EXECUTION COPY
EQUITABLE SHARE CHARGE
BETWEEN
IFR SYSTEMS, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO
SIDLEY & AUSTIN
Xxxxx Xxxxxxxx
Xxxxxx XX0X 0XX
Ref: JM/HW/DOC2.WPD
Tel: 0000 000 0000
Fax: 0000 000 0000
THIS DEED OF CHARGE is made the 5th day of February, 1998
BETWEEN:
(1) IFR SYSTEMS, INC., a Delaware corporation of 00000 Xxxx Xxxx Xxxxxx,
Xxxxxxx, Xxxxxx, XXX (the "CHARGOR"); and
(2) THE FIRST NATIONAL BANK OF CHICAGO a national banking association with its
principal place of business at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, in its capacity as contractual representative for itself and the
other Lenders under the Credit Agreement (as defined below) (the
"CHARGEE").
NOW THIS DEED WITNESSETH AS FOLLOWS:
I. DEFINITIONS AND INTERPRETATION
A. Words and expressions defined in the Credit Agreement (as defined below)
shall, in the absence of express indication to the contrary and save where
the context or subject matter otherwise requires, have the same meanings when
used in this Deed.
A. The following expressions shall bear the following meanings for the
purposes of this Deed:-
"CHARGED PROPERTY" means:-
(i) the Securities;
(ii) all dividends, distributions and other income paid or payable
on or derived from the Securities;
(iii) all shares or other property derived from the Securities
(whether by way of bonus, option or otherwise); and
(iv) all other accretions, rights, benefits and advantages of all
kinds accruing, offered or otherwise derived from the Securities
(whether by way of conversion, redemption, bonus, preference, option,
offer or otherwise);
"CREDIT AGREEMENT" means the credit agreement dated as of 5 February, 1998
(as amended, supplemented or otherwise modified from time to time) made
between the Chargor (the "BORROWER"), the institutions from time to time a
party thereto as Lenders (the "LENDERS") and the Chargee as contractual
representative for itself and the other Lenders;
"ENCUMBRANCE" means any mortgage, charge, assignment, pledge, lien, right
of set-off, encumbrance or other security interest (whether fixed or
floating) whatsoever;
"EVENT OF DEFAULT" means a Default (as defined in Article VIII of the
Credit Agreement);.
"INDEBTEDNESS" means the Obligations of the Chargor under the Credit
Agreement.
"SECURITIES" means 65 per cent of the issued share capital of IFR Systems
Limited (company number 3491978) represented by share certificate number 2;
A. References to the parties to the Credit Agreement or this Deed include
such other persons as may from time to time assume, in accordance with the
terms of the Credit Agreement or this Deed, rights and obligations of any
such party (or their successors) thereunder or hereunder.
A. References to any statute or statutory provision or order or regulation
made hereunder include that statute, provision, order or regulation as
amended, modified, re-enacted or replaced from time to time.
A. References to persons shall include bodies corporate and unincorporate,
associations, state entities (or any agency thereof), partnerships and
individuals.
A. Headings to clauses are for information only and shall not form part of
the operative provisions of this Deed or the Schedules and shall be ignored
in construing the same.
A. References to Recitals, Clauses or Schedules are to recitals to, clauses
of or schedules to this Deed.
A. References in this Deed to any agreement, deed or document (including,
without limitation, references to this Deed) shall be deemed to include
references to such agreement, deed or document as varied, amended, modified,
supplemented or replaced from time to time.
I. COVENANT TO PAY
A. The Chargor covenants that it will pay the Indebtedness to the Chargee in
accordance with the Credit Agreement.
I. CHARGING CLAUSE
A. As continuing security for the payment to the Chargee of the
Indebtedness, the Chargor with full title guarantee hereby charges in favour
of the Chargee all of the
Chargor's interest in and to the Charged Property with the intent that such
charge will take effect as a first equitable charge and shall rank ahead of
any other present or future security on the Charged Property.
I. TRANSFER OF SHARES
A. Forthwith upon execution of this Deed the Chargor shall deliver to the
Chargee all stock and share certificates and other documents of title
(including a certified true and correct copy of the register of members of
IFR Systems Limited) relating to the Securities together with stock transfer
forms executed in blank and left undated on the basis that the Chargee (or
its nominee) shall be entitled to hold such documents of title and stock
transfer forms until the Indebtedness has been irrevocably and
unconditionally discharged in full and shall be entitled, at any time if an
Event of Default shall have occurred and be continuing, to complete (pursuant
to its powers in Clause 12 below) the stock transfer forms on behalf of the
Chargee in favour of itself or such other person as it shall select.
I. DIVIDENDS AND VOTING RIGHTS
A. So long as no Event of Default shall have occurred and be continuing
(excluding for this purpose an Event of Default which shall have been waived
in writing by the Chargee or remedied to the satisfaction of the Chargee):
1. the Chargor shall be entitled to receive and retain all cash dividends,
distributions and other moneys paid on or derived from the Securities;
1. the Chargor shall be entitled to exercise all voting and other rights
and powers attaching to the Securities provided that it shall not exercise
any such voting rights or powers in a manner prejudicial to the interests of
the Chargee under this Deed and in particular, without limiting the
foregoing, the Chargor shall not exercise any voting rights or powers if such
exercise would result in the Securities representing less than 65 per cent in
value of the entire issued share capital of IFR Systems Limited.
A. The rights and powers attaching to the Securities shall, for the
purposes of Clause 5.1(b), include, without limitation, all powers given to
trustees by Section 10(3) and 10(4) of the Trustee Act 1925 (in respect of
securities subject to a trust) and shall be exercisable without any need for
any further consent or authority of the Chargor.
A. At any time when the Securities are registered in the name of the
Chargee or its nominee the Chargee shall not be under any duty to ensure that
any dividends, distributions or other moneys payable in respect of the
Securities are duly and promptly paid or received by it or its nominee or to
verify that the correct amounts are paid or received or to take any action in
connection with the taking up of any (or any offer of any) stocks, shares,
rights, moneys or other property paid, distributed, accruing or offered at
any time by way of interest, dividend, redemption, bonus, rights, preference,
option, warrant or otherwise on, or in respect of, or in substitution for,
any of the Securities.
I. RELEASE AND DISCHARGE
A. At such time as all the Indebtedness under the Credit Agreement has been
unconditionally and irrevocably discharged in full, neither the Chargee nor
the Lenders has any further contingent obligations to lend or grant or create
any other commitment or liabilities under or in connection with the Credit
Agreement or any instruments or documents related or issued pursuant thereto
and the Credit Agreement has been terminated or has no further effect, this
Deed and the security interest granted hereby shall terminate and the Chargee
shall release all the right, title and interest of the Chargee in the Charged
Property. Upon any such termination of security interest, the Chargor shall
be entitled to the return, upon its request and at its expense, of such of
the Charged Property held by the Chargee as shall not have been sold or
otherwise applied pursuant to the terms hereof and the Chargee will, at the
Chargor's expense, execute and deliver to the Chargor such other documents as
the Chargor shall reasonably request to evidence such termination. In
connection with any sales of the Charged Property, as permitted under the
Credit Agreement, the Chargee will release and terminate the liens and
security interest granted under this Deed with respect to such asset.
I. CONTINUING SECURITY
A. This security is to be a continuing security, notwithstanding any
intermediate payment or settlement of account or other matter or thing
whatsoever and in particular the intermediate satisfaction by the Borrower of
the whole or any part of the Indebtedness and is to be in addition, and
without prejudice, to any other security or securities which the Chargee, or
the Lenders or any of them may now or hereafter hold for the Indebtedness or
any part thereof and this security may be enforced against the Chargor
without first having recourse to any other rights of the Chargee.
I. FURTHER ASSURANCE
A. The Chargor undertakes, from time to time and at all times, whether
before or after the security constituted hereunder shall have become
enforceable, to execute and do at its own expense all such deeds, assurances,
agreements, instruments, acts and things as the Chargee may reasonably
require for perfecting and protecting the security hereby constituted or
facilitating the realisation thereof or otherwise for enforcing the same or
exercising any of the Chargee's rights hereunder and in particular, but
without limitation, the Chargor shall execute all transfers, conveyances,
assignments and assurances whatsoever and give all notices, orders,
instructions and directions whatsoever which the Chargee may deem reasonably
necessary or advisable in the exercise of its rights hereunder.
I. NEGATIVE PLEDGE
A. During the continuance of this security the Chargor shall not (except as
provided in the Credit Agreement):
1. create or permit to subsist any Encumbrance on or over all or any part
of the Charged Property or the right to receive or be paid the same or agree
to do so; or
1. sell, transfer or otherwise dispose of the whole or any part of the
Charged Property or the right to receive or to be paid the same or agree to
do so; or
1. dispose of the equity of redemption in respect of any of the Charged
Property.
I. REPRESENTATIONS
A. The Chargor represents and warrants to the Chargee on the date hereof as
follows:
1. that it is the sole, direct, unfettered, legal and beneficial owner of
the Securities; and
1. that the Securities have been duly authorised and are fully paid up,
free from any Encumbrance (other than this charge) and not subject to any
option and represent 65 per cent. in nominal value of the entire issued
share capital of IFR Systems Limited.
I. UNDERTAKING
A. The Chargor hereby undertakes that, forthwith upon the issue by IFR
Systems Limited of any additional shares in favour of the Chargor, the
Chargor will execute and deliver in favour of the Chargee (as agent for
itself and the Lenders) a pledge supplemental to this Deed in respect of such
shares, in a form reasonably acceptable to the Chargee, to the intent that at
all times 65 per cent. in nominal value of the entire issued share capital
of IFR Systems Limited shall constitute the Securities then securing the
Indebtedness.
I. ATTORNEY
A. The Chargor hereby irrevocably and by way of security appoints the
Chargee and any person nominated for the purpose by the Chargee in writing
under hand by an officer of the Chargee severally as its Attorney and in its
name and on its behalf and as its act and deed to execute as a deed and
deliver (using the company seal where appropriate) and otherwise perfect and
do any deed, assurance, agreement, instrument, transfer, act or thing which
may be required or deemed proper in the exercise of any rights or powers
hereunder or otherwise for any of the purposes of this Deed and the Chargor
hereby covenants with the Chargee to ratify and confirm all acts or things
made, done or executed by such attorney as aforesaid.
I. ENFORCEMENT OF SECURITY
A. The restriction on the consolidation of mortgages imposed by Section 93
of the Law of Property Act 1925 shall not apply to this Deed.
A. Section 103 of the Law of Property Xxx 0000 shall not apply to the
charges created by this Deed which shall immediately become enforceable and
the power of sale and other powers conferred by Section 101 of such Act (as
varied or extended by this Deed) shall be immediately exercisable at any time
after notice demanding payment of any sum in respect of the Indebtedness
shall have been given by the Chargee to the Chargor following the occurrence
and during the continuance of an Event of Default.
A. The powers conferred on mortgagees or receivers by the Law of Property
Xxx 0000 and the Insolvency Xxx 0000 shall apply to the security constructed
by this Deed except insofar as they are expressly or impliedly excluded and
where there is ambiguity or conflict between the powers contained in such
Acts and those contained in this Deed, those contained in this Deed shall
prevail.
I. PROTECTION OF THIRD PARTIES
A. No purchaser from, or other person dealing with, the Chargee shall be
concerned to enquire whether any of the powers which it has exercised or
purported to exercise has arisen or become exercisable, or whether any of the
Indebtedness remains outstanding, or whether any event has happened to
authorise the Chargee to act or as to the propriety or validity of the
exercise or purported exercise of any such power; and the title of such a
purchaser and the position of such a person shall not be impeachable by
reference to any of those matters.
A. The receipt of the Chargee shall be an absolute and conclusive discharge
to a purchaser and shall relieve him of any obligation to see to the
application of any moneys paid to or by the direction of the Chargee.
A. In Clauses 14.1 and 14.2, "purchaser" includes any person acquiring, for
money or money's worth, any Encumbrance over, or any other interest or right
whatsoever in relation to, any of the Charged Property.
I. PROTECTION OF CHARGEE
A. The Chargee shall not be liable in respect of any loss or damage which
arises out of the exercise, or the attempted or purported exercise of, or the
failure to exercise any of its powers, unless such loss or damage is caused
by its gross negligence or wilful default or misconduct.
I. OTHER SECURITY, CUMULATIVE POWERS AND AVOIDANCE OF PAYMENTS
A. This security is in addition to, and shall neither be merged in, nor in
any way exclude or prejudice, or be affected by any other security interest,
right of recourse or other right whatsoever (or the invalidity thereof) which
the Chargee may now or at any time hereafter hold or have (or would apart
from this security hold or have) as regards the Chargor or any other person
in respect of the Indebtedness.
A. The powers which this Deed confers on the Chargee are cumulative,
without prejudice to its powers under the general law, and may be exercised
as often as the Chargee thinks appropriate; the Chargee may, in connection
with the exercise of its powers, join or concur with any person in any
transaction, scheme or arrangement whatsoever; and the Chargor acknowledges
that the respective powers of the Chargee shall in no circumstances
whatsoever be suspended, waived or otherwise prejudiced by anything other
than an express waiver or variation in writing.
A. If any amount paid by the Borrowers or any of them in respect of the
Indebtedness is avoided or set aside on the liquidation or administration of
the Chargor or otherwise, then for the purposes of this Deed such amount
shall not be considered to have been paid.
I. SUSPENSE ACCOUNT
A. All moneys received, recovered or realised by the Chargee under this
Deed (including the proceeds of any conversion of currency) may in the
discretion of the Chargee be credited to an interest-bearing suspense or
impersonal account and may be held in such account for so long as the Chargee
may think fit pending their application from time to time (as the Chargee
shall be entitled to do in its discretion) in or towards the discharge of the
Indebtedness or any part thereof and save as provided herein no party shall
be entitled to withdraw any amount at any time standing to the credit of any
suspense or impersonal account referred to above.
I. CURRENCY LAWS
A. All moneys received or held by the Chargee under this Deed may be
converted into such other currency in which the obligations and liabilities
comprised in the Indebtedness were denominated at the rate of exchange then
prevailing for purchasing that other currency with the existing currency in
accordance with the Chargee's customary practice for the exchange of
currencies.
A. No payment to the Chargee (whether under any judgment or court order or
otherwise) shall discharge the obligation or liability of the Chargor in
respect of which it was made unless and until the Chargee shall have received
payment in full in the currency in which the obligation or liability was
incurred (the "ORIGINAL CURRENCY"). In the event of any payment made in a
currency other than the Original Currency ("OTHER CURRENCY"), such obligation
or liability shall be discharged only to the extent
that on the Business Day following receipt by the Chargee of such payment in
such Other Currency the Chargee may in accordance with normal banking
procedures purchase the Original Currency with such Other Currency: if the
amount of the Original Currency so purchased is less than the sum originally
due to the Chargee in the Original Currency, the Chargee shall have a
further separate course of action against the Chargor and shall be entitled
to enforce the security constituted by this Deed to recover the amount of the
shortfall.
I. CERTIFICATES
A. For all purposes, including any legal proceedings, a certificate signed
by one of the Chargee's officers as to the amount of the Indebtedness (or any
part thereof) shall, in the absence of manifest error, be prima facie
evidence thereof against the Chargor.
I. WAIVER
A. No delay or omission of the Chargee in exercising any right, power or
privilege hereunder shall impair such right, power or privilege or be
construed as a waiver of such right, power or privilege nor shall any single
or partial exercise of any such right, power or privilege preclude any
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies of the Chargee herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
A. A waiver given or consent granted by the Chargee under this Deed will be
effective only if given in writing and then only in the instance and for the
purpose for which it is given.
I. INVALIDITY
A. If at any time any one or more of the provisions of this Deed is or
becomes invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions hereof
shall not be in any way affected or impaired thereby.
I. DELEGATION
A. The Chargee may delegate by power of attorney or in any other manner all
or any of the powers, authorities and discretions which are for the time
being exercisable by the Chargee under this Deed to any person or persons
which it shall think fit.
I. REDEMPTION OF PRIOR CHARGES
A. The Chargee may at any time following an Event of Default redeem any and
all prior Encumbrances on or relating to the Charged Property or any part
thereof or procure the transfer of such Encumbrances to itself and may settle
and pass the accounts of the person or persons entitled to the prior
Encumbrances. Any account so settled and passed shall be conclusive and
binding on the Chargor.
I. ASSIGNMENT
A. The Chargee may assign all or any of its rights under this Deed to any
substitute contractual representative or any other person acting on behalf of
any of the Lenders.
I. NOTICES
A. Save as specifically otherwise provided in this Deed, the provisions of
Section 14.1 of the Credit Agreement shall apply to any notice, demand or
other communication to be served under this Deed. For the purposes hereof,
the address and facsimile number of each party hereto shall be as shown
immediately after its name on the signature page of this Deed or at such
other address or number as it may from time to time notify in writing to the
other party.
I. DEED
A. The parties hereto intend this agreement to take effect as a deed.
I. GOVERNING LAW
A. The Deed shall be governed by and construed in accordance with English
law.
A. The Chargor for the benefit of the Chargee irrevocably agrees that the
High Court of Justice in London is to hear and determine any disputes which
may arise out of or in connection with this Deed and that accordingly any
suit, action or proceedings arising out of or in connection with this Deed
("PROCEEDINGS") may be brought in such Court and the Chargor irrevocably
submits to such jurisdiction for the purpose of any such Proceedings, but
without prejudice to the right of the Chargee to bring Proceedings in any
other appropriate jurisdiction or the right to take Proceedings in more than
one jurisdiction (whether concurrently or not).
A. Each of the Chargor and the Chargee irrevocably agrees that any writ,
notice or other document issued in connection with or for the purpose of any
Proceedings in the English Courts shall be duly served upon it if delivered
or sent by registered post to the following person, namely:
In respect of the Chargor:
Name: Any partner of Boodle Xxxxxxxx
Position:
Address: 00 Xxxxx Xxxxxx, Xxxxxx X0X 0XX
In respect of the Chargee:
Name: Xxxxx Xxxxxx
Position: Senior Vice President and Senior Credit
Officer
Address: First Chicago/ NBD London Branch, 0 Xxxxxx
Xxxxxx, Xxxxxx
A. The Chargor irrevocably agrees that a judgment in any Proceedings
brought in the English Courts shall be conclusive and binding (subject to any
appeal it may bring) upon it and may be enforced in the courts of any other
jurisdiction. The Chargor irrevocably waives any objection it may now or
hereafter have to the laying of venue of any Proceedings brought in the
English Courts and any claim it may now or hereafter have that any such
Proceedings have been brought in an inconvenient forum.
A. The Chargor consents generally in respect of any Proceedings to the
giving of any relief or the issue of any process in connection with such
Proceedings including, without limitation, the making, enforcement or
execution against any of its property whatsoever (irrespective of its use or
intended use) of any order or judgment which may be made or given in such
Proceedings.
I. COUNTERPARTS
This Deed may be executed in any number of copies which taken together
shall constitute a single deed.
IN WITNESS whereof this Deed has been duly executed and delivered the day and
year first above written.
EXECUTED as a DEED by )
IFR SYSTEMS, INC. )
)
.......................................
.............................................
director director/secretary
NOTICE DETAILS: are as provided for in the Credit Agreement
EXECUTED as a DEED by )
THE FIRST NATIONAL BANK OF CHICAGO )
acting by its duly authorised officer(s) )
.......................................
.............................................
officer officer
NOTICE DETAILS: as set out in the Credit Agreement
AND COPIES TO:
Address: Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx
Xxxxxxxx 00000
U.S.A.
Facsimile: (000) 000 0000
Attention of: Xxxxx Xxxxx
CONTENTS
Clause No. Page No.
------------------------
1. DEFINITIONS AND INTERPRETATION 1
2. COVENANT TO PAY 2
3. CHARGING CLAUSE 2
4. TRANSFER OF SHARES 3
5. DIVIDENDS AND VOTING RIGHTS 3
6. RELEASE AND DISCHARGE 4
7. CONTINUING SECURITY 4
8. FURTHER ASSURANCE 4
9. NEGATIVE PLEDGE 5
10. REPRESENTATIONS 5
11. UNDERTAKING 5
12. ATTORNEY 5
13. ENFORCEMENT OF SECURITY 6
14. PROTECTION OF THIRD PARTIES 6
15. PROTECTION OF CHARGEE 6
16. OTHER SECURITY, CUMULATIVE POWERS AND
AVOIDANCE OF PAYMENTS 7
17. SUSPENSE ACCOUNT 7
18. CURRENCY LAWS 7
19. CERTIFICATES 8
20. WAIVER 8
21. INVALIDITY 8
22. DELEGATION 8
23. REDEMPTION OF PRIOR CHARGES 8
24. ASSIGNMENT 9
25 NOTICES 9
26. DEED 9
27. GOVERNING LAW 9
28. COUNTERPARTS 10
