PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT (this "Pledge Agreement"), dated as of
May 18, 1999, made by PLD Telekom Inc., a Delaware corporation (the "Pledgor"),
as a pledgor hereunder, and Metromedia International Group, Inc., a Delaware
corporation (the "Secured Party").
W I T N E S S E T H
WHEREAS, the Borrower has entered into a Bridge Loan Agreement, dated
as of the date hereof, with the Secured Party (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement" and capitalized terms
not defined herein but defined therein being used herein as therein defined);
WHEREAS, the Pledgor, is the legal and beneficial owner of the shares
of capital stock described on Exhibit A (the "Pledged Shares"); and
WHEREAS, it is a condition precedent to the effectiveness of the Loan
Agreement and the obligation of the Secured Party to make the Loan contemplated
thereby that the Pledgor shall have entered into this Pledge Agreement;
NOW, THEREFORE, in consideration of the premises, the Pledgor hereby
agrees with the Secured Party as follows:
SECTION 1. (a) Pledge Assignment and Grant of Security. The Pledgor
hereby assigns and pledges to the Secured Party, and hereby grants a security
interest to the Secured Party in the following (the "Collateral"):
(i) all of the Pledged Shares;
(ii) all of its rights and privileges with respect to the Pledged
Shares;
(iii) the certificates representing the shares referred to in clause
(i) above (clauses (i) and (ii) the "Pledged Collateral"); and
(iv) all dividends, distributions, income, profits, warrants, rights,
options, cash, instruments and other property or proceeds, from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing, including by way of split-up, spin-off,
reclassification or other corporate rearrangement.
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SECTION 2. Security for Obligations. This Pledge Agreement secures and
the Collateral is secured for, the full and prompt payment when due (whether at
stated maturity, by acceleration or otherwise) of, and the performance of, the
Loan and all other advances, debts, liabilities, obligations, covenants and
duties owing by the Pledgor to the Secured Party pursuant to the Loan Documents,
whether now or hereafter existing and whether for principal, interest, fees,
expenses or otherwise (the "Obligations").
SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, and, if applicable, with
annotation of the pledge on each of the stock certificates and the shareholders'
register of the issuer, each duly notarized, all in form and substance
satisfactory to the Secured Party. The Secured Party shall have the right, at
any time in its discretion and without notice to the Pledgor, to transfer to or
to register in its name or in the name of any of its nominees any or all of the
Pledged Collateral. In addition, the Secured Party shall have the right at any
time to exchange certificates or instruments representing or evidencing any of
the Pledged Collateral for certificates or instruments of smaller or larger
denominations.
SECTION 4. Representations and Warranties. The Pledgor makes the
following representations:
(a) The Pledged Shares (i) have been duly authorized and validly
issued, (ii) are fully paid and non-assessable and (iii) constitute the
percentage of the issued and outstanding shares of stock of the respective
issuers thereof set forth on Exhibit A.
(b) The Pledgor is the legal and beneficial owner of the Pledged Shares
described on Exhibit A, all of which are free and clear of any lien, security
interest, option or other charge or encumbrance except for the lien created by
this Pledge Agreement.
(c) The pledge and grant of the Collateral pursuant to this Pledge
Agreement creates a valid and perfected first priority security interest in the
Collateral in favor of the Secured Party, securing the payment of all of the
Obligations.
(d) Except as set forth on Schedule 1 hereto, no consent,
authorization, approval, or other action by, and no notice to or filing with,
any foreign or domestic governmental authority is required either (i) for the
pledge by the Pledgor of the Collateral owned by the Pledgor pursuant to this
Pledge Agreement or for the due execution, delivery or performance of this
Pledge Agreement by the Pledgor or (ii) for the exercise by the Secured Party of
the voting or other rights
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provided for in this Pledge Agreement or of the remedies in respect of the
Collateral pursuant to this Pledge Agreement, except as may be required in
connection with the disposition of the Pledged Collateral by Laws affecting the
offering and sale of securities generally.
(e) Except as set forth on Schedule 1 hereto, the Pledgor is not and
will not become a party to or its otherwise bound or will become bound by, by
any agreement, other than this Pledge Agreement, which restricts in any manner
whatsoever the rights of any present or future holder of any of the Pledged
Shares.
(f) Upon delivery to the Secured Party of the Pledged Shares and
annotation of the pledge on the stock certificates and on the shareholders'
register of the issuer, the Secured Party will have a valid and perfected
security interest in the Pledged Shares pursuant to Irish law.
SECTION 5. Further Assurances, Etc. (a) The Pledgor agrees that at any
time and from time to time, at the cost and expense of the Pledgor, the Pledgor
will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that the Secured
Party may request, in order to perfect and protect the lien granted or purported
to be granted hereby or to enable the Secured Party to exercise and enforce its
rights and remedies hereunder with respect to any Collateral.
(b) The Pledgor agrees to defend the title to the Collateral and the
lien thereon of the Secured Party against the claim of any other Person and to
maintain and preserve such lien until indefeasible payment in full of all of the
Obligations.
(c) As may be required pursuant to any applicable law (including
without limitation Irish law), (i) the Pledgor shall deliver all certificates or
other documents representing the Pledged Collateral to the Secured Party with
all necessary stock transfer or other powers duly indorsed in blank, and (ii) in
the event Pledgor obtains possession of any other stock certificates, or other
securities or instruments forming a part of the Collateral, Pledgor shall
promptly deliver same to Secured Party together with all necessary stock
transfer or other powers duly indorsed in blank. Prior to any such delivery, any
Collateral in Pledgor's possession shall be held by Pledgor in trust for the
Secured Party.
SECTION 6. Voting Rights; Dividends; Etc.
(a) As long as no Event of Default shall have occurred and be
continuing (or, in the case of subsection (a)(i) of this Section 6, as long as
no notice thereof shall have been given by the Secured Party to the Pledgor):
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(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral owned by
the Pledgor or any part thereof for any purpose not inconsistent with the terms
of this Pledge Agreement or any other Loan Document; provided, however, that the
Pledgor shall not exercise or shall refrain from exercising any such right if,
in the Secured Party's judgment, such actions would have a material adverse
effect on the value of the Pledged Collateral or any part thereof; and provided,
further, that the Pledgor shall give the Secured Party at least five business
days' written notice of the manner in which it intends to exercise, or its
reasons for refraining from exercising, any such right.
(ii) The Pledgor shall be entitled to receive and retain any
and all dividends and other distributions paid in respect of the Pledged
Collateral owned by the Pledgor, other than any and all
(A) dividends and other distributions paid or payable other
than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or payable in cash
in respect of any Pledged Shares in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid- in-surplus, and
(C) cash paid, payable or otherwise distributed in redemption
of, or in exchange for, any Pledged Collateral,
all of which shall be forthwith delivered to the Secured party to hold as
Pledged Collateral and shall, if received by the Pledgor, be received in trust
for the benefit of the Secured Party, be segregated from the other property or
funds of the Pledgor, and be forthwith delivered to the Secured Party as Pledged
Collateral in the same form as so received (with any necessary endorsement).
(iii) The Secured Party shall execute and deliver (or cause to
be executed and delivered) to the Pledgor all such proxies and other instruments
as the Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights which it is entitled to exercise pursuant
to paragraph (i) above and to receive the dividends or other distributions which
it is authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default
(i) Upon notice by the Secured Party to the Pledgor, all
rights of the Pledgor to exercise the voting and other consensual rights which
it would otherwise
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be entitled to exercise pursuant to Section 6(a)(i) above shall cease, and all
such rights shall thereupon become vested in the Secured party who shall
thereupon have the sole right to exercise such voting and other consensual
rights.
(ii) All rights of the Pledgor to receive the dividends and
other distributions which it would otherwise be authorized to receive and retain
pursuant to Section 6(a)(ii) above shall cease, and all such rights shall
thereupon become vested in the Secured Party who shall thereupon have the sole
rights to receive and hold as Pledge Collateral such dividends and other
distributions.
(iii) All dividends and other distributions which are received
by the Pledgor contrary to the provisions of paragraph (ii) of this Section 6(b)
shall be received in trust for the benefit of the Secured Party, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Secured Party as Pledged Collateral in the same form as so received (with
any necessary endorsement).
(iv) The Pledgor shall, if necessary to permit the Secured
Party to exercise the voting and other rights which it may be entitled to
exercise pursuant to Section 6(b)(i) above and to receive all dividends and
distributions which it may be entitled to receive under Section 6(b)(ii) above,
execute and deliver to the Secured Party, from time to time and upon written
notice of the Secured Party, appropriate proxies, dividend payment orders and
other instruments as the Secured Party may reasonably request. The foregoing
shall not in any way limit the Secured Party's power and authority granted
pursuant to Section 8 hereof.
SECTION 7. Transfers and Other Liens. (a) The Pledgor agrees that it
will not, without the prior written consent of the Secured Party (i) sell or
otherwise dispose of, or grant any option or warrant with respect to, any of the
Collateral, or (ii) create or permit to exist any lien, security interest,
option or other charge or encumbrance upon or with respect to any of the
Collateral, except for the lien created pursuant to this Pledge Agreement.
(b) The Pledgor agrees that it will cause each issuer of the
Pledged Shares not to issue any shares of stock or other securities in addition
to or in substitution for the Pledged Shares, except, with the written consent
of the Secured Party, to the Pledgor.
SECTION 8. Secured Party Appointed Attorney-in-Fact and Proxy. The
Pledgor hereby irrevocably constitutes and appoints the Secured Party and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact and proxy with full irrevocable power and authority in
the place and stead of the Pledgor and in the name of the Pledgor or in its own
name, from time to time in the Secured Party's discretion, for the purpose of
carrying out the terms of this Pledge Agreement, to take any and all appropriate
action and to execute and deliver any and all documents and instruments which
the Secured Party may deem
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necessary or advisable to accomplish the purposes of this Pledge Agreement,
including, without limitation, to receive, indorse and collect all instruments
made payable to the Pledgor representing any dividend or other distribution or
payment in respect of the Collateral or any part thereof, to give full discharge
for the same, and to vote or grant any consent in respect of the Pledged Shares
authorized by Section 6(b) hereof. The Pledgor hereby ratifies, to the extent
permitted by law, all that any said attorney shall lawfully do or cause to be
done by virtue hereof. This power, being coupled with an interest, is
irrevocable until the Obligations are indefeasibly paid in full.
SECTION 9. Secured Party May Perform. If the Pledgor fails to perform
any agreement contained herein, the Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of the Secured Party incurred
in connection therewith shall be payable by the Pledgor under Section 12 hereof
and constitute Obligations secured hereby.
SECTION 10. Reasonable Care. The Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which the Secured Party accords its own property, it being understood that
the Secured Party shall not have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not the Secured Party has
or is deemed to have knowledge of any such matter, (ii) taking any necessary
steps to preserve rights against any person with respect to any Collateral or
(iii) any loss or damage to any of the Collateral or for any change in the value
thereof by reason of any good faith act or omission of Secured Party or its
agents.
SECTION 11. Remedies upon Default. If any Event of Default shall have
occurred and be continuing:
(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 after
default under the Uniform Commercial Code (the "Code") in effect in the State of
New York at that time, 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 office of
the Secured Party or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Secured Party may deem commercially reasonable. The
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least 10 days' notice to the Pledgor of the time and place of any public sale or
the time after which any 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
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the time and placed fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. The Pledgor hereby
waives any claims against the Secured Party arising by reason of the fact that
the price at which any Collateral may have been sold at such a private sale was
less than the price which 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) If the Secured Party shall determine to exercise its right
to sell all or any of the Pledged Collateral pursuant to this Section 11, the
Pledgor agrees that, upon request of the Secured Party, the Pledgor will, at its
own cost and expense:
(i) execute and deliver, and use its best efforts to
cause each issuer of the Pledged Shares and its directors, officers and/or
partners to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts and things, as may be necessary or, in the
opinion of the Secured Party, necessary or advisable to register such Pledged
Shares under the provisions of the Securities Act of 1933, as from time to time
amended (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 or cause to be
made all amendments and supplements thereto and to the related prospectus 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 ("SEC") applicable
thereto;
(ii) use its best efforts to qualify the Pledged
Collateral under the state securities or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Pledged Collateral, as
requested by the Secured Party;
(iii) make available to its security holders, as soon
as practicable, an earning statement which will satisfy the provisions of
Section 11(a) of the Securities Act;
(iv) obtain all approvals, authorizations and
consents as may be required under applicable law and regulations; and
(v) do or cause to be done all such other acts and
things as may be necessary to make such sale of the Pledged Collateral or any
part thereof valid and binding and in compliance with applicable law (including
without limitation under Irish law).
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by the Secured Party by reason of the failure by
the Pledgor to perform any of the covenants in this Section 11 and,
consequently, agrees
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that, if the Pledgor shall fail to perform any of such covenants, it shall pay,
as liquidated damages and not as a penalty, an amount equal to the value of the
Collateral on the date the Secured Party shall demand compliance with this
Section.
(c) The Pledgor recognizes that, by reason of the
aforementioned requirements and certain prohibitions contained in the Securities
Act and applicable state securities laws, the Secured Party may, at its option,
elect not to require the Pledgor to register all or any part of the Pledged
Collateral and may therefore be compelled, with respect to any sale of all or
any part of the Pledged Collateral, to limit purchasers to those who will agree,
among other things, to acquire such securities for their own account, for
investment, and not with a view of the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such sale may result in prices and
other terms less favorable to the seller than if such sale were a public sale
without such restrictions and, notwithstanding such circumstances, agrees that
any such sale shall be deemed to have been made in a commercially reasonable
manner. The Secured Party shall be under no obligation to delay the sale of any
of the Pledged Collateral for the period of time necessary to permit the Pledgor
to register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if the Pledgor would agree to do so.
(d) If the Secured Party determines to exercise its right to
sell any or all of the Pledged Collateral, upon written request, the Pledgor
shall, and shall use best efforts to cause the issuers of the Pledged Shares to,
from time to time, furnish to the Secured Party all such information as the
Secured Party may request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by the Secured
Party as exempt transactions under the Act and rules of the SEC thereunder, as
the same are from time to time in effect.
(e) Any cash held by the Secured Party as Collateral and all
cash proceeds received by the Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
shall be applied by the Secured Party:
First, to the payment of the costs and expenses of such sale,
including, without limitation, reasonable expenses of the Secured Party and its
agents including the fees and expenses of its counsel, and all expenses,
liabilities and advances made or incurred by the Secured Party in connection
therewith or pursuant to Section 9 hereof;
Next, to the Secured Party for the payment in full of the
Obligations; and
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Finally, after payment in full of all of the Obligations to
the payment to the Pledgor or its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same as a court of competent jurisdiction may
direct.
SECTION 12. Expenses. The Pledgor will upon demand pay to the Secured
Party the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees and expenses of the Secured Party's counsel and
of any experts and agents, which the Secured Party may incur in connection with
(i) the administration of this Pledge Agreement, (ii) the custody or
preservation of, sale of, collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights and remedies
hereunder of the Secured Party, or (iv) the failure of the Pledgor to perform or
observe any of the provisions hereof.
SECTION 13. Security Interest Absolute. All rights of the Secured Party
and security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provision of
this Pledge Agreement, the Loan Agreement, the Note or any other Loan Document
or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, or any increase in the amount of, all or any of the
Obligations, or any other amendment or waiver of any term of, or any consent to
any departure from any requirement of, this Pledge Agreement, the Loan
Agreement, the Note or any other Loan Documents;
(iii) any exchange, release or non-perfection of any lien on
any other collateral, or any release or amendment or waiver of any term of any
guaranty of, or consent to departure from any requirement of any guaranty of,
all or any of the Obligations; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, a borrowing or a pledgor.
SECTION 14. Amendments, Etc. No amendment or waiver of any provision of
this Pledge Agreement nor consent to any departure by the Pledgor herefrom shall
in any event be effective unless the same shall be in writing and signed by the
Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 15. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing and shall be delivered to the
addresses set forth in, and deemed delivered as set forth in, the Loan
Agreement.
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SECTION 16. Continuing Security Interest Transfer of Notes or
Obligations. This Pledge Agreement shall create a continuing security interest
in the Collateral and shall (i) remain in full force and effect until
indefeasible payment in full of the Obligations, (ii) be binding upon the
Pledgor, the Pledgor's heirs, legal representatives, successors and assigns and
(iii) inure, together with the rights and remedies of the Secured Party
hereunder, to the benefit of and be enforceable by the Secured Party and its
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (iii), the Secured Party may assign or otherwise
transfer any note held by it or Obligation owing to it to any other Person, and
such other Person shall thereupon become vested with all the rights in respect
thereof granted to the Secured Party herein or otherwise with respect to such of
the notes or Obligations so transferred or assigned. Upon the indefeasible
payment in full of the Obligations, the Pledgor shall be entitled to the return,
upon its request and at its expense, of such of the Collateral owned by the
Pledgor as shall not have been sold or otherwise applied pursuant to the terms
hereof.
SECTION 17. Governing Law; Severability; Terms. This Pledge Agreement
shall be governed by, and be construed and interpreted in accordance with, the
law of the State of New York without regard to conflicts of law principles
thereof except as otherwise required by Irish law and except to the extent that
remedies provided by laws of any jurisdiction other than New York are governed
by the laws of such jurisdiction. Wherever possible, each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity and without
invalidating the remaining provisions of this Pledge Agreement. Unless otherwise
defined herein or in the Agreement, terms defined in Article 9 of the Uniform
Commercial Code as in effect in the State of New York are used herein as therein
defined.
Section 18. Waiver of Jury Trial. The Pledgor waives any right it may
have to a trial by jury in respect of any litigation based on, or arising out
of, under or in connection with, this Pledge Agreement or any other Loan
Document, or any course of conduct, course of dealing, verbal or written
statement or other action of the Pledgor or the Secured Party.
Section 19. Section Titles. The Section titles contained in this Pledge
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not part of this Pledge Agreement.
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IN WITNESS WHEREOF, the undersigned, as Pledgor hereunder, has duly
executed and delivered the Pledge Agreement on the date first above written.
PLD TELEKOM INC.
By: /s/ Xxxxx X.X. Xxxx
-------------------
Name: Xxxxx X.X. Xxxx
Title: Chairman, President and Chief
Executive Officer
Accepted and Acknowledged:
METROMEDIA INTERNATIONAL GROUP, INC. as Secured Party
By: /s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer,
Executive Vice President,
Treasurer and Director
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Exhibit A
---------
115 Ordinary Shares of Technocom Limited.
13
Schedule 1
Required Consents, etc. (Section 4(d))
-----------------------
Travelers Revolving Credit Agreement
Indentures, as amended, pursuant to which the 14% Senior Discount Notes and the
9% Convertible Subordinated Notes have been issued
Revolving Credit Agreement with News America Incorporated
Put and Call Option Agreements, as amended, with Plicom Limited and
Elite International Limited
Agreements affecting shares (Section 4(e))
---------------------------
Subscription and Shareholders Agreement relating to Technocom, as amended
