Filed with the Securities and Exchange Commission on April 1, 1999 Registration
No. 333-74227
SECURITIES AND EXCHANGE COMMISSION
===============================================================================
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 2
TO
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MIH LIMITED
(Exact name of Registrant as specified in its charter)
---------------
<TABLE>
<S> <C> <C>
British Virgin Islands 4841 Inapplicable
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
---------------
Abbot Building
Mount Street
Tortola
Road Town
British Virgin Islands
(284) 494-5471
(Address, including zip code, and telephone number, including
area code, of registrant's registered offices)
---------------
CT Corporation System
1633 Broadway
New York, NY 10019
(212) 664-1666
(Name, address, including zip code, and telephone number, including
area code, of agent for service of process)
---------------
Copies to:
<TABLE>
<S> <C> <C>
Kris F. Heinzelman, Esq. Allan Rosenzweig
Cravath, Swaine & Moore Myriad International Holdings B.V. Michael E. Michetti, Esq.
Worldwide Plaza Jupiterstraat 13-15 Cahill Gordon & Reindel
825 Eighth Avenue 2132 HC Hoofddorp 80 Pine Street, 17th Floor
New York, New York 10019 The Netherlands New York, New York 10005
(212) 474-1000 (31) 23 515 62870 (212) 701-3000
</TABLE>
Approximate date of commencement of proposed sale to the public. As soon
as practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are being offered
in connection on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ] ___________
CALCULATION OF REGISTRATION FEE
===============================================================================
Title of Each Class Proposed Maximum
of Securities to be Aggregate Amount of
Registered Offering Price(1) Registration Fee
- -------------------------------------- ------------------- -------------------
Class A Ordinary Shares, no par value $162,265,000 $ 45,109.67(2)
===============================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933.
(2) This entire amount was previously paid by the Company with the original
filing of this Registration Statement on March 11, 1999 and the filing of
Amendment No. 1 to this Registration Statement on March 25, 1999.
---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the United States Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
================================================================================
<PAGE>
EXPLANATORY NOTE
This amendment to the Company's Registration Statement is being filed
solely for the purpose of filing exhibits.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
- ---------- -----------
<S> <C>
1.1 U.S. Purchase Agreement.
1.2 International Purchase Agreement.
3.1# Memorandum of Association of the Registrant.
3.2# Articles of Association of the Registrant.
5.1# Opinion of Harney Westwood & Riegels with respect to the validity of the securities being
offered.
10.1# Shareholders' Agreement dated June 20, 1997 among Myriad International Holdings B.V., MP
Communications B.V. and NetHold Mediterranean B.V.
10.2#* Investment & Shareholders' Agreement dated April 4, 1997 among Canal+ S.A., FilmNet
Investments B.V., Myriad Holdings Netherlands B.V., MIH Holdings Limited, MIH Limited
and Irdeto B.V.
10.3* Shareholders' Agreement dated February 16, 1998 among Telecom Holding Company Limited,
Shinawatra Computer and Communications Public Company Limited, MIH Limited and
International Broadcasting Corporation Public Company Limited, as supplemented by the
Supplementary Shareholders' Agreement dated May 20, 1998 and as amended by the
Amendment to Shareholders' Agreement dated September 25, 1998.
10.4* Greek Football Broadcasting Agreement dated December 29, 1995 between Football Societes
Anonymes Association and NetHold Hellas S.A.
10.5* Greek Basketball Broadcasting Agreement dated July 3, 1998 between Greek Association of
Basketball Societes Anonymes and NetHold Hellas Pay-TV Societe Anonyme.
10.6* Channel Distribution Agreement dated June 18, 1998 between MultiChoice Africa
(Proprietary) Limited and Electronic Media Network Limited.
10.7 #* Analogue Agreement dated March 31, 1995 between MultiChoice Africa (Proprietary) Limited
and Electronic Media Network Limited.
10.8 #* Facility Letter dated September 29, 1998 from ABSA Bank to MIH Limited.
10.9 # Loan Agreement dated February 17, 1999 between MIH Limited and MeesPierson N.V.
10.10 MIH Limited Share Scheme.
10.11 Stock Purchase Option Agreement dated March 18, 1999 between Thomson Consumer
Electronics, Inc. and MIH Limited.
15.1 # Letter re: unaudited interim financial information.
21 Subsidiaries of the Registrant.
23.1 # Consents of Harney Westwood & Riegels (one is included in Exhibit 5).
23.2 # Consent of Mallinicks.
23.3 # Consent of Nauta Dutilh.
23.4 # Consent of Zepos & Zepos.
23.5 # Consent of White & Case (Thailand) Limited.
23.6 # Consent of Coopers & Lybrand.
</TABLE>
- ----------------
* Indicates that portions of the exhibit have been omitted pursuant to a
request for confidential treatment and that such portions have been filed
separately with the Commission.
+ To be filed by amendment.
# Filed previously with the Commission.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant, MIH Limited, a corporation organized and existing under the
laws of the British Virgin Islands, certifies that it has duly caused this
Registration Statement on Form F-1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hoofddorp, The
Netherlands, on this 1st day of April, 1999.
MIH LIMITED
By: /s/ ALLAN M. ROSENZWEIG
-------------------------------------
Allan M. Rosenzweig
Group Director--Corporate Finance and
Director
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on this 1st day of April, 1999:
Signature Title
--------- -----
* Chairman of the Board
- -------------------------
Theunissen Vosloo
* Chief Executive Officer and Director
- -------------------------
Jacobus D. T. Stofberg
* Director
- -------------------------
Jacobus P. Bekker
* Director
- -------------------------
Vaughan G. Bray
* Chief Executive Officer--
- ------------------------- MIH Asia and Director
Johannes H. W. Hawinkels
* Chief Executive Officer--
- ------------------------- Mindport and Director
Stephen Oldfield
* Director
- -------------------------
Stephan J. Z. Pacak
* Chief Financial Officer
- ------------------------- and Director
Lesley R. Penfold
/s/ ALLAN M. ROSENZWEIG Group Director--
- ------------------------- Corporate Finance and Director
Allan M. Rosenzweig
*By: /s/ ALLAN M. ROSENZWEIG
---------------------
Allan M. Rosenzweig
Attorney-in-Fact
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------------ -----------
<S> <C>
1.1 U.S. Purchase Agreement.
1.2 International Purchase Agreement.
3.1 # Memorandum of Association of the Registrant.
3.2 # Articles of Association of the Registrant.
5.1 # Opinion of Harney Westwood & Riegels with respect to the validity of the securities being
offered.
10.1 # Shareholders' Agreement dated June 20, 1997 among Myriad International Holdings B.V., MP
Communications B.V. and NetHold Mediterranean B.V.
10.2 #* Investment & Shareholders' Agreement dated April 4, 1997 among Canal+ S.A., FilmNet
Investments B.V., Myriad Holdings Netherlands B.V., MIH Holdings Limited, MIH Limited
and Irdeto B.V.
10.3* Shareholders' Agreement dated February 16, 1998 among Telecom Holding Company Limited,
Shinawatra Computer and Communications Public Company Limited, MIH Limited and
International Broadcasting Corporation Public Company Limited, as supplemented by the
Supplementary Shareholders' Agreement dated May 20, 1998 and as amended by the
Amendment to Shareholders' Agreement dated September 25, 1998.
10.4* Greek Football Broadcasting Agreement dated December 29, 1995 between Football Societes
Anonymes Association and NetHold Hellas S.A.
10.5* Greek Basketball Broadcasting Agreement dated July 3, 1998 between Greek Association of
Basketball Societes Anonymes and NetHold Hellas Pay-TV Societe Anonyme.
10.6* Channel Distribution Agreement dated June 18, 1998 between MultiChoice Africa
(Proprietary) Limited and Electronic Media Network Limited.
10.7 #* Analogue Agreement dated March 31, 1995 between MultiChoice Africa (Proprietary) Limited
and Electronic Media Network Limited.
10.8 #* Facility Letter dated September 29, 1998 from ABSA Bank to MIH Limited.
10.9 # Loan Agreement dated February 17, 1999 between MIH Limited and MeesPierson N.V.
10.10 MIH Limited Share Scheme.
10.11 Stock Purchase Option Agreement dated March 18, 1999 between Thomson Consumer
Electronics, Inc. and MIH Limited.
15.1 # Letter re: unaudited interim financial information.
21 Subsidiaries of the Registrant.
23.1 # Consents of Harney Westwood & Riegels (one is included in Exhibit 5).
23.2 # Consent of Mallinicks.
23.3 # Consent of Nauta Dutilh.
23.4 # Consent of Zepos & Zepos.
23.5 # Consent of White & Case (Thailand) Limited.
23.6 # Consent of Coopers & Lybrand.
</TABLE>
- ---------------
* Indicates that portions of the exhibit have been omitted pursuant to a
request for confidential treatment and that such portions have been filed
separately with the Commission.
+ To be filed by amendment.
# Filed previously with the Commission.
================================================================================
EXHIBIT 1.1
MIH LIMITED
(a British Virgin Islands corporation)
4,150,000
Class A Ordinary Shares
U.S. PURCHASE AGREEMENT
Dated: April [ ], 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
U.S. PURCHASE AGREEMENT........................................................1
SECTION 1. Representations and Warranties......................................4
(a) Representations and Warranties by the Company..............4
(i) Compliance with Registration Requirements.........4
(ii) Independent Accountants...........................5
(iii) Financial Statements..............................5
(iv) No Material Adverse Change in Business............6
(v) Good Standing of the Company......................6
(vi) Good Standing of Subsidiaries.....................6
(vii) Capitalization....................................7
(viii) Authorization of Agreement........................7
(ix) Authorization and Description of Securities.......8
(x) Absence of Defaults and Conflicts.................8
(xi) Absence of Labor Dispute..........................9
(xii) Absence of Proceedings............................9
(xiii) Accuracy of Exhibits.............................10
(xiv) Possession of Intellectual Property..............10
(xv) Absence of Further Requirements..................10
(xvi) Possession of Licenses and Permits...............11
(xvii) Title to Property................................11
(xviii) Compliance with Research Guidelines..............12
(xix) Investment Company Act...........................12
(xx) Environmental Laws...............................12
(xxi) Registration Rights..............................13
(xxii) Statistical and Market-Related Data..............13
(xxiii) Johannesburg Stock Exchange......................13
(b) Officer's Certificates....................................13
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing....................13
(a) Initial Securities........................................13
(b) Option Securities.........................................14
(c) Payment...................................................14
(d) Denominations; Registration...............................15
(e) Appointment of Qualified Independent Underwriter..........15
i
<PAGE>
SECTION 3. Covenants of the Company...........................................16
(a) Compliance with Securities
Regulations and Commission Requests.......................16
(b) Filing of Amendments......................................16
(c) Delivery of Registration Statements.......................17
(d) Delivery of Prospectuses..................................17
(e) Continued Compliance with Securities Laws.................17
(f) Blue Sky Qualifications...................................18
(f) Rule 158..................................................19
(g) Use of Proceeds...........................................19
(i) Listing...................................................19
(j) Restriction on Sale of Securities.........................19
(k) Reporting Requirements....................................20
(l) Compliance with Rule 463..................................20
SECTION 4. Payment of Expenses................................................20
(a) Expenses..................................................20
(b) Termination of Agreement..................................21
SECTION 5. Conditions of U.S. Underwriters' Obligations.......................21
(a) Effectiveness of Registration Statement...................21
(b) Opinion of Counsel for Company............................21
(c) Opinion of Counsel for U.S. Underwriters..................22
(d) Officers' Certificate.....................................22
(e) Accountant's Comfort Letter...............................23
(f) Bring-down Comfort Letter.................................23
(g) Approval of Listing.......................................23
(h) No Objection..............................................23
(i) Lock-up Agreements........................................23
(j) Purchase of Initial International Securities..............23
(k) Conditions to Purchase of U.S. Option Securities..........23
(l) Additional Documents......................................24
(m) Termination of Agreement..................................25
SECTION 6. Indemnification....................................................25
(a) Indemnification of U.S. Underwriters......................25
(b) Indemnification of Company, Directors and Officers........27
(c) Actions Against Parties; Notification.....................27
(d) Settlement Without Consent if Failure To Reimburse........28
SECTION 7. Contribution.......................................................28
ii
<PAGE>
SECTION 8. Representations, Warranties and Agreements To Survive Delivery....30
SECTION 9. Termination of Agreement..........................................31
(a) Termination; General.....................................31
(b) Liabilities..............................................31
SECTION 10. Default by One or More of the U.S. Underwriters...................31
SECTION 11. Notices...........................................................32
SECTION 12. Parties...........................................................33
SECTION 13. GOVERNING LAW AND TIME............................................33
SECTION 14. Agent for Service; Submission to
Jurisdiction; Waiver of Immunities................................33
SECTION 15. Judgment Currency.................................................34
SECTION 16. Effect of Headings................................................35
SECTION 17. Counterparts......................................................35
SCHEDULES
Schedule A - List of Underwriters...............................Sch A-1
Schedule B - Pricing Information................................Sch B-1
Schedule C - List of Persons Subject to Lock-Up.................Sch C-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Cravath, Swaine & Moore..........A-1-1
Exhibit A-2 - Form of Opinion of Harvey Westwood & Riegels........A-2-1
Exhibit A-3 - Form of Opinion of Mallinicks.......................A-3-1
Exhibit A-4 - Form of Opinion of Zepos & Zepos....................A-4-1
Exhibit A-5 - Form of Opinion of Nauta Dutilh.....................A-5-1
Exhibit A-6 - Form of Opinion of Loyens & Volkmaars...............A-6-1
Exhibit A-7 - Form of Opinion of White & Case (Thailand)Limited...A-7-1
Exhibit B - Form of Lock-up Letter................................B-1
iii
<PAGE>
MIH LIMITED
(a British Virgin Islands corporation)
4,150,000 Class A Ordinary Shares
(No Par Value)
U.S. PURCHASE AGREEMENT
April [ ], 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
MIH Limited, an International Business Company organized under the
laws of the British Virgin Islands (the "Company"), confirms its agreement with
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and each of the other U.S. Underwriters named in Schedule A
hereto (collectively, the "U.S. Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
Merrill Lynch and Donaldson, Lufkin & Jenrette Securities Corporation are acting
as representatives (in such capacity, the "U.S. Representatives"), with respect
to the issue and sale by the Company referred to in Schedule A and the purchase
by the U.S. Underwriters, acting severally and not jointly, of the respective
numbers of Class A Ordinary Shares, no par value, of the Company ("Class A
Ordinary Shares") set forth in said Schedule A, and with respect to the grant by
the Company to the U.S. Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 622,500
additional Class A Ordinary Shares to cover over-allotments, if any. The
4,150,000 Class A Ordinary Shares referred to in Schedule A (the "Initial U.S.
Securities") to be purchased by the U.S. Underwriters and all or any part of the
622,500 Class A Ordinary
<PAGE>
-2-
Shares subject to the option described in Section 2(b) hereof (the "U.S. Option
Securities") are hereinafter called, collectively, the "U.S. Securities."
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 4,150,000 Class A
Ordinary Shares (the "Initial International Securities") through arrangements
with certain underwriters outside the United States and Canada (the
"International Managers") for which Merrill Lynch International, DLJ Securities
International and MeesPierson N.V. are acting as the international
representatives (the "International Representatives") and the grant by the
Company to the International Managers, acting severally and not jointly, of an
option to purchase all or any part of the International Managers' pro rata
portion of up to 622,500 additional Class A Ordinary Shares solely to cover
over-allotments, if any (the "International Option Securities" and, together
with the U.S. Option Securities, the "Option Securities"). The Initial
International Securities and the International Option Securities are hereinafter
called the "International Securities." It is understood that the Company is not
obligated to sell, and the U.S. Underwriters are not obligated to purchase, any
Initial U.S. Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch International (in such capacity, the "Global
Coordinator").
The Company understands that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after this Agreement has been executed and delivered.
<PAGE>
-3-
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form F-1 (No. 333-74227) covering
the registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical to
the Form of U.S. Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting" and the inclusion in the Form
of International Prospectus of sections under the captions "Additional
Information" and "Certain Netherlands Tax Consequences." The information
included in any such prospectus or in any such Term Sheet, as the case may be,
that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each Form of U.S. Prospectus and Form of
International Prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto, at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final Form
of U.S. Prospectus and the final Form of International Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering of
<PAGE>
-4-
the Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated [ ], 1999 and the preliminary
International Prospectus dated [ ], 1999, respectively, each together with the
applicable Term Sheet, and all references in this Agreement to the date of such
Prospectuses shall mean the date of the applicable Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to and agrees with each U.S. Underwriter as of the date
hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of
each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees
with each U.S. Underwriter, as follows:
(i) Compliance with Registration Requirements. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, and any
post-effective amendments thereto became effective and at the Closing Time
(and, if any U.S. Option Securities are purchased, at the Date of
Delivery), the Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements
<PAGE>
-5-
thereto were issued and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be "materially
different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective.
The representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the U.S.
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by or on behalf of any U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement or the U.S. Prospectus.
Each preliminary prospectus and the prospectuses filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and each preliminary prospectus and each
Prospectus delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the entities
to which they relate as of the dates indicated and their respective
results of operations, shareholders' equity and cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles under International Accounting
Standards ("IAS GAAP") applied on a consistent basis throughout the
periods involved. The supporting
<PAGE>
-6-
schedules included in the Registration Statement present fairly in
accordance with IAS GAAP the information required to be stated therein.
The selected and summary financial data included in the Prospectuses
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in
the Registration Statement.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been
no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the British Virgin Islands and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not, singly or in the aggregate, result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
and all entities in which the Company has a direct or indirect majority
equity interest or voting power (each a "Subsidiary" and, collectively,
the "Subsidiaries") has been duly organized (to the extent applicable) and
is validly existing as a corporation, general partnership, limited
partnership, limited
<PAGE>
-7-
liability company or similar entity in good standing (to the extent
applicable) under the laws of the jurisdiction of its organization, has
organizational power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectuses
and is duly qualified as a foreign corporation (or other such entity) to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not, singly or in the
aggregate, result in a Material Adverse Effect. Except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock or other ownership interests of each Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable (to
the extent applicable) and to the extent owned, directly or indirectly, by
the Company, is owned free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. None of the outstanding shares
of capital stock or other ownership interests of any Subsidiary was issued
in violation of the preemptive or similar rights of any securityholder of
such Subsidiary. The only subsidiaries of the Company are (a) the
subsidiaries listed on Exhibit 21 to the Registration Statement and (b)
certain other subsidiaries which, considered in the aggregate as a single
subsidiary, do not constitute a "significant subsidiary" as defined in
Rule 1-02 of Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
agreements or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options referred to
in the Prospectuses). The shares of issued and outstanding capital stock
of the Company have been duly authorized and validly issued and are fully
paid and non-assessable. None of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or other similar
rights of any direct or indirect securityholder of the Company.
(viii) Authorization of Agreement. The execution, delivery and
performance of this Agreement and the International Purchase Agreement
have been duly authorized by all
<PAGE>
-8-
requisite corporate action on the part of the Company. This Agreement and
the International Purchase Agreement have been duly executed and delivered
by the Company.
(ix) Authorization and Description of Securities. The Securities to
be purchased by the U.S. Underwriters and the International Managers from
the Company have been duly authorized for issuance and sale to the U.S.
Underwriters pursuant to this Agreement and the International Managers
pursuant to the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth herein and in the International Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable. The Class A Ordinary Shares conform in all material
respects to all statements relating thereto contained in the Prospectuses
and such description conforms to the rights set forth in the instruments
defining the same. No holder of the Securities will be subject to personal
liability by reason of being such a holder and the issuance of the
Securities is not subject to the preemptive or other similar rights of any
securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any
Venture (as defined below) is in violation of its charter or by-laws (or
equivalent constitutive documents) or in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any Venture is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
Venture is subject (collectively, "Agreements and Instruments") except for
such defaults that would not, singly or in the aggregate, result in a
Material Adverse Effect. The execution, delivery and performance of this
Agreement and the International Purchase Agreement and the consummation of
the transactions contemplated in this Agreement, the International
Purchase Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectuses under the caption
"Use of Proceeds") and compliance by the Company with its obligations
under this Agreement and the International Purchase Agreement have
<PAGE>
-9-
been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any Venture pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not, singly or in the aggregate, result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws (or equivalent constitutive documents) of the
Company or any Venture or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Venture or any of their assets, properties or
operations. As used herein, (a) "Venture" means any entity in which the
Company has a direct or indirect greater than 20% equity interest or
voting power and (b) a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any Venture.
(xi) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any Venture exists or, to the knowledge of the Company,
is threatened, and the Company is not aware of any existing or threatened
labor disturbance by the employees of any of its or any Venture's
principal suppliers, manufacturers, customers or contractors, which, in
either case, may reasonably be expected to, singly or in the aggregate,
result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any Venture,
which is required to be disclosed in the Registration Statement (other
than as disclosed therein), or which, singly or in the aggregate, may
reasonably be expected to result in a Material Adverse Effect, or which,
singly or in the aggregate, may reasonably be expected to materially and
adversely affect the properties or assets
<PAGE>
-10-
of the Company or any Venture or the consummation of the transactions
contemplated in this Agreement and the International Purchase Agreement or
the performance by the Company of its obligations hereunder or thereunder.
The aggregate of all pending legal or governmental proceedings to which
the Company or any Venture is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental
to the business, singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. The Company and the
Ventures own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any Venture has received
any notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any
Venture therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, may reasonably be expected to result in a
Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities under this Agreement and the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the Inter-
<PAGE>
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national Purchase Agreement, except such as have been already obtained and
are in full force and effect or as may be required (i) under the 1933 Act
or the 1933 Act Regulations and state securities or blue sky laws or (ii)
under the laws and regulations of jurisdictions outside of the United
States and Canada where the International Managers may offer and sell the
International Securities.
(xvi) Possession of Licenses and Permits. Except as otherwise
disclosed in the Registration Statement, the Company and the Ventures
possess such permits, licenses (including, without limitation, television
broadcast frequency allocations and licenses), approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate national, provincial, state or local regulatory agencies or
bodies necessary to conduct the business now operated by them. The Company
and the Ventures are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect. All
of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not,
singly or in the aggregate, result in a Material Adverse Effect. Neither
the Company nor any Venture has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xvii) Title to Property. The Company and the Ventures have good and
marketable title to all real property owned by the Company and the
Ventures and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any
Venture. All of the leases and subleases material to the business of the
Company and the Ventures, considered as one enterprise, and under which
the Company or any Venture holds properties described in the Prospectuses,
are in full force and effect, and neither the Company nor any Venture has
any notice of any material claim
<PAGE>
-12-
of any sort that has been asserted by anyone adverse to the rights of the
Company or any Venture under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or such
Venture to the continued possession of the leased or subleased premises
under any such lease or sublease.
(xviii) Compliance with Research Guidelines. The Company, directly
or indirectly, has not taken and will not take any action that is
inconsistent with the guidelines set forth in the memorandum dated January
14, 1999 of Cahill Gordon & Reindel relating to research reports, and,
without limiting the foregoing, has not distributed and will not
distribute, in any manner, any research report contemplated by such
research guidelines or any portion thereof.
(xix) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any Venture is in
violation of any national, provincial, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and the Ventures have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or threatened ad-
<PAGE>
-13-
ministrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any Venture and (D) there are no events or circumstances that
might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any
Venture relating to Hazardous Materials or any Environmental Laws.
(xxi) Registration Rights. Except as disclosed in the Prospectuses,
there are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxii) Statistical and Market-Related Data. The statistical and
market-related data included in the Prospectuses are based on or derived
from sources which the Company believes to be reliable and accurate in all
material respects or represent the Company's good faith estimates that are
made on the basis of data derived from such sources.
(xxiii) Johannesburg Stock Exchange. All authorizations, approvals,
consents, qualifications or decrees of the Johannesburg Stock Exchange
which are necessary or required for the performance by the Company of its
obligations hereunder have been obtained.
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or any Ventures delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to each U.S. Underwriter as to the
matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial Securities. The Company agrees to sell to each U.S.
Underwriter, severally and not jointly, and on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, each U.S. Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial U.S. Securities set forth in Schedule
<PAGE>
-14-
A opposite the name of such U.S. Underwriter, plus any additional number of
Initial U.S. Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, the Company hereby grants an
option to the U.S. Underwriters, severally and not jointly, to purchase up to an
additional 622,500 Class A Common Shares at the price per share set forth in
Schedule B, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial U.S. Securities but not
payable on the U.S. Option Securities. The option hereby granted will expire 30
days after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial U.S. Securities
upon notice by the Global Coordinator to the Company setting forth the number of
U.S. Option Securities as to which the several U.S. Underwriters are then
exercising the option and the time and date of payment and delivery for such
U.S. Option Securities. Any such time and date of delivery for the U.S. Option
Securities (a "Date of Delivery") shall be determined by the Global Coordinator,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the U.S. Option Securities,
each of the U.S. Underwriters, acting severally and not jointly, on the basis of
the representations and warranties of the Company contained herein and subject
to the terms and conditions herein set forth, will purchase that proportion of
the total number of U.S. Option Securities then being purchased which the number
of Initial U.S. Securities set forth in Schedule A opposite the name of such
U.S. Underwriter bears to the total number of Initial U.S. Securities, subject
in each case to such adjustments as the Global Coordinator in its discretion
shall make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, New York 10005 or at such other
place as shall be agreed upon by the Global Coordinator and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on the date hereof) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed
<PAGE>
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upon by the Global Coordinator and the Company (such time and date of payment
and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option
Securities are purchased by the U.S. Underwriters, payment of the purchase price
for, and delivery of certificates for, such U.S. Option Securities shall be made
at the above-mentioned offices, or at such other place as shall be agreed upon
by the Global Coordinator and the Company, on each Date of Delivery as specified
in the notice from the Global Coordinator to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the U.S. Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
(e) Appointment of Qualified Independent Underwriter. The Company
hereby confirms its engagement of Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") as, and DLJ hereby confirms its agreement with the Company
to render
<PAGE>
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services as, a "qualified independent underwriter" within the meaning of Section
(b)(15) of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD") with respect to the offering and sale of
the U.S. Securities. DLJ, solely in its capacity as qualified independent
underwriter and not otherwise, is referred to herein as the "Independent
Underwriter". As compensation for the services of the Independent Underwriter
hereunder, the Company agrees to pay the Independent Underwriter $5,000 at the
Closing Time. The price at which the U.S. Securities will be sold to the public
shall not be higher than the maximum price recommended by the Independent
Underwriter.
SECTION 3. Covenants of the Company. The Company covenants with each
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Global Coordinator immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (includ-
<PAGE>
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ing any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectuses, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Global Coordinator or counsel for the U.S. Underwriters shall
object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein) and signed copies of
all consents and certificates of experts, and will also deliver to the
U.S. Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
U.S. Underwriter, without charge, as many copies of each preliminary
prospectus as such U.S. Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each U.S. Underwriter, without
charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act or the Securities Exchange of 1934 (the "1934
Act"), such number of copies of the U.S. Prospectus (as amended or
supplemented) as such U.S. Underwriter may reasonably request. The U.S.
Prospectus and any amendments or supplements thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agree-
<PAGE>
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ment, the International Purchase Agreement and the Prospectuses. If at any
time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion
of counsel for the U.S. Underwriters or for the Company, to amend the
Registration Statement or amend or supplement any Prospectus in order that
the Prospectuses will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish
to the U.S. Underwriters such number of copies of such amendment or
supplement as the U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the U.S. Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Global
Coordinator may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective
date of the Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities
have been so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order
<PAGE>
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to make generally available to its securityholders as soon as practicable
an earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect the
listing of the Class A Ordinary Shares (including the Securities) on the
Amsterdam Stock Exchange and comply with the requirements of such exchange
to maintain such listing. In addition, the Company will use its best
efforts to effect and maintain the quotation of the Class A Ordinary
Shares (including the Securities) on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by
the Nasdaq National Market of companies that have securities that are
traded in the over-the-counter market and quotations for which are
reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise dispose of or transfer any Class A
Ordinary Shares or any securities convertible into or exercisable or
exchangeable for Class A Ordinary Shares (including, without limitation,
the Class B Ordinary Shares) or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Class A Ordinary Shares, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Class A Ordinary Shares
or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the sale of the Securities hereunder or under the
International Purchase Agreement or (B) the issuance of any Class A
Ordinary Shares by the Company upon the exercise of options or warrants or
the conversion of securities
<PAGE>
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outstanding on the date hereof and referred to in the Prospectuses. In
addition, during a period of one year from the date of the Prospectuses,
the Company will not, without the prior written consent of the Global
Coordinator, file any registration statement under the 1933 Act for the
benefit of any person (or any of their transferees) listed on Schedule C
hereto.
(k) Reporting Requirements. The Company, during the period when
the Prospectuses are required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act and rules and regulations of the Commission
thereunder within the time periods referred to therein.
(l) Compliance with Rule 463. The Company will file with the
Commission such reports as may be required pursuant to Rule 463 of the
1933 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay
all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iii) the fees and disbursements of the
Company's counsel, accountants and other advisors, (iv) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of
counsel with the preparation of the Blue Sky Survey and any supplement thereto,
(v) the printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectuses and any amendments or
supplements thereto, (vi) all "road show" expenses of the Company and the
Underwriters, (vii) the preparation, printing and delivery to the Underwriters
of copies of any Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the filing
fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the NASD of the terms of the sale
of the Securities, (x) the fees and expenses incurred in connection with the
inclusion of the Securities in
<PAGE>
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the Nasdaq National Market and (xi) the fees and expenses of the Independent
Underwriter.
(b) Termination of Agreement. If this Agreement is terminated by
the U.S. Representatives in accordance with the provisions of Section 5 hereof
(other than in accordance with paragraph (j) as a result of the failure of the
International Managers to comply with their obligations under the International
Purchase Agreement) or Section 9(a)(i) hereof, the Company shall reimburse the
U.S. Underwriters for all of their out-of-pocket expenses incurred by the U.S.
Underwriters in connection with this Agreement or the offering of the Securities
contemplated hereunder, including the reasonable fees and disbursements of
counsel and special counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the U.S. Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance
with the requirements of Rule 430A) or, if the Company has elected to rely
upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of
Closing Time, of each of (i) Cravath Swaine & Moore, counsel for the
Company, (ii) Harvey Westwood and Riegels, special British Virgin Islands
counsel for the Company, (iii) Mallinicks, special
<PAGE>
-22-
counsel and regulatory counsel for the Company, (iv) Zepos & Zepos,
special Greek counsel for the Company, (v) Nauta Dutilh, special Dutch
regulatory counsel for the Company, (vi) Loyens & Volkmaars, special Dutch
tax counsel for the Company, and (vii) White & Case (Thailand) Limited,
special Thai counsel for the Company, each in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letters for each of the other U.S. Underwriters
to the effect set forth in Exhibits A-1 through A-7 hereto, respectively.
(c) Opinion of Counsel for U.S. Underwriters. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as
of Closing Time, of each of Cahill Gordon & Reindel, counsel for the U.S.
Underwriters, and Linklaters & Paines, special Thai counsel to the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters as to such matters as are reasonably
requested by the Representatives.
(d) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the U.S. Representatives shall have received a
certificate of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted, are pending or
are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the U.S. Representatives shall have received from
PricewaterhouseCoopers Inc. a
<PAGE>
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letter dated such date, in form and substance satisfactory to the U.S.
Representatives, together with signed or reproduced copies of such letter
for each of the other U.S. Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from PricewaterhouseCoopers Inc. a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing on the Amsterdam Stock Exchange and shall
have been approved for inclusion in the Nasdaq National Market, in each
case, subject only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form
of Exhibit B hereto signed by the persons listed on Schedule C hereto.
(j) Purchase of Initial International Securities.
Contemporaneously with the purchase by the U.S. Underwriters of the
Initial U.S. Securities under this Agreement, the International Managers
shall have purchased the Initial International Securities under the
International Purchase Agreement.
(k) Conditions to Purchase of U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company or any subsidiary
of the Company hereunder shall be true and correct as of each Date of
Delivery and,
<PAGE>
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at the relevant Date of Delivery, the U.S. Representatives shall have
received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of such
Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion,
dated as of such Date of Delivery, of each of counsels listed in
Section 5(b), each in form and substance satisfactory to counsel for
the U.S. Underwriters, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The favorable
opinion of Cahill Gordon & Reindel, counsel for the U.S.
Underwriters, and of Linklaters & Paines, special Thai counsel to
the U.S. Underwriters, each dated such Date of Delivery, relating to
the U.S. Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section
5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers Inc., in form and substance satisfactory to
the U.S. Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished
to the U.S. Representatives pursuant to Section 5(f) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date
of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with
such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection
<PAGE>
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with the issuance and sale of the Securities as herein contemplated shall
be satisfactory in form and substance to the U.S. Representatives and
counsel for the U.S. Underwriters.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of U.S. Option Securities on a Date of Delivery which is after
the Closing Time, the obligations of the several U.S. Underwriters to
purchase the relevant Option Securities, may be terminated by the U.S.
Representatives by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of U.S. Underwriters. (1) The Company agrees
to indemnify and hold harmless each U.S. Underwriter and each person, if any,
who controls any U.S. Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation,
<PAGE>
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or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment or supplement thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the U.S. Prospectus (or any amendment or supplement
thereto).
(2) In addition to and without limitation of the Company's
obligation to indemnify DLJ as an Underwriter, the Company also agrees to
indemnify and hold harmless the Independent Underwriter and each person, if any,
who controls the Independent Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act (each, a "QIU Indemnified Party"), from
and against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, incurred as a result of the Independent Underwriter's participation
as a "qualified independent underwriter" within the meaning of Section (b)(15)
of Rule 2720 of the Conduct Rules of the NASD in connection with the offering of
the U.S. Securities, including, without limitation, the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
with respect thereto; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company.
<PAGE>
-27-
(b) Indemnification of Company, Directors and Officers. Each U.S.
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a)(1) of this Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment or supplement thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary U.S. prospectus or the U.S. Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such U.S. Underwriter through the U.S.
Representatives expressly for use in the Registration Statement (or any
amendment or supplement thereto) or such preliminary prospectus or the U.S.
Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a)(1) above, counsel to the indemnified parties shall be selected by Merrill
Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances;
provided, that, if indemnity is sought pursuant to Section 6(a)(2), then, in
addition to the fees and expenses of such counsel for the indemnified parties,
the indemnifying party shall be liable for
<PAGE>
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the reasonable fees and expenses of not more than one counsel (in addition to
any local counsel) separate from its own counsel and that of the other
indemnified parties for the QIU Indemnified Parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances if, in the
reasonable judgment of the Independent Underwriter, there may be legal defenses
available to the QIU Indemnified Parties that are different from or additional
to those available to the other indemnified parties. Any such separate counsel
for the QIU Indemnified Parties shall be designated in writing by the
Independent Underwriter. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement Without Consent if Failure To Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(1)(ii) or 6(a)(2) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemni-
<PAGE>
-29-
fied party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the U.S.
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the U.S. Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and
the U.S. Underwriters on the other hand in connection with the offering of the
U.S. Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.
The relative fault of the Company on the one hand and the U.S.
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the U.S. Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the U.S. Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by
<PAGE>
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any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue or alleged untrue statement or omission or
alleged omission.
Notwithstanding the provisions of this Section 7, (i) no U.S.
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the U.S. Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such U.S. Underwriter has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission
and (ii) the QIU Indemnified Parties shall not be required to contribute an
aggregate amount exceeding the fee received by the Independent Underwriter
pursuant to Section 2(e) hereof.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements To Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any Venture submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any U.S. Underwriter or controlling
person or any QIU Indemnified Party, or by or on behalf of the Company, and
shall survive delivery of the Securities to the U.S. Underwriters.
<PAGE>
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SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the U.S.
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the U.S. Representatives, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, the Amsterdam Stock Exchange or the Nasdaq National Market, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or (iv)
if a banking moratorium has been declared by South African, Dutch, United States
Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one
or more of the U.S. Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the U.S. Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting U.S. Underwriters, or any other underwriters, to
purchase all, but
<PAGE>
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not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the U.S. Representatives
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the U.S. Underwriters to purchase and of the Company to
sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the U.S. Underwriters to purchase and the Company to sell the relevant U.S.
Option Securities, as the case may be, either the U.S. Representatives or the
Company shall have the right to postpone Closing Time or the relevant Date of
Delivery, as the case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "U.S. Underwriter"
includes any person substituted for a U.S. Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives c/o Merrill Lynch &
Co., Merrill Lynch Pierce, Fenner & Smith Incorporated at
<PAGE>
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North Tower, World Financial Center, New York, New York 10281-1201, attention of
[ ]; and notices to the Company shall be directed to it at [ ], attention of
[ ].
SECTION 12. Parties. This Agreement shall each inure to the benefit
of and be binding upon the U.S. Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the U.S. Underwriters, the Independent Underwriter and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7, and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the U.S. Underwriters, the Independent Underwriter and the
Company and their respective successors, and said controlling persons and
officers and directors, and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any U.S. Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICT OF LAWS. SPECIFIED TIMES OF
DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company (i)
acknowledges that it has, by separate written instrument, designated and
appointed CT Corporation System, 1633 Broadway, New York, New York 10019 (and
any successor entity), as its authorized agent upon which process may be served
in any suit or proceeding arising out of or relating to this Agreement that may
be instituted in any Federal or state court in the Borough of Manhattan, City of
New York, State of New York, or brought under the United States Federal or state
securities laws, and acknowledges that CT Corporation System has accepted such
designation, (ii) submits to the non-exclusive jurisdiction of any such court in
any such suit or proceeding and (iii) agrees that service of process upon CT
Corporation System and written notice of said service to the Company in
accordance with Section 11 shall be deemed in every respect effective service of
process upon the Company in any
<PAGE>
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such suit or proceeding. The Company further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
CT Corporation System in full force and effect so long as any of the Class A
Ordinary Shares shall be outstanding; provided, however, that the Company may,
by written notice to the U.S. Representatives, designate such additional or
alternative agent for service of process under this Section 14 that (i)
maintains an office located in the Borough of Manhattan, City of New York, in
the State of New York and (ii) is either (x) counsel for the Company or (y) a
corporate service company which acts as agent for service of process for other
persons in the ordinary course of its business. Such written notice shall
identify the name of such agent for process and the address of the office of
such agent for service of process in the Borough of Manhattan, City of New York,
State of New York.
To the extent that the Company or any of its properties, assets or
revenues may or may hereafter become entitled to, or have attributed to the
Company, any right of immunity, on the grounds of sovereignty or otherwise, from
any legal action, suit or proceeding, from the giving of any relief in any such
legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any New York or U.S. federal court, from service of process,
from attachment upon or prior to judgment, from attachment in aid of execution
of judgment, or from execution of judgment, or other legal process or proceeding
for the giving of any relief or for the enforcement of any judgment, in any such
court in which proceedings may at any time be commenced, with respect to the
obligations and liabilities of the Company, or any other matter under or arising
out of or in connection with this Agreement or the International Purchase
Agreement, the Company hereby irrevocably and unconditionally waives such right,
and agrees not to plead or claim any such immunity, and consents to such relief
or enforcement.
SECTION 15. Judgment Currency. The Company agrees to indemnify each
U.S. Underwriter, the Independent Underwriter and each person, if any, who
controls any U.S. Underwriter or the Independent Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any loss
incurred by such party as a result of any judgment or order being given or made
against the Company for any U.S. dollar amount due under this Agreement and such
judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United
<PAGE>
-35-
States dollar amount is converted into the Judgment Currency for the purpose of
such judgment or order and (ii) the spot rate of exchange in The City of New
York at which such party on the date of payment of such judgment or order is
able to purchase United States dollars with the amount of the Judgment Currency
actually received by such party if such party had utilized such amount of
Judgment Currency to purchase United States dollars as promptly as practicable
upon such party's receipt thereof. The foregoing indemnity shall continue in
full force and effect notwithstanding any such judgment or order as aforesaid.
The term "spot rate of exchange" shall include any premiums and costs of
exchange payable in connection with the purchase of, or conversion into, United
States dollars.
SECTION 16. Effect of Headings. The Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
SECTION 17. Counterparts. This Agreement may be executed in one or
more counterparts and, when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
<PAGE>
-36-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the U.S. Underwriters and the Company in accordance with its terms.
Very truly yours,
MIH LIMITED
By
-----------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
--------------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A hereto.
<PAGE>
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................................
Donaldson, Lufkin & Jenrette
Securities Corporation....................................... _________
Total............................................................ 4,150,000
=========
Schedule A-1
<PAGE>
SCHEDULE B
MIH LIMITED
4,150,000
Class A Ordinary Shares
(No Par Value)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be $__________.
2. The purchase price per share for the U.S. Securities to be paid
by the several U.S. Underwriters shall be $__________, being an amount
equal to the initial public offering price set forth above less
$__________ per share; provided that the purchase price per share for any
U.S. Option Securities purchased upon the exercise of the over-allotment
option described in Section 2(b) shall be reduced by an amount per share
equal to any dividends or distributions declared by the Company and
payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities.
Schedule B-1
<PAGE>
SCHEDULE C
List of Persons and Entities Subject
to Lock-Up
1. MIH (BVI) Limited
2. Johnnies Industrial Corporation Limited
3. SuperSport International Holdings Limited
4. Thomson Consumer Electronics, Inc.
5. Ton Vosloo
6. Jacobus D.T. Stofberg
7. J.P. Bekker
8. Vaughan Bray
9. Johannes H.W. Hawinkels
10. Stephen Oldfield
11. Stephan J.Z. Pacak
12. Lesley R. Penfold
13. Allan M. Rosenzweig
14. Sheryl A. Raine
15. James Volkwyn
Schedule C-1
<PAGE>
-1-
Exhibit A-1
FORM OF OPINION OF CRAVATH, SWAINE & MOORE
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-1-1
<PAGE>
Exhibit A-2
FORM OF OPINION OF HARVEY WESTWOOD & RIEGELS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-2-1
<PAGE>
Exhibit A-3
FORM OF OPINION OF MALLINICKS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-3-1
<PAGE>
Exhibit A-4
FORM OF OPINION OF ZEPOS & ZEPOS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-4-1
<PAGE>
Exhibit A-5
FORM OF OPINION OF NAUTA DUTILH
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-5-1
<PAGE>
Exhibit A-6
FORM OF OPINION OF LOYENS & VOLKMAARS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-6-1
<PAGE>
Exhibit A-7
FORM OF OPINION OF WHITE & CASE (THAILAND) LIMITED
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-7-1
<PAGE>
Exhibit B
, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
United States of America
MERRILL LYNCH INTERNATIONAL
DLJ SECURITIES INTERNATIONAL
MEESPIERSON N.V.
c/o Merrill Lynch International
25 Ropemaker Place
London EC2Y 9LY
United Kingdom
Re: Agreement not to sell or otherwise
dispose of securities of MIH Limited
Ladies and Gentlemen:
The undersigned understands that MIH Limited (the "Company")
proposes to file a registration statement on Form F-1 (the "Registration
Statement") with the United States Securities and Exchange Commission in
connection with the initial public offering (the "Offering") of ordinary shares
("Shares") of the Company. The undersigned further understands that the Company
proposes to enter into one or more purchase agreements (collectively, the
"Purchase Agreement") with you as representative of the underwriters of the
Offering (the Underwriters").
In recognition of the benefit that the Offering will confer upon the
undersigned as a securityholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce the Company and the Underwriters to enter into the Pur-
<PAGE>
-3-
chase Agreement and to proceed with the Offering, the undersigned hereby agrees,
that from the date hereof until the first anniversary of the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of Merrill Lynch International, directly or indirectly, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer (collectively, a "Covered Sale") any Shares
(other than any Shares registered in the Offering) or any securities convertible
into or exchangeable or exercisable for any Shares, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition (collectively, the "Locked
Shares") or request the filing of any registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to any
of the foregoing (it being understood that such a request shall not be deemed to
have been made pursuant to any registration rights agreement until a request is
made thereunder and the mere entering into of any registration rights agreement
shall not be deemed such a request) or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of Shares, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of the Shares or other securities, in cash or otherwise.
Notwithstanding the foregoing, on or after the date which is 181
days after the date of the Purchase Agreement, the undersigned may make a
Covered Sale of any Locked Shares, pursuant to a private sale exempt from
registration under the Securities Act and without engaging in any marketing
activities, other than to any broker dealer, bank, investment fund, investment
company, insurance company, trust fund, employee benefit plan or similar
financial institution; provided, however, that (x) the aggregate number of
transferees (including subsequent transferees) who hold Locked Shares prior to
the first anniversary of the date of the Purchase Agreement shall not exceed
five and (y) each such transferee (including any subsequent transferee) must
agree in writing to be bound by the terms of this agreement as if a party
hereto.
<PAGE>
-4-
Sincerely,
Name of Securityholder:
------------------------------
(Print)
Signature:
------------------------------
Name:
Title:
(if not natural person)
===============================================================================
EXHIBIT 1.2
MIH LIMITED
(a British Virgin Islands corporation)
4,150,000
Class A Ordinary Shares
INTERNATIONAL PURCHASE AGREEMENT
Dated: April [ ], 1999
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
INTERNATIONAL PURCHASE AGREEMENT...............................................1
SECTION 1. Representations and Warranties.....................................4
(a) Representations and Warranties by the Company.............4
(i) Compliance with Registration Requirements........4
(ii) Independent Accountants..........................5
(iii) Financial Statements.............................5
(iv) No Material Adverse Change in Business...........6
(v) Good Standing of the Company.....................6
(vi) Good Standing of Subsidiaries....................6
(vii) Capitalization...................................7
(viii) Authorization of Agreement.......................7
(ix) Authorization and Description of Securities......8
(x) Absence of Defaults and Conflicts................8
(xi) Absence of Labor Dispute.........................9
(xii) Absence of Proceedings...........................9
(xiii) Accuracy of Exhibits............................10
(xiv) Possession of Intellectual Property.............10
(xv) Absence of Further Requirements.................10
(xvi) Possession of Licenses and Permits..............11
(xvii) Title to Property...............................11
(xviii) Compliance with Research Guidelines.............12
(xix) Investment Company Act..........................12
(xx) Environmental Laws..............................12
(xxi) Registration Rights.............................13
(xxii) Statistical and Market-Related Data.............13
(xxiii) Johannesburg Stock Exchange.....................13
(b) Officer's Certificates...................................13
SECTION 2. Sale and Delivery to International Managers; Closing..............13
(a) Initial Securities.......................................13
(b) Option Securities........................................14
(c) Payment..................................................14
(d) Denominations; Registration..............................15
(e) Appointment of Qualified Independent Underwriter.........16
- i -
<PAGE>
Page
----
SECTION 3. Covenants of the Company...........................................16
(a) Compliance with Securities
Regulations and Commission Requests.......................16
(b) Filing of Amendments......................................17
(c) Delivery of Registration Statements.......................17
(d) Delivery of Prospectuses..................................17
(e) Continued Compliance with Securities Laws.................18
(f) Blue Sky Qualifications...................................18
(g) Rule 158..................................................19
(h) Use of Proceeds...........................................19
(i) Listing...................................................19
(j) Restriction on Sale of Securities.........................19
(k) Reporting Requirements....................................20
(l) Compliance with Rule 463..................................20
SECTION 4. Payment of Expenses................................................20
(a) Expenses..................................................20
(b) Termination of Agreement..................................21
SECTION 5. Conditions of International Managers' Obligations..................21
(a) Effectiveness of Registration Statement...................21
(b) Opinion of Counsel for Company............................22
(c) Opinion of Counsel for the International Managers.........22
(d) Officers' Certificate.....................................22
(e) Accountant's Comfort Letter...............................23
(f) Bring-down Comfort Letter.................................23
(g) Approval of Listing.......................................23
(h) No Objection..............................................23
(i) Lock-up Agreements........................................23
(j) Purchase of Initial U.S. Securities.......................23
(k) Conditions to Purchase of
International Option Securities...........................24
(l) Additional Documents......................................25
(m) Termination of Agreement..................................25
SECTION 6. Indemnification....................................................25
(a) Indemnification of International Managers.................25
(b) Indemnification of Company, Directors and Officers........27
(c) Actions Against Parties; Notification.....................27
(d) Settlement Without Consent if Failure To Reimburse........28
SECTION 7. Contribution.......................................................29
- ii -
<PAGE>
Page
----
SECTION 8. Representations, Warranties and Agreements To Survive Delivery....31
SECTION 9. Termination of Agreement..........................................31
(a) Termination; General.....................................31
(b) Liabilities..............................................31
SECTION 10. Default by One or More of the International Managers..............32
SECTION 11. Notices...........................................................33
SECTION 12. Parties...........................................................33
SECTION 13. GOVERNING LAW AND TIME............................................33
SECTION 14. Agent for Service; Submission to
Jurisdiction; Waiver of Immunities................................33
SECTION 15. Judgment Currency.................................................35
SECTION 16. Effect of Headings................................................35
SECTION 17. Counterparts......................................................35
SCHEDULES
Schedule A - List of Underwriters...............................Sch A-1
Schedule B - Pricing Information................................Sch B-1
Schedule C - List of Persons Subject to Lock-Up.................Sch C-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Cravath, Swaine & Moore..........A-1-1
Exhibit A-2 - Form of Opinion of Harvey Westwood & Riegels........A-2-1
Exhibit A-3 - Form of Opinion of Mallinicks.......................A-3-1
Exhibit A-4 - Form of Opinion of Zepos & Zepos....................A-4-1
Exhibit A-5 - Form of Opinion of Nauta Dutilh.....................A-5-1
Exhibit A-6 - Form of Opinion of Loyens & Volkmaars...............A-6-1
Exhibit A-7 - Form of Opinion of White & Case (Thailand)Limited...A-7-1
Exhibit B - Form of Lock-up Letter................................B-1
- iii -
<PAGE>
MIH LIMITED
(a British Virgin Islands corporation)
4,150,000 Class A Ordinary Shares
(No Par Value)
INTERNATIONAL PURCHASE AGREEMENT
April [ ], 1999
MERRILL LYNCH INTERNATIONAL
DLJ Securities International MeesPierson N.V.
as Lead Managers of the several International Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
MIH Limited, an International Business Company organized under the
laws of the British Virgin Islands (the "Company"), confirms its agreement with
Merrill Lynch International, ("Merrill Lynch") and each of the other
international managers named in Schedule A hereto (collectively, the
"International Managers," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch and DLJ Securities International and MeesPierson N.V. are acting as
representatives (in such capacity, the "Lead Managers"), with respect to the
issue and sale by the Company referred to in Schedule A and the purchase by the
International Managers, acting severally and not jointly, of the respective
numbers of Class A Ordinary Shares, no par value, of the Company ("Class A
Ordinary Shares") set forth in said Schedule A, and with respect to the grant by
the Company to the International Managers, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
622,500 additional Class A Ordinary Shares to cover over-allotments, if any. The
4,150,000 Class A Ordinary Shares referred to in Schedule A (the "Initial
International Securities") to be purchased by the International Managers and all
or any part of the 622,500 Class A Ordinary Shares subject to the option
described in Section 2(b) hereof
<PAGE>
-2-
(the "International Option Securities") are hereinafter called, collectively,
the "International Securities."
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of 4,150,000 Class A Ordinary Shares
(the "Initial U.S. Securities") through arrangements with certain underwriters
outside the United States and Canada (the "U.S. Underwriters") for which Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Donaldson, Lufkin & Jenrette
Securities Corporation are acting as the representatives (the "U.S.
Representatives") and the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of an option to purchase all or any part of the U.S.
Underwriters' pro rata portion of up to 622,500 additional Class A Ordinary
Shares solely to cover over-allotments, if any (the "U.S. Option Securities"
and, together with the International Option Securities, the "Option
Securities"). The Initial U.S. Securities and the U.S. Option Securities are
hereinafter called the "U.S. Securities." It is understood that the Company is
not obligated to sell, and the International Managers are not obligated to
purchase, any Initial International Securities unless all of the Initial U.S.
Securities are contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities," and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch International (in such capacity, the "Global
Coordinator").
The Company understands that the International Managers propose to
make a public offering of the International Securities as soon as the Lead
Managers deem advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form F-1 (No. 333-74227) covering
the registration of the
<PAGE>
-3-
Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses. Promptly after
execution and delivery of this Agreement, the Company will either (i) prepare
and file a prospectus in accordance with the provisions of Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two forms
of prospectus are to be used in connection with the offering and sale of the
Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of International Prospectus is identical to the Form
of U.S. Prospectus, except for the front cover and back cover pages and the
information under the caption "Underwriting" and the inclusion in the Form of
International Prospectus of sections under the captions "Additional Information"
and "Certain Netherlands Tax Consequences." The information included in any such
prospectus or in any such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each Form of International Prospectus and Form of U.S. Prospectus
used before such registration statement became effective, and any prospectus
that omitted, as applicable, the Rule 430A Information or the Rule 434
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the exhibits thereto and schedules
thereto, at the time it became effective and including the Rule 430A Information
and the Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final Form of International
Prospectus and the final Form of U.S. Prospectus in the forms first furnished to
the Underwriters for use in connection with the offering of the Securities are
herein called the "International Prospectus" and the "U.S. Prospectus,"
respectively, and collectively, the "Prospectuses." If Rule 434 is relied on,
the terms "Interna-
<PAGE>
-4-
tional Prospectus" and "U.S. Prospectus" shall refer to the preliminary
International Prospectus dated [ ], 1999 and the preliminary U.S. Prospectus
dated [ ], 1999, respectively, each together with the applicable Term Sheet, and
all references in this Agreement to the date of such Prospectuses shall mean the
date of the applicable Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
International Prospectus, the U.S. Prospectus or any Term Sheet or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to and agrees with each International Manager as of the
date hereof, as of the Closing Time referred to in Section 2(c) hereof, and as
of each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees
with each International Manager, as follows:
(i) Compliance with Registration Requirements. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, and any
post-effective amendments thereto became effective and at the Closing Time
(and, if any International Option Securities are purchased, at the Date of
Delivery), the Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time
(and, if any International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement
<PAGE>
-5-
of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434 and the
Prospectuses shall not be "materially different," as such term is used in
Rule 434, from the prospectuses included in the Registration Statement at
the time it became effective. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the International Prospectus made in reliance
upon and in conformity with information furnished to the Company in
writing by or on behalf of any International Manager through the Lead
Managers expressly for use in the Registration Statement or the
International Prospectus.
Each preliminary prospectus and the prospectuses filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and each preliminary prospectus and each
Prospectus delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the entities
to which they relate as of the dates indicated and their respective
results of operations, shareholders' equity and cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles under International Accounting
Standards ("IAS GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules included in the Registration
Statement present fairly in accordance with IAS GAAP the information
re-
<PAGE>
-6-
quired to be stated therein. The selected and summary financial data
included in the Prospectuses present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been
no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the British Virgin Islands and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform
its obligations under this Agreement. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not, singly or in the aggregate, result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
and all entities in which the Company has a direct or indirect majority
equity interest or voting power (each a "Subsidiary" and, collectively,
the "Subsidiaries") has been duly organized (to the extent applicable) and
is validly existing as a corporation, general partnership, limited
partnership, limited liability company or similar entity in good standing
(to the extent applicable) under the laws of the jurisdiction
<PAGE>
-7-
of its organization, has organizational power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation (or other such
entity) to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not, singly or
in the aggregate, result in a Material Adverse Effect. Except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock or other ownership interests of each Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable (to
the extent applicable) and to the extent owned, directly or indirectly, by
the Company, is owned free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. None of the outstanding shares
of capital stock or other ownership interests of any Subsidiary was issued
in violation of the preemptive or similar rights of any securityholder of
such Subsidiary. The only subsidiaries of the Company are (a) the
subsidiaries listed on Exhibit 21 to the Registration Statement and (b)
certain other subsidiaries which, considered in the aggregate as a single
subsidiary, do not constitute a "significant subsidiary" as defined in
Rule 1-02 of Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
agreements or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options referred to
in the Prospectuses). The shares of issued and outstanding capital stock
of the Company have been duly authorized and validly issued and are fully
paid and non-assessable. None of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or other similar
rights of any direct or indirect securityholder of the Company.
(viii) Authorization of Agreement. The execution, delivery and
performance of this Agreement and the U.S. Purchase Agreement have been
duly authorized by all requisite corporate action on the part of the
Company. This Agree-
<PAGE>
-8-
ment and the U.S. Purchase Agreement have been duly executed and delivered
by the Company.
(ix) Authorization and Description of Securities. The Securities to
be purchased by the International Managers and the U.S. Underwriters from
the Company have been duly authorized for issuance and sale to the
International Managers pursuant to this Agreement and the U.S.
Underwriters pursuant to the U.S. Purchase Agreement, respectively, and,
when issued and delivered by the Company pursuant to this Agreement and
the U.S. Purchase Agreement, respectively, against payment of the
consideration set forth herein and in the U.S. Purchase Agreement,
respectively, will be validly issued, fully paid and non-assessable. The
Class A Ordinary Shares conform in all material respects to all statements
relating thereto contained in the Prospectuses and such description
conforms to the rights set forth in the instruments defining the same. No
holder of the Securities will be subject to personal liability by reason
of being such a holder and the issuance of the Securities is not subject
to the preemptive or other similar rights of any securityholder of the
Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any
Venture (as defined below) is in violation of its charter or by-laws (or
equivalent constitutive documents) or in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any Venture is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
Venture is subject (collectively, "Agreements and Instruments") except for
such defaults that would not, singly or in the aggregate, result in a
Material Adverse Effect. The execution, delivery and performance of this
Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in this Agreement, the U.S. Purchase Agreement
and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectuses under the caption "Use of Proceeds") and
compliance by the Company with its obligations under this Agreement and
the U.S. Purchase Agreement have been duly authorized by all necessary
corporate action and do not and will not, whether
<PAGE>
-9-
with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any Venture
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not,
singly or in the aggregate, result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or
by-laws (or equivalent constitutive documents) of the Company or any
Venture or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any Venture
or any of their assets, properties or operations. As used herein, (a)
"Venture" means any entity in which the Company has a direct or indirect
greater than 20% equity interest or voting power and (b) a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
Venture.
(xi) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any Venture exists or, to the knowledge of the Company,
is threatened, and the Company is not aware of any existing or threatened
labor disturbance by the employees of any of its or any Venture's
principal suppliers, manufacturers, customers or contractors, which, in
either case, may reasonably be expected to, singly or in the aggregate,
result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any Venture,
which is required to be disclosed in the Registration Statement (other
than as disclosed therein), or which, singly or in the aggregate, may
reasonably be expected to result in a Material Adverse Effect, or which,
singly or in the aggregate, may reasonably be expected to materially and
adversely affect the properties or assets of the Company or any Venture or
the consummation of the
<PAGE>
-10-
transactions contemplated in this Agreement and the U.S. Purchase
Agreement or the performance by the Company of its obligations hereunder
or thereunder. The aggregate of all pending legal or governmental
proceedings to which the Company or any Venture is a party or of which any
of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, singly or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. The Company and the
Ventures own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any Venture has received
any notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any
Venture therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, may reasonably be expected to result in a
Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities under this Agreement and the U.S. Purchase Agreement or
the consummation of the transactions contemplated by this Agreement and
the International Purchase Agreement, except such as have been already
obtained
<PAGE>
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and are in full force and effect or as may be required (i) under the 1933
Act or the 1933 Act Regulations and state securities or blue sky laws or
(ii) under the laws and regulations of jurisdictions outside of the United
States and Canada where the International Managers may offer and sell the
International Securities.
(xvi) Possession of Licenses and Permits. Except as otherwise
disclosed in the Registration Statement, the Company and the Ventures
possess such permits, licenses (including, without limitation, television
broadcast frequency allocations and licenses), approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate national, provincial, state or local regulatory agencies or
bodies necessary to conduct the business now operated by them. The Company
and the Ventures are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect. All
of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not,
singly or in the aggregate, result in a Material Adverse Effect. Neither
the Company nor any Venture has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xvii) Title to Property. The Company and the Ventures have good and
marketable title to all real property owned by the Company and the
Ventures and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any
Venture. All of the leases and subleases material to the business of the
Company and the Ventures, considered as one enterprise, and under which
the Company or any Venture holds properties described in the Prospectuses,
are in full force and effect, and neither the Company nor any Venture has
any notice of any material claim of any sort that has been asserted by
anyone adverse to
<PAGE>
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the rights of the Company or any Venture under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such Venture to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xviii) Compliance with Research Guidelines. The Company, directly
or indirectly, has not taken and will not take any action that is
inconsistent with the guidelines set forth in the memorandum dated January
14, 1999 of Cahill Gordon & Reindel relating to research reports, and,
without limiting the foregoing, has not distributed and will not
distribute, in any manner, any research report contemplated by such
research guidelines or any portion thereof.
(xix) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any Venture is in
violation of any national, provincial, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and the Ventures have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial actions,
suits, de-
<PAGE>
-13-
mands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any Venture and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any Venture relating to Hazardous Materials or any
Environmental Laws.
(xxi) Registration Rights. Except as disclosed in the Prospectuses,
there are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxii) Statistical and Market-Related Data. The statistical and
market-related data included in the Prospectuses are based on or derived
from sources which the Company believes to be reliable and accurate in all
material respects or represent the Company's good faith estimates that are
made on the basis of data derived from such sources.
(xxiii) Johannesburg Stock Exchange. All authorizations, approvals,
consents, qualifications or decrees of the Johannesburg Stock Exchange
which are necessary or required for the performance by the Company of its
obligations hereunder have been obtained.
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or any Ventures delivered to the Global Coordinator, the Lead
Managers or to counsel for the International Managers shall be deemed a
representation and warranty by the Company to each International Manager as to
the matters covered thereby.
SECTION 2. Sale and Delivery to the International Managers; Closing
(a) Initial Securities. The Company agrees to sell to each
International Manager, severally and not jointly, and on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, each International Manager, severally and not
jointly, agrees to purchase from the Company, at the price per share set forth
in Schedule B, the number of Initial International Securities set forth in
Schedule A opposite the name of such Inter-
<PAGE>
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national Manager, plus any additional number of Initial International Securities
which such International Manager may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(b) Option Securities. In addition, the Company hereby grants an
option to the International Managers, severally and not jointly, to purchase up
to an additional 622,500 Class A Common Shares at the price per share set forth
in Schedule B, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
International Securities upon notice by the Global Coordinator to the Company
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery for the International Option Securities (a "Date of
Delivery") shall be determined by the Global Coordinator, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the International Option Securities, each
of the International Managers, acting severally and not jointly, on the basis of
the representations and warranties of the Company contained herein and subject
to the terms and conditions herein set forth, will purchase that proportion of
the total number of International Option Securities then being purchased which
the number of Initial International Securities set forth in Schedule A opposite
the name of such International Manager bears to the total number of Initial
International Securities, subject in each case to such adjustments as the Global
Coordinator in its discretion shall make to eliminate any sales or purchases of
fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, New York 10005 or at such other
place as shall be agreed upon by the Global Coordinator and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on the date hereof) business day after the date hereof (unless
postponed in accordance
<PAGE>
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with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Global Coordinator
and the Company (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the International
Option Securities are purchased by the International Managers, payment of the
purchase price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the International
Managers, for its account, to accept delivery of, receipt for, and make payment
of the purchase price for, the Initial International Securities and the
International Option Securities, if any, which it has agreed to purchase.
Merrill Lynch, individually and not as representative of the International
Managers, may (but shall not be obligated to) make payment of the purchase price
for the Initial International Securities or the International Option Securities,
if any, to be purchased by any International Manager whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such International Manager from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
<PAGE>
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(e) Appointment of Qualified Independent Underwriter. The Company
hereby confirms its engagement of Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") as, and DLJ hereby confirms its agreement with the Company
to render services as, a "qualified independent underwriter" within the meaning
of Section (b)(15) of Rule 2720 of the Conduct Rules of the National Association
of Securities Dealers, Inc. (the "NASD") with respect to the offering and sale
of the International Securities. DLJ, solely in its capacity as qualified
independent underwriter and not otherwise, is referred to herein as the
"Independent Underwriter". As compensation for the services of the Independent
Underwriter hereunder, the Company agrees to pay the Independent Underwriter the
fee specified in Section 2(e) of the U.S. Purchase Agreement at the Closing
Time. The price at which the International Securities will be sold to the public
shall not be higher than the maximum price recommended by the Independent
Underwriter.
SECTION 3. Covenants of the Company. The Company covenants with each
International Manager as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Global Coordinator immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance
<PAGE>
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of any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, will furnish the Global Coordinator with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Global Coordinator or counsel for the
International Managers shall object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Lead Managers and counsel for the International
Managers, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Lead
Managers, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for
each of the International Managers. The copies of the Registration
Statement and each amendment thereto furnished to the International
Managers will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager Underwriter reasonably requested,
and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each International
Manager, without charge, during the period when the International
Prospectus is required to be delivered under the 1933 Act or the
Securities Exchange of 1934 (the "1934 Act"), such number of copies of the
International Prospectus (as amended or supplemented) as such
International Manager may reasonably request. The International Prospectus
and any amendments or supplements thereto furnished to the International
Managers will be identical to the electronically transmitted copies
thereof
<PAGE>
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filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the U.S. Purchase Agreement and the Prospectuses. If at any
time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion
of counsel for the International Managers or for the Company, to amend the
Registration Statement or amend or supplement any Prospectus in order that
the Prospectuses will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish
to the International Managers such number of copies of such amendment or
supplement as the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Global
Coordinator may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective
date of the Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which
<PAGE>
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the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one
year from the effective date of the Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect the
listing of the Class A Ordinary Shares (including the Securities) on the
Amsterdam Stock Exchange and comply with the requirements of such exchange
to maintain such listing. In addition, the Company will use its best
efforts to effect and maintain the quotation of the Class A Ordinary
Shares (including the Securities) on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by
the Nasdaq National Market of companies that have securities that are
traded in the over-the-counter market and quotations for which are
reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise dispose of or transfer any Class A
Ordinary Shares or any securities convertible into or exercisable or
exchangeable for Class A Ordinary Shares (including, without limitation,
the Class B Ordinary Shares) or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Class A Ordinary Shares,
<PAGE>
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whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Class A Ordinary Shares or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the sale of the Securities hereunder or under the U.S. Purchase
Agreement or (B) the issuance of any Class A Ordinary Shares by the
Company upon the exercise of options or warrants or the conversion of
securities outstanding on the date hereof and referred to in the
Prospectuses. In addition, during a period of one year from the date of
the Prospectuses, the Company will not, without the prior written consent
of the Global Coordinator, file any registration statement under the 1933
Act for the benefit of any person (or any of their transferees) listed on
Schedule C hereto.
(k) Reporting Requirements. The Company, during the period when
the Prospectuses are required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act and rules and regulations of the Commission
thereunder within the time periods referred to therein.
(l) Compliance with Rule 463. The Company will file with the
Commission such reports as may be required pursuant to Rule 463 of the
1933 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay
all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iii) the fees and disbursements of the
Company's counsel, accountants and other advisors, (iv) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of
counsel with the preparation of the Blue Sky Survey and any supplement thereto,
(v) the printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectuses and any amendments or
supplements thereto, (vi) all "road show" expenses of the Company and the
Underwrit-
<PAGE>
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ers, (vii) the preparation, printing and delivery to the Underwriters of copies
of any Blue Sky Survey and any supplement thereto, (viii) the fees and expenses
of any transfer agent or registrar for the Securities, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the NASD of the terms of the sale
of the Securities, (x) the fees and expenses incurred in connection with the
inclusion of the Securities in the Nasdaq National Market and (xi) the fees and
expenses of the Independent Underwriter.
(b) Termination of Agreement. If this Agreement is terminated by
the Lead Managers in accordance with the provisions of Section 5 hereof (other
than in accordance with paragraph (j) as a result of the failure of the U.S.
Underwriters to comply with their obligations under the U.S. Purchase Agreement)
or Section 9(a)(i) hereof, the Company shall reimburse the International
Managers for all of their out-of-pocket expenses incurred by the International
Managers in connection with this Agreement or the offering of the Securities
contemplated hereunder, including the reasonable fees and disbursements of
counsel and special counsel for the International Managers.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the International Managers. A prospectus
containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has
<PAGE>
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elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead
Managers shall have received the favorable opinion, dated as of Closing
Time, of each of (i) Cravath Swaine & Moore, counsel for the Company, (ii)
Harvey Westwood and Riegels, special British Virgin Islands counsel for
the Company, (iii) Mallinicks, special counsel and regulatory counsel for
the Company, (iv) Zepos & Zepos, special Greek counsel for the Company,
(v) Nauta Dutilh, special Dutch regulatory counsel for the Company, (vi)
Loyens & Volkmaars, special Dutch tax counsel for the Company, and (vii)
White & Case (Thailand) Limited, special Thai counsel for the Company,
each in form and substance satisfactory to counsel for the International
Managers, together with signed or reproduced copies of such letters for
each of the other International Managers to the effect set forth in
Exhibits A-1 through A-7 hereto, respectively.
(c) Opinion of Counsel for the International Managers. At Closing
Time, the Lead Managers shall have received the favorable opinion, dated
as of Closing Time, of each of Cahill Gordon & Reindel, counsel for the
International Managers, and Linklaters & Paines, special Thai counsel to
the International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers as to such
matters as are reasonably requested by the Lead Managers.
(d) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the Lead Managers shall have received a
certificate of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company has com-
<PAGE>
-23-
plied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted, are pending or
are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Lead Managers shall have received from
PricewaterhouseCoopers Inc. a letter dated such date, in form and
substance satisfactory to the Lead Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in
the Registration Statement and the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the Lead Managers
shall have received from PricewaterhouseCoopers Inc. a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than three
business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing on the Amsterdam Stock Exchange and shall
have been approved for inclusion in the Nasdaq National Market, in each
case, subject only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule C hereto.
(j) Purchase of Initial U.S. Securities. Contemporaneously with
the purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have
purchased the Initial U.S. Securities under the U.S. Purchase Agreement.
<PAGE>
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(k) Conditions to Purchase of International Option Securities. In
the event that the International Managers exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the
Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Lead Managers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(d) hereof remains true and correct as of such
Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion,
dated as of such Date of Delivery, of each of counsels listed in
Section 5(b), each in form and substance satisfactory to counsel for
the International Managers, relating to the International Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for International Managers. The
favorable opinion of Cahill Gordon & Reindel, counsel for the
International Managers, and of Linklaters & Paines, special Thai
counsel to the International Managers, each dated such Date of
Delivery, relating to the International Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers Inc., in form and substance satisfactory to
the Lead Managers and dated such Date of Delivery, substantially in
the same form and substance as the letter furnished to the Lead
Managers pursuant to Section 5(f) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph shall be a
date not more than five days prior to such Date of Delivery.
<PAGE>
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(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the Lead
Managers and counsel for the International Managers.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of International Option Securities on a Date of Delivery which is
after the Closing Time, the obligations of the several International
Managers to purchase the relevant Option Securities, may be terminated by
the Lead Managers by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of the International Managers. (1) The Company
agrees to indemnify and hold harmless each International Manager and each
person, if any, who controls any International Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Pro-
<PAGE>
-26-
spectuses (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment or supplement thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto).
(2) In addition to and without limitation of the Company's
obligation to indemnify DLJ as an Underwriter, the Company also agrees to
indemnify and hold harmless the Independent Underwriter and each person, if any,
who controls the Independent Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act (each, a "QIU Indemnified Party"), from
and against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, incurred as a result of the Independent Underwriter's participation
as a
<PAGE>
-27-
"qualified independent underwriter" within the meaning of Section (b)(15) of
Rule 2720 of the Conduct Rules of the NASD in connection with the offering of
the International Securities, including, without limitation, the aggregate
amount paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any claim
whatsoever with respect thereto; provided that (subject to Section 6(d) below)
any such settlement is effected with the written consent of the Company.
(b) Indemnification of Company, Directors and Officers. Each
International Manager severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a)(1) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment or supplement thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary international prospectus or the International Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such International Manager
through the Lead Managers expressly for use in the Registration Statement (or
any amendment or supplement thereto) or such preliminary prospectus or the
International Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a)(1) above, counsel to the indemnified parties shall be selected by Merrill
Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of
<PAGE>
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the indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances; provided, that, if indemnity is sought
pursuant to Section 6(a)(2), then, in addition to the fees and expenses of such
counsel for the indemnified parties, the indemnifying party shall be liable for
the reasonable fees and expenses of not more than one counsel (in addition to
any local counsel) separate from its own counsel and that of the other
indemnified parties for the QIU Indemnified Parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances if, in the
reasonable judgment of the Independent Underwriter, there may be legal defenses
available to the QIU Indemnified Parties that are different from or additional
to those available to the other indemnified parties. Any such separate counsel
for the QIU Indemnified Parties shall be designated in writing by the
Independent Underwriter. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement Without Consent if Failure To Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(1)(ii) or 6(a)(2) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified
<PAGE>
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party in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the International Managers on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the International Managers on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
the International Managers on the other hand in connection with the offering of
the International Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the International Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
International Managers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
<PAGE>
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The Company and the International Managers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the International Managers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no
International Manager shall be required to contribute any amount in excess of
the amount by which the total price at which the International Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such International Manager has otherwise
been required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission and (ii) the QIU Indemnified Parties shall not be
required to contribute an aggregate amount exceeding the fee received by the
Independent Underwriter pursuant to Section 2(e) of the U.S. Purchase Agreement.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
<PAGE>
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SECTION 8. Representations, Warranties and Agreements To Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any Venture submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person or any QIU Indemnified Party, or by or on behalf of the
Company, and shall survive delivery of the Securities to the International
Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the International
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Lead Managers, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, the Amsterdam Stock Exchange or the Nasdaq National Market, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or (iv)
if a banking moratorium has been declared by South African, Dutch, United States
Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7
<PAGE>
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and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the International Managers. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Lead Managers shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of International Securities to be purchased on such date, each
of the non-defaulting International Managers shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the International Managers to purchase and
of the Company to sell the Option Securities to be purchased and sold on
such Date of Delivery shall terminate without liability on the part of any
non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any
defaulting International Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to
<PAGE>
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effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for an International Manager under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers c/o Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated at North Tower, World
Financial Center, New York, New York 10281-1201, attention of [ ]; and notices
to the Company shall be directed to it at [ ], attention of [ ].
SECTION 12. Parties. This Agreement shall each inure to the benefit
of and be binding upon the International Managers and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the International Managers, the Independent Underwriter and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7, and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers, the Independent Underwriter and
the Company and their respective successors, and said controlling persons and
officers and directors, and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICT OF LAWS. SPECIFIED TIMES OF
DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company (i)
acknowledges that it has, by separate written instrument, designated and
appointed CT Corporation System, 1633 Broadway, New York, New York 10019 (and
any
<PAGE>
-34-
successor entity), as its authorized agent upon which process may be served in
any suit or proceeding arising out of or relating to this Agreement that may be
instituted in any Federal or state court in the Borough of Manhattan, City of
New York, State of New York, or brought under the United States Federal or state
securities laws, and acknowledges that CT Corporation System has accepted such
designation, (ii) submits to the non-exclusive jurisdiction of any such court in
any such suit or proceeding and (iii) agrees that service of process upon CT
Corporation System and written notice of said service to the Company in
accordance with Section 11 shall be deemed in every respect effective service of
process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of CT Corporation System in full force and effect so
long as any of the Class A Ordinary Shares shall be outstanding; provided,
however, that the Company may, by written notice to the Lead Managers, designate
such additional or alternative agent for service of process under this Section
14 that (i) maintains an office located in the Borough of Manhattan, City of New
York, in the State of New York and (ii) is either (x) counsel for the Company or
(y) a corporate service company which acts as agent for service of process for
other persons in the ordinary course of its business. Such written notice shall
identify the name of such agent for process and the address of the office of
such agent for service of process in the Borough of Manhattan, City of New York,
State of New York.
To the extent that the Company or any of its properties, assets or
revenues may or may hereafter become entitled to, or have attributed to the
Company, any right of immunity, on the grounds of sovereignty or otherwise, from
any legal action, suit or proceeding, from the giving of any relief in any such
legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any New York or U.S. federal court, from service of process,
from attachment upon or prior to judgment, from attachment in aid of execution
of judgment, or from execution of judgment, or other legal process or proceeding
for the giving of any relief or for the enforcement of any judgment, in any such
court in which proceedings may at any time be commenced, with respect to the
obligations and liabilities of the Company, or any other matter under or arising
out of or in connection with this Agreement or the International Purchase
Agreement, the Company hereby irrevocably and unconditionally waives such right,
and agrees not to plead or claim any such immunity, and consents to such relief
or enforcement.
<PAGE>
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SECTION 15. Judgment Currency. The Company agrees to indemnify each
International Manager, the Independent Underwriter and each person, if any, who
controls any International Manager or the Independent Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
loss incurred by such party as a result of any judgment or order being given or
made against the Company for any U.S. dollar amount due under this Agreement and
such judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order
and (ii) the spot rate of exchange in The City of New York at which such party
on the date of payment of such judgment or order is able to purchase United
States dollars with the amount of the Judgment Currency actually received by
such party if such party had utilized such amount of Judgment Currency to
purchase United States dollars as promptly as practicable upon such party's
receipt thereof. The foregoing indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, United States dollars.
SECTION 16. Effect of Headings. The Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
SECTION 17. Counterparts. This Agreement may be executed in one or
more counterparts and, when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
<PAGE>
-36-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the International Managers and the Company in accordance with its terms.
Very truly yours,
MIH LIMITED
By
----------------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
DLJ SECURITIES INTERNATIONAL
MEESPIERSON N.V.
By: MERRILL LYNCH INTERNATIONAL
By
--------------------------------------
Authorized Signatory
For themselves and as Lead Managers of the International Managers named in
Schedule A hereto.
<PAGE>
SCHEDULE A
Number of
Initial
International
Name of International Manager Securities
Merrill Lynch International.....................................
DLJ Securities International....................................
MeesPierson N.V................................................. _________
Total........................................................... 4,150,000
=========
Schedule A-1
<PAGE>
SCHEDULE B
MIH LIMITED
4,150,000
Class A Ordinary Shares
(No Par Value)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be $__________.
2. The purchase price per share for the International Securities to
be paid by the several International Managers shall be $__________, being
an amount equal to the initial public offering price set forth above less
$__________ per share; provided that the purchase price per share for any
International Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial International Securities but not
payable on the International Option Securities.
Schedule B-1
<PAGE>
SCHEDULE C
List of Persons and Entities Subject
to Lock-Up
1. MIH (BVI) Limited
2. Johnnies Industrial Corporation Limited
3. SuperSport International Holdings Limited
4. Thomson Consumer Electronics, Inc.
5. Ton Vosloo
6. Jacobus D.T. Stofberg
7. J.P. Bekker
8. Vaughan Bray
9. Johannes H.W. Hawinkels
10. Stephen Oldfield
11. Stephan J.Z. Pacak
12. Lesley R. Penfold
13. Allan M. Rosenzweig
14. Sheryl A. Raine
15. James Volkwyn
Schedule C-1
<PAGE>
Exhibit A-1
FORM OF OPINION OF CRAVATH, SWAINE & MOORE
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-1-1
<PAGE>
Exhibit A-2
FORM OF OPINION OF HARVEY WESTWOOD & RIEGELS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-2-1
<PAGE>
Exhibit A-3
FORM OF OPINION OF MALLINICKS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-3-1
<PAGE>
Exhibit A-4
FORM OF OPINION OF ZEPOS & ZEPOS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-4-1
<PAGE>
Exhibit A-5
FORM OF OPINION OF NAUTA DUTILH
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-5-1
<PAGE>
Exhibit A-6
FORM OF OPINION OF LOYENS & VOLKMAARS
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-6-1
<PAGE>
Exhibit A-7
FORM OF OPINION OF WHITE & CASE (THAILAND) LIMITED
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-7-1
<PAGE>
Exhibit B
, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
United States of America
MERRILL LYNCH INTERNATIONAL
DLJ SECURITIES INTERNATIONAL
MEESPIERSON N.V.
c/o Merrill Lynch International
25 Ropemaker Place
London EC2Y 9LY
United Kingdom
Re: Agreement not to sell or otherwise
dispose of securities of MIH Limited
Ladies and Gentlemen:
The undersigned understands that MIH Limited (the "Company")
proposes to file a registration statement on Form F-1 (the "Registration
Statement") with the United States Securities and Exchange Commission in
connection with the initial public offering (the "Offering") of ordinary shares
("Shares") of the Company. The undersigned further understands that the Company
proposes to enter into one or more purchase agreements (collectively, the
"Purchase Agreement") with you as representative of the underwriters of the
Offering (the Underwriters").
In recognition of the benefit that the Offering will confer upon the
undersigned as a securityholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce the Company and the Underwriters to enter into the Purchase
Agreement and to proceed with the Offering, the under-
<PAGE>
-2-
signed hereby agrees, that from the date hereof until the first anniversary of
the date of the Purchase Agreement, the undersigned will not, without the prior
written consent of Merrill Lynch International, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer (collectively, a "Covered
Sale") any Shares (other than any Shares registered in the Offering) or any
securities convertible into or exchangeable or exercisable for any Shares,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition
(collectively, the "Locked Shares") or request the filing of any registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to any of the foregoing (it being understood that such a request
shall not be deemed to have been made pursuant to any registration rights
agreement until a request is made thereunder and the mere entering into of any
registration rights agreement shall not be deemed such a request) or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of
Shares, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of the Shares or other securities, in cash or otherwise.
Notwithstanding the foregoing, on or after the date which is 181
days after the date of the Purchase Agreement, the undersigned may make a
Covered Sale of any Locked Shares, pursuant to a private sale exempt from
registration under the Securities Act and without engaging in any marketing
activities, other than to any broker dealer, bank, investment fund, investment
company, insurance company, trust fund, employee benefit plan or similar
financial institution; provided, however, that (x) the aggregate number of
transferees (including subsequent
<PAGE>
-3-
transferees) who hold Locked Shares prior to the first anniversary of the date
of the Purchase Agreement shall not exceed five and (y) each such transferee
(including any subsequent transferee) must agree in writing to be bound by the
terms of this agreement as if a party hereto.
Sincerely,
Name of Securityholder:
--------------------------------------------
(Print)
Signature:
--------------------------------------------
Name:
Title:
(if not natural person)
EXHIBIT 10.3
* Indicates where text has been omitted pursuant to a request for confidential
treatment. The omitted text has been filed separately with the Securities and
Exchange Commission.
AGREEMENT
dated 16 February 1998
between
TELECOM HOLDING COMPANY LIMITED
and
SHINAWATRA COMPUTER AND COMMUNICATIONS PUBLIC COMPANY LIMITED
and
MIH LIMITED
and
INTERNATIONAL BROADCASTING CORPORATION
PUBLIC COMPANY LIMITED
----------------------------------------------------------------
SHAREHOLDERS' AGREEMENT
RELATING TO
INTERNATIONAL BROADCASTING CORPORATION
PUBLIC COMPANY LIMITED
----------------------------------------------------------------
Mallinicks
25 Savile Row
London W1X 1AA
<PAGE>
TABLE OF CONTENTS
1. RECITALS ............................................................ 3
2. DEFINITIONS AND INTERPRETATION ...................................... 5
3. CONDITIONS .......................................................... 10
4. BUSINESS OF THE GROUP ............................................... 10
5. CORPORATE GOVERNANCE ................................................ 11
6. BUDGETS ............................................................. 20
7. ACCOUNTS ............................................................ 22
8. FINANCE ............................................................. 23
9. TRANSFER OF SHARES .................................................. 24
10. NON-COMPETE ......................................................... 28
11. DIVIDEND POLICY ..................................................... 29
12. INDEMNITY ........................................................... 30
13. SCOPE, DURATION AND TERMINATION ..................................... 31
14. CONFIDENTIALITY ..................................................... 32
15. WAIVERS ............................................................. 34
16. ASSIGNMENT .......................................................... 34
17. ENTIRE AGREEMENT .................................................... 34
18. NOTICES ............................................................. 35
19. ANNOUNCEMENTS ....................................................... 36
20. RELATIONSHIP OF THE SHAREHOLDERS .................................... 36
21. CONFLICT WITH OTHER DOCUMENTS ....................................... 36
22. GOVERNING LAW AND ARBITRATION ....................................... 37
23. COUNTERPARTS ........................................................ 39
SCHEDULE 1: FORM OF UNDERTAKING (CLAUSE 9.2.1)............................. 41
SCHEDULE 2: FORM OF UNDERTAKING (CLAUSE 9.8.1)............................. 42
2
<PAGE>
SHAREHOLDERS' AGREEMENT
This agreement is made on 16 February 1998 between
(1) TELECOM HOLDING COMPANY LIMITED, with its registered office at Telecom
Tower, 18 Ratchadaphisek Road, Huai Khwang, Bangkok, Thailand ("TH");
(2) SHINAWATRA COMPUTER AND COMMUNICATIONS PUBLIC COMPANY LIMITED, with its
registered office at 414 Phaholyotin Road, Samsen-Nai, Phayathai,
Bangkok, Thailand ("SHIN");
(3) MIH LIMITED, with its registered office at 3rd Floor, Abbot Bulding,
Main Street, Road Town, Tortola, British Virgin Islands ("MIH"); and
(4) INTERNATIONAL BROADCASTING CORPORATION PUBLIC COMPANY LIMITED, with its
registered office at 1376/1 Nakornchaisri Road, Dusit, Bangkok,
Thailand (the "Company").
1. RECITALS
1.1. The Company is incorporated in Thailand with registration
number Bor.Mor.Jor 444 and has entered into an agreement dated
17 April 1989 (as amended on 19 May 1994) with MCOT in terms
of which the Company is entitled to conduct subscription
television in Thailand. The shares of the Company are listed
on the SET.
1.2. At the Effective Date -
1.2.1. if TOT will have exercised its option to acquire
shares in UTV, the issued and outstanding Shares of
the Company will comprise 475,564,751 ordinary Shares
of Baht 10 each;
1.2.2. if TOT will not have exercised its option to acquire
shares in UTV, the issued and outstanding Shares of
the Company will comprise 480,782,376 ordinary Shares
of Baht 10 each;
3
<PAGE>
1.2.3. SHIN and MIH will each own 84,176,550 of the issued
and outstanding Shares of the Company;
1.2.4. MCOT will own 3,000,000 of the issued and outstanding
Shares of the Company;
1.2.5. if TOT will have exercised its option to acquire
shares in UTV, TH will own 232,564,751 of the issued
and outstanding Shares of the Company;
1.2.6. if TOT will not have exercised its option to acquire
shares in UTV, TH will own 237,782,376 of the issued
and outstanding Shares of the Company;
1.2.7. the balance of the issued and outstanding Shares of
the Company will be owned by members of the public;
1.2.8. if TOT will have exercised its option to acquire
shares in UTV, the Company will own 222,864,600
(constituting 95.71 percent) of all the issued and
outstanding shares of UTV. The remaining issued and
outstanding shares in UTV will be owned by MCOT as to
5,000,000 (constituting 2.15 percent) and by TOT as
to 5,000,000 (constituting 2.15 percent);
1.2.9. if TOT will not have exercised its option to acquire
shares in UTV, the Company will own 227,864,600
(being 97.85 percent) of all the issued and
outstanding shares of UTV. The remaining 5,000,000
shares (constituting 2.15 percent of the total issued
and outstanding shares of UTV) will be owned by MCOT.
1.3. UTV has also entered into an agreement with MCOT dated 6 June
1994 (as subsequently amended on 7 September 1994 and 9
November 1994) in terms of which it is entitled to conduct
subscription television in Thailand.
1.4. The businesses of the Company and of UTV will be conducted
from the same registered head office premises and by the same
executive teams.
4
<PAGE>
1.5. The purpose of this Agreement is to record the terms and
conditions regulating the relationship among TH, SHIN and MIH
as Shareholders inter se and with the Company.
2. DEFINITIONS AND INTERPRETATION
In this Agreement -
2.1. clause headings are inserted for convenience only and shall
not be taken into account in its construction;
2.2. unless the context clearly indicates a contrary intention, an
expression which denotes any one gender includes the other
genders, a natural person includes a juristic person and vice
versa, the singular includes the plural and vice versa and the
following expressions bear the meanings assigned to them below
and cognate expressions bear corresponding meanings -
"Affiliate" - in relation to any company,
any other company which
directly or indirectly, (i)
is a parent company of the
first mentioned company,
(ii) is a Subsidiary of the
first mentioned company, or
(iii) is a fellow
Subsidiary of the parent
company of the first
mentioned company;
"Agreed Proportion" - such proportion as equals,
at the relevant time, the
proportion (expressed as a
percentage) which the par
value of the Shares owned
by a Shareholder bears to
the combined total par
value of all the Shares
owned by all the
Shareholders taken as a
whole or where applicable,
the combined par value of
all the Shares of the
relevant Shareholders
taken as a whole;
"Agreement" - this agreement, the
schedules hereto and all
supplementary and amendment
agreements thereto from
time to time;
5
<PAGE>
"Articles" - the Articles of Association
of any Group Company (as
applicable), as amended
from time to time;
"Auditors" - the auditors from time to
time of the Company, who
shall be appointed by a
general meeting of the
shareholders of the Company
and who shall comply with
all requirements, if any,
set for such auditors by
any applicable regulatory
and/or governmental
authorities;
"Board" - the board of directors of
the Company;
"Budgets" - the annual budgets for the
Group, as approved by the
Board from time to time in
accordance with this
Agreement;
"Business" the business of the Group
as set out in clause 4.1;
"Chairman" - the chairman of the Company
referred to in clause 5.16;
"Directors" - the members of the Board
from time to time elected
in accordance with this
Agreement;
"Effective Date" - the date on which Closing
(as defined in the Merger
Agreement) is completed in
accordance with clause 6 of
the Merger Agreement;
"Encumbrance" - includes, without
limitation, any pledge,
attachment, security
interest, the effect of
which is the creation of
security, and any option,
pre-emption, right of first
refusal or other such
right;
"Group" - the Company and its
Subsidiaries (including
UTV;
6
<PAGE>
"Group Company" - a member of the Group;
"MCOT" - the Mass Communications
Organisation of Thailand or
its successor from time to
time;
"Merger Agreement" - the Merger Agreement,
bearing the same date as
this Agreement, between the
Company, TH and UTV;
"Pay-TV" - (i) the exhibition or
transmission, whether by
wire, telephone wire,
over-the-air, cable, optic
fibre, satellite, microwave
signals or any other means
of delivery now known or
hereafter developed or
discovered, of audio,
visual and/or audio visual
data, programming or
services substantially in
scrambled or encrypted
format, to a subscriber,
capable of being
unscrambled or decrypted by
individually addressable
decoders or equivalent
devices, where a fee is
payable by such subscriber
(in addition, if
applicable, to being
charged by the Person
transmitting the signal
incorporating such
programming, data or
services) for the right to
view and/or participate in
such data, programs and
services in unencrypted
format; (ii) the provision,
enabling and disabling of
decoders or equivalent
devices, the marketing and
sale of subscriptions and
the provision of
customer/subscriber support
services and/or know-how
relating thereto, and (iii)
in connection with the
above, the production,
compilation and scheduling
of such data, services,
programming, signal
distribution and other
related activities and
know-how;
7
<PAGE>
"Permitted Transfer" - a Transfer of
Shares to a wholly owned
Subsidiary in accordance
with clause 9.2;
"Permitted Transferee" - a Person to whom Shares are
transferred in accordance
with clause 9.2;
"Person" - any individual, firm,
company, corporation,
government, State or agency
of a State or any joint
venture, partnership,
limited liability company
or other incorporated or
unincorporated body;
"SEC" - the Securities and Exchange
Commission of Thailand or
its successors from time to
time;
"SET" - the Stock Exchange of
Thailand or its successor
from time to time;
"Share" - subject to the provisions
of clause 13.1, an issued
and outstanding share in
the capital of the Company
of whatever class;
"Shareholders" - subject to the provisions
of clause 13, TH, SHIN, MIH
and their respective
Permitted Transferees and
any other Person to whom
Shares are from time to
time Transferred in
accordance with this
Agreement;
"Shareholder Loan" - any loan made by a
Shareholder or an Affiliate
of a Shareholder to the
Company;
"Subsidiary" - in relation to an
undertaking (the holding
company) any other
undertaking in which the
holding company (or persons
acting on its or their
behalf) for the time being,
directly or indirectly,
8
<PAGE>
- holds or controls either:
(i) a majority of the
voting rights exercisable
at general meetings of the
members of that undertaking
on all, or substantially
all, matters; or
(ii) the right to appoint
or remove directors having
a majority of the voting
rights exercisable at
meetings of the board of
directors of that
undertaking on all, or
substantially all, matters;
and any undertaking which
is a Subsidiary of another
undertaking shall also be a
Subsidiary of any further
undertaking of which that
other is a Subsidiary;
"TOT" - the Telephone Organisation
of Thailand or its
successor from time to
time;
"Transfer" - in relation to any Share or
any interest in a Share,
includes (i) the sale,
transfer, lease,
assignment, grant,
renunciation, alienation,
or disposal of such Share
or of any right or interest
which a Person may have in
the Company as result of
such right or interest in
that Share; (ii) entering
into any agreement in
respect of the votes
attached to such Share;
(iii) creating or granting
any Encumbrance over or in
respect of such Share; and
(iv) any agreement (whether
or not subject to
conditions) to do or create
or grant any of the
foregoing;
"Transfer Terms" - the terms and conditions
set out in clause 9.8;
"UTV" - UTV Cable Network Public
Company Limited, with its
registered office at
Telecom Tower, 18
Ratchadaphisek Road, Huai
Khwang, Bangkok,
9
<PAGE>
Thailand;
"UTV Board" - the board of directors of
UTV.
3. CONDITIONS
3.1. This Agreement (except for the provisions referred to in
clause 3.2, which take effect on the date hereof) shall take
effect on the Effective Date.
3.2. If the Effective Date does not occur on or before 30 April
1998 (or such other date as the parties may agree on in
writing before 30 April 1998), this Agreement shall
automatically terminate on that date. In that event no party
shall subsequently have any rights or obligations under this
Agreement other than for breach of clause 14
(Confidentiality), clause 18 (Notices) and clause 22
(Governing Law and Arbitration).
4. BUSINESS OF THE GROUP
4.1. Notwithstanding anything to the contrary in any other
document, the Shareholders agree amongst each other and with
the Company that the principal objective of the Group shall be
to engage in all aspects of Pay-TV, primarily in Thailand, and
thereafter in Myanmar, Laos, Vietnam, Malaysia and Cambodia,
and if the Memorandum of Association of any Group Company does
not reflect this objective then the Shareholders shall use all
their shareholder rights to ensure that the applicable
Memorandum of Association is amended to reflect this
objective. In addition, the Group shall conduct such other
business as the Board may resolve from time to time.
4.2. The Shareholders acknowledge and agree that the Business shall
be conducted in accordance with the Memorandum of Association,
the Articles and the Budget from time to time in force and
each Shareholder shall use its best endeavours to ensure that
the Directors nominated by it vote in such manner as to ensure
that -
4.2.1. the Group operates in the most profitable manner
possible;
10
<PAGE>
4.2.2. no Group Company carries on any business other than
the business set out or specified in the Budget from
time to time in force;
4.2.3. each Group Company complies with all its obligations
under all agreements to which it is expressed to be a
party and complies with the restrictions imposed upon
it under its constitutional documents;
4.2.4. each Group Company obtains and maintains all
authorisations necessary or desirable to carry on its
business;
4.2.5. each Group Company carries on its business on sound
commercial principles; and
4.2.6. the Group Companies carry on any business with
Shareholders and outside parties on arms' length
terms.
4.3. Notwithstanding anything to the contrary herein or in the
Articles, in relation to any resolution proposed to the board
of directors of any Group Company in terms whereof such Group
Company -
4.3.1. enters into, amends, varies, terminates, cancels or
determines the interpretation of any contract with
any Shareholder, or any director or officer of a
Shareholder or any Affiliate of a Shareholder (a
"Related Party"); or
4.3.2 takes, maintains or terminates any legal or
arbitration proceedings against a Related Party,
the Shareholder concerned shall use its best endeavours to
ensure that the Directors nominated by it pursuant to clause
5.4 abstain from voting and from participating in the
discussions on such resolution.
5. CORPORATE GOVERNANCE
5.1. The first Board shall comprise 14 members.
5.2. For as long as it is a shareholder in the Company and for so
long as it is legally
11
<PAGE>
entitled, whether pursuant to a contractual right or
otherwise, to be represented on the Board, MCOT shall be
entitled to nominate such number of Directors (not exceeding
two) as the Shareholders, after consultation with MCOT, may
determine from time to time.
5.3. For so long as the Company is required in terms of any
applicable rule of the SET and/or SEC to have independent
Directors, the general meeting of shareholders of the Company
shall elect, in accordance with the provisions of clause 5.13
below, two such Directors on to the Board. A Director shall be
deemed to be independent if he qualifies as such in terms of
any applicable SEC and SET rules and regulations in force from
time to time.
5.4. Whilst a Shareholder is the registered holder of Shares
representing in aggregate -
5.4.1. 5% (five percent) or more but not exceeding 10% (ten
percent) of all Shares it shall be entitled to
nominate one person for election as a Director;
5.4.2. more than 10% (ten percent), but not more than 20%
(twenty percent) of all Shares, it shall be entitled
to nominate two persons for election as Directors;
5.4.3. more than 20% (twenty percent), but not more than 30%
(thirty percent) of all Shares, it shall be entitled
to nominate three persons for election as Directors;
5.4.4. more than 30% (thirty percent), but not more than 40%
(forty percent) of all Shares, it shall be entitled
to nominate four persons for election as Directors;
5.4.5. more than 40% (forty percent), but not more than 50%
(fifty percent) of all Shares, it shall be entitled
to nominate five persons for election as Directors;
5.4.6. more than 50% (fifty percent) of all Shares, it shall
be entitled to nominate six persons for election as
Directors.
5.5. Each Shareholder shall be entitled from time to time, by
notice in writing to the other Shareholders, to remove any of
the persons nominated by it for election as Directors and to
nominate a replacement to any nominee designated by it who
ceases or is
12
<PAGE>
unable to serve on the Board for any reason.
5.6. Each Shareholder undertakes to the others to exercise all
voting rights exercisable by it as a holder of Shares, whether
at any annual or extraordinary shareholders' meeting or at a
Board meeting, to ensure that the persons nominated (including
all replacements) from time to time by each of the
Shareholders as Directors are duly elected as such and that
such Directors are duly appointed as Authorised Directors of
the Company.
5.7. If any Shareholder notifies the other Shareholders in writing
of its desire to remove any Director previously nominated by
it pursuant to clause 5.4 and such Director does not
voluntarily submit his resignation within 4 (four) days after
the date upon which such notice is served by the Shareholder
in question, each of the Shareholders shall exercise all
shareholder rights to ensure that the Board shall, within 14
(fourteen) days after the date on which the relevant
Shareholder served notice as aforesaid, convene a meeting of
the Shareholders to be held as soon as is legally possible
and, at such meeting, each Shareholder shall exercise all
shareholder rights so as to procure the removal of such
Director from the Board. In addition -
5.7.1. during the 14 (fourteen) or more day period following
such notice, the Shareholders shall use their best
endeavours to ensure that no action is taken by the
Board until such Director is removed, other than by a
unanimous vote of the Directors appointed pursuant to
clause 5.4, (excepting only the soon-to-be-removed
Director);
5.7.2. the Shareholders agree to refrain from exercising any
shareholder or other rights to procure the removal
from the Board of any Director without the consent of
the Shareholder which nominated such Director,
provided, however, that any Director may be removed
without such consent if such Director is placed under
guardianship, becomes bankrupt or subject to an order
prohibiting him from serving as a director of the
Company or is convicted of a serious criminal
offence. No such removal (under the provisions set
out above) of a Director nominated pursuant to clause
5.4 shall affect the rights of any Shareholder to
designate immediately a different individual pursuant
to such clause. A Shareholder which, pursuant to the
provisions of clause 5.4, has lost its right to
nominate one or more persons
13
<PAGE>
for election as Directors (because the number of
Shares held by such Shareholder has fallen below the
threshold in question) shall (if required in order to
procure the removal of the Director in question),
immediately on the occurrence of such loss, be deemed
to have requested the Chairman to convene a
shareholders' meeting as aforesaid to remove from the
Board such Director nominated by such Shareholder.
5.8. A quorum at meetings of the Board shall be 75% (seventy five
percent) of the Directors, which 75% (seventy five percent)
shall comprise at least one Director nominated by each
Shareholder which, pursuant to the provisions of clause 5.4,
is entitled to nominate more than one Director. Should a
quorum not be present within 30 (thirty) minutes after the
time appointed for the commencement of any meeting of the
Board, that meeting shall stand adjourned for 72 (seventy two)
hours, at the same time and place. The adjourned meeting may
only deal with the matters which were on the agenda of the
meeting which was adjourned. Where a meeting has been
adjourned as aforesaid the Chairman shall use his best
endeavours to inform, in the most reasonably expeditious
manner, each of the Directors of the time, date and place to
which the meeting has been adjourned. If at any adjourned
meeting, a quorum is not present within 30 (thirty) minutes
after the time appointed for the commencement of such meeting,
then the Directors present shall constitute a quorum.
5.9. Meetings of the Board shall be held in Bangkok (or such other
place as all Board members may agree on from time to time) and
at such times as the Board shall determine, provided that,
unless otherwise agreed between the Shareholders, a meeting of
the Board shall be held at least once every month. Not less
than 14 (fourteen) days notice (or such other period of notice
as may be agreed from time to time by at least a majority of
the Directors) of each meeting of the Board specifying the
date, time and place of the meeting and the business to be
transacted thereat shall be given to all Directors by the
Chairman. In addition, the Board shall also meet within 14
(fourteen) days after receipt by the Company and all Directors
of a written request to this effect from any two or more
Directors. The written request shall set out such information
(referred to above) as the Chairman would have been obliged to
provide if he had called the meeting. If, notwithstanding the
above provisions, a Director fails to receive full and proper
notice of a meeting, but nevertheless is present at such
meeting, then such Director shall be deemed to have
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waived the notice requirements and shall thus not be entitled
to reply on any failure to comply with the provisions set out
above.
5.10. The Board shall establish an executive committee ("Executive
Committee") for the Group, consisting of the four executives
of the Group referred to in clauses 5.17, 5.18 and 5.19 and
one representative from each Shareholder which is the
registered holder of Shares representing more than 10% (ten
percent) of all Shares and two representatives from each
Shareholder which is the registered holder of Shares
representing more than 20% (twenty percent) of all Shares. The
Executive Committee shall report to the Board. The Board may
delegate such functions to the Executive Committee as it
resolves from time to time. The Board shall, from time to
time, stipulate the operating procedures and voting majorities
required for resolutions of decisions of the Executive
Committee, provided that such majorities shall be consistent
with the balance between the Shareholders and between their
Board representatives established by the provisions of clauses
5.12 and 5.13. During the first year after the Effective Date,
the Executive Committee shall meet weekly. Thereafter, the
Executive Committee shall meet at such times as the Board may
determine from time to time.
5.11. Notwithstanding anything to the contrary herein contained, but
subject to the following provisions being contained in the
Articles of the Company and such Articles being registered
with the appropriate authorities in Thailand, any resolution
signed by all the Directors shall be valid and effective as if
it had been passed at a meeting of the Board. Any such
resolution may consist of several counterparts, each of which
may be signed by 1 (one) or more Directors and shall be deemed
to have been passed on the date on which it was signed by the
last Director who signed it (unless a statement to the
contrary is made in that resolution).
5.12. Subject to the provisions of clause 5.11, all resolutions or
decisions of the Board shall require the affirmative vote of a
majority of the Directors present and voting at a Board
meeting, which majority shall include at least 75% (seventy
five percent) of the number of Directors nominated by the
Shareholders pursuant to clause 5.4 (but excluding the
Director(s) who, pursuant to any provision of this Agreement
or any other applicable law, rule or regulation, is(are)
obliged to abstain from voting on the resolution or decision
in question and excluding the Director(s) in respect of whom
15
<PAGE>
the Shareholder which nominated him(them) for election
undertook in terms of this Agreement to use their best
endeavours to procure the abstention of such Director(s) from
voting). The Chairman shall not under any circumstances have
an additional or casting vote.
5.13. All resolutions or decisions of the shareholders of the
Company shall require the affirmative vote of shareholders of
the Company representing a majority of the votes then
exercisable by holders of all Shares carrying voting rights
who are present and voting at a meeting of shareholders of the
Company, which majority shall include Shareholders holding
Shares carrying voting rights representing at least 75%
(seventy five percent) of all Shares carrying voting rights
then held by Shareholders (but excluding the Shares of
Shareholders which pursuant to any provision in this Agreement
or any other applicable law, rule or regulation are obliged to
abstain from voting on the resolution or decision in
question).
5.14. The Shareholders shall procure that the Chairman ensures the
distribution of the agenda of any meeting of the Board or any
shareholders' meeting in advance of the meeting, and shall
call, by not less than 5 (five) days notice to the
Shareholders, a meeting (or such other form of consultation as
the Shareholders may agree) of the Directors nominated by the
Shareholders, to take place not less than 3 (three) business
days before the relevant meeting and determine the way in
which the representatives of the Shareholders, or the
Shareholders and their respective Affiliates, will vote at the
relevant Board or shareholders' meeting. If the Chairman for
any reason whatever fails to carry out any of his duties as
set out above, any two or more Directors may do so instead.
5.15. The remuneration of the Directors shall be determined by the
Shareholders, while any compensation payable to executives of
the Company, in addition to any remuneration which such
executive may receive by reason of being a Director, shall be
determined by the Board.
5.16. Whilst SHIN is the registered holder of Shares representing in
aggregate more than 10% (ten percent) or more of all Shares,
it shall be entitled -
5.16.1. to nominate one of the Directors nominated by it for
election as Chairman; and
16
<PAGE>
5.16.2. to require the removal and replacement of such person
as Chairman.
Each Shareholder shall use its best endeavours to ensure that
the Directors nominated by it vote in such manner as to give
effect to the provisions set out above.
5.17. Whilst the Shareholding percentage of TH is larger than or
equal to the aggregate Shareholding percentage constituted by
the Shares held by SHIN and MIH together, or smaller by not
more than 5 percentage points, TH shall be entitled to
nominate (and to require the removal of) the Chief Executive
Officer from time to time of the Group ("CEO") and whilst it
is the registered holder of Shares representing more than
10%(ten percent) of all Shares, TH shall be entitled to
nominate (and require the removal of) the President from time
to time of the Group ("the President").
5.18. The Shareholders which each hold more than 10% (ten percent)
of all Shares shall be entitled, acting jointly and by
unanimous vote, to nominate the Chief Financial Officer from
time to time of the Group ("CFO").
5.19. Whilst MIH is the registered holder of Shares representing in
aggregate more than 10% (ten percent) of all Shares, MIH shall
be entitled to nominate (and to require the removal of) the
Chief Operating Officer from time to time of the Group
("COO").
5.20. If, at any time after a person has been appointed to one of
the positions referred to in clauses 5.16, 5.17, 5.18 or 5.19,
any * other than the Shareholder which nominated the person in
question) in the case of clauses 5.16, 5.17 or 5.19 or any *
in the case of clause 5.18, and/or any
*
17
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5.21. *
Each Shareholder agrees that all losses,
claims, damages or liabilities (or actions in respect of) to
which the Company and/or such Shareholders, as the case may
be, may be subject, shall, insofar as such losses, claims,
damages or liabilities arise out of or are based upon the
removal in accordance with clauses 5.18 and *, of the Chairman
or any executive, as the case may be, be borne and paid for by
the Company.
5.22. The CEO -
5.22.1. shall be the top executive in charge of the
management and operations of the Business and affairs
of the Group and shall, subject to the provisions of
this Agreement, have authority to -
5.22.1.1. deal with the employees of the Group,
including with respect to delegation of
duties, promotions, transfers,
terminations and the fixing of
remuneration, subject to any directives
of the Board, if any, in this regard;
5.22.1.2. execute the implementation by the Group
of all policies and directives laid down
by the Board; and
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<PAGE>
5.22.1.3. conduct the Business in accordance with
the Budget from time to time in force.
5.22.2. shall, unless the Board decides to the contrary,
attend all Board meetings and report to the Board on
all activities and operations of the Group, provided
that the CFO, the President and the COO may also be
invited to attend Board meetings. The CEO, President,
CFO and COO shall not be entitled to vote at such
meetings in his/her capacity as CEO, President, CFO,
or COO (as the case may be), except that such a
person shall, of course, be entitled to attend all
Board meetings and to vote as a Director, if, in
addition to his/her position as an executive, he/she
has been appointed as a Director. For the avoidance
of doubt, TH shall have the right to nominate the
person whom it nominated as CEO and/or the President
for appointment to the Board pursuant to clause 5.4;
and
5.22.3. shall, subject to the provisions of clauses 5.17,
5.18, 5.19 and 5.23, appoint (and be entitled to
remove or terminate the employment of) the staff
members and officers of the Group as the Group;
5.22.4. shall report to the Board and the Executive
Committee, as appropriate, and comply with all
policies and directives (including such directives as
stipulate the authority of the CEO to bind a Group
Company) laid down by the Board;
The COO, CFO and President shall all report to and follow the
directives of the CEO and shall be accountable in relation to
their respective functions to the CEO. Unless the Board
decides to the contrary, the President shall be responsible
for all marketing and sales functions of the Group, the CFO
shall be responsible for all financial functions of the Group
and the COO shall be responsible for all operational
activities (other than the marketing and sales activities) of
the Group.
5.23. Subject to the provisions of clause 5.22, the day to day
management of the Group and its affairs shall be carried out
by the officers of the Company and all obligations and
responsibilities on the part of such officers shall be
performed under the direction of the Board, the Executive
Committee or the CEO (as appropriate).
5.24. The CEO shall represent the Company at all shareholders'
meetings of the Company's
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Subsidiaries, which meetings shall appoint the auditors of
each such Subsidiary (which shall be the same as the Auditors)
and elect the board of directors of each such Subsidiary, as
determined by the Board, subject, in the case of the UTV
Board, to the provisions of clause 5.25. In the event of the
Directors failing to adopt a resolution, as contemplated in
clause 5.12, as to the composition of the board of any such
Subsidiary (other than UTV), the composition of any board of
any such Subsidiary shall be the same as the Board except that
MCOT shall have no representation thereon nor shall the
Directors elected pursuant to clause 5.3 be appointed as
directors of such Subsidiary.
5.25. The Company shall ensure, through the exercise of all voting
and other rights which it has as a shareholder in UTV, that
the UTV Board shall consist of the same persons who have been
elected as Directors pursuant to clause 5.4 and of
representatives of MCOT and, in this regard, the provisions of
clause 5.2 shall apply, mutatis mutandis, to the UTV Board. In
addition, if at any time during this Agreement, TOT is a
Shareholder in UTV, it shall be entitled to nominate such
number of directors (not exceeding two) as the Shareholders,
after consultation with TOT, may determine from time to time.
5.26. The provisions of clauses 5.5 through to 5.15, excluding 5.10,
shall apply, mutatis mutandis, to UTV.
5.27. If required in terms of any applicable law, rule or
regulation, the Company shall establish an audit committee
which shall operate in accordance with the provisions of all
applicable laws, rules and regulations.
6. BUDGETS
6.1. The initial Budget of and 3 (three) year financial and
business plan for the Group, being a budget in respect of the
1998 fiscal year (being the year commencing on 1 January 1998
and terminating on 31 December 1998) and a 3 (three) year
budget and financial and business plan shall be prepared by
the Company and submitted to the Board for its approval as
soon as possible after the Effective Date. Each Shareholder
shall use its best endeavours to ensure that, provided the
aggregate funding which in terms of such draft budget is to be
contributed by the shareholders of the Company
20
<PAGE>
over the aforesaid 3 year period does not exceed the Peak
Funding Requirement referred to in clause 8.1, the Directors
nominated by such Shareholder shall approve the draft budget
and business plan within 30 days after its submission to the
Board.
6.2. The Shareholders shall use their best endeavours to ensure
that a budget in respect of each and every subsequent fiscal
year (which shall commence on 1 January and terminate on 31
December of each year) and, if required by the Board, a 3
(three) year financial and business plan, for the Group is
prepared by the CEO and CFO and submitted to the Directors for
their approval, not less than 30 (thirty) days prior to the
commencement of the fiscal year. If such budget is approved
(with or without amendment) by the Directors it shall
constitute the Group's Budget for the fiscal year (or shorter
period) in respect of which it was prepared. If any annual
budget shall not have been so approved by the Directors before
the start of the fiscal year of the Company to which it
relates, the Group shall, until the budget in question shall
have been so approved, continue to operate on a budget
equivalent, on a monthly basis, to the Budget then in force
with respect to the immediately preceding fiscal year with an
increase of 10% (ten percent) for all operating cost line
items specified in such Budget.
6.3. The Directors shall, at every Board meeting, review the
performance of the Group in the light of the Budget then in
force and shall be entitled, at any time during the fiscal
year in respect of which a Budget applies, to request the CFO
to prepare and submit to the Board for its approval a draft
revised budget for the Group. The approval procedure for a
draft budget set out in clause 6.2 shall apply, mutatis
mutandis, to such draft revised budget, provided that a copy
of such draft revised budget shall be supplied to each of the
Directors not less than 15 (fifteen) days prior to the Board
meeting at which such draft revised budget is to be
considered.
6.4. The Business shall be conducted in accordance with the Budget
in force from time to time. If, however, at any time the
income of the Group is materially less than anticipated in the
then current Budget, then the Board shall immediately take the
steps referred to in clause 6.3 and shall, until a revised
budget has been approved, take all reasonable steps to reduce
the expenditure of the Group.
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<PAGE>
ACCOUNTS
7.1 Each Group Company shall at all times keep and maintain at its
principal offices true and accurate accounting and other
financial records and other books and records of its affairs.
7.2 The annual financial and related statements of each Group
Company shall be made up at the completion of each fiscal year
in both the Thai and English languages and the Shareholders
shall ensure that within 4 months after the end of each fiscal
year -
7.2.1. there shall be prepared proper financial statements,
including consolidated balance sheets as at the end
of the Company's fiscal year and a profit and loss
account in respect of such financial year, in
accordance with the requirements of the SET and with
generally accepted accounting principles and
practices in Thailand, and that the same shall be
duly audited by the Auditors; and
7.2.2. such audited financial statements together with the
Chairman's report thereon, shall be submitted by the
Directors to the shareholders of the Company for
approval at the next meeting of such shareholders.
7.3. Without prejudice to clause 7.1, the Company shall prepare in
both the Thai and English languages and send to each of the
Directors within 21 (twenty-one) days of the end of each
calendar month consolidated unaudited management accounts (for
internal purposes) and cash flow statements of the Group for
that month in such form as may be required from time to time
by the Directors.
7.4. Without prejudice to any rights granted to directors of
companies under Thai law, each Director shall have for
himself -
7.4.1. the right to full and complete access to all
properties, assets, books and records of each Group
Company;
7.4.2. the right to examine all accounting records kept by
the Group Companies; and
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<PAGE>
7.4.3. the right to be supplied with all relevant
information, including operating statistics, budgets
and forecasts and such other trading and financial
information in such form as they may reasonably
require to keep each of them properly informed of the
financial and business affairs of the Group
Companies.
FINANCE
8.1. The Shareholders acknowledge and agree that the aggregate
capital expenditure, working capital and cash flow
requirements of the Group (but excluding all funds required to
repay the shareholders loans made to the UTV Business and the
IBC Business (as such terms are defined in the Merger
Agreement) between 30 September 1997 and the Effective Date)
for the first 12 months following the Effective Date shall be
Baht * unless otherwise agreed by the Shareholders (the "Peak
Funding Requirement").
8.2 If any Group Company requires any funds ("Funding") within the
Peak Funding Requirement and in terms of its then Budget to
carry out its Business -
8.2.1. each Shareholder shall, in the first place, use its
best endeavours to procure that the Funding is
financed, as far as practicable, from outside
sources, such as the financial and/or capital
markets, on terms acceptable to the Shareholders;
8.2.2. and the Company is unable, within a reasonable
period, to acquire any of the Funding in the manner
set out in clause 8.2.1, the Funding or the
unacquired portion thereof, as the case may be, shall
be funded by means of an increase in the share
capital of the Company and each Shareholder shall
(and each Shareholder shall use its best endeavours
to ensure that the Director(s) nominated by it
pursuant to clause 5.4 shall) vote in favour of all
resolutions required for such capital increase.
8.3. No shareholder shall be obliged to provide its pro rata
portion of any Funding ("Funding Contribution"). In the event
that any Shareholder does not provide its Funding Contribution
in whole or in part ("a Funding Non-Provider"), the provisions
23
<PAGE>
of clause 8.4 shall apply in respect of such part of the
Funding as the Funding Non-Provider(s) has/have failed to
provide ("the Funding Shortfall"), but the Funding
Non-Provider shall have no obligation or liability to the
Company or otherwise in respect of the Funding Shortfall,
provided that if the funding is contributed by means of a
subscription for Shares then, to the extent that it does not
provide its Funding Contribution, its Shareholding shall be
diluted.
8.4. All Shareholders which are not Funding Non-Providers shall be
entitled to provide the Funding Shortfall in their Agreed
Proportions. If more than one Shareholder offers to provide
all of the Funding Shortfall, the Funding Shortfall shall be
so provided by each such Shareholder pro rata, as nearly as
may be, to their Agreed Proportions at the date on which the
Funding is to be provided.
8.5. Notwithstanding the other provisions of this clause 8, if any
of the Shareholders, with the prior written consent of all the
other Shareholders, issue any guarantees, indemnities,
suretyships or the like over their assets ("guarantees"), as
security for any Indebtedness of any Group Company, then
irrespective of whether such guarantees are issued by 1 (one)
or more or all of the Shareholders, or by any of them jointly,
or by any of them jointly and severally, each consenting
Shareholder hereby agrees to indemnify the others against
claims, actions, expenses, liabilities or losses which may be
suffered by the other pursuant to such guarantees, to the
extent that it is necessary to ensure that the loss shall be
shared equitably between the Shareholders in the Agreed
Proportions at the time that the loss is sustained.
8.6. The Shareholders undertake with each other to vote in favour
of (and to use their best endeavours to ensure that the
Directors appointed by them respectively vote in favour of)
all resolutions required to be passed for the issue of Shares
or the creation of Shareholders' Loans as contemplated in this
clause 8 and to do such other things as may be necessary in
order to give effect to the provisions of this clause 8.
9. TRANSFER OF SHARES
General Restriction on Transfers
9.1. The Shareholders agree and undertake that, except as may be
agreed between them pursuant to the provisions of clause 9.8,
no Transfer of any of their Shares or
24
<PAGE>
Shareholder Loans may be made or registered (or purport to be
made or registered) at any time after the date hereof, save as
provided for in this clause 9 and subject always to compliance
with the Transfer Terms.
Permitted Transfers
9.2. A Shareholder may at any time and on any terms Transfer all
(but not part only) of its Shares to a wholly owned Subsidiary
provided that:
9.2.1. it shall be a condition precedent to any such
Transfer (and any registration thereof) that the
transferor and the transferee enter into a written
undertaking in favour of the other Shareholder(s) and
the Company in the form set out in Schedule 1; and
9.2.2. if the transferee ceases to be a wholly owned
Subsidiary of the transferor, then the transferor
shall procure that the transferee shall have
Transferred to the transferor or another wholly owned
Subsidiary of the transferor all its Shares and
Shareholder Loans prior to the date of such
cessation;
provided always that, notwithstanding such Transfer, the
transferor shall for all purposes remain primarily liable for
the due and proper performance of the transferee's obligations
hereunder.
Rights of First Refusal
9.3 Subject to the provisions of clauses 9.1 and 9.4, if at any
time a Shareholder (the "Offeror") wishes to Transfer any of
its Shares it shall, by notice in writing (the "Offer") to the
Company and to the other Shareholders (the "Offerees"), offer
to sell to the Offerees such Shares ("Sale Shares"), together
with such proportion of the Shareholder Loans made by the
Offeror and/or its Affiliates as is equal (as nearly as
practicable) to the proportion of Shares to be Transferred
("Sale Claims"), at the price and on the terms specified in
the Offer. The Offer shall specify the material terms and
conditions including, without limitation, the price at which
the Offeror is prepared to sell the Sale Shares and Sale
Claims and shall remain open for acceptance by any Offeree for
30 days from the date of the Offer (the "Offer Period"). The
price for the Sale Claims shall be the face value thereof and
the price
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<PAGE>
for the Sale Shares shall be that agreed upon between the
Offeror and the Offerees and failing agreement, shall be the
average weighted middle market price of the Company's Shares
quoted on the SET during the 30 trading days preceding the day
on which the Offer is made (such middle market price to be
determined by the Company's stockbrokers who shall act as
experts and not as arbitrators and whose decision shall be
final and binding on the parties).
9.4. All Offerees shall be entitled to accept an Offer in
proportion to their Agreed Proportions of Sale Shares and Sale
Claims.
9.5. Each Offeree desiring to purchase its Agreed Proportion or
more of the Sale Shares and Sale Claims shall, within the
prescribed period, give notice in writing to the Company, the
Offeror and the other Offerees accordingly, specifying the
maximum number of Sale Shares and Sale Claims it is willing to
purchase. If any Offeree does not wish to purchase any Sale
Shares and Sale Claims, the remaining Sale Shares and Sale
Claims shall be allocated to the accepting Offerees pro rata
in proportion to their Agreed Proportions, provided that
accepting Offerees shall not be required to purchase in excess
of the number of Sale Shares and Sale Claims specified in the
notice aforesaid.
9.6. Subject to compliance with the provisions of clauses 9.3, 9.4
and 9.5, if the accepting Offerees shall not have accepted an
Offer in respect of all of the Sale Shares and Sale Claims,
the Offeror shall be entitled, within 30 (thirty) SET trading
days after such non-acceptance, to sell to a bona fide third
party, but at a cash price which shall not be less than that,
and on terms and conditions which are not, taken as a whole,
more favourable to the third party purchaser than those, at
which the Offerees were entitled to purchase the Sale Shares
and the Sale Claims in terms of clause 9.3, provided that if
the Sale Shares are sold to a bona fide third party on the
SET, the Offeree shall be entitled to sell the Sale Shares
for the market price of the Company's Shares quoted on the
SET on the date of the sale, even if such price is less than
that at which such Sale Shares were offered to the Offerees.
If no such sale shall have been effected during such 30
(thirty) SET trading day period, then the Offeror shall not
be entitled to effect any Transfer of any or all of its
Shares and Shareholder Loans thereafter unless the
provisions of clauses 9.3, 9.4 and 9.5 shall again have been
complied with in respect of such Shares and Loans.
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<PAGE>
9.7. The Shareholders acknowledge that a proposed Transfer may
result in a mandatory offer of Shares under the SET and/or SEC
and/or any other applicable rules (the "Applicable Rules")
having to be made. The Shareholders agree that in the event of
there being any irreconcilable inconsistency between any
mandatory Applicable Rule and any provision of this clause 9
set out above, then the mandatory Applicable Rule shall apply
(but to the extend of the inconsistency only) as between the
Shareholders.
Transfer Terms
9.8 Any Transfer of Shares and/or Shareholder Loans shall be made
on the following terms:
9.8.1. unless the transferee is an existing Shareholder, any
other Shareholder may stipulate as a condition
precedent to any such Transfer (and any registration
thereof) that:
9.8.1.1. the transferee enters into a written
undertaking in favour of the Company and the
other Shareholder(s) in the form set out in
Schedule 2; and
9.8.1.2 the transferee notifies the Company and the
Shareholder(s) (other than the transferor)
of its address for service of all notices
and communications to be given or made under
this Agreement;
9.8.2. if the transferee is an existing Shareholder, the
transferee shall indemnify the transferor (in the
case of a partial Transfer, in the proportion of the
Shares so Transferred) against any claim made against
the transferor by virtue of its liability as surety
or guarantor for any Group Company's obligations;
9.8.3. if the transferor shall have sold all of its Shares,
it shall continue to be bound by clauses 10
(Non-Compete) and 14 (Confidentiality) following the
sale, but shall otherwise cease to be bound by this
Agreement (except in relation to any antecedent
breach);
9.8.4. if the transferee is an existing Shareholder, the
transferor shall sell the Sale Shares and assign the
Shareholder Loans the subject of the Transfer, free
and
27
<PAGE>
clear of all Encumbrances, together with all rights
attaching thereto on or after the date of the
Transfer; and
9.8.5. if the transferee is an existing Shareholder, the
completion of the Transfer shall take place within 30
days after acceptance of the relevant Offer at the
registered office of the Company against delivery to
the transferee of duly executed transfer documents of
the Sale Shares and certificates therefor and
assignment of the Shareholder Loans to the
transferee.
10. NON-COMPETE
10.1. Subject to the provisions of clause 10.3, each of the
Shareholders undertakes to each other and the Group Companies
that while any Group Company carries on Business it shall not,
and shall procure that its Affiliates shall not, without the
prior written consent of the Company, either alone or in
conjunction with or on behalf of any other Person, or directly
or indirectly, do any of the following things while it or any
of its Permitted Transferees is a Shareholder and for a period
of 2 (two) years after it or its Permitted Transfers cease to
be a Shareholder -
10.1.1. carry on or be engaged or interested in any
Subscription Television Business in Thailand,
Myanmar, Laos, Malaysia, Vietnam or Cambodia (other
than as a holder of less that 5% (five percent) of
the stock of a corporation, the securities of which
are traded on a national securities exchange),
provided that if at any time it is proposed to the
Board that a Group Company should carry on or be
engaged or interested in a Subscription Television
Business in Myanmar, Laos, Malaysia, Vietnam or
Cambodia (as the case may be) and the Board fails for
any reason, to approve such proposal within 30 days
after the proposal was made, then the restriction on
Shareholders and their Affiliates not to carry on or
be engaged or interested in a Subscription Television
Business, as set out in this clause 10.1.1, shall, in
so far as it relates to the country in respect of
which the proposal was made, but not approved, lapse
and be of no further force or effect. For the purpose
of this clause 10.1.1, Subscription Television
Business means any business similar to that conducted
by UTV and IBC prior to the Effective Date (but
irrespective of the means of exhibition, distribution
or transmission of the
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signals of the programmes, data and services of such
businesses) as well as pay-per-view services, video
on demand services, audio services and home shopping
services; or
10.1.2. solicit or entice away any employee of a Group
Company or, for a period of two years after the date
hereof, employ any existing or former employee or
officer of a Group Company, provided that a
Shareholder and/or any of its Affiliates shall be
entitled to employ any existing or former employee or
officer of a Group Company who had been seconded to a
Group Company by such Shareholder or any of its
Affiliates; or
10.1.3. use any business name, mark or style of any Group
Company which may suggest ownership thereof; or
10.1.4. assist any other Person to do any of the aforegoing
things.
10.2. It is agreed between the parties hereto that whilst the
restrictions set out in clause 10.1 are considered fair and
reasonable, if it should be found that any of the restrictions
are void or unenforceable and if by deleting part of the
wording or substituting a different geographical limit or a
more restricted range of activities for the geographical
limits or ranges of activities set out in clause 10.1 and it
would not be void then there shall be substituted such next
less extensive limit and/or activity or such deletions shall
be made as shall render clause 10.1 valid and enforceable.
10.3 The provisions of clause 10.1.1 shall not apply to Asia
Multimedia Company Limited and its Subsidiaries.
11. DIVIDEND POLICY
The Shareholders shall procure that the Company shall declare and pay
dividends equal to * of the distributable profits of the Company in
each of its fiscal years, which declaration and payment, if any, shall
be made within 150 days after the end of each fiscal year. The Company
may also declare and pay such interim dividends as the Shareholders may
agree to from time to time.
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<PAGE>
12. INDEMNITY
12.1. The Shareholders acknowledge that -
12.1.1. Reiss Media International, Inc. ("Reiss") may have
certain claims against UTV and/or Cineplex Company
Limited ("Cineplex") arising from the agreement
between Reiss and TH dated 1 January 1995;
12.1.2. Thai Sky Cable Co Ltd ("Thai Sky") has claimed Baht
3.5 billion in compensation from Shinawatra Satellite
Public Company Limited ("SHIN"), Satellite Service
Company Limited ("SSV"), a Subsidiary of the Company,
and from the Company, arising from the alleged
unlawful cancellation of a transponder use agreement
and allegedly unethical promotions;
12.1.3. litigation is pending (i) in the court of appeal of
the state of Washington, United States of America,
between CTVC and Dr Thaksin Shinawatra, SHIN and the
Company, and (ii) in the civil court of Thailand
between Mr William Limonson and the Company (as well
as 17 other parties);
12.2. TH agrees to pay and to indemnify fully, hold harmless and
defend SHIN, UTV, MIH and Cineplex from and against any and
all claims, and/or liabilities, damages, penalties,
judgements, assessments, losses, costs and expenses
(including, but not limited to, reasonable lawyers' fees)
(collectively "Damages") incurred by UTV, SHIN, Cineplex
and/or MIH arising out of, relating to or based upon the
agreement with Reiss referred to in clause 12.1.1.
12.3. Each of SHIN and MIH agrees, jointly and severably, to pay and
to indemnify fully, hold harmless and defend SSV, TH and the
Company from and against any and all Damages incurred by SSV,
TH and the Company arising out of, relating to or based upon
the claims of Thai Sky referred to in clause 12.1.2
12.4. SHIN agrees to pay and to indemnify fully, hold harmless and
defend all Group Companies and TH against any and all Damages
incurred by any Group Company and TH arising out of, relating
to or based upon the claims of CTVC and/or Mr. Limonson
referred to in clause 12.1.3.
30
<PAGE>
12.5. The Shareholders which give(s) the indemnity referred to in
clause 12.2, 12.3 or 12.4 (as the case may be) (the
"Indemnifying Shareholder") shall pay to the Person in whose
favour the indemnity is given (the "Indemnified Person") the
amount of any and all Damages on the date on which such
Damages are incurred by the Indemnified Person (in the case of
loss or damages) and on the date on which the Damages are
discharged by the Indemnified Person (in the case of claims,
liabilities, penalties, judgements, costs and expenses).
12.6. If, pursuant to the litigation instituted by CTVC and Mr.
William Limonson (collectively, the "Claimants") as referred
to in clause 12.1.3 any of the Claimants become legally
entitled to enforce a judgement of a competent court against
any Group Company, which enforcement would result in a
material diminution in the value of TH's then Shareholding in
the Company and after full exhaustion by TH of all remedies
which it may have in terms of the indemnity granted to it in
clause 12.4, such diminution is not remedied, then TH shall be
entitled to request the other Shareholders that the Merger
Agreement as well as the Ancillary Agreements referred to
therein, be rescinded, amended or restructured as may be
appropriate. In the event of such request, the Shareholders
shall meet in order to discuss and investigate mechanisms for
such rescission, amendment or restructuring and for
restitution of all shares, businesses, assets, liabilities,
employees and monies which were transferred pursuant to those
Agreements. If the Shareholders agree on such mechanisms, then
the Shareholders shall take such steps in accordance with the
agreed mechanisms in order to implement, to the extent
practicable, the proposed restitution.
13. SCOPE, DURATION AND TERMINATION
13.1. The parties acknowledge that notwithstanding the fact that the
term "Shares" comprises all the issued and outstanding shares,
of whatever class, of the Company, the provisions of this
Agreement shall apply to Shareholders only in respect of their
holdings of the following pool of Shares: (i) their Shares as
referred to in clauses 1.2.1 to 1.2.6, (ii) all further Shares
which a Shareholder may acquire from another Shareholder
pursuant to the provisions of clause 9, and (iii) to all other
Shares which a Shareholder may acquire on account of its
holding of the Shares referred to in
31
<PAGE>
paragraphs (i) and (ii) above pursuant to a rights and/or
a capitalisation issue or a distribution in lieu of cash
dividends by the Company. The provisions of this Agreement
shall not apply to a Shareholder in respect of any Shares
acquired (before or after the date of this Agreement) by it on
the SET, and such Shares shall not be taken into account in
relation to or be subject to any of the provisions of this
Agreement.
13.2. Except as otherwise provided herein, this Agreement shall
continue in full force and effect without time limit until the
Shareholders agree in writing to terminate this Agreement.
Notwithstanding the foregoing, this Agreement shall cease to
have effect as regards any Shareholder who ceases to be the
registered holder of at least 5% (five percent) of all the
Shares save that such Shareholder shall continue to be bound
by the obligations (but shall not be entitled to the rights)
of Shareholders under clauses 9.1 to 9.3, 9.6, 9.7 and 9.8 and
save for any provisions hereof which expressly provide that
they shall continue regardless of the holding of any Shares by
any party hereto and for any provisions which are expressed to
continue in force thereafter. Any Person who ceases to hold
the aforesaid percentage of Shares shall, subject to the
aforegoing qualifications, upon such cessation, cease to be a
Shareholder hereunder.
14. CONFIDENTIALITY
14.1. Each party undertakes with the others that it shall use (and
shall procure that each of its Affiliates shall use) all
reasonable endeavours to keep confidential (and to ensure that
its officers, employees, agents and professional and other
advisers keep confidential) any information:
14.1.1. which it may have or acquire (whether before or after
the date of this Agreement) in relation to the
customers, business, assets or affairs of any Group
Company;
14.1.2. which, in consequence of the negotiations relating to
this Agreement or being a shareholder in the Company
or having appointees on the Board or the exercise of
its rights or performance of its obligations under
this Agreement, it may have or acquire (whether
before or after the date of this Agreement) in
relation to the customers, business, assets or
affairs of any of the other parties
32
<PAGE>
or their respective Affiliates;
14.1.3. which relates to the contents of this Agreement (or
any agreement or arrangement entered into pursuant to
this Agreement).
No party shall use (and shall ensure that none of its
Affiliates uses) for its own business purposes or disclose to
any third party any such information ("Confidential
Information") without the prior written consent of the other
parties.
14.2. The obligation of confidentiality under clause 14.1 shall not
apply to:
14.2.1. the disclosure on a "need to know" basis to a company
which is another member of the relevant party's group
where such disclosure is for a purpose reasonably
incidental to this Agreement;
14.2.2. information which is independently developed by the
relevant party or acquired from a third party to the
extent that it is acquired with the right to disclose
the same;
14.2.3. the disclosure of information to the extent required
to be disclosed by law, any stock exchange regulation
or any binding judgment, order or requirement of any
court or other competent authority;
14.2.4. the disclosure of information to any tax authority to
the extent reasonably required for the purposes of
the tax affairs of the party concerned or any member
of its group;
14.2.5. the disclosure in confidence to a party's
professional advisers of information reasonably
required to be disclosed for a purpose reasonably
incidental to this Agreement;
14.2.6. information which becomes within the public domain
(otherwise than as a result of a breach of this
clause 14); or
14.2.7. any announcement made in accordance with the terms of
this Agreement.
33
<PAGE>
14.3. The provisions of this clause 14 shall survive any termination
of this Agreement and shall continue to bind a party even if
it ceases to be a Shareholder hereunder pursuant to the
provisions of clause 13.
15. WAIVERS
15.1. No delay in exercising or failure to exercise any right or
remedy under this Agreement shall operate as a waiver thereof
not shall any single or partial exercise of any right or
remedy preclude either the further exercise thereof or the
exercise of any other right or remedy. The rights and
remedies provided by this Agreement are cumulative and do
not exclude any rights, powers or remedies provided by law,
at equity or otherwise.
15.2. In the event that any party shall expressly waive any breach,
default or omission hereunder, without the prior written
consent of the other Shareholders, no such waiver shall apply
to, or operate as, a waiver of similar breaches, defaults or
omissions or be deemed to be a waiver of any other breach,
default or omission hereunder.
16. ASSIGNMENT
No party hereto shall be entitled to transfer this Agreement or any of
the rights and obligations hereunder without the prior written consent
of the other parties, except to a transferee of Shares in accordance
with this Agreement.
17. ENTIRE AGREEMENT
17.1. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements between the
parties or any of them concerning the subject matter hereof
and each of them confirms that there is no other agreement
between any two of the Shareholders which affects their
relationship as Shareholders. No amendment, change or
additions hereto shall be effective or binding on any party
unless reduced to writing and executed by all the parties.
17.2. Each of the parties acknowledges that in entering into this
Agreement it is not relying on any representation or other
statement which is not set out in this Agreement or the
34
<PAGE>
other documents referred to herein.
17.3. This Agreement shall be binding upon and enure to the benefit
of the parties hereto and their respective successors and
permitted assigns. Subject to the immediately preceding
sentence, this Agreement shall not run to the benefit of or be
enforceable by any Person other than a party to this Agreement
and its successors and permitted assigns.
18. NOTICES
18.1. All notices and communications under this Agreement shall be
given in writing and shall be delivered to the relevant party
or sent by registered air mail or facsimile to the address of
that party or that party's facsimile number specified in
clause 18.2. Unless otherwise specified herein, each notice or
other communication shall be deemed effective (i) on the date
received, if personally delivered, (ii) 8 (eight) business
days after being sent, if sent by registered air mail, or
(iii) 1 (one) business day after being sent, if sent by
telecopier with confirmation of transmission.
18.2. Notices and communications shall be addressed as follows:
if to TH Telecom Tower, 18 Ratchadaphisek Road
Huai Khwang, Bangkok, Thailand
Attn: Dr Vallobh Vimolvanich
Fax No: +662 643 1883
if to MIH Planetenweg 6, 2132 HP Hoofddorp, The Netherlands
Attn: Cobus Stofberg/Allan Rosenzweig
Fax No: +31 2356 86880
and
MIH Asia, Admiralty Centre. Tower 2, 14th
Floor Office, 1406-07, 18 Harcourt Road,
Hong Kong
35
<PAGE>
Attn: Ha1ns Hawinkels
Fax No: +852 2529 0222
if to SHIN - 414 Phaholyotin Road, Samsen-Nai,
Phayathai, Bangkok, Thailand
Attn: Mr Boonklee Plangsiri
Fax No: +662 299 5039
if to the Company - 1376/1 Nakornchaisri Road, Dusit,
Bangkok, Thailand
Attn: The Chief Executive Officer
Fax No: +662 243 9021
or such other address of a party, person and/or fax number as
that party shall have notified in writing to all other parties
in accordance with clause 18.1.
18.3. All notices and communications shall be given and made in the
English language.
19. ANNOUNCEMENTS
No announcement or press release concerning this Agreement or the
transactions contemplated hereby shall be made by any party without the
prior written approval of the others, such approval not to be
unreasonably withheld or delayed.
20. RELATIONSHIP OF THE SHAREHOLDERS
It is expressly agreed that the relationship of the Shareholders shall
be that of joint venturers and not that of partners. Accordingly, the
Business shall be conducted as the business of the Group Companies and
no Shareholder shall represent to any person that such Shareholder is
authorised to act on behalf of any of the other Shareholder or that any
partnership, agency, employment or joint liability exists between the
Shareholders in respect of any person who is not a party to this
Agreement.
21. CONFLICT WITH OTHER DOCUMENTS
In the event of any conflict between the provisions of this Agreement
and the provisions of the Articles then, subject to the provisions of
the law of Thailand, the provisions of this
36
<PAGE>
Agreement shall prevail as between the Shareholders and the
Shareholders shall exercise all voting and other rights and powers
legally available to them (whether as Shareholders or otherwise) to
give effect to the provisions of this Agreement. If there is an
irreconcilable conflict between a provision of this Agreement and a
mandatory provision of the law of Thailand, the parties shall use best
efforts to agree on an alternative mechanism or provision which is as
close as reasonably possible to the provisions of this Agreement and
the conflicting provision contained in this Agreement shall be invalid
(but only to the extent necessary), provided that such invalidity shall
not affect the other provisions of this Agreement.
22. GOVERNING LAW AND ARBITRATION
22.1. This Agreement shall be governed by and construed in
accordance with the law of Thailand.
22.2. If any dispute arises at any time between any of the parties
in connection with this Agreement including, without
limitation, the formation or existence of, the implementation
of or the interpretation or application of, the parties'
respective rights and obligations in terms of or arising out
of this Agreement or its breach or termination or the
performance or non-performance of any party's obligations
hereunder or which relates in any way to any matter affecting
the interests of the parties in terms of this Agreement, and
the parties are unable to resolve their dispute, any party may
refer the matter in dispute, in the first instance, to the
respective chief executive officers of the parties for
resolution.
22.3. If after having been referred under clause 22.2, the matter in
dispute shall not have been resolved within 21 (twenty one)
days of the matter having been so referred, any of the parties
may request by notice in writing to the other parties that an
attempt be made to resolve the dispute by way of mediation by
a mediator agreed to between the parties. If the parties are
unable to agree on a mediator within 21 (twenty one) days of
receipt by the other parties of the request for mediation, the
mediation shall not take place. If the mediation occurs, the
following procedures shall be adhered to -
22.3.1. 1 (one) representative of each party shall be
entitled to attend the mediation and no party shall
be entitled to any other representation;
37
<PAGE>
22.3.2. the mediator shall in his absolute discretion
determine the nature and form of the mediation with
the sole aim of resolving the dispute by way of
negotiation as soon as possible;
22.3.3. the decisions of the mediator shall not be binding on
the parties;
22.3.4. the cost of the mediation as determined by the
mediator shall be borne by the parties in equal
shares.
22.4. If mediation does not take place because the parties cannot
agree on a mediator or, if, after mediation pursuant to clause
22.3, the dispute shall not have been resolved or the
mediation agreement shall not have been implemented within the
time agreed to or, if no time had been agreed to, within a
reasonable time after completion of the mediation, any party
may refer the matter in dispute for determination by final
arbitration in Bangkok in accordance with the Rules of the
Arbitration Institute of the Ministry of Justice of Thailand
in force at the date of the request for arbitration ("Rules"),
which Rules are deemed to be incorporated by reference into
this clause), by 3 (three) arbitrators (unless the parties
agree in writing to have a single arbitrator only), one of
whom shall be appointed by the party referring the matter to
arbitration, a further one of whom shall be appointed by the
opposing party and the third appointed by the 2 (two) so
chosen. In the event of either the referring party or the
opposing party failing to appoint an arbitrator within 30 days
after the formal commencement of the arbitration proceedings
and/or failing agreement between the 2 (two) arbitrators
within 14 (fourteen) days of their appointment, upon the
appointment of a third arbitrator, such arbitrator or
arbitrators shall be appointed by the relevant appointing
authority under the Rules on the written request of any of the
relevant parties. The arbitrators shall establish the
procedural rules applicable to the proceedings. The
arbitration shall be conducted in Thai and also, if so
requested by a party to the arbitration proceedings, in the
English language. The arbitrators, if so required by any of
the parties, shall order the parties to make discovery of all
documents relevant to the issues in the arbitration. Subject
to any applicable law, any award of such arbitration shall be
non-appealable, be finally binding upon the parties and may be
entered into and enforced by any court having jurisdiction.
The fees, costs and expenses of any arbitration in terms of
this clause 22 shall be payable in such proportions as the
arbitrators may determine or, in the absence of such
38
<PAGE>
determination, shall be payable in accordance with the Rules.
22.5. This clause shall not preclude any party from obtaining
interim relief on an urgent basis from a court of competent
jurisdiction pending any decision of the arbitrator.
22.6. The provisions of this clause -
22.6.1. constitute an irrevocable consent by the parties to
any proceedings in terms hereof and no party shall be
entitled to withdraw therefrom or claim at any such
proceedings that it is not bound by such provisions;
22.6.2. are severable from the rest of this Agreement and
shall remain in effect despite the termination of or
invalidity for any reason of this Agreement.
23. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
parties on separate counterparts, each of which shall constitute an
original, but all the counterparts shall together constitute but one
and the same instrument.
SIGNED BY ) /s/ VEERAVAT KANCHANADUE
)
)
)
for and on behalf of ) /s/ VALLOBH VIMOLVANICH
TELECOM HOLDING COMPANY LIMITED )
SIGNED BY ) /s/ HANS HAWINKELS
)
)
)
for and on behalf of )
MIH LIMITED )
SIGNED BY ) /s/ PAIBOON LIMPAPHAYOM
)
)
)
for and on behalf of ) /s/ BOONKLEE PLANGSIRI
SHINAWATRA COMPUTER AND COMMUNICATIONS )
PUBLIC COMPANY LIMITED )
39
<PAGE>
SIGNED BY ) /s/ NIWAT BOONSONG
)
)
)
for and on behalf of ) /s/ NEVILLE MEIJERS
INTERNATIONAL BROADCASTING CORPORATION )
PUBLIC COMPANY LIMITED )
40
<PAGE>
SCHEDULE 1: FORM OF UNDERTAKING (Clause 9.2.1)
To: Telecom Holding Limited
Shinawatra Computer and Communications Public Company Limited
MIH Limited
International Broadcasting Corporation Public Company Limited
From: [insert name of permitted transferee] (the "Covenantor")
Date: [insert date]
Dear Sirs
SHAREHOLDERS AGREEMENT RELATING TO INTERNATIONAL BROADCASTING
CORPORATION PLC (the "Agreement")
1 It is recorded that the Covenantor is a Permitted Transferee (as
defined in the Agreement) of [insert name of transferor] and that
[insert name of transferor] wishes to Transfer all of its Shares to the
Covenantor pursuant to clause 9.2 of the Agreement.
2 The Covenantor hereby confirms that it has been supplied with a copy of
the Agreement and hereby undertakes to each of the Parties to the
Agreement, that it shall observe, perform and be bound by the terms and
conditions of the Agreement and all documents expressed to be
supplementary or ancillary thereto as if references therein to [insert
name of the transferor] were references also to the Covenantor.
3 Notwithstanding anything contained herein or the transfer of [the
transferor's] Shares to the Covenantor, nothing in this Form of
Undertaking shall in any way release, discharge or diminish the
liability of [the transferor] for the due and prompt performance of its
(or the Covenantor's) obligations under the Agreement or any document
expressed to be supplemental or ancillary thereto.
4 The Covenantor confirms that its initial details for the purposes of
clause 18 of the Agreement are as follows: [insert name, address and
fax number]
Yours faithfully,
- -----------------------
For and on behalf of [insert name of Permitted Transferee]
41
<PAGE>
SCHEDULE 1: FORM OF UNDERTAKING (Clause 9.8.1)
To: Telecom Holding Limited
Shinawatra Computer and Communications Public Company Limited
MIH Limited
International Broadcasting Corporation Public Company Limited
From: [insert name of proposed transferee] (the "Covenantor")
Date: [insert date]
Dear Sirs
SHAREHOLDERS AGREEMENT RELATING TO INTERNATIONAL BROADCASTING
CORPORATION PLC (the "Agreement")
1 It is recorded that [insert name of transferor] wishes to Transfer
Shares to the Covenantor pursuant to clause 9 of the Agreement.
2 The Covenantor hereby confirms that it has been supplied with a copy of
the Agreement and hereby undertakes to each of the Parties to the
Agreement, that, following the Transfer of the Shares referred to in 1
above, it shall observe, perform and be bound by the terms and
conditions of the Agreement and all documents expressed to be
supplementary or ancillary thereto as a Shareholder.
3 The Covenantor confirms that its initial details for the purposes of
clause 18 of the Agreement are as follows:
[insert name, address and fax number]
Yours faithfully
- --------------------------
For and on behalf of [insert name of proposed transferee]
42
<PAGE>
AGREEMENT
Dated 20th May 1998
between
SHINAWATRA COMPUTER AND COMMUNICATIONS
PUBLIC COMPANY LIMITED
and
TELECOM HOLDING COMPANY LIMITED
and
MIH LIMITED
and
INTERNATIONAL BROADCASTING CORPORATION
PUBLIC COMPANY LIMITED
SUPPLEMENTARY SHAREHOLDERS' AGREEMENT
Mallinicks
25 Saville Row
London W1X 1AA
<PAGE>
SUPPLEMENTARY SHAREHOLDERS' AGREEMENT DATED 20TH MAY 1998
BETWEEN
(1) SHINAWATRA COMPUTER AND COMMUNICATIONS PUBLIC COMPANY LIMITED,
with its registered office at 414 Phaholyotin Road, Samsen-Nai,
Phayathai, Bangkok, Thailand ("SHIN");
(2) TELECOM HOLDING COMPANY LIMITED, with its registered office at
Telecom Tower, 18 Ratchadaphisek Road, Huai Khwang, Bankkok,
Thailand ("TH");
(3) MIH LIMITED, with its registered office at 3rd Floor, Abbot
Building, Main Street, Road Town, Tortola, British Virgin
Islands ("MIH"); and
(4) INTERNATIONAL BROADCASTING CORPORATION PUBLIC COMPANY LIMITED,
with its registered office at 1376/1 Nakornchaisri Road, Dusit,
Bangkok, Thailand (the "IBC" or "the Company").
1. RECITALS
1.1. IBC requires additional funding in order to finance its business
operations and MIH has agreed to provide such funding in the
form of equity finance by subscribing for an additional sixty
million shares in IBC in accordance with the terms of the
Subscription Agreement (defined below), which shares shall fall
within the ambit of the Shareholders' Agreement (defined below).
1.2. Completion of the Subscription Agreement, upon which date MIH
will provide the equity funding to IBC, cannot be achieved
before 12 June 1998. Inasmuch as IBC has an immediate
requirement for funding, MIH has agreed to make such funding
available to IBC by way of a short term loan in accordance with
the terms of the Loan Agreement (defined below), on the basis
that the loan shall be repaid in full out of the proceeds of the
said equity funding.
1.3. TH and SHIN, being substantial shareholders in IBC, have
undertaken to MIH and IBC, to exercise all of their voting and
other powers of control in relation to IBC
2
<PAGE>
and do such other things as may be required, in order to
procure that IBC shall have the requisite authority to enter
into and perform all of its obligations under the Subscription
Agreement and the Loan Agreement.
1.4. This Agreement, which is supplementary to the Shareholders'
Agreement, records inter alia:
1.4.1. the terms of the undertaking by TH and SHIN referred to
in clause 1.3;
1.4.2. for the avoidance of any doubt, that the shares
subscribed for by MIH under the Subscription Agreement
will fall within the ambit of the Shareholders'
Agreement;
1.4.3. that TH, SHIN and MIH have agreed to take up, in full,
their pro-rata allocation of shares pursuant to a rights
issue undertaken by IBC in May\June 1998; and
1.4.4. that certain restrictions have been agreed to by TH,
SHIN and MIH in relation to the transferability of their
shares in IBC.
2. DEFINITIONS AND INTERPRETATION
In this Agreement-
2.1. clause headings are inserted for convenience only and shall not
be taken into account in its construction;
2.2. unless the context clearly indicates a contrary intention, an
expression which denotes any one gender includes the other
genders, a natural person includes a juristic person and vice
versa, the singular includes the plural and vice versa and the
following expressions bear the meanings assigned to them below
and cognate expressions bear corresponding meanings-
"Articles" the Articles of Association of IBC,
as amended from time to time;
3
<PAGE>
"Baht" Thai Baht;
"Institutional Private the issue and allotment, by way of
Placement" private placement to various
institutions, of seventy million
common shares, ranking pari passu
with the existing issued common
shares in IBC;
"Loan Agreement" the agreement of that title between
MIH and the Company bearing the same
date as this Agreement and in terms
whereof MIH has agreed, subject to
certain conditions, to make a short
term Baht loan to the Company;
"Paribas Agreement" the agreement between MIH, IBC and
Paribas S.A. bearing the same date as
this Agreement (dealing inter alia
with the advance by Paribas S.A., on
behalf of MIH, of the subscription
monies for the Subscription Shares,
and the immediate application of such
monies towards discharge of the
indebtedness of IBC to MIH under the
Loan Agreement);
"Permitted Transferee" shall have the meaning ascribed
thereto in the Shareholders'
Agreement;
"Person" any individual, firm, company,
corporation, government, State or
agency of a State or any joint
venture, partnership, limited
liability company or other
incorporated or unincorporated body;
"Rights Issue" the issue and allotment by IBC, by 22
June 1998,
4
<PAGE>
of one hundred and ten million common
shares, ranking pari passu with the
existing issued common shares in IBC,
by way of rights issue to Persons
registered as shareholders of IBC on
15 May 1998, pro-rata to their
shareholdings in IBC at the relevant
time, at a subscription price of
twenty Baht per Share;
"Shareholders' the agreement of that title between
Agreement" the parties hereto dated 16 February
1998;
"Subscription the share subscription agreement
Agreement" between MIH and IBC bearing the same
date as this Agreement in terms
whereof, inter alia, MIH shall
subscribe for and IBC shall, by
way of private placement, issue and
allot to MIH, the Subscription
Shares at a subscription price of
twenty five Baht per share;
"Subscription Shares" sixty million common shares of Baht
10 (ten Baht) each in the share
capital of the Company, ranking pari
passu in all respects with the
existing issued common shares of IBC;
"Transfer" shall have the meaning ascribed
thereto in the Shareholders'
Agreement;
"USD" United States Dollars.
5
<PAGE>
3. VOTING AGREEMENT
3.1. Each of TH and SHIN undertakes to and in favour of MIH and
IBC, it being understood that such undertaking forms the basis
upon which MIH has agreed to enter into the Loan Agreement and
the Subscription Agreement, that each of TH and SHIN shall:
3.1.1. exercise all voting and other powers of control which
each has in relation to IBC and do such other things
as may be necessary, to procure that IBC shall have
the requisite authority to enter into and perform all
of its obligations under the Loan Agreement and the
Subscription Agreement;
3.1.1.1. in particular, but without derogating from
the generality of clause 3.1.1:
procure, in accordance with the Memorandum
and Articles of Association of IBC, that an
extraordinary general meeting of all the
shareholders of IBC is convened on 10 June
1998, for the purposes of passing a
resolution substantially in the following
form:
Resolution
"That sixty million common shares in the
authorized share capital of IBC, ranking
pari passu with the existing common shares
in the capital of IBC, be issued and
allotted by way of private placement to MIH
Limited at a subscription price of twenty
five Baht per share and that MIH Limited be
exempted from having to make a mandatory
tender offer to shareholders as a result of
such subscription by MIH Limited for shares
in IBC."
3.1.1.2. voted favour of the resolution specified in
clause 3.1.1.1 and procure that all
directors of IBC nominated by TH and SHIN
vote in favour of all necessary board
resolutions required to give effect to the
Loan Agreement and the Subscription
Agreement;
3.1.1.3. procure all necessary consents or other
permissions required in
6
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order for the IBC to enter into and perform
all of its obligations under the Loan
Agreement, the Subscription Agreement and
the Paribas Agreement;
3.1.1.4. to the extent each party is able to do so,
facilitate the fulfilment of the conditions
precedent in the Loan Agreement and the
Subscription Agreement.
4. SCOPE OF SHAREHOLDERS' AGREEMENT
It is recorded and agreed that the Subscription Shares to be issued and
allotted to MIH under the Subscription Agreement, shall together with
any other shares in IBC howsoever acquired by MIH from time to time
after the date hereof, fall within the ambit of the Shareholders
Agreement and the Shareholders' Agreement shall apply in respect of
such shares. For example, in computing the shareholding of MIH in IBC
from time to time for the purposes of determining the rights of MIH
under the Shareholders' Agreement, the Subscription Shares shall be
added to MIH's holding of shares in IBC at the relevant time.
5. RIGHTS ISSUE
5.1. It is recorded that the shareholders of IBC have passed a
resolution that IBC undertake the Rights Issue by 22 June
1998. TH, SHIN and MIH undertake to exercise their powers of
control in relation to IBC to procure that the Rights Issue
shall be effected on such date.
5.2 TH, SHIN and MIH agree and each undertake in favour the other
and IBC that each shall take up its full pro-rata allocation
of shares under the Rights Issue as follows:
5.2.1. TH shall subscribe in cash for and IBC shall issue
and allot to TH 54, 412, 443 (fifty four million four
hundred and twelve thousand four hundred and forty
three) common shares;
5.2.2. SHIN shall subscribe in cash for and IBC shall issue
and allot to SHIN 19, 246, 602 (nineteen million two
hundred and forty six thousand six hundred and two)
common shares;
7
<PAGE>
5.2.3. MIH shall subscribe in cash for and IBC shall issue
and allot to MIH 19,246,602 (nineteen million two
hundred and forty six thousand six hundred and two)
common shares.
6. RESTRICTION UPON TRANSFER OF SHARES
6.1. Each of TH, SHIN and MIH agrees and undertakes in favour of
the other that it shall not, and shall procure that any
Permitted Transferee to whom it may Transfer or may already
have Transferred any shares in IBC shall not, during the
period commencing on the date hereof and ending on such date
falling six months after the date upon which IBC shall have
issued all of the aggregate number of 240,000,000 (two
hundred and fourty million) shares pursuant to the Rights
Issue, the Subscription Agreement and the Institutional
Private Placement, or such shorter period as may be agreed
to in writing between all the parties, Transfer any of its
shares in IBC to any Person Save That:
6.1.1. shares may be Transferred to Permitted Transferees
pursuant to the provisions of the Shareholders'
Agreement, subject to the Permitted Transferee
undertaking in writing to be bound by the aforegoing
restriction; and
6.1.2. TH shall have the right to Transfer in accordance
with the terms of the Shareholders' Agreement, up to,
but no more than, one hundred and eighty nine million
shares in IBC for the sole purposes of the placement
of such shares by Paribas S.A. with institutions
together with the shares in IBC offered under the
Institutional Private Placement.
7. INDEMNITY
TH and SHIN hereby indemnify and hold MIH harmless against any losses,
costs, charges, expenses or other liabilities of whatsoever nature and
howsoever arising which MIH and\or IBC may incur as a result of TH
and\or SHIN breaching any other of their obligations under this
Agreement. In the latter regard, TH and SHIN acknowledge and agree that
MIH has agreed to enter into the Loan Agreement on the basis that the
Loan will be repaid out of the proceeds of the subscription under the
Subscription Agreement. In other words, that the
8
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conditions precedent in the Subscription Agreement will be fulfilled
and IBC shall perform all of its obligations thereunder and under the
Paribas Agreement so that the proceeds of the subscription will be
utilised only for the purpose of discharging the Loan.
8. FURTHER ASSURANCE
Each party shall do or procure to be done all such further acts and
things, and execute or procure the execution of all such other
documents, as the other may from time to time reasonably require, for
the purpose of giving the other parties the full benefit of all the
provisions of this Agreement.
9. CONFLICT WITH OTHER DOCUMENTS
In the event of any conflict between the provisions of the Agreement
and the provisions of the Shareholders' Agreement or the Articles then,
subject to the provisions of the law of Thailand, the provisions of
this Agreement shall prevail and the parties hereto shall exercise all
voting and other rights and powers legally available to them (whether
as shareholders or otherwise) to give effect to the provisions of this
Agreement. If there is an irreconsilable conflict between a provision
of the Agreement and a mandatory provision of the law of Thailand, the
parties shall use best efforts to agree on an alternative mechanism or
provision which will reflect as closely as possible the intention of
the parties as set out in this Agreement and the conflicting provision
contained in this Agreement shall be invalid (but only to the extent
necessary), provided that such invalidity shall not affect the other
provisions of this Agreement.
10. WAIVERS
10.1. No delay in exercising or failure to exercise any right or
remedy under this Agreement shall operate as a waiver thereof
nor shall any single or partial exercise of any right or
remedy preclude either the further exercise thereof or the
exercise of any other right or remedy. The rights and remedies
provided by this Agreement are cumulative and do not exclude
any rights, powers or remedies provided by law, at equity or
otherwise.
10.2. In the event that any party shall expressly waive any breach,
default or omission hereunder, without the prior written
consent of the other parties hereto, no such waiver shall
apply to, or operate as, a waiver of similar breaches,
defaults or
9
<PAGE>
omissions or be deemed to be a waiver of any other breach,
default or omission hereunder.
11. NOTICES
All notices and communications under this Agreement shall be given in
accordance with the provisions of clause 18 of the Shareholders'
Agreement.
12. GOVERNING LAW AND ARBITRATION
12.1. This Agreement shall be governed by and construed in
accordance with the law of Thailand.
12.2. If any dispute arises at any time between any of the parties
in connection with this Agreement including, without
limitation, the formation or existence of, the implementation
of or the interpretation or application of, the parties'
respective rights and obligations in terms of or arising out
of this Agreement or its breach or termination or the
performance or non-performance of any party's obligations
hereunder or which relates in any way to any matter affecting
the interests of the parties in terms of this Agreement, and
the parties are unable to resolve their dispute, any party may
refer the matter in dispute, in the first instance, to the
respective chief executive officers of the parties for
resolution.
12.3. If after having been referred under clause 12.2, the matter in
dispute shall not have been resolved within 21 (twenty one)
days of the matter having been so referred, any of the parties
may request by notice in writing to the other parties that an
attempt be made to resolve the dispute by way of mediation by
a mediator agreed to between the parties. If the parties are
unable to agree on a mediator within 21 (twenty one) days of
receipt by the other parties of the request for mediation, the
mediation shall not take place. If the mediation occurs, the
following procedures shall be adhered to -
12.3.1. 1 (one) representative of each party shall be
entitled to attend the mediation and no party shall
be entitled to any other representation;
12.3.2. the mediator shall in his absolute discretion
determine the nature and form
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<PAGE>
of the mediation with the sole aim of resolving the
dispute by way of negotiation as soon as possible;
12.3.3. the decisions of the mediator shall not be binding
on the parties;
12.3.4. the cost of the mediation as determined by the
mediator shall be borne by the parties in equal
shares.
12.4. If mediation does not take place because the parties cannot
agree on a mediator or, if, after mediation pursuant to clause
12.3, the dispute shall not have been resolved or the
mediation agreement shall not have been implemented within
the time agreed to or, if no time had been agreed to, within
a reasonable time after completion of the mediation, any
party may refer the matter in dispute for determination by
final arbitration in Bangkok in accordance with the Rules of
the Arbitration Institute of the Ministry of Justice of
Thailand in force at the date of the request for arbitration
("Rules"), (which Rules are deemed to be incorporated by
reference into this clause), by 3 (three) arbitrators
(unless the parties agree in writing to have a single
arbitrator only), one of whom shall be appointed by the
party referring the matter to arbitration, a further one of
whom shall be appointed by the opposing party and the third
appointed by the 2 (two) so chosen. In the event of either
the referring party or the opposing party failing to appoint
an arbitrator within 30 days after the formal commencement
of the arbitration proceedings and/or failing agreement
between the 2 (two) arbitrators within 14 (fourteen) days of
their appointment, upon the appointment of a third
arbitrator, such arbitrator or arbitrators shall be
appointed by the relevant appointing authority under the
Rules on the written request of any of the relevant parties.
The arbitrators shall establish the procedural rules
applicable to the proceedings. The arbitration shall be
conducted in Thai and also, if so requested by a party to
the arbitration proceedings, in the English language. The
arbitrators, if so required by any of the parties, shall
order the parties to make discovery of all documents
relevant to the issues in the arbitration. Subject to any
applicable law, any award of such arbitration shall be
non-appealable, be finally binding upon the parties and may
be entered into and enforced by any court having
jurisdiction. The fees, costs and expenses of any
arbitration in terms of this clause 12 shall be payable in
such
11
<PAGE>
proportions as the arbitrators may determine or, in the
absence of such determination, shall be payable in accordance
with the Rules.
12.5. This clause shall not preclude any party from obtaining
interim relief on an urgent basis from a court of competent
jurisdiction pending any decision of the arbitrator.
12.6. The provisions of this clause -
12.6.1. constitute an irrevocable consent by the parties to
any proceedings in terms hereof and no party shall be
entitled to withdraw therefrom or claim at any such
proceedings that it is not bound by such provisions;
12.6.2. are severable from the rest of this Agreement and
shall remain in effect despite the termination of or
invalidity for any reason of this Agreement.
13. ENTIRE AGREEMENT
13.1. This Agreement (which for the avoidance of doubt is intended
to be supplementary to the Shareholders' Agreement) together
with the agreements referred to herein, constitute the entire
agreement between the parties and supersede all prior
agreements between the parties or any of them concerning the
subject matter hereof. No amendment, change or additions
hereto shall be effective or binding on any party unless
reduced to writing and executed by all the parties.
13.2. Each of the parties acknowledges that in entering into this
Agreement it is not relying on any representation or other
statement which is not set out in this Agreement or the other
documents referred to herein.
IN WITNESS WHEREOF this Agreement has been executed on the day and year first
above written.
SIGNED BY
/s/ Niwat Boonsong
duly authorised
for and on behalf of
SHINAWATRA COMPUTER AND
COMMUNICATIONS PUBLIC COMPANY LIMITED
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SIGNED BY
/s/ Allan Rosenzweig
duly authorised
for and on behalf of
MIH LIMITED
[SEAL OF TELECOM HOLDING CO. LTD.]
SIGNED BY
/s/ Vallobh Vimolvanich /s/ Soopakij Chearavanont
duly authorised
for and on behalf of
TELECOM HOLDING COMPANY LIMITED
[SEAL OF INTERNATIONAL BROADCASTING CORP.]
SIGNED BY
/s/ Neville Meijers /s/ Niwat Boonsong
duly authorised
for and on behalf of
INTERNATIONAL BROADCASTING CORPORATION
PUBLIC COMPANY LIMITED
13
<PAGE>
Telecom Holdings Limited
Telecom Tower, 18 Ratchadphisek Road, Huai Khwang, Bangkok, Thailand
Shinawatra Computer and Communications Public Company Limited
1376/1 Nakornchaisri Road, Dusit, Bangkok, Thailand
MIH Limited
Planetenweg 6, 2132 HP Hoofddorp, The Netherlands
Dear Sirs
Amendment to Shareholders Agreement dated 16 February 1998
- ----------------------------------------------------------
The Shareholders in United Broadcasting Corporation Public Company Limited ("the
Company"), wish to have the ability to pledge their shares in the Company.
Accordingly, notwithstanding the provisions of the Shareholders Agreement to the
contrary, the parties hereby agree that a Shareholder shall be entitled to
pledge its Shares without first offering to sell such Shares to the other
Shareholders, provided that--
1. The pledgor shall immediately after entering into such pledge advise the
other Shareholders, in writing, of the identity and full address of the
pledgee; and
2. The pledgor shall have ensured that in terms of the agreement of pledge,
the pledgee shall not be entitled to Transfer any of the pledged Shares
except in accordance with the provisions of clauses 9.3 (save that the
pledgee will not be bound by the provisions as to the price of the Sale
Shares as set out in this clause), 9.4, 9.5, 9.6 and 9.7 of the
Shareholders Agreement. After the compliance with the foregoing sentence,
the pledgee shall be entitled to transfer without having to comply with
clauses 9.2 and 9.8.
Capitalised terms have the same meaning herein as in the Shareholders Agreement.
Yours sincerely
/s/ Soopakij Chearavanont
United Broadcasting Public Company Limited
<PAGE>
We agree to the provisions set out above:
Signed by
/s/ Vallobh Vimolvanich
for and on behalf of Telecom Holding Company Limited Date: 25.9.98
Signed by
/s/ Niwat Boonsong
for and on behalf of
Shinawatra Computer and Communications Public Company Limited Date: 25.9.98
Signed by
/s/ Hans Hawinkels
for and on behalf of MIH Limited Date: 25.9.98
EXHIBIT 10.4
* Indicates where text has been omitted pursuant to a request for confidential
treatment. The omitted text has been filed separately with the Securities and
Exchange Commission.
1
CONTRACT OF TELEVISION BROADCASTING
AND
ADVERTISING EXPLOITATION OF MATCHES
In Athens, today the 29th day of December 1995, the day of Friday,
by and between
The legal entity of private law status with the title "FOOTBALL SOCIETES
ANONYMES ASSOCIATION" (EPAE), which has its registered office in 42
Themistokleous St. Athens, and is legally represented by the President of EPAE
Mr. George Dedes.
and
The societe anonyme with the company name "NETHOLD HELLAS S.A.", which has its
registered office in 76 Katechaki and Kifissias St., Athens and is legally
represented by the Vice-President of its Board of Directors Mr. Christodoulos
Ekonomides and its General Manager, Mr. Charalambos Tagmatarchis.
the following points are agreed upon and mutually accepted:
The first contracting party (hereinafter referred to as "EPAE"), which in this
case acts according to the provisions of Law 1958/91, the provisions of the
Statutes, Rules and Regulations of the Hellenic Football Federation (EPO), and
the provisions of the Regulations of Football Matches (KAP) which is in force at
the present (everything
<PAGE>
2
that is mentioned above came to the knowledge of the second contracting party of
the present contract), and according to the decision of its Board of Directors
dated on 19.12.1995, has negotiated the assignment of the live and tele-recorded
television broadcasting and advertising exploitation rights for the A, B and C
Divisions matches as well as of the television programme "THE TIME OF THE
CHAMPIONS". For this purpose it is agreed as follows:
1. ASSIGNED RIGHTS AND CO-EXPLOITATIONS
1.1. According to and in execution of the above mentioned points, EPAE with
the present contract assigns to NETHOLD the following rights or possibilities or
projects:
1.1.1. RIGHTS OF LIVE ENCRYPTED TELEVISION BORADCASTING IN GREECE AND CYPRUS
that is
a. the right of a live television broadcasting on Saturdays, of * entire matches
of the championship within the competence of EPAE, for the periods * of the A
Division (hereinafter referred to as "the SATURDAY MATCH").
b. the right of a live television broadcasting on Sundays, of * entire matches
of the championship within the competence of EPAE, for the periods * of the A
Division (hereinafter referred to as "the SUNDAY MATCH").
<PAGE>
3
c. the right of a live television broadcasting on Mondays, of * entire matches
of the championship within the competence of EPAE, for the periods * of the A
Division (hereinafter referred to as "the MONDAY MATCH").
d. the right of tele-recorded television broadcasting of the highlights of all
the matches of each playing day of the A Division championship within the
competence of EPAE. Especially, as far as the six matches simultaneously played
on Sundays are concerned, NETHOLD has the right to show tele-recorded highlights
in the context of a special NETHOLD programme (hereinafter referred to as "THE
TIME OF THE CHAMPIONS" or as any other title NETHOLD chooses). The above
mentioned programme will be broadcast forty-five minutes after the end of the
matches.
e. the right of a live or a tele-recorded television broadcasting of any and as
many of the entire matches or of the highlights of these matches, of the B and C
Division championships within the competence of EPAE (hereinafter referred to as
"B-C Division matches").
f. The total number of the A National Division matches which shall be broadcast
live in each playing period cannot be higher than * unless more matches must be
broadcast in execution of the present contract's stipulations.
1.1.2. RIGHTS OF RECORDED ENCRYPTED BROADCASTING FOR GREECE AND CYPRUS
that is, the right of the encrypted tele-recorded broadcasting in Greece and in
Cyprus of any and as many of the matches and highlights mentioned above.
(hereinafter referred to as "NETHOLD tele-recorded broadcastings").
<PAGE>
4
1.1.3. POSSIBILITIES AND CO-EXPLOITATION PRJECTS
meaning that the exploitation with joint efforts and for the mutual benefit
depending on the result, of the following rights and possibilities of EPAE, is
agreed:
A: OF BROADCASTINGS ABROAD
that is, of the exploitation abroad of the possibility of a live or/and one or
more tele-recorded broadcasting(s) by a foreign station/foreign stations or by a
Greek station for broadcastings abroad, or directly to satellite receivers, of
any and as many of the matches mentioned above or of highlights of these matches
or of the programme "THE TIME OF THE CHAMPIONS" or of a match or matches of the
B-C Division or of highlights of these matches (hereinafter referred to as
"broadcastings abroad", as it is especially defined in ANNEX A of the present
contract.
B. OF TELERECORDED BROADCASTINGS IN GREECE & CYPRUS BY A GENERAL RECEPTION
STATION OF NATIONAL RANGE
that is, of the exploitation of the right of tele-recorded broadcast in Greece
and Cyprus by one or more general reception station(s) of national range, of any
and as many of the matches mentioned above (A,B,C Divisions)(hereinafter
referred to as "tele-recorded broadcastings of national range"), with the
qualification that for a national range station/stations, only the tele-recorded
broadcastings of three of the A Division matches broadcast live by NETHOLD on
each playing day, is allowed. The tele-recorded broadcasting of the A Division
matches is allowed only after 11:45 p.m. of the same day when the same match was
broadcast live. On the revenues derived by this exploitation, NETHOLD is
entitled to receive * % and EPAE * %. NETHOLD is not obliged to proceed to this
exploitation if it does not wish to do so.
The settlement of the revenues coming in from this exploitation is made in the
same way as it is defined in ANNEX C of the present contract.
<PAGE>
5
C. OF TELE-RECORDED BROADCASTINGS TO REGIONAL & LOCAL GENERAL RECEPTION
STATIONS
that is, of the exploitation of one or more tele-recorded broadcasting(s) of any
and as many of the matches mentioned above or of the matches or of the programme
"THE TIME OF THE CHAMPIONS", by Greek regional or local television stations, as
defined in ANNEX B of the present contract.
D. OF HIGHLIGHTS EXPLOITATION
that is, of the exploitation of the highlights (or, if possible, of the
informative highlights too) as defined in ANNEX C of the present contract
(hereinafter referred to as "highlights exploitation").
E. OF PAY PER VIEW BROADCASTINGS' EXPLOITATION
that is, of the exploitation of the right of the live or tele-recorded
broadcasting of any and as many of the matches of the A, B, and C Divisions,
using the system of selective television viewing (PAY PER VIEW SYSTEM), as
defined in ANNEX D of the present contract.
F. OF THE EXPLOITATION OF THE POSSIBILITIES IN THE FIELD OF TV/FILM
PRODUCTIONS
that is, of the exploitation as well as of the development in any way of any
other rights and possibilities that EPAE has, regarding television or/and film
productions and productions in general, or possibilities in the field of
incorporating by the production, of the television rights on a material carrier
of sound or image or of sound and image and of trading of these rights, or in
the field of modern telematic for the sports funs (hereinafter referred to as
"co-exploitations/developments"), as
<PAGE>
6
defined in ANNEX F of the present contract, or in the field of radio
broadcastings as defined in ANNEX G of the present contract.
1.1.4. RIGHTS OF ADVERTISING EXPLOITATION
that is, the right of the exclusive advertising exploitation in any way
(television advertisements, television sponsorships, assignment of the
advertising exploitation right itself etc.) of the above mentioned rights of
television and radio broadcasting. Wherever, from now on or in the ANNEXES, the
use of any television or radio broadcasting right is mentioned, it is agreed
that NETHOLD has also the rights of advertising exploitation, without being
necessary to mention it expressly. (hereinafter referred to as "rights of
advertising exploitation").
2. *
2.1. *
<PAGE>
7
2.2. It is expressly agreed that the use of decoders in public places for the
broadcasting in these places of the matches mentioned above is forbidden.
NETHOLD has to take instant measures and stop the operation of such decoders.
However, the contracting parties agree to examine jointly the possibility of
allowing the use of decoders in public places for the broadcasting of the above
mentioned matches, if this action is combined with a raise of the subscription
fee and a right of EPAE to a percentage of this raised subscription fee.
3. EXCLUSIVITY OF THE ENCRYPTED BROADCASTING
3.1. The rights mentioned in clause 1 of the present contact, with the exception
of the "broadcastings abroad", the "national range general reception
broadcastings", the "co-exploitations developments" (except PAY FOR VIEW) and
the "radio broad-castings", concern exclusively the encrypted television
broadcastings by NETHOLD, in Greece and Cyprus (PAY TV) by the NETHOLD Pay TV
station in Greece and by "LUMIERE TV" station in Cyprus.
3.2. NETHOLD does not have the right to concede the * another legal entity or
natural person except if it is expressly provided in the present contract.
3.3. After a specific time limit of its own choice and following an earlier
written notice to EPAE, NETHOLD is entitled to carry out (entirely or partly)
the broadcastings mentioned in paragraphs 1.1. and 1.1.2. by another Pay TV
station in Greece, and this does not constitute a concession of NETHOLD's rights
and obligations, because - as long as the legitimate interests of EPAE are not
affected - NETHOLD is not restricted by the present contract regarding the
accession of the matches' broadcastings and, in general, the exercise of all or
some of the rights or possibilities or projects it acquires with the present
contract regarding the accession of the matches' broadcastings and, in general,
the exercise of all or some of the rights or possibilities or projects it
acquires with the present contract, by the programme NETHOLD broadcasts at the
moment, or by any other programme it will transmit in the future, or if NETHOLD
is going to use all the programmes it will probably
<PAGE>
8
transmit in the future in order to broadcast the matches, as long as all of its
programmes are broadcast encrypted.
3.4. By the present contract, NETHOLD is appointed by EPAE as * carrier of the
broadcasting rights for the matches of the A, B, and C Divisions Championships,
and, in the context of and by the present contract, NETHOLD is entitled to be
presented in any way as the official carrier of these rights or to use any term,
words, phrase or phrases or logo of its own choice, by which it should be
mentioned and followed that * NETHOLD * EPAE is liable to proceed in any
necessary action in order to prevent any third party - including the stations
which have highlights broadcasting contracts - from using a word or words, or a
phrase or phrases, or a logo or logos that are in conflict with the regulations
of the previous sub-paragraph, or violate them in any way, or give the
impression that *
* the broadcasting rights of the matches of the A, B, and C Divisions or the
other possibilities included in the present contract, in general.
4. FRAMEWORK OF THE CONCEDED RIGHTS' EXERCISE
For the best exercise of the rights that are conceded with the present contract
as well as that of the co-exploitations that are agreed, it is agreed as
follows:
4.1. DETERMINATION OF MATCHES
4.1.1 The Saturday, Sunday, and Monday match/matches that is/are going to be
broadcast by NETHOLD, are set by EPAE after NETHOLD's suggestion. NETHOLD's
suggestion will concern each time the four following playing days of
<PAGE>
9
the championships. It is possible for more entire matches to be broadcast on
Saturdays, Sundays and Mondays, if EPAE agrees.
4.1.2. EPAE has the right to refuse the determination of a match suggested by
NETHOLD if there are serious and justified reasons, such as reasons regarding
the obligations of the teams abroad, or the participation of the players in
matches of the National Team or the participation of the teams in Football Cup
matches. Also for the last four playing days, a match will not be set to be
played on Saturdays or Mondays, if the result of this match sways - as far as
the general football rating is concerned - a match played on Sunday.
4.1.3. The determination of the Saturday, Sunday or Monday matches, must be made
in a way that is convenient for the playing schedule of the teams, in
collaboration with NETHOLD and always on condition that at least three matches
must be broadcast live on each playing day.
4.1.4. At least eight of the matches of each team which is among the seven first
in the general rating of the previous period, must be included in the matches
broadcast in each football period.
4.2. PLAYING OF MATCHES
4.2.1. TIME
EPAE promises and guarantees that the entire Saturday, Sunday and Monday matches
schedules to be broadcast live, will be broadcast at the time scheduled by EPAE,
which must fall under the broadcasting zones provided in article 14 of UEFA. The
Sunday match is always set after the end of the broadcasting of the programme
"THE TIME OF THE CHAMPIONS", unless if NETHOLD asks for the match to start
earlier. EPAE must take into consideration NETHOLD's suggestions when it
schedules the starting time of the matches, especially if NETHOLD advances
important reasons for it such as better broadcasting of the match at the
suggested time, avoidance of match broadcast's coincidence with the
<PAGE>
10
broadcasting of another match and in general other events that can probably
affect either the television viewing ratings of the match to be broadcast, or
NETHOLD's engagements for the broadcasting of other events etc. EPAE has to
change the starting time of the match, to a time within thirty minutes earlier
or later from the above mentioned starting time, provided that such a change has
been asked for by NETHOLD in writing, at least three days before the day of the
match the starting time of which is requested to be changed, and provided that
there are not any exceptional facts forbidding the change (transportation
problems, public order reasons etc.).
4.2.2. DAY
EPAE has to set the Saturday match on Saturdays, the Sunday match on Sundays and
the Monday match on Mondays. In case of any special circumstances (such as team
obligations in European Cups, National Team obligations, Cup matches, public
order reasons and security reasons etc.), EPAE may for once set a playing day
other than Saturday for a match scheduled to be broadcast on Saturday (Saturday
match), or a playing day other than Sunday for a match scheduled to be broadcast
on Sunday (Sunday match), or a playing day other than Monday for a match
scheduled to be broadcast on Monday (Monday match). EPAE has to notify NETHOLD
of the probable change of the playing day of that match as soon as possible and
at least 15 days before the day a match was scheduled to be played. The match or
matches will be played on a day set after a joint agreement of the two
contracting parties, while NETHOLD has the right to broadcast these matches live
in a way most suitable to itself.
4.2.3. In case that a match scheduled to be broadcast by NETHOLD is postponed
because of force majeure, the rights of NETHOLD for the broadcasting and the
advertising exploitation are in force for the match when it will be played,
regardless of the fact that another match is going to be broadcast instead of
the one that was canceled, interrupted or postponed.
4.2.4. In case that any match is postponed, interrupted or canceled, NETHOLD
keeps the right either to broadcast another match or to broadcast the specific
one when played, or both of the above.
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11
4.2.5. If, for any reason, a Saturday, Sunday or Monday match or matches is/are
played and its/their live broadcast is not possible because of force majeure or
technical reasons, then the rights of NETHOLD are in effect for two recorded
broadcasts of this match or matches.
4.2.6. The present contract does not affect the rights of EPAE as well as those
of its members regarding the exploitation of the television broadcasting and
advertising exploitation rights for any of the matches played during
international tournaments and are not covered by the present contract.
4.2.7. EPAE has to provide NETHOLD for each playing day of the championship with
one hundred and fifty (150) free invitations or tickets for three A Division
matches (50 tickets for every match) selected by NETHOLD.
4.2.8. The above are equally valid for the matches of the B - C Divisions, but
their exploitation is not going to be a NETHOLD obligation. Furthermore, the
contracting parties are bound to find ways of a better exploitation of the
broadcasting rights of the B - C Division matches, and EPAE is obliged,
following a suggestion made by NETHOLD, to proceed to such arrangements on the
determination of the day and time when the matches that are going to be
broadcast will be played, that - without affecting the football rules and
regulations or the arrangements with the Greek Organization of Football
Prognostics (OPAP) - will secure the possibilities of exploiting the
broadcasting rights of these matches, especially if the broadcasting of these
matches is imperative because of the great general rating interest or local
interest they may have. However, it is expressly agreed that no more than three
matches of each Division will be broadcast live on each playing day. However, on
the playing days that there are not any broadcasts of A Division matches,
NETHOLD may broadcast matches of the B and C Divisions.
4.3. ASSISTANCE IN THE BROADCASTS
4.3.1. EPAE is obliged to provide NETHOLD with:
a. the uninterrupted broadcast of the matches which have been selected to be
broadcast.
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12
b. a special card which is issued only once, is in effect permanently, and will
be provided to NETHOLD's broadcasting teams and reporters. This card will
facilitate the direct access of the persons mentioned above to the playing field
or to any other areas or anywhere else it is necessary for them to be in order
to secure the best possible broadcast of the match. This card will also secure,
with a special and irrevocable order addressed to the match observer or the
stadium supervisor and the people responsible for the playing teams, that
NETHOLD's broadcasting teams and reporters will be provided with the necessary
facilities in order to have the best broadcasting of the matches.
c. the exclusive right to select inside the playing area or inside the general
stadium area, the spots where NETHOLD's broadcasting teams will place their
cameras and NETHOLD's reporters will cover the match, according to the FIFA and
UEFA directives and regulations regarding the television broadcasting of the
matches. If there are any particular spots where the better covering of the
match and the better sportscasting conditions for the reporters of NETHOLD are
secured in an exclusive or preferential way, it is obligatory that these spots
are granted - with EPAE's responsibility - to the technical teams and reporters
of NETHOLD. If these spots are taken by other stations, EPAE (through its
observer) has to remove their technical teams IMMEDIATELY and place there the
technical teams and reporters of NETHOLD. If the above are not provided, NETHOLD
is entitled to withdraw its technical teams and not to broadcast the match,
considering that EPAE did not fulfill its obligations regarding the particular
match.
4.3.2. *
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13
4.4. SPECIAL ASSIGNMENTS
4.4.1. EPAE concedes to NETHOLD the exclusive right of using a logo of NETHOLD's
choice on the front or back side of the tickets issued by EPAE, as well as the
exclusive right of using a part (that exists or is additional) of each ticket
for the possibility of draws for gifts that are meant for the holders of these
tickets. The use of this logo on the front side of the ticket must be made in
such a way that neither the right of the teams to promote the people who are
advertised by them or sponsor the teams is restricted, nor the reading of the
data shown on the front side of the ticket is illegible.
4.4.2. EPAE concedes to NETHOLD the exclusive right of organizing inside the
playing fields of the stadium and at its own expense activities for the
promotion of NETHOLD and of the Pay TV spirit (but not in a way that may sway
the playing of the match and as long as the type and content of the activity is
approved by EPAE which will take into consideration the opinion of the home
team). If the activity is sponsored by someone, the net income will be equally
split (50% each) between the contracting parties. NETHOLD is also obliged to
give the percentage of EPAE directly to the home team within five working days
from the day of the match when the activity took place. This right is exclusive
against third parties and not against the home team, when the latter one
organizes such activities with its own means.
4.4.3. Provided that this does not meet with the provisions of the compulsory
law, EPAE concedes to NETHOLD the right of encrypted broadcasting of the hearing
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14
before the athletic justice organ, whatever the title of that organ is and
provided that it falls within the competence of EPAE.
4.4.4. The right of * broadcasting of the draw of the championships which fall
within the competence of EPAE, is assigned to NETHOLD for the entire period that
the present contract is in force. If the activity is sponsored by someone, in
the first place are covered EPAE's expenses for organizing the activity and the
remaining income is split * between the two contracting parties. NETHOLD is also
entitled to concede the right of the above mentioned activity's tele-recorded
broadcasting to a general reception TV station or stations. In this case, this
concession's income is split * between the contracting parties, after deducting
the production costs.
5. REGULATIONS REGARDING THE CO-EXPLOITATIONS
5.1. Where the co-exploitations agreed with the present contract presuppose the
playing of matches, the provisions set in the previous clause of the present
contract are in force.
5.2. EPAE has to appoint up to two representatives who will consult the
representative appointed by NETHOLD, in order to, on the first hand, monitor the
course of the co-exploitations and, on the other hand, to make the necessary
efforts of maximization of profits which may derive from these co-exploitations,
for the benefit of both contracting parties.
5.3. Every three months, NETHOLD has to submit to EPAE a report on the course of
the exploitations/developments. EPAE has the right to proceed, through its above
mentioned representative or an authorized auditor, to the examination of the
documents of each exploitation, in order to ascertain their accuracy and secure
the rights of EPAE.
5.4 In case that NETHOLD, by a project assignment or independent services
providing contract, concedes to a third party (natural person or legal entity)
the assistance in any way in the exploitations/developments, NETHOLD itself
remains
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15
fully and exclusively responsible for any liability which may occur against EPAE
or third parties, due to the activities of these persons.
5.5. Where in the present contract or in its ANNEXES, the distribution of the
net income between the contracting parties is mentioned, we consider as net
income the gross income minus the expenses for the exploitation of the specific
right or project or co-exploitation. These expenses must be those usually
required for the better exploitation of similar rights or projects, taking also
into consideration the better quality result which must be accomplished
according to the present contract.
6. THE OBLIGATIONS OF NETHOLD
6.1. NETHOLD has to and guarantees the complete and thorough broadcasting of the
Saturday, Sunday and Monday matches, as well as that of the "THE TIME OF THE
CHAMPIONS" programme, as far as both the technical and journalistic aspects of
the broadcasting are concerned. NETHOLD will also take all the appropriate
measures for the observance of the objectivity and journalistic ethics
principle, without any interference by EPAE's representatives or by its members,
as NETHOLD is responsible against EPAE is this paragraph is violated. NETHOLD is
not responsible in case of a non-broadcasting of the matches because of force
majeure or because of an interruption of its programme by an Authority Act as
long as NETHOLD is not held responsible for it. Furthermore, EPAE is released
from the obligation of paying the relevant share of the price and if the break
of the TV station's operation is final, the agreement is terminated.
6.2. All kinds of expenses for the television covering of the matches are
charged exclusively on NETHOLD, regardless of the way of exploiting the rights.
The only services that are competent to fulfill the obligations of NETHOLD are
its technical services and its technical departments as well. If NETHOLD uses
third parties in order to meet its obligations, it is not entitled to claim
fraud or negligence of the third party in order to be released from the
obligations it undertakes with the present contract.
6.3. The material of the television production (films, videotapes etc.) will be
under the exclusive ownership and possession of NETHOLD, which is entitled to
make the
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16
exclusive use of this material, according to the clauses of the present
contract, and make all the known commercial television uses (such as special
weekly or other programmes for the promotion and development of football,
exploitation of the material which is kept in the record room etc.).
6.4. NETHOLD has to concede the use of the above mentioned material to third
parties, in the framework of the conceded rights and of the co-exploitations
agreed in the present contract (highlights, informative highlights,
tele-recorded broadcastings' shows etc.). However, the third party that is
involved has to, during the exploitation (through a show or in another way) of
this material, to mention the fact that it has been produced by NETHOLD
following EPAE's permission.
6.5. NETHOLD has to create and keep a record of the broadcastings on material
carriers copies, on which the productions of each previous week should be
incorporated, in order to create a methodical record for the benefit of EPAE.
This record is kept in the NETHOLD premises until the expiry date of the present
agreement and is allocated to any third party that wishes to make a use of it,
in a way that does not affect the rights conceded to NETHOLD by the present
contract, and against a cost which is agreed in advance with EPAE. The net
income derived by this exploitation will be * between the contacting parties *
and the amount which is owed to EPAE will be paid to EPAE in ten days after the
end of each championship round. The allocation to any third party wishing to use
and exploit this material, will be made with the third party's commitment that
it will mention in an explicit way that the production was made or based on
material produced by NETHOLD, after permission granted by EPAE.
7. COST
7.1. The price for the above mentioned concession of rights, is agreed to be (in
cash) the amount of *
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17
7.2. The price - in cash - will be paid in the following way:
a. * of the annual price, on * of each year during which the present contract
will be in force.
b. * of the annual price, on * of each year during which the present contract
will be in force.
c. * of the annual price, on * of each year during which the present contract
will be in force.
d. * of the annual price, on * of each year during which the present contract
will be in force.
For the above mentioned amounts, NETHOLD is charged with the VAT which
will be paid to EPAE within a month from the day of payment of each installment.
7.3. The above mentioned advertising time (of a net value of * drachmas) of the
television programmes of NETHOLD, may be exploited by EPAE directly or by third
parties at its suggestion, on the qualification that EPAE must, at its own
responsibility, use up the advertising time it is entitled to for each year
during which the present contract will be in force, that is, during the time
period from the * of the following year. EPAE is entitled to transfer for
exploitation in the following year an advertising time
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18
of a net value of * and in any case of a value not exceeding the 20% of the
value of advertising time that EPAE should exploit during the previous year.
The advertising time is agreed upon with a "net value", meaning that
the advertising taxes and any public burden in general that regards the
television advertisement, are charged on the party that is going to make use of
the above mentioned time.
The exploitation of the advertising time should take place in
collaboration with NETHOLD, so that the equal distribution of the above
mentioned advertising time is accomplished, in the framework of the total
planning of NETHOLD regarding the advertising time of its TV programmes (or
channels), and the flow of the advertising time towards all those who are
advertised is not affected.
8. GUARANTEES
8.1. NETHOLD guarantees and secures the execution of this contract's terms and
has to abide by its obligations, especially those regarding the payment of the
price and its installments, in the following way:
a. NETHOLD issues and delivers today to EPAE the following Credid Bank cheques
with the respective amounts:
*
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*
19
b. The above mentioned cheques will be delivered to EPAE in order to secure the
NETHOLD's payment of the agreed installments. It is expressly agreed that EPAE
is entitled to proceed to the sight of the cheque in order to collect and encash
each one of the above mentioned cheques, only if a month before the date of each
payment, NETHOLD does not exhibit an irrevocable, unconditional and forfeiting
ex parte in favour of EPAE, letter of guarantee for the payment of the amount
that NETHOLD has to pay on the above mentioned date.
8.2. In case that NETHOLD does not exhibit any of the above mentioned letters of
guarantee within the fixed time, EPAE has the right to proceed to the sight of
the relevant cheque in order to collect and encash this cheque which has been
delivered in order to secure the payment, and if this cheque is of no value EPAE
is entitled to apply paragraph 10.2. of the present contract.
9. PROTECTION AGAINST THIRD PARTIES
9.1. EPAE has to create the appropriate mechanism for the effective observation
and protection of the rights, possibilities and co-exploitations agreed upon in
the present contract, in order to preserve the interests of the contracting
parties. If EPAE is not in the position to create the above mentioned mechanism,
then NETHOLD is entitled to proceed by itself to the creation of the above
mentioned mechanism. The cost of that mechanism, which can not exceed the amount
of *
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*
20
is deducted from the income which is derived by any kind of co-exploitations,
before the distribution of the net operating earnings between the contracting
parties.
9.2. In any case that any third party infringes upon or uses without being
entitled to, the rights, possibilities and co-exploitations of the present
agreement, EPAE is obliged to take immediately all the necessary extrajudicial
or legal measures for the deregulation of the infringement, the avoidance of
this infringement in the future and the rectification of any loss that coming of
this infringement or the use without having the right to. NETHOLD undertakes the
obligation to provide EPAE - jointly with NETHOLD's legal advisors and at
NETHOLD's expense - with any assistance that is needed for this purpose, if EPAE
requests so. However, the relevant actions and claims will be made in the name
and on behalf of EPAE. At NETHOLD's expense, EPAE has to - at NETHOLD's expense
- - provide to NETHOLD with the services of its legal advisors, for the
accomplishment of the present contract.
9.3. If, after NETHOLD's request or claim, EPAE refuses to or neglects or
provides with ineffective protection to the rights of the present contract,
NETHOLD - after setting to EPAE a reasonable time-limit in order to act
immediately and effectively, and if this time-limit expires and no action was
taken - is entitled either to rescind the contract immediately, claiming the
rectification of any loss, or to proceed itself to the extrajudicial and legal
protection of the rights, possibilities and co-exploitations provided in the
present contract, in the name and on behalf of EPAE and at EPAE's expense.
9.4. Any amount that is to be collected after any extrajudicial or legal actions
aiming to protect the rights, possibilities and co-exploitations of the present
contract, devolves to the contracting party that, according to the present
contract, exclusively exercises and exploits the specific right. If the amount
concerned a right or possibility, that is co-exploited by the contracting
parties, then this amount is split between the contracting parties by the
percentages that are agreed upon for the specific co-exploitation, according to
the present contract.
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21
10. TERMS REGARDING THE RESPONSIBILITY
10.1. EPAE is not released from its obligations and responsibilities, in case
that, because of its members' (Football Societes Anonymes - PAE) behaviour it is
not in position to meet the obligations undertaken according to the present
contract.
10.2. In case that NETHOLD fails to pay the installments of the price that is
agreed upon above within the time-limit provided by the present contract, EPAE
is entitled to rescind the present contract within fifteen week days from the
day that EPAE asked NETHOLD to meet its obligation. If NETHOLD fails to do so
within the above mentioned time-limit, the present contract expires and EPAE is
entitled to keep the amounts that are already paid until that moment, and
concede the television broadcasting and advertising exploitation rights for the
rest of the matches, to any other TV station.
10.3. In case that EPAE does not meet an obligation that results from the
present contract, NETHOLD - as long as it has an interest in the further
accomplishment of the contract - is entitled to set a time-limit to EPAE for the
accomplishment of its obligation. If EPAE fails to meet the obligation within
the above mentioned time-limit, NETHOLD is entitled either to proceed to the
attachment on the payments made to EPAE until the latter one meets its
obligations, claiming the rectification of any loss it suffered because of this
delay, or to rescind the contract claiming the rectification of any loss it
suffered because of the termination of the contract.
11. CLAUSES
All the clauses that are included in the present contract are
considered as essential. Their modification or amendment takes place and is
proved only in writing. The contracting parties are obliged to execute the
clauses of the contract accurately as the good faith and the moral law indicate.
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22
12. DURATION OF THE CONTRACT - PREEMPTIVE RIGHT
1. The present contract shall remain in force from the 1st of July 1996 until
the 30th of June 2001, meaning that the contract concerns the championships
which fall within the competence of EPAE of the periods 1996-1997, 1997-1998,
1998-1999, 1999-2000, 2000-2001.
2. After the termination of the present contract, *
13. FINAL CLAUSES
13.1. The execution of the present contract must not be in conflict with UEFA's
regulations, especially with the provisions of article 14, in the way that it is
in effect each time. Any fines imposed because of the violation of UEFA's
regulations by NETHOLD, will be charged to NETHOLD.
13.2. The contracting parties undertake the obligation of resolving their
disputes with a spirit of good will and cooperation, and according to the
principles of the good faith and the moral law, taking into consideration the
other party's fair interests.
13.3. In case of a substantial change of the circumstances which led to the
drawing up of this contract, so that its continuation becomes an excessive and
unjustified
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23
burden for one of the contracting parties, these contacting parties are obliged
to renegotiate on the clauses of the present contract, in a way that its
continuation guarantees the ensuring of the fair interests of both contracting
parties. In case that certain provisions of the present contract are deemed to
be in conflict with the existing or future provisions of the compulsory law, the
contracting parties have to find ways in order to make possible the lawful and
as for the result similar exploitation of the rights, possibilities and
co-exploitations that are provided by the present contract. It is expressly
agreed that in case that the organization and the administration of the
professional championship is conceded to another carrier, or in case that the
exploitation of the rights or possibilities or co-exploitations is removed from
EPAE, the latter one has to secure that any measures and actions necessary for
the invariable continuation of the present contract will be taken. Otherwise,
EPAE is obliged to compensate NETHOLD for any losses resulting from the
termination of the present contract.
13.4. Within fifteen days from the day that the present contract will be signed,
each of the contracting parties has to inform the other party of the
identification of the persons who will represent it during the continuous
deliberations held between the parties for the accomplishment of this contract.
Any change of each contracting party's representative must be immediately
notified in writing to the other party.
13.5. The present contract is deemed to be confidential for both parties, and it
is agreed that neither of them has the right to make announcements and notices
in general on its content, without having consulted first the other contracting
party.
14. ARBITRATION
Any dispute arising from the execution of the present contract is
obligatory referred to arbitration, if the effort of the President of EPAE or of
the person he may appoint, as well as that of the Managing Director of NETHOLD
or of the person he may appoint to resolve it fails. Each of the contracting
parties appoints its arbitrator (and his/her substitute), and the arbitrators,
with a joint agreement, appoint the umpire. If the arbitrators disagree on the
umpire, the President of the Supreme Court, or the person he will appoint, is
appointed to be the umpire. The arbitrators give their arbitration award by
simple majority, and their award is final
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24
and binding for the contracting parties. The arbitrators must come to a decision
within thirty days from the day when the dispute was referred to arbitration.
The arbitration procedure is agreed upon by the arbitrators, at the first
session called by the umpire.
15. LIGHTING OF THE PLAYING FIELDS
In order to facilitate the accomplishment of the present contract in
the framework of the provisions of article 14 of UEFA regulations, NETHOLD is
offering to provide the electric lighting of the playing fields where the A
Division teams play. The electric lighting of these playing fields will take
place at NETHOLD's expense, while the relevant equipment will remain in
NETHOLD's possession and NETHOLD will have the right to withdraw this equipment
at any time. If the owner of the stadium refuses to commit itself in writing to
facilitate the installation of the equipment which is needed for the electric
lighting, by granting the necessary licenses, or facilitate the immediate
removal of this equipment whenever NETHOLD wishes so, NETHOLD withdraws its
offer to the team that is playing in that stadium.
The present contract was drawn up into 27 (38 translated in English)
one sided pages and is composed of fifteen main paragraphs and six (A, B, C, D,
E, F) ANNEXES. The present contract was signed on the annulling clause of
non-approval of this contract by the Assembly of Presidents of the A division
teams (or of their representatives) which had been convoked on the 8th of
January 1996 (8-1-1996). It was signed in three originals in Greek, and each
contracting party took one, while the third original will be submitted to the
qualified IRS in order to be countersigned.
FOR EPAE FOR NETHOLD
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25
ANNEX A
CO-EXPLOITATION OF RIGHTS ABROAD
1. For the whole period during which the present contract shall remain in force,
the contracting parties mutually accept and agree to proceed to the *
co-exploitation abroad (outside Greece and Cyprus) of the television
broadcasting rights of the matches referred to in the main contract. The
co-exploitation will concern the possibility of conceding to a foreign TV
station/to foreign TV stations or to a domestic TV station/to domestic TV
stations - in order to be broadcast abroad - of one live or/and one or more
tele-recorded broadcasting(s) of any and as many of the matches that are
included in the present contract, or of their highlights (Saturday match/
matches, Sunday match/matches, Monday match/matches, "THE TIME OF THE
CHAMPIONS" programme, matches played at the same time on Sundays, B-C Division
matches, highlights) (hereinafter referred to as "broadcasting abroad").
2. With the qualification of the next paragraph, any kind of expenses for the
television coverage and the distribution via satellite or other technical means,
as well as all the other expenses which do not concern the television coverage
and the distribution, such as the expenses for the promotion of the Greek
football abroad, the expenses of agreements with third parties, possible
commissions for the distribution of the programme, legal fees, dues probably
required in other countries etc., are exclusively charged on NETHOLD.
3. If the gross monthly income that derives from the co-exploitation of the
rights abroad exceeds the amount of * US Dollars, then the income - up to the
amount of * US Dollars - is retained by NETHOLD for the cover of any kind of
expenses that are mentioned in previous paragraph. The monthly income beyond the
amount of * US Dollars is split between the contracting parties by * % to EPAE
and * % to NETHOLD.
4. Within ten days from the day that each football round ends, NETHOLD has to
submit to EPAE a complete rendering of accounts on the results of the rights'
co-exploitation abroad, and pay to EPAE the share of the income EPAE is entitled
to receive. If the agreement with the foreign TV station or with the television
rights exploiting company concerns a period of time which is longer than that of
a football round, then the rendering of accounts is submitted at the end of this
period of time,
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26
or at each time when income is collected, if there is such a collection before
the termination of the agreement, while an estimate will always take place on a
monthly basis.
5. NETHOLD has to make any possible effort in order to make the Greek
football known to the television stations abroad and to the television rights
exploiting companies and inform them on the Greek football's worth.
6. In case that NETHOLD considers that the exploitation of the rights abroad
should be conceded to a television rights exploiting company (t.r.e company),
then EPAE from now on and by the present contract and with the qualification of
paragraph 7 of this contract, authorizes NETHOLD to act as EPAE's assignee and
draw up the relevant contract with such a company, on NETHOLD's initiative and
at NETHOLD's expenses. The percentage that EPAE is entitled to receive in this
case is estimated on the income of the above mentioned television rights
exploiting company that is derived from the concession of the rights to
television stations, unless if the collections of NETHOLD from this company are
higher, so EPAE's percentage shall be estimated on the collections of NETHOLD.
7. Any agreement between NETHOLD and a foreign television station or a
television rights exploiting company or between the television rights exploiting
company and the TV station/stations, must be made in writing or by exchanging
faxes, and is in effect only if it is approved by EPAE in writing or by fax.
8. The foreign TV stations which enter into a contract for broadcastings
abroad are not entitled to make any further concession of these rights. As far
as the above mentioned points are concerned, NETHOLD has to bind the parties
that are doing business with it, and in case of this clause's breach, NETHOLD
has to compensate EPAE fully for any kind of losses.
9. In case that NETHOLD fails to pay to EPAE its share of the income that
derives from the broadcastings abroad in due time as it is provided in the
present contract, EPAE has the right - as far as the broadcastings abroad are
concerned - to rescind unilaterally the present contract, by a simple statement,
within ten working days from the day that it required in writing NETHOLD to meet
its obligation. The failure of NETHOLD to do so within the above mentioned
period of time, brings about the termination of the present contract, as far as
the broadcastings abroad are concerned, and EPAE is entitled to retain in its
favour the amounts already paid
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27
until that moment and concede the same rights to another carrier. Furthermore,
EPAE is entitled to claim a certain rectification of any kind of losses.
FOR EPAE FOR NETHOLD
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28
ANNEX B
GENERAL RECEPTION BROADCASTINGS
1. For the whole period during which the present contract shall remain in
force, the contracting parties agree to proceed to the * exploitation of the
right of EPAE for one or more tele-recorded broadcast(s) of the matches that are
included in the main contract, by Greek regional or local TV stations. The
tele-recorded broadcast must take place at a time and in a way that achieves the
maximization of the exploitation without affecting the exclusivity of NETHOLD's
encrypted broadcasting.
2. The income that derives from the co-exploitation of these rights - after
the deduction of the television coverage and transmission expenses, the general
technical expenses and the expenses made for the exploitation of the advertising
time at the provincial TV stations which will be probably agreed upon against
the payment in cash - is shared out between the contracting parties by * % to
EPAE and * % to NETHOLD.
3. Within ten days from the end of each round of the championships that are
included in the main contract, NETHOLD has to submit to EPAE a full rendering of
accounts on the results of the co-exploitation of these rights and pay to EPAE
the share of the income it is entitled to receive.
4. NETHOLD has to make any possible effort in order to inform the Greek
regional or local TV stations which do not transmit their signals in the range
of NETHOLD's encrypted signal of the possibility to broadcast the matches that
are covered by the main contract.
5. Any agreement between NETHOLD and one of the above mentioned TV stations
must be made in writing or by exchanging faxes, and is in effect only if it is
approved by EPAE in writing or by fax.
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6. The above mentioned TV stations, to which broadcasting rights for the
above mentioned matches are conceded, are not entitled to concede in their turn
these rights to third parties and NETHOLD is obliged to bind the party that does
business with it, and, in case of this clause's breach, to compensate EPAE fully
for any loss.
7. In case that NETHOLD does not pay, in due time, to EPAE its percentage of
the income that derives from the co-exploitations, as it is provided in the
present contract, EPAE has the right - as far as the rights of this ANNEX are
concerned - to rescind unilaterally the present contract, by a simple statement,
within ten working days from the day that it required in writing NETHOLD to meet
its obligation. The failure of NETHOLD to do so within the above mentioned
period of time, entails the termination of the present contract, as far as the
rights mentioned in this ANNEX are concerned, and EPAE is entitled to retain in
its favour the amounts already paid until that moment, and concede the same
rights to an other carrier. Furthermore, EPAE is entitled to claim the
rectification of any kind of losses.
FOR EPAE FOR NETHOLD
<PAGE>
30
ANNEX C
CO-EXPLOITATION OF THE HIGHLIGHTS
1. For the whole period during which the present contract shall remain in
force, the contracting parties agree to proceed to the exclusive co-exploitation
of the broadcast of the highlights of the matches included in the main contract
in Greece.
2. The term "highlights" means the best moments during the course of the A
Division - and optionally of the B and C Divisions - matches included in the
main contract. Wherever in ANNEX C or in the main contract it is not expressly
provided in a different way, the term "highlights" means the non-informative
highlights, that is those conceded by EPAE for broadcasting by TV stations, and
those that the TV stations may exploit with advertisements.
3. NETHOLD has to proceed to the production (coverage, editing of the various
scenes that take place in the playing fields of the stadiums etc.) of the
Saturday match's highlights (3 to 5 minutes), of the highlights of the matches
played at the same time on Sundays (at least 5 minutes for each match), of the
highlights of the Sunday match (3 to 5 minutes) and that of the Monday match (3
to 5 minutes). These times may change after a common agreement of the
contracting parties, if it has to be attuned to the needs of the market as well
as to the promotion of the highlights' exploitation. As far as the above
mentioned production is concerned, NETHOLD is committed that the coverage of the
entire matches that it will broadcast, will take place with all the necessary
production equipment which will secure the existence of many "scenes" of the
match (simultaneous coverage by more than one cameras), while the production of
the coverage of the rest of the matches, meaning, those that are played at the
same time on Sunday, will be made as a simple news coverage (at least one
scene). So, NETHOLD promises to make any possible effort to include in the
highlights it will produce all the goals of the A Division matches. However,
NETHOLD is not held responsible for the non tele-recorded and the non included
goals in the highlights, because of force majeure, or because of technical
reasons or actions of third parties. However, it is in any case not possible,
not to include in the highlights a goal or a contentious/contested scene, that
NETHOLD has broadcast.
<PAGE>
31
4. NETHOLD has to make the highlights available (on the material carriers or
using any other technical method that is agreed with the buyers) to the TV
stations that enter into a contract with EPAE or with NETHOLD itself on behalf
of EPAE.
5. The trading of the highlights will be made on the basis of the following
clauses:
5.1. The highlights will be exclusively and solely given to TV stations which
enter into contracts with EPAE or with NETHOLD with long duration contracts (on
an annual, six-month or three-month basis) and not occasionally.
5.2. The trading will be made at a price based on a price list that is drawn up
following a joint agreement of the contracting parties and there will be no
exception from this price list. If it is essential for the co-exploitation
interest, the price list may be modified following a joint agreement. The price
will include the production cost and the cost of the highlights' distribution,
if made by delivery of the highlights to the interested party on a material
carrier. The distribution in any other way, shall be made on the buyer's
responsibility and at his expense.
5.3. EPAE may allow to the television stations which have entered into a
contract with EPAE or NETHOLD, to produce the highlights by themselves, but it
does not entail in any case that neither an agreement on the highlights' trading
at prices lower than the ones of the price list, nor a discount is made on the
prices agreed.
5.4. The broadcasting of highlights by the TV stations which have entered into
contracts, is allowed to take place only after * , unless if at this time
NETHOLD broadcasts live this match at that time. In this case, the broadcasting
of the highlights is allowed only * after the end of NETHOLD's live broadcast of
the match.
5.5. The above mentioned contracting TV stations shall have the right to
broadcast the highlights three times at maximum, within a five-days period from
the day that they got the relevant possibility. Any other use of the highlights
is forbidden to the above mentioned TV stations. It shall be allowed to the
above mentioned TV stations to intervene, at their responsibility, to the
production material given to them, or - according to their contract - to use
their own reporters for the sportscasting, as long as they do it with respect to
the exclusive and preferential coverage of the matches by NETHOLD. In any case,
the TV stations which have entered into contracts are obliged to mention clearly
and expressly the fact that the HIGHLIGHTS were produced by NETHOLD after the
granted permission of EPAE.
<PAGE>
32
5.6. The use of the highlights, in violation of the above mentioned clauses,
obliges EPAE - if EPAE has entered into contract with the violator, or NETHOLD -
if NETHOLD has entered into contract with the violator, to rescind the contract
immediately, claiming - as a penalty clause - the payment made by the TV station
that committed the breach of these clauses of the total amount that has been
agreed, jointly with the violator of the clauses. NETHOLD has the right to
refuse to provide a station which has entered into a contract with EPAE or
NETHOLD with highlights, if this TV station does not meet its obligations to
EPAE even if EPAE neglects and does not rescind the contract, or if this TV
station proceeds to actions that affect certain rights conceded to NETHOLD by
the main contract or its ANNEXES.
6. Regardless of which of the contracting parties distributed the highlights,
the net income that derives from this co-exploitation is split between the
contracting parties by * % to EPAE and * % to NETHOLD, on the qualification that
NETHOLD shall not be entitled to receive an amount higher than *
7. The mutual settlement of accounts takes place within fifteen days from the
end of each round, and within the same period of time each one of the parties is
obliged to pay to the other party the amount which is owed to it, according to
the above mentioned percentages. EPAE preserves the right to balance the amounts
that are owed to NETHOLD, with claims - even non delinquent - against NETHOLD.
8. NETHOLD is obliged to produce and dispose itself or as EPAE's assignee, a
certain highlights' material from the matches included in the main contract,
that last from 5 to 30 minutes. Of this material, the interested TV stations
shall be able to use a part of 2 minutes at maximum, in order to inform their
viewers without exploiting this material, according to the stipulations of
article 45, par.1., Law 1958/91. The distribution of these highlights
(informative highlights) shall be made at a price which shall be reasonable,
with respect to the cost of the price, to all the TV stations wishing to
purchase them from NETHOLD. The TV stations which will have entered into
contracts for the acquisition of the highlights, may also broadcast the
informative highlights from the same material without any additional price. The
contracting parties are committed to find ways and methods, in the framework of
the law, to impose on those who are interested in doing so the obligation of
getting the informative highlights from EPAE, so that the co-exploitation of
these
<PAGE>
33
informative highlights shall be made in the way that is agreed upon for the
highlights too.
9. It is expressly agreed that the co-exploitation agreed upon in ANNEX C, is
made for the purpose of controlling the highlights' trading for the benefit of
EPAE, on the one hand, and for the benefit of NETHOLD, on the other hand, in
order to protect the broadcastings' rights and the rights of advertising
exploitation and co-exploitation, which it acquires by the main contract. For
this purpose, each party is entitled to claim from the other, the immediate and
complete observance of the present contract against third parties, regardless of
which of the contracting parties has entered into a contract with the third
party.
FOR EPAE FOR NETHOLD
<PAGE>
34
ANNEX D
PAY PER VIEW
1. The contracting parties agree to proceed to the co-exploitation of the
right of EPAE for the live or tele-recorded broadcast of any and as many of the
A, B and C Division matches, by using the system of selective television viewing
(PAY PER VIEW), when and if the use of this system in Greece is technically and
legally possible.
2. According to the above mentioned system, every subscriber shall be able, at
a special subscription fee (television season ticket), to watch on his/her
television set all or some of the matches of the teams he/she shall choose, as
long as this team/teams wishes/wish, after consulting with EPAE, to proceed to
the materialization of this way of exploiting its/their television rights.
The level of this special subscription fee shall be determined after
consultations between EPAE, NETHOLD and the interested team.
3. After consulting with the team and EPAE, it will be possible to deactivate
the decoders of the subscribers who live in the home city of the team or within
a certain distance from the stadium, on the days when this team plays as home
team, or in general for the matches which the team does not wish to be broadcast
by the above mentioned system, so that the turn-out of the sports funs to the
stadiums is not prevented.
4. NETHOLD shall be obliged to give television coverage to the matches of the
teams, the matches of which have been agreed to be broadcast by the PAY PER VIEW
system.
The income that derives from the television season ticket - after deducting
the television coverage expenses - shall be split by * % for EPAE and * % for
NETHOLD.
5. If it is necessary, any other detail for the application of the above
mentioned system or of any other system which shall be providing more
exploitation
<PAGE>
35
possibilities of EPAE's television rights and those of the teams,
shall by regulated by special contracts between the contracting parties.
FOR EPAE FOR NETHOLD
<PAGE>
36
ANNEX E
RADIO BROADCASTINGS
1. The contracting parties agree to proceed to the exploitation of the right
of EPAE for live radio broadcasting of any and as many of the A, B, and C
Division matches which fall within the competence of EPAE (radio broadcastings).
2. The income from the exploitation of these rights beyond the amount of *
drachmas, is * between EPAE and NETHOLD. The income up to the amount of *
drachmas is by all means received by EPAE. The sundry expenses of the
co-exploitation are on the TV stations to which these rights shall be conceded.
3. The commitments regarding EPAE's assistance in the television
broadcastings, are also in effect for the radio broadcastings. More
specifically: EPAE is obliged to secure that any technical team or technical
facilities or equipment that is going to be used for radio broadcasts during the
match, shall not be permitted to enter or remain inside the playing fields or
the stadium premises.
4. As far as all the other issues regarding the radio broadcasts are
concerned, the stipulations provided in ANNEX C on the way of trading the
highlights are in effect as well.
FOR EPAE FOR NETHOLD
<PAGE>
37
ANNEX F
CO-EXPLOITATIONS / DEVELOPMENTS
1. The contracting parties agree to proceed to the exclusive co-exploitation
and to the development in any way, of any other existing or future rights and
possibilities of EPAE, with television and/or film productions and productions
in general, or possibilities in the field of incorporating, on material sound
or/and image carriers, of the television rights by the production, and of
trading them, or in the field of modern telematic for sports funs.
2. NETHOLD studies and submits to EPAE specific reports on the exploitation of
other existing rights or possibilities (hereinafter referred to as "project")
for the development of the Greek football in the above mentioned field. EPAE may
also make to NETHOLD similar suggestions.
3. As long as EPAE does not raise objections to the suggested way of
exploitation, NETHOLD proceeds at its own responsibility and expense to the
materialization and exploitation of the project, and the net profits from the
exploitation are split between the contracting parties by * % for EPAE and * %
for NETHOLD.
By the term "net profits" are meant the profits that remain after the
deduction of the production costs as well as that of the costs of the
exploitation products' trading.
4. The amounts due to EPAE (from the exploitation) are payable after the end
of the exploitation.
If the exploitation allows the gradual settlement and payment of these
amounts, then, after a special agreement between the contracting parties, these
points of the specific exploitation are defined.
<PAGE>
38
5. The * live or/and tele-recorded broadcast of the draw for the Championships
by NETHOLD that fall within the competence of EPAE, is agreed to be a special
co-exploitation case.
FOR EPAE FOR NETHOLD
<PAGE>
I certify that the translations into English of exhibits 10.4 and 10.5 to the
Registration Statement on Form F-1 of MIH Limited are fair and accurate.
/s/ LESLEY R. PENFOLD
- ----------------------------------
Name
LR PENFOLD
- ----------------------------------
Title
CHIEF FINANCIAL OFFICER
- ----------------------------------
Date
FEBRUARY 18, 1999
- ----------------------------------
EXHIBIT 10.5
* Indicates where text has been omitted pursuant to a request for confidential
treatment. The omitted text has been filed separately with the Securities and
Exchange Commission.
AGREEMENT
In Athens, today on July 3, 1998, by and between:
1. The private law entity with the name "GREEK ASSOCIATION OF BASKETBALL
SOCIETES ANONYMES (E.S.A.K.E.) registered in Athens at 1 Eratosthenous and
Vas.Konstantinou Strs, duly represented herein by Messrs. Theodore Karatza,
President of its B.O.D. and Panagiotis Blanas, Secretary General of its B.O.D.,
hereinafter mentioned as "E.S.A.K.E"
and
2. The Societe Anonyme with the name "NETHOLD HELLAS PAY-TV SOCIETE ANONYME"
pending the decision of the Prefect of Athens by which article 1 of its Articles
of Incorporation will be amended in reference to its name which will be amended
with the issue of the above decision to "NETMED HELLAS PAY-TV SOCIETE ANONYME"
with the title "NETMED HELLAS S.A.", registered in Athens at 76 Katechaki Str.,
which has the exclusive administration and exploitation of pay-tv programs, duly
represented herein in accordance to its Articles of Incorporation and the
relevant decisions of the General Meeting and its B.O.D. by Messrs.
Christodoulos Economides, Vice President of its B.O.D. and Charalampos
Tagmatarhis, hereinafter mentioned as "NETHOLD".
the following were agreed upon and mutually accepted:
CHAPTER A' - DEFINITIONS AND INTERPRETATIONS
Article 1
1.1. GAMES: are deemed to be herein, all the Greek Championship A1 Men's
National Division basketball games * organized by E.S.A.K.E. These games include
the regular games and the play-offs, which will take place in accordance to
Championship Proclamations issued exclusively by E.S.A.K.E.
1.2. TRANSMISSION: Deemed herein to be the direct to subscribers (showing) of
certain games mentioned above in par.1.1., and their recorded retransmission,
and the transmission of their highlights or extracts within the framework of
special sports programs, dedications, informative (news) programs, e.t.c. in
Greece, Cyprus and in foreign countries in general, to be effected by NETHOLD's
programs by any technical method (analogue or digital) or means (especially by
terrestrial relais and/or cable networks and/or satellite).
*
<PAGE>
*
1.3. EXPLOITATION: It is herein deemed to be any form (not restricted to
financial) of exploitation which will result from the above transmission of
games of their recording and future repetition of their re-transmission or the
showing of their extracts or the distribution of these programs in video tapes
and in general any kind of financial exploitation by any technical method of
transmission/audio video recording.
1.4. ADVERTISING: It is herein deemed to be the promotion of products and/or
services that appear during the transmission of the games or during their normal
breaks on the t.v. screen, and in case as provided by the effective national and
European legislation.
1.5. SPONSORS/SUPPORTERS OF TEAMS: Herein deemed to be the legal and/or natural
persons that either have undertaken the general financial support of the
contesting teams irrespective of the addition or not of their distinctions
(name/mark) to the name of the union/kae (kae), or that promote the
names/title/logo/product or service marks in the appearance of the athletes of
the contesting teams.
1.6.a. ADVERTISING BOARDS: Herein deemed to be all the advertising boards placed
in the courts that are used as home courts by those participating in the
Championship organized by E.S.A.K.E unions/kae, in the special available spaces
for their placement and specifically in the perimeter of the court and are shown
during the game (t.v. advertising boards) which may be revolving in a manner
that for each board more than one advertisement is shown, observing in each case
the safety specifications imposed by FIBA. Also for the above boards, new
technologies such as virtual reality can be used.
b. THE REST OF THE ADVERTISING SPACES: Herein deemed to be all the spaces in the
above courts in which steady advertising boards, tapes (self adhesive or not)
and other material of advertising content can be installed/placed, such as the
center circle, restraining circle, the perimeter of the internal lines of the
court e.t.c. which are shown on the tv screen. The use of new technology as
mentioned above such as virtual reality also applies for the rest of the
advertising spaces.
CHAPTER B' - TERM, SUBJECT
Article 2
2.1. The term herein is determined to two years and it refers to the E.S.A.K.E.
Championship games (Greek Basketball Championship, A1 Men's National Division)
for the periods 1998-1999 and 1999-2000.
<PAGE>
2.2. *
2.3. *
2.4. *
Article 3 - Television transmission and exploitation
3.1. E.S.A.K.E assigns NETHOLD the *
In the foreign countries the above exploitation may be effected either
by direct transmission of the mentioned t.v. program by NETHOLD's pay-tv
programs, or by the further assignment of the t.v. transmission rights to a t.v.
station/channel of NETHOLD'S choice.
3.2. NETHOLD warranties to E.S.A.K.E the complete and thorough transmission of
the games as far as the technical coverage and journalistic diligence is
concerned.
<PAGE>
3.3. All expenses of any nature concerning the t.v. coverage of the games
(production, statistics e.t.c.) burden solely and exclusively NETHOLD. Solely
responsible for the fulfillment of the above undertakings are the technical and
sports departments of NETHOLD and its authorized crews.
3.4. The t.v. production material (films, videotapes e.t.c.) will remain is
NETHOLD'S exclusive proprietorship and possession, which is entitled to use it
in any legal manner. NETHOLD is obliged within two (2) business days from the
t.v. transmission of any game to deliver to E.S.A.K.E its copy in a VHS or BETA
tape in order for E.S.A.K.E. to create an archive for its showing to any
information media for the informing of the coaches, its unions/kae members and
for instructive purposes. E.S.A.K.E undertakes to ensure that this material will
not be exploited commercially by third parties.
3.5. NETHOLD undertakes to transmit at least * live * of each participating
union/kae in the E.S.A.K.E Championship * For the selection of the games to be
transmitted, before the commencement of each championship, a four member
committee will be created, comprised by two members of NETHOLD and two of
E.S.A.K.E. In the case of equality in votes, the opinion of the NETHOLD members
will prevail. NETHOLD is obliged in any case to notify E.S.A.K.E. in writing of
the games to be transmitted program at least fifteen days before the
transmission of each game. In the case that by a decision of the above
committee, the program of the games to be transmitted is modified, the above
fifteen day notice period is curtailed to ten days. It is explicitly defined
that E.S.A.K.E has the right to proceed to the postponement of a game programmed
to be transmitted for the reasons mentioned in the Proclamation and the
E.S.A.K.E. regulations, the content of which NETHOLD states that it acknowledges
and accepts. In this case E.S.A.K.E is obliged to notify NETHOLD immediately in
order for the t.v. transmission program to be modified without the above notice
periods being applied. The hours that the games will be transmitted will be
jointly defined by the parties herein, taking into consideration NETHOLD's
program needs. In any case, NETHOLD undertakes to show equally during the
regular period of each Championship of the term herein the first four unions/kae
of the final score rating of the previous period.
3.6. NETHOLD herein acquires the right and the obligation to transmit live only
* games for each game day of the E.S.A.K.E Championship, during its whole
duration in each period including the regular period and the play-offs, the
games to be chosen as above mentioned. It is defined that the games of the above
championship are conducted usually on Saturdays and Sundays, but during the
regular period and in the play-offs they can also be conducted on other
weekdays, in accordance to the E.S.A.K.E Championship Proclamation and the
relevant game program of the periods 1989-1999 (a copy of the program is
attached herein and after being signed by both parties it comprises an integral
part of the present agreement) NETHOLD thus being obliged and entitled to t.v.
transmit live only * games for each game day of the Championship. For NETHOLD's
program needs and for the fulfillment
<PAGE>
of its obligation to transmit * live games for each game day of the
Championship, one of the programmed games for each game day will be transferred
to the next or the previous day depending on the game obligations of the
contesting teams. Also, in case of a postponement of a programmed game or a
whole game day by E.S.A.K.E for the t.v transmission of the games the above will
also be in effect.
3.7. In addition to the above live transmitted games, NETHOLD is entitled to
show * additional games recorded for each game day of the Championship. The days
and hours of the showing of the above recorded games will be defined jointly by
the parties herein as provided by term 3.5 herein taking into consideration
NETHOLD's program needs. In this NETHOLD is obliged to transmit at least two of
the above recorded home games of each union/kae participating in the above
E.S.A.K.E Championship *
3.8. NETHOLD is entitled to assign one (1) game for each game day during the
term herein, to be transmitted by any t.v. station/channel of NETHOLD's choice,
ERT S.A.'s channels preferred, if the latter so request without any
consideration paid to NETHOLD or E.S.A.K.E by these tv stations/channels. The
transmission of this game will be in any case after 12:00 midnight to 05:00 in
the morning.
Article 4 - Use and Exploitation of Advertising Boards, Other Allowances to
the unions/kae
4.1. In addition to the above * right of t.v. transmission and exploitation of
the matches of the E.S.A.K.E Championship, as defined and specified herein, the
unions/kae which participate in it, in execution of a decision passed in the
General Meeting of 1/2/3-7-98 assign to NETHOLD the * right to allocate and
exploit the tv advertising boards placed in the courts where the above
Championship games that are transmitted take place and of the other advertising
spaces as defined in term 1.6 herein above, according to the terms, conditions
and consideration mentioned herein,
4.2. E.S.A.K.E will make all reasonable endeavours in case of a dispute between
NETHOLD and any of the union/kae members of E.S.A.K.E arising form the cause
above, to arrive at a conciliatory settlement.
Article 5 - Assignment of promotion Rights through the E.S.A.K.E
Championship
5.1. In addition to the aforementioned in terms (3) and (4) rights, E.S.A.K.E
assigns to NETHOLD during the term herein the *
choice or a group of these, through the E.S.A.K.E Championship.
<PAGE>
5.2. Such a promotion is consisted of the promotion of the logo/mark and of any
other distinct mark of NETHOLD's choice or those of a third legal or natural
person of its choice or a group of these:
a. In the trailers announcing the games to be transmitted in accordance to the
terms detailed in article 9.8. herein.
b. In the statistics cards with the information on the contesting teams which
will be shown in accordance to the terms detailed in article 9.6. herein.
c. During the shows mentioned in article 9.10 herein.
d. In the events to be organized by NETHOLD and E.S.A.K.E, according to the
terms detailed in article 9.20 herein and
e. By any other manner that the parties herein jointly agree upon, including the
addition of the aforementioned logo/mark or any other distinctive mark of
NETHOLD's mark, in a manner which the E.S.A.K.E Championship will be called
hereon "XXX Championship" as provided by the rest of terms agreed upon by the
parties.
5.3. In the case that NETHOLD assigns its above mentioned right to another
person as above mentioned, it undertakes to grant it without any consideration
advertising time of 3.000" for each year of the term herein.
CHAPTER C' - FINANCIAL TERMS - WARRANTIES
Article 6 - Financial Terms
6.1 NETHOLD will pay E.S.A.K.E as consideration for the * assignment to it of
the rights mentioned in articles *, the following sums and the advertising time
mentioned below in article 7.
6.1.1. For the assignment of the tv transmission and exploitation rights
mentioned above in articles * herein, and the promotion rights of NETHOLD's
products/services as these are specified through the E.S.A.K.E Championship *
NETHOLD will pay E.S.A.K.E the sum of *
This sum will be paid by NETHOLD to E.S.A.K.E as follows:
*
<PAGE>
*
6.1.2. For the assignment of the tv transmission and exploitation rights
mentioned above in articles 3 and 5 herein, and the promotion rights of
NETHOLD's products/services as these are specified through the E.S.A.K.E
Championship * NETHOLD will pay E.S.A.K.E. the sum of *
This sum will be paid by NETHOLD to E.S.A.K.E as follows:
*
6.1.3. It is explicitly specified that expenses of any nature, duties, V.A.T.
and other surcharges on the above sums exclusively and solely burden NETHOLD.
Also it is explicitly agreed that the above mentioned dates of payment of the
installments (partial payments) are deemed to be dates of maturity of payment
and the present agreement is deemed an agreement of "timely execution".
6.1.4. The payment of the corresponding to each above mentioned installment sum
will be proven by a written receipt of payment issued by E.S.A.K.E. which will
be followed by the issue of an invoice by E.S.A.K.E., with the payment of the
corresponding VAT.
6.1.5. Though unnecessary, it is specified that the above consideration of the
agreement of the parties herein in no manner whatsoever is subject to the
provisions of article 8 par. 1 ev. f of Law 2328/1997, NETHOLD not entitled to
the retaining of any amount for any entity, the Public Sector included.
6.2 NETHOLD will pay the unions/kae members of E.S.A.K.E. that participate in
the above Championship as consideration for the exclusive assignment to it of
the rights mentioned in article 4 herein, the following sums:
6.2.1. For the assignment of the right to use and exploit the tv advertising
boards placed in the courts that the games of E.S.A.K.E.'s competence take place
*
<PAGE>
*
6.2.2. For the calculation of the sum that each union and kae not able to
deliver the above documents of proof and other documents, is entitled to (for
example the unions/kae that have been promoted to the A1 National Men's
Basketball Division) the basis that will be taken into consideration for the
calculation is the sum that the last in the score ratings union/kae received for
the * increased by *
6.2.3 NETHOLD's above obligation concerns the payment of the sum of *
6.2.4. The manner of payment of the sum that each union/kae member of E.S.A.K.E.
is entitled to resulting from the liquidation of the rights to use and exploit
its tv advertising boards, as mentioned above, will be effected by NETHOLD to
each union/kae that participate in the E.S.A.K.E. Championship for the period *
on the basis of the specific agreements between NETHOLD and the union/kae enter
into, without E.S.A.K.E.'s intervention and on the basis of the criterion
mentioned in 6.2.2. In any case, NETHOLD's payment of the sums must be concluded
till the commencement of the Championship of the following period.
6.2.5. For the assignment of the right mentioned in article 4 to use and exploit
the tv advertising boards placed in the courts that the games of E.S.A.K.E.'s
competence take place during the period * NETHOLD will pay each of the unions
and kae members of E.S.A.K.E. that participate in the Championship of the above
period, the sums the latter has received due to the above cause (meaning from
the assignment of the right to use and exploit the tv advertising boards) during
the pervious period * plus the analogous to this sum VAT. The union/kae that
were promoted to the A1 National Division will participate in the Championship
of the above period * and will receive the sum that the union/kae promoted to
the A1 Division, received during the previous period *
6.2.6. NETHOLD's above obligation concerns the payment of the sum of *
<PAGE>
Article 7. Other Financial Terms
7.1. In addition to the aforementioned payable sums, NETHOLD will grant each
union/kae member of E.S.A.K.E. participating in the A1 National Division
Championship of the periods * and for each game day of the term herein,
advertising time of total duration * for the promotion of their
sponsors/supporters as these are determined above in 1.5. (meaning advertising
time of * and advertising time of * for each union/kae member of ESAKE
participating in the Championship). This advertising time can not be transferred
to the following year.
7.2. The relevant advertising will be effected in NETHOLD's programs in
accordance to the effective legislation, will be invoiced based on a special
price list which will be drawn up by it and submitted to the competent tax
authority, and it will concern the advertising promotion of the persons
mentioned in article 1.5. herein.
7.3. NETHOLD is obliged to grant to E.S.A.K.E. in its programs advertising time
of * or each year of the term herein at the price of * per second which
E.S.A.K.E. will use at his judgment solely for its promotion or the promotion of
its services. E.S.A.K.E. solely is entitled to transfer the advertising time
it's entitled to the next basketball period but not to a time period later than
two years after the effective term of the present agreement.
Article 8 - Warranties
8.1. Within an annulling time limit extended to 30-7-1998 NETHOLD as warranty
for the payment of the sums mentioned in articles 6.1., 6.1.1. and 6.1.2. herein
above, is obliged to deliver to E.S.A.K.E. * letters of guarantee of recognized
bank of E.S.A.K.E.'s acceptance, of rolling validity of equal sum to the
installments mentioned in 6.1.1. and 6.1.2. above, that is of * and as provided
explicitly in its text, at its termination it will be extended to cover the
corresponding monthly installment as these have been defined of the next year of
the term herein, so that in any case a time period * will be covered and up to
the coverage of the * * installment as mentioned above.
8.2. The above letters of guarantee that will be delivered to E.S.A.K.E. will be
issued by a recognized bank accepted by E.S.A.K.E. and their text will
correspond to text of the relevant draft drawn up by E.S.A.K.E. of the
no. 18546242 letter of guarantee of ERGO Bank which was delivered to the
mentioned representatives of NETHOLD and the text of which will be adjusted to
the herein agreed. In case the above time limit passes inactive, meaning that
the above letters of guarantee are not delivered by NETHOLD to E.S.A.K.E's
offices, the present agreement will be de jure terminated and NETHOLD will be
liable for E.S.A.K.E.'s and the union/kae indemnification of
<PAGE>
any damage caused due to it. Expenses of any nature concerning the issue of the
letters of guarantee exclusively burden NETHOLD.
8.3. In the case that E.S.A.K.E. exercises its right mentioned in *
8.4. NETHOLD delivered to E.S.A.K.E today * bank cheques issued by it the sum of
* with payment dates the ones mentioned in 6.1.1. herein above. The above
cheques except for the one payment date 7-7-98 will be returned to NETHOLD by
E.S.A.K.E. upon the delivery to the latter of the letters of guarantee.
CHAPTER D' RIGHTS AND OBLIGATIONS OF THE CONTRACTING
PARTIES.
Article 9 - Rights and Obligations of the contracting parties
9.1. In case that a programmed game is not transmitted on NETHOLD's liability,
NETHOLD is obliged to pay E.S.A.K.E. the sum of * as indemnity in addition to
the financial and e.t.c. allowances mentioned above in articles 3.4 and 5
herein. The contracting parties agree that the above sum is fair and reasonable
and covers the damage (restriction to the promotion of the advertised on the
shirts of the contesting teams e.t.c.) suffered by E.S.A.K.E. and its union/kae
members from the above cause.
9.2. In the case that a programmed game will not be transmitted on the liability
of a union/kae and under the condition that this game is not replaced by
another, NETHOLD is entitled to demand from E.S.A.K.E. and against the liable
union/kae the sum of * as indemnity for the damage it suffered by the game not
being transmitted as programmed live and the sum of * as indemnity for the
damage it suffered by the game not being transmitted as programmed recorded. The
contracting parties agree that the above sum is fair and reasonable and covers
the damage suffered by NETHOLD. NETHOLD cannot exercise this right in cases of
force majeure.
9.3. In a case of a game interrupted for any reason NETHOLD is entitled to
transmit (show) the repetition or continuation of the interrupted game without
any additional consideration. In case that a live game is cancelled such a game
will be replaced by another as mentioned specifically above.
9.4. In case of a force majeure event the regulations of the Civil Code will be
applied. Indicative are, the strike of NETHOLD's personnel, failure or other
technical problems in the signal transmission due to problems in the OTE
circuit, emergency news concerning national and solely matters of major
importance etc, athletes' strike, interruption of a game due to violence,
cancellation of a game by an act of authority, collapse of the satellite e.t.c.
<PAGE>
9.5. NETHOLD is obliged two months before the commencement of each period to
inspect with its technical crews if the courts in which the games of the above
Championship will be conducted and comply to the prerequisites and
specifications of tv transmission and to inform E.S.A.K.E. on this matter in
writing within the above time limit.
9.6. *
9.7. *
9.8. NETHOLD is obliged to transmit each week in its programs a satisfactory
number of trailers for each of the games to be transmitted. During the
transmission of the trailers which will be effected during prime time the
simultaneous promotion of the contesting teams will also be effected with their
full name as defined in 1.5. herein above and of E.S.A.K.E.'s logo.
9.9. The tv transmission of the matches will cover the whole game and its extra
time, the showing of the advertisements during each game or its extra time must
not interfere with its completeness and in any case it will be effected with the
restrictions of the effective legislation (normal interruptions, time out,
commercial time out).
9.10. NETHOLD is obliged to transmit each week a show, of which its sports dept.
will have the journalistic responsibility. Also reportage of all the games of
the game will be shown in NETHOLD's sports programs. NETHOLD is obliged to
present in its programs every week within the bounds of sports shows the
union/kae, their history, their activities, and the head of their
administration. The presentation of the union/kae will be to the extent that
this possible, on equal terms.
9.11. NETHOLD is obliged, on its own expenses and care, to create a special
audio-visual mark which will include the logo E.S.A.K.E.'s and of the person
that will assume the rights defined in article 5 herein rights, the duration of
which will be 8-10". This mark must be full and unconditionally accepted by
E.S.A.K.E. will be shown before the beginning and after the end of the
<PAGE>
transmitted game and before the beginning of the show mentioned above in 9.10.
9.12. Each showing on the tv screen of the teams' names, either during the
transmitted game or during the showing of highlights or in the reportage within
the framework of the above shows will include the full name of the team as
mentioned above, meaning it will include the particulars of its
sponsor/supporter in case this is added to its name and will be accompanied by
the showing of E.S.A.K.E.'s logo. E.S.A.K.E. is obliged to notify NETHOLD of a
catalog with full particulars, logos, etc., distinctive marks of
sponsors/supporters of its union/kae members.
9.13. Upon termination of each Championship, NETHOLD will deliver to E.S.A.K.E.
a BETA video tape and a VHS video tape of a up to a two hour duration each with
the best highlights of the transmitted games in order for E.S.A.K.E. to use
these with NETHOLD's written approval for educational reasons but in no case for
commercial exploitation.
9.14. NETHOLD is obliged to show in its programs without the payment of any
consideration and within the framework of its social contribution,
messages/announcements of a social content against violence in the courts which
will be created jointly with E.S.A.K.E. in order to contribute by this manner to
the attempt to stop the violence which appears in the athletic fields. All
relevant expenses burden NETHOLD.
9.15. NETHOLD is obliged to take care so that the journalists, sportscasters and
rest of its associates which will broadcast and comment the transmitted in
accordance to the above, games and the presenters of above mentioned sports
shows, mention the names and the rest of the distinctive marks of the teams as
these are defined in par. 1.5. above each time they refer to these. Also the
above persons are obliged to call the A1 National Division championship as "X
Championship" (person mentioned in article 5 herein) and to make all endeavours
for the promotion and upgrading of the E.S.A.K.E. Championship and of
professional basketball in general, avoiding in any case derogatory and
degrading for it and the organizing entity and the rest of the persons and
entities participating in it, remarks.
9.16. NETHOLD has the right of exploitation of the television advertising
broadcasted during the game with the above 9.9 restriction.
9.17. E.S.A.K.E. is obliged to provide to NETHOLD any element or information of
its disposition that could assist the better promotion of the teams and of the
championship in general.
9.18. NETHOLD solely is entitled to permit in writing the entrance of crews of
other t.v. stations/channels (either of national, or of regional or of local
coverage) in the courts where the games take place in order to receive extracts
for the information of the public as provided by article 45 par 1 of
law 1958/1991. In these cases E.S.A.K.E. should be notified in writing three
days before the conduct of the game in order to inform the personnel of the
courts.
<PAGE>
NETHOLD undertakes to commit the television channels/stations to which it will
provide the 3minutes of information by its own recording of tv programs carriers
as mentioned above, to mention the UNIONS/KAE by their complete names as
referred hereabove.
9.19. E.S A.K.E and its members UNIONS/KAE are obliged to permit the entrance in
the courts where the games will take place of the technicians and sportscasters
etc, employees of NETHOLD and to facilitate them during the performance of their
work, by providing the suitable and secured conditions. For example they should
facilitate the installation of recording, processing and transfer of signal
equipment, the access to the cameramen and sports casters to the appropriate,
according to their judgement, areas upon the condition that they do not hinder
the Secretary, the arbitrators, the games, and the rest factors of the games
during the performance of their duties etc.
9.20. E.S A.K.E promises to NETHOLd that in the framework of the above
cooperation it will support the events (press conferences, receptions etc) that
NETHOLD will organize for the promotion of their cooperation and provides to
NETHOLD the exclusive right of the tv transmission of such events (draw,
Commencement of the championship etc)
9.21. E.S A.K.E is obliged to deliver to NETHOLD any reproductions of all the
games of the championship, either broadcasted or not, that it has probably
recorded in VHS tapes.
9.22. E.S A.K.E is obliged to deliver for each day of competition of the
Championship of its competence for the period of * to NETHOLD a sufficient
number of invitations or free entrance invitations or free entrance for the
courts, where the above games take place in order the latter to distribute them
at its judgement.
9.23. With the prejudice of those provided in article 3.1, par. 2 herein, it is
agreed that it is not permitted to NETHOLD, by any mean to assign, with or
without consideration, to any other tv station/channel of national, regional or
local coverage, the right to broadcast any game of the above championship from
those that NETHOLD is entitled to transmit, as provided, specifically and
detailed herein, as well as to assign the co-exploitation of these games, in any
way, jointly with any other entity.
9.24. Legislative restrictions that could be imposed to tv broadcasting entities
do not affect E.S A.K.E and its members, the UNIONS/KAE. In case that due to
legislative restrictions NETHOLD will be obliged to exploit its programs via
other entities it is entitled to exploit its rights deriving hereby via an other
entity to which it will assign them. In any case it will be liable towards
E.S A.K.E and towards the Unions/kae jointly and severally with its
counter-party in accordance with the said above, entity, and it waives its
benefits of discussion and of division. Any exclusion of any technical method or
mean of transmission of NETHOLD, does not consist an occasion to it to terminate
the terms of the present agreement on its favor. Both parties waive their right
to
<PAGE>
raise any doubts of the present for any reason, including the concurrence of the
provisions of article 388 of the Civil Code.
CHAPTER E - MISCELLANOUS
Article 10
10.1. The parties agree that the terms of the present agreement, which are all
of the essential, consist their complete and unconditional agreement and any
other probable previous agreement, oral or in writing, is invalid.
10.2. It is explicitly prohibited the assignment of the rights deriving hereby
to any third party without the relevant written approval of the counter-party
with the prejudice of the provisions of articles 3.1. par. 2 and 9.24 of the
present agreement. It is permitted especially to the assignment by NETHOLD of
those rights deriving from the provision of article 4 of the present article
(concerning the grant and exploitation of the t.v advertising boards as
specified hereabove) to the company named * and it's duly represented, under the
terms and consideration which will be agreed between them and under the
condition that NETHOLD is solely liable for the payment to the Union/KAE members
of E.S A.K.E, according to articles 6.2 and 6.2.6 herein agreed consideration.
10.3. Any probable agreement of the parties herein concerning the amendment or
modification of the present is drawn up only in writing.
10.4. Any omission of any of the parties to demand the accurate observance of
the hereby agreed terms or to make use of its rights deriving hereby cannot be
interpreted as a waiver.
10.5. In case that the terms of the present agreement will not be executed or
will not be duly executed, the other party is entitled to terminate the
agreement and demand to be indemnifies for any damages
10.6. The termination of the present agreement will be effected in accordance
with the provision of the Civil Code and is notified in accordance with the
provision of the Civil Procedure Code.
10.7. For any dispute or disagreement that may arise in relation with the
interpretation of the terms of the present agreement as well as for any dispute
that may arise from its performance, will be resolved by the Competent Courts of
Athens
The present agreement was executed in 4 originals and each party received two of
them
<PAGE>
THE PARTIES
- --------------------------------------------------------------------------------
1ST ROUND
- --------------------------------------------------------------------------------
- ------------------------------------------
1ST GAME
19/09/98
- ------------------------------------------
A.E.K. - OLYMPIACOS S.F.P.
PAOK - IRAKLIO O.A.A. MINOAN LINES
A.S. PAPAGOU KATSELIS - A.O.
SPORTING SOULIS
IRAKLIS - G.S. PERISTERIOU
A.S. APOLLON PATRON ACHAIA CLAUSS
- - G.S. PANIONIOS NUTELLA
G.S. AMAROUSSIOU - ARIS
A.O. NEAR EAST - PANATHINAIKOS A.O.
- ------------------------------------------
- ------------------------------------------
2ND GAME
26/09/98
- ------------------------------------------
IRAKLIO O.A.A. MINOAN LINES - A.E.K.
A.O. SPORTING SOULIS - PAOK
G.S. PERISTERIOUS - A.S. PAPAGOU
KATSELIS
G.S. PANIONIOS NUTELLA - IRAKLIS
ARIS - A.S. APOLLON PATRON ACHAIA
CLAUSS
PANATHINKAIKOS A.O. - G.S.
AMAROUSSIOU
OLYMPIACOS S.F.P. - A.O. NEAR EAST
- ------------------------------------------
- ------------------------------------------
3RD GAME
03/10/98
- ------------------------------------------
A.E.K. - A.O. SPORTING SOULIS
PAOK - G.S. PERISTERIOU
A.S. PAPAGOU KATSELIS -- G.S.
PANIONIOS NUTELLA
IRAKLIS - ARIS
A.S. APOLLON PATRON ACHAIA CLAUSS
- - PANATHINAIKOS A.O.
G.S. AMAROUSSIOU - A.O. NEAR EAST
OLYMPIACOS S.F.P. -- IRAKLIO O.A.A.
MINOAN LINES
- ------------------------------------------
- ------------------------------------------
4TH GAME
10/10/98
- ------------------------------------------
G.S. PERISTERIOU - A.E.K.
G.S. PANIONIOS NUTELLA - PAOK
ARIS - A.S. PAPAGOU KATSELIS
PANATHINKAIKOS A.O. - IRAKLIS
A.O. NEAR EAST - A.S. APOLLON
PATRON ACHAIA CLAUSS
G.S. AMAROUSSIOU - OLYMPIACOS
S.F.P.
A.O. SPORTING SOULIS - IRAKLIO O.A.A.
MINOAN LINES A.E.
- ------------------------------------------
- ------------------------------------------
5TH GAME
17/10/98
- ------------------------------------------
A.E.K. - G.S. PANIONIOS NUTELLA
A.S. PAPAGOU KATSELIS -
PANATHINAIKOS A.O.
IRAKLIS - A.O. NEAR EAST
A.S. APOLLON PATRON ACHAIA CLAUSS
- - G.S. AMAROUSSIOU
OLYMPIACOS S.F.P. - A.O. SPORTING
SOULIS
IRAKLIO O.A.A. MINOAN LINES - G.S.
PERISTERIOU
- ------------------------------------------
- ------------------------------------------
6TH GAME
24/10/98
- ------------------------------------------
ARIS - A.E.K.
PANATHINAKIOIS A.O. - PAOK
G.S. AMAROUSSIOS - IRAKLIS
A.S. APOLLON PATRON ACHAIA CLAUSS
- - OLYMPIACOS S.F.P.
G.S. PANIONIOS NUTELLA - IRAKLIO
O.A.A. MINOAN LINES
G.S. PERISTERIOU - A.O. SPORTING
SOULIS
- ------------------------------------------
- ------------------------------------------
7TH GAME
26/10/98
- ------------------------------------------
A.O. NEAR EAST - A.E.K.
G.S. AMAROUSSIOU - PAOK
A.S. PAPAGOU KATSELIS - G.S.
AMAROUSSIOU
IRAKLIS - A.S. APOLLON PATRON
OLYMPIAKOS S.F.P. - G.S. PERISTERIOU
IRAKLIO O.A.A. MINOAN LINES - ARIS
A.O. SPORTING SOULIS - G.S.
PANIONIOS NUTELLA
- ------------------------------------------
- ------------------------------------------
8TH GAME
17/10/98
- ------------------------------------------
A.O. NEAR EAST - A.E.K.
G.S. AMAROUSSIOU - PAOK
A.S. APOLLON PATRON ACHAIA CLAUSS
- - A.S. PAPAGOU KATSELIS
IRAKLIS - OLYMPIAKOS S.F.P.
PANATHINAIKOS A.O. - IRAKLIO O.A.A.
MINOAN LINES
ARIS - A.O. SPORTING SOULIS
G.S. PANIONIOS NUTELLA - G.S.
PERISTERIOU
- ------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
2ST ROUND
- --------------------------------------------------------------------------------
- ------------------------------------------
9TH GAME
07/11/98
- ------------------------------------------
A.E.K. - G.S. AMAROUSSIOU
PAOK - A.S. APOLLON PATRON ACHAIA
CLAUSS
A.S. PAPAGOU KATSELIS - IRAKLIS
OLMPIAKOS S.F.P. -- G.S. PANIONIOS
NUTELLA
IRAKLIO O.A.A. MINOAN LINES - A.O.
NEAR EAST
A.O. SPORTING SOULIS -
PANATHINAIKOS A.O.
G.S. PERISTERIOU - ARIS
- ------------------------------------------
- ------------------------------------------
10TH GAME
14/11/98
- ------------------------------------------
A.S. APOLLON PATRON ACHAIA CLAUSS
- - A.E.K.
IRAKLIS - PAOK
A.S. PAPAGOU KATSELIS - OLYMPIACOS
S.F.P.
G.S. AMAROUSSIOU - IRAKLIO O.A.A.
MINOAN LINES
A.O. NEAR EAST - A.O. SPORTING SOULIS
PANATHINAIKOS A.O. - G.S.
PERISTERIOU
ARIS - G.S. PANIONIOS NUTELLA
- ------------------------------------------
- ------------------------------------------
11TH GAME
05/12/98
- ------------------------------------------
A.E.K. - A.O. SPORTING SOULIS
PAOK - G.S. PERISTERIOU
A.S. PAPAGOU KATSELIS - G.S.
PANIONIOS NUTELLA
IRAKLIS - ARIS
A.S. APOLLON PATRON ACHAIA CLAUSS
- - PANATHINAIKOS A.O.
G.S. AMAROUSSIOU - A.O. NEAR EAST
OLYMPIACOS S.F.P. - IRAKLIO O.A.A.
MINOAN LINES
- ------------------------------------------
- ------------------------------------------
12TH GAME
12/12/98
- ------------------------------------------
G.S. PERISTERIOU - A.E.K.
G.S. PANIONIOS NUTELLA - PAOK
ARIS - A.S. PAPAGOU KATSELIS
PANATHINAIKOS A.O. - IRAKLIS
A.O NEAR EAST - A.S. APOLLON
PATRON ACHAIA CLAUSS
G.S. AMAROUSSIOU - OLYMPIACOS
S.F.P.
A.O. SPORTING SOULIS - IRAKLIO O.A.A.
MINOAN LINES A.E.
- ------------------------------------------
- ------------------------------------------
13TH GAME
19/10/98
- ------------------------------------------
A.E.K. - PAOK
OLYMPIACOS S.F.P. - PANATHINAIKOS A.O.
IRAKLIO O.A.A. MINOAN LINES -
A.S. PAPAGOU KATSELIS
A.O. SPORTING SOULIS - IRAKLIS
G.S. PERISTERIOU - A.S. APOLON
PATRON ACHAIA CLAUSS
G.S. PANIONIOS NUTELLA -
G.S. AMAROUSIOU
ARIS - A.O. NIAR IST
<PAGE>
- ------------------------------------------
- ------------------------------------------
14TH GAME
23/12/98
- ------------------------------------------
OLYMPIACOS S.F.P. - AEK
IRAKLIO O.A.A. MINOAN LINES - PAOK
A.O. SPORTING SOULIS - A.S. PAPAGOU
KATSELIS
G.S. PANIONIOS NUTELLA - A.S. APOLON
PATRON ACHAIA CLAUSS
ARIS - G.S. AMAROUSIOU
PANATHINAIKOS A.O. - A.O. NIAR IST
- ------------------------------------------
- ------------------------------------------
- ------------------------------------------
15TH GAME
02/01/99
- ------------------------------------------
AEK - IRAKLIO O.A.A. MINOAN LINES
PAOK - A.O. SPORTING SOULIS
A.S. PAPAGOU KATSELIS - G.S.
PERISTERIOU
IRAKLIS - G.S. PANIONIOS NUTELLA
A.S. APOLON PATRON ACHAIA CLAUSS-
ARHS
G.S. AMAROUSIOU - PANATHINKAIKOS
A.O.
A.O. NIAR IST - OLYMPIACOS S.F.P
- ------------------------------------------
- ------------------------------------------
16TH GAME
09/01/99
- ------------------------------------------
A.O. SPORTING SOULIS - AEK
G.S. PERISTERIOU - PAOK
G.S. PANIONIOS NUTELLA
A.S. PAPAGOU KATSELIS
ARIS IRAKLIS
PANATHINKAIKOS A.O. - A.S. APOLON
PATRON ACHAIA CLAUSS
A.O., NIAR IST - G.S. AMAROUSIOU
IRAKLIO O.A.A. MINOAN LINES -
OLYMPIACOS S.F.P.
- ------------------------------------------
<PAGE>
- ------------------------------------------
17TH GAME
16/01/99
- ------------------------------------------
AEK - G.S. PERISTERIOU
PAOK - G.S. PANIONIOS NUTELLA
A.S. PAPAGOU KATSELIS - ARIS
IRAKLIS - PANATHINAIKOS A.O.
A.S. APOLON PATRON ACHAIA CLAUSS -
A.O. NIAR IST
OLYMPIACOS S.F.P. - G.S. AMARUSIOU
IRAKLIO O.A.A. MINOAN LINES -
SPORTING SOULIS
- ------------------------------------------
- ------------------------------------------
18TH GAME
23/01/99
- ------------------------------------------
G.S. PANIONIOS NUTELLA - AEK
ARIS - PAOK
PANATHINAIKOS A.O. - A.S. PAPAGOU
KATSELIS
A.O. NIAR IST - IRAKLIS
G.S. AMAROUSIOU - A.S. APOLON
PATRON ACHAIA CLAUSS
A.O. SPORTING SOULIS - OLYMPIACOS
S.F.P.
G.S. PERISTERIOU - IRAKLIO O.A.A.
MINOAN LINES
- ------------------------------------------
- ------------------------------------------
19TH GAME
- ------------------------------------------
27/01/99
- ------------------------------------------
AEK - ARIS
PAOK - PANATHINAIKOS A.O.
A.S. PAPAGOU KATSELIS - A.O. NIAR IST
IRAKLIS - G.S. AMAROUSIOU
OLYMPIACOS S.F.P. - A.S. APOLON II.
ACHAIA CLAUSS
IRAKLIO O.A.A. MINOAN LINES - G.S.
PANIONIOS NUTELLA
A.O. SPORTING SOULIS
G.S. PERISTERIOU
- ------------------------------------------
- ------------------------------------------
20TH GAME
06/02/99
- ------------------------------------------
PANATHINAIKOS A.O. - AEK
A.O. NIAR IST PAOK
G.S. AMARUSIOU - A.S. PAPAGOU
KATSELIS
A.S. APOLON PATRON ACHAIA CLAUSS -
IRAKLIS
G.S. PERISTERIOU - OLYMPIACOS S.F.P.
ARIS - IRAKLIO O.A.A. MINOAN LINES
G.S. PANIONIOS NUTELLA
A.O. SPORTING SOULIS
- ------------------------------------------
- ------------------------------------------
21ST GAME
13/02/99
- ------------------------------------------
AEK - A.O. NIAR IST
PAOK - G.S. AMAROUSIOU
A.S. PAPAGOU KATSELIS
A.S. APOLON ACHAIA CLAUSS
OLYMPIACOS S.F.P. - PANTHINAIKOS
A.O.
A.O. SPORTING SOULIS - ARIS
G.S. PERISTERIOU - G.S. PANIONIOS
NUTELLA
<PAGE>
- ------------------------------------------
- ------------------------------------------
22ND GAME
20/02/99
- ------------------------------------------
G.S. AMAROUSIOU - AEK
A.S. APOLON PATRON ACHAIA CLAUSS
- - PAOK
IRAKLIS - A.S. PAPAGOU KATSELIS
G.S. PANIONIOS NUTELLA - OLYMPIACOS
S.F.P.
A.O. NIAR IST - IRAKLIO O.A.A. MINOAN
LINES
PANATHINAIKOKS A.O. - A.O. SPORTING
SOULIS
ARIS - G.S. PERISTERIOUS
- ------------------------------------------
- ------------------------------------------
23RD GAME
06/03/99
- ------------------------------------------
AEK - A.S. APOLON PATRON ACHAIA
CLAUSS
PAOK -IRAKLIS
OLYMPIACOS S.F.P. - A.S. PAPAGOU
KATSELIS
IRAKLIO O.A.A. MINOAN LINES - G.S.
AMAROUSIOU
A.O. SPORTING SOULIS - A.O. NIAR IST
G.S. PERISTERIOU - PANTHINAIKOS A.O.
G.S. PANIONIOS NUTELLA - ARIS
- ------------------------------------------
- ------------------------------------------
24TH GAME
13/03/99
- ------------------------------------------
IRAKLIS - AEK
A.S. PAPAGOU KATSELIS - PAOK
ARIS - OLYMPIACOS S.F.P.
A.S. APOLON PATRON - IRAKLIO O.A.A.
MINOAN LINES
G.S. AMAROUSIOU - A.O. SPORTING
SOULIS
A.O. NIAR IST - G.S. PERISTERIOU
PANATHIAKOS A.O. - G.S. PANIONIOS
NUTELLA
- ------------------------------------------
- ------------------------------------------
25TH GAME
20/03/99
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AEK - A.S. PAPAGOU KATSELIS
OLYMPIACOS S.F.P. PAOK
IRAKLIO O.A.A. MINOAN LINES - IRAKLIS
A.O. SPORTING SOULIS - A.S. APOLON II
ACHAIA CLAUSS
G.S. PERISTERIOU - G.S. AMAROUSIOU
G.S. PANIONIOS NUTELLA - A.O. NIAR IST
ARIS - PANATHINAICOS A.O.
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26TH GAME
27/03/99
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PAOK-AEK
PANATHINAICOS A.O. - OLYMPIACOS
S.F.P.
A.S. PAPAGOU KATSELIS - IRAKLIO
O.A.A. MINOAN LINES
IRAKLIS - A.O. SPORTING SOULIS
A.S. APOLON PATRON ACHAIA CLAUSS -
G.S. PERISTERIOU
G.S. AMAROUSIOU - G.S. PANIONIOS
NUTELLA
A.O. NIAR IST - ARIS
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<PAGE>
I certify that the translations into English of exhibits 10.4 and 10.5 to the
Registration Statement on Form F-1 of MIH Limited are fair and accurate.
/s/ LESLEY R. PENFOLD
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Name
LR PENFOLD
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Title
CHIEF FINANCIAL OFFICER
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Date
FEBRUARY 18, 1999
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EXHIBIT 10.6
* Indicates where text has been omitted pursuant to a request for confidential
treatment. The omitted text has been filed separately with the Securities and
Exchange Commission.
CHANNEL DISTRIBUTION AGREEMENT
between
MULTICHOICE AFRICA (PROPRIETARY) LIMITED
and
ELECTRONIC MEDIA NETWORK LIMITED
Mallinicks
25 Savile Row
London W1X 1AA
<PAGE>
TABLE OF CONTENTS
1. PARTIES.................................................................3
2. DEFINITIONS AND INTERPRETATION..........................................3
3. INTRODUCTION...........................................................16
4. GRANT OF RIGHTS........................................................17
5. TERM...................................................................21
6. PER SUBSCRIBER FEES, REPORTING AND PAYMENT.............................21
7. RECORDS AND AUDIT......................................................29
8. PROPRIETARY AND INTELLECTUAL PROPERTY RIGHTS...........................31
9. DELIVERY AND TRANSMISSION OF CHANNELS..................................32
10. TIERING...............................................................35
11. ENCRYPTION AND DISTRIBUTION OF THE CHANNELS...........................37
12. SMS...................................................................40
13. ADVERTISING...........................................................41
14. OPEN TIME.............................................................42
15. PROGRAMMING...........................................................42
16. MARKETING.............................................................45
17. ANALOGUE PROGRAMME GUIDE..............................................49
18. DIGITAL PROGRAMME GUIDE...............................................50
19. ELECTRONIC PROGRAMMING GUIDE..........................................51
20. REPRESENTATIONS AND WARRANTIES........................................52
21. INDEMNITIES...........................................................54
22. THIRD PARTY INFRINGEMENTS OF VIEWING CARDS............................55
23. PROGRAMME SUPPLIER OBLIGATIONS........................................56
24. PARTIAL TERMINATION...................................................56
25. TERMINATION AND REMEDIES..............................................58
26. FORCE MAJEURE.........................................................64
27. GOVERNING LAW AND DISPUTES............................................65
28. RESTRUCTURING FOR TAX OR REGULATORY REASONS...........................66
29. CONFIDENTIALITY.......................................................67
30. NOTICES...............................................................68
31. MISCELLANEOUS.........................................................69
SCHEDULE 1
SCHEDULE 2A
SCHEDULE 2B
SCHEDULE 3
SCHEDULE 4
SCHEDULE 5
+SCHEDULE 6
SCHEDULE 7
SCHEDULE 8
SCHEDULE 9
SCHEDULE 10
2
<PAGE>
CHANNEL DISTRIBUTION AGREEMENT made on 18 June 1998 between:
1. PARTIES
1.1. MULTICHOICE AFRICA (PROPRIETARY) LIMITED, a company registered
in South Africa, whose principal place of business is at 75
Republic Road, Randburg, South Africa ("MultiChoice"); and
1.2. ELECTRONIC MEDIA NETWORK LIMITED a company registered in
South Africa whose principal place of business is at 137
Hendrik Verwoerd Drive, Randburg, South Africa ("M-Net").
2. DEFINITIONS AND INTERPRETATION
In this Agreement -
2.1. clause headings are inserted for convenience only and shall
not be taken into account in construing this Agreement;
2.2. references to clauses are references to the clauses of this
Agreement;
2.3. if any provision in a definition is a substantive provision
conferring rights or imposing obligations on any Party, effect
shall be given to it as if it were a substantive clause in the
body of this Agreement, notwithstanding that it is only
contained in the interpretation clause;
2.4. if any period is referred to in this Agreement by way of
reference to a number of days, the days shall be reckoned
exclusively of the first and inclusively of the last day
unless the last day falls on a Saturday, Sunday or public
holiday within the Republic of South Africa, in which case the
last day shall be the next succeeding day which is not a
Saturday, Sunday or public holiday;
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<PAGE>
2.5. unless the context clearly indicates a contrary intention, an
expression which denotes any one gender includes the other
genders, a natural person includes an artificial person and
vice versa, the singular includes the plural and vice versa
and the following expressions bear the meanings assigned to
them below and cognate expressions bear corresponding meanings
"Accounting Period" : each calendar month during this
Agreement (with the exception of the
last Accounting Period which will
end on the final day of this
Agreement);
"Affiliate" : either
a) in relation to both
Parties, any Person which,
directly or indirectly:
(i) is controlled by that
Party; or
(ii) controls that Party;
(iii) is under common control
with that Party;
or
b) in relation to MultiChoice:
(i) any Person in whom
MultiChoice has a direct
shareholding greater than
or equal to 30% of the
issued share capital; or
(ii) any Person where
MultiChoice, directly or
indirectly has the right to
appoint or remove directors
holding a majority of the
voting rights at meetings
of the board of directors
of such Person;
"Agreement" : this document together with the
Schedules attached hereto;
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<PAGE>
"A la Carte
Channels" : any television programme service
which is marketed by MultiChoice as
a so-called "stand alone channel"
i.e. a channel which is not marketed
as part of a group of other channels
and does not form part of either the
Premium Tier, Free Tier or the Basic
Tier or any other tier of television
programme services;
"Basic Tier" : an envisaged standard MultiChoice
programming tier which, if
implemented, will consist of
television programme services
administered via the MultiChoice
subscriber management system, and
will include, without limitation,
all programme services, which are
from time to time included in such
tier subject to the provisions of
this Agreement, but will exclude all
A la Carte Channels, Free Channels
and channels comprising the Premium
Tier;
"Channels" : those programme services referred to
in clause 4.1. of this Agreement as
currently named or as they may be
renamed in the future;
"Channel Signals" : the signals comprising the Channels;
"Clearances" : all consents, clearances and
licenses required from the copyright
holders of the programming
transmitted as part of the Channels
to distribute such programming in
the Territory, including all
clearances and licenses from
programming suppliers contracted as
such by M-Net and all necessary
music, mechanical transfer and
public performing
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<PAGE>
rights clearances;
"Commercial
Subscriber" : any Person who owns or operates any
premises, establishment or location
in the Territory, whether operated
for commercial gain or otherwise,
containing rooms for occupation
including hotels, motels, inns,
bungalow parks and guest houses, who
has been authorised by MultiChoice
to receive and decrypt the Channel
Signals;
"Communal
Subscriber" : any Person who owns or operates any
premises, establishment, area or
location in the territory, whether
operated for commercial gain or not,
which is a community meeting place,
including but not limited to
restaurants, clubs, bars, pubs and
the like and is capable of receiving
and has been duly authorised by
MultiChoice specifically to receive
and decrypt the Channel Signals;
"Computicket" : Computicket Limited, a company
registered in South Africa, having
its principal place of business in
Cape Town;
"CPI" : when used in connection with amounts
expressed in Rands means the
weighted average consumer price
index, all items, as notified by the
South African Secretary of
Statistics, of the 12 (twelve) areas
specified in the notice with the
average for 1990 as the base which
equals 100 (one hundred) or when
used in connection with amounts
expressed in United States Dollars
means the United States
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Consumer Price Index as published by
the United States Department of
Commerce. In the case of either
index being replaced by an index of
a different nature, such index shall
be used duly adjusted as if the same
index is used, provided that if such
index is replaced by an index with a
different base, the replacing index
shall be used but it shall be
adjusted in order to correspond with
the index as set out above. All
adjustments to either index shall be
made by a firm of Chartered
Accountants and Auditors agreed by
the Parties or, in the absence of
agreement, by a firm nominated by
the President for the time being of
the South African Institute of
Chartered Accountants;
"Decoder" : an individually addressable
stand-alone device or an integrated
satellite receiver/decoder existing
now or developed in the future,
capable of receiving and, when
enabled, of decrypting the Channels'
Signals, either alone or in
conjunction with a Viewing Card;
"Delivery Failure" : any material disruption,
discontinuance or interruption in or
other interference with the delivery
of the Channels' Signals by M-Net to
MultiChoice (but excluding
interruption for routine
maintenance, adjustment or repair of
the delivery satellite);
"Effective Date" : * 1995
"Employee Subscribers": any person who is an employee of
M-Net, MultiChoice, M-Web,
SuperSport, Computicket and other
associated companies agreed by the
Parties
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<PAGE>
from time to time who, for the
payment of a discounted amount, is
duly authorised to decrypt the
Channels' Signals and to view the
Channels in unencrypted format;
"Encryption" : the scrambling and encryption of the
Channels' Signals so that such
Signals can only be decrypted and
viewed either by means of a
compatible Decoder only or by the
insertion of an enabled Viewing Card
in such Decoder;
"Free Tier" : the MultiChoice programming tier
consisting of the Free Channels;
"Free Channels" : the television programme services
for which a Viewing Card is required
and for which no subscription fee is
payable by any person for the right
to view such programme services in
an unencrypted format;
"Free TV Systems" : any form of television or other
transmission system by means of
which a person can receive audio
visual programming or services on a
television set without charge (other
than compulsory fees charged by a
government or governmental agency
assessed on those who use television
sets) including free satellite and
free cable systems;
"Gross Subscription
Revenue" : the total amount of fees excluding
discounts, for each country
comprising the Territory actually
billed (whether or not received) by
MultiChoice or its Affiliates to all
Subscribers during a particular
Accounting Period.
8
<PAGE>
"Hotel Room" : a room in any premises,
establishment or location, owned or
operated by a Commercial Subscriber,
which is wired and equipped to
decrypt the Channel Signals and to
view the Channels on a television
set in that room in unencrypted
format;
"Marks" : the trade names, trade marks, logos,
and service marks used from time to
time in connection with the
Channels, the name of the Channels,
the titles of the programmes
transmitted as part of the Channels
and the corporate names of M-Net,
being Marks belonging solely and
exclusively to M-Net or the owner of
the copyright in the relevant
programme(s) ("the Relevant Owner"),
as the case may be;
"M-Web" : M-Web Limited, a company registered
in South Africa, whose principal
place of business is in Cape Town;
"MUD (Multiple
Unit Dwelling)
Subscriber" : any person who owns or operates any
premises, establishment or location
in the territory, whether operated
for commercial gain or otherwise,
containing individual living units
including, but not limited to,
blocks of flats, townhouse
complexes, cluster home complexes
(and specifically excluding those
premises, establishments and
locations owned or operated by
Commercial Subscribers) who have
been authorised by MultiChoice on a
bulk billing basis to receive and
decrypt the Channel Signals;
9
<PAGE>
"MUD Unit" : a dwelling unit in any premises,
establishment or location, owned or
operated by a MUD Subscriber, which
is wired and equipped to decrypt the
Channel Signals and to view the
Channels on a television set in that
dwelling unit in unencrypted format;
"MultiChoice
Bouquets" : the MultiChoice C Bouquet and the
MultiChoice Ku Bouquet;
"MultiChoice C
Bouquet" : all the DSTV visual, audio and data
programme services digitally
transmitted via the C band beam of
the Satellite and in respect of
which MultiChoice provides SMS;
"MultiChoice
Ku Bouquet" : all the DSTV visual, audio and data
programme services digitally
transmitted via the Ku band beam of
the Satellite and in respect of
which MultiChoice provides SMS;
"MultiChoice SUD
Subscriber Charge" : the monthly price charged by
MultiChoice to a SUD Subscriber for
the right to view the Channels in an
unencrypted format, it being
understood that different prices may
be charged by MultiChoice within
each country comprising the
Territory and in respect of
different methods of delivery of the
Channels' Signals;
"MultiChoice Marks" : the tradenames, trademarks, logos
and service marks belonging to and
used from time to time by
10
<PAGE>
MultiChoice and its Affiliates
excluding the Marks;
"Open Time" : periods of time on Pay TV Systems
during which programmes and services
broadcast on such systems may be
viewed in unencrypted format without
the payment of a fee in respect of
such programmes and services;
"Parties" : the parties to this Agreement;
"Pay Per View" : the scheduled television exhibition
of programmes which are transmitted
via Pay TV Systems in respect of
which a separate fee is payable in
order to view each event or group of
events;
"Pay TV Systems" : any cable system, multi-point
microwave distribution system,
over-the-air television system,
close circuit television system,
satellite master antenna television
system, direct to home system,
television receive only system,
hotel/motel television system,
privately maintained satellite
receiving antennae and all other
forms of pay or subscription
television or communication systems
and any other telecast, broadcast or
transmission system, now known or
hereafter discovered or developed,
by means of which a Person can
receive audio-visual programming or
services substantially in Encrypted
format, where a fee is payable by
such Person for the right to view
and/or participate in such
programmes and services in
unencrypted format (except for Open
Time), but excluding Pay Per View;
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<PAGE>
"Pay TV Viewers" : Persons in the Territory who are
capable of receiving programming
services by means of Pay TV Systems;
"Person" : individual, company, partnership,
trust, unincorporated association,
government authority or agency or
any other entity;
"Per Subscriber Fees" : the fees payable by MultiChoice to
M-Net determined according to the
provisions of this Agreement;
"Piracy" : the unauthorised use of the
MultiChoice algorithm to decrypt the
Channel Signals and/or the
unauthorised reception of the
Channels inside or outside the
Territory and/or the unauthorised
distribution or broadcasting of the
Channel Signals and/or the
authorised or unauthorised reception
of the Channels outside the
Territory and/or the unimpaired
and/or unauthorised reception of the
Channels and or Channel by any
Person other than a Subscriber;
"Premium Movie
Channel" : a channel consisting of first run
feature length films, being mainly
current first run feature length
films, where a "current" film is one
which had a United States theatrical
release no more than 36 months
previously and a "first run" film is
one which has not previously been
exhibited on any television service
or television channel which is
broadcast or distributed via Pay or
Free TV Systems in the Territory and
a "film" is a motion picture which
was originally produced in the
English language (which
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<PAGE>
shall include a film containing
limited portions of dialogue that
are spoken in a foreign language but
originally subtitled in the English
language). In terms of this
definition, "mainly" shall be
determined over an average 4 (four)
month period and shall mean a
predominant percentage except: (i)
where a predominant percentage is
not available from programme
suppliers; or (ii) where the terms
proposed by programming suppliers
(excluding Affiliates of M-Net) are
so commercially unreasonable when
considered in view of M-Net's rights
and obligations under this Agreement
that M-Net could not be expected to
acquire a predominant percentage on
such terms, in which event "mainly"
shall mean either (i) in respect of
the former situation, that
percentage which is available from
programme suppliers; or (ii) in
respect of the latter situation, the
percentage that M-Net can reasonably
be expected to acquire on such terms
provided, however, that any such
determination shall take into
consideration, without limitation,
M-Net's rights and obligations under
this Agreement;
"Premium Movie/
Sports Channel" : a channel which is a combination of
a Premium Movie Channel and a
Premium Sports Channel;
"Premium Sports
Channel" : a channel which consists of sports
and sports related coverage, a
significant proportion of which is
live coverage, of a cross-section of
Premium Sports (at least three such
sports during any particular month),
and provides live local studio links
between
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<PAGE>
programmes or events;
"Premium Sports" : leading South African and major
international sporting events,
tournaments or matches, as the case
may be, primarily focusing on but
not necessarily limited to, the
sports of rugby, soccer, cricket,
golf, tennis and boxing;
"Premium Tier" : a premium programming tier which
would consist of premium television
programme services administered via
the MultiChoice subscriber
management system and would include
the programme services set out in
Schedule 1 and all other programme
services which would from time to
time be included in such tier,
subject to the provisions of this
Agreement, from the date upon which
MultiChoice tiers the MultiChoice
Bouquet;
"Promotional
Advertisements" : advertisements which aim to promote
the MultiChoice Ku and C Bouquets,
as applicable;
"RAVE (Restricted
Access Viewing
Establishment)
Subscriber" : any person who is sold and marketed
to by MultiChoice under a separate
rate and who owns or operates a
common area in an institution in the
Territory which has been wired and
equipped to receive and decrypt the
Channel Signals, such as but not
limited to hospitals, nursing homes,
prisons, offices, schools,
factories, fire stations, police
stations, military installations,
oil rigs and the like
14
<PAGE>
but excluding any private rooms or
living areas in such institutions,
which, for the avoidance of doubt,
shall be MUD Units);
"Satellite" : the PanAmSat 4 satellite or such
other satellite having substantially
the same footprint and power as may
be determined by MultiChoice from
time to time in accordance with
clause 9.9;
"SMS" : subscriber management services
supplied from time to time by
MultiChoice as stipulated in this
Agreement;
"Subscribers" : all Persons who have contracted to
pay a fee to MultiChoice to receive
any or all of the Channels, on an
audio visual monitor, including, but
not limited to, SUD Subscribers, MUD
Subscribers, Commercial Subscribers,
Communal Subscribers, RAVE
Subscribers and notwithstanding the
fat that no fee is payable by such
persons, VIP Subscribers;
"SUD (Single Unit
Dwelling) Subscriber" : any person who owns, leases or
occupies a private single dwelling
unit or other dwelling unit in the
Territory and has been sold and
marketed to by MultiChoice including
Employee Subscribers on an
individual basis and is duly
authorised to receive and decrypt
the Channel Signals;
"SuperSport" : SuperSport Limited, a company
registered in South Africa, whose
principal place of business is in
Johannesburg;
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<PAGE>
"Territory" : the continent of Africa excluding
those countries listed in paragraph
1.1 of Schedule 2A of this Agreement
but including those Indian Ocean
Islands set out in paragraph 1.2 of
Schedule 2A;
"Transmission Failure": any material disruption,
discontinuance or interruption in or
other interference with the delivery
of the Channels' Signals by
MultiChoice to Subscribers (but
excluding interruption for routine
maintenance, adjustment or repair of
the Uplink Facility or Satellite);
"Transponder Costs" : the cost of the transponder capacity
for the Channels paid by M-Net as
set out in clause 9.8;
"VIP Subscriber" : any Person of strategic or
promotional importance either to
MultiChoice or M-Net whom either of
the Parties have agreed to authorise
to decrypt the Channels' Signals and
to view the Channels in unencrypted
format without the payment of any
fee;
"Viewing Card" : an electronic smart card which, when
it is enabled by or on behalf of
MultiChoice and inserted into a
Decoder, is designed to decrypt the
Channels' Signals and which enables
the Subscriber to view, inter alia,
the Channels in unencrypted format.
3. INTRODUCTION
3.1. It is recorded that -
3.1.1. MultiChoice and M-Net are Parties to an existing
agreement, which took
16
<PAGE>
effect on * 1995 (the "Analogue Agreement"), and
which deals with the analogue distribution by
MultiChoice of the M-Net Domestic and M-Net Africa
channels in Africa;
3.1.2. this Agreement is entered into as being supplementary
to, rather than in replacement of the Analogue
Agreement and shall be construed accordingly;
3.1.3. to the extent that this Agreement conflicts with the
Analogue Agreement then this Agreement shall prevail
to the exclusion of the Analogue Agreement.
3.2. It is also recorded that M-Net is party to an existing
agreement with CNE for the exclusive distribution of its
channel, M-Net Egypt, in Egypt. M-Net and MultiChoice agree to
hold good faith discussions with a view to including Egypt in
the definition of Territory in this Agreement when the
agreement with CNE expires and should MultiChoice no longer
hold any financial interest in CNE.
4. GRANT OF RIGHTS
4.1. M-Net hereby grants to MultiChoice the * right to distribute
and license the reception and redistribution of, and to
market, the channels known as M-Net (Domestic) ("MND"), M-Net
(Africa ) ("MNA"), Movie Magic (Domestic) ("MMD"), Movie Magic
(Africa) ("MMA"), KTV ("KTV") and SuperSport ("SS") from the
Effective Date, throughout the Territory by means of Pay TV
Systems (excluding the analogue distribution of MND and MNA
which is governed by the Analogue Agreement), on the terms set
out herein.
4.2. In addition, but subject to the terms and conditions of this
Agreement, M-Net undertakes that M-Net and/or any Affiliate of
M-Net *
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4.3. It is recorded that:
4.3.1. the MND channel is a 24 hour per day premium general
entertainment channel and is comprised predominantly
of premium Pay TV programmes consisting mainly of
current feature films consistent with a Premium Movie
Channel, occasional specials, occasional series,
(predominantly) live sport consistent with a
Premium Sports Channel, local production and
children's programming primarily targeting audience
needs in South Africa, Namibia and Lesotho, Southern
Zimbabwe, Southern Mozambique, Swaziland, and
Botswana;
4.3.2. the MNA channel is a premium general entertainment
channel comprised predominantly of premium Pay TV
programmes consisting mainly of current feature films
consistent with a Premium Movie Channel, occasional
specials, occasional series and local productions,
and children's programmes, primarily targeting
audience needs in Africa excluding South Africa,
Namibia and Lesotho, Southern Zimbabwe, Southern
Mozambique, Swaziland, and Botswana, and is
transmitted on at least a 16 hour per day basis;
4.3.3. the MMD and MMA channels are Premium Movie Channels
transmitted on at least a 20 hour per day basis,
which target South African and African Pay TV Viewers
respectively; notwithstanding the definition of
Premium Movie Channel, it is agreed and understand
that MMA and MMD shall, from time to time, include
occasional library movies and that movies will
premiere on the MND channel prior to being screened
on MMD and MMA. Nevertheless, the Parties shall, from
time to time, review in good faith the provisions of
this clause in the best interests of both Parties
with a view, when appropriate, to procuring that a
percentage of movies will premier first on MMD and
MMA;
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<PAGE>
4.3.4. the KTV channel is comprised of children's programmes
targeting all African Pay TV viewers and is
transmitted on a 12 hour per day basis from 07h00 to
19h00 (Central African Time);
4.3.5. the SS channel is a 24 per hour day Premium Sports
Channel and is also referred to as Supersport 1.
4.4. Where the hours of transmission of MNA and/or KTV are
increased, the Per Subscriber Fees payable by MultiChoice to
M-Net hereunder shall not increase as a result thereof.
4.5. In consideration of the * rights granted by M-Net to
MultiChoice in terms of clause 4.1, MultiChoice undertakes
that MultiChoice and all of its Affiliates shall not, during
the Term:
4.5.1. *
4.5.2. *
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4.6. In regard to Pay Per View:
4.6.1. MultiChoice shall have a right of first refusal to
market and licence, on a sole and exclusive basis,
any Pay Per View programmes in respect of which M-Net
acquires the Pay Per View distribution rights from
time to time for such distribution within the
Territory or part thereof.
4.6.2. M-Net shall notify MultiChoice forthwith upon
acquiring Pay Per View distribution rights for the
Territory for any such programmes, whereupon the
Parties shall negotiate in good faith the terms of
such distribution by MultiChoice.
4.6.3. If the Parties fail to agree the terms for such
distribution within a period of 60 days from the
notification by M-Net, M-Net (i) shall not itself be
entitled to undertake such Pay Per View distribution,
and (ii) undertakes that it shall not authorise the
Pay Per View distribution of the relevant programme
in the Territory by a third party SMS provider (the
"Third Party"); without first having afforded
MultiChoice the opportunity, on 60 (sixty) days
notice (or such shorter period as may be agreed
between the Parties, taking into account the date of
broadcast of the relevant event) in writing to
MultiChoice, to conclude an agreement on terms and
conditions substantially the same as those agreed
with the Third Party for such Pay Per View
distribution.
4.6.4. M-Net shall have a right of first refusal to supply a
full service Pay Per View, offering 24 (twenty four)
hours per day consisting of premium movies
(consistent with the definition of Premium Movie
Channel) and/or Premium Sports Programming for sole
and exclusive distribution by MultiChoice in the
Territory.
4.7. M-Net shall be entitled to sell or syndicate its programmes
known as Egoli, Carte Blanche and Front Row and also films and
one-off local productions (i.e. one-off specials) in which
M-Net has invested, for third party distribution in the
Territory by any means whatsoever.
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4.8. M-Net shall not be entitled to sell or otherwise syndicate in
any other programmes which have been or are to be included in
any of the Channels for third party distribution in the
Territory by any means whatsoever save that:
4.8.1. M-Net shall be entitled to approach MultiChoice, on a
case by case basis, in relation to the sale or
syndication of other programmes in order to obtain
MultiChoice's approval which shall not be
unreasonably withheld to syndicate same to a third
party broadcaster in the Territory.
4.8.2. *
5. TERM
5.1. Notwithstanding the date of signature hereof, the Agreement
shall be deemed to have commenced on the Effective Date and
shall continue thereafter for a period of 10 (ten) years.
5.2. During the last year of the Term the Parties shall renegotiate
the fees and commercial terms which will apply during the *
years following the Term. If the Parties are able to agree
such fees and commercial terms then this Agreement shall
automatically continue for a further * years on the same terms
and conditions set out herein and in the Standard Terms.
6. PER SUBSCRIBER FEES, REPORTING AND PAYMENT
6.1. In consideration of the grant of rights to MultiChoice as set
out in clause 4.1, MultiChoice shall pay to M-Net in respect
of each Accounting Period, a Per Subscriber Fee in respect of
each Subscriber as set out in Schedule 3 hereto;
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6.2. It is recorded that MultiChoice intends offering incentives to
potential subscribers to persuade such potential subscribers
to purchase a Viewing Card and/or commence payment of monthly
subscription charges; excluding circumstances where a
subscriber is in default of any obligation to MultiChoice. The
incentives may take the form of one or two free viewing
periods ("Free Trials") not exceeding 1 (one) months
cumulative duration during any year (calculated with reference
to the Effective Date or any anniversary thereof); provided
that all such Free Trials involving the Channels shall be
subject to the prior written consent of M-Net, which consent
M-Net shall be entitled to withhold if any supplier of
programmes or material to M-Net has not given its consent to a
Free Trial. M-Net undertakes to use its reasonable endeavors
to obtain the consent of such suppliers to such Free Trials as
may be reasonably requested by MultiChoice.
6.3. *
6.4. It is recorded that at the date of signature hereof the
subscriber charge payable to MultiChoice by SUD Subscribers
within the Ku Band footprint of the Satellite who receive the
Channel Signals on a Direct to Home basis (the "Ku SUD
Subscriber Charge") * per Ku SUD Subscriber inclusive of VAT.
The determination of the Ku SUD Subscriber Charge shall be
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within the reasonable direction of MultiChoice; provided,
however, that MultiChoice shall consult with M-Net prior to
any increase in the Ku SUD Subscriber Charge.
6.5. Price Increases
6.5.1. Increases in the Per Subscriber Fees payable in
respect of the digital distribution of the Channels
in South Africa (the "South African Digital
Increase") shall be negotiated in good faith between
the Parties on an annual basis with a view to
implementing the South African Digital increase on *
each year during the Term. The factors that shall be
taken into account in determining the South African
Digital Increase shall include but not be limited to:
(i) the basis of determining the previous year's
South African Digital Increase;
(ii) the increase in the CPI in respect of the then
preceding calendar year;
(iii) the Rand/US Dollar exchange rate movement in
respect of the then preceding calendar year;
(iv) the total amount of Per Subscriber Fees paid to
M-Net by MultiChoice in respect of the digital
distribution of the Channels in South Africa during
the then preceding calendar year; and, after taking
into consideration any and all additional channels
added to MultiChoice Ku Band Bouquet in the preceding
year, the percentage proportion that this represents
in relation to MultiChoice's overall programming
costs for the then preceding calendar year;
(v) the quality of the Channels, including the number
of major Hollywood studios contracted to supply
movies to M-Net in respect of the then preceding
calendar year;
(vi) M-Net's programming acquisition costs in respect
of the then preceding calendar year;
(vii) economic forecast materials or data which could
have a bearing on the business of either M-Net or
MultiChoice in respect of the calendar year following
implementation of the South African Digital Increase;
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(viii) the results of the latest retail price survey
conducted on behalf of the Parties; and
(ix) the forecast growth in Subscribers for the then
following calendar year: (collectively, the "South
African Digital Increase Factors").
6.5.2. The respective increases in the Per Subscriber Fees
payable in respect of the digital distribution and
analogue distribution of the Channels outside South
Africa (the "ROT Digital and Analogue Increases")
shall also be negotiated in good faith between the
Parties on an annual basis with a view to
implementing the ROT Digital and Analogue Increases
on * each year during the Term. If notwithstanding
reasonable endeavours the parties are unable to reach
agreement on the ROT Digital and Analogue Increases
then the previous year's Per Subscriber Fees shall be
increased by the percentage increase in the USA CPI
occurring in the 12 (twelve) months period prior to
the relevant increase.
6.5.3. The Parties shall use all reasonable endeavours to
ensure that their respective Chief Financial Officers
reach agreement in respect to the South African
Digital Increase prior to * each year, with a view to
implementing such increases on * or thereafter. If,
notwithstanding such reasonable endeavours, the
Parties are unable to reach agreement on the South
African Digital Increase, then the matter shall first
be referred to the Parties' respective Chief
Executive Officers who shall use all reasonable
endeavours to reach agreement concerning the relevant
increase or increases, taking into account the South
African Digital Increase Factors (in respect of the
South African Digital Increase). If the Chief
Executive Officers fail to reach agreement by * then
the matter shall be referred to the Parties'
respective chairpersons who shall use all reasonable
endeavours to reach agreement taking into account the
relevant applicable increase factors. If the Parties'
chairpersons fail to reach agreement by * then the
matter shall be referred to the President (for the
time being) of the South African Institute of
Chartered Accountants who shall be asked to appoint a
suitably
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qualified expert to determine the South African
Digital Increase taking into account the South
African Digital Increase Factors, who shall be
requested to use all reasonable endeavours to make
such a determination by not later than * and who
shall be entitled to consult with any employees or
officers of either Party at his discretion. For the
avoidance of doubt, if at the time of a proposed
referral to the chairpersons envisaged above, the
chairpersons are the same individual, then the
referral shall be directly from the Chief Executive
Officers to the President (for the time being) of the
South African Institute of Chartered Accountants by
not later than *
6.5.4. For the avoidance of doubt, if, notwithstanding the
provisions of sub-clauses 6.5.1 to 6.5.3 inclusive,
the South African Digital Increase has not been
determined by * in any particular year during the
Term, then: (i) MultiChoice shall not be entitled to
increase the retail charge levied on Subscribers
arising from their entitlement to receive the
MultiChoice Ku Band Bouquet until the South African
Digital Increase has been determined; and (ii) the
Per Subscriber Fees payable in respect of the digital
distribution of the Channels in South Africa shall
not be increased until the retail charge levied on
Subscribers arising from their entitlement to receive
the MultiChoice Ku Band Bouquet has been increased
pursuant to the determination of the South African
Digital Increase and such increased retail charge has
been applied on the first day of an Accounting
Period.
6.5.5. Increases in the Per Subscriber Fees in respect of
analogue distribution on the Channels in South Africa
shall be implemented on * during each year of the
Term and shall be proportionate to the increase in
the retail charge to Subscribers (excluding VAT) who
receive the Channels by analogue means, applied in
respect of the twelve month period preceding the
relevant * increase implementation date.
6.5.6. Increases in the Per Subscriber Fees payable in
respect of the analogue distribution of MDN and
Community Service Network ("CSN") shall be
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proportionate to the increase in the charge
(excluding VAT) to Subscribers for MND and CSN
collectively for so long as they are sold
collectively.
6.5.7. If MultiChoice decides to sell MND to Subscribers
separately from CSN, then it shall notify M-Net and
the Parties shall negotiate the mechanism by which
the Per Subscriber Fees payable in respect of MND
hereunder will be varied.
6.6. Minimum Guarantees
6.6.1. Should M-Net be required to pay any minimum
guarantees to * * pursuant to an agreement between *
* whether in short form or long form, MultiChoice
undertakes and guarantees that it shall pay to M-Net
the minimum guarantees payable by M-Net in respect of
those 20 countries listed in Schedule 2B hereto but
only in respect of a maximum of 10,000 (ten thousand)
Subscribers for all such countries taken together.
The amount payable by MultiChoice to M-Net pursuant
to the guarantee set out in this clause 6.7.1 shall
be 10,000 less the actual number of Subscribers in
all Schedule 2B countries during the relevant period
multiplied by the actual programming cost payable per
Subscriber paid by M-Net to * in respect of the
countries set out in Schedule 2B for that period. If
M-Net removes any country from Schedule 2B in terms
of clause 24 or if M-Net appoints a third party
distributor under clause 24.6.2, then the number of
Subscribers in respect of which MultiChoice
guarantees payment under this clause 6.7.1 shall be
reduced by 500 in respect of each such removed
country. Any amount payable by MultiChoice in
accordance with this clause 6.7 will be payable by
MultiChoice to M-Net on the last day of the
Accounting Period in which such amounts are payable
by M-Net to * and will be set out in an invoice which
will be submitted by M-Net to MultiChoice conditional
on the submission by MultiChoice to M-Net of the
information set out in Schedule 4 in accordance with
clause 7.
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6.6.2. M-Net shall make available, upon reasonable notice by
MultiChoice, and MultiChoice shall be entitled to
examine and take copies of, all relevant books,
records and/or contracts or extracts thereof
containing information which may be required for the
determination and verification of (i) any minimum
guarantees payable by M-Net to * and (ii) the actual
programming per Subscriber cost paid by M-Net to * as
referred to in clause 6.7.1.
6.7. All Per Subscriber Fees payable by MultiChoice to M-Net
pursuant to the provisions of this Agreement:
6.7.1. which relate to the distribution of the MNET Analogue
channel in South Africa and MultiChoice Ku and C
Bouquets will be payable in South African Rand
monthly in arrears within 15 (fifteen) days of the
last day of each Accounting Period applying (where
applicable) the US Dollar/South African Rand exchange
rates (as published by the Standard Bank of South
Africa from time to time) applicable on the last day
of the Accounting Period, in respect of which payment
is due; and
6.7.2. which relate to the analogue distribution of the
Channels in South Africa will be payable in South
African Rand monthly in arrears within 15 (fifteen)
days of the last day of each Accounting Period;
6.7.3. which relate to any of the Channels transmitted in
analogue format or by terrestrial means outside of
South Africa will be payable in South African Rand
annually in arrears within 15 (fifteen) days after 31
March in respect of the preceding 12 (twelve)
Accounting Periods of the Term (pro rated where
applicable), calculated on a monthly basis for each
Accounting Period comprising the relevant year with
reference to the average US Dollar/South African Rand
exchange rate over the Accounting Period to which
such payment relates, as published from time to time
by the Standard Bank of South Africa Limited.
6.8. With effect from the Start Date, MultiChoice shall deliver to
M-Net a statement (i)
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(ii) subject to the consent of M-Net which shall not be
unreasonably withheld or delayed, such other date as
MultiChoice may advise from time to time but which will be no
later than fifteen (15) days after the end of each Accounting
Period, MultiChoice shall deliver to M-Net a report relating
to that Accounting Period recording in detail the information
set out in Schedule 4 and such report shall be certified as
accurate in all respects by the MultiChoice Chief Executive or
Chief Financial Officer or such other person who may be
appointed by either of the aforementioned.
6.9. Following receipt of the report referred to in clause 6.9,
M-Net shall deliver to MultiChoice an invoice showing the Per
Subscriber Fees due by MultiChoice to M-Net and MultiChoice
shall pay such invoice in full in accordance with clauses 6.1
and 6.8 above.
6.10. Any payment made by either Party in terms of this Agreement
shall, except in the case of fraud or manifest error or, in
the case of payment by MultiChoice to M-Net where M-Net's
records are subject to an audit by a supplier of programming
to M-Net, be deemed to be accurate and complete if neither
Party has disputed the accuracy of completeness of such
payment by notice to the other within 12 (twelve) months from
the date of receipt by the relevant Party of such payment.
6.11. Notwithstanding any inability to obtain exchange control
approvals from any country in the Territory to remit Per
Subscriber Fees to South Africa, MultiChoice shall make
payment of all such Per Subscriber Fees to M-Net in South
Africa in accordance with this Agreement.
6.12. Neither Party shall be entitled to apply set off in respect of
any fees or charges due in terms of this Agreement or related
agreements.
6.13. MultiChoice and/or its Affiliates shall be liable for all bad
debts arising out of failure to collect such subscription
fees.
6.14. It is recorded that the portion of the per Subscriber charge
which is reflected in this
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Agreement as a Per Subscriber Fee is collected by MultiChoice
acting as an agent for M-Net. Accordingly, MultiChoice in
consideration for the grant of the rights set out in clause 4
acts as M-Net's agent in the collection and payment to M-Net
of Per Subscriber Fees which are payable by MultiChoice to
M-Net in terms of this Agreement.
6.15. Subject to the provisions of clause 31.2 and provided that
there will be no additional fees or costs of whatsoever kind
payable under this Agreement as a result of the following
assignment, M-Net may, upon not less than one month's notice
in writing to MultiChoice, assign all of its rights, in
relation to SS only, to receive payment in terms of this
clause 6, to SuperSport. On receipt of such notice,
MultiChoice shall thereafter be obliged to effect payment of
any Per Subscriber Fees payable hereunder in respect of the
rights so assigned, directly to SS (or at the request of M-Net
to M-Net as agent for SS). Such payment shall be on full
discharge of MultiChoice's obligations to in respect of all
rights granted in terms of this Agreement.
7. RECORDS AND AUDIT
7.1. Notwithstanding the certification of the monthly reports
contemplated in 6.9, MultiChoice shall supply to M-Net within
120 (one hundred and twenty) days of each anniversary of the
Effective Date, or in the case of termination of this
Agreement for whatever reason, within 120 (one hundred and
twenty) days of the date of termination, a statement certified
by the duly appointed auditors of MultiChoice certifying the
completeness and accuracy of all information contained in all
of the reports and statements supplied by MultiChoice to M-Net
in respect of the preceding year or aforesaid portion as the
case may be.
7.2. MultiChoice shall keep, or cause to be kept, and shall
maintain for a period of 5 years, complete, detailed and
accurate records and books of account in respect of its
subscriber base including, but not limited to, the number of
Subscribers in each Accounting Period and of all payments
effected under this agreement, and such records shall contain
all information which may be required for the determination
and verification of all Per Subscriber Fees paid or payable
under this Agreement and
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of all information required for the purposes of the reports
contemplated in 6.9.
7.3.
7.3.1. During this Agreement and subject to clause 8.1,
M-Net shall be entitled to examine or audit the books
and/or records contemplated in clause 7.2 and take
copies and extracts therefrom during normal business
hours upon not less than 5 (five) days prior written
notice, provided that such inspection or audit shall
take place not more frequently than once in any 12
(twelve) month period except if a material
discrepancy is found in which case M-Net shall have
the right to make two further such inspections within
the same twelve month period.
7.3.2. MultiChoice shall permit independent auditors and/or
representatives appointed by any supplier of
programming to M-Net to examine, inspect or audit the
books and records contemplated in 7.2 in accordance
with the provisions contained in 7.3.1; provided that
such independent auditors and/or representatives are
appointed solely on the basis that they convey the
results (rather than any documents supporting the
results) of any audit report to the programme
supplier concerned.
7.4. If any inspection or audit carried out by or on behalf of
M-Net pursuant to clause 7.3 reveals that MultiChoice has
under-reported the amount payable to M-Net, then,
notwithstanding clause 6.11, MultiChoice shall make immediate
payment to M-Net of the amount due and owing. If any
inspection or audit reveals that MultiChoice has over-reported
the amount payable to M-Net, then, notwithstanding clause
6.11, M-Net shall immediately raise a credit note for the
appropriate refund to MultiChoice save where M-Net has paid
programme suppliers based on inaccurate figures and is unable
to obtain refunds from such suppliers, notwithstanding all
reasonable efforts being made by M-Net to do so, in which
event the amount to be refunded to MultiChoice shall be
reduced accordingly.
7.5. All costs of auditing, excluding costs incurred by MultiChoice
pursuant to clause 7.1, shall be borne by M-Net unless any
report or information submitted to M-Net by
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MultiChoice is found to be materially inaccurate, in which
case the costs shall be borne by MultiChoice. For the purposes
of this clause 7.5 a report or any information which differs
in respect of any figure from the correct figure by more than
5% shall be deemed to be materially inaccurate.
7.6. Should M-Net incur any liability to pay any interest, fine or
penalty to third parties as a direct result of incorrect,
inaccurate, incomplete or late reporting by MultiChoice,
MultiChoice shall indemnify M-Net to the full extent of the
amount of such interest, fine or penalty actually paid by
M-Net.
8. PROPRIETARY AND INTELLECTUAL PROPERTY RIGHTS
8.1. M-Net acknowledges that all proprietary and intellectual
property rights (specifically including MultiChoice's
confidential Subscriber data base) arising from the conduct by
MultiChoice of its business shall, as between M-Net and
MultiChoice vest exclusively in MultiChoice.
8.2. M-Net shall, with MultiChoice's prior written consent, which
consent MultiChoice shall not be entitled unreasonably to
withhold or delay, be furnished by MultiChoice with the
identities and addresses of all Subscribers for the sole
purpose of conducting market research and/or relationship
direct marketing during the term of this Agreement (as
specified in Schedule 5 to this Agreement or as determined
otherwise by agreement between the Parties); provided that,
subject to clause 8.3, MultiChoice shall not otherwise be
obliged to disclose to M-Net the identity and addresses of
Subscribers in any circumstances whatsoever.
8.3. MultiChoice shall, as soon as its systems enable it to do so,
(which MultiChoice will use all reasonable endeavours to
expedite) provide M-Net within 48 hours after the last day of
each 3 month period of this Agreement (i.e. on a quarterly
basis) with a list of the names and addresses of all MUD
Subscribers, Commercial Subscribers and the number of MUD
Units and Hotel Rooms, respectively, (where applicable) within
the premises operated by each MUD and Commercial Subscriber,
for each country comprising the Territory. M-Net will be
entitled to provide the information
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contemplated in this clause 8.3 to any supplier of programming
to M-Net.
8.4. In each case, M-Net shall treat such identity and addresses of
subscribers as confidential and shall not utilise or disclose
any such names and addresses to any person for any purposes
other than as set out in 8.2 above or, in the case of
information supplied pursuant to 8.3, for the purposes of
disclosing such information to its programme suppliers. The
obligations described in this sub-clause shall be regarded as
material obligations of M-Net. Upon termination of this
Agreement other than by reason of default by M-Net,
MultiChoice shall undertake one mailshot to all Subscribers to
the Channels on behalf of M-Net, subject to MultiChoice
approving the content and wording of the mailshot (such
approval not to be unreasonably withheld) and M-Net shall, for
the avoidance of doubt, be entitled to include in the mailshot
its address and telephone number to enable Subscribers to
contact M-Net.
9. DELIVERY AND TRANSMISSION OF CHANNELS
9.1. M-Net shall, with effect from the Effective Date, at its own
cost and in accordance with the signal quality specifications
set out in Schedule 6 hereto deliver the Channels' Signals to
the MultiChoice Satellite uplink facility which is situated at
75 Republic Road, Randburg, South Africa (the "Facility").
MultiChoice may elect to change the location of the Facility
in which event M-Net shall deliver the Channels' Signals to
such new location; provided that all additional costs
necessarily incurred by M-Net as a result of such change of
location shall be for the account of MultiChoice and shall be
payable by MultiChoice to M-Net on demand.
9.2. M-Net shall ensure that the quality of the Channels' Signals
as delivered in accordance with this Agreement is sufficient
at all times to ensure that if they are properly transmitted
by MultiChoice by means of the Satellite and (if applicable)
by rebroadcast systems, all Subscribers with properly
functioning Decoders will be able to receive a clear broadcast
quality signal for the Channels, without interruption or
interference.
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9.3. If Delivery Failure is anticipated or occurs, M-Net shall
notify MultiChoice as soon as practicable and M-Net shall take
all reasonably possible steps to prevent and/or rectify
Delivery Failure.
9.4. The Channels' Signals shall, upon being received at the
Facility, be transmitted by MultiChoice or its Affiliates, on:
9.4.1. such terrestrial and rebroadcast transmission
networks as may be required to ensure reception of
the Channels as provided hereunder by Non-DTH
Subscribers as part of existing television
programming packages offered as at the date hereof by
MultiChoice in the Territory in accordance with
Schedule 7 hereto; and
9.4.2. the Satellite on both Ku and C Band transponders as
part of the MultiChoice Bouquets to be offered by
MultiChoice in the Territory in accordance with the
Ku and C band coverage areas reflected in Schedule 8
hereto; and
9.4.3. such other terrestrial and/or rebroadcast
transmission networks or other non-DTH transmission
networks as may be required to deliver any of the
Channels to non direct to home Subscribers who
subscribe to any of the Channels as a result of such
Channels' inclusion in non-DTH MultiChoice television
channel(s) bouquet(s) which is/are developed in the
Territory after the Effective Date.
9.5.
9.5.1. MultiChoice shall, in respect of the transmission of
the Channels' Signals on the Satellite, ensure that:
9.5.1.1. the Channels' Signals are of a clear
broadcast quality; and
9.5.1.2. the Channels' Signals comply with the
technical criteria set out in CCIR601
(rating 4);
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9.5.1.3. comparable bit rates will be used for
comparable television channels on the
MultiChoice Bouquets; and
9.5.1.4. the minimum bit rate used for the Channels
when employing statistical multiplexing
technology will not be less than the bit
rate used for comparable channels and may be
more than that bit rate, subject always to
availability and cost;
9.5.2. MultiChoice shall, in respect of the transmission of
the Channels' Signals on any terrestrial and
rebroadcast transmission network, ensure that the
Channels' Signals are of a clear broadcast quality
equivalent to any Free TV system within the relevant
country and comply with the specifications and
service levels set out in Schedule 9.
9.6. M-Net shall at any stage during this Agreement be entitled to
appoint an independent technical representative to ensure
compliance with the provisions of clause 9.5 and MultiChoice
shall, in such instance, grant all reasonable access to all
relevant transmission facilities.
9.7. If Transmission Failure is anticipated or occurs, MultiChoice
shall notify M-Net as soon as practicable and MultiChoice
shall take all reasonably possible steps to prevent and/or
rectify Transmission Failures.
9.8. In consideration of the transmission of the Channels' Signals
by MultiChoice via the Satellite in terms of this clause 9,
M-Net shall throughout the Term pay to MultiChoice, in respect
of each Accounting Period, Transponder Costs of an amount
equal to the monthly transponder, uplink, staff, overhead and
related operational costs of transmission of the Channels on
the Satellite (such Transponder costs being calculated pro
rata with reference to that proportion of transponder capacity
being used by the Channels when compared to the total amount
of transponder capacity being used by all channels on the
MultiChoice Bouquets). For the avoidance of
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doubt nothing in this clause 9.8 shall be construed as
requiring M-Net to pay any costs associated with dormant
transponder capacity not used for transmission of the
MultiChoice Bouquets.
9.9. MultiChoice, in recognition of the fact that M-Net pays the
Transponder Costs in accordance with 9.8, undertakes that, if
sufficient satellite transponder capacity is not available to
transmit all of the channels comprising the Basic Tier and the
Premium Tier and the A la Carte Channels or the MultiChoice
Bouquet, then MultiChoice will in utilising such transponder
capacity as may be available to MultiChoice treat the Channels
in the same manner as MultiChoice treats any other channels
which are supplied by a programme supplier who pays fees in
respect of transponder capacity and the Channels will be given
preference over any channel in respect of which transponder
costs are not paid by the programme supplier.
10. TIERING
10.1. MultiChoice undertakes that the Channels shall be transmitted
and packaged as premium channels in the MultiChoice Bouquets
throughout the Term, and shall be included in the Premium Tier
from the date upon which MultiChoice tiers the MultiChoice
Bouquet. In addition, MultiChoice further undertakes that the
Channels shall be marketed as premium channels on non
direct-to-home Pay TV Systems in South Africa, Lesotho,
Botswana, Namibia, Nigeria, Ghana, Kenya, Uganda, Tanzania and
Zambia in accordance with Schedule 7 hereto. The Channels
shall continue to be transmitted in this manner on such non
direct to home pay TV systems during the Term provided that
MultiChoice or its Affiliates are able to maintain the
necessary broadcast licences and such other permissions as may
be required and provided further that MultiChoice is able to
continue providing subscriber management services in these
countries on a basis that is commercially viable; provided
further that:
10.1.1. in those countries set out Schedule 7 where
MultiChoice has the rights to transmit a television
channel on one frequency only, the frequency shall be
used for either MNA or MND, or subject to M-Net's
consent, SS, depending
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on whether the rights acquired by M-Net in respect of
the relevant channel cover the relevant country;
10.1.2. in those countries set out in Schedule 7 where
MultiChoice has the rights to transmit television
channels on 2 frequencies only, MultiChoice shall
distribute in accordance with 10.1.1, one of the
Channels contemplated in that clause on the first
frequency and shall distribute any other Channel on
the second frequency;
10.2. It is recorded that the tiering structure and/or
channel/programming content of the MultiChoice C Bouquet may
be different to that of the MultiChoice Ku Bouquet, and in
addition, the tiering structure and/or the channel/programming
content of the MultiChoice Bouquets may differ from country to
country and/or area to area within the Territory.
10.3. The Channels shall also be included, whenever this is deemed
desirable by MultiChoice acting in accordance with the
criteria and requirements referred to hereunder, as part of
any non direct to home Pay TV Systems set up after the
Effective Date in countries forming part of the Territory
where such Pay TV Systems are managed by MultiChoice or an
Affiliate. The criteria and requirements which MultiChoice
shall adhere to in this regard are as follows:
10.3.1. in countries forming part of the Territory where
MultiChoice has rights to transmit a television
channel on either one or two frequencies, M-Net may
nominate its preferred Channel or Channels, as the
case may be, for such transmission and MultiChoice
shall consult with M-Net prior to the finalisation of
MultiChoice's decision concerning such transmission,
taking into account the needs of the Territory.
10.3.2. M-Net shall be entitled to attend all meetings and/or
negotiations between MultiChoice, its Affiliates and
any local Pay TV Systems operator in any part of the
Territory called by MultiChoice for the specific
purpose of discussing the proposed inclusion or
exclusion of any of the Channels in or from such non
direct to home Pay TV Systems and MultiChoice shall
give
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M-Net reasonable and timely notice of all such
meetings.
10.4. For the avoidance of doubt MultiChoice shall only be entitled
to supply Communal Subscribers with the SS Channel and no
other Channel shall be supplied to any Communal Subscriber.
10.5. MultiChoice shall not knowingly cause, allow or permit any
Channel or any part thereof other than SS to be exhibited in
any common area in a non-residential establishment.
10.6. MultiChoice shall not be entitled to charge Subscribers any
specific subscription fee for the right to receive the MMD or
MMA channels. In addition, MMD may only be distributed by
MultiChoice to Subscribers who have the right to receive MND
(and MMA to subscribers who have the right to receive MNA).
10.7. For the avoidance of doubt, the Parties record that
MultiChoice shall only distribute the relevant Channels in the
appropriate countries as set out in Schedule 7.
10.8. Subject to the provisions of this Agreement, MultiChoice shall
have the right to charge such Viewing Card connection fee
and/or such other subscription charges as MultiChoice may
determine in its discretion.
11. ENCRYPTION AND DISTRIBUTION OF THE CHANNELS
11.1. During this Agreement, MultiChoice shall -
11.1.1. Encrypt the Channels' Signals before transmitting the
Channels' Signals from the Facility and shall ensure
that, subject to clause 14, the Channels' Signals are
Encrypted when transmitted into the Territory by the
Satellite;
11.1.2. procure the transmission of the Channels' Signals
(together with all over-the-air addressing
information) from the Facility to the Territory by
means of the Satellite;
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11.1.3. conclude, in its name or through its
nominees, agents or Affiliates, subscription
agreements with Subscribers and potential
subscribers, which agreements confer upon
Subscribers the right to receive and decrypt
the Channels' Signals and to view, inter
alia, the Channels in unencrypted format, on
such terms (including the price to such
Subscribers) as MultiChoice may determine,
subject to the provisions of this Agreement;
and
11.1.4. procure that each Subscriber is in
possession of such enabled Viewing Card as
may be necessary to receive and decrypt the
Channels' Signals.
11.1.5. at all times ensure that Subscribers pay for
their right to receive the Channels save as
provided elsewhere in this Agreement;
11.1.6. shall in no circumstances whatsoever enable
any Decoder in any area for which an
admission fee is charged other than a
Decoder operated by a Communal Subscriber
and then solely in respect of the SS Channel
(in conjunction with the Supersport
Package);
11.1.7. shall not knowingly enable any Decoder to
receive the Channels outside the Territory
nor shall MultiChoice promote the Channels
outside the Territories.
11.2. MultiChoice warrants that MultiChoice shall at all times (save
for the MND Open Time window) encrypt the Channels using the
Irdeto technology or such other form of substituted encryption
technology as may be determined by MultiChoice and approved by
M-Net provided that such approval shall not be unreasonably
delayed or withheld.
11.3. MultiChoice shall notify M-Net as soon as is practicable but,
in any event, at least 60 (sixty) days prior to any proposed
material change to any of its encryption systems or devices.
11.4. M-Net and any programme supplier with whom M-Net concludes any
agreement
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shall be entitled on reasonable notice to MultiChoice to
inspect the premises of MultiChoice, and/or its Affiliates,
for the purposes of ascertaining the safety and security
measures implemented by MultiChoice and/or its Affiliates
pursuant to this Agreement. However, neither M-Net nor any
programme supplier shall be entitled to have access to any
confidential information which is proprietary to MultiChoice
save that an appropriately qualified third party nominated by
M-Net or the relevant programme supplier, as the case may be,
will be permitted to verify the information requested without
divulging to M-Net or the relevant programme supplier the
confidential information itself, provided that third party has
signed MultiChoice's standard confidentiality agreement.
11.5. MultiChoice shall ensure that all decoders are correctly
enabled and tiered to receive the channels and hereby
indemnifies M-Net against any damages, liabilities, fines or
penalties sustained or incurred by M-Net arising out of or
connected to a breach of this clause 11.5 by MultiChoice.
11.6. MultiChoice shall immediately notify M-Net of any Piracy of
which it becomes aware and shall, together with M-Net,
determine the steps which should be taken, such as the
upgrading of decoders and/or other anti-piracy campaigns in
order to cause such Piracy to cease and shall keep M-Net fully
informed of the implementation of such steps; provided that if
the Parties are not able to agree on the steps which should be
taken then this matter shall be determined in accordance with
clause 27. If M-Net incurs or suffers expenses, damages,
losses, penalties or fines as a result of Piracy which was
known to MultiChoice but not notified by MultiChoice to M-Net
then MultiChoice shall indemnify M-Net and hold it harmless
from and against all such expenses, damages, losses, penalties
or fines.
11.7. MultiChoice shall, if it becomes aware that Piracy is
occurring pursuant to a breach of the encryption technology
contemplated in clause 11.2, exercise all rights which it has
or may have against Irdeto BV ("Irdeto") whether at common law
or in terms of the agreement between MultiChoice and Irdeto
relating to the use of the Irdeto Technology in order to
procure the termination of the Piracy within the shortest time
which is reasonably possible.
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12. SMS
During this Agreement MultiChoice shall provide SMS in respect of the
Channels, such SMS to consist, inter alia, of the following:
12.1. maintaining a current computerised subscriber database capable
of recording sufficient details of each Subscriber, including
records of the status of Subscribers;
12.2. administering the subscriptions of Subscribers by producing
and (when required) distributing in the Territory contracts
for new Subscribers and setting up and maintaining an
infrastructure whereby the subscription contracts are
collected, returned and recorded;
12.3. procuring the distribution, sale, maintenance and repair of
Decoders in the Territory;
12.4. obtaining and distributing Viewing Cards to Subscribers (if
applicable) and issuing replacement Viewing Cards from time to
time as MultiChoice may deem appropriate;
12.5. enabling new Subscribers and disenabling defaulting
Subscribers or those wishing to cancel their subscriptions,
via the conditional access over-the-air addressing system;
12.6. administering the upgrades and downgrades for Subscribers who
request a variation in their chosen programme package;
12.7. handling the despatch of invoices in respect of the collection
of subscription monies payable by subscribers or administering
payments in respect thereof;
12.8. receive and respond promptly to all enquiries from the public
and subscribers within the Territory concerning the Channels
and, in particular establish and maintain telephonic customer
help and support lines and customer service centres within
each country in which the Channels are broadcast by means of
non direct to home pay TV Systems;
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12.9. timeously communicating all changes in the scheduling or
programming of the Channels which are notified by M-Net to
MultiChoice to the customer service centres contemplated in
12.8;
12.10. supplying M-Net in November of each year with MultiChoice's
projections for subscriber growth for the forthcoming
financial year.
13. ADVERTISING
13.1. All advertising revenue from the flighting of advertisements
on the Channels shall be for M-Net's sole benefit.
13.2. It is recorded that a separate agreement has been reached
between the Parties regarding the allocation of time, inter
alia, for Promotional Advertisements on the Channels and
channel-specific and event-specific promotions on other
channels in the applicable MultiChoice Bouquet.
13.3. In respect of MND and CSN collectively, M-Net will provide
MultiChoice, free of charge, with airtime with a reach of 150
audience rating points ("ARs") per month for the sole purpose
of screening Promotional Advertisements. MultiChoice shall be
entitled, in respect of those Promotional Advertisements
utilising the ARs, to incorporate any promotional materials
promoting the MultiChoice Bouquets, including materials that
are channel specific. With respect to promotional materials
that are programme specific, MultiChoice shall be required to
obtain M-Net's consent before proceeding.
13.4. The Promotional Advertisements referred to in clause 13.2
above shall be booked in accordance with guidelines to be
agreed between the Parties from time to time.
13.5. The air time provided for Promotional Advertisements on the
Channels or on the MultiChoice Bouquets, if not used in an
Accounting Period will not be transferable to
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any subsequent Accounting Period.
13.6. The scheduling of the promotional slots shall be at M-Net's
discretion, provided that:
13.6.1. M-Net shall consult with MultiChoice from time to
time regarding such scheduling; and
13.6.2. the scheduling shall be based on a regular pattern to
be agreed between the Parties from time to time.
14. OPEN TIME
14.1. Notwithstanding MultiChoice's obligations to encrypt the
Channels, M-Net shall, in its sole discretion, but after
consultation with MultiChoice determine from time to time
periods of Open Time during which the MND channel shall be
transmitted in an unencrypted format and shall notify
MultiChoice of such periods. Subsequent to the implementation
of tiered broadcasting by MultiChoice, MultiChoice shall,
during such periods, transmit the MND Channel in an
unencrypted format to all Subscribers within the Ku-band
footprint of the Satellite and to all other Persons within
such footprint in possession of a Decoder.
14.2. The Parties record that, until determined otherwise by M-Net
in accordance with clause 14.1, the periods of Open Time will
be 17:00 to 19:00 (CAT) each day of the week.
15. PROGRAMMING
15.1. The programmes comprising the Channels will be determined by
M-Net in its sole discretion and in accordance with the terms
of this Agreement. All copyright to the Channels' Signals and
the broadcasts in respect of the Channels shall remain vested
in M-Net.
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15.2. M-Net will ensure that the content (including advertising) of
the Channels complies with the applicable laws, regulatory
codes, orders and directions issued from time to time by any
competent regulatory authority in South Africa, and M-Net
shall use its reasonable endeavours to do the same with regard
to any other countries in which the Channels are exhibited
from time to time by way of terrestrial non direct to home
distribution systems ("non DTH countries").
15.3. If M-Net becomes aware of the fact that the content of the
Channels does not comply with applicable laws and regulations
in any such non DTH countries, it shall advise MultiChoice of
such fact as soon as practicable and the Parties undertake to
meet and to negotiate, in good faith, with a view to agreeing
the action which should be taken in respect of such country;
provided that if the Parties are unable to reach agreement
then MultiChoice shall be entitled, in respect of the relevant
non DTH country to terminate the distribution of the relevant
Channel in such non DTH country via the relevant non direct to
home network but shall not be entitled to withdraw the country
from the Territory and shall, further, not be entitled to
black out any Channel (or part thereof) in respect of which
such advice has been received and action has not been agreed.
15.4. MultiChoice recognises that it will be difficult for M-Net to
keep abreast of all censorship laws, rules, regulatory codes,
orders and directions applicable throughout the Territory.
MultiChoice will be obliged to pass on information relating to
such censorship laws, rules, regulatory codes, orders and
directions which are reasonably likely to be relevant to the
Channels and which are applicable in the Territory, that
MultiChoice may come across in the course of its business
activities in the Territory. However, nothing in this clause
15.4 shall be construed as obliging MultiChoice to familiarise
itself with all such laws, rules, regulatory codes, orders and
directions, that may be applicable in the Territory.
15.5. M-Net shall not be liable to MultiChoice and/or to any
Affiliate for any breach of laws, rules, regulatory codes,
orders, directions or regulations arising from the exhibition
by MultiChoice of the Channels in the Territory or in any
country forming
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exhibition by MultiChoice of the Channels in the Territory or
in any country forming part of the Territory in circumstances
where M-Net is unable to comply with or to ascertain the laws,
rules, regulatory codes, orders, directions or regulations of
the relevant country forming part of the Territory and has
given MultiChoice 30 days prior written notice in writing that
it is unable to do so.
15.6. Notwithstanding the provisions of 15.1 and the obligation
placed on M-Net to obtain Clearances in respect of the
programming which is included in the Channels, the obtaining
of clearances by M-Net in respect of all rights concerning all
music which is included in the Channels ("Music Rights") shall
be dealt with in accordance with this clause. M-Net shall use
reasonable endeavours to procure the clearance of all Music
Rights in respect of the Territory. The Parties record that
the obtaining of clearances in respect of Music Rights may
necessitate the payment, in those countries within the
Territory in which the Channels are distributed via a non
direct to home distribution system, to Music Rights
collection agencies or other organisations within such
countries. M-Net shall use its reasonable endeavours to
negotiate with and effect payment to such agencies or
organisations and MultiChoice shall offer its advice and
assistance to M-Net to facilitate such negotiations. If,
notwithstanding M-Net's reasonable endeavours, M-Net is unable
to clear the necessary Music Rights in respect of any country
on commercially viable terms then M-Net shall inform
MultiChoice in writing of the nature of the rights which M-Net
has been unable to clear and the reasons for such failure. *
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15.7. MultiChoice shall not, without the consent of M-Net, in any
way add to, alter or delete any part of the programming
comprising the Channels (other than as provided for in this
Agreement) and shall ensure that the Channel Signals are
distributed contemporaneously and on an uninterrupted basis at
all times except for encryption or by agreement.
15.8. MultiChoice undertakes to use its reasonable endeavours to
protect the copyright of authors of the works exhibited
pursuant to this agreement and the copyright of M-Net of any
broadcast of the Channels. Should MultiChoice become aware of
any third party infringing the rights of M-Net or the rights
of copyright holders of works exhibited as part of the
Channels, pursuant to the exhibition of the Channels,
MultiChoice will promptly inform M-Net of all the
circumstances of the infringement within MultiChoice's
knowledge at the time. Should M-Net decide to take legal or
other action of any kind against any such party, MultiChoice
shall assist M-Net in every reasonable way requested by M-Net
in pursuing any such action. Each Party shall, however, bear
its own costs arising out of or pursuant to such action,
unless otherwise agreed between the Parties. It is recorded
that M-Net has obligations similar to the aforegoing
obligations in its agreements with its programme suppliers.
15.9. Should MultiChoice decide to take legal or other action of any
kind against any Party alleged to be infringing the rights of
M-Net in relation to any material provided by M-Net,
MultiChoice shall first seek and obtain the written consent of
M-Net to such action and further shall keep M-Net fully
informed of the progress of such action. M-Net shall be
obliged to assist MultiChoice in every reasonable way
requested by MultiChoice in pursuing such action. Each Party
shall however bear its own costs arising out of or pursuant to
such action, unless otherwise agreed between the Parties.
16. MARKETING
16.1. MultiChoice shall promote and market the Channels to Pay TV
Viewers in the Territory and shall conduct marketing and
promotion activities with a view to maximising the number of
Subscribers to the Channels. The nature of such activities
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shall, subject to the provisions of this Agreement, be in the
absolute discretion of MultiChoice. The marketing and
promotion shall be of a high standard and shall not reflect
adversely upon the Channels or M-Net or any programme supplier
contracted as such by M-Net.
16.2. The Parties shall develop guidelines for the preparation,
production, distribution and otherwise of all promotional and
marketing material which relates or is connected in any way to
the Channels ("the Guidelines"). MultiChoice undertakes that
all marketing and promotional material which in any way refers
or relates to the Channels will comply with such Guidelines.
16.3. If M-Net undertakes any promotion of the Channels, then it
shall ensure that -
16.3.1. all promotional materials are prepared and
distributed in accordance with the Guidelines;
16.3.2. any such materials do not in any way reflect
adversely on MultiChoice or imply that any programme
service in the MultiChoice Bouquet (other than the
Channels or any other programme service owned by
M-Net) is owned, operated or controlled by it.
16.4. M-Net shall provide to MultiChoice, at M-Net's cost, monthly
listings of the programme schedules for the Channels, which
shall, whenever possible, be provided at least ninety (90)
days before the start of the calendar month in which such
programmes are to be transmitted and which shall be provided
in such format as MultiChoice may reasonably require from time
to time. Such listings shall be as accurate as possible and
M-Net shall notify MultiChoice promptly upon any change being
made thereto and MultiChoice shall, in turn, employ all
reasonable endeavours to make such changes in all promotional,
advertising and marketing materials and also to reflect such
changes in the electronic programming guide. MultiChoice may
use such information in any printed or electronic media in
order to market and promote the Channels.
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16.5. MultiChoice acknowledges that the Marks belong solely and
exclusively either to M-Net or the Relevant Owner. M-Net
hereby grants to MultiChoice (or where the Relevant Owner is
not M-Net, M-Net will use its reasonable endeavours to procure
that the Relevant Owner grants to MultiChoice) a licence to
use the Marks during the Agreement (free of charge to
MultiChoice) in all media for the sole purpose of advertising
and marketing the MultiChoice Bouquets and/or the Channels,
such licence to be restricted to the non-commercial usage of
such Marks and to terminate automatically if this Agreement
terminates. MultiChoice's use of the Marks shall be in
accordance with the Guidelines. All goodwill in the Marks
shall automatically vest in M-Net or the Relevant Owner, as
appropriate. MultiChoice shall at its own cost promptly make
available to M-Net, at its reasonable request, copies of any
promotional advertising material created or disseminated by
MultiChoice which mentions or uses any of the Marks.
16.6. M-Net acknowledges that the MultiChoice Marks belong solely
and exclusively either to MultiChoice or to Affiliates of
MultiChoice. MultiChoice hereby grants to M-Net a licence to
use the MultiChoice Marks during this Agreement (free of
charge to M-Net) in all media for the sole purpose of
advertising and marketing the MultiChoice Bouquets and/or
the Channels, such licence to be restricted to the
non-commercial usage of such marks and to terminate
automatically if this Agreement terminates. M-Net's use of
the MultiChoice Marks shall be in accordance with the
Guidelines. All goodwill in the MultiChoice Marks shall
automatically vest in MultiChoice or the Relevant Owner, as
appropriate. M-Net shall at its own cost promptly make
available to MultiChoice, at its reasonable request, copies
of any promotional advertising material created or
disseminated by M-Net which mentions or uses any of the
MultiChoice Marks.
16.7. M-Net will provide MultiChoice with such research results from
image tracking and disconnect, quantitative and qualitative
studies (unless, in the case of particular quantitative and/or
qualitative studies, M-Net determines that these are of
sufficient strategic importance to be damaging if provided to
MultiChoice) as may be necessary and useful for MultiChoice to
position, market and sell the Channels and to enhance the
service which MultiChoice offers to Subscribers. In return
MultiChoice shall
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provide M-Net with access to the market research which is
carried out by MultiChoice concerning the Channels and the
MultiChoice Bouquets, and MultiChoice shall provide regular
reports to M-Net concerning MultiChoice's GAP survey results.
M-Net may, in addition, request MultiChoice to include certain
incremental supplementary market research relating to the
Channels as part of the ongoing MultiChoice market research
to which M-Net has access pursuant to this clause and such
incremental research will be conducted by MultiChoice but at
M-Net's incremental cost. Each Party will make research
results and reports available to the other within 21 days of
such results or reports becoming available to the Party
commissioning the relevant research.
16.8. M-Net will make available to MultiChoice, free of charge on a
monthly basis, a variety of materials, including in tape
format, promoting the Channels, insofar as the rights granted
to M-Net by its licensors permit it to do so.
16.9. Each Party will be entitled to preview promotional materials
produced by the other for the purposes of ascertaining factual
accuracy prior to the production of such promotional materials
and each Party shall comply with any reasonable instructions
issued by the other concerning the rectification of factual
errors. MultiChoice shall, in addition, be obliged: (1) to
obtain M-Net's approval to access M-Net's tape library for the
purposes of obtaining and using recorded extracts from, or
relating to, the Channels for promotional purposes; and (2) to
clear with M-Net, at the conceptual stage, all promotional and
marketing material pertaining to the Channels and/or
MultiChoice Bouquet, whether for broadcast or other
distribution, where such material will incorporate material
owned by M-Net or which M-Net has obtained from its programme
suppliers. M-Net shall not unreasonably withhold or delay its
approval (which shall be deemed to be given if M-Net has not
responded within one working day save in exceptional
circumstances where M-Net has indicated that the approval will
take longer).
16.10. MultiChoice shall promptly inform M-Net in the event that
MultiChoice becomes aware that a significant decrease in the
availability of Decoders in the Territory has occurred or is
likely to occur.
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17. ANALOGUE PROGRAMME GUIDE
17.1. MultiChoice shall be responsible, at its cost and expense,
subject to clauses 17.3 and 17.4, for compiling a monthly
television guide magazine (the "Analogue Guide") including a
separate programme guide section of at least 10 pages in
length setting out details of the programming comprising the
Channels, for distribution to analogue Subscriber in the
Territory. The Analogue Guide shall include information to be
supplied to MultiChoice by M-Net in digital data format
concerning the programmes on the Channels during the month to
which the relevant edition of the Analogue Guide relates.
Editorial control of the Analogue Guide shall vest in
MultiChoice, subject to due consultation with M-Net; provided
that all pages allocated to M-Net pursuant to clause 17.2
shall be subject to M-Net's approval and shall be submitted to
M-Net in electronic final proof form prior to the reproduction
of the magazine and the guide to which such pages relate. In
addition, the clearance procedure contemplated in clause 16.9
shall apply in respect of all visual material which is
included in the guide which is proprietary to M-Net or to any
programme supplier contracted as such by M-Net.
17.2. It is recorded that M-Net is currently allocated 30 (thirty)
pages in respect of the Analogue Guide and the Digital Guide
(as defined hereafter) at the MultiChoice programme guide per
page rate card less a 30% (thirty percent) discount with no
Oracle or other commissions applied. M-Net shall continue to
be obliged to take up and pay for the aforementioned pages
allocated to it.
17.3. M-Net shall be entitled to purchase such additional insert and
advertising pages in the Analogue and Digital Guides from
MultiChoice as MultiChoice may determine in its discretion at
the price rate referred to in clause 17.2 and M-Net shall be
entitled to sell such pages to any Person and retain the whole
of the proceeds of such sales. No such sales shall be
concluded by M-Net without MultiChoice's prior written
confirmation (which shall not be unreasonably delayed or
withheld) of the availability of such inserts or pages and the
prices applicable thereto.
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17.4. One Analogue Guide per month shall be mailed by MultiChoice to
each analogue Subscriber to the Channels at MultiChoice's cost
save that M-Net shall bear any additional mailing costs in
respect of any additional pages requested by it in terms of
clause 17.3. MultiChoice shall also provide M-Net with such
additional programme guides as M-Net may order from
MultiChoice and MultiChoice shall be entitled to charge M-Net
for such programme guides at a rate agreed upon between the
Parties.
17.5. Sales of pages of advertising and inserts in the Analogue
Guide will be effected by M-Net or its nominee who will bear
all the cost of the sales but retain 20% of the net proceeds
of the sales of advertising and inserts as a commission or
such other amount as may be agreed by the Parties from time to
time.
17.6. All costs associated with the production of the magazine and
programme Analogue Digital Guide, including but not limited
to printing, distribution and mailing, shall be borne by
MultiChoice save for those costs which are borne by M-Net at
present in accordance with the usual course of business
between the Parties, such as, for example, certain charges
relating to transparencies, duplication, picture scanning,
photography and database subscribers (M-Lib) which shall
continue to be borne by M-Net.
17.7. MultiChoice shall allocate to M-Net at least 8 cover pages of
the Analogue Guide, at no extra cost, and M-Net shall be
entitled in its sole discretion to determine the topics which
will comprise such cover pages, save that the purpose of such
cover pages will be the promotion of all or any of the
Channels.
18. DIGITAL PROGRAMME GUIDE
18.1. MultiChoice may, at its sole discretion, compile television
guide magazines (the "Digital Guides") for distribution to
digital Subscribers. MultiChoice shall include in each of the
Digital Guides a selection of highlights from the listings
schedules for the Channels, as well as inclusion in the
listing of programme titles in the central section of the
Digital Guides, for as long as MultiChoice, in its sole
discretion,
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continues to produce the Digital Guides. Editorial control of
the Digital Guides shall vest solely in MultiChoice, subject
to due consultation with M-Net; provided that all pages
allocated to M-Net pursuant to clause 18.2, if produced by
MultiChoice, shall be subject to M-Net's written approval and
shall be submitted to M-Net in final proof form prior to the
printing of the magazine and guide to which such pages relate.
In addition, the clearance procedure contemplated in clause
16.9 shall apply in respect of all visual material which is
included in the guide which is proprietary to M-Net or any
programme supplier contracted as such by M-Net.
18.2. MultiChoice shall mail one Digital Guide per month to each
applicable Subscriber to the Channels at MultiChoice's cost
save that the mailing costs of any pages purchased by M-Net in
terms of clause 17.3 shall be borne by M-Net.
18.3. The Parties have appointed Oracle as exclusive agent to sell
pages of advertising and inserts in both the Analogue and
Digital Guides on the terms and conditions of the agency
appointment as set out in the Letter of Understanding.
19. ELECTRONIC PROGRAMMING GUIDE
19.1. The Parties record that MultiChoice has developed an
electronic programming guide which will be made available to
Subscribers within the Territory. All costs and expenses
associated with the development and the provision of the
electronic programming guide shall be for the account of
MultiChoice, unless otherwise agreed between the Parties.
19.2. MultiChoice undertakes to consult with M-Net prior to the
final determination of the format of the electronic
programming guide; provided that MultiChoice undertakes, for
as long as MultiChoice, in its sole discretion, continues to
make such guide available, to afford to the Channels, the
first three positions in the default mode of such electronic
programme guide, or where Channels are grouped by genre, the
first position of the applicable genre, and in addition, the
same prominence in such electronic programming guide as is
afforded to the Channels in the magazine and
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guide in respect of the Ku band portion of the Territory;
provided further that nothing in this clause shall be
construed as precluding MultiChoice from earning additional
revenue from any channel which pays additional charges for
extra space in any electronic marketing materials aimed at
marketing the MultiChoice Bouquets or any part thereof.
20. REPRESENTATIONS AND WARRANTIES
20.1. M-Net and MultiChoice each represents, warrants and undertakes
to the other that it has the requisite power and authority to
enter into this Agreement and to perform fully its obligations
hereunder.
20.2. MultiChoice represents, warrants and undertakes to M-Net that:
20.2.1. MultiChoice will use and will procure that its
Affiliates use all reasonable endeavours to obtain
and hold such licences, consents and permissions as
are required from any third party and each
appropriate governmental authority and/or regulatory
body or authority for MultiChoice and such Affiliates
to perform their obligations under this Agreement (if
any) and that such licences, consents and permissions
are and will during this Agreement remain in full
force and effect and that MultiChoice is not in
breach of any of the terms of the same and
MultiChoice will not knowingly do or permit anything
to be done which might cause any such licences,
consents or permissions awarded to or obtained by it
to be suspended or revoked;
20.2.2. MultiChoice shall not record the Channels or any part
thereof and shall not knowingly permit any other
Person so to do, except as may be required by law or
otherwise to comply with the terms of any licence,
consent or permission referred to in clause 20.2.1.
or as may be agreed to in writing between the
Parties;
20.2.3. The Channels' Signals will only be transmitted in an
Encrypted format over Pay TV Systems except as may be
permitted by M-Net in accordance with
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clause 14;
20.2.4. Save as disclosed there is no significant breach of
the security of the Encryption technology as at the
date of signature hereof and shall employ all
reasonable security systems and procedures to prevent
any loss, theft, Piracy of which it become aware,
unauthorised use, reception or copying of the
Channels or any part thereof and shall immediately
notify M-Net if it knows that such an event has
occurred in accordance with clause 11.6.
20.3 M-Net represents, warrants and undertakes to MultiChoice that:
20.3.1. subject to clause 15.6, it has or will secure prior
to the delivery of the Channels' Signals all
Clearances required of M-Net in relation to the
broadcast, transmission and distribution of the
Channels throughout the Territory and, in
particular, that M-Net will subject to any
notification by M-Net to MultiChoice in terms of
clause 15.6, at all times during this Agreement hold
and comply with the terms of the Clearances and will
not do nor permit anything to be done nor omit to do
anything which might cause any such Clearances to be
suspended or revoked;
20.3.2 subject to clause 15, ensure compliance with the
applicable laws, rules, regulatory codes, orders and
directions issued from time to time by any competent
regulatory authority within the Territory, and with
relevant legislation enacted within the Territory
relating to the content of and/or advertising
contained in the Channels (except in relation to any
advertising inserted into the Channels by
MultiChoice);
20.3.3. it shall ensure that, subject to clause 15, neither
the Channels provided to MultiChoice by M-Net nor any
part thereof will infringe the copyright, performing
right, trademark, or other proprietary right or
interest of any third party or will constitute a
misuse of any confidential information of a third
party within the Territory;
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20.3.4. it shall retain possession of copies of the
transmissions of the Channels for such period and in
such form as is required to be retained by all
applicable South African regulations or legislation
and shall at the reasonable request of MultiChoice
provide (free of charge) a copy of any such part of
the transmissions of the Channels to any relevant
South African regulatory authority or agency;
20.3.5. it shall ensure that during this Agreement the
Channels retain their current quality, presentation,
style and character;
20.3.6. *
21. INDEMNITIES
21.1. MultiChoice hereby indemnifies M-Net and holds it harmless
from and against all liabilities, claims, costs, damages and
expenses (including, without limitation, reasonable legal
costs reasonably and properly incurred pursuant to a claim by
a third party) arising out of any breach by MultiChoice or any
Affiliate of MultiChoice of any term, condition,
representation, warranty, undertaking or obligation contained
in this Agreement.
21.2. M-Net hereby indemnifies MultiChoice and holds it harmless
from and against all liabilities, claims, costs, damages and
expenses (including, without limitation, reasonable legal
costs reasonably and properly incurred pursuant to a claim by
a third party) arising out of any breach by M-Net or any
Affiliate of M-Net of any term, condition, representation,
warranty, undertaking or obligation contained in this
Agreement.
21.3. MultiChoice hereby indemnifies M-Net and holds it harmless
against all liabilities, claims, costs, damages and expenses
(including, without limitation, reasonable legal costs
reasonably and properly incurred pursuant to a claim by a
third party) arising
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out of any claim brought about as a result of MultiChoice or
any of its Affiliates not obtaining any licence, consent any
permission referred to in clause 20.2.1, notwithstanding its
reasonable endeavours to do so.
21.4. If either Party wishes to assert a right to be indemnified for
claims by third parties as set forth in this clause 21 it
shall:
21.4.1. promptly notify the other of the claim or legal
proceeding which gives rise to such right as soon as
reasonably practicable upon becoming aware of the
same;
21.4.2. afford the other the opportunity to participate in
and fully control any compromise, settlement or other
resolution or disposition of such claim or
proceedings (subject to being fully indemnified by
that other Party); and
21.4.3. co-operate fully with any reasonable request of the
other Party in respect of the third Party claim, but
that other Party shall pay the costs of the
participation in and control of any compromise,
settlement or resolution or other disposition of such
claim or proceeding.
21.5. After the termination of this Agreement, the indemnity set out
in this clause 21 shall cease to have any force or effect
except in relation to antecedent breach by MultiChoice or
M-Net.
21.6. Notwithstanding the aforegoing, neither Party shall be liable
to the other for any indirect or consequential loss or damage
including, without limitation, loss of business or profits
arising out of any breach of this Agreement.
22. THIRD PARTY INFRINGEMENTS OF VIEWING CARDS
Each Party shall notify the other forthwith in the Territory upon
becoming aware that Viewing Cards intended for Subscribers and issued
by MultiChoice are being supplied outside the Territory or Pirated
(whether inside or outside the Territory) and M-Net shall, if
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so requested by MultiChoice, provide all reasonable assistance to
MultiChoice in taking appropriate action to prevent or combat such
distribution or piracy, provided that all costs and expenses incurred
by M-Net in this regard shall be for the account of MultiChoice.
23. PROGRAMME SUPPLIER OBLIGATIONS
23.1. The Parties record that M-Net, pursuant to agreements with
suppliers of programming to M-Net, ("the Supplier Agreements")
has assumed certain obligations which are set out in Schedule
10. MultiChoice undertakes that it will not take any action
which causes M-Net to breach such obligations. In addition,
MultiChoice undertakes to procure that all of MultiChoice's
Affiliates comply in full with the obligation assumed by
MultiChoice in terms of this clause 23.1.
23.2. MultiChoice agrees not to knowingly take any action which may
have the effect of frustrating the Supplier Agreements (or any
term of any such agreement) and to assume liability for and
indemnify M-Net against any and all liabilities, claims cost
and expenses arising out of actions by MultiChoice and/or its
Affiliates contrary to the obligations set out in Schedule 10
which may be amended by agreement between the Parties from
time to time in accordance with changes or additions to the
terms and conditions of the Supplier Agreements.
24. PARTIAL TERMINATION
24.1. If any Clearance, necessary regulatory clearance, permission,
licence or approval (the "Approvals") obtained by M-Net
terminates or is terminated (other than by reason of M-Net's
breach or failure to renew such Approval other than as a
consequence of a breach by MultiChoice of its obligations
hereunder); or
24.2. if M-Net demonstrates to MultiChoice that any such Approval
has been varied by (or that the renewal of such an Approval
would result in) the imposition on M-Net of a material
monetary burden which makes the provision of all or any of the
Channels to any country within the Territory not commercially
viable for M-Net; or
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24.3. if MultiChoice determines that the provision of the Channels
to any of the countries set out in Schedule 2B, results
pursuant to clause 6.7.1, in the imposition on MultiChoice of
a material monetary burden which makes the provision of any of
the Channels to any such country not commercially viable for
MultiChoice;
24.4. if MultiChoice wishes to terminate the distribution of any of
the Channels in the countries set out in Schedule 7 hereto
either for commercial reasons or as a consequence of a failure
to maintain the necessary broadcast licences or other
permissions in any of such countries;
24.5. if Piracy in any countries within the Territory is of such a
nature that M-Net is or is likely to be in breach of its
programme licensing agreements with its Licensors; or
24.6. if any re-broadcast operators authorised by MultiChoice to
rebroadcast any of the Channels within any country in the
Territory has failed or is failing to provide accurate
detailed accounting and reporting information in terms of this
Agreement to M-Net, such that M-Net is or is likely to be in
breach of its programme licensing agreement with its
Licensors;
then the relevant Party shall consult with the other Party
with a view to determining the appropriate action to be taken
in respect of the relevant country provided that if the
Parties are unable to reach agreement within a reasonable
period, then on the giving of 180 days written notice by M-Net
to MultiChoice where clauses 24.1, 24.2,24.5 or 24.6 apply or
by MultiChoice to M-Net where clauses 24.3 or 24.4 apply, the
notifying Party shall be entitled to remove such country from
the Territory or Schedule 2B, as applicable, and this
Agreement shall cease to apply in respect of such country,
without any liability of M-Net to MultiChoice or vice versa
except in respect of Per Subscriber Fees due and payable or
guarantee payments accrued at the date of withdrawal of such
country (but always subject to any contrary provisions in
clause 6.7).
The notifying Party may only remove a country from the ambit
of this Agreement in
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terms of this clause 24 in circumstances where it has fully
explained and disclosed to the other Party the nature of the
relevant difficulty and has consulted with the other Party in
accordance with this clause 24 provided that in terms of this
clause 24:
24.6.1. Neither Party shall be entitled to remove South
Africa from the Territory; and
` 24.6.2. M-Net shall be entitled subsequent to the removal of
any country, in terms of clauses 24.3 or 24.4, to appoint any
person to distribute the Channels within the relevant country
and to provide such other ancillary services as may be
provided.
25. TERMINATION AND REMEDIES
25.1. A Party may terminate this Agreement without prejudice to any
other rights or remedies available to such Party either at law
or in terms of this Agreement, including without limitation,
the right to claim damages (either in addition to or in
substitution for such termination) at any time by giving
notice in writing to the other Party where:
25.1.1. the other Party has committed a material breach of
any of its obligations under the Agreement which is
incapable of remedy; or
25.1.2. the other Party has committed a material breach of
any of its obligations under the Agreement which is
capable of remedy and which the other Party has not
remedied within 60 (sixty) days of receipt of written
notice to do so (or, in the case of M-Net issuing
notice subsequent to a breach of a Supplier Agreement
caused by MultiChoice's default, then such lesser
period (if any) set out in the relevant Supplier
Agreement or, in the case of M-Net issuing a notice
subsequent to both MultiChoice's default and notice
by the relevant supplier, then such lesser period (if
any) set out in the relevant Supplier Agreement less
a reasonable period for M-Net to receive such notice
and
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issue notice as contemplated herein); or
25.1.3. the other Party has committed a second or subsequent
material breach of any of its obligations under this
Agreement after having remedied an earlier similar
breach during the preceding 6 months after written
notice to do so;
25.1.4. proceedings are started for the other Party's winding
up, dissolution or reorganisation (otherwise than
while solvent and for the purpose of a bona fide
reconstruction or amalgamation) or for the
appointment of a receiver, trustee or similar officer
of any or all of the other Party's revenues or
assets; or
25.1.5. the other Party ceases to carry on business or
suffers any execution or distress over a material
part of its assets; or
25.1.6. the other Party becomes bankrupt or insolvent or
files any application, petition or action for relief
under any bankruptcy, insolvency or moratorium law;
or
25.1.7. the other Party admits in writing its inability to
pay its debts or is unable to pay its debts as they
fall due; or
25.1.8. the other Party suffers any similar event of
insolvency or bankruptcy under the terms of the
jurisdiction of its domicile; or
25.1.9. an application is made for an administration (or
similar) order to be made in respect of the other
Party; or
25.1.10. the other Party suspends or threatens to suspend its
operations.
25.2. In addition, and without prejudice to any other rights or
remedies which M-Net may have either at law or in terms of
this Agreement, including, without limitation the right to
claim damages (either in addition to or in substitution for
such termination), M-Net may terminate this agreement at any
time by giving notice in writing to
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MultiChoice where:
25.2.1. M-Net, pursuant to a breach of any provision of this
Agreement by MultiChoice, breaches any Supplier
Agreement with any major studio which is or becomes a
member of the Motion Picture Association of America
and such Supplier Agreement is terminated pursuant to
such breach, without notice to M-Net to remedy such
breach; provided that M-Net shall be required to
exercise such right to terminate within 30 days of
the date of termination of the relevant Supplier
Agreement; or
25.2.2. Transmission Failure occurs for an average of 15
minutes per day over any period of 30 days within a
continuous period of 90 days or for a continuous
period of 30 days; provided that if such Transmission
Failure occurs in only one country (with the
exception of South Africa) and relates solely to the
non direct to home transmission system within such
country M-Net shall be entitled to terminate this
Agreement only with respect to the country in which
such transmission failure occurs and this Agreement
shall cease to apply in respect of such country;
provided further that where such Transmission Failure
occurs for lesser periods than those contemplated in
this clause 25.2.2 and such Transmission Failure
constitutes a breach by MultiChoice of its
obligations in terms of this Agreement, M-Net shall
not be entitled to terminate this Agreement but shall
be restricted to such other rights and remedies as
may be available to M-Net either at law or in terms
of this Agreement. For the avoidance of doubt, M-Net
shall be entitled to terminate this Agreement as a
whole where the Transmission Failure (described
above) occurs only in South Africa.
25.3. In addition, MultiChoice may terminate this agreement without
prejudice to any other rights or remedies available to
MultiChoice either at law or in terms of this agreement
including, without limitation, the right to claim damages
(either in addition to or in substitution for such
termination) at any time by giving notice in writing to M-Net
where Delivery Failure occurs for an average of 15 minutes per
day over any period of 30 days within a continuous period of
90 days or for a continuous
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period of 30 days. Where Delivery Failure occurs in respect of
one or more (but not all) the Channels, MultiChoice shall be
entitled to elect whether to terminate this Agreement as a
whole or in relation only to those Channels affected by the
Delivery Failure. Where Delivery Failure occurs for lesser
periods than those contemplated in this clause 25.3 and such
Delivery Failure constitutes a breach by M-Net of its
obligations in terms of this Agreement, MultiChoice shall not
be entitled to terminate this Agreement but shall be
restricted to such other rights and remedies as may be
available to MultiChoice either at law or in terms of this
Agreement.
25.4. Notwithstanding any provision to the contrary contained in
this Agreement, should standards of quality, presentation,
style and character of any of the Channels becomes
significantly inferior during the course of this agreement as
demonstrated by consistent independent market research
conducted by an independent body jointly appointed by the
Parties ("Independent Market Research") over a four month
period. MultiChoice shall be entitled to give notice to M-Net
requiring the standard as at the Effective Date to be
restored. Such request shall be considered at a review forum
to be held by the Parties not later than 30 days after such
request and at a second review forum to be held not later than
30 days thereafter. Should the standard as at the Effective
Date not be restored to the reasonable satisfaction of
MultiChoice within 120 days (or such longer period as may be
agreed between the Parties) after the second review forum,
MultiChoice shall be entitled, after a period of 30 days of
negotiation between the Parties regarding the exclusivity of
and fees payable for the applicable Channel, in the event that
agreement cannot be reached, to terminate this Agreement in
respect of the Channel concerned but shall not be entitled to
terminate this Agreement in its entirety.
25.5. If either the composition, standards, quality, character or
style of the MultiChoice C Bouquet or the MultiChoice Ku
Bouquet become(s) significantly inferior during the course of
this Agreement or the packaging of other channels on either of
the MultiChoice Bouquets is detrimental to the growth of
Subscribers having the right to receive the Channels, both as
demonstrated by consistent Independent Market Research
conducted over a four month period, then M-Net shall be
entitled to give notice to MultiChoice requiring the standard
to be restored. Such request shall be
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considered at a review forum to be held by the Parties not
later than 30 days after such request and at a second review
to be held not later than 30 days thereafter. If the standard
is not restored to the reasonable satisfaction of M-Net within
120 days (or such longer period as may be agreed between the
Parties) after the second review forum, M-Net shall be
entitled, after a period of negotiation between the Parties
regarding the exclusivity of and fees payable for the
Channels, in the event that agreement cannot be reached, to
terminate this Agreement in respect of the applicable C or Ku
MultiChoice Bouquet only and not the Agreement in its
entirety. If, as a result of termination of this Agreement in
respect of the Ku MultiChoice Bouquet, it proves commercially
unviable for M-Net to acquire the programming rights for
distribution of the Channels in the C-Band Territory as part
of the MultiChoice C Bouquet, then M-Net shall be entitled to
terminate this Agreement in its entirety upon at least 6 (six)
months written notice to MultiChoice.
25.6. Notwithstanding any provision to the contrary contained in
this Agreement.
25.6.1. should any of the Channels defined in clause 4.3 with
reference to a Premium Movie Channel -
25.6.1.1. cease to fall within the parameters
of the definition of a Premium Movie
Channel; or
25.6.1.2. when compared over a period of at
least three months, in terms of
programming quality and content to
three other English premium movie
channels (on other non MultiChoice
bouquets) as determined by an
independent third party, but at
least one of which must be
distributed in a market where
competing movie channels exist,
cease to be comparable to or better
than such channels; or
25.6.2. should any of the Channels defined in clause 4.3 with
reference to a Premium Sports Channel cease to fall
within the parameters of the definition of a Premium
Sports Channel -
then MultiChoice shall be entitled, upon 3 (three) months
notice to M-Net, to terminate this Agreement in respect of the
Channel concerned but shall not be
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entitled to terminate this Agreement in its entirety.
25.7. Notwithstanding the provisions of this agreement which provide
otherwise, if this Agreement is terminated for any reason
whatsoever, MultiChoice shall be obliged to continue
transmitting the Channels' Signals in terms of and in
accordance with the provisions of this Agreement and providing
SMS in accordance with this Agreement for a period of 120 days
calculated from the date of such termination. For the
avoidance of doubt, the provisions of this clause 25.7 shall
survive the termination of this Agreement and, notwithstanding
such termination, M-Net shall be liable to pay to MultiChoice
Transponder Costs in respect of such 120 day period and
MultiChoice shall be liable to pay to M-Net Per Subscriber
Fees in respect of such 120 day period provided that neither
Party shall be restrained from entering into negotiations of
any nature whatsoever with any other Person relating, in the
case of M-Net to the distribution of the Channel Signals
within the Territory and, in the case of MultiChoice, to the
inclusion of any other channels in the MultiChoice Bouquet
including on the Premium Tier.
25.8. Within 20 (twenty) days after the termination of the period
contemplated in 25.7 (howsoever occasioned), each Party shall
at the direction of the other either destroy or return to the
other Party all materials furnished to it under this agreement
and in its possession or under its control (other than copies
and extracts of audit documents taken under clause 7.3) and
each Party shall certify in writing to the other Party that
the relevant direction has been complied with.
25.9. Except as may otherwise be agreed immediately on termination
of this Agreement for whatever reason, MultiChoice shall at
the expiry of the period contemplated in 25.7 disenable
Subscribers from receiving and decrypting the Channels'
Signals whereafter Subscribers and shall cease to be entitled
to receive and decrypt the Channels.
25.10. Termination of this Agreement by either Party for whatever
reason shall not prejudice or affect the rights or remedies of
such Party against the other Party in
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respect of any antecedent breach of this Agreement.
25.11. In the event that more than 50% (fifty percent) of the
shareholding in either Party is acquired by a new shareholder
in a manner that allows such new shareholder to control the
relevant Party, then the Party not affected by such change in
control shall be entitled upon 60 (sixty) days notice to
terminate this Agreement.
26. FORCE MAJEURE
26.1. A Party shall not be liable for any loss suffered by the other
Party arising out of delay in or prevention of performance of
the Party's obligations due to any cause or reason beyond its
control, such as Satellite failure, Acts of God, war (declared
or undeclared), strikes, riots, political insurrection,
rebellion, revolution, fire, flood, explosion, prohibition of
import, acts or orders of Government or any agency or
instrumentality thereof (whether de facto or de jure), or any
law or regulation having force of law.
26.2. The Party whose performance is delayed or prevented shall
immediately give notice in writing to the other Party.
26.3. If a Party's performance is delayed by such a cause the
Party shall be entitled to a reasonable extension not
exceeding 30 days for performance. If performance is or will
be delayed for longer than this period the performance shall
be regarded as having been prevented.
26.4. If a Party's performance is prevented by such a cause the
Parties shall:
26.4.1. if the obligation of which performance is prevented
is not material, make such financial or other
adjustment between them as may be equitable;
26.4.2. if the obligation of which performance is prevented
is material, endeavour in good faith to agree on an
alternative basis for achieving the objects of this
Agreement. If agreement on an alternative basis is
not reached this
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Agreement shall terminate and -
26.4.2.1. either Party may retain the other's
performance to the extent
performance has taken place;
26.4.2.2. if a Party does not elect to retain
the other's performance the other
Party may nevertheless require that
Party to retain the performance,
unless to do so would be inequitable
in the circumstances;
26.4.2.3. if a Party elects or is required to
retain the other's performance, the
Parties shall make such financial
adjustment between them as may be
equitable.
27. GOVERNING LAW AND DISPUTES
27.1. This Agreement shall be governed by and construed in all
respects in accordance with the laws of South Africa.
27.2 If any dispute arises at any time between any of the Parties
in connection with this Agreement including without
limitation, the formation or existence of, the implementation
of or the interpretation or application of, the Parties'
respective rights and obligations in terms of or arising out
of this Agreement or its breach or termination or the
performance or non-performance of any Party's obligations
hereunder or which relates in any way to any matter affecting
the interests of the Parties in terms of this Agreement, and
the Parties are unable to resolve their dispute, any Party may
refer the matter in dispute, in the first instance, to the
respective chief executive officers of the Parties for
resolution.
27.3. If, after having been referred under clause 27.2, the matter
in dispute shall not have been resolved by the said chief
executive officers within 30 (thirty) days of such matter
having been so referred, any Party may refer the matter in
dispute for determination by final arbitration in Johannesburg
in accordance with the Arbitration Act 1965 or any replacement
Act, by 3 (three) arbitrators (unless the Parties agree in
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writing to have a single arbitrator only), 1 (one) of whom
shall be appointed by the referring Party(ies), a further 1
(one) of whom shall be appointed by the opposing Party(ies)
and the third appointed by the 2 (two) so chosen. In the event
of the referring Party(ies) or the opposing Party(ies) failing
to appoint an arbitrator and/or failing agreement between the
2 (two) arbitrators within 14 (fourteen) days of their
appointment upon the appointment of a third arbitrator, such
arbitrator or arbitrators shall be appointed by the president
for the time being of the Law Society of the Transvaal on the
written request of either the referring Party(ies) or the
opposing Party(ies). The arbitrator shall establish the
procedural rules applicable to the proceedings. The
arbitration shall be conducted in the English language. The
arbitrator, if so required by any of the Parties, shall order
the Parties to make discovery of all documents relevant to the
issues in the arbitration. Any award of such arbitration shall
be finally binding upon the Parties and may be entered into
and enforced by any court having jurisdiction.
27.4. This clause shall not preclude any Party from obtaining
interim relief on an urgent basis from a court of competent
jurisdiction pending any decision of the arbitrator.
27.5. The provisions of this clause 27 -
27.5.1. constitute an irrevocable consent by the Parties to
any proceedings in terms hereof and no Party shall be
entitled to withdraw therefrom or claim at any such
proceedings that it is not bound by such provisions;
27.5.2. are severable from the rest of this Agreement and
shall remain in effect despite the termination of or
invalidity for any reason of this Agreement.
28. RESTRUCTURING FOR TAX OR REGULATORY REASONS
28.1. The Parties shall co-operate with each other and take all such
reasonable steps (including the re-structuring of this
Agreement) as may be legally available to them -
28.1.1. to minimise the incidence of any taxes, levies,
imposts, duties, charges, fees,
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deductions, withholdings, restrictions or clauses of
any description on any amounts payable by or to a
Party pursuant to this Agreement;
28.1.2. to avoid the imposition by any competent regulatory
authority of any burdensome obligation on either of
the Parties,
provided that in taking such steps the Parties shall preserve
the commercial intention underlying this Agreement.
28.2. In the event that this Agreement or any term in it is
determined to be void and/or unenforceable by any competent
regulatory or judicial authority, the Parties shall consult
one another with a view to amending this Agreement to the
satisfaction of such regulatory or judicial authority,
provided that in the event that the Parties are unable within
three months of such authority's decision to agree an
amendment satisfactory to such authority which, in the
reasonable opinion of both Parties, substantially gives effect
to their respective original intentions, either Party may, by
serving written notice on the other, terminate this Agreement
without further liability.
29. CONFIDENTIALITY
29.1. Subject to clause 29.2, each Party undertakes to the other
that it will treat as confidential the terms of this Agreement
together with all information whether of a technical nature or
otherwise relating in any manner to the business or affairs of
the other Party as may be communicated to it hereunder or
otherwise in connection with this Agreement and will not
disclose such information to any person, firm or company
(other than to its auditors and other professional advisers)
or to the media, and will not use such information other than
for the purposes of this Agreement, subject always to any
prior specific authorisation in writing by the other Party to
such disclosure or use.
29.2. The provisions of clause 29.1 shall not apply to any
information which:
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29.2.1. is in the public domain other than by default of the
recipient Party;
29.2.2. is obtained by the recipient Party from a bona fide
third Party having the right to disseminate such
information;
29.2.3. is or had already been independently generated by the
recipient Party;
29.2.4. is required to be disclosed by any programme supplier
contracted as such by M-Net or any Affiliate of M-Net
or by law or the valid order of a court of competent
jurisdiction or the request of any governmental or
other regulatory authority or agency, in which event
the disclosing Party shall so notify the other as
promptly as practicable (and if possible prior to
making any disclosure) and shall use its reasonable
endeavours to seek confidential treatment of such
information.
29.3. The obligations contained in this clause 29 shall endure
beyond the termination of this Agreement without limit in time
except and until any confidential information enters the
public domain otherwise than through default of the Party
receiving the same.
30. NOTICES
30.1. Notices and communications under this agreement shall be given
in writing and may be delivered to the relevant Party or sent
by registered air mail or facsimile to the address of that
Party or that Party's facsimile number specified in 30.2 which
shall be regarded as the respective Parties domiciliar citandi
et executandi.
30.2. Notices and communications shall be addressed as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
30.2.1. if to MultiChoice: 75 Republic Road, Randburg, South Africa
Fax No: 00 27 11 329-5420
30.2.2. if to M-Net: 137 Hendrik Verwoerd Drive, Randburg, South
</TABLE>
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Africa
Fax No: 00 27 11 789-7002
or such other address of a Party, person and/or fax number as
that Party shall have notified in writing to the other Party.
30.3. Notices and communications shall be given and made in the
English language.
31. MISCELLANEOUS
31.1. NO PARTNERSHIP
Nothing in this Agreement shall be deemed to create any joint
venture, partnership or principal and agent relationship
between MultiChoice and M-Net except with regard to the
collection of Per Subscriber Fees where MultiChoice acts as
the agent of M-Net in accordance with provisions of this
agreement and neither such Party shall hold itself out in its
advertising or otherwise in any manner which would indicate or
imply any such relationship with the other.
31.2. ASSIGNMENT
Neither Party shall be entitled to assign, transfer or
otherwise encumber this Agreement or any of the rights or
obligations hereunder without the prior written consent of the
other (such consent not to be unreasonably withheld or
delayed), save that either Party may transfer any of its
obligations to an Affiliate, provided that (i) the relevant
Party (being the assignor) shall guarantee the performance of
such obligations by such Affiliate; (ii) the relevant Party
shall be jointly and severally liable together with such
Affiliate for the fulfilment by such Affiliate of such
obligations; (iii) the relevant Party shall indemnify the
other Party against any loss sustained by it as a result of
the non performance of such obligations; (iv) if the relevant
Party is M-Net, and if M-Net sells or transfers its ownership
of any of the Channels, it shall itself remain bound by clause
4.2 throughout the Term and shall, in addition, procure that
the assignee binds itself to the undertaking set out in clause
4.2
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hereof; and for the avoidance of doubt, the Fees payable by
MultiChoice to M-Net under this Agreement shall not increase
as a consequence of such sale or transfer of ownership; and
(v) in the event that the assignee ceases to be an Affiliate,
it shall immediately reassign all assigned rights and
obligations back to the Relevant Party unless the prior
consent of the other Party shall have been obtained.
31.3. SUBCONTRACTING
MultiChoice shall be entitled to appoint Affiliate and/or
third party sub-contractors to perform any of its rights or
obligations set out herein upon notifying M-Net thereof in
writing provided that MultiChoice shall remain liable to M-Net
as primary obligor in respect of any rights and/or obligations
sub-contracted in terms of this clause 31.3.
31.4. ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between
the Parties relating to the subject matter of this Agreement
and no oral representations, warranties or promises shall be
implied as terms of this Agreement.
31.5. WAIVER
Any waiver by either Party of a breach of any term or
condition of this Agreement shall be in writing and shall not
be deemed to be a continuing waiver or a waiver of any other
or subsequent breach unless the written notice so provides.
AS WITNESS whereof this Agreement was executed by the Parties on the day and
year first above written.
SIGNED BY /s/ Jim Volkwyn ) /s/ George Safzides
)
for and on behalf of )
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MULTICHOICE AFRICA (PROPRIETARY) )
LIMITED )
in the presence of: )
SIGNED BY /s/ Lazarus Zim ) /s/ Russell McMillan
)
for and on behalf of )
ELECTRONIC MEDIA NETWORK )
LIMITED )
in the presence of: )
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SCHEDULE 1
PREMIUM TIER CHANNELS
M-Net (Domestic) : MND
Movie Magic (Domestic) : MMD
KTV
Super Sport : SS
Movie Magic (Africa) : MMA
M-Net (Africa) : MNA
SuperSport II : SS II
<PAGE>
SCHEDULE 2A
SPECIFIC INCLUSIONS AND SPECIFIC EXCLUSIONS TO THE TERRITORY
1.1 THOSE PARTS OF WEST AND NORTH AFRICA EXCLUDED FROM THE TERRITORY
1.1.1 Completely excluded
Algeria
Chad
Djibouti
Egypt
Gambia
Guinea-Bissau
Libya
Mauritania
Morocco
Senegal
Somalia
Tunisia
1.1.2 Partially Excluded (including approximate percentage of
country excluded assuming that all satellite dishes are
pointing to the relevant horizon)
Sierra Leone 30 (thirty) per cent
Guinea 50 (fifty) per cent
Mali 90 (ninety) per cent
Spanish Sahara 20 (twenty) per cent
1.2 THE INDIAN OCEAN ISLANDS INCLUDED AS PART OF THE TERRITORY
The Cornoros
Mauritius
The Seychelles
Madagascar
Reunion
<PAGE>
SCHEDULE 2B
Those countries in respect of which minimum guarantees are payable
by MultiChoice
Angola
Benin
Burkina Faso
Burundi
Central African Republic
Congo
Equatorial Guinea
Eritrea
Ethiopia
Guinea
Liberia
Mali
Niger
S>o TormII and Principe
Reunion
Rwanda
Sierre Leone
Togo
Western Sahara (also known as Spanish Sahara)
Zanzibar
<PAGE>
SCHEDULE 3* (5 pages omitted)
<PAGE>
SCHEDULE 4
INFORMATION TO BE REPORTED ON BY MULTICHOICE FOR EACH ACCOUNTING PERIOD
1.1 Total number of actual Subscribers
- on first day of Accounting Period
- on last day of Accounting Period
1.2 Total number of Equated Subscribers (including all information which
may be necessary in order to calculate the number of Equated
Subscribers)
- on first day of accounting period
- on last day of accounting period
1.3 The information set out in 1.1 and 1.2 by Subscriber category ie:
1.3.1 SUD Subscribers
1.3.2 MUD Subscribers by sub-category of Subscribers (including
the number of Wired Rooms)
- apartments
- hotels/motels and other transient dwellings
- hospitals
- all other MUD subscribers
1.3.3 Communal Subscribers (including number of Television Sets)
1.3.4 Commercial Subscribers
1.3.5 VIP Subscribers
1.3.6 Employee Subscribers
1.3.7 Free Trials given in accordance with clause 6.3.
1.4 The information set out in 1.1, 1.2 and 1.3 on a country by country
basis in respect of each country within the territory
1.5 The information required in terms of 1.1, 1.2, 1.3 and 1.4 in respect
of each Channel together with the MultiChoice SUD Subscriber Charge,
charged by MultiChoice in respect of each Channel within each country
and the actual revenue derived by MultiChoice.
1.6 The information required in terms of 1.1, 1.2, 1.3, 1.4 and 1.5 showing
the number of Subscribers receiving each channel via DTH distribution
systems reflecting the Subscribers receiving via the C-Band and those
receiving via the Ku-Band of the Satellite and the number of
Subscribers receiving each Channel via non-direct to home distribution
systems
<PAGE>
SCHEDULE 5
M-Net Market Research
- - Framework Market Segmentation
- - Image Tracking
- - Delphi Segmentation
- - KTV Quantitative and Qualitative
- - M-Net Advertising Campaign Survey
- - Local Productions Qualitative and Quantitative
- - Super Sport Image Tracking
- - Disconnect Survey
- - TVQ Panel
This schedule may be amended from time to time by mutual agreement between the
parties.
<PAGE>
SCHEDULE 6
SIGNAL QUALITY SPECIFICATIONS
1. VIDEO
The following specifications detail the minimum requirements for the
video output signal that will be delivered to the MultiChoice's
equipment from the M-Net Network Switching Room.
1.1 ANALOGUE DELIVERY
Standard : PAL
Level : 1V p-p
Impedance : 75 ohm
Signal to noise ratio: : -48 dB
(Unified weighted CCIR Rec.567-3)
Frequency response : 30 Hz to 5.5 MHZ
+/- 0.3 dB
Group delay response : 30 Hz to 5.5 MHZ
+/- 25 nS
1.2 DIGITAL DELIVERY
Standard : SMPTE 259m
PAL sourced
: 270 Mbits per sec SDI
1.3 GENERAL
1.3.1 The video signal subjective quality shall confirm to
CCIR 500-2 quality rating 5.
1.3.2 In the case of the signal being delivered by a
compressed digital system, the video bit rate shall
be at least 8 MB/S.
1.3.3 Standard converters must be avoided where possible.
2. AUDIO
<PAGE>
2.1 ANALOGUE DELIVERY
Maximum level : + 6dBm
Reference Level : 0 dBm
Impedance : 600 ohm
Frequency response : 15 Hz to 15 kHz
+/- 1 dB
Signal-to-noise ratio : -55 dB
(CCIR 468-3 Q-Pk mean weighted)
2.2 DIGITAL DELIVERY
Standard : AES/EBU digital
(not imbedded)
<PAGE>
SCHEDULE 7
A. MULTICHOICE - PROVISION OF EXISTING SMS TO M-NET CHANNELS FOR NON DTH
SUBSCRIBERS IN
(i) NIGERIA:
MNA (West) [- covered by Analogue Agreement]
SS on a 24 hour basis
MM and KTV totalling 24 hours, being 12 hours each per day
(ii) GHANA:
MNA (West) [- covered by Analogue Agreement]
MM and SS on a 24-hour basis
(iii) KENYA AND UGANDA:
MNA (East), MM and SS on a 24 hour basis [MNA - covered by Analogue
Agreement
(iv) TANZANIA:
From October 1997:
MNA (East), SS on a 24 hour basis [MNA - covered by Analogue Agreement
(v) ZAMBIA:
SS and MNA (East) on a 24 hour basis
(vi) LESOTHO:
MND
(vii) NAMIBIA:
MND, SS 24
(viii) BOTSWANA:
<PAGE>
MNA (East): SS 24
(ix) ZAIRE (Congo):
MNA (West), SS 24
(x) MALAWI:
MNA (East), SS 24
(xi) RWANDA:
MNA (East), SS 24
(xii) BURUNDI
MNA East, SS24
(xiii) MALI:
SS, MNA
(xiv) ST HELENA:
SS 24
<PAGE>
SCHEDULE 8
PanAmSat 4 Footprints
<PAGE>
[GRAPHIC OMITTED]
PAS-4 Southern Africa Horizontal Beam Ku-Band (CONTOURS 55, 54, 53, 52, 50, 48,
46, 44 dBW)
<PAGE>
[GRAPHIC OMITTED]
PAS-1 Africa Beam V C-Band (CONTOURS 39, 38, 37, 35, 33, 31, 29, 27 dBW)
<PAGE>
SCHEDULE 9
SPECIFICATIONS AND SERVICE LEVELS
<TABLE>
<CAPTION>
MAX NORM HOURS UNSCHEDULED MAX NORM HOURS SCHEDULED
CATEGORY DOWN DURA- LOW LOW DOWN DURA- LOW LOW
TIME TION POWER POWER TIME TION POWER POWER
PER PER PER PER PER PER PER PER
ANNUM EVENT ANNUM EVENT ANNUM EVENT ANNUM EVENT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SATELLITE 17 4 12 4 12 2 12 4
TRANSMISSION
("A")
TERRESTRIAL 17 4 12 4 12 2 12 4
OR OTHER
REBROADCAST
TRANSMISSION
("B")
NETWORK AVAILABILITY: 99-8% PER MONTH BASED ON 24 HOURS OF
(BOTH A & B) BROADCASTING PER DAY
RESPONSE TIMES: NORMAL OFFICE HOURS (7:30 TO 23:00) 1 HOUR
(BOTH A & B) AFTER HOURS (23:00 TO 07:30) 2 HOURS
EQUIPMENT MAINTENANCE: i) PREVENTATIVE MAINTENANCE : THREE MONTHLY
(BOTH A & B) ii) BASIC REGULAR MAINTENANCE : WEEKLY
iii) SYSTEM CHECKS : DAILY
MONITORING: 24 HOURS PER DAY
AUDIO VISUAL QUALITY
(BOTH A & B)
REPORTING: DAILY: TELEPHONICALLY / E-MAIL
(Both A & B) WEEKLY: E-MAIL
MONTHLY: DETAILED WRITTEN REPORT (ON A COUNTRY BY
COUNTRY BASIS IN RESPECT OF DIRECT TO HOME AND NON
DIRECT TO HOME TRANSMISSION SYSTEMS)
STANDBY FACILITY: 24 HOURS A DAY
(BOTH A & B)
</TABLE>
<PAGE>
SCHEDULE 10
A. MultiChoice - Provision of SMS for M-Net Channels to DTH Ku Band
Subscribers
South Africa, Lesotho, Namibia, Botswana, Zimbabwe and Swaziland
MND - Premium Tier
MM - Premium Tier
SS - Premium Tier
KTV - Premium Tier
B. MultiChoice - Provision of Future SMS for M-Net Channels to DTH C band
Subscribers.
The Territory (excluding South Africa, Lesotho, Botswana, Zimbabwe and
Swaziland)
MNA - Premium Tier
SS - Premium Tier
MMA - Premium Tier
KTV - Premium Tier
<PAGE>
SCHEDULE 11
LETTER AGREEMENT BETWEEN ORACLE AND MULTICHOICE
<PAGE>
SCHEDULE 12* (3 pages omitted)
EXHIBIT 10.10
DEED CONSTITUTING
THE MIH LIMITED SHARE TRUST
between
MIH Limited
and
Ernst & Young Trustees Limited
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. PURPOSE................................................................ 3
2. DEFINITIONS AND INTERPRETATION......................................... 3
3. CREATION AND ADMINISTRATION OF THE TRUST............................... 9
4. APPOINTMENT OF TRUSTEES................................................ 10
5. POWERS OF TRUSTEES..................................................... 10
6. DUTIES OF TRUSTEES..................................................... 10
7. PRIVILEGES, EXEMPTIONS AND INDEMNITIES OF TRUSTEES..................... 11
8. FURNISHING OF SECURITY BY TRUSTEES.................................... 11
9. TERMINATION OF TRUST................................................... 11
10. ALLOCATION AND ALLOTMENT OF SHARES TO THE TRUST..................... 12
11. FINANCIAL ASSISTANCE................................................ 13
12. OFFER OF SHARES OR GRANT OF OPTIONS................................. 15
13. OFFERS.............................................................. 15
14. RIGHTS AND OBLIGATIONS UNTIL PURCHASE PRICE PAID.................... 16
15. PAYMENT OF PURCHASE PRICE........................................... 17
16. OBLIGATIONS OF BENEFICIARIES VIS-A-VIS TRUSTEES..................... 19
17. EFFECT OF PAYMENT OF FULL PURCHASE PRICE............................ 19
18. GRANT, EXERCISE AND LAPSE OF OPTIONS................................ 20
19. EFFECT OF SALE OF SCHEME SHARES..................................... 22
20. EFFECT OF CESSATION OF A BENEFICIARY'S EMPLOYMENT................... 23
21. CANCELLATION OF SALE BY REASON OF NON-PAYMENT....................... 24
22. CANCELLATION OF TRANSACTIONS AND REPURCHASE OF SCHEME SHARES........ 24
23. RIGHTS ISSUES....................................................... 25
24. CAPITALISATION ISSUES AND REDUCTIONS OF CAPITAL IN SPECIE........... 26
25. ADJUSTMENTS IN EVENT OF CERTAIN TRANSACTIONS AND LIQUIDATION
OF THE COMPANY .................................................. 27
26. TAKEOVER OF COMPANY................................................. 28
27. DISCLOSURE BY COMPANY IN ANNUAL FINANCIAL STATEMENTS................ 30
28. AMENDMENTS OF SCHEME................................................ 30
29. DISPUTES............................................................ 30
30. ADDRESSES........................................................... 30
31. ISSUES OF SHARES TO ANY PERSON...................................... 32
32. DETERMINATION OF MARKET VALUE OF SCHEME SHARES...................... 32
33. EMPLOYMENT RIGHTS................................................... 33
34. PROPER LAW.......................................................... 33
35. CHANGE OF PROPER LAW................................................ 33
36. ACTS OF THE COMPANY................................................. 34
37. DEEMING PROVISION................................................... 34
SCHEDULE..................................................................... 36
PART 1....................................................................... 36
PART II...................................................................... 38
PART III..................................................................... 43
PART IV...................................................................... 44
PART V....................................................................... 47
PART VI...................................................................... 48
PART VII..................................................................... 52
PART VIII.................................................................... 55
</TABLE>
2
<PAGE>
This Deed is made on March 25, 1999 between
(1) MIH Limited, a company incorporated in the British Virgin Islands, of 3rd
Floor, Abbot Building, Main Street, Road Town, Tortola, British Virgin
Islands (the "Company"); and
(2) Ernst & Young Trustees Limited, a company incorporated in Jersey, of Le
Gallais Chambers, 54 Bath Street, St Helier, Jersey, Channel Islands JE4
8YD (the "Original Trustee").
PART I - INTRODUCTION
1. PURPOSE
1.1. The Company currently conducts, through its direct and indirect
Subsidiaries, pay television, internet and related technology
businesses in Africa, the Middle East, Europe, South-East Asia and
North America.
1.2. This Scheme is intended to advance the interests of the Group and
its shareholders by attracting and retaining Employees who are
able to contribute to the successful management and growth of the
Group and to stimulate the personal involvement of these Employees
in the advancement of the Group, thereby encouraging their
continued service with the Group. Accordingly, the Trustees may,
from time to time, award Offers and Options to such Employees as
may be selected in the manner provided in this Scheme.
2. DEFINITIONS AND INTERPRETATION
In this Deed -
2.1. clause headings are inserted for convenience only and shall not be
taken into account in its construction;
2.2. unless the context clearly indicates a contrary intention, an
expression which denotes any one gender includes the other
genders, a natural person includes a juristic person and vice
versa, the singular includes the plural and vice versa and the
following expressions bear the meanings assigned to them
3
<PAGE>
below and cognate expressions bear corresponding meanings -
"Acquisition Price" - the price defined as such in
clause 19.1;
"the Act" - The International Business
Companies Ordinance No.8 of 1984 of
the British Virgin Islands and any
statutory amendment or re-enactment
thereof;
"Awards" - the awards, referred to in clause
1.2, which may be granted to
selected Employees in terms of this
Scheme;
"Bankers" - such international investment bank
as shall be appointed by the
Company as and when the bank is
required to perform any function
in terms of this Deed;
"Beneficiary" - any Employee who has accepted an
Offer or an Option, provided that
for so long as an Employee is a
resident of Jersey, he shall not be
eligible to become a Beneficiary in
terms of the Scheme;
"Capitalisation Issue" - the issue of Shares on a
capitalisation of the Company's
profits and/or reserves (including
its share premium account and
capital redemption reserve fund);
"Capitalisation Share" - a fully paid Share allotted, in a
Capitalisation Issue, in respect of
a Scheme Share and any further
fully paid Share similarly allotted
in respect of the Capitalisation
Share, during the time that the
Share to which it is linked in
terms of clause 24.2 is a Scheme
Share;
4
<PAGE>
"Deed" - this trust deed, including the
Schedule;
"Deed of Adherence" - an agreement between the Company,
the Trustees and a Subsidiary,
substantially in the form set out
in Part VIII of the Schedule, in
terms whereof such Subsidiary
agrees to be bound to the terms and
conditions of this Agreement to the
extent that it relates to
Subsidiaries;
"Discretion" - a sole, absolute and unfettered
discretion;
"Employee" - an employee (including an executive
director and a consultant) of the
Company or of a Subsidiary of the
Company which will have agreed to
be bound by the terms and
conditions of this Agreement by
executing a Deed of Adherence and,
unless the context clearly
indicates a contrary intention, the
term "Employee" also includes the
Employees' Trust, in relation to an
employee who is a beneficiary
thereunder, and "Employment" has a
corresponding meaning;
"Employees' Trust" - a discretionary trust or trusts
created by the Company or the
Trustees, the beneficiaries of
which shall be some or all of those
Employees (and their respective
spouses, dependants, descendants
and/or nominees) for whose benefit
the Trustees have made Offers or
5
<PAGE>
granted Options to the Employees'
Trust, which Offers or Options
could, in terms hereof, have been
made or granted directly to the
Employees concerned;
"Exercise Price" - the price defined as such in clause
18.1.1;
"Executor" - the person in any applicable
jurisdiction, who administers a
deceased person's estate;
"Group" - the Company and its Subsidiaries;
"Market Value" - the market value per Scheme Share
on a date as calculated in
accordance with the provisions set
out in clause 32;
"Offer" - an offer made under the Scheme
to an Employee to purchase Shares
from the Trust;
"Offer Date" - the date, stipulated as such in the
written notification (referred to
in clause 13.1) from the Trustees
to an Employee, being the date on
which an Offer is made (or, if such
date is earlier than the date of
such written notification, is
deemed to have been made) to such
Employee in terms of the Scheme;
"Option" - an option granted under the Scheme
to an Employee, which, when
exercised in respect of any Scheme
Shares to which the option relates,
will result in a sale of such
Scheme Shares by the Trust to the
Beneficiary;
"Option Date" - the date, stipulated as such in the
written notification (referred to
in clause 18.1.1) from the Trustees
to an Employee, being the date on
which an Option is granted (or, if
such date is earlier than the date
of such written notification, is
deemed to have been granted) to
such Employee in terms of the
Scheme;
6
<PAGE>
to an Employee;
"Purchase Price" - the price defined as such in clause
13.1;
"Put and Call Option" - an agreement between the Trustees
and a Beneficiary in the form (or
substantially in the form) set out
in Part VI of the Schedule (in
relation to Scheme Shares acquired
pursuant to an Offer) or Part VII
of the Schedule (in relation to
Scheme Shares acquired on the
exercise of an Option);
"Record Date" - the close of business on the date
the register of the Company will be
closed to determine entitlement to
participate in a Rights Issue,
Capitalisation Issue or a Reduction
of Capital, as the case may be;
"Reduction of Capital" - a reduction of the Company's share
capital, including a reduction of
the Company's share premium account
or capital redemption reserve fund;
"Reserved Share" - a Scheme Share which a Beneficiary
has undertaken to purchase, or has
purchased, from the Trustees in
terms of clause 13 or which a
Beneficiary has an Option to
purchase, in each case until such
Beneficiary has acquired ownership
and has paid the full Acquisition
Price of the Scheme Share;
"Rights Issue" - the offer of any securities of the
7
<PAGE>
Company or of any other body
corporate to all holders of Shares,
pro rata to their holdings at the
Record Date;
"Schedule" - the schedule to this Deed;
"Scheme" - the share incentive scheme set out
in this Deed, as it may be amended
from time to time in accordance
with the terms hereof;
"Scheme Share" - the Shares referred to in clause
10.1, including Capitalisation
Shares and Rights Issue Shares;
"SE" - any Stock Exchange on which Shares
are listed;
"Security Agreement" - the security agreement referred to
in Part III of the Schedule;
"Shares" - shares in the capital of the
Company, of whatever class;
"Statutes" - any applicable statutes, laws,
rules or regulations which have
force of law and which relate to or
affect the performance by the
Trustees of their duties and
functions under the Scheme;
"Subsidiary" - any company which is a subsidiary
of the Company within the meaning
of the Act, as well as any company
which the Trustees from time to
time declare, in their Discretion,
to be a subsidiary of the
8
<PAGE>
Company for the purposes of this
Deed and the Scheme;
"Trust" - the MIH Limited Share Trust
constituted in terms of this Deed;
"Trustees" - includes the Original Trustee and
any trustee(s) succeeding or
substituted for the Original
Trustee or any additional or
subsequent trustees at any time,
holding office as such in terms of
this Deed;
"Unreserved Share" - a Scheme Share which is not a
Reserved Share;
"Year" - the Company's financial year;
2.3. except where the context requires otherwise, references to
statutory provisions shall be construed as references to those
provisions as respectively amended or re-enacted or as the
application is modified by other provisions (whether before or
after the date hereof) from time to time.
PART II - CONSTITUTION OF THE TRUST
3. CREATION AND ADMINISTRATION OF THE TRUST
3.1. The MIH Limited Share Trust is hereby constituted as a trust under
the laws of the Island of Jersey, which trust shall be implemented
and administered by the Trustees for the purposes and in the
manner set out herein.
3.2. The Trustees shall, subject to the provisions of this Deed, be
entitled to establish such rules and regulations as they, in their
Discretion, deem necessary for the proper administration of the
Scheme and to make such determinations and interpretations and to
take such ancillary steps in
9
<PAGE>
connection therewith as they deem necessary or desirable. Without
limiting the generality of the aforegoing, the Trustees shall have
the authority, inter alia, to select, after having received a
recommendation from the Company to that effect, Employees to
participate in the Scheme, to determine the Awards to be granted
to an Employee, to grant Awards singly, in combination, or in
tandem, and to do all things and to take such actions as may be
necessary for the proper operation of the Scheme in accordance
with the provisions hereof.
3.3. As between the Trustees, on the one hand, and the Company and the
Beneficiaries respectively, on the other hand, the determinations
of the Trustees in the implementation and administration of the
Scheme shall be final and conclusive.
3.4. The Trustees may delegate to one or more persons or committees
some or all of the powers exercisable by them in terms of this
Deed on such terms and for such periods as they deem fit, and may
revoke any appointment and vary the terms of any delegation.
4. APPOINTMENT OF TRUSTEES
4.1. The Original Trustee is appointed as trustee of the Trust and it does, by
its signature of this Deed, accept such appointment.
4.2. The provisions of Part I of the Schedule shall apply to the cessation of
office and succession of Trustees.
5. POWERS OF TRUSTEES
5.1. The Trustees shall have the powers set out in Part II of the
Schedule.
5.2. A Trustee may not be or become a Beneficiary.
6. DUTIES OF TRUSTEES
The Trustees shall have the duties set out in Part III of the Schedule.
10
<PAGE>
7. PRIVILEGES, EXEMPTIONS AND INDEMNITIES OF TRUSTEES
A Trustee shall enjoy the privileges, exemptions and indemnities set out
in Part IV of the Schedule.
8. FURNISHING OF SECURITY BY TRUSTEES
If, for any reason, a Trustee is at any time required to furnish security
for his duties, the costs from time to time of doing so shall be
recoverable from the Trust.
9. TERMINATION OF TRUST
9.1. The Scheme shall terminate and wind up in accordance with clauses
9.2 and 9.3 on the first to occur of the following -
9.1.1. the Trustees determining that the Scheme is insolvent or
receiving advice to that effect and the Trustees thereupon
deciding to terminate and wind up the Scheme; or
9.1.2. the Company directing the Trustees that the Scheme be wound
up; or
9.1.3. the Company being dissolved or ceasing to carry on business
(unless its successor or successors in business shall take
the place of the Company for all the purposes of the
Scheme); or
9.1.4. the one hundredth anniversary hereof.
Upon such termination, the Trustees shall notify each Beneficiary
thereof in writing.
9.2. Upon termination, the Trustees shall realise the assets of the
Trust, wind up the affairs of the Trust and pay over to the
Company any surplus funds (after discharging all liabilities)
remaining in the Trust.
9.3. Should the amount paid by the Trustees to the Company in terms of
clause 9.2 fall short of the full indebtedness of the Trust to the
Company and its Subsidiaries, the Trustees shall be relieved of
all liability for such shortfall, which shall constitute a loss to
be borne by the Company and the Subsidiaries in such proportions
as the Company in its Discretion determines to be
11
<PAGE>
equitable.
9.4. When the Trustees have disposed of all the assets of the Trust in
accordance with this Deed, the Scheme shall be terminated and the
Trustees shall be discharged from the trusts thereof without the
necessity of written discharges or resignations.
PART III - COVENANTS BY COMPANY AND SUBSIDIARIES
10. ALLOCATION AND ALLOTMENT OF SHARES TO THE TRUST
10.1. The shares subject to the Scheme shall be Class "A" ordinary
Shares. The Company shall, as and when the Trustees make an Offer
to an Employee or an Employee exercises an Option, in respect of a
particular number of Shares, allot and issue to the Trustees, for
the purpose of the Scheme, the same number of Shares at a price
which is equal to the Acquisition Price payable by the Employee
for such Shares, provided that such Shares, when added to the
number of Scheme Shares then issued hereunder, shall not, at any
time, represent more than 10% (ten per cent) of the total issued
share capital of the Company from time to time.
10.2. Notwithstanding the provisions of clause 10.1, the Trustees may,
in any case, arrange for the direct allotment and issue of Scheme
Shares to a Beneficiary who has accepted an Offer or exercised an
Option.
10.3. The Shares referred to in clauses 10.1 and 10.2 shall be allotted
and issued subject to the provisions of this Deed and each such
allotment shall, without limiting the generality of the
aforegoing, be upon the basis that -
10.3.1. the Shares will upon acquisition by the Trustees
(pursuant to clause 10.1) or the Beneficiaries (pursuant
to clause 10.2) become Scheme Shares;
10.3.2. Scheme Shares may only be disposed of in terms of this
Deed; and
10.3.3. Scheme Shares and any Capitalisation Shares linked
thereto (whether
12
<PAGE>
subject to an Offer or an Option or not) shall
participate in money or assets distributed in a Reduction
of Capital, Capitalisation Issue or Rights Issue and in
all dividends declared from time to time by the Company.
10.4. Whenever the Trustees acquire any Shares other than in terms of
clause 10.1, the Company shall treat the acquisition as if it were
made in terms of such clause and the provisions of clause 10.3
shall apply to all Shares so acquired.
11. FINANCIAL ASSISTANCE
11.1. Upon every issue of Shares in terms of clause 10, and whenever the
Trustees propose to acquire any other Shares for the purpose of
the Scheme (including Shares acquired in terms of a Rights Issue),
an amount equal to the total consideration payable on account of
those Shares shall be lent and advanced to the Trustees, in terms
of the further provisions hereof, as and when the Trustees become
obliged to pay the consideration, except to the extent that the
Trustees have funds available for this purpose.
11.2. The person to lend and advance monies to the Trustees in terms of
clause 11.1 shall be -
11.2.1. the Company, insofar as those Shares are offered or any
Option is granted in respect thereof, to Employees of the
Company or, in relation to those Employees, to the
Employees' Trust, or
11.2.2. a Subsidiary of the Company, insofar as those Shares are
offered or any Option is granted in respect thereof, to
Employees of that Subsidiary or, in relation to those
Employees, to the Employees' Trust,
provided that until it is determined to whom, or for whose
benefit, the Shares will be offered or an Option in respect
thereof will be granted, the Company shall lend and advance the
monies required for those Shares and if any Shares are thereafter
offered to an Employee of a Subsidiary (or, in relation to that
Employee, to the Employees' Trust), or an Option is granted in
respect thereof to such Employee (or, in relation to such
Employee, to the
13
<PAGE>
Employees' Trust), that Subsidiary shall advance the monies
concerned to the Trustees who shall use those monies to repay, pro
tanto, their indebtedness to the Company.
11.3. The Company and/or the Subsidiaries falling within the ambit of
clause 11.2.2 shall lend and advance to the Trustees, as and when
required by them, monies for the proper execution of their duties
as such, including, without derogating from the generality of the
aforegoing -
11.3.1. for payment of any disbursements and expenditure incurred
by them in their capacity as Trustees;
11.3.2. for payment of amounts due in terms of clause 8;
11.3.3. for payment of any amount in respect of which they have
been lawfully indemnified pursuant to the terms of clause
7;
11.3.4. for lending to a Beneficiary the amount of any income or
other tax or the amount required to subscribe for Rights
Issue Shares pursuant to clauses 15.2 and 19.3.2
respectively; and
11.3.5. for payment of the purchase price of Scheme Shares
acquired pursuant to the provisions of clause 26.2,
paragraph 4 of Part V of the Schedule or the Put and Call
Option respectively.
11.4. Loans to the Trustees in terms of clauses 12.1, 12.2 and 12.3
shall -
11.4.1. bear interest at such rate as may be agreed between the
lender concerned and the Trustees, from time to time; and
11.4.2. be repaid from amounts received by the Trustees in terms
of clause 17 or clause 18 which are surplus, after
discharging all liabilities then due, to the Trust's
requirements for the ensuing period of 6 (six) months.
PART IV - PARTICIPATION BY EMPLOYEES
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12. OFFER OF SHARES OR GRANT OF OPTIONS
12.1. The Trustees may from time to time, in accordance with clauses
13.1 and 18.1, (and in accordance, furthermore, with any
recommendations from the Company in that regard and after
consultation with the Employees concerned) make Offers of or grant
Options in respect of Shares to named Employees, or, in relation
to such Employees, to the Employees' Trust.
12.2. The Trustees may not, pursuant to the Scheme, grant to, or for the
benefit of, any one Employee Awards in respect of which the
aggregate number of Scheme Shares exceeds one (1)% of the
Company's total issued share capital at that time.
12.3. An Offer or Option shall be personal to and be capable of
acceptance only by the Employee to whom it is addressed; provided
that the Trustees may, in their Discretion and subject to such
terms and conditions as they may impose, permit the assignment of
any rights under any Offer or Option (including, without
limitation, rights arising pursuant to the acceptance or exercise,
as the case may be, by the Employee) to the trustee(s) of any
trust; provided further, however, that, notwithstanding any such
assignment, the Employee in question (or, in the case of such
Employee's death, his Executor) shall remain liable for all
obligations of a Beneficiary hereunder and shall be the only
person recognised by the Trustees as being entitled to enforce any
of a Beneficiary's rights, in terms of the Scheme.
13. OFFERS
13.1. Every Offer made to an Employee under this Scheme shall be made in
writing by the Trustees to the Employee, and shall specify, inter
alia, the name of the Employee to whom, or for whose benefit, the
Offer is made, the Offer Date, the number of Scheme Shares offered
and the Market Value of the Scheme Shares to which the Offer
relates on the Offer Date ("Purchase Price").
13.2. An Offer shall be accepted in writing, in such form as the
Trustees may
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stipulate, and be delivered to the Trustees within 14 (fourteen)
days after the date of the written notification in terms of clause
13.1, failing which it shall lapse.
13.3. Any acceptance of an Offer shall -
13.3.1. specify the number of Shares in respect of which an Offer
is accepted, which shall be the whole or a lesser number
of the number of Scheme Shares to which the Offer
relates;
13.3.2. specify an address for the purpose of clause 30;
13.3.3. be accompanied by a duly executed Security Agreement and
also by a duly executed Put and Call Option, in
each case in respect of the Scheme Shares specified in
accordance with clause 13.3.1;
13.3.4. otherwise be subject to and governed by the provisions of
this Deed.
14. RIGHTS AND OBLIGATIONS UNTIL PURCHASE PRICE PAID
Until the full Purchase Price of any Scheme Shares has been paid to the
Trustees -
14.1. all such Scheme Shares and all Capitalisation Shares linked
thereto shall be registered as provided in clause 2 of Part III of
the Schedule. If, however, the Trustees will have transferred the
Scheme Shares to the Beneficiary (by registration in the name of
the Beneficiary) on or after acceptance of the Offer (but before
payment of the full Purchase Price), then ownership of the Scheme
Shares and all Capitalisation Shares linked thereto shall, subject
to the provisions of the Security Agreement executed by such
Beneficiary, vest in such Beneficiary; provided that the Trustees
and a Beneficiary may agree that, instead of adopting the
aforesaid procedure, registration of transfer of the Scheme Shares
to the Beneficiary shall not take place on acceptance of the Offer
but only against payment of the full Purchase Price and that, on
such registration of transfer, ownership of the Scheme Shares and
all Capitalisation Shares linked thereto shall, subject to the
provisions of the Security Agreement, vest in the Beneficiary;
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14.2. a Beneficiary shall, after having taken transfer of such Scheme
Shares, be entitled, subject to clause 15.4, to dividends declared
and to Capitalisation Issues and Rights Issues in respect thereof
and money or assets distributed pursuant to a Reduction of
Capital;
14.3. subject to clause 14.2, those Scheme Shares and all Capitalisation
Shares linked thereto may not be sold or transferred by a
Beneficiary (other than to the Trustees in the manner and on the
basis as is expressly provided in clauses 22 or 26 or, if
applicable, in terms of the Put and Call Option) or, subject to
the provisions of the Security Agreement, in any way be mortgaged,
pledged or otherwise encumbered, unless the Trustees have given
their prior written consent thereto;
14.4. any sale resulting from the acceptance of an Offer or the exercise
of an Option may be cancelled in terms of clauses 20, 21 and 22;
14.5. the voting rights attaching to all Scheme Shares sold to
Beneficiaries in terms of this Scheme and all Capitalisation and
Rights Shares linked thereto shall, at all times until such Shares
are transferred to the Beneficiaries, be exercisable by the
Trustees;
14.6. on a winding-up of the Company, any proceeds payable to the holder
of Scheme Shares shall be applied firstly in discharging any
amount due by such Beneficiary to the Trustees.
15. PAYMENT OF PURCHASE PRICE
15.1. Unless the Trustees in their Discretion decide otherwise, the
outstanding Purchase Price due on any Scheme Share which has been
transferred to a Beneficiary shall bear interest in an amount
equal to the dividends (if any) paid on such Share.
15.2. If a Beneficiary who has taken transfer of his Scheme Shares
becomes liable for any income or other tax by reason of his not
being obliged to pay interest on the outstanding portion of the
Purchase Price at all, or being obliged to pay only a low rate of
interest, the Trustees may, in their Discretion, lend the
Beneficiary the amount by which that income or other tax (as
determined by
17
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them) exceeds any dividends received by him in respect of his Scheme
Shares during that year and the amount so lent shall be deemed to form
part of the outstanding balance of the Purchase Price payable by the
Beneficiary for his Scheme Shares.
15.3. To the extent that the dividends (if any) payable to a Beneficiary
in respect of his Scheme Shares in any year exceed any taxation
payable by him as contemplated in clause 15.2, such dividends
shall be retained by the Trustees and be paid towards the
reduction of interest accrued and the outstanding balance of the
Purchase Price of the Beneficiary's Scheme Shares. The same
provision shall apply to any money received pursuant to a
Reduction of Capital.
15.4. The Purchase Price of any Scheme Shares purchased pursuant to an
acceptance of an Offer may be paid at any time after the Offer
Date, provided that -
15.4.1. such payment may not be effected before the lapse of the
following respective periods (calculated from the Offer
Date):
15.4.1.1. 3 (three) years, and then only in respect of up
to one-third of the total number of such Scheme
Shares;
15.4.1.2. 4 (four) years, and then only in respect of up
to two-thirds of the total number of such
Scheme Shares; and
15.4.1.3. 5 (five) years in respect of more than two
thirds of such Scheme Shares,
unless the Trustees, in their Discretion, allow
earlier payment;
15.4.2. the whole of the Purchase Price of the Scheme Shares
(together with any amount lent to a Beneficiary pursuant
to clause 15.2) shall be paid to the Trustees not later
than 5 (five) years and 105 (one hundred and five) days
after the Offer Date.
The Trustees may not apply any payments made on account of the
Purchase Price nor any amounts received pursuant to the provisions
of clause 15.2
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<PAGE>
rateably towards payment of the Purchase Price of all Scheme
Shares but shall, instead, appropriate all such payments and
amounts towards the discharge in full of the debt owed by a
Beneficiary in respect of each of the Scheme Shares.
15.5. Subject to clause 15.4.1, a Beneficiary may pay the outstanding
balance of the Purchase Price, or any portion thereof, before the
due date for payment.
15.6. Notwithstanding anything to the contrary herein contained (except
for clause 20), on cessation of a Beneficiary's employment by the
Group (the date of such cessation being the "Termination Date")
the balance of the Purchase Price (together with any amount lent
to a Beneficiary pursuant to clause 15.2) owing by that
Beneficiary for any Scheme Shares acquired by him in terms of the
Scheme shall, except to the extent that the Trustees otherwise
decide, become due and payable, if cessation of employment was due
to death or ill-health, 6 (six) months after the Termination Date,
but otherwise on the Termination Date.
16. OBLIGATIONS OF BENEFICIARIES VIS-A-VIS TRUSTEES
Every Beneficiary shall, in addition to and without prejudice to any
obligation imposed elsewhere in this Deed, whether express or implied -
16.1. ensure that payment of the Purchase Price owing in respect of any
Scheme Shares is punctually made on the due date; and
16.2. at all times strictly observe the provisions of this Deed.
17. EFFECT OF PAYMENT OF FULL PURCHASE PRICE
Upon a Beneficiary paying the Purchase Price of each Scheme Share
purchased by him in full -
17.1. such Scheme Share and all Capitalisation Shares linked thereto
shall cease to be Scheme Shares and any burdens attaching to any
such Shares in terms of this Deed shall cease to operate, but such
Shares shall be subject to the pre-emption provisions set out in
Part V (and, if applicable, the provisions set out in the Put and
Call Options in Part VI) of the Schedule;
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17.2. the Trustees shall, if this has not been done before, forthwith
cause such Share to be transferred to the Beneficiary (that is,
registered in the name of the Beneficiary) against payment of the
stamp and/or transfer duty, if any, payable in respect of the
transfer thereof;
17.3. the Company shall forthwith, if the Shares of the Company are then
listed on a SE, apply for a listing of such Share if, for any
reason, a listing in respect thereof will not already have been
granted.
18. GRANT, EXERCISE AND LAPSE OF OPTIONS
18.1. An Option granted to, or for the benefit of, an Employee under
this Scheme -
18.1.1. shall be offered in writing by the Trustees to the
Employee (or, to the Employees' Trust, for the benefit of
the Employee) in the form prescribed by the Trustees in
their Discretion. Such award shall specify, inter alia,
the number of Scheme Shares to which the Option relates,
the Option Date and the price at which the Option may be
exercised, which shall be the Market Value of the Scheme
Shares to which the Option relates on the Option Date
("Exercise Price");
18.1.2. shall be accepted in writing, in such form as the
Trustees may stipulate, and be delivered to the Trustees
within 14 (fourteen) days after the date of the written
notification referred to in clause 18.1.1, failing which
it shall lapse. The acceptance shall specify an address
for the purpose of clause 31;
18.1.3. may be accepted in respect of the whole or any such
lesser number of the number of Scheme Shares to which the
Option relates, as the Employee may elect;
18.1.4. shall, on acceptance, be accompanied by a duly executed
Security Agreement and also by a duly executed Put and
Call Option.
18.2. A Beneficiary shall exercise an Option by written notice to the
Trustees specifying the exercise date as well as the number of
Scheme Shares in
20
<PAGE>
respect of which the Option is being exercised. An Option may be
exercised at any time after it has been granted and may be
exercised from time to time in respect of all or any of the Scheme
Shares to which the Option relates, but not after it has lapsed in
terms of clause 18.3. When an Option is exercised, the Trustees
and the Beneficiary may agree that the resulting contract be
implemented in the manner provided for in the proviso to clause
14.1, ie. that the Scheme Shares are not registered in the name of
the Beneficiary on exercise of the Option, but that such
registration occurs only when the Exercise Price thereof has been
paid in full. Notwithstanding the date upon which an Option is
exercised, in whole or part, the implementation of the resulting
contract (involving the payment of the Exercise Price against
registration of transfer of the Scheme Shares in the name of the
Beneficiary) may not take place -
18.2.1. in respect of any Scheme Shares until the third
anniversary of the Option Date;
18.2.2. between the third and fourth anniversaries of the Option
Date, in respect of more than one-third of the total
number of Scheme Shares subject to the Option;
18.2.3. between the fourth and fifth anniversaries of the Option
Date, in respect of such number of Scheme Shares as
constitutes, together with any Scheme Shares in respect
of which the Option was exercised and the resulting
contract has been implemented in terms of clause 18.2.2,
more than two-thirds of the total number of Scheme Shares
subject to the Option; and
18.2.4. in respect of any balance of the total number of Scheme
Shares subject to the Option, until after the fifth
anniversary of the Option Date,
unless the Trustees, in their Discretion, allow earlier
implementation.
18.3. An Option shall lapse -
18.3.1. to the extent that it is not exercised before the expiry
of 5 (five) years
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and 105 (one hundred and five) days from the Option Date;
or
18.3.2. if the Beneficiary ceases to be an Employee for any
reason other than his death, retirement through
ill-health, disability, retrenchment or redundancy or
having reached the Group's normal retirement age or for
any other reason that the Trustees in their Discretion
consider valid; or
18.3.3. if the interest of a Beneficiary in an Option is attached
under any circumstances and the Trustees pass a
resolution to that effect; or
18.3.4. in accordance with clause 18.4.
18.4. If, while any portion of a Beneficiary's Option remains
unexercised, he ceases to be an Employee by reason of his death,
retirement through ill health, disability, redundancy,
retrenchment or having reached the normal Group retirement age or
for any other reason that the Trustees, in their Discretion
consider valid (so that his Option does not lapse in terms of
clause 18.3.2), the Beneficiary or the Executor of his estate, as
the case may be, may within 60 (sixty) days of the termination
date exercise any unexercised portion of the Option. Such exercise
shall be accompanied by payment of the Exercise Price of the
Scheme Shares subject thereto and upon such payment being received
by the Trustees, the Scheme Shares in question shall be delivered
and released to the Beneficiary or his Executor, as the case may
be. To the extent that the Option is not then exercised it shall
lapse.
19. EFFECT OF SALE OF SCHEME SHARES
19.1. For the purposes of this Deed, a sale in respect of any Scheme
Shares sold to a Beneficiary arising from the exercise of an
Option or the acceptance of an Offer shall be implemented by the
registration of transfer by the Trustees of the Scheme Shares in
the name of the Beneficiary and the payment by the Beneficiary to
the Trustees of the Purchase Price or Exercise Price, as the case
may be (collectively, the "Acquisition Price").
19.2. On implementation of a sale as set out in clause 19.1, the risk in
and benefit
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<PAGE>
to the Scheme Shares shall, subject to clause 19.3, pass to the
Beneficiary.
19.3. If, after exercise of an Option or acceptance of an Offer, but
before the implementation of the sale arising from such exercise
or acceptance, there should occur -
19.3.1. a Capitalisation Issue or a Reduction of Capital pursuant
to which assets are distributed to shareholders, a
Beneficiary shall, in respect of the Scheme Shares
purchased by him, participate therein; and
19.3.2. a Rights Issue, the Beneficiary shall, by written notice
to the Trustees, be entitled to participate therein in
respect of the Scheme Shares purchased by him and in such
event the Beneficiary shall pay the relevant amount in
terms of such Rights Issue, which amount the Trustees
shall, if so requested by the Beneficiary, lend him on
such terms as they, in their Discretion, determine.
20. EFFECT OF CESSATION OF A BENEFICIARY'S EMPLOYMENT
20.1. If a Beneficiary's Employment ceases by reason of his lawful
dismissal by the company in the Group which employs him on the
grounds of misconduct, or by reason of his resignation or notice
given by him, any sale of Scheme Shares to him arising from the
acceptance of an Offer or the exercise of an Option, shall, unless
the Trustees in their Discretion decide otherwise and to the
extent that such sale has not been implemented, be cancelled and
the Beneficiary shall have no further rights hereunder. In such
event, all amounts, other than interest, actually paid by a
Beneficiary for Scheme Shares in respect of which the sale has not
been implemented by the registration of transfer in the name of
the Beneficiary of the Scheme Shares in question against payment
thereof in full, shall be refunded to the Beneficiary. Where any
Scheme Shares have been transferred to a Beneficiary without the
Purchase Price thereof having been paid in full, such Shares shall
immediately be retransferred to the Trustees and to the extent
necessary such Beneficiary irrevocably authorises and empowers the
Trustees to complete any instrument of share transfer or other
document which may require completion in order to implement such
re-transfer.
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20.2. The provisions of clauses 15.6, 18.3.2, 18.4 and 20.1 of this Deed
and 6.1 of each Put and Call Option shall apply, mutatis mutandis,
to the Employees' Trust in respect of Scheme Shares, Options,
Offers and other rights to Shares held by the Employees' Trust for
the benefit of an Employee whose Employment ceases.
21. CANCELLATION OF SALE BY REASON OF NON-PAYMENT
21.1. If any Acquisition Price (or any portion thereof) is not paid by
the due date therefor, the Trustees shall be entitled to cancel
the sale in terms of which those Scheme Shares were acquired by
that Beneficiary and, thereupon - 21.1.1. the Beneficiary shall
cease to have any interest in such Scheme Shares and in all
Capitalisation Shares linked thereto;
21.1.2. those Scheme Shares shall once again become Unreserved
Shares and the Capitalisation Shares shall cease to be
linked thereto and shall thereupon also become Unreserved
Shares; and
21.1.3. the Beneficiary shall be liable to the Trustees for all
damages suffered in consequence thereof.
21.2. Should the Beneficiary fail and/or refuse to comply with his
obligations under clause 21.1, the Trustees are empowered and
authorised (and the Beneficiary, by accepting an Offer or being
granted an Option, similarly authorises the Trustees) to do all
such things and sign all or any documents on behalf of that
Beneficiary as may be necessary to give effect to the provisions
of this Deed.
21.3. The provisions of clause 21.2 shall, mutatis mutandis, apply in
any other circumstances in which a Beneficiary or the Executor of
his estate fails to make any payment to the Trustees when due, but
without prejudice to any other rights which the Trustees may enjoy
under this Deed or the laws of Jersey.
22. CANCELLATION OF TRANSACTIONS AND REPURCHASE OF SCHEME SHARES
24
<PAGE>
The Trustees may, if they in their Discretion consider that the
circumstances warrant such action and the Beneficiary agrees thereto -
22.1. cancel any purchase of Scheme Shares resulting from the exercise
by that Beneficiary of an Option or the acceptance by him of an
Offer to the extent that the purchase of such Scheme Shares has
not been implemented; and
22.2. repurchase from that Beneficiary any Scheme Shares acquired by him
in terms of the Scheme at a price not exceeding the Acquisition
Price of such Scheme Shares,
and where a transaction is so cancelled as aforesaid, the Trustees shall
refund to the Beneficiary all amounts (other than interest) paid by him
on account of the Acquisition Price of those Shares.
23. RIGHTS ISSUES
A Beneficiary shall be entitled to participate in any Rights Issue in
respect of his Reserved Shares (including those which are the subject
matter of an Option) and all Capitalisation Shares linked thereto, as if
the Acquisition Price of those Scheme Shares was at the Record Date
already paid in full. The provisions of this Deed shall apply, mutatis
mutandis, to such Rights Issue Shares as if they were Scheme Shares.
Until payment in full of the Acquisition Price of the Scheme Shares to
which such Rights Issue or Capitalisation Shares attach and of the price
of the Rights Issue Shares, such Rights Issue or Capitalisation Shares
shall be deemed to be Scheme Shares and shall also be subject to the
pre-emption provisions referred to in Part V of the Schedule, the Put and
Call Option (if applicable) and to the provisions of the Security
Agreement executed by such Beneficiary. If a Beneficiary elects not to
participate in any Rights Issue, any letter of allocation arising from
the Rights Issue may, if the Trustees so decide, be sold for the
Beneficiary's benefit or acquired by the Trustees for a price equal to
the Market Value of the rights on the day preceding the date of purchase
(which shall be determined, in their discretion, by the Trustees or, if
they so elect, by the Bankers) and the net proceeds, if any, of the sale
shall be applied to reduce the Acquisition Price owing, or which may
become owing, by the Beneficiary, provided that if the Beneficiary does
not purchase (and implement the purchase of) the Scheme Shares in
question, the amount so paid to the Trustees shall
25
<PAGE>
be forfeited to it.
24. CAPITALISATION ISSUES AND REDUCTIONS OF CAPITAL IN SPECIE
24.1. Subject to clauses 24.2 and 25, a Beneficiary shall participate in
any Capitalisation Issue in respect of his Reserved Shares and all
Capitalisation Shares linked thereto, as if the Acquisition Price
of those Scheme Shares was, at the Record Date, already paid in
full.
24.2. No Beneficiary shall, in respect of any Scheme Shares for which
the Acquisition Price has not been paid in full, be entitled to
renounce his rights to any Capitalisation Shares issued in respect
of those Scheme Shares or dispose thereof in any other way, and
all such Capitalisation Shares shall -
24.2.1. be allotted and issued subject to the restrictions and
provisions of this Deed; and
24.2.2. for so long as the Purchase Price of the Scheme Shares in
respect of which they are issued is not paid in full or
for so long as the Option for the Scheme Shares in
respect of which they are issued has not been exercised
and/or the Exercise Price of the Scheme Shares in respect
of which they are issued has not been paid in full, be
linked to the relevant Scheme Shares and shall, mutatis
mutandis, be subject in all respects to the same
restrictions and provisions as are attached to the Scheme
Shares.
24.3. If, on the Record Date of a Capitalisation Issue, the Trustees
hold any Unreserved Shares, they shall, for purposes of the
Scheme, participate in Capitalisation Issues in respect of the
Unreserved Shares and any Capitalisation Shares accruing to the
Trust shall, upon allotment and issue, become Scheme Shares.
24.4. The provisions of clauses 24.2.2 and 24.3 of this Deed shall
apply, mutatis mutandis, to any Shares or other assets received in
respect of Scheme Shares on a Reduction of Capital.
26
<PAGE>
PART V - GENERAL
25. ADJUSTMENTS IN EVENT OF CERTAIN TRANSACTIONS AND LIQUIDATION OF THE
COMPANY
25.1. In the event of the Company splitting or consolidating its Shares,
reorganising its share capital or making any distribution to
shareholders other than cash dividends, the Trustees may, in their
Discretion, make an adjustment to the number of Scheme Shares
subject to Awards then outstanding, to any Purchase or Exercise
Prices relating to Awards and to any other provisions relating to
Awards affected by such change, provided that the Bankers (acting
as experts, not as arbitrators) shall have confirmed in writing
that in their opinion such adjustment is fair and reasonable. The
Trustees may also make adjustments to take into account material
changes in law or in accounting practices or principles, mergers,
consolidations, schemes of arrangement, reconstructions,
acquisitions, dispositions, repurchases or similar corporate
transactions or any other event, if it is determined by the
Trustees that adjustments are appropriate to avoid distortion in
the operation of this Scheme, but no such adjustments other than
those required by law may (without the Beneficiary's consent)
adversely affect the rights of any Beneficiary under any Award
previously granted.
25.2. If the Company is placed in liquidation in circumstances other
than as contemplated by clause 25.1 -
25.2.1. the full amount owing in respect of a sale of Scheme
Shares by each Beneficiary shall forthwith become due and
payable, provided that the Trustees may, in their
Discretion, release a Beneficiary from any balance owing
by him to the Trustees;
25.2.2. save as provided in clause 25.2.1 and for any rights to
claim any payment which the Trustees may then have
against the Company, the Trustees may resolve to
terminate this Scheme as from the Date of Liquidation;
and
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<PAGE>
25.2.3. any Option which has not yet been exercised shall ipso
facto lapse from the date of liquidation.
For the purposes hereof "Date of Liquidation" means the date upon
which any application or petition (whether provisional or final)
for the liquidation or winding up of the Company was lodged at
court.
26. TAKEOVER OF COMPANY
26.1. Should direct or indirect Control of the Company pass to a person
or to 2 (two) or more persons acting in concert in whom Control
did not vest before, then the Trustees shall within fourteen (14)
days after such change of Control has become binding -
26.1.1. resolve in their Discretion whether or not this Scheme
shall continue in force; and
26.1.2. advise the Beneficiaries of their decision in this
regard.
For the purpose of this clause 26 "Control" means beneficial
ownership of more than 50% (fifty percent) of the combined voting
power of the issued voting securities of the Company. It shall be
in the Discretion of the Trustees to determine whether or not any
form of reconstruction or amalgamation of the Company in terms of
the laws applicable to it amounts to a change of control as
envisaged in this clause 26.
26.2. Notwithstanding anything to the contrary contained in this Scheme
or in the terms upon which an Award was made to a Beneficiary, a
Beneficiary shall, in the event of the Trustees resolving in terms
of clause 26.1 that the Scheme shall not continue in force, be
entitled to exercise all Options granted to him under this Scheme
and to implement any sale resulting from any Offer made or Option
exercised, within 30 (thirty) days after the date upon which the
Trustees resolved to discontinue the Scheme and shall then sell to
the Trustees (who shall buy) all Scheme Shares owned by him
(including any Scheme Shares acquired by him under an Offer) -
26.2.1. if the person who acquired Control of the Company is an
associated undertaking (as defined in clause 26.4),
either on the terms and
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<PAGE>
conditions of the transaction pursuant to which the
change of Control occurs in respect of the Company or for
the Market Value of each Scheme Share on the date of such
change, whichever is more favourable to a Beneficiary;
26.2.2. in any circumstances other than that referred to in
clause 26.2.1, on the terms and conditions of the
transaction pursuant to which the change of Control
occurs in respect of the Company,
and to the extent necessary such a Beneficiary
irrevocably authorises and empowers the Trustees to
complete any instrument of share transfer or other
document which may require completion in order to
implement any such purchase and sale.
26.3. The purchase price of the Scheme Shares purchased by the Trustees
pursuant to clause 26.2 shall be paid -
26.3.1. if a Beneficiary has any indebtedness outstanding to the
Trust in respect of any of his Scheme Shares, pro tanto,
to the Trust. If the amount of such outstanding
indebtedness exceeds the amount of the purchase price,
payment to the Trust of the whole of the purchase price
shall operate as a complete discharge of the
Beneficiary's obligations to the Trust under the Scheme;
26.3.2. as to the balance, if any, to the Beneficiary in
question.
26.4. For the purposes of clause 26.2 an "associated undertaking"
means -
26.4.1. an undertaking in which any person who directly or
indirectly beneficially owns 25% (twenty-five percent) or
more of the combined voting power of the issued voting
securities of the Company ("an owner"), directly or
indirectly-
26.4.1.1. owns more than 50% (fifty percent) of the
combined voting power of the issued voting
securities thereof; or
26.4.1.2. has the power to appoint more than half of the
members of the board thereof; or
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<PAGE>
26.4.1.3. has the right to manage the affairs thereof;
26.4.2. an undertaking which directly or indirectly has in or
over an owner the rights or powers listed in clause
26.4.1.
26.5. To the extent that a Beneficiary fails to exercise an Option or
complete a sale as set out in clause 26.2, the right to do so
shall lapse.
26.6. If the Trustees resolve in terms of clause 26.1 that the Scheme
shall continue in force then a Beneficiary shall remain subject to
all the terms and conditions of this Scheme, including, if
applicable, the Put and Call Option.
27. DISCLOSURE BY COMPANY IN ANNUAL FINANCIAL STATEMENTS
The Company shall disclose in its annual financial statements such
details regarding the Scheme as may be necessary in terms of any
applicable accounting and/or SE requirements.
28. AMENDMENTS OF SCHEME
The Trustees may, with the approval of the Company, amend, add to and/or
delete any of the provisions of this Scheme, provided that no such
amendment, addition or deletion shall affect the rights of any
Beneficiary in respect of any existing Offers made or Options granted to
such Beneficiary, except with the consent of such Beneficiary, and
provided further that no such amendment, addition or deletion shall be
such as to jeopardise any approval of the Scheme whilst the proper law
remains that of Jersey.
29. DISPUTES
Any dispute arising under or in respect of this Scheme shall be referred
to the decision of the Bankers, acting as experts and not as
arbitrators, whose decision thereon shall be final and binding on the
parties to the dispute.
30. ADDRESSES
30.1. The parties choose, for all purposes under this Deed, whether in
respect of
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court process, notices or other documents or communications of
whatsoever nature (including the exercise of any Option), the
following addresses:
30.1.1. The Company : The registered address of the Company from
time to time;
30.1.2. The Trustees : The registered address of the Company from
time to time;
30.1.3. A Beneficiary : The address appointed in terms of clause
13.3.2 or clause 18.1.2, as the case may be.
30.2. Any person appointed as a Trustee in the place of any of the first
Trustees or any successor shall select an address for the purpose
of this clause 30.
30.3. Any notice or communication required or permitted to be given in
terms of this Deed shall be valid and effective only if in writing
(which shall include a telefax).
30.4. The Company, a Trustee or a Beneficiary may by notice to any other
party (except that a Beneficiary is not obliged to notify other
Beneficiaries) change its address to another address, provided
that the change shall become effective on the seventh day after
the receipt of the notice by the addressee.
30.5. Any notice to a party contained in a correctly addressed envelope,
and
30.5.1. sent by prepaid registered post to it at its appointed
address; or
30.5.2. delivered by hand to a responsible person during ordinary
business hours at its appointed address
shall be deemed to have been received, in the case of clause
30.5.1, on the tenth business day after posting (unless the
contrary is proved) and, in the case of clause 30.5.2, on the day
of delivery.
30.6. Notwithstanding anything to the contrary herein contained, a
written notice or communication actually received by a party shall
be an adequate written notice or communication to it
notwithstanding that it was not sent to or
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delivered at its chosen address.
31. ISSUES OF SHARES TO ANY PERSON
The Company shall be entitled at any time to issue new Shares to any
person, on such terms and conditions as the Company may determine. None
of the Beneficiaries (nor their representatives or their
successor-in-title) shall have any action of whatsoever nature (including
an action based on an alleged oppression or fraud on minority
shareholders) arising from any such issue of Shares to any person.
32. DETERMINATION OF MARKET VALUE OF SCHEME SHARES
32.1. The Market Value of a Scheme Share on any date before 31 March
1999 shall be determined by the Company. The Market Value of a
Scheme Share shall thereafter be determined annually by the
Bankers and in doing so the Bankers shall value each Scheme Share
as a direct proportion of the value of the whole of the issued
Share capital of the Company, assuming a sale of the whole of the
Company to a single buyer. All the information which shall be made
available to a willing buyer and a willing seller in these
circumstances shall therefore be made available to the Bankers. In
determining the Market Value of a Scheme Share the Bankers shall
act as experts and not as arbitrators and their decision shall be
final and binding on the Company, the Trustees and all
Beneficiaries.
32.2. For the purposes of the annual determination of the Market Value
of the Scheme Shares, the Bankers shall within thirty (30) days
after the completion in each Year of the annual financial
statements of the Company provide the board of directors of the
Company and the Trustees with a signed certificate setting out the
Market Value of each Scheme Share, which value shall hold good
until the next determination thereof by the Bankers.
32.3. If the Shares are listed on a SE, the manner of determining the
Market Value set out in clauses 32.1 and 32.2 shall, if the
Trustees in their Discretion so determine, not apply, and the
Market Value of a Scheme Share at any date
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shall be equivalent to the middle market price of a listed Share
of the same class as the Scheme Shares on the immediately
preceding trading day as determined by the Trustees.
32.4. If the listing as aforesaid of the Shares is at any time
suspended, then the manner of determining the Market Value shall
revert, for the duration of the suspension, to that set out in
clauses 32.1 and 32.2. Notwithstanding anything to the contrary in
this Scheme, the effective date of the sale of any Scheme Shares
purchased by the Trust during the period of any suspension of the
listing of the Shares, shall be deemed to be the date on which
such suspension is lifted or the date of the first determination
of the Market Value of the Scheme Shares by the Bankers after the
date of sale, whichever is earlier.
33. EMPLOYMENT RIGHTS
Neither the adoption of this Scheme, nor the making of Offers or granting
of Options, shall confer upon any Employee any right to continued
Employment with any Group company or affect in any way the right of any
Group company to terminate an Employment relationship at any time. Except
as specifically provided in this Scheme or by the Trustees, neither the
Trustees nor any Group company shall be liable for the loss of existing
or potential profit in Offers made or Options granted under this Scheme
in the event of termination of an Employment relationship.
34. PROPER LAW
This Deed, the Scheme and all determinations made and related actions
taken by the Trustees shall be governed by the laws of Jersey, Channel
Islands, and shall be construed accordingly, notwithstanding the fact
that one or more Trustees may from time to time be resident or domiciled
elsewhere than in the Island of Jersey.
35. CHANGE OF PROPER LAW
The Trustees, with the consent of the Company, may, by instrument,
declare that the proper law of the Scheme shall be the law of some other
place in any part of the
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world under which the terms of the Scheme shall be capable of taking
effect and such law shall thereupon become the proper law of the Scheme,
but subject to the power conferred by this clause and until any further
declaration be made under such power, provided always that so often as
any such declaration shall be made, the Trustees shall be at liberty to
make such consequential alterations or additions in or to the trusts,
powers and provisions of the Scheme as the Trustees may consider
necessary or desirable to ensure that the trusts, powers and provisions
of the Scheme shall, mutatis mutandis, be as valid and effective as they
are under the law of Jersey.
36. ACTS OF THE COMPANY
36.1. Any power, right or discretion conferred on the Company by this
Deed shall, unless otherwise expressly provided herein, be
exercisable by a resolution of its board of directors or of the
renumeration committee of such board of directors or of a
committee thereof appointed for the purposes of the Deed or by
some person duly nominated in the manner aforesaid by the Company
to exercise such powers and discretions. Any writing purporting to
be a copy of a resolution of the board of directors or a committee
thereof, signed by the chairman of the meeting, shall be
sufficient evidence of the exercise of the power, right or
discretion thereby involved to any person acting thereon in good
faith and without negligence.
36.2. The Company shall, in connection with the administration of the
Scheme, do all things and give to the Trustees all information in
its power or possession which shall reasonably be required by the
Trustees.
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SIGNED BY /s/ ALLAN M. ROSENZWEIG
for and on behalf of
MIH LIMITED
SIGNED BY /s/ DAVID WATERS
for and on behalf of
ERNST & YOUNG TRUSTEES LIMITED
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SCHEDULE
PART 1
CESSATION OF OFFICE OF TRUSTEES AND SUCCESSION
1. Appointment and Removal of Trustees
1.1. The Company has the power of appointing, by instrument, new or
additional Trustees of the Scheme.
1.2. The minimum number of Trustees shall be one.
1.3. The Company may at any time by instrument remove a Trustee from
office with immediate effect, whereupon the relevant Trustee shall
execute such documents and do such things as may be necessary to
give proper effect to such removal, it being provided that a
purported removal under this paragraph 1.3 which would result in
there being less than the minimum number of trustees of the Scheme
shall have no effect.
1.4. Acts or instruments done or executed for the proper vesting of the
assets of the Trust in new or additional Trustees shall be done
and executed by the continuing or retiring Trustee at the expense
of the Company, provided always that in the event of the
retirement or removal of any Trustee hereunder such outgoing
Trustee shall be released from all claims, demands, actions,
proceedings and accounts of any kind on the part of any person
(whether in existence or not) actually or prospectively interested
under this trust in all or any part of the assets of the Trust or
under the trusts of the Scheme or in respect of any act or thing
done or omitted in execution or purported execution of such trusts
other than and except only actions -
1.4.1. arising from any breach of trust in which such Trustee was
a party or privy; or
1.4.2. to recover from such Trustee trust property or the proceeds
of trust property in the possession of such Trustee or
previously received by such Trustee) and converted to his
use.
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2. Resignation of Trustees
2.1. Any Trustee may resign his appointment as Trustee by serving on
the Company notice in writing to that effect and such resignation
shall take effect on the expiry of 14 clear days after receipt by
the Company of such notice or (if the result of the resignation
becoming effective would but for this provision, be that there
would be less than the minimum number of Trustees) on such later
date when the resignation becoming effective would not have that
result and the Trustee so resigning, the Company and the other
Trustee(s) shall execute such documents and do such things as may
be necessary to give proper effect to such resignation.
2.2. Where a person for any reason ceases to hold office as a Trustee
and such person or his personal representatives or (in the case of
a corporate person) its liquidator, reasonably apprehends that it
or they is/are or may be or become under any liability (including
a contingent liability and a fiscal liability of any nature
whatsoever arising in any part of the world) and -
2.2.1. such liability has been incurred or may be incurred by that
person or his personal representatives or its liquidator in
consequence of that person having been a Trustee; and
2.2.2. that person would have been entitled to be exonerated or
discharged from liability or would have been reimbursed for
the same by the Company if that liability had been
discharged at a time when he was still a Trustee;
the Company shall covenant to indemnify that person or his
personal representatives or its liquidator against such liability.
2.3. If for any reason the duty imposed on the Company to covenant as
mentioned in paragraph 2.2 is unenforceable or otherwise invalid
or ineffective or inapplicable or the Company refuses to comply
with such duty, the Trustees shall nevertheless have power, if in
their discretion they think fit, to covenant to indemnify any such
person or his personal representatives or its liquidator out of
the assets of the Trust against any such liability as aforesaid.
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PART II
POWERS OF TRUSTEES
1. Trustees' Powers
1.1. The Trustees shall, in relation to the assets of the Trust, have
all the same powers as a natural person acting as the beneficial
owner thereof and without prejudice thereto and to all statutory
powers and immunities, shall have the powers and immunities set
out herein without being limited by any specific powers set out
herein, provided that the Trustees shall not exercise any of their
powers so as to conflict with the beneficial provisions of the
Scheme or to infringe any restrictions expressly imposed herein
upon the exercise of any powers.
1.2. In any case of doubt or dispute about the meaning and the effect
of any word, phrase or provision in the Deed the same shall be
referred for interpretation to the Trustees whose decision thereon
shall be final and conclusive.
1.3. The Trustees shall have and be entitled to exercise all powers,
rights, authorities and discretions in connection with the Scheme
which are required or proper to enable them to carry out any
transaction, act, instrument or thing arising under or in
connection with the Scheme. The consent or concurrence of the
Employees or the Beneficiaries or any of them shall not be
necessary in connection with the giving of any receipt or
discharge or the making of any payment or the doing of any act or
thing made or done in the exercise of their powers as Trustees or
in connection with the Scheme, except as is expressly provided in
the Deed. Persons dealing in good faith with the Trustees in
relation to the Scheme shall not be entitled to, or be under any
obligation to, enquire of the Trustees about the investment or
application of monies paid or property transferred by them to the
Trustees, but shall be
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completely exonerated by the Trustees' receipt.
1.4. In the event of the Trustees being liable to or accountable for
any tax imposed in any jurisdiction or other imposition of any
kind referable to the assets of the Trust or any benefits payable
under the Scheme or otherwise in connection with the Scheme, the
Trustees shall be entitled to pay such tax or other imposition
from the assets of the Trust notwithstanding that payment of the
same would not be legally enforceable in the jurisdiction in which
the assets of the Trust are for the time being situated.
2. Decisions and Meetings of the Trustees
2.1. The Trustees may make whatever arrangements and regulations they
consider appropriate for the making and recording of their
decisions and for the holding of, convening of and procedure at,
meetings of the Trustees.
2.2. Without prejudice to paragraph 2.1, every decision, resolution or
exercise of a power or direction required to be, or capable of
being made, by the Trustees shall be validly made if so made by a
majority in number of the Trustees and any instrument executed in
pursuance of any such decision, resolution or exercise shall have
binding legal effect (as if executed by all the Trustees) if it is
executed by a majority in number of the Trustees. However, this
provision shall not render a Trustee liable for any act or thing
done or omitted without his consent.
3. Professional Advice
The Trustees may in relation to the Scheme rely on the advice or opinion
(whether or not obtained by them) of any accountant, actuary, broker,
lawyer, medical practitioner, or other professional person, including a
firm or company of pension consultants which the Trustees believe to be
of good repute and shall not be responsible for any loss to the assets of
the Trust occasioned as a result of acting in accordance with such advice
or opinion. The cost of obtaining such advice or opinion (to the extent
that it is not otherwise paid) shall form part of the expenses of the
Scheme.
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4. Delegation by Trustees
The Trustees shall have and may exercise the following powers in addition
to all other powers vested in them by the Deed and by law, namely:
4.1. power to delegate to any person or body of persons which the
Trustees believe to be of good repute (whether or not that person
or one of those persons is one of the Trustees) such of their
powers, duties, authorities and discretions over investments as
they may deem expedient for the convenient administration of the
Scheme;
4.2. power from time to time to authorise (in writing) such persons as
they think fit to draw cheques on any banking account of the
Scheme or to endorse any cheque or to give receipts and discharges
and so that any such receipt or discharge shall be as valid and
effective as if it were given by the Trustees and so that the
provision of a written authority of the Trustees shall be a
sufficient protection to any person taking any such receipts or
discharge or otherwise acting under or relying upon such
authority;
4.3. power to make arrangements generally for the administration of the
Scheme as they think fit and, in particular, to employ such agents
and staff, including a secretary, to transact any business of the
Scheme, including signing certificates and making and receiving
payments and granting receipts and discharges, but subject always
to the directions and instructions of the Trustees and to such
regulations as the Trustees may make from time to time for the
purpose of his duties. The remuneration of such person or persons
shall be part of the expenses of the Scheme incurred by the
Trustees for its proper administration.
5. Trustees' Right to Charge
5.1. A Trustee who is an individual engaged in a profession or business
may charge and be paid all reasonable professional and other
charges for business done, time spent and services rendered by him
or his firm in connection with the trusts and powers hereof, both
for acting as such professional adviser and for acting as Trustee
hereof. Such payment will be over and above his out of
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pocket expenses (which will be reimbursed to the Trustee) and will
be made irrespective of whether the services are such as would
normally be undertaken by a professional adviser or otherwise.
5.2. Any Trustee which is a company shall be entitled to charge and be
paid out of the Trust fund and/or the income thereof, such
remuneration as may from time to time be agreed between it and the
Company. However, in default of such agreement, the Trustee shall
be paid in accordance with its scale of fees from time to time in
force.
6. Expenses
The Company shall be responsible for the expenses and remuneration
incurred by the Trustees in the administration of the Scheme. In the
event that part or all of such expenses or remuneration is not paid, the
Trustees shall recover such expenses or remuneration (as the case may be)
from the assets of the Trust.
7. Specific Powers
The Trustees have the following specific powers, apart from such other
powers as may be conferred upon them by law or elsewhere in this Deed
(whether expressed or implied), but subject always to the provisions of
this Deed, namely:
7.1. to acquire, for the purpose of the Scheme, Shares either by
original subscription or purchase, and upon such terms as they in
their Discretion may deem fit;
7.2. to invest the surplus monies of the Trust in such investments, on
such terms and in such manner as they in their Discretion may
determine;
7.3. to realise any such investment and to re-invest the proceeds in
the manner aforesaid;
7.4. to borrow or raise monies from the Company and/or any other person
for the purposes of the Scheme, on such terms as they in their
Discretion may deem fit;
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7.5. subject to any applicable Statutes, to open and operate banking
and building society accounts of all descriptions;
7.6. to draw, accept, make or endorse cheques, bills of exchange or
promissory notes for and on behalf of the Trust;
7.7. to exercise all rights conferred by Shares and other assets of the
Trust, including voting rights, rights of conversion, rights to
take up further allotments (by way of Capitalisation or Rights
Issues) of Shares and the like, as they in their Discretion may
deem fit;
7.8. to make loans to any person, whether interest-bearing or otherwise
and whether secured or unsecured, for any purpose considered by
the Trustees in their Discretion to be in the interests of the
Trust and the Beneficiaries;
7.9. to exercise such further rights, powers and authorities as may
from time to time be conferred upon them by the Company;
7.10. to form a trust or trusts, and settle the terms and provisions of
such trust/s, for the benefit of Employees, and their respective
spouses, descendants, dependants and/or nominees, who may benefit
or may have benefitted under the Scheme.
8. Capacity and Locus Standi
Without prejudice to the above, the Trustees shall have:
8.1. full capacity to contract in their capacities as such, subject
always to such limitations, if any, as may be imposed by this
Deed, provided that they will under no circumstances be personally
liable on any such contract;
8.2. locus standi in judicio and be capable of bringing, defending,
opposing, withdrawing, settling and/or otherwise acting in
connection with any proceedings whatsoever in or before any court,
or in any arbitration, or before any other forum, provided that
all costs reasonably incurred by them
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in that regard shall be for the account of the Trust.
PART III
DUTIES OF TRUSTEES
These are the duties referred to in clause 6 of this Deed.
The Trustees, in addition to any other duty imposed by this Deed, whether
express or implied, shall -
1. make Offers or grant Options to Employees in terms of clause 12 of the
Deed;
2. procure that all Reserved Shares and Capitalisation Shares remain
registered in the names of the Trustees or their nominee and ensure that
they remain so registered until they are transferred to Beneficiaries;
3. procure that all circulars, letters and other documents issued to
shareholders of the Company in any Rights Issue are issued to
Beneficiaries as well;
4. cause to be transferred to a Beneficiary upon his complying with his
obligations in terms of any contract resulting from the acceptance of an
Offer or the exercise of an Option, the Scheme Shares acquired by him,
which shall cease to be Reserved Shares, and all Capitalisation Shares
linked thereto, which shall, however, be subject to the pre-emption
provisions set out in part V of the Schedule and, if applicable, to the
Put and Call Option;
5. ensure that a Beneficiary shall, as a precondition to Scheme Shares being
transferred to him or the acceptance of an Option, execute a security
agreement in favour of the Trustees to give a security interest over all
Scheme Shares held by the Beneficiary from time to time including any
Capitalisation Shares and any Rights Issue Shares acquired by that
Beneficiary on account of his holding of Scheme Shares or an Option
pursuant to the terms of the laws of the British Virgin Islands . The
security agreement shall serve as security for the due -
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5.1. payment by a Beneficiary of all amounts owing by the Beneficiary
to the Trustees pursuant to the provisions of the Scheme; and
5.2. fulfilment by the Beneficiary of all the Beneficiary's obligations
to the Trustees under the Deed and, in particular, the Put and
Call Option (if applicable);
6. pay over to the Company all surplus funds (after discharging liabilities)
held by the Trustees from time to time, which the Trustees in their
Discretion consider will not immediately be required by them for the
purpose of the Scheme;
7. cause proper records and books of account to be kept of the business and
affairs of the Trust and their administration thereof, which records and
books shall be in the custody of the Company on behalf of the Trustees;
8. cause to be prepared and audited, as soon as possible after the end of
each Year:
8.1. a balance sheet and income statement;
8.2. such further accounts, if any, of the Trust as the Trustees may,
in their Discretion, deem fit;
9. as soon as possible after the completion of such balance sheet and
accounts referred to in 8 above, deliver to the Company 3 (three) copies
thereof, duly signed by the Trustees.
PART IV
TRUSTEES' PRIVILEGES, EXEMPTIONS AND INDEMNITIES
1. TRUSTEES' INDEMNITIES
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1.1. No Trustee shall be responsible, chargeable or liable in any
manner whatsoever for or in respect of any loss of or any
depreciation or default upon any of the investments, securities,
stocks or bank or other deposits in or upon which the monies and
property comprising the assets of the Trust or any part thereof
may at any time be invested or deposited pursuant to the
provisions hereof or for any delay which may occur from whatever
cause in the investment of any monies from the assets of the Trust
or for the safety of any securities or documents of title
deposited by the Trustees for safe custody.
1.2. No Trustee shall as trustee of the Scheme or in respect of the
exercise of the rights or powers hereunder incur any personal
responsibility or be liable for anything whatsoever except for
breach of trust arising from his own fraud, wilful misconduct or
gross negligence and (except only in such case) the Trustees shall
be entitled to be indemnified out of the assets of the Trust, in
priority to any payment to or in respect of the Beneficiaries,
against all liabilities and expenses incurred by them in the
execution or purported execution of the powers, trusts,
authorities and discretions vested in the Trustees by the Deed and
against all proceedings, costs, charges, expenses, claims and
payments in respect of any matter or thing done or omitted in any
way relating to the Scheme or relating to or arising out of the
Deed. The Trustees may retain and pay out of the assets of the
Trust the amount of any such liabilities and expenses and of any
monies payable to them under the foregoing indemnity and the
Trustees shall have a prior lien on the assets of the Trust for
all monies payable to them under this paragraph 1.
1.3. The Trustees shall not be bound by, or be required to interfere
in, the management or conduct of the Company, but so long as there
is no notice of any act of dishonesty or misappropriation of
monies on the part of the person or persons (including the
managing or general partner in the case of a partnership) having
the management of the business of the Company, the Trustees may
leave the conduct of such business wholly to such person or
persons and shall not be liable for any act or default of such
person or persons.
1.4. Nothing contained in this paragraph 1 or elsewhere in this Deed
shall relieve
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a remunerated Trustee or a professional nominee company from any
liability arising out of its or his own breach of trust or
negligence. Nor shall anything so contained relieve any other
corporate body, officer or person from liability in respect of
negligence in the performance of any duties on behalf of the
Scheme for which it or he is remunerated.
2. A Trustee shall not -
2.1. be obliged to furnish any security to any applicable authority or
to any other officer or official for the performance of his duties
in terms hereof, whether in terms of the Statutes or otherwise;
2.2. be disqualified from (but only if a prior full disclosure has been
made to the other Trustees)
2.2.1. acting as adviser, agent, broker or attorney to or
contracting with the Trustees;
2.2.2. obtaining any remuneration in respect of his services in
any capacity referred to in 2.2.1 above.
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PART V
RIGHTS OF PRE-EMPTION
1. The provisions of this part V apply to any person or trust, including the
Employees' Trust ("Covenantor") who or which acquires Shares in the
Company pursuant to the Scheme, whether or not he is an Employee, but
shall be subject to the provisions of Part VI (to the extent that the
latter apply to a Covenantor).
2. For so long as this Schedule applies to a Covenantor, he will not sell or
otherwise dispose of or transfer any Shares owned by him, except as set
out in 3 below.
3. Each Covenantor undertakes that if at any time he intends to sell or
otherwise dispose of or transfer any Shares owned by him he shall serve a
written notice on the Trustees (and, if the Covenantor wishes to sell
such Shares to a specified third party purchaser (who shall be a bona
fide purchaser) attach a copy of a written offer from that purchaser to
purchase the Shares) in terms of which the Covenantor shall offer to sell
the Shares to the Trustees at the same price as that offered by the third
party purchaser or the Market Value of the Shares on the day preceding
the date of the offer, whichever is the higher, and the Trustees shall be
entitled to accept the offer (by written notice to the Beneficiary)
before the expiry of seven days after the date of the offer.
4. If any Shares are purchased in terms of 3 above, the purchase price shall
be payable against delivery of the Shares in transferable form not later
than 7 (seven) days after the date of purchase. The cost of transfer
shall be paid by the Trustees.
5. If the Trustees do not accept an offer made in terms of 3 above in
respect of all of the Shares offered, the Beneficiary may, within 10
(ten) trading days after the expiry of the offer, sell the Shares to a
bona fide third party or, if applicable, accept the offer from the
purchaser referred to in such offer.
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PART VI
PUT AND CALL OPTION
(OFFERS ONLY)
If you wish to participate in the scheme by way of a share offer this document
must be completed and returned together with the acceptance form and the
security agreement.
THIS AGREEMENT is made the day of 199[ ] between ("the
Beneficiary") AND [ ], trustees of the MIH Limited
Share Trust ("the Trustees")
pursuant to which and in consideration of the mutual covenants contained herein
the Beneficiary and the Trustees agree that:
1. terms used in this Agreement shall, unless the context otherwise
required, have the meanings ascribed to them in the Deed constituting the
MIH Limited Share Trust ("the Scheme");
2. the Beneficiary shall not sell, transfer or otherwise dispose of any of
his Scheme Shares, nor shall he pledge, hypothecate or otherwise encumber
such scheme shares, except as set out in the Security Agreement, clauses
22 and 26.2 of the Scheme and in this Agreement;
3. the Beneficiary hereby grants the Trustees an option (the "Call Option")
to purchase the Scheme Shares acquired by the Beneficiary pursuant to the
Offer dated _______________________ 199_ in accordance with the terms set
out in this Agreement;
4. the Trustees hereby grant the Beneficiary an option (the "Put Option") to
require that the Trustees purchase the Scheme Shares acquired by the
Beneficiary pursuant to the Offer dated _________________________ 199_ in
accordance with the terms and conditions set out in this Agreement;
5. the Put Option may, subject to 11 below, be exercised by the Beneficiary
in respect of
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any Scheme Shares for which the full Purchase Price has been paid. Where
a Put Option is exercised, the purchase price payable by the Trustees for
the Scheme Shares which are the subject of the Put Option ("Put Shares")
shall be the Market Value thereof as at the date on which the Put Option
is exercised;
6. the Call Option may, subject to 7, 8 and 10.2 below, be exercised by the
Trustees following the occurrence of any of the following events:
6.1. subject to clause 20.2 of the Scheme, the Beneficiary ceasing to
be an Employee for any reason whatever, or
6.2. the non-payment by the Beneficiary of any amounts which are due
and owing to the Trustees pursuant to the Scheme;
6.3. the Beneficiary entering into an arrangement with his creditors or
being declared bankrupt; or
6.4. a resolution of the Trustees to terminate the Scheme in
consequence of a determination by the Trustees that there has been
a change of control in respect of the Company as is referred to in
clause 26 of the Scheme;
7. subject to 9 below, where the Call Option is exercised in respect of
Scheme Shares of which the full Purchase Price has not been paid and such
Call Option has become exercisable, other than by reason of the cessation
of employment of the Beneficiary by reason of his death, retirement
through ill health, disability, having reached the normal group
retirement age or any other reason approved by the Trustees, in their
discretion, in respect of the Beneficiary in question, the purchase price
per Scheme Share at which the Call Option shall be exercised shall be an
amount equal to the lower of the Market Value thereof on the Offer Date
and on the date of exercise;
8. where the Call Option is exercised in respect of Scheme Shares for which
the full Purchase Price has been paid or where the Call Option is
exercised in respect of Scheme Shares for which the full Purchase Price
has not been paid and the Call Option has become exercisable by reason of
the cessation of employment of the Beneficiary by reason of his death,
retirement through ill health, disability, having reached the normal
group retirement age or any other reason approved by the Trustees, in
their discretion, in respect of the Beneficiary in question, the purchase
price payable by the Trustees to the Beneficiary shall be the Market
Value of the Scheme Shares on the date of exercise;
49
<PAGE>
9. where the Call Option has become exercisable following the Trustees'
resolution to terminate the Scheme in consequence of a change of control
as referred to in 6 above, the exercise of the Call Option shall take
place on the 31st day following such resolution without further notice to
the Beneficiary and the price to be paid by the Trustees for the Scheme
Shares shall be the price determined in accordance with clause 26 of the
Scheme and not the price determined in accordance with 7 or 8 above of
this Agreement;
10. in addition to the Scheme Shares referred to in 3 above, this Agreement
shall apply to:-
10.1. Capitalisation Shares acquired by the Beneficiary by reason of the
holding of the Scheme Shares to which this Agreement relates as
though those Capitalisation Shares had been acquired at the same
time as the Scheme Shares and formed part of the original holding
to which this Agreement relates;
10.2. Rights Issue Shares acquired by the Beneficiary pursuant to clause
23 of the Scheme. Notwithstanding anything to the contrary in the
Scheme or in this Agreement, where a Call Option is exercised in
respect of Rights Issue Shares the purchase price payable by the
Trustees to a Beneficiary shall be the Market Value of such Rights
Issue Shares on the date of exercise;
11. the purchase price of the Scheme Shares purchased pursuant to this Call
Option shall be paid:-
11.1. if the Beneficiary has any indebtedness to the Trustees pursuant
to or arising from the Scheme, pro tanto, to the Trustees. If the
amount of such indebtedness exceeds the amount of the purchase
price for such Scheme Shares, payment to the Trustees of the whole
of the purchase price shall operate as a complete discharge of the
Beneficiary's indebtedness to the Trustees;
11.2. as to the balance, if any, to the Beneficiary.
The Trustees shall pay the purchase price as aforesaid within 14
(fourteen) days after the date of exercise against delivery of such
Scheme Shares to the Trustees in transferable form;
12. the Beneficiary irrevocably empowers and authorises the Trustees or any
agent of the Trustees, to do all such things and to sign all such
documents on the Beneficiary's behalf, as may be necessary to give effect
to this Agreement;
50
<PAGE>
13. notwithstanding anything to the contrary in this Agreement or in the
Scheme, if at any time the Shares are publicly traded on a SE, then
this Agreement shall cease to have any force or effect in respect of all
Scheme Shares for which the Purchase Price has been paid in full and
neither the Beneficiary nor the Trustees shall have any rights or
obligations hereunder in respect of such Scheme Shares. In such
circumstances the Beneficiary shall be entitled to deal with such Scheme
Shares without restriction, except such restrictions as are contained in
the rest of the Deed;
14. this Agreement shall be governed by the laws of Jersey, Channel Islands
and shall be construed accordingly and the Beneficiary hereby submits to
the non-exclusive jurisdiction of the courts of Jersey in connection
herewith.
Signed by the Beneficiary
----------------------
Signed on behalf of the Trustees
------------------------
51
<PAGE>
PART VII
PUT AND CALL OPTION
(OPTIONS ONLY)
If you wish to participate in the scheme by way of an option this document must
be completed and returned together with the acceptance form and the security
agreement.
THIS AGREEMENT is made the day of 199[ ] between ("the
Beneficiary") AND [ ], Trustees of the MIH Limited
Share Trust ("the Trustees")
pursuant to which and in consideration of the mutual covenants contained herein
the Beneficiary and the Trustees agree that:
1. terms used in this Agreement shall, unless the context otherwise
requires, have the meanings ascribed to them in the Deed constituting the
MIH Limited Share Trust ("the Scheme");
2. the Beneficiary shall not sell, transfer or otherwise dispose of any of
his Scheme Shares, nor shall he pledge, hypothecate or otherwise encumber
such Scheme Shares, except as set out in the Security Agreement, clauses
22 and 26.2 of the Scheme and in this Agreement;
3. the Trustees hereby grant the Beneficiary an option (the "Put Option") to
require that the Trustees purchase the Scheme Shares registered in the
name of the Beneficiary pursuant to the Option granted on the Option Date
in accordance with the terms and conditions set out in this Agreement;
4. where a Put Option is exercised, the purchase price payable by the
Trustees for the Scheme Shares which are the subject of the Put Option
("Put Shares") shall be the Market Value thereof as at the date on which
the Put Option is exercised;
5. the Beneficiary hereby grants the Trustees an option (the "Call Option")
to purchase the Scheme Shares acquired by the Beneficiary pursuant to the
Option granted on the
52
<PAGE>
Option Date in accordance with the terms set out in this Agreement;
6. the Call Option may be exercised by the Trustees following the occurrence
of any of the following events:
6.1. subject to clause 20.2 of the Scheme, the Beneficiary ceasing to
be an Employee for any reason whatever;
6.2. the non-payment by the Beneficiary of any amounts which are due
and owing to the Trustees pursuant to this Scheme;
6.3. the Beneficiary entering into an arrangement with his creditors or
being declared bankrupt; or
6.4. a resolution of the Trustees to terminate this Scheme in
consequence of a determination by the Trustees that there has been
a change of control in respect of the Company as is referred to in
clause 26 of this Scheme;
7. subject to 8 below, the purchase price per Scheme Share at which the Call
Option shall be exercised shall be an amount equal to the Market Value
thereof, on the date of exercise of the Call Option;
8. where the Call Option has become exercisable following the Trustees'
resolution to terminate the Scheme in consequence of a change of control
as referred to in 6.4 above, the exercise of the Call Option shall take
place on the 31st day following such resolution without further notice to
the Beneficiary and the price to be paid by the Trustees for the Scheme
Shares shall be the price determined in accordance with clause 26 of the
Scheme and not the price determined in accordance with 7 above of this
Agreement;
9. in addition to the Scheme Shares referred to in 2 above, this Agreement
shall apply to:-
9.1. Capitalisation Shares acquired by the Beneficiary by reason of the
holding of the Scheme Shares to which this Agreement relates as
though those Capitalisation Shares had been acquired at the same
time as the Scheme Shares and formed part of the original holding
to which this Agreement relates;
9.2. Rights Issue Shares acquired by the Beneficiary pursuant to clause
23 of the Scheme. Notwithstanding anything to the contrary in the
Scheme or in this Agreement, where a Call Option is exercised in
respect of Rights Issue Shares
53
<PAGE>
the purchase price payable by the Trustees to a Beneficiary shall
be the Market Value of such Rights Issue Shares on the date of
exercise;
10. the purchase price of the Scheme Shares purchased pursuant to this Call
Option shall be paid:-
10.1. if the Beneficiary has any indebtedness to the Trustees pursuant
to or arising from the Scheme, pro tanto, to the Trustees. If the
amount of such indebtedness exceeds the amount of the purchase
price for such Scheme Shares, payment to the Trustees of the whole
of the purchase price shall operate as a complete discharge of the
Beneficiary's indebtedness to the Trustees;
10.2. as to the balance, if any, to the Beneficiary.
The Trustees shall pay the purchase price as aforesaid within 14
(fourteen) days after the date of exercise against delivery of such
Scheme Shares to the Trustees in transferable form;
11. the Beneficiary irrevocably empowers and authorises the Trustees or any
agent of the Trustees, to do all such things and to sign all such
documents on the Beneficiary's behalf, as may be necessary to give effect
to this Agreement;
12. notwithstanding anything to the contrary in this Agreement or in the
Scheme, if at any time the Shares become publicly traded on a SE, then
the Put Option shall fall away and the provisions relating thereto shall
cease to have any force or effect. Thereafter, neither party shall be
bound by the provisions of this Agreement and the Beneficiary shall be
entitled to deal with Scheme Shares which are registered in his name
without restriction, except such restrictions as are contained in the
rest of the Deed;
13. this Agreement shall be governed by the laws of Jersey, Channel Islands
and shall be construed accordingly and the Beneficiary hereby submits to
the non-exclusive jurisdiction of the courts of Jersey in connection
herewith.
Signed by the Beneficiary
----------------------
Signed on behalf of the Trustees
------------------------
54
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PART VIII
DEED OF ADHERENCE
To: MIH Limited
Ernst & Young Trustees Limited
Dear Sirs
Deed constituting the MIH Limited Share Trust (the "Deed")
1. It is recorded that the Covenantor is a Subsidiary of MIH Ltd and that one
or more of the Covenantor's Employees will become Beneficiaries under the
Scheme.
2. The Covenantor hereby confirms that it has been supplied with a copy of the
Deed and hereby undertakes to each of the parties to the Deed, that it shall
observe, perform and be bound by the terms and conditions of the Deed and
all documents expressed to be supplementary or ancillary thereto as if
references therein to a Subsidiary were references also to the Covenantor.
3. The Covenantor confirms that its initial details for the purposes of clause
30 of the Deed are as follows:
[insert name, address and fax number].
4. Capitalised terms in this Deed of Adherence have the same meanings as in the
Deed.
Yours faithfully
- ------------------------
For and on behalf of
[insert name of Subsidiary]
55
EXHIBIT 10.11
STOCK PURCHASE OPTION AGREEMENT
AMONG
THOMSON CONSUMER ELECTRONICS, INC.,
a Delaware corporation
AND
MIH LIMITED,
a company organized under the laws of the British Virgin Islands
Dated as of March 18, 1999
<PAGE>
STOCK PURCHASE OPTION AGREEMENT
This Stock Purchase OPTION Agreement (the "Agreement") is entered into as
of March 18, 1999, by and between THOMSON CONSUMER ELECTRONICS, INC., a Delaware
corporation (the "Buyer"), and MIH Limited, a company organized under the laws
of the British Virgin Islands (the "Seller"). The Buyer and the Seller are
referred to collectively herein as the "Parties."
RECITALS
A. Myriad International Holdings BV, a company organized under the laws of
The Netherlands ("MIH") and Buyer entered into that certain Stock Purchase
Agreement, dated as of the date hereof, whereby Buyer sold its shares of common
stock in OpenTV, Inc., a Delaware corporation, to MIH, and, in exchange, MIH
delivered a Promissory Note, dated as of the date hereof (the "Note"),
originally issued by MIH to Buyer.
B. Pursuant to the terms of the Note, Buyer has an option to convert the
outstanding principal on and accrued interest under the Note into the MIH
Limited Shares (as defined below).
C. This Agreement sets forth the terms and conditions of a transaction
whereby, if the Buyer chooses to exercise its option to purchase the MIH Limited
Shares, the Buyer will purchase from the Seller, and the Seller will sell to the
Buyer, the MIH Limited Shares in accordance with this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
SECTION 1. Definitions; Interpretations.
1.1 Certain Defined Terms.
The following terms when used in this Agreement, including its preamble
and recitals, shall have the following meanings:
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, agreement, restriction, assessment, trust (constructive or other),
preference, priority or charge of any kind, including, without limitation (i)
any conditional sale or other title retention agreement and any lease in the
nature thereof, (ii) the filing of or agreement to give any financing statement
under the uniform commercial code of any jurisdiction, (iii) any lien or charge
arising by statute or other law, (iv) any security agreement or preferential
arrangement, (v) any stockholders' agreement, voting trust or agreement, or
proxy, or (vi) any option, warrant, or put or call agreement or arrangement. The
term Lien shall not include any resale restrictions under applicable securities
laws.
"Lockup Agreement" shall mean an agreement in the form of Exhibit A, to be
effective as of the IPO Closing Date.
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<PAGE>
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under the Internal Revenue Code
of 1986, as amended, Section 59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
1.2 Note Definitions.
Unless otherwise defined herein, capitalized terms used in this Agreement,
including its preamble and recitals, shall have the meanings ascribed to them in
the Note.
SECTION 2. Exercise of Option; Purchase and Sale of MIH Limited Shares.
2.1 Conversion Option.
If the IPO Conversion Option is exercised in accordance with the terms of
the Note, Buyer shall be entitled to receive that number of Class A Ordinary
Shares of MIH Limited (the "Class A Shares") equal to (i) the aggregate
principal amount of the Note, together with unpaid interest thereon accrued to
the IPO Closing Date, divided by (ii) the initial offering price per share to
the public for such Class A Ordinary Shares of MIH Limited (without giving
effect to any underwriting discounts or commissions) (the "MIH Limited Shares").
Buyer shall be under no obligation to exercise the IPO Conversion Option
hereunder.
2.2 Purchase and Sale Transaction.
If the IPO Conversion Option is exercised in accordance with the terms of
the Note, then, on and subject to the terms and conditions of this Agreement,
Buyer agrees to purchase from Seller, and Seller agrees to issue and sell to
Buyer on the IPO Closing Date, the MIH Limited Shares, free and clear of all
Liens, for the consideration specified in Section 2.3. In addition Seller agrees
to pay to Buyer any amounts owed in lieu of fractional shares pursuant to the
terms of the Note.
2.3 Purchase Price.
The aggregate purchase price for the MIH Limited Shares shall be an amount
equal to the aggregate principal amount of the Note, together with unpaid
interest thereon accrued to the IPO Closing Date, which shall be payable by
Buyer on the IPO Closing Date by the delivery of the original Note to Seller and
the cancellation of the Note by Seller.
2
<PAGE>
2.4 The Closing.
The closing of the purchase and sale of MIH Limited Shares contemplated by
this Section 2 (the "Closing") shall take place on the IPO Closing Date. Upon
the Closing, Buyer shall be deemed to have become a holder of record of the MIH
Limited Shares as of the IPO Closing Date. All deliveries required at Closing
and all actions to be taken at Closing shall be deemed to have occurred
simultaneously and shall be effective at the same time on the IPO Closing Date
as the closing of the sale of Class A Shares sold pursuant to the IPO
Registration Statement.
2.5 Deliveries at the Closing.
On the IPO Closing Date:
(a) Seller will deliver to Buyer (i) a copy of Seller's board
resolutions as certified by the secretary of Seller, authorizing and
approving the execution, delivery and performance of this Agreement by
Seller; (ii) newly issued stock certificates in the name of Buyer
representing the MIH Limited Shares (indicating the exact number of
shares), representing good and marketable title to the MIH Limited Shares,
free and clear of all Liens; and (iii) the cash payment due in lieu of
fractional shares as provided for in the Note, in immediately available
funds in the form of cash, a wire transfer or a cashiers check.
(b) Buyer will deliver to Seller (i) a copy of Buyer's board
resolutions, as certified by the secretary of Buyer, authorizing and
approving the execution, delivery and performance of this Agreement by
Buyer; (ii) the original Note marked as "CANCELED"; (iii) all of the
Pledged Collateral (the "Pledged Collateral"), as that term is defined in
that certain Pledge Agreement between MIH and Buyer dated as of the date
hereof, including, without limitation, stock certificate no. 21 duly
registered in the name of MIH, and all stock powers related thereto,
together with duly executed UCC termination statements with respect to the
Pledged Collateral for all jurisdictions in which Buyer has filed UCC-1
financing statements related thereto, and Buyer shall have released all
Liens created by Buyer with respect to the Pledged Collateral; and (iv)
subject to Section 5.4, the Lockup Agreement duly executed by Buyer.
2.6 Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer.
The obligation of the Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to satisfaction
of the following conditions:
(i) the representations and warranties set forth in Section
3.1 shall be true and correct in all material respects at and as of
the IPO Closing Date;
(ii) the Seller shall have performed and complied with all of
its covenants in Sections 2 and 5 hereunder in all material respects
through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent consummation of
any of the transactions contemplated by this Agreement, or (B) cause
any of the transactions contemplated by this
3
<PAGE>
Agreement to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(iv) the Seller shall have delivered to the Buyer a copy of
Seller's board resolutions, as certified by the secretary of Seller,
authorizing the execution, delivery and performance of this
Agreement by Seller; and
(v) the IPO Conversion Option has been exercised in accordance
with Section 2.1.
The Buyer may waive any condition specified in this Section 2.6(a)
if it executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller.
The obligation of the Seller to consummate the transactions to be
performed by it in connection with the Closing is subject to satisfaction
of the following conditions:
(i) the representations and warranties set forth in Section
3.2 shall be true and correct in all material respects at and as of
the IPO Closing Date;
(ii) the Buyer shall have performed and complied with all of
its covenants in Sections 2 and 5 hereunder in all material respects
through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent consummation of
any of the transactions contemplated by this Agreement or (B) cause
any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect); and
(iv) the IPO Conversion Option has been exercised in
accordance with Section 2.1.
The Seller may waive any condition specified in this Section 2.6(b)
if it executes a writing so stating at or prior to the Closing.
SECTION 3. Representations and Warranties.
3.1 Representations and Warranties of the Seller.
Except as set forth in the disclosure schedule attached hereto (the
"Disclosure Schedule"), the Seller hereby represents and warrants to the Buyer
(i) as of the date hereof and, (ii) if Buyer consummates the purchase and sale
transaction under this Section 2 at the Closing, as of the IPO Closing Date,
except to the extent Seller notifies Buyer in writing prior to the Closing, by
MAC Notice (as defined in Section 5.2 below) or otherwise, in which case the
contents of such notice shall be deemed a part of the Disclosure Schedule for
purposes of such representations and warranties as of the IPO Closing Date; as
follows:
4
<PAGE>
(a) Organization of the Seller. Seller is a corporation duly
organized and validly existing under the laws of the jurisdiction of its
incorporation.
(b) Authorization of Transaction; Enforceability. All consent,
approvals, authorizations and orders necessary for the execution, delivery
and performance by Seller of this Agreement have been duly and lawfully
obtained, and Seller has full right, power, authority and capacity to
execute, deliver and perform this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by Seller
and constitutes a legal, valid and binding agreement of Seller,
enforceable against Seller in accordance with its terms.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the performance by Seller of its obligations hereunder,
will violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, or other law of any government,
governmental agency, or court to which the Seller is subject or any
provision of its corporate charter documents or bylaws.
(d) Ownership of Shares; Delivery of Good Title. The MIH Limited
Shares, when issued, sold, and delivered in accordance with this
Agreement, shall be duly and validly issued, and good and valuable
consideration has been paid therefor, and nonassessable. Upon delivery of
the certificates representing the MIH Limited Shares in accordance with
this Agreement, Buyer will have good and marketable title to all of the
MIH Limited Shares, free and clear of all Liens.
(e) Accuracy of IPO Registration Statement. The IPO Registration
Statement does not contain any untrue statement of any material fact, and
will not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading in light
of the circumstances under which such statements are made. For purposes of
this representation and warranty, a statement or omission shall not be
considered false or misleading to the extent such statement or omission is
corrected by an amendment to the IPO Registration Statement that is
delivered to Buyer prior to the IPO Closing Date.
3.2 Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Seller (i) as of the date hereof
and, (ii) if Seller consummates the purchase and sale transaction under this
Section 2 at the Closing, as of the IPO Closing Date, except to the extent Buyer
notifies Seller in writing prior to the Closing; as follows:
(a) Organization of the Buyer. Buyer is a corporation duly organized
and validly existing under the laws of the jurisdiction of its
incorporation.
(b) Authorization of Transaction; Enforceability. All consent,
approvals, authorizations and orders necessary for the execution, delivery
and performance by Buyer of this Agreement have been duly and lawfully
obtained, and Buyer has full right, power, authority and capacity to
execute, deliver and perform this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by Buyer
and constitutes a legal, valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms.
(c) IPO Registration Statement. Buyer has received and reviewed the
IPO Registration Statement and all amendments thereto timely delivered by
Seller to Buyer prior to
5
<PAGE>
the date hereof. Buyer will review prior to the IPO Closing Date all
amendments to the IPO Registration Statement that are timely delivered by
Seller to Buyer prior to the IPO Closing Date.
(d) Investment. Buyer is not acquiring the MIH Limited Shares with a
view to or for sale in connection with any distribution thereof within the
meaning of the Securities Act of 1933, as amended. Buyer is an "accredited
investor" as that term is defined in Rule 501 of the SEC under the Act (as
defined below) and has the necessary knowledge and experience to assess
the risks involved with an investment in the MIH Limited Shares. The Buyer
also understands that the MIH Limited Shares issued to the Buyer will be
"restricted securities" under Rule 144 of the Securities Act of 1933, that
the Buyer may not resell or otherwise transfer such MIH Limited Shares
without compliance with the Securities Act of 1933 and applicable state
securities laws and that it may have to bear the risk of this investment
for an indefinite period of time.
SECTION 4. Registration Rights.
The Seller covenants and agrees as follows:
4.1 Definitions.
For purposes of this Section 4:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Resale Registration Statement" means a registration
statement under the Act.
(c) The term "Holder" means Buyer or Thomson multimedia, S.A., upon
assignment from Buyer of all of its rights and obligations set forth in
this Agreement.
(d) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
(e) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or
ordering of effectiveness of the Resale Registration Statement.
(f) The term "Registrable Securities" means (i) the MIH Limited
Shares and (ii) any securities of the Seller issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which
is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of the MIH Limited Shares. Notwithstanding
the foregoing, "Registrable Securities" shall not include any securities
sold by a person to the public, either pursuant to a registration
statement or Rule 144, or sold by a person in a transaction in which its
rights under this Section 4 are not assigned.
(g) The term "SEC" shall mean the United States Securities and
Exchange Commission.
6
<PAGE>
4.2 Filing of Resale Registration Statement.
(a) The Seller shall prepare and file with the SEC the Resale
Registration Statement with respect to all of the Registrable Securities
on or prior to the 375 calendar day anniversary of the IPO Closing Date
(the "Required Filing Date"). Seller shall use its commercially reasonable
efforts to have the Resale Registration Statement to be declared effective
by the SEC on or prior to the fifteen (15) month anniversary of the IPO
Closing Date and keep the Resale Registration Statement effective until
such date as is the earlier of (a) the date on which all such Registrable
Securities have been sold or (b) the one (1) year anniversary of the date
upon which the SEC has declared the Resale Registration Statement
effective, provided that Rule 415, or any successor rule under the Act,
permits an offering on a continuous or delayed basis, and provided further
that applicable rules under the Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective
amendment which (i) includes any prospectus required by Section 10(a)(3)
of the Act or (ii) reflects facts or events representing a material or
fundamental change in the information set forth in the Resale Registration
Statement, the incorporation by reference of information required to be
included in (i) and (ii) above to be contained in periodic reports filed
pursuant to Section 13 or 15(d) of the 1934 Act in the Resale Registration
Statement. Following the effective date of the Resale Registration
Statement, the Seller shall be entitled, from time to time, to notify the
Holder to discontinue offers or sales of Registrable Securities pursuant
to the Resale Registration Statement for the period of time stated in such
notice, up to 30 days (such notice being a "Blackout Notice"), if there
has been any initiation of negotiations with respect to a material
transaction or a material circumstance which the Seller in good faith
believes would not be required to be disclosed at such time other than in
connection with a registration statement. Such notice shall be signed by
an authorized officer of the Seller and shall certify such determination.
The Seller may issue any number of Blackout Notices and such Blackout
Notices may be given consecutively, but the maximum number of days covered
by such notices shall not exceed 75 days in the aggregate and not more
than a maximum of 60 consecutive days. As a condition to use the Resale
Registration Statement, the Holder agrees that upon receipt of a Blackout
Notice the Holder shall discontinue offers and sales of Registrable
Securities pursuant to the Resale Registration Statement for such period
of time.
(b) The Seller shall prepare and file with the SEC such amendments
and supplements to the Resale Registration Statement and the prospectus
used in connection with the Resale Registration Statement as may be
necessary to comply with the applicable provisions of the Act with respect
to the disposition of all securities covered by the Resale Registration
Statement.
(c) The Seller shall furnish to the Holder such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as it may reasonably
request in order to facilitate the disposition of Registrable Securities
owned by it.
(d) The Seller shall use its commercially reasonable efforts to
register and qualify the securities covered by the Resale Registration
Statement under such other securities or "blue sky" laws of such
jurisdictions as shall be reasonably requested by the Holder; provided
that the Seller shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) The Seller shall notify the Holder of Registrable Securities
covered by the Resale Registration Statement at any time when a prospectus
relating thereto is required to be delivered under the Act of the
happening of any event as a result of which the prospectus included in the
Resale Registration Statement, as then in effect, includes an untrue
statement of a
7
<PAGE>
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
(f) The Seller shall use its commercially reasonable efforts to list
all such Registrable Securities registered pursuant hereunder on each
securities exchange on which the Class A Shares are then listed.
4.3 Payments by Seller.
If Seller has not filed the Resale Registration Statement on or prior to
the Required Filing Date, as the same may be extended as contemplated in Section
4.4(b), then the Seller will pay to the Holder as a penalty an aggregate amount
equal to the product of $1,000 multiplied by the number of days, if any, that
elapse between the Required Filing Date, as the same may be extended as
contemplated in Section 4.4(b), and the date on which the Resale Registration
Statement is actually filed with the SEC.
4.4 Furnish Information.
(a) It shall be a condition precedent to the obligations of the
Seller to take any action pursuant to Section 4.2 with respect to the
Registrable Securities of the Holder that such Holder shall timely furnish
to the Seller such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
securities as shall be reasonably and timely requested by the Seller to
effect the registration of such Holder's Registrable Securities.
(b) If, and only if, the Holder has not provided such information in
a timely manner and a subsequent delay occurs with respect to filing the
Resale Registration Statement by the Required Filing Date, the Required
Filing Date shall be extended solely by the number of days that pass until
such information is provided by Holder.
(c) The Holder shall provide any additional information reasonably
requested by the Seller that is required to comply with any requests by
the staff of the SEC in connection with their review of the Resale
Registration Statement.
4.5 Expenses of Registration.
All expenses incurred in connection with the registration, filings or
qualifications pursuant to this Section 4, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, and
fees and disbursements of counsel for the Seller shall be borne by the Seller.
The Buyer shall be responsible for all underwriter or brokerage discounts and
commissions and the fees and disbursements of counsel for the Buyer incurred in
connection with the registration of the Registrable Securities and for all other
expenses incurred by the Buyer in connection with any sale of the Registrable
Securities, including fees, discounts and commissions of any broker dealers.
4.6 Indemnification.
(a) To the extent permitted by law, the Seller will indemnify and
hold harmless each Holder, and each person, if any, who controls such
Holder within the meaning of the Act, against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under
the Act, the 1934 Act, any federal or state securities law or any rule or
regulation
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promulgated under the Act, or the 1934 Act or any federal or state
securities law in connection with the offering covered by the Resale
Registration Statement, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation") by Seller: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Resale Registration
Statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Seller of
the Act, the 1934 Act, any federal or state securities law or any rule or
regulation promulgated under the Act, or the 1934 Act or any federal or
state securities law in connection with the offering covered by the Resale
Registration Statement; and the Seller will pay to each such Holder or
controlling person, as incurred, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 4.6(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or
action if such settlement is effected without the consent of the Seller
(which consent shall not be unreasonably withheld), nor shall the Seller
be liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by any
Holder or controlling person.
(b) To the extent permitted by law, each Holder will indemnify and
hold harmless the Seller, each of its directors, each of its officers who
has signed the Resale Registration Statement, and each person, if any, who
controls the Seller within the meaning of the Act against any losses,
claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the 1934 Act, any
federal or state securities law or any rule or regulation promulgated
under the Act, or the 1934 Act or any federal or state securities law in
connection with the offering covered by the Resale Registration Statement,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation by such
Holder, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with
the Resale Registration Statement; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person
intended to be indemnified pursuant to this subsection 4.6(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this subsection 4.6(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent
shall not be unreasonably withheld); provided, that, in no event shall any
indemnity under this subsection 4.6(b) exceed the gross proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 4.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section
4.6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel selected by the indemnifying party; provided,
however, that an indemnified party (together with all other indemnified
parties which may be represented without conflict by one counsel) shall
have the right to retain one separate counsel selected by the indemnifying
party, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would
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be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 4.6 to the extent of such prejudice, but the omission to so
deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than
under this Section 4.6.
(d) If the indemnification provided for in this Section 4.6 is held
by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in lieu of indemnifying
such indemnified party hereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense
as well as any other relevant equitable considerations. The relative fault
of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
(e) The obligations of the Seller and Holders under this Section 4.6
shall survive the completion of any offering of Registrable Securities in
a registration statement under this Section 4.
4.7 Reports Under Securities Exchange Act of 1934.
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Act and any other rule or regulation of the SEC that may
at any time permit a Holder to sell securities of the Seller to the public
without registration, the Seller agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90)
days after the IPO Closing Date;
(b) file with the SEC in a timely manner all reports and other
documents required of the Seller under the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by
the Seller that it has complied with the reporting requirements of SEC
Rule 144 (at any time after ninety (90) days after the effective date of
the IPO Registration Statement), the Act and the 1934 Act (at any time
after it has become subject to such reporting requirements), (ii) a copy
of the most recent annual or semi-annual report of the Seller and such
other reports and documents so filed with the SEC by the Seller, and (iii)
such other information as may be reasonably requested in availing any
Holder of any rule or regulation of the SEC which permits the selling of
any such securities without registration or pursuant to such form.
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4.8 Limitations on Subsequent Registration Rights.
(a) From and after the date of this Agreement, the Seller shall not,
without the prior written consent of the Holders, enter into any agreement
with any holder or prospective holder of any securities of the Seller
which would allow such holder or prospective holder to include such
securities in the Resale Registration Statement filed under Section 4
hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration
only to the extent that the inclusion of his securities will not reduce
the amount of the Registrable Securities of the Holders which is included.
4.9 No Representation or Guaranty Regarding MIH Limited Shares.
Neither MIH, MIH Limited, nor any of their respective affiliates, makes
any representation or guaranty regarding the sale by Holder of any MIH Limited
Shares, including, without limitation, the ability to sell, the availability of
purchasers therefor and the timing or price thereof.
SECTION 5. Pre-Closing Covenants.
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing under Section 2.
5.1 General.
Prior to the IPO Closing Date, Seller shall finalize and, to the extent
necessary, file with the Company's Registry in the British Virgin Islands,
resolutions and authorizations of the directors of Seller regarding certain
changes to the share capital of Seller, which would include a resolution and
authorization necessary for the closing of the sale of the MIH Limited Shares to
Buyer under Section 2 of this Agreement..
5.2 Notice of Changes.
Seller shall provide Buyer with a copy of each amendment to the IPO
Registration Statement promptly following the filing of such amendment with the
SEC. Seller shall timely deliver to Buyer written notification (a "MAC Notice")
of any material adverse change in the business, assets, financial condition, or
operations of MIH Limited (and in any event it shall use its best efforts to
deliver the MAC Notice within four (4) business days of the occurrence of the
material adverse change). Seller shall provide in the MAC Notice a good faith
estimate of the date of the Final Notice Date. In the event of a postponement of
the IPO Conversion Date under Section 2(a) of the Note, Seller shall provide
Holder with written notice of the new date for printing of the Red Herring
promptly following Seller's good faith determination of such date.
5.3 Analyst Reports.
Seller shall use commercially reasonable efforts to provide a copy of the
analyst reports related to the IPO Registration Statement to Buyer promptly
following their publication. TCE shall hold such analyst reports in confidence
and shall not use or divulge or disclose any of the information contained
therein (except after and to the extent such information is made available to
the public) to any person or entity, except such employees, agents, advisors and
representatives of TCE who need to know such information for purposes of
assessing whether TCE should exercise the IPO Conversion Option.
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5.4 Lockup Agreement.
In the event any of Seller's significant shareholders signs only lockup
agreements (the "Alternative Lockup Agreements") that contain substantially
different terms than the Lockup Agreement, Seller agrees that Buyer may, at its
option, sign such Alternative Lockup Agreements in lieu of the Lockup Agreement.
Seller shall notify Buyer promptly of any Alternative Lockup Agreements.
SECTION 6. Post-Closing Covenant.
In case at any time after the Closing any further action is necessary to
carry out the purchase and sale transaction under Section 2, each of the Parties
will take such further action (including the execution and delivery of such
further instruments and documents) as any other Party reasonably may request in
writing, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8 below).
SECTION 7. Mindport Subscription Option.
7.1 Subscription Option.
If (i) Buyer purchases the MIH Limited Shares hereunder pursuant to its
exercise of the IPO Conversion Option in accordance herewith, and (ii) Mindport
publicly files a registration statement with the SEC for an initial public
offering of its equity securities (the "Mindport Securities"), on a firmly
underwritten basis (the "Mindport IPO") on or before the second anniversary of
the IPO Closing Date, then Buyer shall have the right, at its option, to
purchase a portion of the Mindport Securities (the "Mindport Shares") offered in
the Mindport IPO and registered under the registration statement in connection
therewith, in accordance with this Section 7 (the "Mindport Subscription
Option"). Buyer hereby acknowledges and agrees that neither MIH, MIH Limited,
nor any of their affiliates (a) has any obligation to conduct a public offering
with respect to Mindport or any other entity, or (b) makes any representation or
guaranty with respect to (i) whether any Mindport Securities will become
publicly traded, (ii) whether Mindport will ever initiate a public offering of
any shares of its capital stock, or (iii) whether the securities of any other
entity within the MIH group or the Mindport group (including, without
limitation, any affiliate of MIH, MIH Limited or Mindport) will become publicly
traded.
7.2 Option Procedure and Exercise.
Seller shall cause Mindport to deliver written notice (the "Subscription
Notice") to Buyer of its intention to conduct a Mindport IPO, as soon after the
time Mindport can offer its shares to Buyer in compliance with United States
securities laws as is practicable, which notice shall be accompanied by a copy
of the registration statement most recently filed by Mindport with the SEC with
respect to the Mindport IPO. Buyer shall have the option to purchase the
Mindport Shares by delivery of written notice to Seller and Mindport (the
"Exercise Notice") of its intention to exercise its Mindport Subscription Option
on or before the close of business on the date that is ten (10) days after the
receipt by Buyer of the Subscription Notice. Seller shall provide Buyer with
appropriate instructions for providing notice to Mindport. In the event Buyer
exercises its Mindport Subscription Option in accordance with this Section 7.2,
and subject to the limitation in the following sentence, Buyer shall be entitled
to purchase on the closing date of the Mindport IPO ("Mindport Closing Date")
the number of Mindport Shares to be offered by Mindport in the Mindport IPO
equal to the quotient of (i) the aggregate Fair Market Value (as defined below)
of the MIH Limited Shares then owned by Buyer as of the date Buyer delivers the
Exercise Notice,
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divided by (ii) the initial offering price per share to the public for the
Mindport Securities to be sold in the Mindport IPO (without giving effect to any
underwriting discounts or commissions) (the "Per Share Price"). Notwithstanding
the above, in no event shall Buyer have the right to purchase under the Mindport
Subscription Option more than fifteen percent (15%) of the equity securities of
Mindport on a fully diluted basis, taking into account and including for
purposes of calculating this percentage, all securities to be issued in the
Mindport IPO. The Fair Market Value of the MIH Limited Shares, on a per share
basis, shall be the average closing price per share of the Class A Ordinary
Shares of MIH Limited listed on the Nasdaq National Market for the five (5)
business days immediately prior to the date upon which the Exercise Notice is
given, as reported in the Wall Street Journal or similar generally recognized
reporter of such prices. Buyer shall include its calculation of the Fair Market
Value in its Exercise Notice.
7.3 Issuance and Purchase of Mindport Shares.
If Buyer exercises its Mindport Subscription Option in accordance with
this Section 7, then, on the Mindport Closing Date, subject to Section 7.4,
Seller shall cause Mindport to issue and sell to Buyer, that number of Mindport
Shares determined in accordance with Section 7.2 above, and Buyer shall purchase
such Mindport Shares in exchange for the payment, in cash, of an amount equal to
the aggregate number of Mindport Shares being sold to Buyer multiplied by the
Per Share Price. The purchase of the Mindport Shares by Buyer under the Mindport
Subscription Option shall occur as of the Mindport Closing Date. On the Mindport
Closing Date, Buyer shall represent that it is not acquiring the MIH Limited
Shares with a view to or for sale in connection with any distribution thereof
within the meaning of the Act, and that Buyer is an "accredited investor" as
that term is defined in Rule 501 of the SEC under the Act.
7.4 Lockup Agreement.
The sale of Mindport Shares to Buyer shall be subject to the condition
precedent that Buyer executes reasonable and customary lockup agreements in
conjunction with its exercise of the Mindport Subscription Option.
7.5 Appointment of Director.
If Buyer purchases the Mindport Shares pursuant to the Mindport
Subscription Option, and the Mindport Shares received by Buyer thereunder are in
excess of twelve and one-half percent (12.5%) of the equity securities of
Mindport, determined on a fully diluted basis (taking into account the Mindport
Shares issuable to Buyer in connection with the exercise of the Mindport
Subscription Option), then MIH Limited shall cause the election to the Mindport
board of directors (the "Mindport Board") of an individual designated by Buyer
who is acceptable to MIH Limited in its sole and good faith discretion. Such
director shall be excluded from access to any material or meeting or portion
thereof if the Mindport Board reasonably believes such director's presence would
result in a potential conflict of interest regarding the subject matter to be
discussed, including based on competitive concerns. Upon the date that Buyer
ceases to own at least twelve and one-half percent (12.5%) of the equity
securities of Mindport, determined on a fully diluted basis, whether due to the
sale of securities by Buyer, Mindport or otherwise, Buyer's right to designate a
director to the Mindport Board shall terminate and the Buyer director then
serving on the Mindport Board may be removed by action of a majority of the
remaining members of the Mindport Board or by the stockholders of Mindport.
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SECTION 8. Remedies for Breaches.
8.1 Survival of Representations and Warranties.
All representations and warranties contained in Section 3 of this
Agreement shall survive the Closing and the consummation of the transactions
contemplated hereby (and any examination or investigation by or on behalf of any
party hereto) until the second anniversary of the date of this Agreement,
subject to the following sentence. No action may be commenced by either Party
with respect to any inaccuracy of or breach of any representation or warranty in
Section 3 of this Agreement, unless written notice, setting forth in reasonable
detail the claimed breach thereof, shall be given pursuant to Section 11.7 to
the other Party on or before the second anniversary of the date of this
Agreement; provided, however, that if such notice is given pursuant to Section
11.7 prior to such second anniversary, then the termination of the survival of
all representations and warranties on such first anniversary shall not effect
any liability arising prior to such termination which is the subject of such
notice.
8.2 Seller Indemnification.
Seller hereby indemnifies, covenants and agrees to defend and hold
harmless Buyer and its officers, directors, employees, agents and
representatives (collectively, "Representatives") from and against any and all
losses, liabilities, obligations, costs, expenses, damages or judgments of any
kind or nature whatsoever (including reasonable attorneys', accountants' and
experts' fees, disbursements of counsel, and other costs and expenses incurred
pursuing indemnification claims under this Section 8 hereof) (collectively,
"Damages") arising out of or resulting from: (a) any breach of any
representation or warranty made by Seller in Section 3.1 of this Agreement, or
(b) the failure of Seller to perform or observe any covenant, agreement or
provision to be performed or observed by Seller pursuant to Section 2 of this
Agreement.
8.3 Buyer Indemnification.
Buyer hereby indemnifies, covenants and agrees to defend and hold harmless
Seller and its Representatives from and against any and all Damages arising out
of or resulting from: (a) any breach of any representation or warranty made by
Buyer in Section 3.2 of this Agreement, or (b) the failure of Buyer to perform
or observe any covenant, agreement or provision to be performed or observed by
Buyer pursuant to Section 2 of this Agreement.
8.4 Indemnification Procedure.
Each party entitled to be indemnified pursuant to this Section 8 (each, an
"Indemnified Party") shall notify the party against whom indemnification is
sought (the "Indemnifying Party") in writing of any action against such
Indemnified Party in respect of which the Indemnifying Party is or may be
obligated to provide indemnification under this Section 8, promptly after the
receipt of notice of the commencement thereof. The omission of any Indemnified
Party so to notify the Indemnifying Party of any such action shall not relieve
the Indemnifying Party from any liability which the Indemnifying Party may have
to such Indemnified Party, except to the extent such failure to provide notice
is materially prejudicial to the ability of the Indemnifying Party to defend
such action. In case any such action shall be brought against any Indemnified
Party and it shall notify the Indemnifying Party of the commencement thereof,
the Indemnifying Party shall be entitled to participate therein and, to the
extent that the Indemnifying Party may wish, to assume the defense thereof, with
counsel reasonably satisfactory to such
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Indemnified Party, and after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof, the
Indemnifying Party will not be liable to such Indemnified Party under this
Section 8 for any legal or other expense subsequently incurred by such
Indemnified Party in connection with the defense thereof nor for any settlement
thereof entered into without the consent of the Indemnifying Party; provided,
however, that (i) if the Indemnifying Party shall elect not to assume the
defense of such claim or action or (ii) if the Indemnified Party reasonably
determines (x) that there may be a conflict between the positions of the
Indemnifying Party and of the Indemnified Party in defending such claim or
action or (y) that there may be legal defenses available to such Indemnified
Party different from or in addition to those available to the Indemnifying
Party, then separate counsel for the Indemnified Party shall be entitled to
participate in and conduct the defense, in the case of (i) and (ii)(x), or such
different defenses, in the case of (ii)(y), and the Indemnifying Party shall be
liable for any reasonable legal or other expenses incurred by the Indemnified
Party in connection with the defense.
SECTION 9. Certain Taxes.
All transfer, documentary, sales, use, stamp, registration and other
similar Taxes and fees (including any penalties and interest) incurred in
connection with the purchase and sale transaction in Section 2 or Section 7 of
this Agreement (including any New York State Gains Tax, New York City Transfer
Tax and any similar tax imposed in other states, subdivisions or foreign
jurisdictions), shall be paid by Buyer when due, and Buyer will, at its own
expense, file all necessary Tax Returns and other documentation with respect to
all such transfer, documentary, sales, use, stamp, registration and other Taxes
and fees, and, if required by applicable law, Seller will, and will cause its
affiliates to, join in the execution of any such Tax Returns and other
documentation at Buyer's expense.
SECTION 10. Termination.
10.1 Termination of Agreement.
Certain of the Parties may terminate this Agreement as provided below:
(a) the Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing in the event the Seller has
breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Buyer has notified the Seller
of the breach, and the breach has continued without cure for a period of
30 days after the notice of breach; provided, however, that Buyer may only
terminate this Agreement as a result of or in connection with information
contained in a MAC Notice if Seller delivers a MAC Notice to Buyer not
less than one business day prior to the date (the "Pricing Date") on which
Seller establishes the initial offering price per share to the public for
the Class A Ordinary Shares of MIH Limited in the MIH Limited IPO, and
Buyer delivers to Seller written notice of its intent to terminate this
Agreement on or before the Pricing Date; and
(c) the Seller may terminate this Agreement by giving written notice
to the Buyer at any time prior to the Closing in the event the Buyer has
breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Seller has notified the Buyer
of the breach, and the breach has continued without cure for a period of
30 days after the notice of breach.
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10.2 Effect of Termination.
If any Party terminates this Agreement pursuant to Section 10.1 above, all
rights and obligations of the Parties hereunder shall terminate without any
liability of any Party to any other Party, except for any liability of any Party
then in breach; provided, however that if Buyer terminates this Agreement as a
result of or in connection with information contained in a MAC Notice, Seller
shall have no liability to Buyer for breach of any representation, warranty or
covenant hereunder, and Seller shall pay to Buyer the principal amount of and
interest under the Note in accordance with its terms.
SECTION 11. Miscellaneous.
11.1 Press Releases and Public Announcements.
No Party nor any of their respective affiliates shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use
reasonable efforts to advise the other Parties prior to making the disclosure).
11.2 No Third-Party Beneficiaries.
This Agreement shall not confer any rights or remedies upon any Person
other than the Parties and their respective successors and permitted assigns.
11.3 Entire Agreement.
This Agreement (including the Note and other documents referred to herein)
constitutes the entire agreement among the Parties and supersedes any prior
understandings, agreements, or representations by or among the Parties, written
or oral, including the Letter Agreement by and among Myriad International
Holdings BV, Thomson multimedia S.A., TCE and OpenTV, dated as of December 18,
1998, as amended by the Conversion Option Term Sheet, dated as of March 16,
1999, to the extent they related in any way to the subject matter hereof.
11.4 Succession and Assignment.
This Agreement shall be binding upon and inure to the benefit of the
Parties named herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other Party;
provided, however, that the Buyer may assign all of its rights and interests
hereunder, in whole and not in part, to Thomson multimedia S.A., a societe
anonyme incorporated under the laws of France.
11.5 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together will constitute one and
the same instrument.
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11.6 Headings.
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
11.7 Notices.
All notices, requests, demands, claims, and other communications hereunder
will be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly given if (and then two business days after) it is
sent by registered or certified mail, return receipt requested, postage prepaid,
and addressed to the intended recipient as set forth below:
If to the Seller: Copy to:
MIH Limited Paul, Hastings, Janofsky & Walker L.L.P.
Jupiterstraat 13-15 Twenty-Third Floor
2132 HC Hoofddorp 555 South Flower Street
The Netherlands Los Angeles, California 90071-2371
Attention: Mr. Allan Rosenzweig Attention: Siobhan McBreen Burke, Esq.
Telecopy No: 31-23-568-6880 Telecopy No.: (213) 627-0705
If to the Buyer: Copy to:
Thomson Consumer Electronics, Inc. Morrison & Foerster LLP
10330 N. Meridian Street 425 Market Street
Post Office Box 1976 San Francisco, California 94105-2482
Indianapolis, Indiana 46206-1976 Attention: Robert Townsend, Esq.
Attention: Jack Kielty, Esq. Telecopy No.: (415) 268-7522
Telecopy No.: (317) 587-6702
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
11.8 Governing Law.
(a) This Agreement shall be construed in accordance with and
governed by the internal laws of the State of California (as permitted by
Section 1646.5 of the California Civil Code, or any similar successor
provision) without giving effect to any choice of law rule that would
cause the application of the laws of any jurisdiction other the internal
laws of the State of California to the rights and duties of Buyer and
Seller.
(b) Any legal action or proceeding with respect to this Agreement
may be brought in the courts of the State of California or of the United
States for the Northern District of California, and each Party hereby
consents, for itself and in respect of its property, to the non-exclusive
jurisdiction of those courts. Each Party irrevocably waives any objection,
including any
17
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objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any
action or proceeding in such jurisdiction in respect of this Agreement.
Each Party further consents to process being served in any such action or
proceeding either by mailing a copy thereof to such party in accordance
with Section 11.7, or by serving a copy thereof upon such party to the
full extent permitted by law. Each Party agrees that such service shall be
deemed in every respect effective service of process upon the other Party
in any such action or proceeding and shall be taken and held to be valid
personal service upon and personal delivery to the other Party to the full
extent permitted by law.
11.9 Waiver of Jury Trial.
EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION OR PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY A PARTY AGAINST THE OTHER PARTY, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH PARTY HERETO FURTHER AGREES THAT ITS
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
11.10 Amendments and Waivers.
No amendment of any provision of this Agreement shall be valid unless the
same shall be in writing and signed by the Buyer and the Seller. No waiver by
any Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
11.11 Severability.
Any term or provision of this Agreement that is invalid or unenforceable
in any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.
11.12 Expenses.
Each of the Parties will bear its own costs and expenses (including legal
fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby, unless expressly provided otherwise herein.
11.13 Construction.
Any reference to any federal, state, local, or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean including without limitation.
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11.14 Incorporation of Exhibits, Annexes, and Schedules.
The Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
11.15 Binding Agreement.
The Parties hereby acknowledge and agree that, upon execution of this
Agreement by each Party, this Agreement shall constitute a legally binding
agreement among the Parties, and the Parties acknowledge and agree that good and
valuable consideration has been given for such purpose.
*****
19
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
THOMSON CONSUMER
ELECTRONICS, INC.
By: /s/ JAMES E. MEYER
------------------------------------
Title: COO & Exec. V.P.
------------------------------------
MIH LIMITED
By: /s/ ALLAN M. ROSENZWEIG
------------------------------------
Title: Director
------------------------------------
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Disclosure Schedule to Stock Purchase Option Agreement
Exceptions to the Seller's Representations and Warranties
Concerning the Transaction
Seller is currently in the process of finalizing and, to the extent necessary,
filing with the Company's Registry in the British Virgin Islands, resolutions
and authorizations of the directors of Seller regarding certain changes to the
share capital of Seller, which would include a resolution and authorization
necessary for the closing of the sale of the MIH Limited Shares to Buyer under
Section 2 of this Agreement.
i
<PAGE>
Page
Exhibit A
Lockup Agreement
ii
<PAGE>
March , 1999
MERRIL LYNCH
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
United States of America
MERRILL LYNCH INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
MEESPIERSON N.V.
c/o Merrill Lynch International
25 Ropemaker Place
London EC2Y 9LY
United Kingdom
Re: Agreement not to sell or otherwise
dispose of securities of MIH Limited
------------------------------------
Ladies and Gentlemen:
The undersigned understands that MIH Limited (the "Company") proposes to
file a registration statement on Form F-1 (the "Registration Statement") with
the United States Securities and Exchange Commission in connection with the
initial public offering (the "Offering") of ordinary shares ("Shars") of the
Company. The undersigned further understands that the Company proposes to enter
into one or more purchase agreements (collectively, the "Purchase Agreement")
with you as representative of the underwriters of the Offering (the
"Underwriters").
In recognition of the benefit that the Offering will confer upon the
undersigned as a securityholder of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Company and the Underwriters to enter
into the Purchase Agreement and to proceed with the Offering, the undersigned
hereby agrees, that from the date hereof until the first anniversary of the date
of the Purchase Agreement, the undersigned will not, without the prior written
consent of Merrill Lynch International, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or other-
<PAGE>
-2-
wise dispose of or transfer (collectively, a "Covered Sale") any Shares (other
than any Shares registered in the Offering) or any securities convertible into
or exchangeable or exercisable for any Shares, whether now owned or hereafter
acquired by the undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition (collectively, the "Locked Shares")
or request the filing of any registration statement under the Securities Act of
1933, as amended (the "Securities Act"), with respect to any of the foregoing
(it being understood that such a request shall not be deemed to have been made
pursuant to any registration rights agreement until a request is made thereunder
and the mere entering into of any registration rights agreement shall not be
deemed such a request) or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of Shares, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of the Shares
or other securities, in cash or otherwise.
Notwithstanding the foregoing, (a) the undersigned may at any time make a
Covered Sale of any Locked Shares to its parent company Thomson multimedia S.A.,
provided that Thomson multimedia S.A. shall have agreed in writing to be bound
by the terms of this agreement as if a party hereto, and (b) on or after the
date which is 181 days after the date of the Purchase Agreement, the undersigned
may make a Covered Sale of any Locked Shares, pursuant to a private sale exempt
from registration under the Securities Act and without engaging in any marketing
activities, other than to any broker dealer, bank, investment fund, investment
company, insurance company, trust fund, employee benefit plan or similar
financial institution; provided, however, that (x) the aggregate number of
transferees (including subsequent transferees) who hold Locked Shares prior to
the first anniversary of the date of the Purchase Agreement shall not exceed
five and (y) each such transferee (including any subsequent transferee) must
agree in writing to be bound by the terms of this Agreement as if a party
hereto.
Sincerely,
Name of Securityholder:
- -----------------------
(Print)
Signature:
- -----------------------
Name:
Title:
(if not natural person)
EXHIBIT 21
Certain MIH Limited Subsidiary Companies
<TABLE>
<CAPTION>
Place of
Name of Subsidiary Incorporation
------------------ -------------
<S> <C>
Devtech Limited British Virgin Islands
Digco BV Netherlands
Intervision (Services) BV Netherlands
Intervision Holdings (Services) BV Netherlands
Irdeto BV Netherlands
Irdeto Consultants BV Netherlands
Irdeto Consultants (Pty) Limited (Australia) Australia
Irdeto Consultants Inc (USA) California
Irdeto NV (Netherlands Antilles) Netherlands Antilles
MIH China Ltd Hong Kong
MIH Finance SA (Lux) Luxembourg
MIH Holdings SA (Lux) Luxembourg
MIH Intelprop Holdings Ltd Mauritius
MIH Investments SA (Lux) Luxembourg
MultiChoice Hellas SA Myriad Development BV
MultiChoice Cyprus Limited Cyprus
MultiChoice Middle East Holdings Inc British Virgin Islands
MultiChoice Middle East SMS Co Ltd (Mauritius) Mauritius
MultiChoice Middle East Inc British Virgin Islands
Myriad Development BV Netherlands
Myriad Holdings Africa BV Netherlands
Myriad International Holdings Asia BV Netherlands
Myriad International Holdings BV Netherlands
Myriad International Programming Services BV Netherlands
Myriad Services Limited British Virgin Islands
International Broadcasting Corporation Public
Company Limited Thailand
NetHold Hellas SA Greece
NetMed BV Netherlands
NetHold Mediterranean SA Greece
Orbicom (Pty) Limited South Africa
Paltech Limited British Virgin Islands
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Place of
Name of Subsidiary Incorporation
------------------ -------------
<S> <C>
Powerchip British Virgin Islands
SWL Lisenz Verwaltungs GmbH Austria
Synergistic Network Development SA Greece
Villiers Securities Ltd Mauritius
TV/Com International Inc. California
Open TV, Inc. California
MultiChoice Africa(Pty) Limited South Africa
IGN SportsBook (Pty) Limited South Africa
MultiChoice Supplies(Pty) Limited South Africa
MultiChoice Africa Ltd (BVI) British Virgin Islands
Lesotho Broadcasting (Pty) Limited Lesotho
MultiChoice Lesotho (Pty) Limited Lesotho
MultiChoice Transkei (Pty) Limited South Africa
MultiChoice Rentals (Pty) Limited South Africa
Multimedia Highway (Pty) Limited South Africa
MultiChoice Botswana (Pty) Limited Botswana
MultiChoice Namibia (Pty) Limited Namibia
MultiChoice Ghana Limited Ghana
Details Nigeria Limited Nigeria
MultiChoice Nigeria Limited Nigeria
MultiChoice Uganda Limited Uganda
MultiChoice Tanzania Limited Tanzania
MultiChoice Kenya Holdings Ltd BVI British Virgin Islands
MultiChoice Zambia Holdings Ltd BVI British Virgin Islands
MultiChoice Kenya Limited Kenya
MultiChoice Zambia Limited Zambia
MultiChoice Egypt Limited Egypt
Cable Network Egypt Ltd Egypt
</TABLE>
