PLEDGE AGREEMENT on SHARES in CENTRAL EUROPEAN MEDIA ENTERPRISES N.V. Dated March 10, 2008 among Central European Media Enterprises Ltd. as the Pledgor The Bank of New York as the Pledgee and Central European Media Enterprises N.V. as the Company
Exhibit
10.4
on
SHARES
in
CENTRAL
EUROPEAN MEDIA ENTERPRISES N.V.
Dated
March 10, 2008
among
as the
Pledgor
The
Bank of New York
as the
Pledgee
and
Central
European Media Enterprises N.V.
as the
Company
THIS PLEDGE AGREEMENT is made
this tenth day of March, 2008 (this “Pledge Agreement”), by and
among Central European Media
Enterprises Ltd., a company duly organized and existing under the laws of
Bermuda, with its registered office at Clarendon House, 2 Church Street,
Xxxxxxxx, XX CX Bermuda, as the “Pledgor”, The Bank of New York, a New York
corporation, having its registered office at Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX,
Xxxxxx Xxxxxxx, as the “Pledgee”, and Central European Media Enterprises
N.V., a public company with limited liability (naamloze vennootschap)
incorporated under the laws of the Netherlands Antilles, having its corporate
seat in Curaçao, the Netherlands Antilles, and its registered address at
Schottegatweg Xxxx 00, Xxxxxxx, xxx Xxxxxxxxxxx Antilles and registered in the
commercial register of the chamber of Commerce and Industries of Curaçao under
number 67248 (the “Company”),
WHEREAS, the Pledgor has
entered into that certain indenture with inter alia the Pledgor as
Issuer and the Pledgee in its capacity as Security Trustee, dated March 10, 2008
(as amended, novated, restated, supplemented or otherwise modified from time to
time, including without limitation, by way of increase of the facilities made
available thereunder) (the “Indenture”);
WHEREAS, upon incorporation on
July 14, 1994, the Pledgor acquired the legal and beneficial title to 60
ordinary shares in the capital of the Company, and pursuant to the issuance of
one share on September 19, 1994, the Pledgor acquired the legal and beneficial
title to 1 ordinary share in the capital of the Company, each with a nominal
value of USD 100,- and collectively constituting the entire issued and
outstanding share capital of the Company (the “Present Shares”);
WHEREAS, to secure the
performance of the Secured Obligations, as defined hereafter, the Pledgor and
the Pledgee wish to hereby establish a fifth priority right of pledge in respect
of the Present Shares as well as in respect of any and all future shares in the capital
of the Company to be acquired (either through issue, purchase, distribution or
otherwise) by the Pledgor after the date of this Pledge Agreement (the “Future Shares”, together with
the Present Shares hereafter where appropriate also referred to as the “Shares”), under the following
terms.
NOW, THEREFORE, in
consideration of the premises and mutual covenants set forth herein, the parties
hereto agree as follows:
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1.
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Definitions
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Unless
otherwise defined herein, or the context requires otherwise, terms used in this
Pledge Agreement, including its preamble and recitals, shall have the meaning as
defined in the Indenture. In addition, the following terms used in this Pledge
Agreement, including its preamble and recitals, shall have the following
meanings:
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(a)
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an
“Event of
Default”: each Event of Default as defined in Section 6.01 of the
Indenture;
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(b)
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an
"Event of Statutory
Default": each event where the Pledgor is in default ("verzuim"), as defined
in Article 6:81 of the NACC, in the performance of one or more of the
Secured Obligations,
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(c)
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“Existing Rights of
Pledge": means the rights of pledge on the Shares (as defined
hereinafter) created in favor of (i) the predecessor of the Pledgee
(JPMorgan Chase Bank, N.A., London Branch), on the fifth day of May two
thousand five pursuant to that certain pledge agreement dated the fifth
day of May two thousand five among inter alia JPMorgan
Chase Bank, N.A., London Branch, the Pledgor and the Company, (ii)
European Bank for Reconstruction and Development on the twenty-first day
of July two thousand six pursuant to that certain pledge agreement dated
the twenty-first day of July two thousand six among European Bank for
Reconstruction and Development, the Pledgor and the Company, (iii) the
Pledgee on the sixteenth day of May two thousand seven pursuant to that
certain pledge agreement dated the sixteenth day of May two thousand seven
among inter alia
the Pledgee, the Pledgor and the Company, and (iv) European Bank
for Reconstruction and Development on the twenty-second day of August two
thousand seven pursuant to that certain pledge agreement dated the
twenty-second day of August two thousand seven among inter alia European
Bank for Reconstruction and Development, the Pledgor and the
Company;
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(d)
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the
“2005 Indenture”:
the indenture dated as of the fifth day of May two thousand five, by and
among the Pledgor as issuer, CME Media Enterprises B.V., and the Company
as Guarantors, and JPMorgan Chase Bank, N.A., London Branch, as Security
Trustee, Trustee, Transfer Agent and Principal Paying Agent, and JPMorgan
Luxembourg S.A. as Registrar and Luxembourg Transfer and Paying
Agent;
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(e)
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the
“2007 Indenture”:
the indenture dated as of the sixteenth day of May two thousand seven, by
and among the Pledgor as issuer, CME Media Enterprises B.V., and the
Company as Guarantors, BNY Corporate Trustee Services Limited as Trustee
and The Bank of New York as Security Trustee, The Bank of New York, as
Transfer Agent and Principal Paying Agent, and The Bank of New York
(Luxembourg) S.A. as Registrar and Luxembourg Transfer Agent and
Luxembourg Paying Agent;
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(f)
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the
"Loan Agreement":
means the loan agreement dated the twenty-first day of July two thousand
six between the Pledgor, as borrower and the European Bank for
Reconstruction and Development, as
lender;
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(g)
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the
“Parallel Debt”:
shall mean the Parallel Debt as defined in Section 12.09 of the
Indenture;
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(h)
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the
“Right of Pledge”:
the fifth priority right of pledge in respect of the Shares established in
this Pledge Agreement;
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(i)
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the
“Secured
Obligations”: any and all present and future obligations and
liabilities (whether actual or contingent and whether owed jointly or
severally or in any other capacity whatsoever) of each of the Pledgor, the
Company and CME Media Enterprises B.V. to pay an amount of money (tot voldoening van een
geldsom) to the Pledgee under the Parallel Debt or the Indenture
and the Notes (as defined in the Indenture), each as amended from time to
time, as well as all payment obligations of the Pledgor to the Pledgee
under this deed, and
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(j)
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a
“Voting Event”:
means the occurrence of an Event of Statutory Default of which the Pledgee
has given notice to the Pledgor and the
Company.
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2.
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Right
of Pledge
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2.1
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As
security for the Secured Obligations, the Pledgor hereby agrees to grant
and hereby grants to the Pledgee a disclosed fifth priority right of
pledge (openbaar
pandrecht in vijfde rang) in respect of the Shares, which Right of
Pledge the Pledgee agrees to accept and hereby so
accepts.
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2.2
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The
Right of Pledge is one and indivisible (één en ondeelbaar).
The Right of Pledge shall not be affected by one or more but not all of
the Secured Obligations being discharged or the Secured Obligations being
amended. The Right of Pledge includes a right of pledge in respect of all
accessory rights (afhankelijke rechten)
and all ancillary rights (nevenrechten) attached
to the Shares.
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2.3
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The
Pledgor shall, if and when required by the Pledgee, execute such further
encumbrances and assurances, and do all such acts and things as the
Pledgee may reasonably require over or in relation to the Shares to
maintain, perfect or protect the security rights created by this Pledge
Agreement over the Shares, such that this Pledge Agreement will continue
to constitute a fifth priority right of pledge of the Shares, until
payment in full of the Secured Obligations or termination of this Pledge
Agreement in accordance with Section 8 of this Pledge
Agreement.
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2.4
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By
co-signing this Pledge Agreement, the Company acknowledges the Right of
Pledge created by this Pledge Agreement, as provided in article 2:113 of
the Netherlands Antilles Civil Code (“NACC”).
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2.5
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The
Company shall register in the Company’s shareholders’ register that the
Shares are encumbered with a fifth priority right of pledge in favor of
the Pledgee and that, subject to Section 3 of this Pledge Agreement, the
Pledgee has the Voting Rights.
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3.
Voting rights
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3.1.
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The
voting and other consensual rights and similar rights or powers attaching
to the Shares or any part thereof (the “Voting Rights”) are
hereby transferred by the Pledgor to the Pledgee under the condition
precedent (opschortende
voorwaarde) of (i) the occurrence of a Voting Event and (ii) the
termination and/or release of the Existing Rights of Pledge. By means of
execution of this Pledge Agreement the Pledgor also hereby adopts a
resolution in capacity of sole shareholder of the Present Shares to
approve the granting of the Right of Pledge and the transfer of the Voting
Rights. Until the occurrence of a Voting Event and subject to the
termination and/or release of the Existing Rights of Pledge, the Pledgor
may exercise any and all such Voting Rights,
save:
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(a)
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that
no such exercise may violate or be inconsistent with the express terms or
purpose of this Pledge Agreement, the Existing Rights of Pledge, the 2005
Indenture, the Loan Agreement, the 2007 Indenture and/or the
Indenture;
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(b)
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that
no such exercise may have the effect of impairing the position or
interests of the Pledgee; and
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(c)
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as
set out in Section 3.2 below.
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3.2.
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Upon
the occurrence of a Voting Event:
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(a)
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any
and all rights of the Pledgor to exercise the Voting Rights which it is
entitled to exercise pursuant to Section 3.1 above shall cease
automatically without further notice to the Pledgor being required and the
Pledgee shall have the sole and exclusive right and authority to exercise
such Voting Rights and shall be entitled to exercise or refrain from
exercising such rights in such manner as the Pledgee may in its absolute
discretion deem fit; and
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(b)
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the
Pledgee shall immediately be entitled, at any time at its sole discretion,
to effect the resignation of and/or to dismiss the directors of the
Company or any of them, and to appoint new directors of the Company and
the Pledgor hereby undertakes to do all things and execute all documents
and instruments as may be required by the Pledgee to ensure the
effectiveness of any such resignations, dismissals or
appointments.
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3.3.
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By
signing this Pledge Agreement, the Company confirms (and the other parties
agree) that a written notice from the Pledgee to the Company stating that
a Voting Event has occurred, shall be sufficient for the Company to accept
the Pledgee as being exclusively entitled to such rights and other powers
which it is entitled to exercise pursuant to this Section 3 upon the
occurrence of such a Voting Event and subject to the termination and/or
release of the Existing Rights of
Pledge.
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3.4.
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In
addition and without prejudice to the obligations of the Pledgor pursuant
to the Pledge Agreement, each of the Pledgor and the Company agrees to
notify the Pledgee immediately of any event or circumstance which could
reasonably be of importance to the Pledgee with a view to the preservation
and exercise of the Pledgee’s rights under or pursuant to this Pledge
Agreement, such as (without limitation) the filing of a petition for the
bankruptcy of the Pledgor, the filing of a petition for a moratorium of
payments by the Pledgor, attachment or garnishment of the Pledgor’s
assets, the termination of any one of the Pledgor’s commercial activities
or its dissolution.
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3.5.
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Upon
the occurrence of a Voting Event and subject to the termination and/or
release of the Existing Rights of Pledge, the Pledgee shall have the
rights which the law attributes to holders of depositary receipts, issued
with a company’s co-operation, of shares in its
capital.
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3.6.
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During
the term of the Right of Pledge, the foregoing provisions of this Section
3 with respect to the Voting Rights on the Present Shares also apply to
the Future Shares. In addition, the Pledgor and the Pledgee shall, if
reasonably practicable, at the time of or, if not practicable at such
time, as soon as reasonably practicable, after the acquisition of such
Future Shares, arrange that the attribution of the Voting Rights attaching
thereto shall be ratified if that is reasonably deemed necessary, in the
Pledgee's sole discretion, to enable the Pledgee to exercise such Voting
Rights upon the occurrence of the condition precedent as provided in
Section 3.1 of this Pledge Agreement. If such ratification is, at the
Pledgee's sole discretion, not obtained in time, the Pledgor shall fully
co-operate in the taking of such other reasonable measures relating to
such transfer of voting rights as are proposed by the
Pledgee.
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4.
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Authority
to collect
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4.1
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The
authority to collect dividends, distributions from reserves, repayments of
capital and all other distributions and payments in any form, which, at
any time, during the term of the Right of Pledge, become payable on any
one or more of the Shares, shall accrue to the Pledgee, as provided for in
Section 3:246 of the NACC, subject to the termination and/or release of
the Existing Rights of Pledge.
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4.2
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In
derogation of the provisions of paragraph 1, the Pledgee hereby grants
approval to the Pledgor to collect all dividends, distributions from
reserves, repayments of capital and all other distributions and payments
in any form, which, at any time, during the term of the Right of Pledge,
become payable on any one or more of the Shares, subject to the
termination and/or release of the Existing Rights of
Pledge.
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4.3
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The
Pledgee may terminate the authorization mentioned in paragraph 2 upon
occurrence of an Event of Default only. Termination of the authorization
is made by written statement to that effect, by the Pledgee to the
Pledgor. The Pledgee shall inform the Company of the termination in
writing.
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5.
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Representations
and warranties
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5.1
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The
Pledgor hereby represents and warrants that the following is true and
correct on the date of this Pledge
Agreement:
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a.
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the
Company is a public company with limited liability (naamloze vennootschap),
legally established under the laws of the Netherlands Antilles by notarial
deed drawn up before Xxxxxx Xxxxxxxxxxx Xxxxxxxx Xxxxxx, civil law notary
officiating in Curaçao, on the fourteenth day of July nineteen hundred and
ninety-four. A copy of the present articles of association is attached to
this Pledge Agreement (Annex I). The
Company is currently registered with the commercial register of the
Chamber of Commerce and Industries of Curaçao under number 67248. A copy
of the extract from the commercial register is attached to this Pledge
Agreement (Annex
II);
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b.
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the
Company has not been dissolved, and no resolution has been adopted to
dissolve the Company, nor has any request therefore been filed, nor has
any notice by the Chamber of Commerce, as described in Section 2:25 of the
NACC, been received. The Company has not been declared bankrupt nor has a
suspension of payment been granted, nor have any requests thereto been
filed;
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c.
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the
shareholders' register is accurate and completely up to date. A copy of
the shareholders' register is attached to this Pledge Agreement (Annex
III);
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d.
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the
entire issued share capital of the Company consists of the Present Shares;
all of the Present Shares are fully paid-up; the Company has not granted
any rights to subscribe for shares in its capital which have not yet been
exercised;
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e.
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the
Pledgor has a complete and unencumbered right to the Present Shares, with
the exception of the Existing Rights of
Pledge;
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f.
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the
Present Shares are not subject to either (limited) rights or obligations
to transfer to third parties or claims based on contracts of any nature
and have not been encumbered with any attachments, except for the Existing
Rights of Pledge;
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g.
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the
Pledgor is authorized to establish the Right of
Pledge;
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h.
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all
resolutions and approvals, required for establishing the Right of Pledge,
have been adopted and received
respectively;
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i.
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the
obligations of the Pledgor and the Company vis-à-vis the Pledgee,
resulting from the Indenture and this Pledge Agreement respectively, are
lawful obligations of the Pledgor and the Company respectively and are
legally enforceable against the Pledgor and the Company
respectively;
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j.
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the
assumption and performance by the Pledgor and the Company respectively of
the obligations vis-à-vis the Pledgee resulting from the Indenture and
this Pledge Agreement are not contrary to any provision of applicable law
or any agreement to which the Pledgor or the Company is a party, or by
which the Pledgor or the Company is bound in any other
way;
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k.
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the
Pledgor has provided the Pledgee with all information and data with
respect to the Present Shares which the Pledgor reasonably believes to be
of importance for the Pledgee;
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5.2.
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Furthermore,
the Pledgor hereby declares:
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the
Pledgor has acquired the Present Shares as follows:
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as
for the numbers 1 through 60, pursuant to the notarial deed of
incorporation, drawn up before Xxxxxx Xxxxxxxxxxx Xxxxxxxx Xxxxxx, civil
law notary officiating in Curaçao, on the fourteenth day of July nineteen
hundred and ninety-four.
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-
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as
for the number 61, pursuant to the issuance of one share on the nineteenth
day of September nineteen hundred and
ninety-four.
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6.
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Undertakings
by the Pledgor
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6.1.
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During
the term of the Right of Pledge, the Pledgor shall not alienate, pledge or
in any other way encumber the Shares or the rights to acquire Shares
without the prior written consent of the Pledgee, except for the
encumbrance in accordance with Section 12.01 of the
Indenture.
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6.2.
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The
Pledgor shall as far as possible provide that the Shares and/or rights to
acquire Shares he acquires after execution of this Pledge Agreement shall
be pledgeable, and that the transferability thereof shall not be more
cumbersome than the transferability of the
Shares.
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6.3.
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Whenever
the Pledgor is aware that the Company is involved in the preparation of a
legal merger or demerger as a result of which the Company would cease to
exist, the Pledgor shall inform the Pledgee thereof in writing
immediately.
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6.4.
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Whenever
the Pledgor is aware that actions have been taken for the winding-up,
dissolution, administration, bankruptcy, suspension of payments or
reorganization of the Company, the Pledgor shall inform the Pledgee
thereof in writing
immediately.
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7.
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Exercise
of the Right of Pledge.
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7.1.
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Upon
the occurrence of an Event of Statutory Default, the Pledgee has, with due
regard to the relevant provisions of the Existing Rights of Pledge, the
right to exercise all rights and powers which the Pledgee has under the
laws of the Netherlands Antilles as holder of a right of pledge over the
Shares and the Pledgee shall be authorized to sell the Shares or part
thereof, in accordance with Section 3:248 of the NACC, without prejudice
to the provision of Section 3:251 of the NACC, in order to recover the
proceeds thereof.
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7.2
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In
the event the Pledgee enforces the Right of Pledge, the Pledgee shall,
with due regard to the relevant provisions of the Existing Rights of
Pledge, following payment of the execution costs from the proceeds,
allocate the net proceeds to fulfill the Secured
Obligations.
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7.3
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The
Pledgee does not bear the obligations referred to in Sections 3:249 and
3:252 of the NACC towards others than the
Pledgor.
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8.
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Termination
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8.1
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The
Pledgee is entitled to terminate (opzeggen) in whole or
in part the Right of Pledge as referred to in Article 3:81(2) sub (d) of
the NACC. Notice of termination must be given in writing by the Pledgee to
the Pledgor and the Company.
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8.2
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The
Right of Pledge shall terminate by operation of law upon the payment and
satisfaction in full of all Secured Obligations. In that event, the
Pledgee shall evidence such termination in accordance with Section 8.01 of
the Indenture.
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9.
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Costs
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All
reasonable costs, fees and expenses incurred in connection with the
creation or execution of any documentation in connection with the Right of
Pledge and the enforcement of the Right of Pledge shall be for the account
of the Pledgor, and the Pledgor shall indemnify and hold harmless the
Pledgee for such costs and reasonable expenses incurred in connection with
such enforcement.
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10.
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Notices
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Any
notices or other communication under or in connection with this Pledge Agreement
shall be in writing in the English language and shall be delivered personally or
by registered mail or fax. Proof of posting shall be deemed to be proof of
receipt:
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(i)
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in
the case of hand delivery: on the day the notice is received by
recipient;
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(ii)
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in
the case of a registered letter: on the third business day after posting;
or
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(iii)
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in
the case of a fax transmission: upon receipt of fax
confirmation.
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Notices
and other communications under this Pledge Agreement may in each case be sent to
the following address of the parties hereto:
Address
Pledgor:
x/x XXX
Xxxxxxxxxxx Xxxxxxxxxxx
0xx xxxxx,
Xxxxxxx House
00
Xxxxxxx
Xxxxxx
XX0X 0XX
Xxxxxx
Xxxxxxx
Attention:
Chief Financial Officer
Address
Pledgee:
The Bank
of New York
x/x Xxx
Xxxxxx Xxxxxx
Xxxxxx
X00 0XX
Xxxxxx
Xxxxxxx
Attention:
Xxxxx Xxxxxxxx
Address of the
Company:
Central
European Media Enterprises N.V.
c/o
Curaçao Corporation Company N.V.
Xxxxxxxxxxxxx
Xxxx 00,
Xxxxxxx,
Xxxxxxxxxxx Antilles
or such
other address or fax number as notified by the relevant party by not less than
five business days prior notice.
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11.
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Rescission
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The
Pledgor and the Pledgee hereby waive, to the fullest extent permitted by law,
their right to dissolve this Pledge Agreement pursuant to failure in the
performance of one or more of their obligations as referred to in Article 6:265
of the NACC or on any other ground.
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12.
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Governing
Law and Submission to Jurisdiction
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12.1
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The
provisions of this Pledge Agreement and the Right of Pledge created
hereby, are governed by, and shall be construed in accordance with, the
laws of the Netherlands Antilles.
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12.2
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The
Pledgor and the Pledgee agree that the competent court in Curaçao, the
Netherlands Antilles shall have non-exclusive jurisdiction with regard to
any and all disputes which may arise out of or in connection with this
Pledge Agreement.
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13. Amendment
of this Pledge Agreement
This
Pledge Agreement may only be amended by a written agreement executed by each of
the Pledgor and the Pledgee. Pledgor and Pledgee shall notify the Company of
such amendment in writing.
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14.
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Severability
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The
illegality, invalidity or unenforceability of any provision of this Pledge
Agreement or any part thereof under the laws of any jurisdiction shall not
affect its legality, validity or enforceability under the laws of any other
jurisdiction nor the legality, validity or enforceability of any other provision
or part thereof. Any illegal, invalid or unenforceable provision shall have the
effect of an alternative provision that would be valid and the purpose of which
conforms with the first mentioned provision and that would presumably have been
included in this Pledge Agreement in order to carry out the intentions of the
parties if the first mentioned provision had been omitted in view of its
illegality, invalidity or unenforceability.
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15.
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Counterparts
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This
Pledge Agreement may be executed in counterparts, each of which when so executed
and delivered shall be an original, but all of which together constitute one and
the same document.
* signature page to
follow *
SIGNATURE PAGE PLEDGE
AGREEMENT ON SHARES
The
parties hereto have caused this Pledge Agreement to be duly executed on the day
and year first written above.
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as
the Pledgor
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/s/ Xxxxxxx
Xxxxx
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By:
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Xxxxxxx
Xxxxx
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Its:
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Chief
Executive Officer
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The
Bank of New York
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as
the Pledgee
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/s/ Xxxxx
Xxxxxxxx
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By:
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Xxxxx
Xxxxxxxx
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Its:
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Authorised
Signatory
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Central
European Media Enterprises N.V.
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/s/ Xxxxxxx
Xxxxx
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By:
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Xxxxxxx
Xxxxx
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Its:
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Managing
Director
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