EXHIBIT 10.13

 

Dated 30 November 2007

 

(1) EMRISE ELECTRONICS CORPORATION
as Chargor

 

-and-

 

(2) GVEC RESOURCE IV INC.
as Collateral Agent

 

 

--------------------------------------------------------------------------------

 

SHARE CHARGE

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

Clause

 

Page

 

 

 

 

1.

DEFINITIONS AND INTERPRETATION

 

1

2.

COVENANT TO PAY

 

4

3.

CHARGE

 

4

4.

COVENANTS BY THE CHARGOR

 

4

5.

DIVIDENDS AND VOTING RIGHTS

 

6

6.

REPRESENTATIONS AND WARRANTIES BY THE CHARGOR

 

6

7.

FURTHER ASSURANCE

 

7

8.

POWERS OF THE COLLATERAL AGENT

 

7

9.

RECEIVER

 

8

10.

CONTINUING SECURITY AND PROTECTIVE PROVISIONS

 

9

11.

NEW ACCOUNTS, SUSPENSE ACCOUNTS, NON-MERGER

 

10

12.

POWER OF ATTORNEY

 

11

13.

DISCHARGE CONDITIONAL

 

11

14.

DISCHARGE OF SECURITY

 

12

15.

CURRENCY

 

12

16.

COSTS

 

13

17.

ASSIGNMENT

 

13

18.

NOTICES

 

14

19.

MISCELLANEOUS

 

15

20.

LAW AND JURISDICTION

 

15

 

i

--------------------------------------------------------------------------------

 

THIS SHARE CHARGE (such agreement, as the same may from time to time be amended,
supplemented, restated, replaced or otherwise modified herein referred to as
this “Share Charge”) is made as a deed on 30 November 2007.

 

BY:

 

1.                                       EMRISE ELECTRONICS CORPORATION a
company organized and existing under the laws of the State of New Jersey (the
“Chargor”)

 

IN FAVOUR OF

 

2.                                      GVEC RESOURCE IV INC., a company
organized and existing under the laws of the British Virgin Islands, acting as
collateral agent (such entity, acting in such capacity, together with it
successors and assigns, herein referred to as the “Collateral Agent”) for the
benefit of the Lenders that are from time to time parties to the Credit
Agreement (as defined below), the “Lenders”).

 

RECITALS

 

(A)                              On or about the date hereof, a Credit Agreement
has been entered into between EMRISE Corporation, a company organized and
existing under the laws of the State of Delaware (the “Parent”), each of the
Parent’s Subsidiaries identified on the signature pages thereof (such
Subsidiaries, together with the Parent, herein collectively referred to as the
“Borrowers”), the Collateral Agent and the Lenders (such agreement, as the same
may from time to time be amended, supplemented, restated, replaced or otherwise
modified herein referred to as the “Credit Agreement”).

 

(B)                                The Chargor will derive substantial direct
and indirect economic and other benefits from the extensions of credit under the
Credit Agreement. It is also a condition precedent to the effectiveness of the
Credit Agreement that the Chargor shall have entered into this Share Charge.

 

NOW THIS DEED WITNESSES as follows:

 

In consideration of the execution, delivery and performance by the Lenders of
the agreements referred to above, the Chargor hereby agrees with the Collateral
Agent (acting for the benefit of itself and the Lenders in accordance with the
provisions of the Credit Agreement) as follows:

 

1.                                       DEFINITIONS AND INTERPRETATION

 

1.1                                 TERMS DEFINED ABOVE

 

Terms defined above shall have their specified meanings.

 

1.2                                 REFERENCES TO COLLATERAL AGENT

 

When references are made herein to the Collateral Agent, unless otherwise
indicated, it is understood that such references refer to the Collateral Agent,
acting as agent for the

 

1

--------------------------------------------------------------------------------

 

benefit of itself and the Lenders in accordance with the provisions of the
Credit Agreement.

 

1.3                                 OTHER DEFINED TERMS

 

Words and expressions defined in the Credit Agreement shall, save as otherwise
defined herein, bear the same meanings in this Share Charge but so that, so far
as the context admits, the following expressions shall have the respective
meanings ascribed to them:

 

“Beneficiaries” means the Collateral Agent and the Lenders and “Beneficiary”
means each or any of them;

 

“Business Day” means a day on which banks are open in London for the transaction
of business;

 

“Company” means EMRISE Electronics Ltd. (Company No. 1969006) having its
registered office at Brunswick Road, Coobs Wood, Ashford, Kent TN23 1EH, UK;

 

“Loan Documents” has the meaning given to that expression in the Credit
Agreement;

 

“Obligors” means, collectively, (a) the Borrowers; (b) each other entity that is
now or may hereafter be a party to the UK Guaranty (as such term is defined in
the Credit Agreement) (c) each other entity that is now or may hereafter be a
party to the French Guaranty (as such term is defined in the Credit Agreement)
and (d) each other entity that is now or may hereafter be a party to the
Japanese Guaranty (as such term is defined in the Credit Agreement);

 

“Receiver” means a receiver or receiver and manager of the Chargor appointed by
the Collateral Agent under this Share Charge.

 

“Secured Obligations” means (a) all principal, interest, premium, fees,
reimbursements, indemnifications, and other amounts how or hereafter owed by the
Obligors under the Credit Agreement and the other Loan Documents and all present
and future obligations and liabilities of any kind (whether actual or contingent
and whether owed jointly or severally or in any other capacity whatsoever);
(b) all amounts, obligations, or liabilities of any kind now or hereafter owed
by the Chargor under this Share Charge and the other Loan Documents; and (c) any
increases, extensions, renewals, replacements, and rearrangements of the
foregoing obligations under any amendments, supplements, restatements,
replacements and other modifications of the agreements creating the foregoing
obligations, in each case, whether direct or indirect, absolute or contingent.

 

“Securities” means all stocks, shares, bonds and securities of any kind in the
Company (marketable or otherwise) negotiable instruments and warrants, whether
registered in the name of, or beneficially owned by, the Chargor:

 

(a)                                  which are listed or described in the
Schedule; or

 

2

--------------------------------------------------------------------------------

 

(b)                                 which are registered in the name of or shall
be transferred into the name of the Collateral Agent (or any nominee or agent
for the Collateral Agent) or held or to be held to the order of the Collateral
Agent (whether for safe custody, collection, security or otherwise); or

 

(c)                                  which may after the date hereof be
registered in the name of, or beneficially owned by, the Chargor

 

and in each such case includes all dividends, interest or other distributions
payable thereon and all allotments, accretions, offers, rights, bonuses,
benefits and advantages whatsoever (whether by way of conversion, redemption,
preference, option or otherwise) which accrue, are offered or arise in respect
thereof.

 

1.4                                 IN THIS SHARE CHARGE (UNLESS OTHERWISE
PROVIDED):

 

(A)                                  REFERENCES TO CLAUSES AND THE SCHEDULE ARE
TO BE CONSTRUED AS REFERENCES TO THE CLAUSES OF, AND THE SCHEDULE TO, THIS SHARE
CHARGE AS AMENDED OR VARIED FROM TIME TO TIME AND REFERENCES TO SUB CLAUSES
SHALL UNLESS OTHERWISE SPECIFICALLY STATED BE CONSTRUED AS REFERENCES TO THE SUB
CLAUSES OF THE CLAUSE IN WHICH THE REFERENCE APPEARS;

 

(B)                                 REFERENCES TO THE CREDIT AGREEMENT, OR TO
ANY OTHER DOCUMENT OR AGREEMENT ARE TO BE CONSTRUED AS REFERENCES TO THE CREDIT
AGREEMENT, OR SUCH OTHER DOCUMENT OR AGREEMENT AS IS IN FORCE FOR THE TIME BEING
AND AS AMENDED, VARIED, NOVATED OR SUPPLEMENTED, AS THE CASE MAY BE, FROM TIME
TO TIME;

 

(C)                                  WORDS IMPORTING THE SINGULAR SHALL INCLUDE
THE PLURAL AND VICE VERSA;

 

(D)                                 REFERENCES TO A PERSON SHALL BE CONSTRUED SO
AS TO INCLUDE THAT PERSON’S ASSIGNS OR TRANSFEREES OR SUCCESSORS IN TITLE AND
SHALL BE CONSTRUED AS INCLUDING REFERENCES TO AN INDIVIDUAL, FIRM, PARTNERSHIP,
JOINT VENTURE, COMPANY, CORPORATION, UNINCORPORATED BODY OF PERSONS OR ANY STATE
OR ANY AGENCY THEREOF;

 

(E)                                  REFERENCES TO ANY STATUTE OR STATUTORY
PROVISION INCLUDE ANY STATUTE OR STATUTORY PROVISION WHICH AMENDS; EXTENDS,
CONSOLIDATES OR REPLACES THE SAME; OR WHICH HAS BEEN AMENDED, EXTENDED,
CONSOLIDATED OR REPLACED BY THE SAME, AND SHALL INCLUDE ANY ORDERS, REGULATIONS,
INSTRUMENTS OR OTHER SUBORDINATE LEGISLATION MADE UNDER THE RELEVANT STATUTE;

 

(F)                                    REFERENCES TO LIABILITY OR LIABILITIES
ARE TO BE CONSTRUED TO INCLUDE ALL LIABILITIES AND OBLIGATIONS WHETHER ACTUAL,
CONTINGENT, PRESENT OR FUTURE AND WHETHER INCURRED SOLELY OR JOINTLY OR AS
PRINCIPAL OR SURETY;

 

(G)                                 THE WORDS “OTHER” AND “OTHERWISE” SHALL NOT
BE CONSTRUED EJUSDEM GENERIS WITH ANY FOREGOING WORDS WHERE A WIDER CONSTRUCTION
IS POSSIBLE; AND

 

3

--------------------------------------------------------------------------------

 

(H)                                 THE WORDS “INCLUDING” AND “IN PARTICULAR”
SHALL BE CONSTRUED AS BEING BY WAY OF ILLUSTRATION OR EMPHASIS ONLY AND SHALL
NOT BE CONSTRUED AS, NOR SHALL THEY TAKE EFFECT AS, LIMITING THE GENERALITY OF
ANY FOREGOING WORDS.

 

2.                                       COVENANT TO PAY

 

The Chargor covenants with the Collateral Agent (acting for the benefit of
itself and the Beneficiaries pursuant to the provisions of the Credit Agreement)
that it will on demand pay and discharge each of the Secured Obligations when
due to the Collateral Agent PROVIDED THAT the liability of the Chargor hereunder
shall be limited to the amount realised by the disposal of the Securities and
other amounts payable by the Chargor under this Share Charge.

 

3.                                       CHARGE

 

The Chargor hereby charges with full title guarantee the Securities by way of
first fixed charge to the Collateral Agent (acting as agent for the benefit of
itself and the Beneficiaries pursuant to the provisions of the Credit Agreement)
as a continuing security to secure the payment and performance of the Secured
Obligations.

 

The Collateral Agent is hereby authorised to arrange at any time during the
occurrence and continuance of an Event of Default under the Credit Agreement or
any Loan Document for any of the Securities to be registered in the name of the
Collateral Agent (or its nominee) and the Collateral Agent will use its best
endeavours to notify the Chargor of any such registration.

 

4.                                       COVENANTS BY THE CHARGOR

 

4.1                                 THE CHARGOR HEREBY COVENANTS WITH THE
COLLATERAL AGENT, FOR THE BENEFIT OF ITSELF AND THE OTHER BENEFICIARIES, THAT
DURING THE CONTINUANCE OF THIS SECURITY THE CHARGOR WILL:

 

(A)                                  DEPOSIT WITH THE COLLATERAL AGENT (UNLESS
THE COLLATERAL AGENT SHALL OTHERWISE AGREE) ONLY SECURITIES WHICH ARE FULLY PAID
AND WHICH IT HAS A GOOD RIGHT TO DEPOSIT AND TRANSFER FREE FROM ANY OPTION,
LIEN, CHARGE OR ENCUMBRANCE OF ANY KIND AND IN RESPECT OF WHICH IT SHALL LODGE:

 

(I)                                     ALL STOCK AND SHARE CERTIFICATES AND
DOCUMENTS OF TITLE;

 

(II)                                  EXECUTED UNDATED TRANSFERS OF THE
SECURITIES COMPLETED IN BLANK OR DULY EXECUTED AND DATED TRANSFERS IN FAVOUR OF
THE COLLATERAL AGENT (AS AGENT AND TRUSTEE FOR THE BENEFICIARIES) OR ITS NOMINEE
OR AGENT AS THE COLLATERAL AGENT MAY DIRECT; AND

 

(III)                             SUCH OTHER DOCUMENTS AS THE COLLATERAL AGENT
MAY FROM TIME TO TIME REQUIRE FOR PERFECTING THE TITLE OF THE BENEFICIARIES TO
THE SECURITIES INCLUDING ANY BONUS OR RIGHTS ISSUE (DULY EXECUTED BY OR SIGNED
ON BEHALF OF THE REGISTERED HOLDER) OR FOR VESTING OR ENABLING THE CHARGOR TO
VEST THE SAME IN THE COLLATERAL AGENT OR ITS NOMINEES OR IN ANY PURCHASER TO THE

 

4

--------------------------------------------------------------------------------

 

intent that the Collateral Agent may at any tune without notice present them for
registration;

 

(B)                                 DULY AND PROMPTLY PAY ALL CALLS,
INSTALLMENTS OR OTHER PAYMENTS WHICH MAY BE MADE OR BECOME DUE IN RESPECT OF ANY
OF THE SECURITIES AS AND WHEN THE SAME FROM TIME TO TIME BECOME DUE (AND IF THE
CHARGOR DOES NOT DO SO, THE COLLATERAL AGENT MAY MAKE SUCH PAYMENTS ON BEHALF OF
THE CHARGOR, IN WHICH EVENT ANY SUMS SO PAID SHALL BE REIMBURSED ON DEMAND BY
THE CHARGOR TO THE COLLATERAL AGENT);

 

(C)                                  COMPLY PROMPTLY WITH ANY NOTICE SERVED ON
IT UNDER THE COMPANIES ACT 1985 OR 2006;

 

(D)                                 NOT (WITHOUT THE PRIOR CONSENT IN WRITING OF
THE COLLATERAL AGENT OR EXCEPT AS PROVIDED HEREIN):

 

(I)                                     PERMIT ANY PERSON OTHER THAN THE CHARGOR
OR THE COLLATERAL AGENT (OR ITS NOMINEE OR AGENT) TO BE REGISTERED AS HOLDER OF
THE SECURITIES OR ANY PART THEREOF; OR

 

(II)                                  CREATE OR PURPORT TO CREATE OR PERMIT TO
SUBSIST ANY MORTGAGE, CHARGE, LIEN OR ENCUMBRANCE (OTHER THAN IN FAVOUR OF THE
COLLATERAL AGENT OR AS PERMITTED UNDER THE CREDIT AGREEMENT) ON OR OVER THE
SECURITIES OR ANY PART THEREOF OR INTEREST THEREIN; OR

 

(III)                             SELL, TRANSFER, GRANT ANY OPTION OVER OR
OTHERWISE DISPOSE OF THE SECURITIES OR ANY PART THEREOF OR INTEREST THEREIN OR
ATTEMPT OR-AGREE SO TO DO;

 

(E)                                  NOT DO OR CAUSE OR PERMIT TO BE DONE
ANYTHING WHICH MAY IN ANY WAY DEPRECIATE, JEOPARDISE OR OTHERWISE PREJUDICE THE
VALUE TO THE BENEFICIARIES OF THE SECURITIES.

 

4.2                                 THE CHARGOR HEREBY FARTHER COVENANTS AND
AGREES WITH THE BENEFICIARIES THAT:

 

(A)                                  THE COLLATERAL AGENT AND ITS NOMINEES AT
THE DISCRETION OF THE COLLATERAL AGENT MAY EXERCISE IN THE NAME OF THE CHARGOR
OR OTHERWISE AT ANY TIME WHETHER BEFORE OR AFTER DEMAND FOR PAYMENT AND WITHOUT
ANY FURTHER CONSENT OR AUTHORITY ON THE PART OF THE CHARGOR IN RESPECT OF THE
SECURITIES ANY VOTING RIGHTS AND ANY POWERS OR RIGHTS WHICH MAY BE EXERCISABLE
BY THE PERSON IN WHOSE NAME THE SECURITIES ARE REGISTERED OR BY THE BEARER
THEREOF; BUT SUCH POWER SHALL BE EXERCISED SUBJECT TO THE PROVISIONS OF CLAUSE
5;

 

(B)                                 THE CHARGOR WILL, IF SO REQUESTED BY THE
COLLATERAL AGENT, TRANSFER ALL OR ANY OF THE SECURITIES TO THE COLLATERAL AGENT
OR TO SUCH NOMINEES WHERESOEVER SITUATE OR AGENTS AS THE COLLATERAL AGENT MAY
SELECT AND THAT THE COLLATERAL AGENT MAY HOLD ALL OR ANY OF SUCH SECURITIES IN
ANY BRANCH OF THE COLLATERAL AGENT OR WITH ANY CORRESPONDENTS OR OTHER AGENTS
WHETHER IN THE UNITED KINGDOM OR OVERSEAS;

 

5

--------------------------------------------------------------------------------

 

(C)                                  SUBJECT TO CLAUSE 8.7 THE CHARGOR SHALL
PROVIDE TO THE COLLATERAL AGENT A COPY OF ANY REPORT, ACCOUNTS, CIRCULAR OR
NOTICE RECEIVED IN RESPECT OF OR IN CONNECTION WITH ANY OF THE SECURITIES
PROMPTLY FOLLOWING THE RECEIPT THEREOF BY THE CHARGOR.

 

5.                                       DIVIDENDS AND VOTING RIGHTS

 

Without prejudice to any other provision in this Share Charge (other than Clause
4.2), the Collateral Agent hereby agrees with the Chargor that until it shall
have made demand for payment on the Borrowers under the Credit Agreement for any
of the Secured Obligations or until the occurrence of an Event of Default has
occurred and which is continuing under the Credit Agreement or any of the Loan
Documents:

 

(A)                                  THE CHARGOR WILL HOLD ALL DIVIDENDS PAID ON
AND RECEIVED BY IT IN RESPECT OF THE SECURITIES; AND

 

(B)                                 THE CHARGOR WILL EXERCISE ALL VOTING AND
OTHER RIGHTS AND POWERS ATTACHED TO THE SECURITIES.

 

6.                                       REPRESENTATIONS AND WARRANTIES BY THE
CHARGOR

 

The Chargor represents and warrants to the Collateral Agent, for the benefit of
itself and the Beneficiaries, and undertakes that:

 

(A)                                  THE COMPANY IS DULY INCORPORATED AND
VALIDLY EXISTING UNDER THE LAW OF ENGLAND AND WALES;

 

(B)                                 SUBJECT TO AND AS PERMITTED BY THE CREDIT
AGREEMENT, THE CHARGOR IS THE SOLE, ABSOLUTE AND; BENEFICIAL OWNER OF THE
SECURITIES, THAT NO PERSON SAVE THE CHARGOR HAS ANY RIGHT OR INTEREST OF ANY
SORT WHATSOEVER IN OR TO THE SECURITIES AND THAT THERE ARE NO AGREEMENTS OR
ARRANGEMENTS (INCLUDING ANY RESTRICTIONS ON TRANSFER) AFFECTING THE SECURITIES
IN ANY WAY OR WHICH WOULD OR MIGHT IN ANY WAY FETTER OR OTHERWISE PREJUDICE THE
RIGHTS OF THE CHARGOR OR ANY MORTGAGEE OF THE SECURITIES;

 

(C)                                  THE SECURITIES ARE DULY AUTHORISED, VALIDLY
ISSUED AND FULLY PAID AND ARE AND WILL AT ALL TIMES BE FREE FROM ANY RESTRICTION
ON TRANSFER AND THERE ARE NO MONEYS OR LIABILITIES OUTSTANDING IN RESPECT OF ANY
OF THE SECURITIES;

 

(D)                                 THIS SHARE CHARGE CONSTITUTES ITS LEGAL,
VALID, BINDING AND ENFORCEABLE OBLIGATIONS AND IS A SECURITY OVER ALL AND EVERY
PART OF THE SECURITIES EFFECTIVE IN ACCORDANCE WITH ITS TERMS (SUBJECT TO LAWS
AFFECTING THE RIGHTS OF CREDITORS GENERALLY);

 

(E)                                  THIS SHARE 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 OR CHARGOR IS A PARTY
OR BY WHICH IT IS BOUND; AND

 

(F)                                    ALL NECESSARY AUTHORISATIONS AND CONSENTS
TO ENABLE OR ENTITLE IT TO ENTER INTO THIS SHARE CHARGE HAVE BEEN OBTAINED AND
WILL REMAIN IN FULL FORCE AND EFFECT AT ALL TIMES DURING THE SUBSISTENCE OF THE
SECURITY CONSTITUTED BY THIS SHARE CHARGE.

 

6

--------------------------------------------------------------------------------

 

7.                                       FURTHER ASSURANCE

 

The Chargor shall at any time, if and when required by the Collateral Agent,
execute such further legal or other charges or assignments in favour of the
Collateral Agent as the Collateral Agent shall from time to time reasonably
require over all or any of the Securities and all rights relating thereto both
present and future (including any bonus or substituted securities) and such
other transfers or documents as the Collateral Agent may from time to time
reasonably require for perfecting its title to the same or for vesting or
enabling it to vest the same in itself or its nominees or in any purchaser as
the Collateral Agent deems necessary or desirable to secure the Secured
Obligations or to facilitate the realisation of the Securities or the exercise
of the powers conferred on the Collateral Agent; such further charges or
assignments to be prepared by or on behalf of the Collateral Agent at die cost
of the Chargor and to contain an immediate power of sale without notice, a
clause excluding section 93 and the restrictions contained in section 103 of the
Law of Property Act 1925 and such other clauses for the benefit of the
Beneficiaries as the Collateral Agent may reasonably require.

 

8.                                       POWERS OF THE COLLATERAL AGENT

 

8.1                                 AT ANY TIME AFTER THE COLLATERAL AGENT SHALL
HAVE DEMANDED PAYMENT OF ANY OF THE SECURED OBLIGATIONS IN ACCORDANCE WITH THE
TERMS OF THE LOAN DOCUMENTS:

 

(A)                                  THE COLLATERAL AGENT AND ANY NOMINEE OF THE
COLLATERAL AGENT WHERESOEVER SITUATE MAY WITHOUT FURTHER NOTICE AND WITHOUT THE
RESTRICTIONS CONTAINED IN SECTION 103 OF THE LAW OF PROPERTY ACT 1925 IN RESPECT
OF ALL OR ANY OF THE SECURITIES EXERCISE ALL THE POWERS OR RIGHTS (INCLUDING
VOTING RIGHTS) WHICH MAY BE EXERCISABLE BY THE REGISTERED HOLDER OF THE
SECURITIES AND ALL OTHER POWERS CONFERRED ON MORTGAGEES BY THE LAW OF PROPERTY
ACT 1925 AS HEREBY VARIED OR EXTENDED; AND

 

(B)                                 ANY DIVIDENDS, INTEREST OR OTHER PAYMENTS
WHICH MAY BE RECEIVED OR RECEIVABLE BY THE COLLATERAL AGENT OR BY ANY NOMINEE IN
RESPECT OF ANY OF THE SECURITIES MAY BE APPLIED BY THE COLLATERAL AGENT AS
THOUGH THEY WERE PROCEEDS OF SALE.

 

8.2                                 SECTION 93 OF THE LAW OF PROPERTY ACT 1925
SHALL NOT APPLY TO THIS SECURITY OR TO ANY SECURITY GIVEN TO THE COLLATERAL
AGENT OR THE BENEFICIARIES PURSUANT HERETO.

 

8.3                                 IN EXERCISING THE POWERS REFERRED TO IN
CLAUSE 8.1, THE SECURITIES OR ANY PART THEREOF MAY BE SOLD OR DISPOSED OF AT
SUCH TIMES IN SUCH MANNER AND GENERALLY ON SUCH TERMS AND CONDITIONS AND FOR
SUCH CONSIDERATION AS THE COLLATERAL AGENT MAY THINK FIT. ANY SUCH SALE OR
DISPOSITION MAY BE FOR CASH, DEBENTURES OR OTHER OBLIGATIONS, SHARES, STOCK,
SECURITIES OR OTHER VALUABLE CONSIDERATION AND BE PAYABLE IMMEDIATELY OR BY
INSTALLMENTS SPREAD OVER SUCH PERIOD AS THE COLLATERAL AGENT SHALL THINK FIT. NO
PURCHASER OR OTHER PERSON SHALL BE BOUND OR CONCERNED TO SEE OR ENQUIRE WHETHER
THE RIGHT OF THE COLLATERAL AGENT TO EXERCISE ANY OF THE POWERS HEREBY CONFERRED
HAS ARISEN OR NOT OR BE CONCERNED WITH NOTICE TO THE CONTRARY OR WITH THE
PROPRIETY OF THE EXERCISE OR PURPORTED EXERCISE OF SUCH POWERS.

 

7

--------------------------------------------------------------------------------

 

8.4                                 ALL MONEY RECEIVED BY THE COLLATERAL AGENT
IN THE EXERCISE OF ANY POWERS CONFERRED BY THIS SHARE CHARGE SHALL BE APPLIED,
AFTER PAYMENT OF ALL COSTS AND EXPENSES INCURRED IN THE EXERCISE OF SUCH POWER
AND AFTER THE DISCHARGE OF ALL LIABILITIES HAVING PRIORITY THERETO, IN OR
TOWARDS SATISFACTION OF THE SECURED OBLIGATIONS IN SUCH ORDER AS THE COLLATERAL
AGENT IN ITS ABSOLUTE DISCRETION MAY FROM TIME TO TIME DETERMINE.

 

8.5                                 THE COLLATERAL AGENT SHALL NOT BE LIABLE TO
ACCOUNT AS MORTGAGEE IN POSSESSION IN RESPECT OF ALL OR ANY OF THE SECURITIES
AND SHALL NOT BE LIABLE FOR ANY LOSS UPON REALISATION OR FOR ANY NEGLECT OR
DEFAULT TO PRESENT ANY INTEREST COUPON OR ANY BOND OR STOCK DRAWN FOR REPAYMENT
OR FOR ANY FAILURE TO PAY ANY CALL OR INSTALLMENT OR TO ACCEPT ANY OFFER OR TO
NOTIFY THE CHARGOR OF ANY SUCH MATTER OR FOR ANY NEGLIGENCE OR DEFAULT BY ITS
NOMINEES, CORRESPONDENTS OR AGENTS OR FOR ANY OTHER LOSS OF ANY NATURE
WHATSOEVER IN CONNECTION WITH ME SECURITIES OTHER THAN ANY CAUSED BY THE
COLLATERAL AGENT’S GROSS NEGLIGENCE OR WILLFUL DEFAULT.

 

8.6                                 THE CHARGOR HEREBY AGREES FULLY TO INDEMNIFY
AND HOLD HARMLESS THE COLLATERAL AGENT AND THE OTHER BENEFICIARIES FROM AND
AGAINST ALL LOSSES, ACTIONS, CLAIMS, EXPENSES, DEMANDS AND LIABILITIES WHETHER
IN CONTRACT, TORT OR OTHERWISE:

 

(A)                                  IN RESPECT OF CALLS OR OTHER PAYMENTS
RELATING TO THE SECURITIES NOW OF HEREAFTER INCURRED BY THE COLLATERAL AGENT OR
ANY OTHER BENEFICIARY (OR ANY NOMINEE OR AGENT OF ANY OF THEM) OR BY ANY OFFICER
OR EMPLOYEE FOR WHOSE LIABILITY, ACT OR OMISSION IT MAY BE ANSWERABLE; AND

 

(B)                                 OCCASIONED BY ANY BREACH BY THE CHARGOR OF
ANY OF ITS COVENANTS OR OTHER OBLIGATIONS TO THE COLLATERAL AGENT OR ANY OTHER
OF THE BENEFICIARIES UNDER THIS SHARE CHARGE.

 

The Chargor shall indemnify the Collateral Agent and the other Beneficiaries on
demand and shall pay interest on the sums demanded from the date of demand to
the date of actual payment at the Default Rate, as such term is defined in
Section 2.6(b) of the Credit Agreement (both before and after judgment).

 

8.7                                 NEITHER THE COLLATERAL AGENT NOR ANY OTHER
BENEFICIARY SHALL HAVE ANY LIABILITY OR RESPONSIBILITY TO THE CHARGOR FOR ANY
ACTION TAKEN OR OMITTED TO BE TAKEN BY THE COLLATERAL AGENT IN RELATION TO THE
SECURITIES (INCLUDING ANY SECURITIES WHICH ARE AT ANY TIME REGISTERED IN THE
NAME OF THE COLLATERAL AGENT (OR ANY NOMINEE OR AGENT FOR THE COLLATERAL
AGENT)). IN PARTICULAR, THE COLLATERAL AGENT SHALL HAVE NO LIABILITY AS A RESULT
OF ANY FAILURE TO FORWARD TO THE CHARGOR ANY REPORT, CIRCULAR OR OTHER
COMMUNICATION RECEIVED BY THE COLLATERAL AGENT IN RELATION TO ANY SECURITIES OR
TO ACCEPT OR DECLINE ANY OFFER MADE IN RESPECT OF ANY SECURITIES OR TO MAKE ANY
PAYMENT IN RELATION TO ANY SECURITIES.

 

9.                                       RECEIVER

 

9.1                                 AT ANY TIME AFTER THIS SECURITY BECOMES
ENFORCEABLE THE COLLATERAL AGENT MAY WITHOUT FURTHER NOTICE APPOINT ANY ONE OR
MORE QUALIFIED PERSONS TO BE A RECEIVER OR RECEIVER AND MANAGER (EACH A
“RECEIVER”) OF ALL OR ANY PART OF THE SECURITIES IN LIKE MANNER IN EVERY RESPECT
AS IF THE COLLATERAL AGENT HAD BECOME ENTITLED UNDER THE LAW OF PROPERTY ACT

 

8

--------------------------------------------------------------------------------

 

1925 TO EXERCISE THE POWER OF SALE THEREBY CONFERRED. IN THIS CLAUSE “QUALIFIED
PERSON” MEANS A PERSON WHO, UNDER THE INSOLVENCY ACT 1986, IS QUALIFIED TO ACT
AS A RECEIVER OF THE PROPERTY OF ANY COMPANY WITH RESPECT TO WHICH HE IS
APPOINTED.

 

9.2                                 EVERY RECEIVER APPOINTED IN ACCORDANCE WITH
CLAUSE 9.1 SHALL HAVE AND BE ENTITLED TO EXERCISE ALL POWERS CONFERRED BY THE
LAW OF PROPERTY ACT 1925 AS IF SUCH RECEIVER HAS BEEN DULY APPOINTED THEREUNDER
TOGETHER WITH ALL POWERS CONFERRED ON RECEIVERS UNDER THE INSOLVENCY ACT 1986.
ADDITIONALLY, EACH RECEIVER SHALL HAVE POWER TO DO ALL SUCH OTHER ACTS AND
THINGS AS HE MAY CONSIDER DESIRABLE OR NECESSARY FOR REALISING THE SECURITIES OR
ANY PART THEREOF OR INCIDENTAL OR CONDUCIVE TO ANY OF THE MATTERS, POWERS OR
AUTHORITIES CONFERRED ON A RECEIVER UNDER OR BY VIRTUE OF THIS SHARE CHARGE AND
TO EXERCISE IN RELATION TO THE SECURITIES OR ANY PART THEREOF ALL SUCH POWERS,
AUTHORITIES AND THINGS AS HE WOULD BE CAPABLE OF EXERCISING IF HE WERE, THE
ABSOLUTE BENEFICIAL OWNER OF THE SAME AND TO USE THE NAME OF THE CHARGOR FOR ALL
OR ANY OF THE PURPOSES AFORESAID.

 

9.3                                 ANY RECEIVER APPOINTED PURSUANT TO THIS
SHARE CHARGE SHALL BE THE AGENT OF THE CHARGOR (AND NOTWITHSTANDING THE
LIQUIDATION OF SUCH CHARGOR, ANY RECEIVER SHALL NOT HE THE AGENT OF THE;
COLLATERAL AGENT) AND SHALL AS SUCH AGENT BE DEEMED TO BE IN THE SAME POSITION
AS A RECEIVER APPOINTED BY A MORTGAGEE UNDER THE LAW OF PROPERTY ACT 1925. THE
CHARGOR SHALL BE SOLELY LIABLE FOR SUCH RECEIVER’S COSTS, DEFAULTS AND
REMUNERATION AND SHALL BE LIABLE ON ANY CONTRACTS AND ENGAGEMENTS MADE OR
ENTERED INTO BY SUCH RECEIVER, EXCEPT THE COLLATERAL AGENT MAY FROM TIME TO TIME
REMOVE ANY RECEIVER APPOINTED BY IT AND MAY WHENEVER IT MAY DEEM IT EXPEDIENT
APPOINT ANOTHER QUALIFIED PERSON AS A NEW RECEIVER IN THE PLACE OF ANY RECEIVER
WHOSE APPOINTMENT MAY FOR ANY REASON HAVE TERMINATED AND MAY FROM TIME TO TIME
FIX THE REMUNERATION OF ANY RECEIVER APPOINTED BY IT.

 

9.4                                 ALL OR ANY OF THE POWERS, AUTHORITIES AND
DISCRETIONS WHICH ARE CONFERRED BY THIS SHARE CHARGE (EITHER EXPRESSLY OR
IMPLIEDLY) UPON A RECEIVER OF THE SECURITIES MAY BE EXERCISED AFTER THE SECURITY
HEREBY CREATED BECOMES ENFORCEABLE BY THE COLLATERAL AGENT IN RELATION TO THE
WHOLE OF THE SECURITIES OR ANY PART THEREOF WITHOUT FIRST APPOINTING A RECEIVER
THEREOF OR NOTWITHSTANDING THE APPOINTMENT OF A RECEIVER THEREOF.

 

10.                                 CONTINUING SECURITY AND PROTECTIVE
PROVISIONS

 

10.1                           THE SECURITY CONSTITUTED BY THIS SHARE 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
OBLIGATIONS OR ANY OTHER MATTER OR THING WHATSOEVER AND SHALL BE BINDING UNTIL
ALL THE SECURED OBLIGATIONS HAVE BEEN UNCONDITIONALLY AND IRREVOCABLY PAID AND
DISCHARGED IN FULL. IN PARTICULAR THIS SHARE CHARGE SHALL NOT BE REDUCED,
DISCHARGED OR OTHERWISE ADVERSELY AFFECTED BY:

 

(A)                                  ANY VARIATION, EXTENSION, COMPROMISE,
DISCHARGE, DEALING WITH, EXCHANGE OR RENEWAL OF ANY RIGHT OR REMEDY WHICH THE
COLLATERAL AGENT OR ANY OTHER BENEFICIARY MAY NOW OR HEREAFTER HAVE AGAINST THE
OBLIGORS OR ANY OTHER PERSON IN RESPECT OF THE SECURED OBLIGATIONS;

 

9

--------------------------------------------------------------------------------

 

(B)                                 ANY ACT OR OMISSION BY THE COLLATERAL AGENT
OR ANY OTHER BENEFICIARY OR ANY OTHER PERSON IN TAKING UP, PERFECTING OR
ENFORCING OR THE NON-ENFORCEMENT OF ANY SECURITY OR GUARANTEE FROM OR AGAINST
THE OBLIGORS OR ANY OTHER PERSON;

 

(C)                                  ANY TERMINATION, AMENDMENT, VARIATION,
NOVATION OR SUPPLEMENT OF OR TO ANY OF THE SECURED OBLIGATIONS;

 

(D)                                 ANY GRANT OF TIME, INDULGENCE, WAIVER OR
CONCESSION TO THE OBLIGORS OR ANY OTHER PERSON;

 

(E)                                  ANY CHANGE IN THE CONSTITUTION, NAME AND
STYLE OF THE OBLIGORS OR ANY OTHER PERSON;

 

(F)                                    ANY INVALIDITY, ILLEGALITY,
UNENFORCEABILITY, IRREGULARITY, FRUSTRATION OR DISCHARGE BY OPERATION OF LAW OF
ANY ACTUAL OR PURPORTED LIABILITY OF, OR ANY SECURITY HELD FROM, THE OBLIGORS OR
ANY OTHER PERSON IN CONNECTION WITH THE SECURED OBLIGATIONS;

 

(G)                                 ANY ACT OR OMISSION WHICH WOULD NOT HAVE
DISCHARGED OR AFFECTED ANY OF THE LIABILITIES OF THE CHARGOR HAD IT BEEN A
PRINCIPAL DEBTOR OR BY ANYTHING DONE OR OMITTED BY ANY PERSON WHICH, BUT FOR
THIS PROVISION, MIGHT OPERATE TO EXONERATE OR DISCHARGE THE CHARGOR OR OTHERWISE
REDUCE OR EXTINGUISH ANY OF ITS LIABILITIES UNDER THIS SHARE CHARGE.

 

10.2                           THE CHARGOR SHALL NOT AT ANY TIME (WHILE ANY OF
THE SECURED OBLIGATIONS ARE OUTSTANDING) TAKE ANY SECURITY OR OTHER RIGHT OR
BENEFIT FROM OR EXERCISE ANY RIGHT AGAINST THE OBLIGORS, A GUARANTOR OR ANY
OTHER PERSON IN CONNECTION WITH THE LIABILITY OF, OR ANY PAYMENT MADE BY, THE
CHARGOR UNDER OR PURSUANT TO THIS SHARE CHARGE.

 

10.3                           IF THE CHARGOR SHALL BE IN BREACH OF CLAUSE 10.2
ANY SECURITY OR OTHER RIGHT OR BENEFIT OBTAINED FROM ANY BORROWER OR ANY OTHER
PERSON SHALL BE HELD UPON TRUST TO TRANSFER OR PAY THE SAME TO THE COLLATERAL
AGENT TO THE EXTENT NECESSARY TO SATISFY ANY LIABILITY OF THE CHARGOR HEREUNDER.

 

11.                                 NEW ACCOUNTS, SUSPENSE ACCOUNTS, NON-MERGER

 

11.1                           IF THE COLLATERAL AGENT OR ANY OTHER BENEFICIARY
RECEIVES NOTICE (WHETHER ACTUAL OR OTHERWISE) OF ANY SUBSEQUENT MORTGAGE OR
CHARGE AFFECTING ALL OR ANY PART OF THE SECURITIES THE COLLATERAL AGENT MAY OPEN
A NEW ACCOUNT OR ACCOUNTS WITH THE OBLIGORS AND, IF IT DOES NOT OPEN A NEW
ACCOUNT, IT SHALL NEVERTHELESS BE TREATED AS IF IT HAD DONE SO AT THE TIME WHEN
THE COLLATERAL AGENT OR THE OTHER BENEFICIARY RECEIVED OR WAS DEEMED TO HAVE
RECEIVED NOTICE AND AS FROM THAT TIME ALL PAYMENTS MADE BY THE OBLIGORS TO THE
COLLATERAL AGENT OR OTHER BENEFICIARY SHALL BE CREDITED OR BE TREATED AS HAVING
BEEN CREDITED TO THE NEW ACCOUNT AND SHALL NOT OPERATE TO REDUCE THE AMOUNT
SECURED BY THIS SHARE CHARGE AT THE TIME WHEN THE COLLATERAL AGENT OR THE OTHER
BENEFICIARY RECEIVED OR WAS DEEMED TO HAVE RECEIVED SUCH NOTICE.

 

11.2                           ALL MONEYS RECEIVED, RECOVERED OR REALISED BY THE
COLLATERAL AGENT UNDER THIS SHARE CHARGE (INCLUDING THE PROCEEDS OF ANY
CONVERSION OF CURRENCY) MAY IN THE DISCRETION OF

 

10

--------------------------------------------------------------------------------

 

THE COLLATERAL AGENT BE CREDITED TO ANY SUSPENSE OR IMPERSONAL ACCOUNT HELD WITH
THE COLLATERAL AGENT AND MAY BE HELD IN SUCH ACCOUNT FOR SO LONG AS THE
COLLATERAL AGENT MAY THINK FIT. THE CHARGER SHALL NOT BE CONCERNED WITH, AND
SHALL HAVE NO RIGHT IN RESPECT OF, THE APPLICATION BY THE COLLATERAL AGENT OF
ANY SUMS RECEIVED, RECOVERED OR REALISED BY THE COLLATERAL AGENT UNDER THIS
SHARE CHARGE.

 

11.3                           THIS SHARE CHARGE IS IN ADDITION TO AND SHALL NOT
MERGE WITH OR OTHERWISE PREJUDICE OR AFFECT ANY BANKER’S LIEN, RIGHT TO COMBINE
AND CONSOLIDATE ACCOUNTS, RIGHT OF SET OFF OR ANY OTHER CONTRACTUAL OR OTHER
RIGHT OR REMEDY OR ANY GUARANTEE, LIEN, PLEDGE, BILL, NOTE, MORTGAGE OR OTHER
SECURITY NOW OR HEREAFTER HELD BY OR AVAILABLE TO THE BENEFICIARIES.

 

12.                                 POWER OF ATTORNEY

 

12.1                           THE CHARGOR HEREBY IRREVOCABLY APPOINTS THE
FOLLOWING, NAMELY:

 

(A)                                  THE COLLATERAL AGENT; AND

 

(B)                                 EACH AND EVERY PERSON TO WHOM THE COLLATERAL
AGENT SHALL FROM TIME TO TIME HAVE DELEGATED THE EXERCISE OF THE POWER OF
ATTORNEY CONFERRED BY THIS CLAUSE 12;

 

jointly and also severally to be its attorney or attorneys and in its name and
otherwise on its behalf to sign, seal, execute, deliver, perfect and do all
deeds, instruments, documents, acts and things which may be required (or which
the Collateral Agent shall consider requisite) for carrying out any obligation
imposed on the Chargor by or pursuant to this Share Charge, for carrying any
sale or other dealing by the Collateral Agent or any other Beneficiary into
effect, for getting in the Securities, and generally for enabling the Collateral
Agent to exercise the powers conferred on it by or pursuant to this Share Charge
or by law. The Collateral Agent shall have full power to delegate the power
conferred on it by this Clause 12.1, but no such delegation shall preclude the
subsequent exercise of such power by the Collateral Agent itself or preclude the
Collateral Agent from making a subsequent delegation thereof to some other
person and any such delegation may be revoked by the Collateral Agent at any
time.

 

12.2                           THE POWER OF ATTORNEY HEREBY GRANTED IS AS
REGARDS THE COLLATERAL AGENT AND ITS DELEGATES (AND AS THE CHARGOR HEREBY
ACKNOWLEDGES) GRANTED IRREVOCABLY AND FOR VALUE AS PART OF THE SECURITY
CONSTITUTED BY THIS SHARE CHARGE TO SECURE PROPRIETARY INTERESTS IN AND THE
PERFORMANCE OF OBLIGATIONS OWED TO THE RESPECTIVE DONEES WITHIN THE MEANING OF
THE POWERS OF ATTORNEY ACT 1971.

 

12.3                           THE CHARGOR AGREES TO RATIFY AND CONFIRM ANYTHING
SUCH ATTORNEY SHALL LAWFULLY AND PROPERLY DO OR PURPORT TO DO BY VIRTUE OF
CLAUSE 12.1 AND ALL MONEY EXPENDED BY ANY SUCH ATTORNEY SHALL BE DEEMED TO BE
EXPENSES INCURRED BY THE COLLATERAL AGENT UNDER THIS SHARE CHARGE.

 

13.                                 DISCHARGE CONDITIONAL

 

13.1                           ANY RELEASE, DISCHARGE OR SETTLEMENT BETWEEN THE
CHARGOR AND THE COLLATERAL AGENT IN RELATION TO THIS SHARE CHARGE SHALL BE
CONDITIONAL UPON NO DISPOSITION OR PAYMENT TO THE

 

11

--------------------------------------------------------------------------------

 

COLLATERAL AGENT OR ANY OTHER BENEFICIARY BY ANY BORROWER OR ANY OTHER PERSON
BEING AVOIDED, SET ASIDE OR ORDERED TO BE REFUNDED PURSUANT TO ANY LAW RELATING
TO INSOLVENCY OR FOR ANY OTHER REASON.

 

13.2                           IF ANY SUCH DISPOSITION OR PAYMENT IS AVOIDED,
SET ASIDE OR ORDERED TO BE REFUNDED, THE COLLATERAL AGENT SHALL BE ENTITLED TO
ENFORCE THIS SHARE CHARGE AGAINST THE CHARGOR AS IF SUCH RELEASE, DISCHARGE OR
SETTLEMENT HAD NOT OCCURRED AND ANY SUCH DISPOSITION OR PAYMENT HAD NOT BEEN
MADE.

 

14.                                 DISCHARGE OF SECURITY

 

14.1                           TERMINATION

 

This Share Charge and the security interest created hereby shall terminate when
all the Secured Obligations have been indefeasibly paid in full in cash, at
which time the Beneficiaries shall direct the Collateral Agent to execute and
deliver to the Chargor or the Chargor’s designee, at the relevant Chargor’s
expense, all documents which such Chargor shall reasonably request from time to
time to evidence such termination. Any execution and delivery of termination
documents pursuant to this Clause 14 shall be without recourse to or warranty by
the Collateral Agent or the Beneficiaries.

 

14.2                           RELEASE

 

If any of the Securities shall be sold, transferred or otherwise disposed of by
a Chargor in a transaction permitted by the Loan Documents, the security
interest created hereby in any Securities that is so sold, transferred or
otherwise disposed of shall automatically terminate and be released upon the
closing of such sale, transfer or other disposition, and such Securities shall
be sold free and clear of the lien and security interest created hereby;
provided, however, that such security interest will continue to attach to all
proceeds of such sales or other dispositions. In connection with any of the
foregoing, the Beneficiaries shall direct the Collateral Agent to execute and
deliver to the Chargor or the Chargor’s designee, at the Chargor’s expense, all
documents that the Chargor shall reasonably request from time to time to
evidence such termination. Any execution and delivery of termination documents
pursuant to this Clause 14 shall be without recourse to or warranty by the
Collateral Agent or the Beneficiaries.

 

14.3                           UPON ANY RELEASE OF THE SECURITIES NEITHER THE
COLLATERAL AGENT NOR ANY OF THE OTHER BENEFICIARIES NOR THEIR NOMINEES OR AGENTS
(AS THE CASE MAY BE) SHALL BE BOUND TO RELEASE OR TRANSFER TO THE CHARGOR THE
IDENTICAL STOCKS, SHARES OR SECURITIES WHICH WERE DEPOSITED WITH OR TRANSFERRED
TO IT OR THEM AND THE CHARGOR SHALL ACCEPT SHARES AND SECURITIES OF THE SAME
CLASS AND DENOMINATION OR SUCH OTHER SECURITIES AS THEN REPRESENT THE
SECURITIES.

 

15.                                 CURRENCY

 

15.1                           ALL MONEYS RECEIVED OR HELD BY THE COLLATERAL
AGENT OR ANY OTHER BENEFICIARY UNDER THIS SHARE CHARGE MAY FROM TIME TO TIME
AFTER DEMAND HAS BEEN MADE BY THE COLLATERAL AGENT OR AH EVENT OF DEFAULT HAS
OCCURRED BE CONVERTED INTO SUCH OTHER CURRENCY AS THE COLLATERAL AGENT CONSIDERS
NECESSARY OR DESIRABLE TO COVER THE SECURED OBLIGATIONS IN THE

 

12

--------------------------------------------------------------------------------

 

CURRENCY THEREOF AT THE THEN PREVAILING SPOT RATE OF EXCHANGE OF THE COLLATERAL
AGENT (AS REASONABLY DETERMINED BY THE COLLATERAL AGENT) FOR PURCHASING THAT
OTHER CURRENCY WITH THE EXISTING CURRENCY.

 

15.2                           NO PAYMENT TO THE COLLATERAL AGENT OR ANY OTHER
BENEFICIARY (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 COLLATERAL AGENT OR SUCH OTHER BENEFICIARY SHALL HAVE
RECEIVED PAYMENT IN FULL IN THE CURRENCY IN WHICH SUCH OBLIGATION OR LIABILITY
WAS INCURRED AND, TO THE EXTENT THAT THE AMOUNT OF ANY SUCH PAYMENT SHALL ON
ACTUAL CONVERSION INTO SUCH CURRENCY FALL SHORT OF SUCH OBLIGATION OR LIABILITY
ACTUAL OR CONTINGENT EXPRESSED IN THAT CURRENCY, THE COLLATERAL AGENT OR SUCH
OTHER BENEFICIARY SHALL HAVE A FURTHER SEPARATE CAUSE OF ACTION AGAINST THE
CHARGOR AND SHALL BE ENTITLED TO ENFORCE THIS SHARE CHARGE TO RECOVER THE AMOUNT
OF THE SHORTFALL.

 

16.                                 COSTS

 

The Chargor shall on demand pay to the Collateral Agent the amount of all
reasonable costs and expenses and other liabilities (including reasonable legal
and out of pocket expenses and any Value Added Tax on such costs and expenses)
which the Collateral Agent or any other Beneficiary incurs in connection with:

 

(A)                                  THE PREPARATION, NEGOTIATION, EXECUTION AND
DELIVERY OF THIS SHARE CHARGE;

 

(B)                                 ANY STAMPING OR PAYMENT OF STAMP DUTY
RESERVE TAX OR REGISTRATION OF THIS SHARE CHARGE OR ANY TRANSFER OF THE
SECURITIES PURSUANT HERETO;

 

(C)                                  ANY ACTUAL OR PROPOSED AMENDMENT OR WAIVER
OR CONSENT UNDER OR IN CONNECTION WITH THIS SHARE CHARGE;

 

(D)                                 ANY DISCHARGE OR RELEASE OF THIS SHARE
CHARGE;

 

(E)                                  THE PRESERVATION OR EXERCISE (OR ATTEMPTED
PRESERVATION OR EXERCISE) OF ANY RIGHTS UNDER OR IN CONNECTION WITH AND THE
ENFORCEMENT (OR ATTEMPTED ENFORCEMENT) OF THIS SHARE CHARGE; OR

 

(F)                                    DEALING WITH OR OBTAINING ADVICE ABOUT
ANY OTHER MATTER OR QUESTION ARISING OUT OF OR IN CONNECTION WITH THIS SHARE
CHARGE;

 

together with interest thereon at the Default Rate from the date of demand (or
if earlier the date of payment by the Collateral Agent or such other
Beneficiary) until the date of payment by the Chargor whether before or after
judgment.

 

17.                                 ASSIGNMENT

 

The Beneficiaries may assign or otherwise transfer the whole or any part of the
benefit of this Share Charge to any person to whom all or any part of its
rights, benefits and obligations under the Credit Agreement are assigned or
transferred in accordance with the provisions of the Credit Agreement and the
expression “the Beneficiaries” wherever used

 

13

--------------------------------------------------------------------------------

 

herein shall be deemed to include the assignees and other successors, whether
immediate or derivative, of any Beneficiary, who shall be entitled to enforce
and proceed upon this Share Charge in the same manner as if named herein. The
Beneficiaries shall be entitled to disclose (on a confidential basis) any
information concerning the Chargor to any such assignee or other successor or
any participant or proposed assignee, successor or participant. The Chargor may
not assign or transfer all or any part of its rights and/or obligations under
this Share Charge.

 

18.                                 NOTICES

 

18.1                           WITHOUT PREJUDICE TO ANY OTHER METHOD OF SERVICE
OF NOTICES AND COMMUNICATIONS PROVIDED BY LAW, A DEMAND OR NOTICE UNDER THIS
SHARE CHARGE SHALL BE IN WRITING SIGNED BY AN OFFICER OR AGENT OF THE COLLATERAL
AGENT AND MAY BE SERVED ON THE CHARGOR BY HAND, BY POST OR BY FACSIMILE
TRANSMISSION. ANY SUCH NOTICE OR COMMUNICATION SHALL BE SENT TO THE ADDRESS OR
NUMBER OF THE CHARGOR AS SET OUT BELOW:

 

EMRISE Electronics Corporation
9654 Hermosa Avenue
Rancho Cucamonga, CA 91730
USA
Attn: D. John Donovan

 

With a copy to:

 

Rutan & Tucker, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Attn: Larry A. Cerutti, Esq.
Fax No.: (714) 546-9035

 

18.2                           ANY SUCH NOTICE OR COMMUNICATION GIVEN BY THE
COLLATERAL AGENT OR ANY OTHER BENEFICIARY SHALL BE DEEMED TO HAVE BEEN RECEIVED:

 

(A)                                  IF SENT BY FACSIMILE TRANSMISSION, WITH A
CONFIRMED RECEIPT OF TRANSMISSION FROM THE RECEIVING MACHINE, ON THE BUSINESS
DAY ON WHICH TRANSMITTED OR THE FOLLOWING BUSINESS DAY IF TRANSMITTED AFTER THE
NORMAL BUSINESS HOURS OF THE CHARGOR;

 

(B)                                 IN THE CASE OF A WRITTEN NOTICE LODGED BY
HAND, ON THE BUSINESS DAY OF ACTUAL DELIVERY OR THE FOLLOWING BUSINESS DAY IF
DELIVERED AFTER THE NORMAL BUSINESS HOURS OF THE CHARGOR; AND

 

(C)                                  IF POSTED, ON THE SECOND BUSINESS DAY
FOLLOWING THE DAY ON WHICH IT WAS PROPERLY DISPATCHED BY FIRST CLASS MAIL
POSTAGE PREPAID.

 

18.3                           ANY NOTICE GIVEN TO THE COLLATERAL AGENT OR ANY
OTHER BENEFICIARY SHALL BE DEEMED TO HAVE BEEN GIVEN ONLY ON ACTUAL RECEIPT.

 

14

--------------------------------------------------------------------------------

 

19.                                 MISCELLANEOUS

 

19.1                           ALL SUMS PAYABLE BY THE CHARGOR UNDER THIS SHARE
CHARGE SHALL BE PAID WITHOUT ANY SET OFF, COUNTERCLAIM, WITHHOLDING OR DEDUCTION
WHATSOEVER UNLESS REQUIRED BY LAW IN WHICH EVENT THE CHARGOR WILL,
SIMULTANEOUSLY WITH MAKING THE RELEVANT PAYMENT UNDER THIS SHARE CHARGE, PAY TO
THE COLLATERAL AGENT SUCH ADDITIONAL AMOUNT AS WILL RESULT IN THE RECEIPT BY THE
COLLATERAL AGENT OF THE FULL AMOUNT WHICH WOULD OTHERWISE HAVE BEEN RECEIVABLE
AND WILL SUPPLY THE COLLATERAL AGENT PROMPTLY WITH EVIDENCE SATISFACTORY TO THE
COLLATERAL AGENT THAT THE CHARGOR HAS ACCOUNTED TO THE RELEVANT AUTHORITY FOR
THE SUM WITHHELD OR DEDUCTED.

 

19.2                           NO DELAY OR OMISSION ON THE PART OF THE
COLLATERAL AGENT IN EXERCISING ANY RIGHT OR REMEDY UNDER THIS SHARE CHARGE SHALL
IMPAIR THAT RIGHT OR REMEDY OR OPERATE AS OR 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 SHARE CHARGE OF THAT OR ANY
OTHER RIGHT OR REMEDY.

 

19.3                           THE RIGHTS OF THE BENEFICIARIES UNDER THIS SHARE
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 COLLATERAL AGENT DEEMS
EXPEDIENT.

 

19.4                           ANY WAIVER BY THE COLLATERAL AGENT OR ANY OTHER
BENEFICIARY OF ANY TERMS OF THIS SHARE CHARGE OR ANY CONSENT OR APPROVAL GIVEN
BY ANY OF THEM UNDER IT SHALL BE EFFECTIVE ONLY IF GIVEN IN WRITING AND THEN
ONLY FOR THE PURPOSE AND UPON THE TERMS AND CONDITIONS (IF ANY) ON WHICH IT IS
GIVEN.

 

19.5                           IF AT ANY TIME ANY ONE OR MORE OF THE PROVISIONS
OF THIS SHARE 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 SHARE CHARGE NOR THE
LEGALITY, VALIDITY OR ENFORCEABILITY OF SUCH PROVISION UNDER THE LAW OF ANY
OTHER JURISDICTION SHALL BE IN ANY WAY AFFECTED OR IMPAIRED AS A RESULT.

 

19.6                           ANY STATEMENT, CERTIFICATE OR DETERMINATION OF
THE COLLATERAL AGENT AS TO THE AMOUNT OF THE SECURED OBLIGATIONS OR (WITHOUT
LIMITATION) ANY OTHER MATTER PROVIDED FOR IN THIS SHARE CHARGE SHALL IN THE
ABSENCE OF MANIFEST ERROR BE CONCLUSIVE AND BINDING ON THE CHARGOR.

 

20.                                 LAW AND JURISDICTION

 

20.1                           THIS SHARE CHARGE IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH ENGLISH LAW.

 

20.2                           THE CHARGOR IRREVOCABLY AGREES FOR THE EXCLUSIVE
BENEFIT OF THE BENEFICIARIES THAT THE COURTS OF ENGLAND SHALL HAVE JURISDICTION
TO HEAR AND DETERMINE ANY SUIT, ACTION OR PROCEEDING AND TO SETTLE ANY DISPUTE
WHICH MAY ARISE OUT OF OR IN CONNECTION WITH THIS SHARE CHARGE AND FOR SUCH,
PURPOSES IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS.

 

15

--------------------------------------------------------------------------------

 

20.3                           NOTHING CONTAINED IN THIS CLAUSE SHALL LIMIT THE
RIGHT OF THE COLLATERAL AGENT OR OTHER BENEFICIARY TO TAKE PROCEEDINGS AGAINST
THE CHARGOR IN ANY OTHER COURT OF COMPETENT JURISDICTION (INCLUDING WITHOUT
LIMITATION AND FOR THE AVOIDANCE OF DOUBT, IN ACCORDANCE WITH THE TERMS OF THE
CREDIT AGREEMENT) NOR SHALL THE TAKING OF ANY SUCH PROCEEDINGS IN ONE OR MORE
JURISDICTIONS PRECLUDE THE TAKING OF PROCEEDINGS IN ANY OTHER JURISDICTION
WHETHER CONCURRENTLY OR NOT (UNLESS PRECLUDED BY APPLICABLE LAW).

 

20.4                           THE CHARGOR IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY HAVE NOW OR IN THE FUTURE TO THE COURTS OF ENGLAND BEING NOMINATED
FOR THE PURPOSE OF THIS CLAUSE ON THE GROUND OF VENUE OR OTHERWISE AND AGREES
NOT TO CLAIM THAT ANY SUCH COURT IS NOT A CONVENIENT OR APPROPRIATE FORUM.

 

20.5                           THE CHARGOR IRREVOCABLY AND UNCONDITIONALLY
AUTHORISES AND APPOINTS EMRISE ELECTRONICS LTD. OF BRUNSWICK ROAD, COBBS WOOD,
ASHFORD, KENT TN23 1EH, UNITED KINGDOM (OR SUCH OTHER COMPANY WITH A REGISTERED
OFFICE IN ENGLAND AS IT MAY FROM TIME TO TIME SUBSTITUTE BY NOT LESS THAN
FIFTEEN DAYS WRITTEN NOTICE TO THE COLLATERAL AGENT) TO ACCEPT SERVICE OF ALL
LEGAL PROCESS ARISING OUT OF OR CONNECTED WITH THIS SHARE CHARGE AND SERVICE ON
SUCH PERSON (OR SUBSTITUTE) SHALL BE DEEMED TO BE SERVICE ON THE CHARGOR. EXCEPT
UPON SUCH A SUBSTITUTION THE CHARGOR SHALL NOT REVOKE ANY SUCH AUTHORITY OR
APPOINTMENT AND SHALL AT ALL TIMES MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN
ENGLAND AND IF ANY SUCH, AGENT CEASES FOR ANY REASON TO BE AN AGENT FOR THIS
PURPOSE SHALL FORTHWITH APPOINT ANOTHER AGENT AND ADVISE THE COLLATERAL AGENT
ACCORDINGLY.

 

IN WITNESS whereof the Chargor has executed this Share Charge as a deed with the
intention that it be delivered on the day and year first before written.

 

16

--------------------------------------------------------------------------------

 

SCHEDULE

 

Number of shares or
amount of stock

 

Description of stocks,
shares, or other securities

 

 

 

58,668

 

Ordinary shares of £1 each in EMRISE Electronics Ltd. a company registered in
England and Wales (Registered No. 1969006)

 

17

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF the Chargor has executed this Share Charge as a deed with the
intention that it be delivered on the day and year first before written

 

EXECUTED as a Deed on behalf of

)

 

EMRISE Electronics Corporation, a company

)

 

incorporated in the State of New Jersey by

)

 

Carmine Oliva being a person

)

/s/ Carmine Oliva

who in accordance with the laws of that

)

 

territory, is acting under the authority

)

 

of President & Chief Executive Officer

)

 

 

--------------------------------------------------------------------------------

 

 

)

/s/ Robert J. Anderson

 

 

 

Robert J. Anderson

 

 

Authorized Signatory

 

 

 

SIGNED for and on behalf of

)

/s/ Peter Paul Mendel

 

GVEC RESOURCE IV INC. in its capacity

)

Peter Paul Mendel

as Collateral Agent

)

Authorized Signatory

 

--------------------------------------------------------------------------------