EXHIBIT 10.1
CREDIT AMENDING AGREEMENT
THIS CREDIT AMENDING AGREEMENT dated as of February 1, 2004 is entered
into by and among Canadian Imperial Bank of Commerce (the "LENDER"), EMS
Technologies Canada Ltd. (the "BORROWER") and EMS Technologies Inc., formerly
Electromagnetic Sciences, Inc.(the "GUARANTOR") (the "CREDIT AMENDING
AGREEMENT").
RECITALS:
A. The Lender and the Borrower are parties to a credit agreement dated as of
July 24, 2002 (as may be amended, supplemented, restated, changed,
modified or replaced from time to time, the "CREDIT AGREEMENT"). All
references to the Credit Agreement contained herein shall include all
supplements, amendments, restatements and modifications thereto entered
into from time to time.
B. The Guarantor has agreed to guarantee the repayment of all debts,
liabilities and obligations whether present or future, direct or indirect,
absolute or contingent, matured or unmatured of the Borrower to the Lender
(the "OUTSTANDING OBLIGATIONS");
C. The Guarantor has executed and delivered a guarantee (together with all
amendments, restatements, modifications, supplements, replacements,
extensions, renewals, and confirmations, the "GUARANTEE"), security
documents or instruments creating a security interest, assignments,
hypothecs, liens, pledges, other charges and subordination and
postponements of claim (together with all amendments, restatements,
modifications, supplements, replacements, extensions, renewals, and
confirmations, the "SECURITY DOCUMENTS"); and
D. The Borrower, the Lender and the Guarantor have agreed to amend certain
terms of the Credit Agreement in the manner set out in this Credit
Amending Agreement.
NOW THEREFORE, in consideration of the premises herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINED TERMS. In this Credit Amending Agreement, all defined terms shall
have the respective meanings set forth in the Credit Agreement unless
otherwise defined herein. In this Credit Amending Agreement:
(a) "ASSET DISPOSITION" means a sale or other disposition of assets by
the Borrower or any Subsidiary or any expropriation, condemnation,
destruction or other loss of property of the Borrower of any
Subsidiary, but shall exclude: (i) the disposition of obsolete or
worn out property in the ordinary course of business; (ii) the sale
of inventory in the ordinary course of business; (iii) the exchange
of equipment or other personal property for the functional
equivalent thereof in the ordinary course of business; and (iv) the
leasing or licensing of property in the ordinary course of business;
and
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(b) "NET PROCEEDS" means with respect to any Asset Disposition, the
amount received by the Borrower or any Subsidiary from such Asset
Disposition, including proceeds from any insurance polices received
by the Borrower or any Subsidiary in connection with such Asset
Disposition and amounts received by the Borrower or Subsidiary
pursuant to any expropriation proceeding or condemnation proceeding
in connection with such asset Disposition, in each case net of
professional fees and expenses, commissions, taxes and other
disposition costs.
2. WAIVER OF CERTAIN COVENANTS. The Lender agrees to waive the Borrower's
compliance with the following covenants only for the fiscal quarter ending
December 31, 2003:
(a) the Current Ratio;
(b) the Fixed Charge Ratio;
(c) the Funded Debt to EBITDA Ratio; and
(d) the Effective Equity.
3. AMENDMENT TO CREDIT D: FOREIGN EXCHANGE CONTRACTS. The Credit Limit under
section Credit D: Foreign Exchange Contracts of the Credit Agreement is
amended by deleting "US$5,000,000" and replacing it with "US$2,000,000".
4. SALE OF PART OF THE MONTREAL PROPERTY. The Lender agrees to the sale of
the Property (as described in an offer to purchase dated September 10,
2003 between Broccolini Construction Inc. and the Borrower (as amended,
supplemented, restated, changed, modified or replaced from time to time,
the "OFFER TO PURCHASE")) provided that the following conditions are
satisfied:
(a) Net Proceeds rising from the sale of the Property are paid to the
Lender and applied against the outstanding balance of Credit B -
Demand Instalment Loan as a permanent reduction of such Credit B -
Demand Instalment Loan;
(b) the mortgage in the amount principle of $2,100,000 to be executed by
the Purchaser (as defined in the Offer to Purchase) in favour of the
Borrower (the "VTB MORTGAGE") shall be assigned to the Lender; and
(c) an irrevocable direction to the Purchaser shall be executed by the
Borrower authorizing and directing the Purchaser to pay all amounts
due from the VTB Mortgage to the Lender.
Notwithstanding the foregoing, the Lender agrees that if the Borrower
completes the sale of the Montreal Space Division of the Borrower on or
before April 30th 2004, and the Net Proceeds of such sale are applied to
permanently reduce the Outstanding Obligations by the Borrower to the
Lender in an amount equal to not less than US$35,000,000, then the Lender
agrees that the Borrower may
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retain the Net Proceeds from the sale of the Property and the Lender shall
execute such other documents as the Borrower may reasonably require to
give effect to the foregoing provision.
5. ACKNOWLEDGEMENT OF GUARANTEES. The Guarantor hereby acknowledges, confirms
and agrees that the Guarantee unconditionally and irrevocably guarantees
to the Lender the full and punctual payment when due, whether at stated
maturity, by required payment, by acceleration, declaration, demand or
otherwise, of all debts, liabilities and obligations, present or future,
direct or indirect, absolute or contingent, matured or not, at any time
owing or remaining unpaid by the Borrower to the Lender pursuant to the
Credit Agreement together with interest thereon and all costs, charges and
expenses incurred in connection therewith (including counsel fees and
expenses) upon the terms and conditions set out in the Guarantee and the
Guarantee remains in full force and effect as at the date hereof.
6. CONTINUING EFFECT OF SECURITY DOCUMENTS. The Guarantor acknowledges,
confirms and agrees that the Guarantor's Security Documents remain in full
force and effect as at the date hereof and secure the Outstanding
Obligations.
7. GUARANTOR'S INFORMATION. The Guarantor confirms that the Guarantor shall
independently keep apprised of the financial position of the Borrower and
acknowledges that the Lender has no obligation to the Guarantor to do so
or to give notice of any further amendments or previous amendments to the
Credit Agreement. The Guarantor acknowledges and confirms that the
Guarantor has received a copy of the Credit Agreement and understands the
terms thereof.
8. NATURE OF AMENDMENTS AND DEFINED TERMS. It is acknowledged and agreed that
the terms of this Credit Amending Agreement are in addition to and, unless
specifically provided for, shall not limit, restrict, modify, amend or
release any of the understandings, agreements or covenants as set out in
the Credit Agreement. The Credit Agreement shall henceforth be read and
construed in conjunction with this Credit Amending Agreement and the
Credit Agreement together with all of the powers, provisions, conditions,
covenants and agreements contained or implied in the Credit Agreement
shall be and shall continue to be in full force and effect. References to
the "Credit Agreement" or the "Agreement" in the Credit Agreement or in
any other document delivered in connection with, or pursuant to, the
Credit Agreement, shall mean the Credit Agreement, as amended hereby.
9. EFFECTIVENESS. This Credit Amending Agreement shall become effective on
the date on which this Credit Amending Agreement shall have been duly
executed and delivered by the Lender, the Borrower and the Guarantor.
10. REPRESENTATIONS AND WARRANTIES. Each of the Borrower and the Guarantor
hereby represents and warrants that each of covenants, the representations
and warranties made by the Borrower and the Guarantor in or pursuant to
the Credit Agreement or any other document, agreement, certificate or
instrument executed in favour of the Lender pursuant to the Credit
Agreement shall be, after giving effect to this Credit Amending Agreement,
true and correct as if made on and as of the date hereof.
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11. CONTINUING EFFECT OF LOAN AGREEMENT. This Credit Amending Agreement shall
not be construed as a waiver or consent to any further or future action on
the part of the Borrower and/or the Guarantor that would require a waiver
or consent of the Lender. Except as provided hereby, the provisions of the
Credit Agreement are and shall remain in full force and effect.
12. NO NOVATION. Nothing in this Credit Amending Agreement, nor in the Credit
Agreement when read together with this Credit Amending Agreement, shall
constitute novation, payment, readvance, or otherwise of any existing
Outstanding Obligations of the Borrower.
13. COUNTERPARTS. This Credit Amending Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original agreement
and all of which shall constitute one agreement. All counterparts shall be
construed together and shall constitute one and the same agreement. This
Credit Amending Agreement, to the extent signed and delivered by means of
electronic transmission (including, without limitation, facsimile and
Internet transmissions), shall be treated in all manner and respects as an
original agreement and should be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in
person.
14. GOVERNING LAW. THIS ONTARIO CREDIT AMENDING AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE THEREIN.
15. EXPENSES. The Borrower and the Guarantor, jointly and severally, agree to
pay or reimburse the Lender for all of its reasonable out-of-pocket costs
and expenses incurred in connection with the preparation, negotiation and
execution of this Credit Amending Agreement, including, without
limitation, the fees and disbursements of counsel to the Lender.
16. FEES. The Borrower shall pay the Lender an amendment fee of $10,000 which
is due and payable upon the execution and delivery of this Credit Amending
Agreement by the Lender. The Loan Administration Fee is also increased to
$30,000 per month effective February 1, 2004.
17. ADDITIONAL SECURITY.
In addition to existing security in place the Borrower shall provide the
following:
a) a securities pledge agreement executed by the Borrower on the
Lender's standard form pledging all shares of Ottercom Limited owned
by the Borrower; and
b) such further or additional opinions, certificates, resolutions or
other supporting documents as the Lender or its solicitors may
require.
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Amending
Agreement to be executed and delivered by their duly authorized officers as of
the date first written above.
CANADIAN IMPERIAL BANK OF COMMERCE
Per:
_________________________________________
Name:
Title:
_________________________________________
Name:
Title:
We have authority to bind the Bank.
EMS TECHNOLOGIES CANADA LTD.
Per:
_________________________________________
Name:
Title:
I have authority to bind the Corporation.
EMS TECHNOLOGIES INC.
Per:
_________________________________________
Name:
Title:
I have authority to bind the Corporation.