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Exhibit 10.23
PLEDGE AGREEMENT
between
MAGINET CORPORATION,
as Pledgor
and
THE CHASE MANHATTAN BANK, N.A.,
as Pledgee
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Dated as of December [31], 1995
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TABLE OF CONTENTS*
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Section Page
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SECTION 2. DEFINITIONS AND PRINCIPLES OF
CONSTRUCTION........................................ 2
SECTION 3. PLEDGE OF SECURITIES................................ 3
SECTION 4. APPOINTMENT OF AGENTS; ENDORSEMENTS................. 6
SECTION 5. VOTING AND OTHER RIGHTS WHILE NO
EVENT OF DEFAULT.................................... 6
SECTION 6. DIVIDENDS AND OTHER DISTRIBUTIONS................... 7
SECTION 7. REMEDIES IN CASE OF EVENT OF DEFAULT................ 7
SECTION 8. APPLICATION OF PROCEEDS............................. 10
SECTION 9. PURCHASERS OF PLEDGE COLLATERAL..................... 11
SECTION 10. FURTHER ASSURANCES.................................. 11
SECTION 12. TRANSFER BY THE PLEDGOR............................. 12
SECTION 13. REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE PLEDGOR............................ 13
SECTION 14. PLEDGOR'S OBLIGATIONS ABSOLUTE...................... 13
SECTION 15. REGISTRATION........................................ 13
SECTION 16. INDEMNITY........................................... 14
SECTION 17. TERMINATION; RELEASE................................ 15
SECTION 18. NOTICES............................................. 15
SECTION 19. MISCELLANEOUS....................................... 16
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* This Table of Contents is provided for convenience only and is not a part
of the attached Pledge Agreement.
EXECUTION COPY
PLEDGE AGREEMENT
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PLEDGE AGREEMENT, dated as of December 3l, 1995, between MAGINET
CORPORATION, a corporation organized under the laws of the State of California,
as pledgor (the "Pledgor"), and The Chase Manhattan Bank, N.A., a national
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banking association, as collateral agent (the "Pledgee") for the benefit,
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pursuant to the Appointment Agreement, of New York Life Insurance Company, The
Mutual Life Insurance Company of New York, Waslic Company II and Namtor BVC LP
as Noteholders and their respective successors and permitted assigns.
Capitalized terms used herein shall have the meanings provided in Section 2.
WITNESSETH:
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WHEREAS, the Pledgor and the Purchasers have entered into the Note
Agreement providing for the issuance and sale of the Notes and the issuance of
the Warrants as contemplated therein;
WHEREAS, The Chase Manhattan Bank, N.A., the Pledgor and the Purchasers
have entered into the Appointment Agreement providing for the appointment of The
Chase Manhattan Bank, N.A. to act as collateral agent for the benefit of the
Noteholders under the Security Documents (including this Agreement);
WHEREAS, pursuant to the Note Agreement, the Pledgor agreed to restrict the
actions of a subsidiary of the Pledgor until such time as the Pledgor shall,
among other things, have executed and delivered to the Pledgee this Agreement;
WHEREAS, the Pledgor desires to execute this Agreement to satisfy the
condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to the Pledgor,
the receipt and sufficiency of which are hereby acknowledged, the Pledgor hereby
makes the following representations and warranties to the Pledgee and hereby
covenants and agrees with the Pledgee as follows:
SECTION 1. SECURITY. (a) This Agreement is for the benefit of the Pledgee
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as collateral agent for the Noteholders pursuant to the Appointment Agreement
(and, to the extent provided in Section 16 of this Agreement, for the benefit of
the Pledgee in its individual capacity) to secure: (i) the payment due of the
principal of and interest in respect
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of the Notes and payment of all other obligations and liabilities (including
without limitation indemnities, premium, if any, fees and interest thereon) of
the Pledgor, now existing or hereafter incurred under, arising out of or in
connection with the Note Agreement, each Note or any other Note Document (other
than the Warrants); and (ii) the due performance and compliance with the terms
of the Note Documents by the Pledgor (all such principal, interest, obligations
and liabilities, collectively, the "Secured Obligations").
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SECTION 2. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION. For all purposes
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of this Agreement: (i) capitalized terms not otherwise defined herein shall have
the meanings set forth in the Note Agreement; (ii) the principles of
construction set forth in the Note Agreement shall apply; and (iii) as used
herein, references to "this Agreement", "hereunder" and words of like meaning
shall refer to this pledge agreement.
As used in this Agreement:
"Agreement" and "this Agreement" shall mean this pledge agreement, dated as
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of December, 1995, as the same may be modified, amended or supplemented from
time to time.
"Liquidating Dividend" shall have the meaning set forth in Section 6.
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"Maximum Foreign Pledge" shall mean (i) prior to the occurrence of a Change
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in Tax Law Event, the aggregate number of Securities representing 66% (or such
other threshold amount as may become relevant after the date hereof in
determining whether a pledge under one or more pledge agreements would result in
the undistributed earnings of the Subsidiary, as determined for U.S. Federal
income tax purposes, being treated as a deemed dividend to the Pledgor) of the
total combined voting power of all classes of Securities entitled to vote; and
(ii) on and following the occurrence of a Change in Tax Law Event, the aggregate
number of Securities representing the maximum total combined voting power of all
classes of Securities entitled to vote that may be pledged without creating a
deemed dividend to the Pledgor.
"Pledge Documents" shall mean: (i) this Agreement (and any other pledge
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agreement in form and substance satisfactory to the Pledgee entered into as
contemplated by this Agreement); (ii) the Note Agreement and (iii) any other
Note Document to which the Pledgee is or will be a party.
"Secured Obligations" shall have the meaning set forth in Section 1.
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"Securities" shall mean, as of the date of determination, all the issued
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and outstanding shares of capital stock or similar equity interests of the
Subsidiary (and any options, warrants or other rights to purchase such capital
stock or similar equity interests). The Pledgor hereby represents and warrants
that on the date hereof: (i) the information set forth in Annex A concerning the
Securities issued and outstanding as of the date hereof and the Pledged
Securities is true and correct; and (ii) there are no outstanding options,
warrants, or other rights to purchase the Securities.
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All Securities described as "Pledged Securities" in Annex A are
hereinafter referred to as the "Pledged Securities," and the Pledged Securities,
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together with all proceeds thereof, including any securities and moneys received
and at the time held by the Pledgee hereunder, are hereinafter referred to as
the "Pledge Collateral."
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"Subsidiary" shall mean Pacific Pay Video (Taiwan) Inc.
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SECTION 3. PLEDGE OF SECURITIES.
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3.1 Pledge. To secure the Secured Obligations and for the purposes set
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forth in Section 1, the Pledgor: (i) hereby grants to the Pledgee a continuing
security interest of first priority in all of the Pledge Collateral; (ii) hereby
pledges and deposits as security with the Pledgee (except as otherwise permitted
in this Section 3) the Pledged Securities owned by the Pledgor on the date
hereof and delivers to the Pledgee certificates therefor (to the extent such
Pledged Securities are certificated) either with the pledge duly endorsed in
blank or with the pledge duly endorsed thereon; and (iii) hereby assigns,
transfers, hypothecates, mortgages, charges and sets over to the Pledgee all of
the Pledgor's right, title and interest in and to such Pledged Securities, to be
held by the Pledgee upon the terms and conditions set forth in this Agreement
and the other Pledge Documents.
3.2 Subsequently Acquired Securities. If the Pledgor shall acquire (by
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purchase, stock dividend or otherwise, including pursuant to Section 6), at any
time or from time to time after the date hereof, any Securities (other than
Pledged Securities) and, following such acquisition, the Pledged Securities
(together with any Securities pledged to the Pledgee under another pledge
agreement) are less than the then existing Maximum Foreign Pledge, then the
Pledgor will forthwith (i) pledge, mortgage or charge on a first priority basis
under another pledge agreement in form and substance satisfactory to the
Pledgee, and deposit as security with the Pledgee, such additional Securities as
are necessary so that the Pledged Securities and such additional Securities so
pledged, mortgaged or charged under another pledge agreement are equal to the
then existing Maximum Foreign Pledge and (ii) deliver to the Pledgee
certificates therefor either with the pledge duly endorsed in blank or with the
pledge duly endorsed thereon. The Pledgor will promptly deliver to the Pledgee a
certificate executed by a Responsible Officer describing such additional
Securities and certifying that the same have been duly pledged, mortgaged or
charged with the Pledgee under such other pledge agreement.
3.3 Uncertificated Securities. Notwithstanding anything to the contrary
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contained in Sections 3.1 and 3.2, if any Pledged Securities are evidenced by an
uncertificated security, the Pledgor shall promptly: (i) notify the Pledgee of
such uncertificated security; (ii) take all actions required to perfect the
security interest of the Pledgee therein under applicable law; and (iii) notify
the Pledgee of such actions taken. The Pledgor further agrees: (i) to take such
actions as the Pledgee deems necessary or reasonably desirable to effect the
foregoing and to permit the Pledgee to exercise any of its rights and remedies
hereunder or any other pledge agreement entered into by the Pledgor as
contemplated herein; and (ii) to provide an opinion of counsel satisfactory to
the Pledgee with respect to any such pledge of uncertificated Pledged Securities
upon the pledge thereof and at any other time promptly upon request of the
Pledgee.
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3.4 Change in Tax Law Event. If a Change in Tax Law Event occurs, then
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the Pledgor shall forthwith pledge, mortgage or charge under another pledge
agreement in form and substance satisfactory to the Pledgee that portion of the
Securities owned by the Pledgor and not previously pledged, mortgaged or charged
to the Pledgee. The Pledgor will promptly deliver to the Pledgee a certificate
executed by a Responsible Officer describing such additional Securities and
certifying that the same have been duly pledged, mortgaged or charged with the
Pledgee under such other pledge agreement.
SECTION 4. APPOINTMENT OF AGENTS: ENDORSEMENTS. The Pledgee shall have
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the right to appoint one or more agents for the purpose of retaining physical
possession of the Pledged Securities and other Pledge Collateral (and any
additional Securities to be pledged to the Pledgee pursuant to the terms of this
Agreement), which may be held (in the discretion of the Pledgee) in the name of
the Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any
nominee or nominees of the Pledgee or an agent appointed by the Pledgee.
SECTION 5. VOTING AND OTHER RIGHTS WHILE NO EVENT OF DEFAULT. Unless and
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until an
Event of Default shall have occurred and be continuing, the Pledgor shall
be entitled to vote any and all Pledged Securities and to give consents, waivers
or ratifications in respect thereof; provided, that in no event shall the
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Pledgor cast any vote, or give any consent, waiver or ratification or take any
action which would violate or be inconsistent with any of the terms of this
Agreement, any other Note Document or any other instrument or agreement referred
to herein or therein or which would have the effect of impairing the position or
interests of the Pledgee or any Noteholder. All such rights of the Pledgor to
vote and to give consents, waivers and ratifications shall cease upon the
earlier to occur of: (i) delivery to the Pledgor of written notice from any
Noteholder pursuant to Section 9.1 of the Note Agreement or from the Pledgee
stating that an Event of Default has occurred and is continuing; or (ii) a
Responsible Officer obtaining knowledge of any condition or event which
constitutes an Event of Default, when Section 7 shall become applicable;
provided, that the Pledgee shall be under no duty to deliver the written notice
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described in clause (i) of the foregoing unless and until it has received a
notice from any Noteholder stating that an Event of Default has occurred and is
continuing.
SECTION 6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event
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of Default shall have occurred and be continuing all cash dividends payable in
respect of the Pledged Securities shall be paid directly to the Pledgor;
provided, that notwithstanding any of the foregoing, all cash dividends payable
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in respect of the Pledged Securities which are determined by the Pledgee to
represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital (each, a "Liquidating Dividend") shall be paid
directly to the Pledgee and retained by it as part of the Pledge Collateral
unless the event creating such Liquidating Dividend was permitted by, and did
not otherwise result in an Event of Default occurring under, the Note Agreement.
The Pledgee shall also be entitled to receive directly, and to retain as
part of the Pledge Collateral:
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(a) all other or additional stock or securities of the Subsidiary paid or
distributed by way of dividend in respect of the Pledged Securities;
(b) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged Securities by way
of stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(c) all other or additional stock or other securities or property which may
be paid in respect of the Pledge Collateral by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation or similar
corporate reorganization or otherwise;
except, in each case, prior to the occurrence and continuance of an Event
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of Default, to the extent the receipt of such stock dividends and other
securities distributions would cause the Pledged Securities (and any additional
Securities pledged to the Pledgee under one or more additional pledge
agreements) to exceed the then existing Maximum Foreign Pledge, in which case
the Pledgee shall be entitled to receive directly and retain as part of the
Pledge Collateral only such amount of stock dividends and securities
distributions as equals, together with the Pledged Securities and other
Securities previously pledged to the Pledgee, the then existing Maximum Foreign
Pledge.
SECTION 7 REMEDIES IN CASE OF EVENT OF DEFAULT. (a) In case an Event of
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Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all the rights, powers and remedies vested in it (whether vested in it
by this Agreement, by any other Note Document or by law) for the protection and
enforcement of its rights in respect of the Pledge Collateral, and the Pledgee
shall be entitled without limitation to exercise the following rights, which the
Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Pledge Collateral
otherwise payable under Section 6 to the Pledgor;
(ii) to the extent permitted by law and to the extent not previously
transferred, to transfer all or any part of the Pledged Securities into the
Pledgee's name or the name of its nominee or nominees;
(iii) to vote all or any part of the Pledged Securities (whether or not
transferred into the name of the Pledgee) and give all consents, waivers and
ratifications in respect of the Pledge Collateral and otherwise act with respect
thereto as though it were the outright owner thereof (the Pledgor hereby
irrevocably constituting and appointing the Pledgee the proxy and attorney-in-
fact of the Pledgor, with full power of substitution to do so, as further
provided in paragraph (b) below); and
(iv) to notify the Pledgor that it intends to keep, sell or otherwise
dispose of all or any part of the Pledge Collateral in such manner, for such
price and on such terms and conditions as the Pledgee may specify and apply the
proceeds of any such disposition of the Pledge Collateral in accordance with the
provisions of Section 8. If the Pledgor within ten (10) days afar receipt of
such notice notifies the Pledgee that the Pledgor objects to the
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actions proposed in such notice, then the Pledgee shall be entitled to
foreclose its pledge of the Pledge Collateral in accordance with Republic of
China law, including the Republic of China Law Governing the Application of the
Chapter of Obligations and the Republic of China Compulsory Execution Law. If
the Pledgor does not within ten (10) days after receipt of such notice so notify
the Pledgee of its objection, then the Pledgor shall be deemed to have consented
to such actions and the Pledgee may proceed with such actions. Thereafter the
Pledgee may at any time or from time to time sell, assign and deliver, or grant
options to purchase, all or any part of the Pledge Collateral, or any interest
therein, at any public or private sale, without demand of performance,
advertisement or notice of intention to sell or of the time or place of sale or
adjournment thereof (all of which are hereby waived by the Pledgor) or to redeem
or otherwise the Pledged Collateral, for cash, on credit or for other property,
for immediate or future delivery without any assumption of credit risk, and for
such price or prices and on such terms as the Pledgee may determine. The
Pledgor hereby waives and releases to the fullest extent permitted by law any
right or equity of redemption with respect to the Pledge Collateral, whether
before or after sale hereunder, and all rights, if any, of marshalling the
Pledge Collateral and any other security for the Secured Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the Pledgee
on behalf of the Noteholders may bid for and purchase all or any part of the
Pledge Collateral so sold free from any such right or equity of redemption.
None of the Pledgee or the Noteholders shall be liable for failure to collect or
realize upon any or all of the Pledge Collateral or for any delay in so doing
nor shall any of them be under any obligation to take any action whatsoever with
regard thereto.
(b)(i) The Pledgor hereby irrevocably appoints the Pledgee as its
attorney-in-fact with right of substitution, so that the Pledgee or any other
Person empowered by the Pledgee shall be authorized, without need of further
authorization from the Pledgor, upon the occurrence and continuance of an Event
of Default and in preservation of the rights of the Pledgee and the Noteholders
hereunder:
(A) to effect the sale of any of the Pledge Collateral in one
or more transactions to the extent permitted by law and in such other
manner as may be determined by the attorney-in-fact, including the direct
sale without public auction of any such Pledge Collateral at such price,
and upon such terms as may be determined by such attorney-in-fact;
(B) to enter upon any premises where the Pledge Collateral or
any part thereof may be located without the need for a court order or
other form of authority otherwise than upon the authority granted herein;
(C) to take and retain actual possession and control of any
such Pledge Collateral as receivers without bond or otherwise, and
transport any such Pledge Collateral to any location as determined by
such attorney-in-fact;
(D) to administer, manage and use any of the Pledge Collateral;
(E) to conclude any agreement and collect any moneys thereunder
or otherwise due to the Pledgor in respect of, or generated through the
usage of, any of the Pledge Collateral;
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(F) to exercise any of the rights of the Pledgor arising under
or in connection with the Pledge Collateral or to delegate to another
Person, in substitution of such attorney-in-fact, the exercise of such
rights of the Pledgor, under such terms as such attorney-in-fact shall
deem proper or necessary;
(G) to collect, claim and receive all moneys and avail itself
of all benefits that accrue and that may become due and payable to the
Pledgor with respect to the Pledge Collateral and to hold the same as
security for the timely payment and discharge by the Pledgor of the
Secured Obligations;
(H) to send written notice to the Subsidiary instructing it to
pay all moneys due and owing to the Pledgor from time to time (whether
payable in U.S. dollars, in another convertible foreign currency or
other-wise), with respect to the Pledge Collateral to such bank accounts
as shall be designated in the notice;
(I) to institute and maintain such suits and proceedings as
such attorney-in-fact shall deem expedient to prevent any impairment of
the Pledge Collateral or to preserve and protect such attorney-in-fact's
interest therein;
(J) to execute and deliver such deeds of conveyance or sale as
may be necessary or proper for the purpose of conveying full title and
ownership, free from any claims and rights of the Pledgor, to any of the
Pledge Collateral, after foreclosure thereof; and
(K) in general, to sign such agreements and documents and
perform such acts and things required, necessary or, in the opinion of
such attorney-in-fact, advisable, to fully accomplish the purpose hereof.
(ii) This special power of attorney shall be deemed coupled with an
interest, and shall not be revoked by the Pledgor until the discharge in full of
the Secured Obligations. Upon the earlier to occur of: (A) delivery to the
Pledgor of written notice from any Noteholder pursuant to a notice delivered
under Section 9.1 of the Note Agreement or the Pledgee stating that an Event of
Default has occurred and is continuing; or (B) a Responsible Officer obtaining
knowledge of any condition or event which constitutes an Event of Default, the
Pledgor shall abstain from exercising any rights with respect to the Pledge
Collateral which shall be inconsistent with the exercise of the rights and
functions herein granted to the Pledgee as attorney-in-fact, including
abstaining from collecting, claiming and receiving any moneys with respect to
the Pledge Collateral; provided, that the Pledgee shall be under no duty to
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deliver the written notice described in clause (A) of the foregoing unless and
until it has received a notice from any Noteholder stating that an Event of
Default has occurred and is continuing. To the extent that the Pledgor shall
receive any moneys in respect thereof notwithstanding the provisions of this
paragraph (ii), it shall be deemed to have received such funds for the account
of the Pledgee and shall hold the same in trust and promptly pay the same to the
Pledgee or as it may direct from time to time.
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SECTION 8. APPLICATION OF PROCEEDS. All moneys collected by the
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Pledgee upon any sale or other disposition of the Pledge Collateral, together
with all other moneys received by the Pledgee hereunder, shall, to the extent
permitted by applicable law, be applied in the following order of priority:
(a) FIRST, to the payment of such fees as are due and payable to any
judicial or governmental body in the Republic of China in connection with such
sale or other disposition of the Pledge Collateral or the collection of any such
moneys;
(b) SECOND, to the payment of such amounts as are due and payable to the
Pledgee or any of its agents (or any prior collateral agent) pursuant to this
Agreement or the Appointment Agreement, including the payment of all costs and
expenses incurred by the Pledgee in connection with such sale, the delivery of
the Pledge Collateral or the collection of any such moneys (including, without
limitation, attorneys' fees and expenses);
(c) THIRD, to the payment of the Secured Obligations in the following
order of priority to the extent such amounts are not sufficient to repay the
Secured Obligations in full and within each category on a pro rata basis among
the Noteholders:
(i) to the payment of charges, fees, indemnity obligations, costs and
expenses due under the Note Agreement or the other Note Documents to the
Noteholders;
(ii) to the payment of interest on principal with respect to the Notes
which became overdue;
(iii) to the payment of interest accrued with respect to the Notes;
(iv) to the payment of principal with respect to the Notes; and
(v) to the payment of premium, if any, with respect to the Notes; and
(d) FOURTH, any balance of such money as directed in writing by the
Pledgor.
SECTION 9. PURCHASERS OF PLEDGE COLLATERAL. Upon any sale of the Pledge
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Collateral by the Pledgee hereunder (whether by virtue of the power of sale
herein granted, pursuant to judicial process or otherwise), the receipt of the
Pledgee or the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Pledge Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Pledgee or such officer or be answerable in any
way for the misapplication or nonapplication thereof.
SECTION 10. FURTHER ASSURANCES. Without limitation to the provisions of
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Section 7, the Pledgor agrees that it will (in each case at its own expense):
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(a) prepare, execute, file and refile such financing statements,
continuation statements and other documents in such offices as may be necessary
or reasonably desirable and wherever required or permitted by law in order to
perfect and preserve the Pledgee's security interest in the Pledge Collateral,)
and the Pledgee agrees to execute such financing statements and other documents
prepared by the Pledgor, and the Pledgor hereby irrevocably authorizes the
Pledgee following an Event of Default, as its attorney-in-fact, to file or cause
to be filed such financing statements and amendments thereto and other documents
relative to all or any part of the Pledge Collateral without the signature of
the Pledgor where permitted by law;
(b) comply with the requirements of Section 7.13 of the Note Agreement
(which provision is incorporated in full herein by reference); and
(c) do such further acts and things (including, without limitation,
paying all required documentary and other stamp tax) and execute and deliver to
the Pledgee such additional conveyances, assignments, agreements and instruments
(including without limitation one or more pledge agreements in form and
substance satisfactory to the Pledgee) as may be reasonably required or deemed
advisable to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder.
SECTION 11. THE PLEDGEE. (a) The Pledgee will hold in accordance with the
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terms and provisions of the Appointment Agreement (which terms and provisions
are incorporated in full herein by reference) all Pledge Collateral at any time
received by it under this Agreement. It is expressly understood and agreed that
the obligations of the Pledgee as holder of the Pledge Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement and in the
Appointment Agreement, and no implied covenants or obligations shall be read
into this Agreement against the Pledgee.
(b) In case of any litigation under this Agreement, or in case of any
enforcement of remedies or exercise of rights upon the occurrence of an Event of
Default, or in case the Pledgee deems that, by reason of any present or future
law of any jurisdiction, it may not or may not effectively exercise any of the
powers, rights or remedies herein granted to it or hold title to the properties,
in trust, as herein granted, or take any other action which may be desirable or
necessary in connection therewith, the Pledgee shall be entitled to appoint, to
the extent consistent with applicable law, one or more separate or additional
co-agents.
In the event that the Pledgee appoints an individual or institution as a
separate or additional co-agent: (i) any appointment of any such co-agent by the
Pledgee shall be made only with the prior written consent of the Pledgor and the
Required Holder(s) (except that, if the Pledgee shall have received written
notice from any Holder of Secured Obligations that a Default or an Event of
Default has occurred and is continuing, such consent shall be required only of
the Required Holder(s)), which consent shall not be unreasonably withheld or
delayed; and (ii) each and every remedy, power, right, title, interest, trust,
duty and obligation expressed or intended by this Agreement to be exercised
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by or vested in, conveyed to or imposed upon, the Pledgee with respect thereto
shall be exercisable by and vest in such separate or additional co-agent but
only to the extent necessary, appropriate or desirable to enable such separate
or additional co-agent to exercise or have vested in it such powers, rights,
trusts, titles, interests, duties and obligations and remedies, and every
covenant and obligation necessary, appropriate or desirable to the exercise
thereof by such separate or additional co-agent shall run to and be enforceable
by either or any of them.
The Pledgee shall have the right to terminate the appointment of any
such co-agent hereunder with the prior written consent of the Pledgor and the
Required Holder(s) (except that, if the Pledgee shall have received written
notice from any Holder that a Default or an Event of Default has occurred and is
continuing, such consent shall be required only of the Required Holder(s)),
which consent shall not be unreasonably withheld or delayed. Should any
instrument in writing from the Pledgor be required by the separate or additional
co-agent so appointed by the Pledgee to more fully and certainly vest in and
confirm to it such remedies, rights, powers, titles, interests, trusts, duties
and obligations, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Pledgor. In case any separate or
additional co-agent, or a successor to either, shall become incapable of acting,
resign or be removed, all the remedies, rights, powers, titles, interests,
trusts, duties and obligations of such separate or additional co-agent, so far
as permitted by law, shall vest in and be exercised by the Pledgee until the
appointment of a new agent or successor to such separate or additional co-agent.
SECTION 12. TRANSFER BY THE PLEDGOR. The Pledgor will not assign, sell
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or otherwise dispose of, grant any option with respect to, or create, incur,
assume or suffer to exist any Lien on any portion of the Pledge Collateral or
any other Securities owned by it, except: (i) Liens in favor of Persons other
than the Noteholders permitted under Section 8.1 of the Note Agreement; and (ii)
Liens created by this Agreement and by any other Pledge Document.
SECTION 13. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR.
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The Pledgor represents and warrants that: (i) it is the legal, record and
beneficial owner of, and has good and marketable title to, the Securities
described on Annex A hereto, subject to no Lien (except the Lien created by this
Agreement); (ii) it has full power, authority and legal right to pledge all such
Securities pursuant to this Agreement; (iii) all the shares of such Securities
have been duly and-validly issued, are fully paid and nonassessable; (iv) this
Agreement (and any other pledge agreement entered into as contemplated by this
Agreement) creates, as security for the Secured Obligations, a valid and
enforceable first priority perfected Lien on all of the Pledge Collateral in
existence on the date hereof, in favor of the Pledgee for the benefit of the
Noteholders, subject to no Lien in favor of any other Person; and (v) other than
registrations and filings described on Annex B hereto (all of which have been
made prior to the date hereof or will be made within the relevant statutory
period) no consent, filing, recording or registration is required to perfect the
Lien purported to be created by this Agreement. The Pledgor covenants and
agrees that: (i) it will defend the. Pledgee's right, title and Lien in and to
the Pledge Collateral against the claims and demands of all Persons; and (ii) it
will take all actions within its powers to ensure
10
that it will have like title to and right to pledge any other property at any
time hereafter pledged to the Pledgee as Pledge Collateral hereunder or under
another pledge agreement.
SECTION 14. PLEDGOR'S OBLIGATIONS ABSOLUTE. The obligations of the
------------------------------
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of, or addition or supplement to or
deletion from, the Note Agreement, any Note or any other instrument or agreement
referred to therein or any assignment or transfer of any thereof; (ii) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of the Note Agreement, any Note or any other such instrument or
agreement or any exercise or nonexercise of any right, remedy, power or
privilege under or in respect of the Note Agreement, any Note or any other such
instrument or agreement; (iii) any furnishing of any additional security to the
Pledgee or any acceptance thereof or any sale, exchange, release, surrender or
realization of or upon any security by the Pledgee; or (iv) any invalidity,
irregularity or unenforceability of all or part of the Secured Obligations or of
any security therefor or the termination or release of any security therefor.
SECTION 15. REGISTRATION. (a) If an Event of Default shall have
------------
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any securities law or laws, or listing
requirements, to be effected with respect to all or any part of the Pledged
Securities, the Pledgor as soon as practicable and at its expense will use its
best efforts to cause such registration to be effected (and be kept effective)
and will use its best efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Pledged Securities, including
without limitation, registration under any applicable securities laws (including
the Securities Act) and appropriate compliance with any other governmental and
listing requirements, provided that the Pledgee shall furnish to the Pledgor
such information regarding the Pledgee as the Pledgor may request in writing and
as shall be required in connection with any such registration, qualification or
compliance. The Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and agrees to indemnify
and hold harmless the Pledgee and all others participating in such registration,
qualification or compliance (or the distribution of such Pledged Securities)
against all losses, liabilities, claims or damages caused by any untrue
statement (or alleged untrue statement) of a material fact contained therein (or
in any related registration statement, notification or the like) or by any
omission (or alleged omission) to state therein (or in any related registration
statement, notification or the like) a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same may have been caused by an untrue statement or omission
based upon information furnished in writing to the Pledgor by the Pledgee
expressly for use therein.
11
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7
such Pledged Securities or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under any applicable securities law or
laws (including the, Securities Act), the Pledgee may sell such Pledged
Securities or part thereof by private sale in accordance with Section 7(a)(iv)
so that such sale may legally be effected without such registration. Without
limiting the generality of the foregoing, in any such event the Pledgee: (i) may
proceed to make such private sale notwithstanding that a registration statement
for the purpose of registering such Pledged Securities or part thereof shall
have been filed under such securities laws; (ii) may approach and negotiate with
a single possible purchaser to effect such sale; and (iii) may restrict such
sale to a purchaser who will represent and agree that such purchaser is
purchasing for its own account, for investment, and not with a view to the
distribution or sale of such Pledged Securities or any part thereof. In the
event of any such sale, the Pledgee shall incur no responsibility or liability
for selling all or any part of the Pledged Securities at a price which the
Pledgee (acting in accordance with instructions from the Required Holder(s)) may
in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
SECTION 16. INDEMNITY. (a) The Pledgor covenants and agrees to pay to
----------
the Pledgee from time to time, and the Pledgee shall be entitled to, reasonable
compensation for all services rendered by it, and the Pledgor will pay or
reimburse the Pledgee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Pledgee in accordance with
any of the provisions of this Agreement or any other Pledge Document (including
the compensation and the expenses and disbursements of its agents and counsel
and of all Persons not regularly in its employ).
(b) The Pledgor also covenants to indemnify the Pledgee (which, for
purposes of this Section 16, shall include its directors, officers, employees
and agents) for, and to hold it harmless from and against, any and all loss,
liability or expense reasonably incurred without gross negligence, willful
misconduct or bad faith on the part of the Pledgee, arising out of or in
connection with the acceptance or administration of this trust, the exercise of
any rights and remedies arising out of this Agreement or any other Pledge
Document, or the performance of any of its duties, including the reasonable
costs and expenses of defending itself against any claim of liability and in
enforcing any provision of this Agreement or any other Pledge Document (except
any liability incurred with gross negligence, willful misconduct or bad faith on
the part of the Pledgee), with interest thereon at a rate equal to that in the
Pledgee's customary banking practice with respect to overdrafts (including the
imposition of interest, funds, wage and administrative fees) from the date the
same shall have been paid until actually reimbursed.
(c) The obligations of the Pledgor under this Section 16 to compensate
and indemnify the Pledgee and to pay or reimburse the Pledgee for reasonable
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction, discharge or other termination of
this Agreement and any other Pledge Document and the resignation or removal of
the Pledgee hereunder.
12
(d) To secure payment of such compensation, reimbursement and
indemnification, the Pledgee shall have a claim and Lien prior to that of any
party, which claim and Lien shall constitute Secured Obligations secured by this
Agreement.
SECTION 17. TERMINATION: RELEASE. Upon:
--------------------
(a) the receipt by the Pledgee of a certificate executed by each
Purchaser certifying that the conditions set forth in Section 5.3 of the Note
Agreement to the release of the Pledge Collateral have been satisfied; or
(b) the date on which the Secured Obligations have been discharged in
full; this Agreement shall terminate, and the Pledgee, at the written request
and expense of the Pledgor, will promptly execute and deliver to the Pledgor a
proper instrument or instruments acknowledging the satisfaction and termination
of this Agreement, and will duly assign, transfer and deliver to the Pledgor,
without recourse and without any representation or warranty, such of the Pledge
Collateral as may be in the possession of the Pledgee and has not theretofore
been sold or otherwise applied or released pursuant to this Agreement, together
with any moneys at the time held by the Pledgee hereunder.
SECTION 18. NOTICES. All notices and other communications hereunder
-------
shall be in the English language, in writing and made at the addresses, in the
manner and with the effect provided in Section 11.10 of the Note Agreement,
provided that, for this purpose, the address of the Pledgee shall be as follows:
The Chase Manhattan Bank, N.A.
Corporate Trust Administration
4 Chase MetroTech Center,
3rd Floor, Brooklyn,
New York 11245
Facsimile: (718) 242-5885 or
(718) 242-3529
or sent to the Pledgee at such other address as it may designate for itself by
notice given in accordance with this Section 18.
SECTION 19. MISCELLANEOUS.
-------------
19.1 Benefit of Agreement. This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and permitted assigns of the parties hereto and shall inure to the benefit of
the Noteholders; provided, however, that the Pledgor may not, without the prior
written consent of the Pledgee (acting on the instructions of all the
Noteholders), assign or transfer any of its right or obligations hereunder. The
Pledgee may transfer, assign or grant its rights hereunder in connection with an
assignment or transfer of all or any part of its interest in and rights under
this Agreement pursuant to the provisions of Sections 10 and 11 of the
Appointment Agreement.
13
19.2 Amendment, Waiver. This Agreement may be changed, waived,
-----------------
discharged or terminated only with the written consent of the Required
Holder(s), the Pledgor and the Pledgee.
19.3 Governing Law. This Agreement is a contract made under the laws
-------------
of the Republic of China and shall for all purposes be construed and enforced
in accordance with, and the rights of parties shall be governed by, the laws of
such country.
19.4 Section Headings, Counterparts. The headings of the several
------------------------------
sections and subsections in this Agreement and the title of this Agreement are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement. This Agreement may be executed
in any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute one and the same instrument.
19.5 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
19.6 Consent to Jurisdiction; Service of Process. For the purposes
-------------------------------------------
of assuring that the Pledgee and the Noteholders may enforce their respective
rights under this Agreement, the Pledgor for itself and its successors and
assigns, hereby irrevocably: (i) agrees that any legal or equitable action, suit
or proceeding against the Pledgor arising out of or relating to this Agreement
or the other Note Documents or any transaction contemplated hereby or the
subject matter of any of the foregoing may be instituted in any court in Taipei,
Taiwan, Republic of China; (ii) waives any objection which it may now or
hereafter have to the venue of any action, suit or proceeding in the Republic of
China or any claim of forum non conveniens in the Republic of China; and (iii)
--------------------
irrevocably submits itself to the non-exclusive jurisdiction of any court of
competent jurisdiction in Taipei, Taiwan, Republic of China for purposes of any
such action, suit or proceeding. Without limiting the foregoing, the Pledgor
hereby appoints, in the case of any such action or proceeding brought in the
courts of or in the Republic of China, Baker & McKenzie, with offices on the
date hereof at 15th Floor, Hung Tai Center, 168 Tun Hwa North Road, Taipei,
Taiwan, Republic of China, to receive, for it and on its behalf, service of
process in the Republic of China with respect thereto, provided the Pledgor may
appoint any other person, reasonably acceptable, to the Pledgee (acting on the
instructions of the Required Holder(s)), with offices in the Republic of China
to replace such agent for service of process upon delivery to the Noteholders of
a reasonably acceptable agreement of such new agent agreeing so to act. The
Pledgor agrees that service of process by means of notice (as provided in
Section 11.10 of the Note Agreement) of any such action, suit or proceeding with
respect to any matter as to which it has submitted to jurisdiction as set forth
in this Section 19.6 shall be taken and held to be valid personal service upon
it.
19.7 No Waiver; Remedies Cumulative. No failure or delay on the part
------------------------------
of the Pledgee or any Noteholder in exercising any right, power or privilege
hereunder or under
14
any other Pledge Document, as the case may be, and no course of dealing between
the Pledgor and the Pledgee or any Noteholder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Pledge Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Pledge Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Pledgee or any Noteholder, as the case may
be, would otherwise have. No notice to or demand on the Pledgor in any case
shall entitle the Pledgor to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Pledgee or any
Noteholder to any other or further action in any circumstances without notice or
demand.
19.8 New Secured Lenders. The parties acknowledge that Section 8.1
-------------------
of the Note Agreement contemplates that the Noteholders may enter into an
intercreditor agreement for the purpose of sharing the Pledge Collateral with
the other parties to such agreement in accordance with the terms thereof. It is
understood that at the time of such event, the Pledgor, the Pledgee and the
Noteholders will investigate whether and how this Agreement may be amended to
accommodate and give effect to such an intercreditor agreement.
15
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected Officers duly authorized as of
the date first above written.
MAGINET CORPORATION
By
--------------------
Name
Title
THE CHASE MANHATTAN BANK, N.A., as
Collateral Agent, pursuant to the
Appointment Agreement, for the benefit of
New York Life Insurance Company, The Mutual Life
Insurance Company of New York, Waslic Company II and
Namtor BVC LP as Noteholders and their respective
successors and permitted assigns
By
-------------------------------
Name
Title
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
MAGINET CORPORATION
By /s/JA Barth
---------------------
Name James A. Barth
Title CFO
THE CHASE MANHATTAN BANK, N.A., as
Collateral Agent, pursuant to the
Appointment Agreement, for the benefit of
New York Life Insurance Company, The Mutual Life
Insurance Company of New York, Waslic Company II and
Namtor BVC LP as Noteholders and their respective
successors and permitted assigns
By
-----------------------
Name
Title
ANNEX A to
PLEDGE AGREEMENT
LIST OF SECURITIES AND PLEDGED SECURITIES
------------------------------------------
PACIFIC PAY VIDEO (TAIWAN) INC.
-------------------------------
Number of Securities Number of Pledged Securities Percentage of Outstanding
(ordinary shares) (ordinary shares) Shares of Capital Stock
----------------- ----------------- -----------------------
Owned by Pledged by
Pledgor Pledgor
------- -------
2,500,000 1,375,000 55% 55%
ANNEX B to
PLEDGE AGREEMENT
Registrations and Filings
-------------------------
None