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EXHIBIT 10.22
EXECUTION COPY
ESCROW AND STOCK PLEDGE AGREEMENT
THIS ESCROW AND STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of
April 26, 2000, is entered into between MRV Communications, Inc., a Delaware
corporation (the "Secured Party") and those certain Selling Shareholders listed
on Schedule A hereto represented by Keh-xxxxx Xxx (individually, a "Pledgor" and
collectively, the "Pledgors"), and the law firm of Xxxxx & XxXxxxxx, Taipei
office having Xxxxx X. Xxxx as its representative ("Escrow Agent"), with
reference to the following:
WHEREAS, the Pledgors have purchased and will collectively beneficially own
Five Hundred Fourteen Thousand, Two Hundred and Eighty Six (514,286) shares of
the common stock of the Secured Party (the "MRV Shares") pursuant to that
certain Stock Purchase Agreement (the "Stock Purchase Agreement"), dated April
26, 2000, by and among Quantum Optech Inc., a corporation organized and existing
under the laws of the Republic of China ("QOI"), the Secured Party, and certain
shareholders of QOI;
WHEREAS, in connection with such purchase of MRV Shares and pursuant to the
Stock Purchase Agreement, the Pledgors made certain representations, warranties
and covenants to Secured Party and incurred certain indemnification obligations
with respect to Secured Party;
WHEREAS, as a condition for the Secured Party to enter into and to
consummate the transactions contemplated by the Stock Purchase Agreement, the
Pledgors desire to place the MRV Shares in escrow and pledge, grant, transfer,
and assign to the Secured Party a security interest in the Collateral (as
hereinafter defined) to secure the Secured Obligations (as hereinafter defined),
as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations, and warranties set forth herein and for other good and valuable
consideration, the parties hereto agree as follows:
1. Definitions and Construction.
(a) Definitions. All initially capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed thereto in the Stock Purchase
Agreement. As used in this Agreement:
"Escrow Agent" shall have the meaning ascribed thereto in Section 2 of this
Agreement.
"Agreement" shall mean this Escrow and Stock Pledge Agreement.
"Collateral" shall mean the Pledged Shares and the Proceeds, collectively.
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"Lien" shall mean any lien, mortgage, pledge, assignment (including any
assignment of rights to receive payments of money), security interest, charge,
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, or any agreement to give
any security interest).
"Pledged Shares" shall mean all of the shares described in the recitals to this
Agreement and any other shares identified as Pledged Shares on Schedule A
attached hereto (or any addendum thereto) in an amount totaling 171,429 shares.
"Pledgor" shall have the meaning ascribed thereto in the preamble to this
Agreement.
"Proceeds" shall mean all proceeds (including proceeds of proceeds) of the
Pledged Shares including all: (a) rights, benefits, distributions, premiums,
profits, dividends, interest, instruments, documents of title, accounts,
contract rights, inventory, equipment, general intangibles, deposit accounts,
chattel paper, and other property, from time to time received, receivable, or
otherwise distributed in respect of or in exchange for, or as a replacement of
or a substitution for, any of the Pledged Shares or proceeds thereof (including
any stock, or other securities or instruments, excluding cash, issued after any
recapitalization, readjustment, reclassification, merger or consolidation with
respect to the Secured Party and any claims against financial intermediaries
under Section 8-313(2) of the California Commercial Code (the "Code") or
otherwise); (b) "proceeds," as such term is used in Section 9-306 of the Code;
(c) proceeds of any insurance, indemnity, warranty, or guaranty (including
guaranties of delivery) payable from time to time with respect to any of the
Pledged Shares or proceeds thereof; (d) payments, excluding cash, (in any form
whatsoever) made or due and payable to the Pledgors or any individual Pledgor
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Pledged Shares or
proceeds thereof; and (e) other amounts from time to time paid or payable,
excluding cash, under or in connection with any of the Pledged Shares or
proceeds thereof.
"Secured Obligations" shall mean all liabilities, obligations, or undertakings
owing by the Pledgors or any individual Pledgor to the Secured Party of any kind
or description arising out of or outstanding under, advanced or issued pursuant
to, or evidenced by this Agreement or Section 10 of the Stock Purchase
Agreement, irrespective of whether for the payment of money, whether direct or
indirect, absolute or contingent, due or to become due, voluntary or
involuntary, whether now existing or hereafter arising, and including all
interest (including interest that accrues after the filing of a case under the
Bankruptcy Code) and any and all costs, fees (including attorneys fees), and
expenses which the Pledgors are required to pay pursuant to any of the
foregoing, by law, or otherwise.
"Secured Party" shall have the meaning ascribed thereto in the preamble to this
Agreement, together with its successors or assigns.
"Securities Act" shall have the meaning ascribed thereto in Section 9(c) of this
Agreement.
"Stock Purchase Agreement" shall have the meaning ascribed thereto in the
recitals to this Agreement.
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(b) Construction.
(i) Unless the context of this Agreement clearly requires otherwise, references
to the plural include the singular and to the singular include the plural, the
part includes the whole, the term "including" is not limiting, and the term "or"
has, except where otherwise indicated, the inclusive meaning represented by the
phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and other
similar terms in this Agreement refer to this Agreement as a whole and not
exclusively to any particular provision of this Agreement. Article, section,
subsection, exhibit, and schedule references are to this Agreement unless
otherwise specified. All of the exhibits or schedules attached to this Agreement
shall be deemed incorporated herein by reference. Any reference to this
Agreement or to the Stock Purchase Agreement includes any and all alterations,
amendments, restatements, extensions, modifications, renewals, or supplements
thereto or thereof, as applicable.
(ii) Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against the Secured Party or the Pledgors, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by the parties and their respective counsel and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of the parties hereto.
(iii) In the event of any direct conflict between the express terms and
provisions of this Agreement and of the Stock Purchase Agreement, the terms and
provisions of the Stock Purchase Agreement shall control.
2. Escrow. At the Closing, MRV shall transfer the Escrowed Shares to the
Selling Shareholders and then the Selling Shareholders shall deliver the
Escrowed Shares directly to the law firm of Xxxxx and XxXxxxxx, Taipei Office
having Xxxxx X. Xxxx as the representative (the "Escrow Agent"). The Pledgor and
the Secured Party agree that the Escrow Agent shall act according to the sole
instruction given by the Secured Party in accordance with the Stock Purchase
Agreement and this Agreement. The Escrow Agent agrees to keep the Escrowed
Shares in a security vault or safe deposit box, and will act with respect to
such Escrowed Shares pursuant to the terms of this Agreement and the Stock
Purchase Agreement.
3. Pledge. As security for the prompt payment and performance of the
Secured Obligations in full by the Pledgors when due (including amounts that
would become due but for the operation of the provisions of the Bankruptcy
Code), the Pledgors hereby pledge, grant, transfer, and assign to the Secured
Party a security interest in all of the Pledgors' right, title, and interest in
and to the Collateral. The Pledgors will deliver to the Escrow Agent a Power of
Attorney and a Stock Assignment, as attached in the Schedules C and D hereof,
respectively, upon execution of this Agreement.
4. Delivery and Registration of Collateral.
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(a) All certificates or instruments representing or evidencing the Collateral
shall be promptly delivered by the Pledgors to the Escrow Agent, as the Secured
Party's sole and exclusive agent, who shall hold such certificates or
instruments and the shares represented thereby for the sole and exclusive
benefit of the Secured Party. Such certificates or instruments shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Secured Party.
(b) In the event the that Secured Party becomes entitled to payment pursuant to
Section 10 of the Stock Purchase Agreement, the Secured Party shall have the
unilateral right to cause the Escrow Agent to transfer to the Secured Party in
the name of the Secured Party or any of its nominees any or all of the
Collateral. In addition, the Secured Party shall have the right at any time to
exchange certificates or instruments representing or evidencing the Collateral
for certificates or instruments of smaller or larger denominations.
(c) Any and all Collateral (including dividends, interest, and other
distributions, excluding cash) at any time received or held by the Pledgors
shall be so received or held in trust for the Secured Party, shall be segregated
from other funds and property of the Pledgor and shall be forthwith delivered to
the Escrow Agent in the same form as so received or held, with any necessary
endorsements.
(d) If at any time and from time to time any Collateral consists of an
uncertificated security or a security in book entry form, then the Pledgors
shall immediately cause the Secured Party's security interest thereon to be
perfected in accordance with applicable law.
(e) The Escrow Agent may take any action, including without limitation the
transfer of title and possession of the Collateral to MRV, not specified in this
Agreement upon receipt by the Escrow Agent of MRV's instruction to deal with the
situations relating to, including without limitation, any disputes among the
parties in connection with the Stock Purchase Agreement and this Agreement or
claims by any third party directly or indirectly, formally or informally, filed,
occurred or made known to MRV or the Escrow Agent.
5. Voting Rights and Dividends.
(a) The Escrow Agent shall have the exclusive right to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof based upon the Secured Party's reasonable instructions and in accordance
with this Agreement and the Stock Purchase Agreement and shall be entitled to
receive and retain in escrow any dividends or distributions, excluding cash,
paid with respect to the Collateral.
(b) In the event that the Escrow Agent shall deliver the Collateral to the
Secured Party, all rights of the Escrow Agent to exercise the voting and other
consensual rights or receive and retain dividends or distributions, excluding
cash, that it would otherwise be entitled to exercise or receive and retain, as
applicable pursuant to Section 5(a) hereof, shall cease, and all such rights
shall thereupon become vested in the Secured Party, who shall thereupon have
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the sole right to exercise such voting or other consensual rights and to receive
and retain such dividends and distributions, excluding cash. The Pledgors shall
execute and deliver (or cause to be executed and delivered) to the Secured Party
all such proxies and other instruments as the Secured Party may reasonably
request for the purpose of enabling the Secured Party to exercise the voting and
other rights which it is entitled to exercise and to receive the dividends and
distributions that it is entitled to receive and retain pursuant to the
preceding sentence.
6. Representations and Warranties. The Pledgors represent, warrant, and
covenant as follows:
(a) The Pledgors have taken all steps it deems necessary or appropriate to be
informed on a continuing basis of changes or potential changes affecting the
Collateral (including rights of conversion and exchange, rights to subscribe,
payment of dividends, reorganizations or recapitalization, tender offers and
voting rights), and the Pledgors agree that the Secured Party, in its capacity
as the Secured Party only, shall have no responsibility or liability for
informing the Pledgors of any such changes or potential changes or for taking
any action or omitting to take any action with respect thereto;
(b) All information herein or hereafter supplied to the Secured Party by or on
behalf of the Pledgors in writing with respect to the Collateral is, or in the
case of information hereafter supplied will be, accurate and complete in all
material respects;
(c) The Pledgors are and will be the sole legal and beneficial owners of the
Collateral (including the Pledged Shares and all other Collateral acquired by
the Pledgors after the date hereof) free and clear of any adverse claim, Lien,
or other right, title, or interest of any party;
(d) This Agreement, and the delivery to the Escrow Agent of the Pledged Shares
representing the Collateral, creates a valid, perfected, and first priority
security interest in one hundred percent (100%) of the Pledged Shares in favor
of Secured Party securing payment of the Secured Obligations, and all actions
necessary to achieve such perfection (as defined in the Uniform Commercial Code)
have been duly taken;
(e) Schedule A to this Agreement is true and correct and complete in all
material respects; without limiting the generality of the foregoing, all the
Pledged Shares are in certificated form, and, except to the extent registered in
the name of Secured Party or its nominee pursuant to the provisions of this
Agreement, are registered in the name of each Pledgor, as applicable;
(f) There are no presently existing Proceeds owned by any Pledgor, except as set
forth in Schedule B hereto; and
(g) To the best knowledge of the Pledgors, the pledge of the Collateral pursuant
to this Agreement does not violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
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7. Further Assurances.
(a) The Pledgors agree that from time to time, at the expense of the Pledgors,
the Pledgors will promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or reasonably
desirable, or that the Secured Party may request, in order to perfect and
protect any security interest granted or purported to be granted hereby to the
Secured Party or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Pledgor will: (i) at the request of the
Secured Party, xxxx conspicuously each of its records pertaining to the
Collateral with a legend, in form and substance reasonably satisfactory to
Secured Party, indicating that such Collateral is subject to the security
interest granted hereby; (ii) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or reasonably desirable, or as the Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby; (iii) allow inspection of the Collateral by the Secured Party or
persons designated by the Secured Party; and (iv) appear in and defend any
action or proceeding that may affect the Pledgor's title to or the Secured
Party's security interest in the Collateral, except for any litigation at the
cost of the Secured Party.
(b) The Pledgors hereby authorize the Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of any Pledgor where permitted
by law. A carbon, photographic, or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) Each Pledgor will furnish to the Secured Party, upon the request of the
Secured Party: (i) a certificate executed by an authorized officer of such
Pledgor, and dated as of the date of delivery to Secured Party, itemizing in
such detail as the Secured Party may request, the Collateral which, as of the
date of such certificate, has been delivered to the Secured Party by such
Pledgor pursuant to the provisions of this Agreement; and (ii) such statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may request.
8. Covenants of Pledgors. Each Pledgor shall:
(a) Perform each and every covenant in the Stock Purchase Agreement and related
agreements as applicable to the Pledgor; and
(b) At all times keep at least one complete set of its records concerning
substantially all of the Collateral at such the Pledgor's Primary Address as set
forth in Schedule A hereto, and not change the location of such Primary Address
or such records without giving the Secured Party at least thirty (30) days prior
written notice thereof.
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9. Remedies. In the event that the Secured Party becomes entitled to
payment pursuant to Section 10 of the Stock Purchase Agreement and the Pledgors
shall fail to remit such payment, then Secured Party shall be entitled to
exercise the following rights and remedies:
(a) the Secured Party may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Code
(irrespective of whether the Code applies to the affected items of Collateral),
and the Secured Party may also without notice (except as specified below) sell
the Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker's board or at any of the Secured Party's offices
or elsewhere, for cash, on credit or for future delivery, at such time or times
and at such price or prices and upon such other terms as the Secured Party may
deem commercially reasonable, irrespective of the impact of any such sales on
the market price of the Collateral. To the maximum extent permitted by
applicable law, the Secured Party may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply all or any part of
the Secured Obligations as a credit on account of the purchase price of any
Collateral payable at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives (to the extent permitted by law) all
rights of redemption, stay, or appraisal that it now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted. Each Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) calendar days notice to such Pledgor of the
time and place of any public sale or the time after which a private sale is to
be made shall constitute reasonable notification. The Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Secured Party may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. To the maximum extent permitted by law, each Pledgor hereby waives
any claims against the Secured Party arising because the price at which any
Collateral may have been sold at such a private sale was less than the price
that might have been obtained at a public sale, even if the Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree.
(b) Each Pledgor hereby agrees that any sale or other disposition of the
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, or other financial institutions in California in
disposing of property similar to the Collateral shall be deemed to be
commercially reasonable.
(c) Each Pledgor hereby acknowledges that the sale by the Secured Party of any
Collateral pursuant to the terms hereof in compliance with the Securities Act of
1933 as now in effect or as hereafter amended, or any similar statute hereafter
adopted with similar purpose or effect (the "Securities Act"), as well as
applicable "Blue Sky" laws or other state securities laws may require strict
limitations as to the manner in which the Secured Party or any subsequent
transferee of the Collateral may dispose thereof. Each Pledgor acknowledges and
agrees that in order to protect the Secured Party's interest it may be necessary
to sell the Collateral at a
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price less than the maximum price attainable if a sale were delayed or were made
in another manner, such as a public offering under the Securities Act. The
Pledgors have no objection to sale in such a manner and agrees that the Secured
Party shall have no obligation to obtain the maximum possible price for the
Collateral. Without limiting the generality of the foregoing, the Pledgor agrees
that, in the event that the Secured Party becomes entitled to payment under
Section 10 of the Stock Purchase Agreement, the Secured Party may, subject to
applicable law, from time to time attempt to sell all or any part of the
Collateral by a private placement, restricting the bidders and prospective
purchasers to those who will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, the Secured Party may
solicit offers to buy the Collateral or any part thereof for cash, from a
limited number of investors deemed by the Secured Party, in its reasonable
judgment, to be institutional investors or other responsible parties who might
be interested in purchasing the Collateral. If the Secured Party shall solicit
such offers, then the acceptance by the Secured Party of one of the offers shall
be deemed to be a commercially reasonable method of disposition of the
Collateral.
(d) If the Secured Party shall determine to exercise its right to sell all or
any portion of the Collateral pursuant to this Section, each Pledgor agrees
that, upon request of the Secured Party, such Pledgor will, at its own expense:
(i) use its best efforts to execute and deliver all such instruments and
documents, and to do or cause to be done all such other acts and things,
as may be necessary or, in the reasonable opinion of the Secured Party,
advisable to register such Collateral under the provisions of the
Securities Act, and to cause the registration statement relating thereto
to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectuses which,
in the opinion of the Secured Party, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto;
(ii) use its best efforts to qualify the Collateral under the state
securities laws or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by the
Secured Party;
(iii) execute and deliver to any person, entity or governmental authority
as the Secured Party may choose, any and all documents and writings which,
in the Secured Party's reasonable judgment, may be necessary or
appropriate for approval, or be required by, any regulatory authority
located in any city, county, state or country where the Pledgor or the
issuers engage in business, in order to transfer or to more effectively
transfer the Pledged Shares or otherwise enforce the Secured Party's
rights hereunder; and
(iv) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
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The Pledgors acknowledge that there is no adequate remedy at law for failure by
it to comply with the provisions of this Section and that such failure would not
be adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
(e) EACH PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW: (i)
ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME
SECURED PARTY DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN THIS
SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS OR
MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING
OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION(a) OF THIS
SECTION, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.
10. Duties of Secured Party. The powers conferred on the Secured Party
hereunder are solely to protect its interests in the Collateral and shall not
impose on it any duty to exercise such powers. Except as provided in Section
9-207 of the Code, the Secured Party shall have no duty with respect to the
Collateral or any responsibility for taking any necessary steps to preserve
rights against any other persons with respect to any Collateral.
11. CHOICE OF LAW AND VENUE. THE VALIDITY OF THIS AGREEMENT, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED CALIFORNIA OR, AT THE
SOLE OPTION OF SECURED PARTY, IN ANY OTHER COURT IN WHICH SECURED PARTY SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. THE PLEDGORS AND SECURED PARTY EACH
WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENCE OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11.
12. Amendments; Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by any Pledgor herefrom shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Secured Party to exercise, and no delay in exercising any right under this
Agreement, the Stock Purchase Agreement or any other related
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agreement, or otherwise with respect to any of the Secured Obligations, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under this Agreement, the Stock Purchase Agreement or otherwise with
respect to any of the Secured Obligations preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided for in this
Agreement or otherwise with respect to any of the Secured Obligations are
cumulative and not exclusive of any remedies provided by law.
13. Notices. Unless otherwise specifically provided herein, any notice of
other communication herein required or permitted to be given shall be in writing
and shall be delivered in the manner set forth in the Stock Purchase Agreement.
14. Continuing Security Interest. This Agreement shall create a continuing
security interest in the Collateral and shall: (i) remain in full force and
effect until the termination of or indefeasible payment in full of the Secured
Obligations under the Stock Purchase Agreement; (ii) be binding upon each
Pledgor and such Pledgor's successors and assigns; and (iii) inure to the
benefit of the Secured Party and its successors, transferees, and assigns. Upon
the termination of the Secured Obligations, the security interests granted
herein to Secured Party shall automatically terminate and all rights to the
Collateral shall revert to the Pledgors, as applicable. Upon any such
termination, the Secured Party will, at each Pledgor's expense, execute and
deliver to each Pledgor such documents as such Pledgor shall reasonably request
to evidence such termination. Such documents shall be prepared by such Pledgor
and shall be in form and substance reasonably satisfactory to the Secured Party.
15. Security Interest Absolute. To the maximum extent permitted by law, all
rights of the Secured Party, all security interests hereunder, and all
obligations of the Pledgors hereunder, shall be absolute and unconditional
irrespective of:
(a) any change in the time, manner, or place of payment of, or in any other term
of, all or any of the Secured Obligations, or any other amendment or waiver of
or any consent to any departure from the Stock Purchase Agreement or any other
agreement or instrument relating thereto to the extent such other amendment or
waiver does not affect the Secured Obligations;
(b) any other circumstances that might otherwise constitute a defense available
to, or a discharge of, the Pledgor.
To the maximum extent permitted by law, the Pledgors hereby waive any right to
require the Secured Party to: (A) proceed against or exhaust any security held
from the Pledgors; or (B) pursue any other remedy in the Secured Party's power
whatsoever.
16. Headings. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement or be given any substantive effect.
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17. Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement.
19. Waiver of Marshaling. Each of the Pledgors and the Secured Party
acknowledges and agrees that in exercising any rights under or with respect to
the Collateral: (i) the Secured Party is under no obligation to marshal any
Collateral; (ii) may, in its absolute discretion, realize upon the Collateral in
any order and in any manner it so reasonably elects; and (iii) may, in its
absolute discretion, apply the proceeds of any or all of the Collateral to the
Secured Obligations in any order and in any manner it so reasonably elects. The
Pledgors and the Secured Party waive any right to require the marshaling of any
of the Collateral.
20. Escrow Fees. The Escrow Agent shall be entitled to compensation (the
"Escrow Fees") in the amount equivalent to 0.3% of the value of the Escrowed
Shares (equaling $70.00 per share) on the date of Closing as defined in Stock
Purchase Agreement for the services to be rendered by it hereunder and in
addition the Escrow Agent shall be reimbursed for all losses, liabilities or
expenses, including reasonable attorneys' fees ("Reimbursement"), incurred or
made by it arising out of or in connection with its entering into this Agreement
or carrying out its duties hereunder, including the costs and expenses of
defending itself against any claim of liability in the premises. The Escrow Fees
shall be equally borne by the Pledgors and the Secured Party. The Reimbursement
shall be borne by the Pledgors when it is incurred and may be applied against
the Escrowed Shares or other securities, instruments or considerations in
replacement of or substitution of the Escrowed Shares as the case may be. For
avoidance of doubt, the Escrow Agent Fees only cover the services of taking
custody of the Escrowed Shares.
21. Miscellaneous.
(a) The Secured Party and the Pledgors hereby agree to jointly and severally
indemnify and hold the Escrow Agent harmless from and against any losses, costs,
claims, or actions arising from or incurred in connection with the escrow
agent's performance of its obligations hereunder unless such losses, costs,
claims or actions are incurred as a result of the Escrow Agent's willful
misconduct or gross negligence.
(b) The Escrow Agent may rely and shall be protected in acting or refraining
from acting upon any written notice, instruction or request furnished to it
hereunder and believed by it to
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be genuine and to have been signed or presented by the proper party or parties.
The Escrow Agent may conclusively presume that the undersigned representative of
any party hereto which is a legal entity other than a natural person has full
power and authority to instruct the Escrow Agent on behalf of that party unless
written notice to the contrary is delivered to the Escrow Agent.
(c) The Escrow Agent shall not be liable for any action taken by it in good
faith and believed by it to be authorized or within the rights or powers
conferred upon it by this Agreement, and may consult with counsel of its own
choice and shall have full and complete authorization and protection for any
action taken or suffered by it hereunder in good faith and in accordance with
the opinion of such counsel.
(d) The Escrow Agent may resign and be discharged from its duties or obligations
hereunder by giving notice in writing of such resignation specifying a date upon
which such resignation shall take effect, whereupon a successor Escrow Agent
shall be appointed by the Secured Party. In the event that Escrow Agent resigns,
there shall not be any additional Escrow Fees to be paid by the Pledgors to the
successor escrow agent.
IN WITNESS WHEREOF, the Pledgors and the Secured Party have caused this
Agreement to be duly executed and delivered by their officers thereunto duly
authorized as of the date first written above.
MRV COMMUNICATIONS, INC. XXXXX & XXXXXXXX, TAIPEI AS ESCROW AGENT
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxx
------------------------ ------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxx Xxxx
Title: C.F.O. Title: Senior Partner
PLEDGORS
By: /s/ Keh-xxxxx Xxx
------------------------
Name: Keh-xxxxx Xxx
Title: Authorized Representative
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SCHEDULE A
TO
ESCROW AND STOCK PLEDGE AGREEMENT
Pledgor:
PLEDGED SHARES
FORMER NAME, IF PLEDGOR'S PLEDGOR'S
NUMBER OF CERTIFICATE ANY, IN WHICH PERCENTAGE PRIMARY
PLEDGOR SHARES CLASS NUMBER(S) CERTIFICATE ISSUED OWNERSHIP ADDRESS
------- --------- ----- ----------- ------------------ --------- ---------
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SCHEDULE B
TO
ESCROW AND STOCK PLEDGE AGREEMENT
Existing Proceeds:
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SCHEDULE C
POWER OF ATTORNEY
I, _____________, on behalf of the Pledgors, hereby irrevocably constitute and
appoint Xxxxx X. Xxxx of Xxxxx & XxXxxxxx, Attorneys-at-Law, to be my attorney
in the Republic of China, with full power of substitution and revocation, to
hold up to One-Hundred-Seventy-One Thousand, Four-Hundred Twenty-Nine (171,429)
shares, with all dividends, rights and interests accruing to or accrue upon the
same, of MRV Communications Inc., which are registered in the name of the
Pledgors on the shareholders' roster of MRV; and to vote, transfer, assign,
sell, pledge or otherwise dispose of the Collateral during the term of the
Escrow and Stock Pledge Agreement and in accordance with the provisions of the
Escrow and Stock Pledge Agreement.
.
IN WITNESS WHEREOF, I have executed this Power of Attorney on the __th day of
April, 2000.
Selling Shareholders
--------------------------------
Name: Keh-xxxxx Xxx
Title: Authorized Representative
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SCHEDULE D
STOCK ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
________________________________________________________________________________
__________________________________Shares of the Common Stock ___________________
Stock of MRV Communications, Inc. standing in __________________________ name(s)
on the books of said Corporation represented by Certificate(s) No. _____________
herewith and do hereby irrevocable constitute and appoint_______________________
_______________________________ attorney to transfer the said stock on the books
of the within name corporation with full power of substitution.
Date:
---------------------
-----------------------------
[Name of Pledgor]
Signature Guaranteed:
-----------------------------
[Name of Witness]
