Exhibit 10.12


 


 


DATED    June 24,  2004


 


 


BURDALE
FINANCIAL LIMITED


 


 


and


 


 


VIEWSONIC
EUROPE LIMITED


 


 












PLEDGE
AGREEMENT












 


 


Nabarro
Nathanson


Lacon
House


Theobald’s
Road


London  WC1X 8RW


 


Tel:  020
7524 6000


 

















 


PLEDGE AGREEMENT


 


DATE JUNE 24, 2004


 


PARTIES


 


(1)                        BURDALE FINANCIAL LIMITED of
53 Queen Anne Street, London, W1G 9HP (the “Pledgee”); and


 


(2)                        VIEWSONIC EUROPE LIMITED
(Company registration No. 03131161), a company organised and existing under the
laws of England (the “Pledgor”).


 


RECITALS


 


(A)                    The Pledgor has entered into
an agreement dated 24 June 2004 (the “Credit
Agreement”) under the terms of which the Pledgee has agreed to make
available to the Pledgor a facility of up to twenty million US dollars
(US$20,000,000).


 


(B)                      The Pledgor has agreed to
execute this Pledge Agreement by way of security for its obligations under the
Credit Agreement.


 


(C)                      This Pledge Agreement relates
to all of the Pledgor’s present and future inventory/trading stock and other
moveable assets located in the Netherlands, including computer monitors and all
other inventory (together, the “Goods”).


 


(D)                     With respect to any Goods,
from time to time stored in each of the Warehouses  (as defined below), Pledgor and Pledgee will enter into a third
party pledgeholder agreement with Furness Logistics Moerdijk B.V. (the “Third Party”)
thus converting the non-possessory right of pledge created under this Agreement
into a possessory right of pledge.


 


IT IS AGREED AS
FOLLOWS:


 


1.                            DEFINITION


 


1.1                                          In this pledge agreement the term “Warehouses”
means the warehouses, operated by Furness Logistics Moerdijk B.V., a private
limited liability company (besloten vennootschap met beperkte aansprakelijkheid),
incorporated and existing under the laws of the Netherlands and having its
registered seat at Moerdijk, located at:


 


(i)   Tradeboulevard 4, Havennummer 528, 4761 RL
Moerdijk; and


 


(ii)  other premises of the Third Party located
at  Moerdijk


 


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2.                            AGREEMENT TO PLEDGE


 


2.1                                          The Pledgor and the Pledgee hereby agree,
in order to secure to the Pledgee the prompt payment in full of the Secured
Obligations (as defined below), that the Pledgor will create a first ranking
non-possessory right of pledge on the Goods in the manner set forth in Clause
2.


 


2.2                                          If and to the extent at any time it shall
appear that any right of pledge created hereby or pursuant hereto shall not
have the ranking as referred to above, the Pledgor and the Pledgee confirm, and
- to the extent necessary - hereby further agree, that a valid right of pledge
has or shall nevertheless have been created. In that case the right of pledge
shall have the highest possible rank.


 


3.                            RIGHT OF NON-POSSESSORY PLEDGE


 


3.1                                          As a further security for the due and
punctual payment of the amounts owing pursuant to the Credit Agreement (the “Secured Obligations”) , the Pledgor hereby
grants a first ranking non-possessory right of pledge (bezitloos pandrecht eerste in rang)
or, as the case may be, the Pledgor grants in advance a first ranking
non-possessory right of pledge (bezitloos pandrecht eerste in rang) on the
Goods to the Pledgee and the Pledgee hereby accepts such right of pledge. With
respect to any Goods located at the Warehouses (the “Warehouse Goods”) this
non-possessory right of pledge shall be converted into a possessory right of
pledge in the manner provided for in Clause 3.


 


3.2                                          The pledge is vested, at the option of the
Pledgee, by way of registering this deed or by way of notarial deed. The
Pledgee is authorised to register this deed. The Pledgor grants the Pledgee an
irrevocable power of attorney tovest the pledge by way of notarial deed, even
if the deed has been registered, in which case the Pledgee is authorised to
represent the Pledgor.


 


4.                            POSSESSORY  PLEDGE


 


4.1                                          The right of pledge on the Warehouse Goods
shall be converted into a first ranking possessory right of pledge by bringing
the Warehouse Goods in the control (feitelijke macht) of the Third Party. This
will be done:


 


4.1.1                                                    With respect to the Goods that
are present in the Warehouses at the time of execution of the Third Party
Pledgeholder Agreement by the Third Party, by the agreement of the Third Party
to hold such Warehouse Goods pursuant to the Third Party Pledgeholder Agreement
as a third party within the meaning of article 3:236 paragraph 1 of the
Dutch Civil Code; and


 


4.1.2                                                    With respect to any Goods
which arrive at the Warehouses after the execution of the Third Party
Pledgeholder Agreement by the Third Party, by the acceptance by the Third Party
of such Warehouse Goods into its custody pursuant to the Third Party
Pledgeholder Agreement as a third party within the meaning of
article 3:236 paragraph 1 of the Dutch Civil Code.


 


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4.2                                          The first ranking possessory right of pledge
on the Warehouse Goods shall be governed by the terms and conditions of this
Agreement and, upon the execution by the parties thereto, the Third Party
Pledgeholder Agreement. In case of any inconsistency between this agreement and
the Third Party Pledgeholder Agreement, the terms of the former shall prevail.


 


4.3                                          For the avoidance of doubt,  if and to the extent the Third Party
Pledgeholder Agreement and the mechanisms set out in this Agreement fail to
create a valid possessory right of pledge on behalf of the Pledgee, the Goods
located at the Warehouses will still be and stay subject to the non-possessory
right of pledge created pursuant to this Agreement.


 


5.                            DELIVERY OF GOODS TO WAREHOUSES


 


5.1                                          The Pledgor undertakes to procure delivery
of any and all Goods, destined to be destributed in or from the Netherlands to
any of the Warehouses, listed in clause 1.1.


 


6.                            WARRANTIES


 


6.1                                          The Pledgor represents and warrants, to and
agrees with the Pledgee:


 


6.1.1                                                    that it has the full ownership
of and legal title to the present Goods;


 


6.1.2                                                    that it has the full power and
authority (is
volledig beschikkingsbevoegd) to pledge the present Goods;


 


6.1.3                                                    that the present Goods are not
subject to any attachments or limited property rights (in Dutch: beperkte rechten) in favour of third
parties; and


 


6.1.4                                                    that there are no rights of
retention on or against the Goods (other than those notified to the Pledgee in
accordance with the Credit Agreement).


 


6.2                                          The Pledgor hereby covenants and agrees
that the representations and warranties set forth in Subclause 6.1 shall be
deemed made by it with respect to each of the future Goods in each instance,
and upon the moment, when the Pledgor becomes the owner of such Goods.


 


6.3                                          The Pledgor further declares that it has
not previously or in advance transferred or created limited property rights on
or against the Goods, either in whole or in part, to or in favour of any third
parties.


 


7.                            RESERVED RIGHTS


 


7.1                                          The Pledgor shall ensure in so far as
possible that, upon its acquisition of any of the Goods, the transferor of such
Goods shall not reserve title to any of the Goods or any limited property
rights in respect of any of the Goods. 
The Pledgor shall notify the Pledgee of any reservation of title
affecting the Goods in accordance with the Credit Agreement.


 


7.2                                          If and to the extent that the acquisition
by the Pledgor of the full and unencumbered ownership of any of the Goods is
subject to the Pledgor (further) performing any act or


 


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making
any payment, the Pledgor hereby undertakes to perform such act or to make such
payment when due.


 


8.                            DUTY OF CARE


 


The
Pledgor shall take good care of the Goods and must take all measures necessary
or desired by the Pledgee. The Pledgor may not perform or neglect to perform
any acts which may prejudice the interests of the Pledgee. If the Pledgor is in
default with respect to any of these obligations, the Pledgee may, at the
expense of the Pledgor, do all that it deems necessary, without prejudice to any
of the Pledgee’s other rights.


 


9.                            SPECIFICATION


 


9.1                                          The Pledgor shall, upon first request
thereto of the Pledgee, immediately provide the Pledgee with a specification of
the Goods and/or of the location of the Goods.


 


9.2                                          The Pledgee or any persons appointed by the
Pledgee shall at any time be allowed to enter the places where the Goods are
located, in order to inspect and check the state of the Goods.


 


10.                     OTHER DOCUMENTS


 


10.1                                    The Pledgor hereby agrees that, to the
extent the Goods are or shall be represented by documents of title or shipping
documents, such as warehouse receipts and bills of lading or other commercial
documents, the right of pledge created hereby shall encompass such documents.


 


10.2                                    The Pledgor shall, upon first demand of the
Pledgee, deliver such documents in so far as not yet pledged hereunder, thus
creating a right pledge in favour of the Pledgee, endorsed if necessary to
effect such pledge, to the Pledgee.


 


11.                     INSURANCE


 


11.1                                    The Pledgor shall, for its own account,
insure and keep the Goods insured under normal conditions. The Pledgor shall
provide the Pledgee with the insurance policies at the Pledgee’s first request.
In the event the Pledgor fails to provide the Pledgee with the insurance
policies, the Pledgee shall be authorised to insure the Goods itself for the
account of the Pledgor in such manner and under such conditions as the Pledgee
deems appropriate.


 


11.2                                    In the event the Pledgor becomes aware of a
right of pledge on the insurance proceeds as referred to in Article 3:229
of the Netherlands Civil Code coming into existence, the Pledgor shall notify
the insurance company and the Pledgee without delay.


 


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12.                     SALE OF THE GOODS


 


The
Pledgor may not sell, transfer, lease or otherwise grant possession of the
Goods to third parties, without permission of the Pledgee. The Pledgee hereby
grants the Pledgor its permission to transfer the Goods in the ordinary course
of business for a commercially sound and arm’s length price and subject to the
terms of the Third Party Pledgeholder Agreement, entered into between (i) the
Pledgee (ii) the Pledgor and (iii) the Third Party on.....June  2004 .
The Pledgee can revoke its permission at any time by giving written notice of
the revocation to the Pledgor. This permission automatically terminates in case
of the occurrence of an Event of Default.The pledge shall remain vested until
the transfer and delivery of the Goods has taken place.


 


13.                     NOTIFICATION


 


13.1                                    The Pledgor shall promptly inform the
Pledgee of any event or the receipt of any notice which may be of relevance for
the position of the Pledgee as pledgee hereunder or which may affect the
fulfilment by the Pledgor of any of its covenants or obligations hereunder, or
may effect its ability to carry on its business or the security created hereby,
including events when another person seeks possession of any of the Goods,
claims a right of retention with respect to any of the Goods, or when the
Pledgor’s bankruptcy, suspension of payments, or liquidation is ordered. In
each such situation the Pledgor shall inform such other person about the right
of pledge created hereby.


 


13.2                                    The Pledgor shall promptly inform the
Pledgee if a situation arises whereby the Pledgor is forced to inform the authorities
who collect social security premiums or taxes that it is not or no longer in a
position to pay its debts in respect of these social security premiums or taxes
when the same fall due.


 


13.3                                    The Pledgor shall not pledge or encumber
with other limited property rights any of the Goods without the prior written
approval of the Pledgee.


 


14.                     POSSESSION


 


The
Pledgee is at all times entitled to take possession of the Goods or part
thereof, either directly or by ordering a third party to take possession.


 


15.                     COLLECTION BY PLEDGOR


 


15.1                                    In the event the Pledgor is in default
hereunder or with respect to the Obligations, the Pledgee shall be entitled to
sell the Goods and to take recourse against the proceeds.


 


15.2                                    The Pledgee shall be under no obligation to
notify the Pledgor or any other person who has any limited property right or
who has levied an attachment on or against the Goods or any party thereof of
its intention to sell the Goods.


 


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15.3                                    The Pledgor hereby renounces its right to
request the President of the District Court to order that the Goods be sold in
a manner which differs from the public auction, described in Article 3:250
of the Netherlands Civil code.


 


16.                     CONTINUING AND INDEPENDENT SECURITY


 


16.1                                    This Agreement and the security hereby
created shall be:


 


16.1.1                                              a continuing security for the
Obligations and in particular, but without limitation, shall not be, nor be
considered as satisfied by any intermediate payment or satisfaction on account of
any of the moneys and liabilities hereby secured or any settlement of accounts
between the Pledgor or any other party that has assumed liability for, and/or
provided security in respect of, the Obligations; and


 


16.1.2                                              in addition to, and
independent of and shall not operate so as to prejudice or affect or merge in
any other security which the Pledgee may hold at any time for the Obligations.


 


16.2                                    Where any discharge (whether in respect of
this Agreement, any other security for the Obligations or otherwise) is made in
whole or in part or any arrangement is made on the faith of any payment,
security or other disposition which is subsequently avoided or must be restored
on bankruptcy, liquidation or otherwise without limitation, the liability of
the Pledgor under this Agreement and the security interests hereby created
shall continue as if there had been no discharge or arrangement. The Pledgee
shall be entitled to concede or compromise any claim that any such payment,
security or other disposition is liable to avoidance or repayment.


 


16.3                                    To the extent possible under the laws of
The Netherlands, the security created hereby shall not be prejudiced, affected
or diminished by any act, omission or circumstance which, but for this
provision, might operate to release, discharge or otherwise exonerate the
Pledgor from its liability to the Pledgee in respect of any of the Obligations
or affect such obligations, including without limitation:


 


16.3.1                                              any extension or postponement
of the time of payment or other indulgence granted to or any acceptance of
partial payment by or any settlement, composition or adjustment with the
Pledgor or any other person;


 


16.3.2                                              any, amendment or variation of
or extension of the due date for performance of any term of the Credit Agreement
or any other agreement in connection with the Obligations or any increase,
reduction, exchange, acceleration, renewal, surrender, release or loss of or
failure to perfect any of the Obligations or any security therefore or any
non-presentment or non-observance of any formality in respect of any
instruments;


 


16.3.3                                              the transfer by the Pledgee of
any of its rights, benefits or obligations under the Credit Agreement or any
other agreement to which it is a party to another person or entity;


 


16.3.4                                              any irregularity,
unenforceability or invalidity of any (but not all) of the Secured Obligations
or of the obligations of any other person or any present or future law or order
of any government or authority (whether of right or in fact) purporting to
reduce or otherwise affect any of such obligations to the intent that the
Pledgor’s obligations under this Agreement shall remain in full force and this
Agreement and the term “Secured


 


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Obligations”
shall be construed accordingly as if there were no such irregularity,
unenforceability, invalidity, law or order;


 


16.3.5                                              the bankruptcy or liquidation
or any change in the name or constitution of the Pledgor, or any other person;
or


 


16.3.6                                              the taking, variation, compromise,
renewal or release of or refusal or neglect to perfect or enforce any rights,
remedies or securities against or granted by the Pledgor or any other person.


 


To the
extent possible under the laws of The Netherlands, the term “Secured
Obligations” shall include all items which would be Secured Obligations but for
the liquidation, absence of legal personality or incapacity of the Pledgor or
any statute of limitation.


 


17.                     COSTS


 


All
reasonable costs, charges and expenses, including the fees and expenses of
counsel, which the Pledgee may incur in connection with the exercise of any of
the rights of pledge under this Agreement shall be borne by the Pledgor.


 


18.                     POWERS OF ATTORNEY


 


The
Pledgor hereby grants irrevocable and unconditional power of attorney to the
Pledgee to execute and deliver any documents, instructions, agreements or other
instruments on its behalf and to do everything on its behalf which the Pledgee
considers in its sole and absolute discretion necessary or advisable for the
purpose of effecting and or perfecting the right of pledge created pursuant to
this Agreement.


 


19.                     CURRENCY INDEMNITY


 


If any
sum due from the Pledgor under this Agreement or any order or judgment given or
made in relation hereto has to be converted from the currency (the first
currency) in which the same is payable hereunder or


 


under
such order or judgment into another currency (the second currency) for the
purpose of:


 


19.1                                    making or filing a claim or proof against
the Pledgor;


 


19.2                                    obtaining an order or judgment in any court
or other tribunal;


 


19.3                                    enforcing any order or judgment given or
made in relation hereto applying the same in satisfaction of any of the
Obligations,


 


the
Pledgor shall as a separate and independent obligation indemnify and hold
harmless the Pledgee from and against any loss suffered as a result of any
discrepancy between:


 


19.3.1                                              the rate of exchange used for
such purpose to convert the sum in question from the first currency into the
second currency; and


 


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19.3.2                                              the rate or rates of exchange
at which the Pledgee may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of such order, judgment, claim or proof or
for application in satisfaction of the Obligations.


 


20.                     TAXES, DEDUCTIONS AND WITHHOLDINGS


 


All
payments made by the Pledgor under this Agreement shall be made free and clear
of and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any governmental authority, excluding net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on the Pledgee as a result of a present or former connection between the
Pledgee and the jurisdiction of the governmental authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Pledgee having executed, delivered
or performed its obligations or received a payment under, or enforced, the
Credit Agreement). If any such non-excluded taxes, levies, imposts, duties,
charges, fees deductions or withholdings “Non-Excluded
Taxes” are required to be withheld from any amounts payable to the
Pledgee hereunder the amounts so payable to the Pledgee shall be increased to
the extent necessary to yield to the Pledgee (after payment of all Non-Excluded
Taxes) a net sum equal to the sum which it would have received and retained had
no such deduction or withholding been made or required to be made. Whenever any
Non-Excluded Taxes are payable by the Pledgor, as promptly as possible
thereafter the Pledgor shall send to the Pledgee a certified copy of an
original official receipt received by the Pledgor showing payment thereof. If
the Pledgor fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Pledgee the required receipts or
other required documentary evidence, the Pledgor shall indemnify the Pledgee
for the incremental taxes, interest or penalties that may become payable by the
Pledgee as a result of any such failure. The agreements in this
subsection shall survive the termination of this Agreement and the payment
of all amounts payable hereunderRESCISSION


 


The
Pledgor hereby waives its right to rescind (ontbinden)
or, to the extent allowed under Dutch law, have nullified (vernietigen) the legal acts (rechtshandelingen) represented by this
Agreement which waiver is hereby accepted by the Pledgee.


 


21.                     POWER TO ASSIGN


 


The
Pledgee shall be entitled to assign or transfer the whole or any part of the
benefit of this Agreement to any assignee or transferee of all or part of its
rights and obligations under the Credit Agreement and the Pledgor hereby gives
its irrevocable consent and continuing agreement to any such assignment or
transfer hereunder. The Pledgee shall be entitled to disclose any information
concerning the Pledgor to any successor or proposed successor or to any person
who may otherwise enter into contractual relations with the Pledgee in relation
to this Agreement.


 


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22.                     LAW AND JURISDICTION


 


22.1                                    This Agreement shall be governed by and
construed in accordance with the laws of The Netherlands.


 


22.2                                    The competent court in Amsterdam, The
Netherlands, has non-exclusive jurisdiction to settle any disputes which may
arise in connection with this Agreement.


 


22.3                                    The Pledgor irrevocably waives any
objections on the ground of venue or forum non conveniens or any similar
grounds.


 


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IN WITNESS whereof the parties hereto have executed this Pledge
Agreement this 24 June 2004.


 


 


	
  BURDALE
  FINANCIAL LIMITED

  
	
   

  
	
  By:

  	
  /s/ Nigel B.
  Hogg

  	
   

  
	
   

  
	
  Name: Nigel
  B. Hogg

  
	
   

  
	
  Title:  Director

  



 


 


	
  VIEWSONIC
  EUROPE LIMITED

  
	
   

  
	
  By:

  	
  /s/
  Christopher Franey

  	
   

  
	
   

  
	
  Name:
  Christoper Franey

  
	
   

  
	
  Title:
  President

  



 


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