DEED OF GUARANTEE BETWEEN PPF a.s. as Guarantor and CME MEDIA ENTERPRISES B.V. and CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. as Beneficiaries DATED 2 MAY 2005 London
EXECUTION
COPY
BETWEEN
PPF
a.s.
as
Guarantor
and
CME
MEDIA ENTERPRISES B.V.
and
as
Beneficiaries
DATED 2
MAY ▇▇▇▇
▇
▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇
London
THIS
GUARANTEE is made
by way of a deed on 2 May 2005,
BETWEEN:
|
(1) |
PPF
a.s., a
joint-stock company established and existing under the laws of the Czech
Republic, having its registered office at ▇▇▇▇▇▇
▇, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ Code 140 21, Identification
Number: 250
99 345, registered in the Commercial Register kept with the Municipal
Court in Prague, Part B., Insert Number 4495
(the "Guarantor"); |
|
(2) |
CME
MEDIA ENTERPRISES B.V., a
company organized under the laws of the Netherlands, and having its
registered office at ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ Soest, the Netherlands
("CME
ME");
and |
|
(3) |
CENTRAL
EUROPEAN MEDIA ENTERPRISES LTD., a
company organized under the laws of Bermuda, and having
its registered office at Clarendon House, Church Street, ▇▇▇▇▇▇▇▇, ▇▇ CX
Bermuda ("CME
Ltd"). |
WHEREAS:
|
(A) |
PPF
(Cyprus) Ltd is a company organised under the laws of the Republic of
Cyprus with registered number HE 92433 and having its registered office at
Arch. Makariou III, ▇-▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
Cyprus ("PPF"); |
|
(B) |
PPF
is a wholly-owned subsidiary of the
Guarantor; |
|
(C) |
PPF,
CME ME and CME Ltd have entered into a framework agreement dated December
13, 2004, pursuant to which CME ME shall purchase from PPF 85% of the TV
Nova Group (the "Framework
Agreement"); |
|
(D) |
Pursuant
to the Framework Agreement, PPF has agreed to procure a guarantee by the
Guarantor in favour of CME ME and CME Ltd (the "Beneficiaries")
of the performance of PPF's or any of its affiliates payment obligations
under the Transaction Documents, and the Guarantor hereby agrees to
provide such a guarantee. |
IT
IS AGREED as
follows:
|
1 |
Definitions
and Interpretations |
In this
Guarantee the words and expressions used shall, unless expressly defined herein,
have the same meanings ascribed to them in the Framework Agreement, except that
references to Clauses are to clauses of this Guarantee. All references to PPF
herein shall be deemed to include reference to any relevant affiliate(s) of
PPF.
|
2 |
Guarantee |
|
2.1 |
In
consideration of the Beneficiaries entering into the Framework Agreement
with PPF, the Guarantor irrevocably and unconditionally guarantees to the
Beneficiaries the full and prompt
payment and discharge of all such sums of money and liabilities due, owing
or incurred or payable and unpaid by PPF to the Beneficiaries pursuant to
the Transaction Documents from time to time (including without limitation
any sums or liabilities due, owing or incurred in connection with any
Purchase Price adjustments, any Indemnity Claims (including for the
avoidance of doubt Indemnity Claims with respect to Third Party Claims),
any breach by PPF of any of the Transaction Documents and any costs of
enforcement of any of the Transaction Documents (other than this
Guarantee)
(together the "Obligations"
and the Obligations to which a Demand (as defined below) relates shall be
the "Demand
Obligations"). |
|
2.2 |
Time
for Making Payments |
If PPF
has failed to pay or perform its Demand Obligations and such failure has been
referred to dispute resolution pursuant to the relevant Transaction Document
("Dispute
Resolution") and
pursuant to such Dispute Resolution the Beneficiaries shall have obtained any
preliminary decision of an arbitrator or arbitral tribunal on the merits of the
Beneficiaries’ claim against PPF with respect to the Demand Obligations
(notwithstanding any actual or potential appeal thereof by PPF or any of the
Beneficiaries or Protected Parties, and notwithstanding that any further
proceedings between PPF and the Beneficiaries may be contemplated or pending
with respect to other matters of performance or quantum of liability) (a
"Preliminary
Decision"), the
Guarantor shall upon written demand by the Beneficiaries (a "Demand")
forthwith provide the Initial Security pursuant to Clause 2.3 below in
an amount which shall be the lesser of:
|
(i) |
the
amount stated in the Demand; or |
|
(ii) |
the
amount awarded to the Beneficiaries or any CME Protected Party in respect
of the Demand Obligations pursuant to the Preliminary Decision plus the
costs and expenses of enforcement of the Demand Obligations incurred by
the Beneficiaries and payable and unpaid by PPF under the relevant
Transaction Documents (other than this Guarantee) and not taken into
account in the Preliminary Decision, |
(such
amount being referred to as the "Demand
Amount").
|
2.3 |
Initial
Security |
|
2.3.1 |
The
Initial Security shall consist of either (i) cash in an Escrow Account,
denominated in US$, Euros or CZK, or (ii) a Bank
Guarantee. |
|
2.3.2 |
The
Guarantor shall give written notice to the Beneficiaries confirming which
form of Initial Security shall be provided within 2 Business Days of
receipt of a Demand. |
|
2.4 |
Payment
in Escrow |
|
2.4.1 |
If
the Initial Security is provided in the form of cash, the Guarantor shall
forthwith pay the required amount into an Escrow Account with an Escrow
Bank, pursuant to an Escrow Agreement. All costs related to the Escrow
Account shall be borne by the Guarantor without diminution of the amount
in the Escrow Account. |
2
| 2.4.2 |
If
pursuant to the final decision (which decision shall not be subject to any
further appeal by any of Beneficiaries, the Protected Parties or PPF) of
any Dispute Resolution between the Beneficiaries and PPF related to the
Demand Obligations (the "Final
Decision"),
any amount is awarded in favour of the Beneficiaries, the Escrow Bank
shall pay to the Beneficiaries from the Escrow Account the lesser
of: |
|
(i) |
the
amount stated in the Demand; or |
|
(ii) |
the
amount awarded to the Beneficiaries in respect of the Demand Obligations
pursuant to the Final Decision (including any awards of costs and expenses
of enforcement of the Demand Obligations (other than under this Guarantee)
as awarded pursuant to the Final Decision). |
|
2.4.3 |
To
the extent that the amount in the Escrow Account is not sufficient to pay
the amounts payable to the Beneficiaries pursuant to Clause 2.4.2
above, the Guarantor shall, forthwith on written demand from the
Beneficiaries, pay to the Beneficiaries such additional amounts as may be
required to fully discharge the amounts payable pursuant to Clause
2.4.2. |
|
2.4.4 |
If
at any time as a result of the Final Decision, the amount payable by PPF
to the Beneficiaries in respect of the Demand Obligations pursuant to the
Final Decision exceeds the amount demanded by the Beneficiaries pursuant
to the relevant Demand and to the extent such additional amounts remain
unpaid by PPF, the Beneficiaries may by written notice demand that the
Guarantor pays such additional amounts and the Guarantor shall pay to
Beneficiaries such additional amounts
forthwith. |
|
2.4.5 |
If
pursuant to the Final Decision, the amount that is awarded in favour of
the Beneficiaries is less than the amount in the Escrow Account, after
payment in full to the Beneficiaries pursuant to Clause 2.4.2
above, the Guarantor shall be entitled to cause the Escrow Bank to pay
forthwith to the Guarantor for the Guarantor's own account any remaining
sum credited to the Escrow Account. |
|
2.4.6 |
If
pursuant to the Final Decision no amount is awarded in favour of the
Beneficiaries, the Guarantor shall be entitled to cause the Escrow Bank to
pay forthwith to the Guarantor for the Guarantor's own account the amount
the Guarantor had paid into the Escrow Account pursuant to Clause
2.4.1
above. |
|
2.5 |
Use
of Bank Guarantee |
|
2.5.1 |
If
the Initial Security is provided in the form of a Bank Guarantee, the
Guarantor shall forthwith deliver the Bank Guarantee for the required
amount to CME ME. All costs related to the Bank Guarantee shall be borne
by the Guarantor. |
3
|
2.5.2 |
If
pursuant to the Final Decision, any amount is awarded in favour of the
Beneficiaries, the Beneficiaries shall be entitled to call on the Bank
Guarantee for payment of an amount equal to the lesser
of: |
|
(i) |
the
amount stated in the Demand; or |
|
(ii) |
the
amount awarded to the Beneficiaries in respect of the Demand Obligations
pursuant to the Final Decision (including any awards of costs and expenses
of enforcement of the Demand Obligations (other than under this Guarantee)
as awarded pursuant to the Final Decision). |
|
2.5.3 |
To
the extent that the amount of the Bank Guarantee is not sufficient to pay
the amounts payable to the Beneficiaries pursuant to Clause 2.5.2 above,
the Guarantor shall, forthwith on written demand from the Beneficiaries,
pay to the Beneficiaries such additional amounts as may be required to
fully discharge the amounts payable pursuant to Clause
2.5.2 |
|
2.5.4 |
If
at any time as a result of the Final Decision, the amount payable by PPF
to the Beneficiaries in respect of the Demand Obligations pursuant to the
Final Decision exceeds the amount demanded by the Beneficiaries pursuant
to the relevant Demand and to the extent such additional amounts remain
unpaid by PPF, the Beneficiaries may by written notice demand that the
Guarantor pays such additional amounts and the Guarantor shall pay to
Beneficiaries such additional amounts
forthwith. |
|
2.5.5 |
If
pursuant to the Final Decision, the amount that is awarded in favour of
the Beneficiaries is less than the amount of the Bank Guarantee, after
payment in full to the Beneficiaries pursuant to Clause 2.5.2 above, the
Guarantor shall be entitled to cause the Beneficiaries to return the Bank
Guarantee to the Guarantor. |
|
2.5.6 |
If
pursuant to the Final Decision no amount is awarded in favour of the
Beneficiaries, the Guarantor shall be entitled to cause the Beneficiaries
to return the Bank Guarantee to the
Guarantor. |
|
3 |
Substitute
Security |
At any
time after the Initial Security has been provided pursuant to this Guarantee, it
may be replaced with Substitute Security as provided in Clause 13 of the
Framework Agreement.
|
4 |
Waiver
of defences |
The
obligations of the Guarantor under this Guarantee shall not be affected by any
act, omission or thing which but for this provision would reduce release or
prejudice any of its obligations under this Guarantee including:
4
|
(i) |
any
alteration to any provision of the Transaction Documents or in the extent
or nature of the obligations to be performed pursuant to the Transaction
Documents, |
|
(ii) |
the
granting by the Beneficiaries of any time
or other indulgence, |
|
(iii) |
any
concession or arrangement granted or made by the Beneficiaries to or with
PPF, |
|
(iv) |
the
taking by the Beneficiaries of any other security (including any
Substitute Security), in respect of the obligations or liabilities of PPF
pursuant to the Transaction Documents or any other agreement entered into
pursuant thereto or of any such other security or the release of any such
other security and the Guarantors' liability under this Guarantee shall
not be affected by any failure, delay or forbearance on the part of the
Beneficiaries in enforcing any such security or any of its rights against
PPF, |
|
(v) |
any
present or future law or regulation purporting to reduce or prejudice any
of the obligations or liabilities of PPF pursuant to the Transaction
Documents, |
|
(vi) |
the
taking, variation, compromise, renewal or release of or refusal or neglect
to effect take up or enforce any rights against or security over assets of
PPF or any other person or any non-presentation or non-observance of any
formality or other requirement in respect of any instrument or any failure
to realise the full value of any security, |
|
(vii) |
any
incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status, function, control or
ownership of PPF or any other person; or |
|
(viii) |
any
unenforceability, illegality or invalidity of any Obligations of PPF under
the Transaction Documents to the intent that the Guarantor's liability
under this Guarantee shall remain in full force and its guarantee be
construed accordingly as if there were no unenforceability, illegality or
invalidity. |
|
5 |
Principal
obligor |
Without
prejudice to the Beneficiaries' rights against PPF as principal obligor, the
Guarantor shall be deemed principal obligor and not merely as surety in respect
of any amounts payable by PPF pursuant to a Final Decision in respect of Demand
Obligations and accordingly the Guarantor shall not be discharged nor shall its
liability hereunder be affected by any act or thing or means whatsoever by which
its said liability would have been discharged or affected if it had not been
principal obligor.
|
6 |
Discharge
of Guarantee |
|
6.1 |
Notwithstanding
any composition, release or arrangements effected by the Beneficiaries
with PPF, the Guarantor's liability under this Guarantee shall be
discharged only by payment and discharge by the Guarantor to the
Beneficiaries in full of all sums, obligations and liabilities which may
from time to time be respectively due or owing or incurred from or by
PPF. |
5
|
6.2 |
For
the avoidance of doubt the Beneficiaries hereby acknowledge that under no
circumstances shall: |
|
(i) |
the
Guarantor be required to make payment more than once for any loss under
this Guarantee, |
|
(ii) |
any
of the Beneficiaries or CME Protected Parties be entitled to demand
recovery of any loss under this Guarantee in respect of which loss the
Guarantor has already made payment in full to another Beneficiary or CME
Protected Party pursuant to this Guarantee;
or |
|
(iii) |
any
of the Beneficiaries or CME Protected Parties be entitled to recover in
respect of a loss under this Guarantee, if such party has already
recovered for such loss under any other Transaction
Document. |
|
7 |
Reinstatement |
Each
assurance, security or payment which may be avoided under any enactment relating
to bankruptcy or insolvency or any statutory modification or re-enactment of any
such enactment, remains in force notwithstanding any intermediate settlement of
account or payment or any change in the constitution or control of, or the
insolvency or any bankruptcy, winding-up or analogous proceedings relating to
PPF.
|
8 |
Continuing
Guarantee |
This
Guarantee shall be a continuing guarantee and the provisions of this Guarantee
shall remain in force notwithstanding any intermediate settlement of account or
payment or any change in the constitution or control of, or the appointment of a
receiver, administrative receiver or administrator of any of PPF's assets,
insolvency or any bankruptcy, winding-up, reorganisation, amalgamation,
reconstruction or analogous matter or proceedings relating to PPF.
|
9 |
Partial
Exercise |
No single
exercise of any right, power or privilege conferred by this Guarantee shall
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege.
|
10 |
Appropriations |
|
10.1 |
Until
all of the Obligations of PPF under or arising pursuant to the Transaction
Documents have been irrevocably paid and/or discharged in full, the
Guarantor shall not: |
6
|
(i) |
by
virtue of or in respect of any payment made, security realised or moneys
received for or on account of the Guarantor's liability under this
Guarantee, be subrogated to, benefit from, succeed to or share in any
rights, security or moneys held or received by the Beneficiaries or be
entitled to any right of contribution or claim any right of indemnity, or
exercise any other rights or legal remedies;
or |
|
(ii) |
claim
or prove as creditor or otherwise in competition with the Beneficiaries in
respect of any moneys owing to it by PPF in the event of any bankruptcy,
liquidation or other insolvency proceedings relating to PPF.
|
|
10.2 |
In
the event the Guarantor receives any sums from PPF in respect of any
payment of the Guarantor hereunder, the Guarantor shall hold such monies
in trust for the Beneficiaries so long as any sums are payable
(contingently or otherwise) under this Guarantee in relation to the
Transaction Documents. |
|
11 |
Payment |
|
11.1 |
All
payments made by the Guarantor under this Guarantee shall be made to the
Beneficiary which has requested such
payment. |
|
11.2 |
All
payments shall be made in US Dollars. If the Demand is denominated in any
other currency such amount shall be converted on the date upon which the
Guarantor makes such payment or deposits such amounts in the Escrow
Account (as appropriate) into US Dollars applying the relevant exchange
rate set forth in the Framework Agreement. |
|
11.3 |
All
sums payable under this Guarantee shall be paid in full without set-off or
counterclaim and free and clear of and without deduction of or withholding
for or on account of any present or future taxes, duties and/or other
charges. |
|
12 |
Amendments |
The
Guarantor hereby authorises PPF and the Beneficiaries (and Newco) to make
any addendum
or variation to the Transaction Documents, the full and due performance and
observance of which addendum or variation shall be likewise guaranteed by the
Guarantor in accordance with the terms of this Guarantee. The obligations of the
Guarantor hereunder shall in no way be affected by any variation or addendum to
the Transaction Documents.
|
13 |
Additional
security |
This
Guarantee is in addition to and not in substitution for any present and future
guarantee, lien or other security held by the Beneficiaries. The Beneficiaries'
rights hereunder are in addition to and not exclusive of those provided by
law.
|
14 |
Changes
to the parties |
No party
may assign, transfer or novate or dispose of any of, or any interest in, or its
rights, benefits and/or obligations under this Guarantee without consent of the
other parties in writing; provided, however, that the Beneficiaries may effect
such an assignment, transfer, novation or disposal in order to grant security
interests to a non-affiliated financial institution for purposes of securing
financing.
7
|
15 |
Representations
and warranties |
The
Guarantor represents and warrants to the Beneficiaries that:
|
(i) |
it
has full power, authority and right to enter into and carry out its
obligations hereunder, |
|
(ii) |
this
Guarantee constitutes the valid and legally binding obligations of
it, |
|
(iii) |
the
entry into and performance by it of, and the transactions contemplated by
this Guarantee do not and will not conflict
with: |
|
(a) |
any
law or regulation or judicial or other
order, |
|
(b) |
its
constitutional documents; or |
|
(c) |
any
document which is binding on it or on any of its assets;
and |
|
(iv) |
it
is neither insolvent, unable to pay its debts as they fall due (as such
expression is defined in sub-sections 1(a) to (d) (inclusive) and
sub-section (2) of section 123 of the Insolvency Act 1986), nor subject to
any insolvency or analogous proceedings in any
jurisdiction. |
|
16 |
Indemnity |
The
Guarantor hereby agrees to indemnify the Beneficiaries upon demand against all
reasonable Losses (and any Taxes or charges thereon) to which the Beneficiaries
may be subject or which the Beneficiaries may incur in connection with the
enforcement of this Guarantee.
|
17 |
Notices |
Any
notice to be given hereunder shall be deemed to be duly given if it is delivered
by hand or sent by registered or recorded delivery to the addressees' registered
office and in the case of any such notices, the same shall, if sent by
registered post or recorded delivery, be deemed to have been received 48 hours
after being posted.
|
18 |
Governing
Law and Jurisdiction |
|
18.1 |
This
Guarantee shall be governed by and construed in accordance with the laws
of England and Wales. |
|
18.2 |
Any
disputes, claims or controversy arising out of or related to this
Agreement, including any question as to its formation, validity,
interpretation or termination, that cannot be resolved by negotiations
between the Parties shall be settled by arbitration on an ad
hoc
basis in accordance with the UNCITRAL Arbitration Rules, by three
arbitrators appointed by the Parties or otherwise appointed by the London
Court of International Arbitration in accordance with such rules. The
arbitration shall be conducted in London and all documents and proceedings
shall be in the English language. Any of the Parties shall have the right
to initiate the proceedings. |
8
|
18.3 |
The
Guarantor irrevocably submits to the execution against it as primary
obligor of the Demand Obligations which are the subject of any Final
Decision and shall not seek to contest such Final Decision pursuant to
this Clause 18. |
|
19 |
Counterparts |
This
Guarantee may be executed in any number of counterparts each of which when
executed shall constitute an original of this Guarantee and all the counterparts
together shall constitute one and the same instrument.
|
20 |
Severability |
If any
provision of this Guarantee is or becomes illegal, invalid or unenforceable that
shall not affect the validity or enforceability of any other provisions of this
Guarantee.
|
21 |
Rights
of Third Parties |
|
21.1 |
Subject
to Clause 21.2,
no person who is not a party to this Guarantee, shall have any rights
under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce a term
of this Guarantee. |
|
21.2 |
The
CME Protected Parties (as such term is defined in the Framework Agreement)
shall have the right under the Contracts (Rights of Third Parties) ▇▇▇
▇▇▇▇ to enforce this Guarantee. |
|
22 |
Acknowledgement
of Rights of CME Protected Parties |
The
Guarantor hereby acknowledges that the CME Protected Parties have enforceable
rights under the Framework Agreement and that such rights are guaranteed by the
Guarantor pursuant to this Guarantee.
9
IN
WITNESS whereof
the Guarantor has executed and delivered this Guarantee as a deed the day and
year first
before written.
|
Executed
as a deed by: |
|
|
PPF
a.s. |
|
|
acting
by Ing.
Aleš Minx |
|
|
as
its lawful attorney: |
|
|
/s/
Ales Minx | |
|
Executed
as a deed by: |
|
|
CME
MEDIA ENTERPRISES B.V. |
|
|
acting
by: |
|
|
/s/
▇▇▇ ▇▇▇▇▇▇▇ | |
|
Authorised
signatory | |
|
Executed
as a deed by: |
|
|
acting
by: |
|
|
/s/
▇▇▇ ▇▇▇▇▇▇▇ | |
|
Authorised
signatory | |
10