EXECUTION COPY EXHIBIT 10.04
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of February
5, 1998, is executed by and between IFR SYSTEMS, INC., a Delaware corporation
(the "Pledgor"), and The First National Bank of Chicago, as "Agent" for itself
and for the "Holders of Secured Obligations" under the Credit Agreement defined
below. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed to such terms in the "Credit Agreement"
(as defined below).
WITNESSETH:
WHEREAS, the Pledgor, the Agent and certain financial institutions
from time to time party thereto (the "Lender") have entered into a certain
Credit Agreement of even date herewith (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), pursuant to which
the Lenders have agreed, subject to certain conditions precedent, to make loans
and other financial accommodations to the Pledgor from time to time;
WHEREAS, the Pledgor owns all of the issued and outstanding Capital
Stock of those corporations (the "Subsidiaries"), described on EXHIBIT A hereto;
and
WHEREAS, the Agent and the Lenders have required, as a condition to
their entering into the Credit Agreement, that the Pledgor execute and deliver
this Pledge Agreement;
NOW, THEREFORE, for and in consideration of the foregoing and of any
financial accommodations or extensions of credit (including, without limitation,
any loan or advance by renewal, refinancing or extension of the agreements
described hereinabove or otherwise) heretofore, now or hereafter made to or for
the benefit of the Pledgor pursuant to the Credit Agreement or any other
agreement, instrument or document executed pursuant to or in connection
therewith, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the Agent hereby
agree as follows:
1. PLEDGE. The Pledgor hereby pledges to the Agent, for the benefit
of the Agent and the Holders of Secured Obligations, and grants to the Agent for
the benefit of the Agent and the Holders of Secured Obligations, a security
interest in, the following (collectively, the "Pledged Collateral"):
(a) The investment property consisting of the shares of the Capital
Stock of the Subsidiaries, now or at any time or times hereafter owned by
the Pledgor, and the certificates representing the shares of such Capital
Stock (such now-owned shares being identified on EXHIBIT A attached hereto
and made a part hereof), all options, warrants and other forms of
investment property for the purchase of shares of the stock of the
Subsidiaries now or hereafter held in the name of the Pledgor (all of said
Capital Stock, options and warrants and all Capital Stock held in the name
of the Pledgor as a result of the exercise of such options or warrants
being hereinafter collectively referred to as the "Pledged Stock"),
herewith delivered to the Agent accompanied by stock powers in the
form of EXHIBIT B attached hereto and made a part hereof (the "Powers")
duly executed in blank, and all dividends, cash, instruments, investment
property and other property from time to time received, receivable or
otherwise distributed in respect of, or in exchange for, any or all of the
Pledged Stock;
(b) All additional shares of Capital Stock of the Subsidiaries from
time to time acquired by the Pledgor in any manner, and the certificates
representing such additional shares (any such additional shares shall
constitute part of the Pledged Stock and the Agent is irrevocably
authorized to amend EXHIBIT A from time to time to reflect such additional
shares), and all options, warrants, other forms of investment property,
dividends, cash, instruments and other rights and options from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares;
(c) The property and interests in property described in SECTION 3 and
SECTION 7 below; and
(d) All proceeds of the foregoing.
2. SECURITY FOR LIABILITIES. The Pledged Collateral secures the
prompt payment, performance and observance of (i) the Secured Obligations and
(ii) the Pledgor's obligations and liabilities under this Pledge Agreement and
each agreement, document or instrument executed pursuant to or in connection
with this Pledge Agreement (all such obligations and liabilities of the Pledgor
and the Subsidiaries now or hereafter existing being hereinafter referred to as
the "Liabilities").
3. PLEDGED COLLATERAL ADJUSTMENTS. If, during the term of this
Pledge Agreement:
(a) Any stock dividend, reclassification, readjustment or other
change is declared or made in the capital structure of the Subsidiaries, or
any option included within the Pledged Collateral is exercised, or both, or
(b) Any subscription warrants or any other rights or options shall be
issued in connection with the Pledged Collateral,
then all new, substituted and additional shares, warrants, rights, options,
other securities, or other investment property acquired or issued by reason of
any of the foregoing, shall be immediately delivered to and held by the Agent
under the terms of this Pledge Agreement and shall constitute Pledged Collateral
hereunder; PROVIDED, HOWEVER, that nothing contained in this SECTION 3 shall be
deemed to permit any stock dividend, issuance of additional stock, warrants,
rights or options, reclassification, readjustment or other change in the capital
structure of the Subsidiaries which is not expressly permitted in the Credit
Agreement.
4. SUBSEQUENT CHANGES AFFECTING PLEDGED COLLATERAL. The Pledgor
represents and warrants that it has made its own arrangements for keeping itself
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, reorganization or other exchanges, tender offers and voting
rights), and the Pledgor agrees that neither the Agent nor any of the Holders of
Secured Obligations shall have any obligation to inform the Pledgor of any such
changes or potential
changes or to take any action or omit to take any action with respect thereto.
The Agent may, after the occurrence of a Default, without notice and at its
option, transfer or register the Pledged Collateral or any part thereof into its
or its nominee's name with or without any indication that such Pledged
Collateral is subject to the security interest hereunder. In addition, the
Agent may at any time exchange certificates or instruments representing or
evidencing Pledged Shares for certificates or instruments of smaller or larger
denominations.
5. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants as follows:
(a) The Pledgor is the sole legal and beneficial owner of 100% of the
issued and outstanding Capital Stock of the Subsidiaries as set forth on
EXHIBIT A, free and clear of any Lien except for the security interest
created by this Pledge Agreement;
(b) The Pledgor has full corporate power and authority to enter into
this Pledge Agreement;
(c) There are no restrictions upon the voting rights associated with,
or upon the transfer of, any of the Pledged Collateral;
(d) The Pledgor has the right to vote, pledge and grant a security
interest in or otherwise transfer such Pledged Collateral free of any
Liens;
(e) No authorization, approval, or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
either (i) for the pledge of the Pledged Collateral pursuant to this Pledge
Agreement or for the execution, delivery or performance of this Pledge
Agreement by the Pledgor or (ii) for the exercise by the 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 such disposition by
laws affecting the offering and sale of securities generally);
(f) The pledge of the Pledged Collateral pursuant to this Pledge
Agreement creates a valid and perfected first priority security interest in
the Pledged Collateral, in favor of the Agent for the benefit of the Agent
and the Holders of Secured Obligations, securing the payment and
performance of the Liabilities; and
(g) The Powers are duly executed and give the Agent the authority
they purport to confer; and
(h) The Pledgor's chief executive office is located at 00000 Xxxx
Xxxx Xxxxxx, Xxxxxxx, XX 00000-0000, and Pledgor shall not change the
location of its chief executive office without giving the Agent thirty (30)
days prior written notice.
6. VOTING RIGHTS. During the term of this Pledge Agreement, and
except as provided in this SECTION 6 below, the Pledgor shall have the right to
vote the Pledged Stock on all corporate questions in a manner not inconsistent
with the terms of this Pledge Agreement, the Credit Agreement and any other
agreement, instrument or document executed pursuant thereto or
in connection therewith. After the occurrence of a Default, the Agent or the
Agent's nominee may, at the Agent's or such nominee's option and following
written notice from the Agent to the Pledgor, exercise all voting powers
pertaining to the Pledged Collateral, including the right to take action by
shareholder consent. Such authorization shall constitute an irrevocable voting
proxy from the Pledgor to the Agent or, at the Agent's option, to the Agent's
nominee.
7. DIVIDENDS AND OTHER DISTRIBUTIONS. (a) So long as no Default or
Unmatured Event of Default shall have occurred:
(i) The Pledgor shall be entitled to receive and retain any and all
dividends and interest paid in respect of the Pledged Collateral, PROVIDED,
HOWEVER, that any and all
(A) dividends and interest paid or payable other than in cash
with respect to, and instruments and other property received,
receivable or otherwise distributed with respect to, or in exchange
for, any of the Pledged Collateral;
(B) dividends and other distributions paid or payable in cash
with respect to any of the Pledged Collateral on account of a partial
or total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in surplus; and
(C) cash paid, payable or otherwise distributed with respect to
principal of, or in redemption of, or in exchange for, any of the
Pledged Collateral;
shall be Pledged Collateral, and shall be forthwith delivered to the Agent
to hold, for the benefit of the Agent and the Holders of Secured
Obligations, as Pledged Collateral and shall, if received by the Pledgor,
be received in trust for the Agent, for the benefit of the Agent and the
Holders of Secured Obligations, be segregated from the other property or
funds of the Pledgor, and be delivered immediately to the Agent as Pledged
Collateral in the same form as so received (with any necessary
endorsement); and
(ii) The Agent shall execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
receive the dividends or interest payments which it is authorized to
receive and retain pursuant to CLAUSE (i) above.
(b) After the occurrence of a Default or a Unmatured Event of Default and
upon receipt by the Borrower of written notice from the Agent of the Agent's
election to have any of the following clauses apply:
(i) All rights of the Pledgor to receive the dividends and interest
payments which it would otherwise be authorized to receive and retain
pursuant to SECTION 7(a)(i) hereof shall cease, and all such rights shall
thereupon become vested in the Agent, for the benefit of the Agent and the
Holders of Secured Obligations, which shall thereupon have the sole right
to receive and hold as Pledged Collateral such dividends and interest
payments;
(ii) All dividends and interest payments which are received by the
Pledgor contrary to the provisions of CLAUSE (i) of this SECTION 7(b) shall
be received in trust for the
Agent, for the benefit of the Agent and the Holders of Secured Obligations,
shall be segregated from other funds of the Pledgor and shall be paid over
immediately to the Agent as Pledged Collateral in the same form as so
received (with any necessary endorsements);
(iii) The Pledgor shall, upon the request of the Agent, at Pledgor's
expense, execute and deliver, and cause the Subsidiaries and their
respective, officers and directors to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts
and things, as may be necessary or, in the opinion of the Agent, the
Pledgor or their respective counsel, advisable to register the applicable
Pledged Collateral under the provisions of the Securities Act of 1933, as
amended (the "Securities Act") and to exercise its best efforts to cause
the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Agent, the Pledgor or their
respective counsel, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(iv) The Pledgor shall, upon the request of the Agent, at Pledgor's
expense, use its best efforts to qualify the Pledged Collateral under state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Pledged Collateral, as requested by the
Agent;
(v) The Pledgor shall, upon the request of the Agent, at the
Pledgor's expense, cause the Subsidiaries to make available to the holders
of its securities, as soon as practicable, earnings statements which will
satisfy the provisions of Section 11(a) of the Securities Act; and
(vi) The Pledgor shall, upon the request of the Agent, at the
Pledgor's expense, do or cause to be done all such other acts and things as
may be necessary to make such sale of the Pledged Collateral or any part
thereof valid and binding and in compliance with applicable law.
The Pledgor will reimburse the Agent and/or the Holders of Secured Obligations
for all expenses incurred by the Agent and/or the Holders of Secured
Obligations, including, without limitation, reasonable attorneys' and
accountants' fees and expenses in connection with the foregoing. Upon or at any
time after the occurrence of a Default, if the Agent determines that, prior to
any public offering of any securities constituting part of the Pledged
Collateral, such securities should be registered under the Securities Act and/or
registered or qualified under any other federal or state law and such
registration and/or qualification is not practicable, then the Pledgor agrees
that it will be commercially reasonable if a private sale, upon at least ten
(10) Business Days' notice to the Pledgor, is arranged so as to avoid a public
offering, even though the sales price established and/or obtained at such
private sale may be substantially less then prices which could have been
obtained for such security on any market or exchange or in any other public
sale.
8. TRANSFERS AND OTHER LIENS. The Pledgor agrees that it will not
(i) sell or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral without the prior written consent of the Agent, or (ii)
create or permit to exist any Lien upon or with respect to any of the Pledged
Collateral, except for the security interest under this Pledge Agreement.
9. FINANCING STATEMENTS. To the extent permitted by applicable law,
the Pledgor hereby authorizes the Agent to file financing or continuation
statements and amendments thereto disclosing the security interest granted to
the Agent under this Pledge Agreement without the Pledgor's signature appearing
thereon, and the Agent agrees to notify the Pledgor when such a filing has been
made. The Pledgor agrees that a carbon, photographic, photostatic, or other
reproduction of this Pledge Agreement or of a financing statement is sufficient
as a financing statement.
10. REMEDIES. (a) The Agent shall have, in addition to any other
rights given under this Pledge Agreement or by law, all of the rights and
remedies with respect to the Pledged Collateral of a secured party under the
Uniform Commercial Code as in effect in the State of Illinois. After the
occurrence of a Default and following written notice to the Pledgor, the Agent
(personally or through an 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, to exercise all voting rights with respect thereto, to
collect and receive all cash dividends and other distributions made thereon, and
to otherwise act with respect to the Pledged Collateral as though the Agent were
the outright owner thereof, the Pledgor hereby irrevocably constitutes and
appoints the Agent as the proxy and attorney-in-fact of the Pledgor, with full
power of substitution to do so; PROVIDED, that the Agent agrees not to exercise
such powers as attorney-in-fact unless a Default has occurred and is continuing;
PROVIDED, HOWEVER, that the Agent shall have no 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. In addition, after the occurrence of a Default, the
Agent shall have such powers of sale and other powers as may be conferred by
applicable law. With respect to the Pledged Collateral or any part thereof
which shall then be in or shall thereafter come into the possession or custody
of the Agent or which the Agent shall otherwise have the ability to transfer
under applicable law, the Agent may, in its sole discretion, without notice
except as specified below, after the occurrence of a Default, sell or cause the
same to be sold at any exchange, broker's board or at public or private sale, in
one or more sales or lots, at such price as the Agent may deem best, for cash or
on credit or for future delivery, without assumption of any credit risk, and the
purchaser of any or all of the Pledged Collateral so sold shall thereafter own
the same, absolutely free from any claim, encumbrance or right of any kind
whatsoever. The Agent and each of the Holders of Secured Obligations may, in
its own name, or in the name of a designee or nominee, buy the Pledged
Collateral at any public sale and, if permitted by applicable law, buy the
Pledged Collateral at any private sale. The Pledgor will pay to the Agent all
reasonable expenses (including, without limitation, court costs and reasonable
attorneys' and paralegals' fees and expenses) of, or incidental to, the
enforcement of any of the provisions hereof. The Agent agrees to distribute any
proceeds of the sale of the Pledged Collateral in accordance with the Credit
Agreement and the Pledgor shall remain liable for any deficiency following the
sale of the Pledged Collateral.
(b) Unless any of the Pledged Collateral threatens to decline
speedily in value or is or becomes of a type sold on a recognized market, the
Agent will give the Pledgor reasonable notice of the time and place of any
public sale thereof, or of the time after which any private sale or other
intended disposition is to be made. Any sale of the Pledged Collateral
conducted in conformity with reasonable commercial practices of banks,
commercial finance companies, insurance companies or other financial
institutions disposing of property similar to the Pledged Collateral shall be
deemed to be commercially reasonable. Notwithstanding any provision to the
contrary contained herein, the Pledgor agrees that any requirements of
reasonable notice shall be
met if such notice is received by the Pledgor as provided in SECTION 26 below at
least five (5) Business Days before the time of the sale or disposition;
provided, however, that Agent may give any shorter notice that is commercially
reasonable under the circumstances. Any other requirement of notice, demand or
advertisement for sale is waived, to the extent permitted by law.
(c) In view of the fact that federal and state securities laws may
impose certain restrictions on the method by which a sale of the Pledged
Collateral may be effected after a Default, the Pledgor agrees that after the
occurrence of a Default, the Agent may, from time to time, attempt to sell all
or any part of the Pledged Collateral by means of a private placement
restricting the bidders and prospective purchasers to those who are qualified
and will represent and agree that they are purchasing for investment only and
not for distribution. In so doing, the Agent may solicit offers to buy the
Pledged Collateral, or any part of it, from a limited number of investors deemed
by the Agent, in its reasonable judgment, to be financially responsible parties
who might be interested in purchasing the Pledged Collateral. If the Agent
solicits such offers from not less than four (4) such investors, then the
acceptance by the Agent of the highest offer obtained therefrom shall be deemed
to be a commercially reasonable method of disposing of such Pledged Collateral;
provided, however, that this Section does not impose a requirement that the
Agent solicit offers from four or more investors in order for the sale to be
commercially reasonable.
11. SECURITY INTEREST ABSOLUTE. All rights of the Agent and the
Holders of Secured Obligations and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(i) Any lack of validity or enforceability of the Credit Agreement or
any other agreement or instrument relating thereto;
(ii) Any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Liabilities, or any other amendment
or waiver of or any consent to any departure from the Credit Agreement;
(iii) Any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any part of the Liabilities; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor in respect of the
Liabilities or of this Pledge Agreement.
12. AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby appoints
the Agent its attorney-in-fact, with full authority, in the name of the Pledgor
or otherwise, from time to time in the Agent's sole discretion, to take any
action and to execute any instrument which the Agent may deem necessary or
advisable to accomplish the purposes of this Pledge Agreement, including,
without limitation, to receive, endorse and collect all instruments made payable
to the Pledgor representing any dividend, interest payment or other distribution
in respect of the Pledged Collateral or any part thereof and to give full
discharge for the same and to arrange for the transfer of all or any part of the
Pledged Collateral on the books of the Subsidiaries to the name of the Agent or
the Agent's nominee; PROVIDED, that the Agent agrees not to exercise such powers
as attorney-in-fact unless a Default has occurred and is continuing.
13. WAIVERS. (i) The Pledgor waives presentment and demand for
payment of any of the Liabilities, protest and notice of dishonor or Default
with respect to any of the Liabilities and all other notices to which the
Pledgor might otherwise be entitled except as otherwise expressly provided
herein or in the Credit Agreement.
(ii) The Pledgor understands and agrees that its obligations and
liabilities under this Pledge Agreement shall remain in full force and effect,
notwithstanding foreclosure of any real property securing all or any part of the
Secured Obligations by trustee sale or any other reason impairing the right of
the Pledgor, the Agent or any of the Holders of Secured Obligations to proceed
against the Pledgor, any other guarantor or the Pledgor's or such guarantor's
property. The Pledgor agrees that all of its obligations under this Pledge
Agreement shall remain in full force and effect without defense, offset or
counterclaim of any kind.
(iii) The Pledgor hereby expressly waives the benefits of any law in
any jurisdiction applicable to this Pledge Agreement purporting to allow a
guarantor or pledgor to revoke a continuing guaranty or pledge with respect to
any transactions occurring after the date of the guaranty or pledge.
(iv) The Pledgor hereby irrevocably waives all rights of subrogation
(whether contractual, under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, 11
U.S.C. Section 101 et seq. (the "Bankruptcy Code"), under common law or
otherwise, to the claims of the Agent and the Holders of Secured Obligations
against the Borrower and all contractual, statutory or common law rights of
contribution, reimbursement, indemnification and similar rights and "claims" (as
such term is defined in the Bankruptcy Code) against the Borrower which arise,
or may arise, in connection with, or as a result of, this Pledge Agreement.
14. TERM. This Pledge Agreement shall remain in full force and
effect until the Liabilities have been fully and indefeasibly paid in cash and
the Credit Agreement has terminated pursuant to its terms. Upon the termination
of this Pledge Agreement as provided above (other than as a result of the sale
of the Pledged Collateral), the Agent will release the security interest created
hereunder and, if it then has possession of the Pledged Stock, will deliver the
Pledged Stock and the Powers to the Pledgor.
15. DEFINITIONS. The singular shall include the plural and vice
versa and any gender shall include any other gender as the context may require.
Terms used herein but not defined in this Pledge Agreement or the Credit
Agreement shall have the meaning accorded such terms under the Uniform
Commercial Code, as the same may, from time to time, be in effect in the State
of Illinois.
16. SUCCESSORS AND ASSIGNS. This Pledge Agreement shall be binding
upon and inure to the benefit of the Pledgor, the Agent, for the benefit of
itself and the Holders of Secured Obligations, and their respective successors
and assigns. The Pledgor's successors and assigns shall include, without
limitation, a receiver, trustee or debtor-in-possession of or for the Pledgor.
17. GOVERNING LAW. THIS PLEDGE AGREEMENT HAS BEEN EXECUTED AND
DELIVERED BY THE PARTIES HERETO IN CHICAGO, ILLINOIS. ANY DISPUTE BETWEEN THE
AGENT AND THE PLEDGOR ARISING OUT OF OR RELATED TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN
CONNECTION WITH THIS PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF ILLINOIS.
18. CONSENT TO JURISDICTION; COUNTERCLAIMS; FORUM NON CONVENIENS.
(a) EXCLUSIVE JURISDICTION. Except as provided in SUBSECTION (b) of this
SECTION 18, the Agent, on behalf of itself and the Holders of Secured
Obligations, and the Pledgor agree that all disputes between them arising out of
or related to the relationship established between them in connection with this
Pledge Agreement, whether arising in contract, tort, equity, or otherwise, shall
be resolved only by state or federal courts located in Chicago, Illinois, but
the parties acknowledge that any appeals from those courts may have to be heard
by a court located outside of Chicago, Illinois.
(b) OTHER JURISDICTIONS. The Agent shall have the right to proceed
against the Pledgor or its real or personal property in a court in any location
to enable the Agent to obtain personal jurisdiction over the Pledgor, to realize
on the Pledged Collateral or any other security for the Liabilities or to
enforce a judgment or other court order entered in favor of the Agent. The
Pledgor shall not assert any permissive counterclaims in any proceeding brought
by the Agent arising out of or relating to this Pledge Agreement.
(c) VENUE; FORUM NON CONVENIENS. Each of the Pledgor and the Agent
waives any objection that it may have (including, without limitation, any
objection to the laying of venue or based on FORUM NON CONVENIENS) to the
location of the court in which any proceeding is commenced in accordance with
this SECTION 18.
19. RESERVED.
20. WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE AGENT WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN THE AGENT AND THE PLEDGOR ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED BY THIS PLEDGE AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EITHER THE
PLEDGOR OR THE AGENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS PLEDGE
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
21. WAIVER OF BOND. The Pledgor waives the posting of any bond
otherwise required of the Agent in connection with any judicial process or
proceeding to realize on the Collateral or any other security for the
Liabilities, to enforce any judgment or other court order entered in favor of
the Agent, or to enforce by specific performance, temporary restraining order,
or preliminary or permanent injunction, this Pledge Agreement or any other
agreement or document between the Agent and the Pledgor.
22. ADVICE OF COUNSEL. The Pledgor represents and warrants to the
Agent and the Holders of Secured Obligations that it has consulted with its
legal counsel regarding all waivers under this Pledge Agreement, including
without limitation those under SECTION 13 and SECTIONS 17
through 21 hereof, that it believes that it fully understands all rights that it
is waiving and the effect of such waivers, that it assumes the risk of any
misunderstanding that it may have regarding any of the foregoing, and that it
intends that such waivers shall be a material inducement to the Agent and the
Holders of Secured Obligations to extend the indebtedness secured hereby.
23. SEVERABILITY. Whenever possible, each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but, if any provision of this Pledge Agreement shall be held to
be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Pledge Agreement.
24. FURTHER ASSURANCES. The Pledgor agrees that it will cooperate
with the Agent and will execute and deliver, or cause to be executed and
delivered, all such other stock powers, proxies, instruments and documents, and
will take all such other actions, including, without limitation, the execution
and filing of financing statements, as the Agent may reasonably request from
time to time in order to carry out the provisions and purposes of this Pledge
Agreement.
25. THE AGENT'S DUTY OF CARE. The Agent shall not be liable for any
acts, omissions, errors of judgment or mistakes of fact or law including,
without limitation, acts, omissions, errors or mistakes with respect to the
Pledged Collateral, except for those arising out of or in connection with the
Agent's (i) gross negligence or willful misconduct, or (ii) failure to use
reasonable care with respect to the safe custody of the Pledged Collateral in
the Agent's possession. Without limiting the generality of the foregoing, the
Agent shall be under no obligation to take any steps necessary to preserve
rights in the Pledged Collateral against any other parties but may do so at its
option. All expenses incurred in connection therewith shall be for the sole
account of the Pledgor, and shall constitute part of the Liabilities secured
hereby.
26. NOTICES. All notices and other communications required or
desired to be served, given or delivered hereunder shall be made in writing or
by a telecommunications device capable of creating a written record and shall be
addressed to the party to be notified as follows:
if to the Pledgor, at
IFR Systems, Inc.
00000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
if to the Agent, at
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxx Green
Telecopy: (000) 000-0000
or, as to each party, at such other address as designated by such party in a
written notice to the other party. All such notices and communications shall be
deemed to be validly served, given or delivered (i) three (3) days following
deposit in the United States mails, with proper postage prepaid; (ii) upon
delivery thereof if delivered by hand to the party to be notified; (iii) upon
delivery thereof to a reputable overnight courier service, with delivery charges
prepaid; or (iv) upon transmission thereof with confirmation of successful
transmission from the sending telecommunications device, if sent by
telecommunications device.
27. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent pursuant to the terms of the Credit Agreement, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
28. SECTION HEADINGS. The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
29. EXECUTION IN COUNTERPARTS. This Pledge Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which shall together constitute one and the same agreement.
30. MERGER. This Pledge Agreement represents the final agreement of
the Pledgor with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between the Pledgor and the Agent or any Holder of Secured
Obligations.
31. 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 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.
IN WITNESS WHEREOF, THE PLEDGOR AND THE AGENT HAVE EXECUTED THIS
PLEDGE AGREEMENT AS OF THE DATE SET FORTH ABOVE.
IFR SYSTEMS, INC.
BY:
-----------------------------
NAME:
TITLE:
THE FIRST NATIONAL BANK OF CHICAGO, AS AGENT
BY:
-----------------------------
NAME:
TITLE:
SIGNATURE PAGE TO BORROWER PLEDGE AGREEMENT
ACKNOWLEDGMENT
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THE FOREGOING
PLEDGE AGREEMENT, AGREES PROMPTLY TO NOTE ON ITS BOOKS THE SECURITY INTERESTS
GRANTED UNDER SUCH PLEDGE AGREEMENT, AND WAIVES ANY RIGHTS OR REQUIREMENT AT ANY
TIME HEREAFTER TO RECEIVE A COPY OF SUCH PLEDGE AGREEMENT IN CONNECTION WITH THE
REGISTRATION OF ANY PLEDGED COLLATERAL IN THE NAME OF THE AGENT OR ITS NOMINEE
OR THE EXERCISE OF VOTING RIGHTS BY THE AGENT OR ITS NOMINEE.
THE UNDERSIGNED WAIVES ALL RIGHTS IT MAY HAVE UNDER SECTION 8-402 OF
THE UNIFORM COMMERCIAL CODE OR OTHER APPLICABLE LAW AS TO THE GENUINENESS AND
EFFECTIVENESS OF EACH INSTRUCTION OR INDORSEMENT WITH RESPECT TO THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, FOR ANY GUARANTEE OF THE SIGNATURE ON
THE STOCK POWER(S) OR OTHER DOCUMENTS EXECUTED.
-------------------------------
[ ]
------------------------
BY:
----------------------
NAME:
TITLE:
ACKNOWLEDGMENT
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THE FOREGOING
PLEDGE AGREEMENT, AGREES PROMPTLY TO NOTE ON ITS BOOKS THE SECURITY INTERESTS
GRANTED UNDER SUCH PLEDGE AGREEMENT, AND WAIVES ANY RIGHTS OR REQUIREMENT AT ANY
TIME HEREAFTER TO RECEIVE A COPY OF SUCH PLEDGE AGREEMENT IN CONNECTION WITH THE
REGISTRATION OF ANY PLEDGED COLLATERAL IN THE NAME OF THE AGENT OR ITS NOMINEE
OR THE EXERCISE OF VOTING RIGHTS BY THE AGENT OR ITS NOMINEE.
THE UNDERSIGNED WAIVES ALL RIGHTS IT MAY HAVE UNDER SECTION 8-402 OF
THE UNIFORM COMMERCIAL CODE OR OTHER APPLICABLE LAW AS TO THE GENUINENESS AND
EFFECTIVENESS OF EACH INSTRUCTION OR INDORSEMENT WITH RESPECT TO THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, FOR ANY GUARANTEE OF THE SIGNATURE ON
THE STOCK POWER(S) OR OTHER DOCUMENTS EXECUTED.
-------------------------
[ ]
------------------------
BY:
-----------------------
NAME:
TITLE:
ACKNOWLEDGMENT
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THE FOREGOING
PLEDGE AGREEMENT, AGREES PROMPTLY TO NOTE ON ITS BOOKS THE SECURITY INTERESTS
GRANTED UNDER SUCH PLEDGE AGREEMENT, AND WAIVES ANY RIGHTS OR REQUIREMENT AT ANY
TIME HEREAFTER TO RECEIVE A COPY OF SUCH PLEDGE AGREEMENT IN CONNECTION WITH THE
REGISTRATION OF ANY PLEDGED COLLATERAL IN THE NAME OF THE AGENT OR ITS NOMINEE
OR THE EXERCISE OF VOTING RIGHTS BY THE AGENT OR ITS NOMINEE.
THE UNDERSIGNED WAIVES ALL RIGHTS IT MAY HAVE UNDER SECTION 8-402 OF
THE UNIFORM COMMERCIAL CODE OR OTHER APPLICABLE LAW AS TO THE GENUINENESS AND
EFFECTIVENESS OF EACH INSTRUCTION OR INDORSEMENT WITH RESPECT TO THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, FOR ANY GUARANTEE OF THE SIGNATURE ON
THE STOCK POWER(S) OR OTHER DOCUMENTS EXECUTED.
-------------------------
[ ]
------------------------
BY:
-----------------------
NAME:
TITLE:
ACKNOWLEDGMENT
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THE FOREGOING
PLEDGE AGREEMENT, AGREES PROMPTLY TO NOTE ON ITS BOOKS THE SECURITY INTERESTS
GRANTED UNDER SUCH PLEDGE AGREEMENT, AND WAIVES ANY RIGHTS OR REQUIREMENT AT ANY
TIME HEREAFTER TO RECEIVE A COPY OF SUCH PLEDGE AGREEMENT IN CONNECTION WITH THE
REGISTRATION OF ANY PLEDGED COLLATERAL IN THE NAME OF THE AGENT OR ITS NOMINEE
OR THE EXERCISE OF VOTING RIGHTS BY THE AGENT OR ITS NOMINEE.
THE UNDERSIGNED WAIVES ALL RIGHTS IT MAY HAVE UNDER SECTION 8-402 OF
THE UNIFORM COMMERCIAL CODE OR OTHER APPLICABLE LAW AS TO THE GENUINENESS AND
EFFECTIVENESS OF EACH INSTRUCTION OR INDORSEMENT WITH RESPECT TO THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, FOR ANY GUARANTEE OF THE SIGNATURE ON
THE STOCK POWER(S) OR OTHER DOCUMENTS EXECUTED.
-------------------------
[ ]
------------------------
BY:
-----------------------
NAME:
TITLE:
EXHIBIT A
TO
PLEDGE AGREEMENT
DATED AS OF FEBRUARY 5, 1998
PLEDGED STOCK CERTIFICATES
Percentage of Shares of
Issued and Outstanding Capital Stock owned by
Stock owned the Pledgor Subject
Name by the Pledgor to Pledge
--------------------------------------------------------------------------
IFR Instruments, Inc. 100% 1,000
PK Technology, Inc. 100% 1,000
Marconi Instruments, Inc. 100% 6,000
IFR Finance, Inc. 100% 500,000
EXHIBIT B
to
PLEDGE AGREEMENT
dated as of February 5, 1998
FORM OF STOCK POWER
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer to _____________________________ _____ Shares of Common Stock of
________________________, a ________________________ corporation, represented by
Certificate No. __ (the "Stock"), standing in the name of the undersigned on the
books of said corporation and does hereby irrevocably constitute and appoint
___________________________________ as the undersigned's true and lawful
attorney, for it and in its name and stead, to sell, assign and transfer all or
any of the Stock, and for that purpose to make and execute all necessary acts of
assignment and transfer thereof; and to substitute one or more persons with like
full power, hereby ratifying and confirming all that said attorney or substitute
or substitutes shall lawfully do by virtue hereof.
Dated:
------------------
IFR SYSTEMS, INC.
By:
-------------------------
Title:
