THIS CHARGE is dated 14th September 1998 and made BETWEEN:
(1) QUANTUM PERIPHERALS (EUROPE) S.A. (registered in Switzerland) whose
registered office is at Xxxxxx-Xxxxxxxx 00X, XX-0000, Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxx (the "Company"); and
(2) THE SUMITOMO BANK, LIMITED whose principal office in England is at Temple
Court, 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (the 'Bank')
WITNESSES as follows:
1. Definitions and Interpretation
1.1 In this Charges unless the context otherwise requires:
'Deposit' means the sum of US $85,000,000 deposited in the
Security Account and all other monies from time to time standing
to the credit of the Security Account and any account opened by
the Bank in accordance with Clause 7.2 together with all interest
and other rights arising in connection therewith.
'Encumbrance' means any mortgage charge pledge lien assignment
hypothecation security interest title retention preferential right
or trust arrangement or other security arrangement or agreement or
any right conferring a priority of payment.
'Interest Calculation Period' means consecutive periods of 1 week,
1 month, 3 months, 6 months, 9 months or 1 year each as selected
by the Company and notified to the Bank not later than the close
of business in London on the third London Business Day prior to
the start of an Interest Calculation Period and in default of such
selection, one month.
'Letters of Credit' means the two standby letters of credit in
favour of Matsushita - Kotobuki Electronics Industries Ltd and
Ireland - Kotobuki Electronics Industries Ltd as the same may from
time to time be amended, increased or extended in accordance with
the instructions of the Company.
'LIBID' means the one-eighth of one percent below LIBOR for US
Dollars in the London Interbank Market at 11 am London time two
London Business Days prior to the first day of any Interest
Calculation Period as quoted on Telerate page 3750 (or an
alternative screen reference if it ceases to be quoted on that
page) except in respect of the first Interest Calculation Period
which will be fixed on receipt of the Deposit.
'LPA' means the Law of Property Xxx 0000
'Reimbursement Agreement' means the reimbursement agreement [dated
14 September, 1998] between the Company and the Bank relating to
the issue of the Letters of Credit.
'Security Account' means the Deposit as defined in the
Reimbursement Agreement in the name of the Company with the Bank
and all rights of the Company in relation to such Deposit.
'Secured Liabilities' means all monies obligations and liabilities
whatsoever which may now or at any time in the future be due owing
or incurred by the Company to the Bank under the Reimbursement
Agreement and/or this Charge whether actual or contingent.
1.2 Any reference in this document to "this Charge shall be deemed to
include any instruments amending varying supplementing, novating
or replacing the terms of this document from time to time.
2. Covenant to Pay
2.1 In consideration of the Bank's agreement to issue the Letters of
Credit the Company covenants with the Bank that it will on demand
pay and discharge the Secured Liabilities when due to the Bank.
3. Charge
3.1 The Company with full title guarantee and as a continuing security
for the payment and discharge of the Secured Liabilities charges
in favour of the Bank by way of first fixed charge the Deposit and
all the entitlements to interest the right to repayment and other
rights and benefits accruing to or arising in connection with the
Deposit to the intent that such charge shall operate as a release
of the Deposit to the Bank until the Secured Liabilities have been
unconditionally and irrevocably paid and discharged in full
provided that interest will be remitted to the company as set out
in clause 4.2 below.
4. Terms of the Deposit
4.1 The Company shall not be entitled to withdraw or transfer all or
any part of the Deposit until the corresponding part or the
Secured Liabilities have been unconditionally and irrevocably paid
and discharged in full to the intent that the principal amount of
the Deposit shall at all times be equal to the aggregate of the
Bank's exposure for the "Stated Amounts" as defined in each of the
Letters of Credit.
4.2 Interest shall accrue on the Deposit at LIBID for consecutive
Interest Calculation Periods in accordance with normal Euromarket
conventions and be paid to the Company on the last day of each
Interest Calculation Period provided that if the Company is in
breach of any provision of this Charge or of any contract or
agreement giving rise to or otherwise
concerning the Secured Liabilities then any such interest shall be
credited to the Security Account and form part of the Deposit.
4.3 Any agreement (whether before on or after the date of this Charge)
that the Deposit is to be held on fixed time deposit shall be for
the purposes of calculation and payment of interest only and shall
not prejudice the Bank's rights or obligations under any provision
of this Charge. The Bank may unilaterally terminate any such fixed
time deposit period at any time after the date on which all or any
part of the Secured Liabilities shall become due and payable and
adjust any interest payable by the Bank accordingly.
4.4 If the Deposit is held on fixed time deposit then on the expiry of
the relevant fixed time deposit period it shall be redeposited in
an amount not to exceed the Bank's Obligations as defined in the
Reimbursement Agreement or successively redeposited on such terms
(including without limitation successive fixed time deposits) as
may be from time to time between the Company and the Bank or
failing such agreement as may be determined by the Bank.
4.5 If any time deposit needs to be cancelled either pursuant to the
terms of the Reimbursement Agreement or the terms hereof, the
Company will be responsible for any broken funding cost thereby
incurred by the Bank in covering its position. The Bank will give
the Company details of its calculations.
5. Right of Set-off
The Company authorises the Bank subject to the conditions specified in
the Paragraph 3 of the Reimbursement Agreement, to apply the Deposit or
any part thereof at any time towards satisfaction of all or any of the
Secured Liabilities as are then due and payable as the Bank may think
fit. The Bank will give prompt notice of the exercise of any such set off
right.
6. Representations Warranties and Covenants by the Company
6.1 The Company represents and warrants to the Bank and undertakes that:
(a) it is and will be the sole absolute and beneficial owner
with full title guarantee of all the Deposit free from
Encumbrances and will not create or attempt to create or
permit to arise or subsist any Encumbrance (other than this
Charge) on or over the Security Account or all or any part
of the Deposit;
(b) it has not sold assigned or otherwise disposed of or agreed
to sell assign or dispose of and will not at any time
during the subsistence of this Charge sell assign or
dispose of or agree to sell assign or otherwise dispose of
or agree to dispose of all or any of the Company's right
title and interest in and to all or any part of the
Deposit.
(c) it has and will at all times have the necessary power to
enter into and perform its obligations under this Charge;
(d) this Charge constitutes its legal valid binding and
enforceable obligations and is a security over all and
every part of the Deposit effective in accordance with its
terms;
(e) this Charge does not and will not conflict with or result
in any breach or constitute a default under any agreement
instrument or obligation to which the Company is a party or
by which it is bound;
(f) all necessary authorisations and consents to enable or
entitle it to enter into this Charge have been obtained and
will remain in full force and effect during the subsistence
of the security constituted by this Charge.
7. Continuing Security
7.1 The security constituted by this Charge shall be continuing and
shall not be considered as satisfied or discharged by any
intermediate payment or settlement of the whole or any part of the
Secured Liabilities or any other matter or thing whatsoever
including the insolvency liquidation or administration of the
Company or any analogous event occurring under the law of
incorporation of the Company and shall be binding until all the
Secured Liabilities have been unconditionally and irrevocably paid
and discharged in full.
7.2 The Secured Liabilities shall be deemed for the purposes of all
powers implied by statute to have become due and payable within
the meaning of Section 101 of the LPA immediately on the execution
of this Charge and Section 103 of the LPA (restricting the power
of sale) Section 109 of the LPA (restricting the power to appoint
a receiver) and Section 93 of the LPA (restricting the right of
consolidation) shall not apply to this Charge, save that the Bank
shall not exercise such powers unless and until the Company is in
breach of the Secured Obligations.
8. Power of Attorney
8.1 The Company by way of security irrevocably appoints the Bank to be
attorney of the Company (with full powers of substitution and
delegation) for the Company and in its name or otherwise and on
its behalf and as its act and deed to sign seal execute deliver
perfect and do all deeds instruments notices documents acts and
things which the Company may or ought to do under the covenants
and provisions contained in this Charge and generally its name and
on its behalf to exercise all or any of the powers authorities and
discretions conferred by or pursuant to this Charge or by the LPA
on the Bank and to execute and deliver and otherwise perfect any
deed assurance agreement instrument or act which it may deem
proper in
the exercise of all or any of the powers authorities and
discretions conferred on the Bank pursuant to this Charge.
8.2 The Company ratifies and confirms and agrees to ratify and confirm
anything such attorney shall lawfully and properly do or purport
to do by virtue of Clause 8.1 and all reasonable money expended by
any such attorney shall be deemed to be expenses incurred by the
Bank under this Charge.
9. Further Assurances
9.1 Without prejudice to anything else contained in this Charge the
Company shall at any time at the request of the Bank but at the
cost of the Borrower promptly sign seal execute deliver and do all
deeds instruments notices documents acts and things in such form
as the Bank may from time to time require for perfecting or
protecting the security over the whole or any part of the Deposit
or for facilitating its realization.
10. Currency Indemnity
10.1 If under any applicable law or regulation or pursuant to a
judgment or order being made or registered against the Company or
the liquidation of the Company or without limitation for any other
reason any payment under or in connection with this Charge is made
or fails to be satisfied in a currency (the "payment currency")
other than the currency in which such payment is expressed to be
due under or in connection with this Charge (the "contractual
currency") then to the extent that the amount of such payment
actually received by the Bank when converted into the contractual
currency at the rate of exchange falls short of the amount due
under or in connection with this Charge the Company as a separate
and independent obligation shall indemnify and hold harmless the
Bank against the amount of such shortfall. For the purposes of
this Clause "rate of exchange" means the rate at which the Bank is
able on or about the date of such payment to purchase, in
accordance with its normal practice, the contractual currency with
the payment currency and shall take into account (and the Company
shall be liable for) any premium and other costs of exchange
including any taxes or duties incurred by reason of any such
exchange.
11. Costs
11.1 All reasonable cost charges and expenses properly incurred by the
Bank in relation to this Charge or the Secured Liabilities shall
be reimbursed by the Company to the Bank on demand on a full
indemnity basis and until so reimbursed shall carry interest at
the Bank's cost of funds from the date of payment to the date of
reimbursement.
12. Miscellaneous
12.1 No reasonable delay or omission on the part of the Bank in
exercising any right or remedy under this Charge shall impair that
right or remedy or operate as to be taken to be a waiver of it nor
shall any single partial or defective exercise of any such right
or remedy preclude any other or further exercise under this Charge
of that or any other right or remedy.
12.2 The Bank's rights under this Charge are cumulative and not
exclusive of any rights provided by law and may be exercised from
time to time and as often as the Bank deems expedient.
12.3 Any waiver by the Bank of any terms of this Charge or any consent
or approval given by the Bank under it shall only be effective if
given in writing and then only for the purpose and upon the terms
and conditions if any on which it is given.
12.4 The security constituted by this Charge shall be in addition to
and shall not be prejudiced determined or affected by nor operate
so as in any way to determine prejudice affect or merge in any
Encumbrance which the Bank may now or at any time in the future
hold for or in respect of the Secured Liabilities or any of them
and shall not be prejudiced by time or indulgence granted to any
person or any abstention by the Bank in perfecting or enforcing
any remedies securities guarantees or rights it may now or in the
future have from or against the Company or any other person or any
waiver release variation act omission forbearance unenforceability
indulgence or invalidity of any such remedy security guarantee or
right.
12.5 If at any time any one or more of the provisions of the Charge is
or becomes illegal invalid or unenforceable in any respect under
any law of any jurisdiction neither the legality validity or
enforceability of the remaining provisions of this Charge nor the
legality validity or enforceability of such provision under the
law of any other jurisdiction shall in any way affected or
impaired as a result.
12.6 Any statement certificate or determination of the Bank as to the
Secured Liabilities the Deposit or without limitation any other
matter provided for in this Charge shall in the absence of
manifest error be conclusive and binding on the Company.
13. Communications
13.1 Every notice demand or other communication under this Charge shall
be in writing and may be delivered personally or by letter, telex
or facsimile transmission despatched by the Bank to the Company to
its address specified at the head of this Charge or to the
following numbers:
Facsimile: 00-00-000-0000
--------------
for the attention of: Finance Director
----------------
or to such other address and or telex number and or facsimile
number as may be notified in accordance with this Clause by the
Borrower to the Bank for such purpose.
13.2 Every notice demand or other communication shall be deemed to have
been received (if sent by post) twenty-four hours after being
posted first class postage prepaid (if posted from and to an
address within the United Kingdom) and (if delivered personally or
despatched by telex (subject to receiving the correct telex
answerback) or by facsimile transmission) at the time of delivery
or despatch if during normal business hours on a working day in
the place of intended receipt and otherwise at the opening of
business in that place on the next succeeding such working day.
14. Governing Law and Jurisdiction
14.1 This Charge is governed by and shall be construed in accordance
with English law and both parties submit to the jurisdiction of
the English courts for the settlement of any disputes arising
hereunder, The Company appoints Xxxxx XxXxxxxx at Xxxxxxx Xxxxx,
Xxxxxx XX0X 00X as its agent for the service of process in
England..
IN WITNESS whereof the Company has executed and delivered this Charge as
a Deed the day and year first before written.
EXECUTED UNDER SEAL AND )
DELIVERED AS A DEED )
by QUANTUM PERIPHERALS ) ............................................Seal
(EUROPE) S.A. acting by )
Xxxx Xxxxxxx Herpeux in the )
presence of: )
Witness:
Signature /s/ Xxxx Xxxxx
--------------------------------
Name Xxxx Xxxxx
-----------------------
Address Champs Montants 16a
-----------------------
2074 Marin
-----------------------
Switzerland
-----------------------
Occupation Acting Finance Director
