANY JURISDICTION OTHER THAN GEORGIA.
(b) PLEDGORS IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR THEMSELF
AND THEIR PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA, AND ANY STATE COURT SITTING
IN XXXXXX COUNTY AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY,
- 16 -
OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH GEORGIA
STATE COURT OR, TO THE EXTENT PERMITTED BY APPLICABLE LAW, SUCH FEDERAL COURT.
EACH PLEDGOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT
ANY RIGHT THAT THE CANADIAN COLLATERAL AGENT OR ANY SECURED CREDITOR MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER SECURED DEBT DOCUMENT AGAINST SUCH PLEDGOR OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION IN WHICH THE PROPERTY THAT IS THE SUBJECT OF SUCH
ACTION OR PROCEEDING IS LOCATED.
(c) EACH PLEDGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING DESCRIBED IN PARAGRAPH (B) OF THIS SECTION AND
BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH PLEDGOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.
(d) EACH PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN
THE MANNER PROVIDED FOR NOTICES IN THE CREDIT AGREEMENT. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER SECURED DEBT DOCUMENT WILL AFFECT THE RIGHT OF ANY
PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(e) EACH PLEDGOR HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS PLEDGE AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PLEDGOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS NOT BEEN INDUCED TO ENTER INTO THIS
PLEDGE AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
26. No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Pledge Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Pledge Agreement
shall be construed as if drafted jointly by the parties
- 17 -
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Pledge
Agreement.
27. Benefit of Secured Creditors. All Liens granted or contemplated hereby
shall be for the benefit of the Secured Creditors and all proceeds or payments
realized from Pledged Collateral in accordance herewith shall be applied to the
Secured Obligations in accordance with the terms of the Intercreditor Agreement.
28. Termination of this Pledge Agreement. No termination or cancellation
(regardless of cause or procedure) of the Credit Agreement shall in any way
affect or impair the powers, obligations, duties, rights and liabilities of the
parties hereto in any way with respect to (i) any transaction or event occurring
prior to such termination or cancellation, (ii) the Pledged Collateral, or (iii)
any Pledgor's undertakings, agreements, covenants, warranties and
representations contained in this Pledge Agreement and all such undertakings,
agreements, covenants, warranties and representations shall survive such
termination or cancellation until the payment and performance, in full, of all
Secured Obligations of the Pledgors. Subject to Section 13 hereof, this Pledge
Agreement shall terminate upon the payment and performance, in full in cash, of
all Secured Obligations of the Pledgors.
29. Additional Pledged Collateral. In the event that the any new Pledgor
is required, under the terms of any Secured Debt Document or otherwise, to
pledge and hypothecate any Pledged Collateral after the Closing Date, such
Pledgor shall pledge and hypothecate such Pledged Collateral, and be bound with
respect to such Pledged Collateral by all of the terms and conditions hereof, by
delivery to the Canadian Collateral Agent of an executed counterpart of a
Supplement to Pledge Agreement in the form of Exhibit A attached hereto.
[Signature Page Follows]
- 18 -
IN WITNESS WHEREOF, each Pledgor has caused this Pledge Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above.
EMS TECHNOLOGIES, INC.
By:______________________________
Name:
Title:
EMS INVESTMENT HOLDINGS, INC.
By:______________________________
Name:
Title:
LXE INC.
By:______________________________
Name:
Title:
Acknowledged and Agreed to :
BANK OF AMERICA, NATIONAL
ASSOCIATION (CANADA BRANCH),
as Canadian Collateral Agent
By: __________________________
Name:
Title:
EXECUTION COPY
Schedule I to
Pledge Agreement
EMS Technologies, Inc.
EMS Investment Holdings, Inc.
LXE Inc.
Schedule II to
Pledge Agreement
PART A
Name of Place of Percentage of Shares Shares Issued
Corporation Incorporation Issued and Outstanding Par/No Par and Outstanding
----------- ------------- ---------------------- ---------- ---------------
PART B
Name of Place of Percentage of Shares Shares Issued
Corporation Incorporation Issued and Outstanding Par/No Par and Outstanding
----------- ------------- ---------------------- ---------- ---------------
EXHIBIT A
to
Pledge Agreement
SUPPLEMENT TO PLEDGE AGREEMENT
THIS SUPPLEMENT TO PLEDGE AGREEMENT (this "Supplement"), dated as of
_____________ __, 200_, is executed by [_________________], [__________] (the
"Pledgor"), in favor of BANK OF AMERICA, NATIONAL ASSOCIATION (CANADA BRANCH),
as Canadian Canadian Collateral Agent (the "Canadian Collateral Agent"), for the
benefit of the Secured Creditors (as defined below). Terms used herein but not
defined herein shall have the meaning defined for those terms in the Pledge
Agreement (as defined below).
WITNESSETH:
WHEREAS, EMS Technologies, Inc., EMS Investment Holdings, Inc. and LXE
Inc. (the "Existing Pledgors") are parties to that certain Pledge Agreement,
executed by the Existing Pledgors in favor the Canadian Collateral Agent, dated
as of December __, 2004 (as amended, restated, supplemented or otherwise
modified from time to time, the "Pledge Agreement"), pursuant to which the
Pledgors pledged stock and other collateral to the Canadian Collateral Agent,
for the benefit of the Secured Creditors;
WHEREAS, it is a condition precedent to the obligations of the Canadian
Administrative Agent, the Issuing Bank, the Swingline Lender (each as defined in
the Credit Agreement), and the Lenders (collectively the "Creditors") under the
Credit Agreement that the Pledgor grant to the Canadian Collateral Agent a
security interest in all of its Additional Pledged Collateral (as defined below)
to secure all indebtedness and other obligations of the Borrower under the
Credit Agreement;
WHEREAS, it is a condition precedent to the Swap Providers entering into
the Hedging Transactions that the Pledgor enter into this Agreement to secure
the Hedging Obligations; and
WHEREAS, the Pledgor wishes to grant a security interest in its Additional
Pledged Collateral to satisfy the conditions precedent set forth above.
NOW, THEREFORE, in consideration of the premises and in order to ensure
the Pledgor's compliance with the Credit Agreement, the Pledgor hereby agrees as
follows:
SECTION 1. Additional Pledge. As security for the payment and performance
of the Secured Obligations, the Pledgor hereby (i) pledges and grants to the
Canadian Collateral Agent, for the benefit of the Creditors, a first priority
continuing security interest in all of the Pledgor's right, title and interest
in, to and under the following property, whether now owned by or owing to, or
hereafter acquired by or arising in favor of the Pledgor and (ii) pledges and
grants to the Canadian Collateral Agent for the benefit of the Swap Providers, a
first priority continuing security interest in all of the Pledgor's right, title
and interest in, to and under the following property, whether now
- ii -
owned by or owing to, or hereafter acquired by or arising in favor of the
Pledgor:
(a) The Equity Interests more particularly described on Schedule I
hereto and the certificates representing such Equity Interests (the
"Additional Pledged Shares"), and all dividends, cash, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Shares;
(b)all other Pledged Collateral (as defined in the Pledge Agreement)
(the items described in subsections (a) and (b) above, collectively, the
"Additional Pledged Collateral"); and
SECTION 2. Certificates and Instruments. As security for the payment and
performance of the Secured Obligations, the Pledgor hereby delivers to the
Canadian Collateral Agent, for its benefit and the benefit of the Secured
Creditors and any other holder of any Secured Obligations, all of Pledgor's
right, title and interest in and to the certificates and instruments evidencing
the Additional Pledged Collateral, accompanied by instruments of transfer or
assignment, duly executed in blank.
SECTION 3. Representations and Warranties. Pledgor hereby (a) represents
and warrants that the Pledgor is the legal and beneficial owner of the
Additional Pledged Collateral, free and clear of any lien, security interest,
option or other charge or encumbrance except for the security interest created
by the Pledge Agreement as supplemented by this Supplement; and (b) restates
each representation and warranty set forth in Section 5 of the Pledge Agreement,
as supplemented by this Supplement, as of the date hereof with respect to the
Additional Pledged Collateral.
SECTION 4. Additional Pledged Collateral. By execution and delivery of
this Supplement, the Additional Pledged Collateral shall become a part of the
Pledged Collateral referred to in the Pledge Agreement and shall secure the
Secured Obligations as if such Additional Pledged Collateral were Pledged
Collateral on the date of the Pledge Agreement, and shall be subject to all of
the terms and conditions governing Pledged Collateral under the Pledge
Agreement. From and after the date hereof, Schedule II and Schedule III to the
Pledge Agreement are hereby amended to add the Additional Pledged Share.
SECTION 5. Binding Effect. This Supplement shall become effective when it
shall have been executed by the Pledgor and thereafter shall be binding upon the
Pledgor and shall inure to the benefit of the Secured Creditors. Upon the
effectiveness of this Supplement, this Supplement shall be deemed to be a part
of and shall be subject to all the terms and conditions of the Pledge Agreement.
The Pledgor shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Secured Creditors.
SECTION 6. Governing Law; Terms. THIS SUPPLEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
SECTION 7. Execution in Counterparts. This Supplement may be executed in
any number
- iii -
of counterparts (including by telecopy), each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of the date first above
written.
"Pledgor"
By:
__________________________________
Name:
Title:
Schedule I
to
SUPPLEMENT TO PLEDGE AGREEMENT
Schedule II
to
SUPPLEMENT TO PLEDGE AGREEMENT
