Exhibit 10.6

CONTROL AGREEMENT
 
June 6, 2013
 
PLEDGOR: FREQUENCY ELECTRONICS, INC.
(“Pledgor”)
 
BANK: JPMorgan Chase Bank, N.A. (“Bank”)
 
COMPANY: J.P. Morgan Securities LLC (including all successors and assigns, the
“Company”)
 

The financial institution identified in the heading on this Agreement as the
Bank (“Bank,” which may be referred to in the Pledge, as defined in this
Agreement, as “Secured Party” or “Lender” or a similar reference), the person or
entity identified in the heading on this Agreement as the Pledgor (“Pledgor,”
who or which may be referred to in the Pledge as “Debtor” or “Grantor” or a
similar reference) and the securities intermediary identified in the heading on
this Agreement as the Company (“Company,” including any affiliate, which may be
referred to in the Pledge as “Securities Intermediary” or a similar reference)
hereby agree as follows:

1. Account. The Company has established securities account number 220-52818
(including any successor account, howsoever numbered, the “Account”). The
Company acknowledges that attached hereto as Exhibit A is a statement of the
Account produced by the Company in the ordinary course of its business regarding
the property credited to the Account as of the date of such statement. The
Pledgor has granted the Bank a security interest in, pledge and assignment of
the Account pursuant to a pledge/and or security agreement (the “Pledge”). The
parties are entering into this control agreement (this “Agreement”) to perfect
the Bank’s security interest in the Account. The Account is a “securities
account” and the Company is acting as a “securities intermediary” and shall
treat all property in the Account as “financial assets” under Article 8 of the
Uniform Commercial Code as adopted in the State of New York as in effect from
time to time (“UCC”).

2. Control. This section 2 applies before and after a Notice of Sole Control is
given or an Event of Default occurs and notwithstanding section 4 below. The
Company and the Pledgor agree the Account is subject to a security interest in
favor of the Bank and the Bank shall have control over the Account in accordance
with provisions of the UCC. The Pledgor further irrevocably directs the Company
to follow all directions from the Bank to ensure its legal and operational
control over the Account, including making notations in the Company’s records
pertaining to the Account that are necessary or appropriate to reflect the
Pledge, to move Collateral from the existing Account to establish a new Account,
with a new account number # 220-52818, for the purpose of holding the
collateral, if need be, to style the Account to read: “JPMorgan Chase Bank, N.A.
- Collateral Account for FREQUENCY ELECTRONICS, INC.” or any abbreviations made
by Securities Intermediary for operational purposes and/or to move the Account
to any affiliates of the Bank acting as a securities intermediary, all to
exercise legal and operational control over the Account as may be necessary or
desirable to reflect the Pledge, in the sole discretion of the Bank. Any Account
with a new account number  # 220-52818, if need be, along with any and all
successor Accounts, shall be included in the description of “Collateral” in the
Pledge.

3. Priority of Lien/Subordination. The Company has not entered into a control
agreement with respect to the Account with any other party and agrees that the
Company will not do so while this Agreement is in effect. The Company does not
know of any claim to or interest in the Account, except for claims and interests
of the parties referred to in this Agreement. The Company further represents
that the Account is not a margin account and that it will not advance margin or
other credit to the Pledgor, except for credit related to the settlement of
transactions in the ordinary course of business. The Company subordinates in
favor of the Bank any security interest, lien or right of setoff it may have,
now or in the future, against the Account or property in the Account, although
the Company may retain a prior lien against the property in the Account to
secure payment for property purchased for the Account and normal commissions and
fees for the Account.
 
 
 

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4. Trading Permitted; No Distributions or Liquidation. Until a Notice of Sole
Control is given by the Bank to the Company, the Company may make purchases for
and sales of any property held in the Account upon the instructions of the
Pledgor without the consent of the Bank. After the Bank gives a Notice of Sole
Control to the Company (a form of which is attached as Exhibit B), the Company
shall cease complying with instructions or entitlement orders from the Pledgor
and shall act only upon the instructions of the Bank. Notwithstanding the above
provisions, the Company shall not at any time comply with any instructions or
entitlement orders from the Pledgor to withdraw any property from the Account
(including, but not limited to, proceeds of sales, income, interest, dividends
and capital gains distributions) solely to the extent that, after giving effect
to such withdrawal, the principal amounts outstanding under Tranche A (as
defined in that certain Credit Agreement dated as of the date hereof by an
between Bank and Pledgor (the “Credit Agreement”)) would exceed the Loan Value
of the Pledged Investments (as such terms are defined in the Credit Agreement).
Until such time as the Bank gives a Notice of Sole Control, the Pledgor may
direct the Company to exercise any voting rights with respect to the
Account.  From and after the date the Bank gives a Notice of Sole Control to the
Company, the Company shall act only upon the Bank’s sole written instructions or
entitlement orders, without further consent of the Pledgor. The Pledgor hereby
expressly authorizes the Company to act in accordance with such instructions or
entitlement orders without the Pledgor’s consent or concurrence. Further, the
Pledgor agrees not to assert a claim or demand against the Company for complying
with instructions, entitlement orders or notices received from the Bank.  If not
all assets in the Account are subject to the Pledge, then the assets subject to
the Pledge are identified on the statement or otherwise and, to the extent that
such assets do not include all assets in the Account, then the Account as used
in this Agreement shall only mean such assets and proceeds. Notwithstanding any
reference to a Notice of Sole Control (which shall be in a form substantially in
the form of Exhibit B): (i) all transactions relating to the Account or any
items therein duly consummated or processed by the Company prior to its receipt
of a Notice of Sole Control (or duly commenced by the Company prior to any such
receipt and so consummated or processed thereafter) shall be deemed not to
constitute a violation of this Agreement; and (ii) the Company may (at its
discretion and without any obligation to do so) commence honoring solely the
Bank’s orders concerning the Account at any time or from time to time after it
becomes aware that the Bank has sent a Notice of Sole Control to the Pledgor
(including without limitation reversing or redirecting any transaction referred
to in clause (i) above) with no liability whatsoever to the Pledgor or any other
party for doing so.

5. Fees and Reporting. All charges and expenses incident to the Account remain
in full force and effect and shall continue to be the obligation of the Pledgor
alone. The Pledgor expressly agrees that all income, earnings and profits with
respect to the Account shall be reported for State and Federal income tax
purposes as attributable to the Pledgor and not the Bank. The Pledgor authorizes
the Company, the Bank, and any other person authorized to report income
distributions to report all earnings and profits from the Account to any
appropriate taxing authority under the Pledgor’s Social Security or Taxpayer
Identification Number. The Pledgor authorizes the Company, upon the Bank’s
direction, to send copies of all statements and confirmations for the Account to
the Bank, and the Company agrees to comply with such direction.

6. Limitation of Liability. The Company undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement, it being
expressly understood that there are no implied duties under this Agreement. In
no event shall the Company be liable, directly or indirectly, for any (i)
damages or expenses arising out of services provided under this Agreement, other
than damages which result from the Company’s gross negligence or willful
misconduct, or (ii) indirect, special or consequential damages, even if the
Company has been advised of the possibility of such damages.

7. Indemnification. The Pledgor agrees to indemnify the Company, its officers
and employees, and hold it and them harmless for and from all claims, losses,
liabilities and expenses, including without limitation, reasonable legal fees
and expenses arising from any claim of any party resulting from actions the
Company takes in accordance with the provisions of this Agreement, except to the
limited extent that any such claim is proximately caused by the Company’s, or
its officers’ or employees’, gross negligence or willful misconduct.

8. Account Agreement. This Agreement supplements the account agreement between
the Company and the Pledgor. If there is a conflict between this Agreement and
any other agreement between the Pledgor and the Company, this Agreement shall
control; provided, however, that the terms of this Agreement shall not be deemed
or construed to make the Bank a party to such account agreement.

9. Notice. Any notices and demands under or related to this Agreement shall be
in writing and delivered to the intended party at its address or facsimile
number stated below, and if to the Bank, at its main office if no other address
of the Bank is specified herein, by one of the following means: (a) by hand, (b)
by a nationally recognized overnight courier service, (c) by certified mail,
postage prepaid, with return receipt requested, or (d) by facsimile
transmission. Notice shall be deemed given: (a) upon receipt if delivered by
hand, (b) on the Delivery Day after the day of deposit with a nationally
recognized courier service, (c) on the third Delivery Day after the notice is
deposited in the mail, or (d) when transmitted to the facsimile number specified
below and a confirmation receipt is received by the sender. “Delivery Day” means
a day other than a Saturday, a Sunday, or any other day on which national
banking associations are authorized to be closed. Any party may change its
address for purposes of the receipt of notices and demands by giving notice of
such change in the manner provided in this provision.
 
 
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If to the Pledgor:

 
FREQUENCY ELECTRONICS, INC.
 
Pledgor’s Name
 
 
55 Charles Lindbergh Boulevard
 
Address
 
 
Uniondale, NY 11553
 
City, State ZIP

If to the Bank:

 
JPMorgan Chase Bank, N.A.
 
 
P.O. Box 33035, KY1-4340
 
Address
 
 
Louisville, KY 40232-3035
 
City, State ZIP

If to the Company:

 
J.P. Morgan Securities LLC
 
 
Attn: Manager, Margin Department
 
Name
 
 
Suite IL1-0291 11th Floor
420 W. Van Buren Street
 
Address
 
 
Chicago, IL 60606-3534
 
City, State ZIP
 
 
312-954-6778
 
Phone Number
 
 
312-954-6944
 
Fax Number
 
 
With a copy by fax to:
 
Chase Wealth Management/Brokerage
 
Attn: Manager
 
Name
 
 
1111 Polaris Parkway, Floor 2J
 
Address
 
 
Columbus, OH 43240-2050
 
City, State ZIP
 
 
800-564-4398
 
Fax Number

 
 
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10. Termination. The Company may terminate this Agreement upon the sending of at
least thirty (30) days’ advance written notice to the other parties hereto. Any
other termination or any amendment or waiver of this Agreement shall be effected
solely by an instrument in writing executed by all the parties hereto.

11. Miscellaneous. The provisions of this Agreement shall remain in effect until
the Bank gives the Company written notice to the contrary. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective legal representatives and corporate
successors and assigns. If any provision of this Agreement is determined to be
illegal or unenforceable, such provision shall be deemed severable from the
balance of the provisions of this Agreement and the remaining provisions shall
be enforceable in accordance with their terms.

[signature page immediately follows]
 
 
 
 
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Bank:
   
JPMorgan Chase Bank, N.A.
   
By:
/s/ Gina Franceschini
     
Gina Franceschini
Authorized Officer
     
Printed Name
Title

   
Pledgor:

     
FREQUENCY ELECTRONICS, INC.
     
By:
/s/ Alan Miller
       
Alan Miller
Secretary/Treasurer and CFO
       
Printed Name
Title
 
Date Signed:
June 6, 2013

 
 

   
Company:
   
J.P. Morgan Securities LLC
   
By:
/s/ Elizabeth Weikes
     
Elizabeth Weikes
                             Associate 
     
Printed Name
Title

Outside Counsel Prepared
 
 
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EXHIBIT A

[ATTACH CUSTOMER STATEMENT OF ACCOUNT]

 
 
 
 

 
 
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EXHIBIT B
 

 
J.P. Morgan Securities LLC
 
Attn: Manager, Margin Department
 
Name
 
 
Suite IL1-0291 11th Floor
420 W. Van Buren Street
 
Address
 
 
Chicago, IL 60606-3534
 
City, State ZIP
 
 
312-954-6778
 
Phone Number
 
 
312-954-6944
 
Fax Number
 
 
With a copy by fax to:
 
Chase Wealth Management/Brokerage
 
Attn: Manager
 
Name
 
 
1111 Polaris Parkway, Floor 2J
 
Address
 
 
Columbus, OH 43240-2050
 
City, State ZIP
 
 
800-564-4398
 
Fax Number

Re: Notice of Sole Control

Ladies and Gentlemen:

Pursuant to the Control Agreement between the Pledgor and the Bank (a copy of
which is attached hereto), we give you notice of our sole control over account
number __________________ and any property therein (the “Account”) held with
J.P. Morgan Securities LLC You are instructed not to accept any instructions,
entitlement orders or directions with respect to the Account from any party
other than the undersigned affiliate.

We are hereby delivering a copy of this notice to FREQUENCY ELECTRONICS, INC..
 
THIS EXHIBIT IS EXECUTED ON:
   
Date

   
Bank:
   
JPMorgan Chase Bank, N.A.
   
By:
                 
Printed Name
Title

cc: FREQUENCY ELECTRONICS, INC.
FREQUENCY ELECTRONICS, INC.
[for internal use only: loan number(s)________________________________-]

 
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