<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 11, 1998
-------------------------------
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Bermuda 0-24796 Not Applicable
- ---------------------------- ----------------------- ----------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
Clarendon House, Church Street, Hamilton HM CX Bermuda
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (441) 296-1431
----------------------------
Not Applicable
- -------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Disposition of Assets.
On December 11, 1998, Central European Media Enterprises Ltd. ("the Company")
sold (the "TVN Sale") its interests in the TVN television operations in Poland
to International Trading and Investments Holding S.A. ("ITI"), a company
publicly traded on the Luxembourg Stock Exchange and the Company's partner in
the TVN operations. The TVN Sale was effected pursuant to a Sale and Purchase
Agreement dated December 10, 1998. Prior to the TVN Sale, the Company and ITI
were partners in the TVN television operations such that certain indirect
wholly owned subsidiaries of the Company owned 33% of the outstanding shares of
TVN Sp. z o.o. ("TVN") and 50% of the outstanding shares of Federacja
Sp. z o.o. ("Federation"). In addition, certain indirect wholly owned
subsidiaries of the Company owned 49% of the outstanding shares of Neovision
Holding B.V. ("Neovision") and 10% of the outstanding shares of ITI Media.
Details of the TVN Sale are as follows: the Company caused its subsidiaries to
transfer to ITI and certain of its affiliates all of their above listed
interests in TVN, Federation, Neovision and ITI Media together with certain
outstanding receivables in exchange for $10 million in cash, a note (the "ITI
Note") in a principal amount of $40 million bearing interest at a rate of 5% per
annum and generally maturing on December 10, 2001 that is convertible into
equity securities of ITI and exchangeable into similar debt securities of ITI,
the release of a $10 million bank guarantee and the assumption by ITI of various
obligations of the Company and its subsidiaries in respect of programming and
satellites relating to the TVN operations. Pursuant to the terms of the Sale and
Purchase Agreement and the ITI Note, between September 10, 2001 and the maturity
date of the ITI Note, the Company will be able to convert, at its option, all or
any portion of the principal amount of the ITI Note plus all interest accrued
and unpaid thereon (the "Conversion Amount") into an amount of equity securities
of ITI (the "ITI Ordinary Shares") equal to the Conversion Amount divided by 80%
of the average of the daily closing price of one share of the publicly traded
ITI Ordinary Shares during the twelve month period immediately preceding the
time that the Company gives notice of its intention to convert on whichever of
the Warsaw Stock Exchange or the Luxembourg Stock Exchange has the largest
average daily trading volume. As a result of the TVN Sale, the Company will
record a write-down of approximately $25 million in its fourth quarter financial
results. Ronald S. Lauder, the non-executive Chairman of the Board of Directors
of the Company, owns a non-controlling indirect minority interest in ITI.
Item 7. Financial Statements and Exhibits.
The following are the pro forma financial statements of the Company taking into
account the TVN Sale:
Pro Forma Consolidated Balance Sheet as of September 30, 1998. 3
Pro Forma Consolidated Statements of Operations for the Year Ended
December 31, 1997. 5
Pro Forma Consolidated Statements of Operations for the Nine Months
Ended September 30, 1998. 6
Notes to Pro Forma Financial Statements (unaudited). 7
2
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CENTRAL EUROPEAN MEDIA ENTERPRISES LTD
PRO FORMA - Consolidated Balance Sheet as at
September 30, 1998
<TABLE>
<CAPTION>
($000s)
(unaudited)
ACTUAL PRO-FORMA
CME Polish SUBTOTAL Adjustments September 30,
September 30, 1998 Entities 1998
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 31,240 (405) 30,835 10,000 a) 40,835
Restricted cash 274 - 274 - 274
Accounts receivable, net 34,023 (7,551) 26,472 - 26,472
Program rights costs 40,662 (10,255) 30,407 - 30,407
Advances to affiliates 15,403 (3,711) 11,692 (3,198) c) 8,494
Other short-term assets 19,435 (3,754) 15,681 - 15,681
Total current assets 141,037 (25,676) 115,361 6,802 122,163
Investments in unconsolidated affiliates 42,967 - 42,967 - 42,967
Federacja - - - - -
TVN 2,395 (2,395) - - -
Neovision 7,447 (7,447) - - -
Investments 13,008 - 13,008 - 13,008
ITI 10,000 (10,000) - - -
Loans to affiliates 33,939 - 33,939 (20,930) c) 13,009
Note receivable - - 19,836 b) 19,836
Property, plant and equipment, net 70,547 (10,043) 60,504 - 60,504
Program rights costs 21,063 (1,139) 19,924 - 19,924
Licence costs and other intangibles, net 6,274 - 6,274 - 6,274
Goodwill and organization costs, net 53,383 - 53,383 - 53,383
Deferred income taxes 1,653 - 1,653 - 1,653
Other assets 28,669 (21,148) 7,521 - 7,521
Total assets 432,382 (77,848) 354,534 5,708 360,242
</TABLE>
3
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<TABLE>
<S> <C> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities 71,065 (15,340) 55,725 4,000 d) 59,725
Duties and other taxes payable 13,283 (2,874) 10,409 - 10,409
Income taxes payable 608 - 608 - 608
Current portion of credit facilities and 9,672 - 9,672 - 9,672
obligations under capital leases
Dividends payable - - - - -
Investments payable 9,133 - 9,133 - 9,133
Advances from affiliates 34,676 (47,678) (13,002) 14,809 c) 1,807
Total current liabilities 138,437 (65,892) 72,545 18.809 91,354
Deferred income taxes 1,780 - 1,780 - 1,780
Long-term portion of credit facilities and 25,785 (12,647) 13,138 12,647 c) 25,785
obligations under capital leases
Investments payable 2,563 - 2,563 - 2,563
$100,000,000 9 3/8 % Senior Notes 99,870 - 99,870 - 99,870
DM 140,000,000 8 1/8 % Senior Notes 83,611 - 83,611 - 83,611
Other Liabilities 762 - 762 - 762
Minority interest in consolidated - - - - -
subsidiaries
Commitments and contingencies -
SHAREHOLDERS' EQUITY:
Class A Common Stock, $0.01 par value: authorized:
100,000,000 shares at September 30, 1998 and
100,000,000 shares at December 31, 1997
issued and outstanding: 181 - 181 - 181
18,070,789 at September 30, 1998
and 16,934,894 at December 31, 1997;
Class B Common Stock, $0.01 par value: authorized:
15,000,000 shares at September 30, 1998
and December 31, 1997 ;
issued and outstanding: 6,062,329 at 61 - 61 - 61
September 30, 1998 and 7,064,475 at
December 31, 1997
Additional paid-in capital 333,895 - 333,895 - 333,895
Accumulated deficit (251,793) 747 e) (251,046) (25,748) e) (276,794)
Cumulative currency translation (2,770) (56) (2,826) - (2,826)
adjustment
Total shareholders' equity 79,574 691 80,265 (25,748) 54,517
Total liabilities and shareholders' equity 432,382 (77,848) 354,534 5,708 360,242
</TABLE>
4
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CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
PRO FORMA - Consolidated Statements of Operations
($000s, except per share data)
(unaudited)
<TABLE>
<CAPTION>
ACTUAL PRO-FORMA
Year ended Operations of Year ended
December 31, Polish December 31,
1997 Entities 1997
(unaudited)
<S> <C> <C> <C>
GROSS REVENUES: 199,502 (5,129) 194,373
Discounts and agency commissions (44,108) - (44,108)
-----------------------------------------------------------------
Net revenues 155,394 (5,129) 150,265
STATION EXPENSES:
Other operating costs and expenses 80,171 (19,474) 60,697
Amortization of programming rights 32,464 (9,694) 22,770
Depreciation of station fixed assets and 15,654 (470) 15,184
other intangibles
-----------------------------------------------------------------
Total station operating costs and expenses 128,289 (29,638) 98,651
Selling, general and administrative expenses 27,372 (4,419) 22,953
CORPORATE EXPENSES:
Corporate operating costs and development 25,467 - 25,467
expenses
Amortization of goodwill and allowance for 14,845 - 14,845
development costs
Capital registration tax - - -
-----------------------------------------------------------------
40,312 - 40,312
Operating (loss) / profit (40,579) 28,928 (11,651)
Equity in loss of unconsolidated affiliates (12,394) 2,054 (10,340)
Loss on impairment of investments in unconsolidated (20,707) - (20,707)
affiliates
Interest and other income 10,142 (29) 10,113
Interest expense (16,128) 6 (16,122)
Foreign currency exchange (loss) / gain (6,818) 961 (5,857)
-----------------------------------------------------------------
Net loss / (income) before provision for income (86,484) 31,920 (54,564)
taxes
Provision for income taxes (14,608) - (14,608)
-----------------------------------------------------------------
Net Loss before minority interest (101,092) 31,920 (69,172)
Minority interest in loss / (income) of 16,000 (14,934) 1,066
consolidated subsidiaries
-----------------------------------------------------------------
Net loss (85,092) 16,986 (68,106)
=================================================================
PER SHARE DATA Net loss per share
Basic (3.56) (2.85)
====== ======
Diluted (3.56) (2.85)
====== ======
Common shares used in computing per share amounts:
Basic 23,911 23,911
======= ======
Diluted 23,911 23,911
======= ======
</TABLE>
5
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CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
PRO FORMA - Consolidated Statements of Operations
($000s, except per share data)
(unaudited)
<TABLE>
<CAPTION>
ACTUAL PRO-FORMA
Nine months Operations of Nine months
ended Polish ended
September 30, 1998 Entities September 30, 1998
(unaudited) (unaudited)
<S> <C> <C> <C>
GROSS REVENUES: 175,283 (20,837) 154,446
Discounts and agency commissions (37,923) 2,272 (35,651)
Net revenues 137,360 (18,565) 118,795
STATION EXPENSES:
Other operating costs and expenses 76,031 (22,926) 53,105
Amortization of programming rights 57,809 (18,719) 39,090
Depreciation of station fixed assets and 14,658 (2,549) 12,109
other intangibles
Total station operating costs and expenses 148,498 (44,194) 104,304
Selling, general and administrative 25,556 (4,746) 20,810
expenses
CORPORATE EXPENSES:
Corporate operating costs and development 18,403 (464) 17,939
expenses
Amortization of goodwill and allowance 13,318 - 13,318
for development costs
Restructuring charge 2,552 - 2,552
34,273 (464) 33,809
Operating (loss) / profit (70,967) 30,839 (40,128)
Equity in loss of unconsolidated affiliates (3,498) 2,914 (584)
Loss on impairment of investments in - - -
unconsolidated affiliates
Interest and other income 2,531 551 3,082
Interest expense (16,002) 54 (15,948)
-------- --- --------
Interest and other income (13,471) 605 (12,866)
Foreign currency exchange (loss) / gain (8,953) 609 (8,344)
Net (loss) / income before provision for income (96,889) 34,967 (61,922)
taxes
Provision for income taxes (8,426) - (8,426)
Net Loss before minority interest (105,315) 34,967 (70,348)
Minority interest in loss / (income) of 16,618 (16,026) 592
consolidated subsidiaries
Net loss $ (88,697) 18,941 (69,756)
PER SHARE DATA Net loss per share (Note 2)
Basic $ (3.69) $ (2.90)
========= =========
Diluted $ (3.69) $ (2.90)
========= =========
Common shares used in computing per share amounts:
Basic 24,063 24,063
====== ======
Diluted 24,063 24,063
====== ======
</TABLE>
6
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Notes to Pro Forma Financial Statements (Unaudited)
1. Basis of Presentation
Reference is made to Item 2. of this filing for a description of the TVN Sale
(as defined in Item 2) for which the following pro forma financial statements
are provided.
The unaudited pro forma balance sheet eliminates the assets and liabilities of
the Polish operations as of September 30, 1998 and further includes the TVN
Sale transaction, assuming the disposition had been completed as of the
respective balance sheet date. The pro forma statements of operations are the
statement of operations of Central European Media Enterprises Ltd. for the year
ended December 31, 1997 and for the nine months ended September 30, 1998,
assuming that the TVN Sale occurred at the beginning of the periods presented.
The historical balance sheet used in the preparation of the pro forma financial
statements has been derived from Central European Media Enterprises Ltd's
unaudited financial statements as of September 30, 1998. The historical
statement of operations for the year ended December 31, 1997 has been derived
from the audited statements of operations for such period. The historical
statement of operations for the nine months ended September 30, 1998 has been
derived from the Company's unaudited financial statements for such period.
2. Unaudited Pro Forma Adjustments
A description of the adjustments included in the auaudited pro forma financial
statements are as follows:
a) Reflects the receipt of $10 million in cash from the acquiror of the
Company's interest in Poland
b) Reflects the present value of the note received from the acquiror of the
Company's interest in Poland, which bears a below-fair-market-value
interest rate
c) Reflects the write-off of amounts due to and from the Company from
and to the acquiror of the Company's interests in Poland
d) Reflects the estimated costs and expenses associated with the TVN Sale
e) Reflects the estimated loss on the TVN Sale
f) The adjustments are based on available information and upon certain
assumptions Central European Media Enterprises Ltd. believes are
reasonable under the circumstances.
7
<PAGE>
Exhibits
2.1. Sale and Purchase Agreement, dated December 10, 1998, between Central
European Media Enterprise Ltd. and International Trading and
Investments Holding S.A.
99.1 Press Release of Central European Media Enterprises Ltd., dated
December 10, 1998.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Central European Media Enterprises Ltd.
---------------------------------------
(Registrant)
December 28, 1998 By /s/ John A. Schwallie
- ---------------------- ---------------------------------------
Date John A. Schwallie
Chief Financial Officer
<PAGE>
================================================================================
SALE AND PURCHASE AGREEMENT
between
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
and
INTERNATIONAL TRADING AND INVESTMENTS HOLDINGS S.A.
Dated December 10, 1998
SALE OF SHARES
in
FEDERACJA SP. Z O.O.
TVN SP. Z O.O.
ITI MEDIA N.V.
and
NEOVISION HOLDING B.V.
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS ...................................................................................1
AGREEMENT...................................................................................2
1. Sale and Purchase of Shares and Assets.............................................2
2. The Closing........................................................................3
3. Terms of the Senior Convertible Notes..............................................5
3.1. Principal Amount; Final Maturity Date.....................................5
3.2. Interest..................................................................5
3.3. Conversion; Time of Conversion............................................6
3.4. Notice of Conversion......................................................6
3.5. Method of Conversion......................................................6
3.6. Conversion Price..........................................................6
3.7. Cancellation of the Convertible Notes when Fully Converted;
Partial Conversion........................................................7
3.8. Mandatory Redemption......................................................7
3.9. Optional Redemption.......................................................8
3.10. Exchange Rights...........................................................8
3.11. Notes Payable on Redemption Date; Partial Redemption......................9
3.12. Events of Default.........................................................9
3.13. Remedies on Default, etc.................................................11
3.14. Registration, Exchange and Substitution of Notes.........................11
4. Representations and Warranties of ITI Holdings....................................12
4.1. Organization; Authority..................................................12
4.2. Authority; Binding Effect................................................12
4.3. Compliance with Other Instruments, etc...................................12
4.4. Litigation...............................................................13
4.5. Judgments................................................................13
5. Covenants of ITI Holdings.........................................................13
5.1. Programming and Satellite Commitments....................................13
5.2. Phillips Obligations.....................................................15
5.3. Interlink Obligations....................................................15
5.4. BPH and BRE Guarantees...................................................15
5.5. Warsaw Stock Exchange Listing............................................15
5.6. Luxembourg Stock Exchange Listing........................................16
5.7. Ranking of Notes; Negative Pledge........................................16
5.8. Consolidation, Merger and Sale of Assets.................................16
</TABLE>
i
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<TABLE>
<CAPTION>
Page
<S> <C>
5.9. Provision of Information.................................................16
5.10. Sufficient Authorized and Unissued ITI Ordinary Shares...................16
5.11. Taxes....................................................................17
5.12. Fully Paid Shares of Ordinary Shares.....................................17
5.13. Certain Shareholder Actions..............................................17
5.14. Public Announcements.....................................................17
6. Certain Representations and Covenants of CME......................................18
6.1. Representations Relating to Programming Contracts........................18
6.2. Representations Relating to Satellite Contracts..........................18
6.3. Public Announcements.....................................................19
7. Miscellaneous.....................................................................19
7.1. Definitions..............................................................19
7.2. Tax Matters..............................................................23
7.3. Governing Law............................................................23
7.4. Arbitration..............................................................23
(a) General.........................................................23
(b) Selection of the Arbitrators....................................24
(c) Interim Orders..................................................24
(d) The Award.......................................................24
(e) Specific Enforcement............................................24
(f) No Appeal.......................................................24
7.5. Amendment, Assignment, etc...............................................25
7.6. Notices..................................................................25
7.7. Survival.................................................................26
7.8. Expenses.................................................................26
7.9. Severability; Invalidity.................................................26
7.10. No Third Party Beneficiaries.............................................26
7.11. Translation..............................................................27
7.12. Further Assurances.......................................................27
7.13. Integration; Section Headings; Counterparts; Agency; etc.................27
Exhibit A Form of Senior Convertible Note
Exhibit B Form of Agreement for the Sale of TVN Shares
Exhibit C Form of Agreement for the Sale of Federation Shares
Exhibit D-1 Form of Neovision Share Transfer Agreement
Exhibit D-2 Form of CME's Power of Attorney
Exhibit D-3 Form of ITI Holding's Power of Attorney
Exhibit D-4 Form of Dunatrust Waiver
Exhibit E Form of ITI Media Group Share Transfer Agreement
Exhibit F-1 Form of Assignment of TVN's Receivables (CME Media)
Exhibit F-2 Form of Assignment of Federacja's Receivables (CME Media)
Exhibit F-3 Form of Assignment of Federacja's Receivables (CME Poland)
Exhibit F-4 Form of Assignment of TVN's Receivables (CME Poland)
Exhibit G-1 Form of Assignment of Federacja's Receivables (CME Programming)
ii
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Exhibit G-2 Form of Assignment of TVN's Receivables (CME Programming)
Exhibit H-1 Form of Assignment of Federacja's Receivables (CME Development)
Exhibit H-2 Form of Assignment of TVN's Receivables (CME Development)
Exhibit I-1 Form of CME Release
Exhibit I-2 Form of ITI Holdings Release
Exhibit J-1 Form of TVN Release
Exhibit J-2 Form of Federation Release
Exhibit K Form of Minute of Order
Exhibit L Form of Joint Press Release
</TABLE>
iii
<PAGE>
SALE AND PURCHASE AGREEMENT
SALE AND PURCHASE AGREEMENT, dated December 10, 1998, between
Central European Media Enterprises Ltd. ("CME"), a company organized under the
laws of Bermuda, and International Trading and Investments Holdings S.A. ("ITI
Holdings"), a company organized under the laws of Luxembourg.
RECITALS:
A. Affiliates of each of CME and ITI Holdings have formed, and
currently own all of the capital stock of, TVN Sp. z o.o. ("TVN") and Federacja
Sp. z o.o. ("Federation"), each a company organized under the laws of Poland.
CME Media Enterprises B.V. ("CME Media"), a company organized under the laws of
The Netherlands and a indirect wholly-owned subsidiary of CME, currently owns
33% of the outstanding shares of TVN (the "TVN Shares"). CME Poland B.V. ("CME
Poland"), a company organized under the laws of The Netherlands and a indirect
wholly-owned subsidiary of CME, currently owns 50% of the outstanding shares of
Federation (the "Federation Shares").
B. In connection with formation of TVN and Federation, certain
affiliates of CME acquired equity interests in Neovision Holding B.V.
("Neovision"), a company organized under the laws of The Netherlands, and ITI
Media Group N.V. ("ITI Media"), a company organized under the laws of The
Netherlands Antilles. CME Media currently owns 49% of the outstanding shares of
Neovision (the "Neovision Shares"). CME Poland currently owns 10% of the
outstanding shares of ITI Media (the "ITI Media Shares").
C. CME Poland has made loans to Federation in an aggregate
original principal amount of $12,000,000 pursuant to two separate loan
agreements dated February 13, 1998 (the "Federation Loans"). Fifty percent (50%)
of such loans have been guaranteed by ITI Holdings pursuant to a guarantee dated
February 13, 1998 (the "Federation Guarantee").
D. CME Media has made loans to TVN in an aggregate original
principal amount of $19,050,000 pursuant to loan agreements dated as of May 6,
1997, May 27, 1997, July 1, 1997, July 15, 1997, September 29, 1997, October 16,
1997, and December 15, 1997 (the "TVN Loans"), which loans were subsequently
assigned by CME Media to CME Poland.
E. CME Programming Services Inc. ("CME Programming"), a
corporation organized under the laws of the State of Delaware, and CME
Programming Services B.V. ("CMEPS BV"), a corporation organized under the laws
of The Netherlands, have entered into, on behalf of Federation and TVN, certain
licensing
<PAGE>
agreements for programming, and CME Programming and CME Media have entered into,
on behalf of TVN, certain agreements with operators of communication satellites.
F. CME Development Corporation ("CME Development"), a
corporation organized under the laws of the State of Delaware, has entered into
Management Services Agreements, dated August 1, 1997, with each of Federation
(the "Federation Management Services Agreement") and TVN (the "TVN Management
Services Agreement");
G. CME Media has guaranteed certain obligations (i) of TVN to
Bank Rozwoju Eksportu SA in an aggregate amount of up to $5 million under a
guarantee dated July 21, 1997 (the "BRE Guarantee"), and (ii) of TVN to Bank
Przemyslowo Handlowy SA in an aggregate amount of up to $5 million under a
guarantee dated August 28, 1997 (the "BPH Guarantee").
H. CME wishes to cause its Affiliates to transfer to ITI
Holdings, and ITI Holdings wishes to acquire, or to cause its Affiliates to
acquire, from such CME Affiliates, all of CME's indirect interests in TVN,
Federation, Neovision and ITI Media on the terms hereof.
I. All capitalized terms not otherwise defined have the
meanings set forth in Section 7.1 hereof.
AGREEMENT:
1. Sale and Purchase of Shares and Assets. On the date hereof,
(a) CME shall cause (i) CME Media to transfer to ITI TV Holdings Sp. z o.o.
("ITI TV") the TVN Shares, and to transfer to ITI Holdings the Neovision Shares
(including any rights CME Media may have to ITI Neovision Sp. z o.o and
Endemol-Neovision Sp. z o.o.) and all of its outstanding loans to TVN; (ii) CME
Poland to transfer to Unidome Beheer B.V. ("Unidome") the Federation Shares, to
transfer to ITI Holdings the ITI Media Shares and all of its outstanding loans
to Federation, and to discharge ITI Holdings and its Affiliates from all
obligations under the Federation Guarantee; (iii) CME Programming to transfer to
ITI Holdings all of its outstanding TVN and Federation receivables through
November 30, 1998; and (iv) CME Development to transfer to ITI Holdings all of
its outstanding TVN and Federation receivables through November 30, 1998, (b) in
exchange for receipt by CME and its Affiliates from ITI Holdings of (u) $10
million in cash; (v) ITI Holding's Senior Convertible Notes (w) the BRE Release;
(x) the BPH Release; and (y) the covenants, notes, agreements, indemnities and
guarantees of ITI Holdings set forth herein (including the covenants and
indemnity of ITI Holdings set forth in Section 5.1 hereof relating to the
obligations incurred by CME Programming and CME Media in the performance of the
Programming Contracts and the Satellite Contracts, and the Programming Notes).
2
<PAGE>
2. The Closing. The closing of the sale and purchase of shares
and assets described in Section 1 shall occur simultaneously with the execution
of this Agreement, as follows (all transactions occurring contemporaneously,
except as otherwise indicated):
(a) CME Media delivers to ITI Holdings, with respect to the
transfer of TVN Shares from CME Media to ITI TV, a share transfer
agreement in the form of Exhibit B hereto and a notice to the
Management Board of TVN referred to in Exhibit B;
(b) CME Poland delivers to ITI Holdings, with respect to the
transfer of Federation Shares from CME Poland to Unidome, a share
transfer agreement in the form of Exhibit C hereto and a notice to the
Management Board of Federation referred to in Exhibit C;
(c) CME Media delivers to ITI Holdings, with respect to the
transfer of the Neovision Shares from CME Media to ITI Holdings, a
share transfer agreement in the form of Exhibit D-1 hereto and a power
of attorney in the form of Exhibit D-2 hereto; ITI Holdings executes a
power of attorney in the form of Exhibit D-3 hereto and causes
Dumatrust Management Services B.V. to execute a waiver in a form of
Exhibit D-4 hereto;
(d) CME Poland delivers to ITI Holdings with respect to the
transfer of ITI Media Shares from CME Poland to ITI Holdings, a share
transfer agreement in the form of Exhibit E hereto;
(e) CME Media delivers to ITI Holdings assignment of
receivables agreements in the forms of Exhibit F-1 and Exhibit F-2
pursuant to which CME Media assigns to ITI Holdings all amounts due to
it from TVN and Federation with respect to certain receivables;
(f) CME Poland delivers to ITI Holdings assignment of
receivables agreements in the forms of Exhibit F-3 and Exhibit F-4
pursuant to which CME Poland assigns to ITI Holdings all amounts due to
CME Poland from Federation with respect to the Federation Loans and
from TVN with respect to the TVN Loans; by the execution of this
Agreement CME Poland discharges the Federation Guarantee;
(g) CME Programming delivers to ITI Holdings assignment of
receivables agreements in the forms of Exhibit G-1 and Exhibit G-2,
pursuant to which CME Programming assigns to ITI Holdings all amounts
due to it from Federation through November 30, 1998 under the
Programming Services Agreement between CME Programming and Federation
dated August 1, 1997, and all
3
<PAGE>
amounts due to it from TVN through November 30, 1998 under the
Programming Services Agreement between CME Programming and Federation
dated December 1, 1996;
(h) CME Development delivers to ITI Holdings an assignment of
receivables agreement in the forms of Exhibit H-1 and Exhibit H-2
hereto, respectively, pursuant to which CME Development assigns to ITI
Holdings all amounts due to it from Federation through November 30,
1998 under the Federation Management Services Agreement, and from TVN
through November 30, 1998 under the TVN Management Services Agreement;
(i) ITI Holdings delivers to CME immediately payable bank
checks in an aggregate amount of $10,000,000 from banks acceptable to
CME;
(j) ITI Holdings issues and delivers to CME (or such
Affiliate(s) of CME as CME shall identify at closing), one or more of
its senior convertible notes, in the form of Exhibit A hereto, in an
aggregate principal amount of $40,000,000 (collectively, the "Senior
Convertible Notes");
(k) ITI Holdings shall pay or cause to be paid to CME Media
the amount of $1,686,572 on December 31, 1998 and the amount of
$1,558,886 on January 31, 1999, in each case by wire transfer of
immediately available funds to the account of CME Media designated by
CME Media, such obligation to be evidenced by notes of ITI Holdings
(the "Programming Notes") satisfactory to CME;
(l) by execution of this Agreement, CME Programming assigns to
ITI Holdings the right to receive, in accordance with the relevant
satellite services agreement, 25% of its deposit in respect of the "Hot
Bird 3" satellite, and CME Media assigns to ITI Holdings the right to
receive, in accordance with the relevant satellite services agreement,
50% of its deposit with respect to the "Hot Bird 5" satellite;
(m) ITI Holdings delivers to CME a release from BPH
discharging CME fully from all obligations and liabilities under the
BPH Guarantee (the "BPH Guarantee Release");
(n) ITI Holdings delivers to CME a release from BRE
discharging CME fully from all obligations and liabilities under the
BRE Guarantee (the "BRE Guarantee Release");
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(o) CME delivers to ITI Holdings a release in the form of
Exhibit I-1 hereto (the "CME Release") and ITI Holdings delivers to CME
a release in the form of Exhibit I-2 hereto (the "ITI Holdings
Release");
(p) TVN delivers to CME a release in the form of Exhibit J-1
hereto (the "TVN Release") and Federation delivers to CME a release in
the form of Exhibit J-2 hereto (the "Federation Release");
(q) ITI Holdings delivers to CME (and CME cancels upon such
delivery) all warrants to purchase CME shares issued to each of MAWA
Holding N.V., Lavender Foundation and Staffordshire Corporation N.V.;
(r) CME, ITI Holdings and their respective Affiliates deliver
documents satisfactory to CME and ITI Holdings terminating the
agreements listed on Schedule 2(r) hereto (the "Termination
Agreements");
(s) CME delivers to ITI Holdings resignations of the
directors, representatives and signatories of ITI Media, Neovision,
TVN, TV Wisla and Federation appointed by CME or any Affiliate thereof
and ITI Holdings agrees to promptly remove the names of such CME
representatives form the commercial register and deliver to CME a copy
of an excerpt from the Commercial register evidencing such removal;
(t) CME delivers a Minute of Order in the form of Exhibit K
hereto with respect to CME's outstanding claims against ITI Holdings in
the High Court of Justice, Queen's Bench Division, Commercial Court
relating to the Federation Guarantee; and
(u) ITI Holdings delivers copies of official records of
meetings of shareholders of TVN and Federation that reflect the grant
of formal shareholders' approval (pokwitowanie) to any and all CME
nominees on the management board and supervisory board of each such
company for the performance of their respective duties during the
fiscal year 1997.
3. Terms of the Senior Convertible Notes. The Senior
Convertible Notes are subject to the following terms and conditions with which
ITI Holdings will comply punctually as though such terms and conditions were set
out in full in such Senior Convertible Notes:
3.1. Principal Amount; Final Maturity Date. The aggregate
principal amount of the Senior Convertible Notes at the time outstanding shall
be payable in full on December 10, 2001 (the "Final Maturity Date"), subject to
mandatory and optional redemption in accordance with Sections 3.8 and 3.9 below.
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3.2. Interest. The Senior Convertible Notes shall bear
interest on the outstanding principal amount thereof at a rate of 5% per annum,
from and including December 10, 1998 to but excluding the Final Maturity Date.
Such interest shall be payable semiannually in arrears on June 10, 1999 and
December 10, 1999, and quarterly in arrears on March 10, June 10, September 10,
and December 10 of years 2000 and 2001. Notwithstanding the foregoing, in case
TVN shall be adjudicated bankrupt by a Polish court having jurisdiction over it
on or prior to December 10, 2000, interest on the Senior Convertible Notes shall
not accrue from the date any such bankruptcy court order becomes final and
non-appealable.
3.3. Conversion; Time of Conversion. From time to time on and
after September 10, 2001 and prior to the Final Maturity Date (or, if later, the
payment by ITI Holdings of all amounts due under and with respect to the Senior
Convertible Notes), each holder of a Senior Convertible Notes (a "Holder") shall
have the right to convert, at its option, all or any portion of the principal
amount of the Senior Convertible Notes held by it plus all interest accrued and
unpaid thereon to the date fixed for conversion (at the option of such Holder),
into bearer ordinary shares, nominal value of FLUX 50 of ITI Holdings ("ITI
Ordinary Shares") at the Conversion Price specified in Section 3.6.
3.4. Notice of Conversion. A Holder shall give notice to ITI
Holdings of its intention to convert its Senior Convertible Notes (or any
portion thereof) into ITI Ordinary Shares not less than 10 days before the date
as of which conversion shall take place. Such notice shall specify the aggregate
amount of principal and interest to be converted (the "Conversion Amount").
3.5. Method of Conversion. (a) In order to receive
certificates evidencing the ITI Ordinary Shares issuable upon conversion of the
Conversion Amount, a Holder shall surrender its Senior Convertible Notes (or
portion thereof) to ITI Holdings for conversion by delivering such Senior
Convertible Notes to, or sending such Senior Convertible Notes by international
courier service, charges prepaid, addressed to ITI Holdings at its principal
place of business in Luxembourg, accompanied by written notice to ITI Holdings
stating such Holder's intention to convert its Senior Convertible Notes and the
Conversion Amount.
(b) Upon the surrender of the Senior Convertible Notes as
provided above, ITI Holdings shall deliver to the Holder within 5 days after the
date on which conversion is to be deemed effective, one or more certificates for
the number of ITI Ordinary Shares deliverable upon exchange of such Senior
Convertible Notes.
(c) ITI Ordinary Shares delivered to a Holder upon exchange of
the Senior Convertible Notes shall be the ITI Ordinary Shares listed or admitted
for trading on at least one securities exchange or quotation system, including
on the Luxembourg
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Stock Exchange or Warsaw Stock Exchange, which shares such Holder shall be
entitled to sell freely as of the date of such delivery without further
registration or similar action.
3.6. Conversion Price. The Senior Convertible Notes and any
interest incurred and unpaid thereon shall be convertible into such number of
ITI Ordinary Shares that is equal to (a) the Conversion Amount divided by (b)
the product of (i) the Market Price (as defined below) of one Ordinary Share on
the day the notice of conversion is given pursuant to Section 3.4 hereof times
(ii) eighty percent (80%) (or, solely in the event that a bankruptcy order with
respect to TVN shall have become final and non-appealable prior to December 11,
2000, 100%). The "Market Price" means, in respect of an ITI Ordinary Share on a
particular date, the average of the daily closing prices of the publicly traded
ITI Ordinary Shares during the immediately preceding twelve month period on (x)
if the ITI Ordinary Shares have been traded on the Warsaw Stock Exchange during
such period, whichever of the Warsaw Stock Exchange or the Luxembourg Stock
Exchange has had the larger average daily trading volume of the ITI Ordinary
Shares during such period, or (y) if the ITI Ordinary Shares have not been
traded on the Warsaw Stock Exchange during such period, the Luxembourg Stock
Exchange.
3.7. Cancellation of the Convertible Notes when Fully
Converted; Partial Conversion. (a) Upon tender of a Senior Convertible Note for
full conversion, such Senior Convertible Note shall be canceled by ITI Holdings
and all outstanding payment obligations of ITI Holdings thereunder shall
terminate.
(b) If a Senior Convertible Note is to be converted only in
part, it shall be surrendered to ITI Holdings and ITI Holdings shall execute and
deliver to the Holder or its assignee, without any charges whatsoever, a new
Senior Convertible Note (or Notes, in such denominations as may be specified by
the Holder) in an aggregate principal amount equal to, and in exchange for, the
unconverted portion of the principal of the Senior Convertible Note so
surrendered.
3.8. Mandatory Redemption. (a) In the event of a direct or
indirect sale by ITI Holdings or any Subsidiary of ITI Holdings to any person
other than a wholly-owned Subsidiary of ITI Holdings (a "Non-ITI Holder") of all
or any portion of the outstanding shares of TVN or Federation, or the issuance
of shares of the capital stock of TVN or Federation to any Non-ITI Holder, in
either case on or prior to December 10, 2000, ITI Holdings shall redeem
contemporaneously with such sale or issuance a percentage of the outstanding
principal amount of the Senior Convertible Notes (not greater than 100%) equal
to twice the percentage of ownership in TVN or Federation acquired by such
Non-ITI Holder, whichever may be higher, at a redemption price equal to the
principal amount of the Senior Convertible Notes being so redeemed (the
"Mandatory Redemption Amount") plus the Mandatory Redemption Premium. All
accrued and unpaid interest on the Mandatory Redemption Amount through the date
of redemption shall be due and payable on such date of redemption. The Mandatory
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Redemption Premium shall be equal to the greater of (i) one-half of (x) the
aggregate consideration received directly or indirectly by ITI Holdings (or any
Subsidiary of ITI Holdings), TVN and/or Federation, as the case may be, from the
Non-ITI Holder, minus (y) the aggregate percentage interest in TVN and
Federation being so acquired by the Non-ITI Holder (expressed as a fraction)
multiplied by $100 million, and (ii) such amount as will result, together with a
pro rata portion of all amounts paid to the Holder of the Senior Convertible
Notes pursuant to Section 3.2 hereof, in the Holder of the Senior Convertible
Notes receiving a compound annual return on the Mandatory Redemption Amount of
20%.
(b) ITI Holdings shall notify each Holder in writing of any
sale or issuance referred to in the first sentence of Section 3.8(a) hereof no
later than the earliest of (x) the first public announcement thereof, (y) the
execution of a definitive agreement with respect thereof, and (z) the day of
consummation thereof. Any such notice shall state: (i) the expected mandatory
redemption date, (ii) the mandatory redemption price, and (iii) the place where
the Senior Convertible Notes are to be surrendered for payment.
3.9. Optional Redemption. (a) ITI Holdings shall have the
right to redeem the outstanding amount of the Senior Convertible Notes, in whole
or in multiples of $10 million, at any time prior to September 10, 2001 upon
prior written notice to the Holders thereof, at a redemption price equal to the
principal amount of the Senior Convertible Notes being so redeemed (the
"Optional Redemption Amount") plus a premium equal to the Optional Redemption
Premium. All accrued and unpaid interest on the Optional Redemption Amount
through the date of redemption shall be due and payable on such date of
redemption. The Optional Redemption Premium shall be equal to the greater of (i)
ten percent of the Optional Redemption Amount, and (ii) such amount as will
result, together with a pro rata portion of all amounts paid to the holder of
the Senior Convertible Notes pursuant to Section 3.2 hereof, in the Holders of
the Senior Convertible Notes receiving a compound annual return on the Optional
Redemption Amount of 20%.
(b) ITI Holdings shall, at least 15 days prior to the optional
redemption date initially fixed by ITI Holdings, notify the Holders in writing
of such redemption date and of the principal amount to be redeemed. Any such
notice shall state: (i) the expected redemption date, (ii) the redemption price,
and (iii) the place where the Senior Convertible Notes are to be surrendered for
payment.
3.10. Exchange Rights. The Holders shall have the right,
exercisable upon written notice of the Holders of a majority of the outstanding
principal amount of Senior Convertible Notes to ITI Holdings during the period
commencing on the date hereof and ending on the six month anniversary of the
date hereof, to require ITI Holdings to issue and deliver to the Holders, at the
Holders' expense and subject to the acceptance of a listing application by the
Luxembourg Stock Exchange, in exchange for
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the outstanding Senior Convertible Notes, a like aggregate principal amount of
debt securities (the "Exchange Notes") of ITI Holdings of the same terms as the
Senior Convertible Notes (except that the face value of each Exchange Note shall
be such as each Holder may request) and fully subject to the terms and
conditions of this Section 3 as though fully set out therein, that are listed on
the Luxembourg Stock Exchange. If the Holders exercises such right, they shall
not be entitled, for as long as the Exchange Notes are listed on the Luxembourg
Stock Exchange, to invoke the right of mandatory redemption set forth in Section
3.8 hereof. Upon receipt of a notice requesting issuance of the Exchange Notes,
ITI Holdings shall use its best effort to promptly list the Exchange Notes on
the Luxembourg Stock Exchange and shall maintain such listing until the Maturity
Date (or, if later, the payment by ITI Holdings of all amounts due under and
with respect to the Exchange Notes). All references herein to the "Notes" shall
be to the Senior Convertible Notes and the Exchange Notes, collectively, and
references to a "Note" shall be to any Senior Convertible Note or Exchange Note
individually.
3.11. Notes Payable on Redemption Date; Partial Redemption.
(a) Notice of redemption having been given, the Notes (or portion thereof) to be
redeemed shall, on the redemption date, become due and payable at the redemption
price herein specified and from and after such date (unless ITI Holdings shall
default in the payment of the redemption price) such Notes (or such portion)
shall cease to bear interest. Upon surrender of the Notes for redemption in
accordance with such notice, such Notes shall be paid by ITI Holdings at the
redemption price. If the Notes (or portion thereof) called for redemption shall
not be so paid upon surrender thereof for redemption, the principal and the
premium shall, until paid, bear interest from the redemption date at the rate
borne by the Notes.
(b) If a Note is to be redeemed only in part, it shall be
surrendered at the place of payment and ITI Holdings shall execute and deliver
to the Holder or its assignee, without any charges whatsoever, a new Note (or
Notes), of any denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Note so surrendered.
3.12. Events of Default. If any of the following conditions or
events (each, an "Event of Default") shall occur and be continuing:
(a) ITI Holdings shall default in the payment of any principal
of or premium, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise;
(b) ITI Holdings shall default in the payment of any interest
on any Note when the same becomes due and payable, and such default
continues for more than 3 days;
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(c) ITI Holdings shall default in the payment of any other
amount payable by it in accordance with this Agreement (including but
not limited to pursuant to the covenants and agreements set forth in
Sections 5.1 through 5.4 hereof), and such default continues for more
than 10 days;
(d) ITI Holdings shall default in the performance of any
non-payment obligation or covenant set forth in this Agreement, and
such default continues for more than 10 days following the receipt by
ITI Holdings from CME or from any Holder of a Note of notice of such
default;
(e) any representation or warranty of ITI Holdings set forth
in this Agreement or in any instrument furnished in compliance with or
in reference to this Agreement or otherwise in connection with the
transactions contemplated by this Agreement shall prove to have been
false or incorrect in any material respect on the date as of which
made;
(f) if ITI Holdings shall (i) be not generally able to pay its
debts as they become due, (ii) file, or consent by answer or otherwise
to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction,
(iii) make an assignment for the benefit of its creditors, (iv) consent
to the appointment of a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any
substantial part of its property, (v) be adjudicated insolvent or (vi)
take corporate action for the purpose of any of the foregoing; or
(g) if a court or governmental authority of competent
jurisdiction shall enter an order appointing a custodian, receiver,
trustee or other officer with similar powers with respect to ITI
Holdings, or if an order for relief shall be entered in any case or
proceeding for liquidation or reorganization or otherwise to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of ITI Holdings, or
if any petition for any such relief shall be filed against ITI Holdings
and such petition shall not be dismissed within 30 days;
then, (x) upon the occurrence of any Event of Default described in subdivision
(f) or (g) of this section 3.12, the unpaid principal amount of and all accrued
interest on all Senior Convertible Notes and Exchange Notes shall automatically
become due and payable or (y) upon the occurrence of any other Event of Default,
any Holder or Holders of 25% or more in principal amount of the Senior
Convertible Notes and Exchange Notes at the time outstanding may at any time
(unless all defaults shall theretofore have been remedied) at its or their
option, by written notice or notices to ITI Holdings, declare all the Senior
Convertible Notes and Exchange Notes to be due and payable, whereupon the
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same shall forthwith mature and become due and payable, together with interest
accrued thereon and, in either case, there shall also be due and payable, to the
extent permitted by applicable law, a premium in the amount which would be
payable as a premium if the Company then had elected to prepay the Senior
Convertible Notes pursuant to section 3.9, all without presentment, demand,
protest or notice, which are hereby waived.
3.13. Remedies on Default, etc. In case any one or more Events
of Default shall occur and be continuing, the Holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such Holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained in this Agreement or in such
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise. In case of a default in the payment of any principal of or
premium, if any, or interest on any Note, ITI Holdings will pay to the Holder
thereof such further amount as shall be sufficient to cover the cost and
expenses of collection, including, without limitation, reasonable attorneys'
fees, expenses and disbursements. No course of dealing and no delay on the part
of any Holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such Holder's rights, powers or
remedies. No right, power or remedy conferred by this Agreement or by any Note
upon any Holder thereof shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise.
3.14. Registration, Exchange and Substitution of Notes. (a)
ITI Holdings shall keep at its principal executive office a register for the
registration and registration of transfers of Notes. The name and address of
each Holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and ITI Holdings shall not be affected by any
notice or knowledge to the contrary. ITI Holdings shall give to any Holder of a
Note promptly upon request therefor, a complete and correct copy of the names
and addresses of all registered holders of Notes.
(b) Upon surrender of any Note at the principal executive
office of ITI Holdings for registration of transfer or exchange (and in the case
of a surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered Holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), ITI Holdings shall
execute and deliver, at its own expense, one or more new Notes (as requested by
the Holder thereof) in exchange therefor, in an aggregate principal amount equal
to the unpaid principal amount of the surrendered Note. Each such new Note shall
be payable to such Person as such holder may request and shall be substantially
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in the form of Exhibit A. Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been paid
thereon. ITI Holdings may require payment of a sum sufficient to cover any stamp
tax or governmental charge imposed in re spect of any such transfer of Notes.
(c) Upon receipt by ITI Holdings of notice by any Holder of
the ownership of and the loss, theft, destruction or mutilation of any Note, and
(i) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it, or (ii) in the case of mutilation, upon surrender and
cancellation thereof, ITI Holdings at the expense of such Holder shall execute
and deliver, in lieu thereof, a new Note, dated and bearing interest from the
date to which interest shall have been paid on such lost, stolen, destroyed or
mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.
4. Representations and Warranties of ITI Holdings. ITI
Holdings hereby represents and warrants to CME and to each original Holder of a
Senior Convertible Note as follows:
4.1. Organization; Authority. ITI Holdings is a company duly
organized and validly existing under the laws of Luxembourg and has all
requisite power and authority to own and operate its properties and to carry on
its business as now conducted and as proposed to be conducted.
4.2. Authority; Binding Effect. (a) ITI Holdings has the power
and authority to execute and deliver this Agreement, and ITI Holdings and each
of its Affiliates has the power and authority to execute and deliver each of the
other Transaction Documents to which it is a party, and to perform its
obligations hereunder and thereunder. Such execution, delivery and performance
have been duly authorized by all necessary corporate action on their part. This
Agreement and the other Transaction Documents to which ITI Holdings or any of
its Affiliates is a party have been duly executed and delivered by its duly
authorized representatives, and constitute its valid and legally binding
obligations enforceable against each of them in accordance with the terms hereof
and thereof, except as the same may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws from time to time
in effect affecting creditors' rights generally and except for the availability
of equitable remedies.
(b) The issuance of the Senior Convertible Notes has been duly
authorized by ITI Holdings; the Senior Convertible Notes constitute valid and
legally binding obligations of ITI Holdings enforceable against ITI Holdings in
accordance with their terms. The enforceability of the Senior Convertible Notes
as set forth in this Section is subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
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principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
4.3. Compliance with Other Instruments, etc. The execution,
delivery and performance of this Agreement, the Senior Convertible Notes and
each of the other Transaction Documents to which ITI Holdings is a party will
not (i) violate or conflict with any provision of ITI Holdings' or any of its
Affiliates' articles of incorporation; (ii) violate any law, statute, rule,
regulation or order of any Governmental Authority; or (iii) violate, conflict
with, or constitute a breach of or default in, any contract, agreement,
arrangement, commitment or plan to which ITI Holdings or any of its Affiliates
is a party or by which ITI Holdings, any of its Affiliates or any of their
respective assets are bound or affected.
4.4. Litigation. Except for the outstanding claims relating to
the Federation Guarantee, there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of ITI Holdings, threatened, in any
court or before any governmental agency or instrumentality, or before any
arbitrator, by or against or affecting or relating to ITI Holdings or any of its
Affiliates which, if adversely determined, would restrain or enjoin the
consummation of the transactions contemplated by this Agreement or declare
unlawful the transactions or events contemplated by this Agreement or cause any
of such transactions to be rescinded.
4.5. Judgments. There are no judgments, injunctions, orders or
other judicial or administrative mandates outstanding against or affecting ITI
Holdings or any of its Affiliates which would hinder or delay the consummation
of the transactions contemplated by this Agreement.
5. Covenants of ITI Holdings.
5.1. Programming and Satellite Commitments. (a) (i) ITI
Holdings will use its best efforts to cause CME Programming (along with CME and
all other Affiliates of CME) to be fully released from all obligations and
liabilities relating to the programming commitments set forth in Schedule 5.1(a)
hereto (the "Programming Contracts") not later than January 31, 1999. ITI
Holdings shall be responsible for all payments due and other liabilities under
each of the Programming Contracts from and after December 1, 1998. ITI Holdings
promptly shall procure, on terms satisfactory to CME, the substitution of ITI
Holdings (or such Affiliate as it may designate) for CME Programming (or such
other Affiliate of CME who shall be party to any Programming Contract) as a
party to each of the Programming Contracts and the full release of CME and all
of its Affiliates from any liability thereunder, and CME shall use its best
efforts (without being required to incur any expense) to assist ITI Holdings in
connection with such substitution and release.
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(ii) ITI Holdings shall be responsible for 25% of all payments
due and other liabilities under the "Contract for a Space Segment Service on the
Eutelsat Hotbird 3 Satellite," dated June 8, 1995, between British
Telecommunications plc ("BT") and CME Programming (the "Hot Bird 3 Contract")
and 50% of all payments due and other liabilities under the "Contract No.
98062/GCP," dated May 8, 1998, between France Telecom S.A. ("FT") and CME Media
(the "Hot Bird 5 Contract" and, together with the Hot Bird 3 Contract, the
"Satellite Contracts"), in each case from and including December 1, 1998. ITI
Holdings and CME shall use all reasonable efforts promptly to substitute TVN (or
another Affiliate of ITI Holdings) for CME with respect to the portions of the
Hot Bird 3 Contract and Hot Bird 5 Contract for which ITI Holdings is
responsible pursuant to the previous sentence, and the full release of CME
Programming, CME Media, CME and all other Affiliates of CME from any liability
thereunder.
(b) (i) Until such time as CME and all of its Affiliates are
fully released from all liabilities with respect to the Programming Contracts,
ITI Holdings will pay (or will cause Federation and TVN to pay) to CME Media
(and/or such other Affiliate(s) of CME as CME shall identify) in advance all
funds required by CME and its Affiliates to allow them to pay timely and in full
all amounts owed by them in respect of programming furnished to TVN or
Federation.
(ii) Until such time as CME and all of its Affiliates are
fully released from all liabilities with respect to the Satellite Contracts, ITI
Holdings will pay (or will cause Federation and TVN to pay) directly to BT 25%
of all amounts due under the Hot Bird 3 Contract and directly to FT 50% of all
amounts due under the Hot Bird 5 Contract, in each case when and as such amounts
are due.
(c) (i) With respect to the foregoing obligations for the
months of December 1998 and January 1999, ITI Holdings shall pay or cause to be
paid to CME Media, pursuant to Section 2(j) hereof, the amount of $1,686,572 on
December 31, 1998 and the amount of $1,558,886 on January 31, 1999, and ITI
Holdings has delivered to CME Media the Programming Notes evidencing such
obligation. In the event that ITI Holdings assumes any payment obligations under
any Programming Contracts for the months of December 1998 and January 1999, and
CME has received evidence satisfactory to it of the full release of CME and all
of its Affiliates from any liabilities with respect to such obligations, the
relevant payment obligation of ITI Holdings to CME Media will be reduced by the
amount by which CME and its Affiliates have been so released, and CME Media will
return to ITI Holdings the relevant Programming Note in exchange for new
Programming Note in a principal amount equal to such reduced obligation and
otherwise identical in all respects to the Programming Note for which it has
been exchanged. CME will cause CME Media to use the proceeds of the Programming
Notes to pay obligations under the Programming Contracts and the Satellite
Contracts with respect to the months of December 1998 and January 1999.
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(ii) With respect to the foregoing obligations for the month
of February 1999 and each month thereafter, CME Media (or another Affiliate of
CME) shall invoice ITI Holdings for the estimated amounts due for such calendar
month not later than the 25th day of the preceding calender month. ITI Holdings
shall pay such invoiced amount to CME Media (and/or other Affiliate(s) of CME)
by the 10th day of the month with respect to which such amount was invoiced.
Each monthly invoice will also contain an adjustment reflecting a reconciliation
of the previous month's invoiced estimate to the amounts actually paid to third
parties by CME and its Affiliates on behalf of TVN and Federation.
(d) In furtherance of the foregoing covenants and agreements,
ITI Holdings hereby covenants and agrees to indemnify and hold harmless CME
Programming, CME Development, CME Media, CME and each other Affiliate of CME
from and against any and all liabilities, obligations, losses, costs and
damages, whether absolute, accrued, conditional or otherwise (any of the
foregoing, "Liabilities"), resulting from or arising out of the Programming
Contracts, the Satellite Contracts (to the extent of ITI Holdings' obligations
under Section 5.1(b)) and the other contracts and documents set forth in
Schedule 5.1(c) hereto. In the event that CME Programming, CME Development, CME
Media, CME or any other Affiliate of CME is required to make any payment under
or otherwise incurs any Liability with respect to any Programming Contract or
Satellite Contract, ITI Holdings shall pay to such entity on demand such amount
as shall result in such entity receiving from ITI Holdings an amount in cash
equal to such payment or Liability.
5.2. Phillips Obligations. With respect to the Contract
Services Agreement, dated as of May 19, 1997, among Philips Broadcast Television
Systems GmbH ("Philips"), Unidome Beheer B.V. and CME Poland (the "Philips
Agreement"), ITI Holdings will perform all obligations of the "Owner", and will
pay all amounts due to Philips (amounting to approximately $1,497,461 as of the
date hereof), under such Agreement. ITI Holdings shall indemnify and hold
harmless CME and its Affiliates and their respective shareholders, directors,
officers, agents and representatives from and against any and all losses,
claims, damages, expenses, actions, demands, assessments, costs, judgments,
awards, fines, sanctions, penalties, amounts paid in settlement, or liabilities
in respect of the Philips Agreement.
5.3. Interlink Obligations. With respect to the $977,712
amount owed by TVN to Interlink Network Corp. ("Interlink"), ITI Holdings shall
pay, or cause TVN to pay, to CME the sum of $81,417 (without deduction for any
withholding or other taxes) on the 15th day of each calender month in 1999 (for
a total amount to be received by CME of $977,712). Provided that all such
amounts are duly received by CME on each such date, CME will cause Interlink to
forego any claim against TVN or ITI Holdings with respect to such obligation,
and CME will hold TVN and ITI Holdings harmless against any claim by Interlink
with respect to such amount.
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<PAGE>
5.4. BPH and BRE Guarantees. From and after the date hereof,
ITI Holdings will indemnify and hold harmless CME and CME's Affiliates and the
respective shareholders, directors, officers, agents and representatives of the
foregoing from and against any and all losses, claims, damages, expenses,
actions, demands, assessments, costs, judgments, awards, fines, sanctions,
penalties, amounts paid in settlement, or liabilities incurred or sustained by
any of them under or in respect of the BHP Guarantee or the BRE Guarantee or as
a result of the failure of ITI Holdings to CME and all of its Affiliates to be
released from all obligations and liabilities under the BPH Guarantee and the
BRE Guarantee.
5.5. Warsaw Stock Exchange Listing. ITI Holdings will use its
reasonable efforts to cause the ITI Ordinary Shares to be listed on the Warsaw
Stock Exchange no later than December 31, 1999. Once so listed, ITI Holdings
will cause such listing to be maintained until at least the Final Maturity Date.
5.6. Luxembourg Stock Exchange Listing. ITI Holdings will
maintain the listing of the ITI Ordinary Shares on the Luxembourg Stock Exchange
until at least the Final Maturity Date, provided that ITI Holdings need not
maintain such listing if and for so long as the ITI Ordinary Shares are listed
on another major stock exchange in Western Europe or the United States.
5.7. Ranking of Notes; Negative Pledge. So long as any Senior
Convertible Notes or Exchange Notes are outstanding, ITI Holdings (a) shall
cause all outstanding Senior Convertible Notes and Exchange Notes to rank pari
passu with all other unsubordinated indebtedness of ITI Holdings, and (b) shall
not encumber any of its assets or permit any of its Subsidiaries to encumber
their respective assets except in the case of the encumbrance of the assets of
an ITI Holdings' Subsidiary for the purpose of financing ordinary course
operations of any such Subsidiary and/or any Affiliate of any such Subsidiary.
5.8. Consolidation, Merger and Sale of Assets. So long as any
Senior Convertible Notes or Exchange Notes are outstanding, ITI Holdings will
not consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into ITI
Holdings, without the prior written consent of CME and the holders of at least
50% (by principal amount) of the outstanding Convertible Notes and Exchange
Notes.
5.9. Provision of Information. So long as any Senior
Convertible Notes or Exchange Notes are outstanding, ITI Holdings will (and will
cause each of its Affiliates to) deliver to CME copies of each registration,
report, statement, notice or filing (i) required to be filed by ITI Holdings
with any securities regulator or any other
16
<PAGE>
Governmental Authority or (ii) sent to its shareholders, and will furnish to CME
at its request copies of any other publicly-available information relating to
ITI Holdings and its Affiliates.
5.10. Sufficient Authorized and Unissued ITI Ordinary Shares.
So long as any Senior Convertible Notes or Exchange Notes are outstanding, ITI
Holdings shall preserve unimpaired the right of each Holder upon exchange
thereof to receive such number of ITI Ordinary Shares as such Holder shall be
entitled to receive in accordance with the provisions of Section 3.3 and shall
ensure that it shall have sufficient authorized and unissued shares of ITI
Ordinary Shares to permit the full conversion of the amount outstanding under
the Senior Convertible Notes or the Exchange Notes at any time at the conversion
price then in effect.
5.11. Taxes. (a) ITI Holdings shall pay any and all taxes that
may be payable in respect of the issue, transfer and delivery of the ITI
Ordinary Shares issued to any Holder upon any conversion of the Senior
Convertible Notes or the Exchange Notes, other than income, capital gains and
similar taxes imposed on such Holder by reason of conversion of such Senior
Convertible Notes or Exchange Notes.
(b) ITI Holdings hereby covenants and agrees to indemnify and
hold harmless CME Poland, CME Media and their respective nominees to the
management board and supervisory board of each of Federation and TVN from and
against any and all liabilities and obligations for taxes (including any
penalties, interests, additions to taxes and reasonable legal fees) of
Federation and TVN for which CME Poland, CME Media or their nominees to the
management board and supervisory board of each of Federation and TVN may be
responsible under the applicable law.
(c) ITI Holdings hereby covenants and agrees to indemnify and
hold harmless CME and its Affiliates from any stamp duty and other similar taxes
or governmental chargers payable in connection with the execution of agreements
forms of which are attached hereto as Exhibits B through H-2 hereof.
5.12. Fully Paid Shares of Ordinary Shares. ITI Holdings
warrants and covenants that all ITI Ordinary Shares delivered upon the
conversion of the Senior Convertible Notes or the Exchange Notes will be duly
authorized, fully paid and nonassessable and that each Holder will receive valid
and marketable title to such ITI Ordinary Shares, free and clear of all Liens.
Any preemptive rights of ITI Holdings' shareholders with the respect to the
issuance of ITI Ordinary Shares upon the conversion of the Senior Convertible
Notes or the Exchange Notes have been duly waived.
5.13. Certain Shareholder Actions. ITI Holdings agrees to
cause each of TVN, Federation, Endemol-Neovision Sp. Zo.o. and TV Wisla to hold
their respective general meetings of shareholders prior to June 30, 1999 and to
deliver to CME, within ten
17
<PAGE>
days from the date of such meetings, copies of official records thereof that
reflect the grant of formal shareholders' approval (pokwitowanie) to any and all
CME nominees to the management board and supervisory board of each of TVN,
Federation and TV Wisla of their respective duties during the fiscal year 1998.
ITI Holdings further agrees to cause TV Wisla and Endemol-Neovision Sp. Zo.o to
hold their respective general meetings of shareholders for the 1997 fiscal year
prior to December 20, 1998 and to deliver to CME, within ten days from the date
of such meetings, copies of the official record thereof that reflects the grant
of formal shareholders' approval (pokwitowanie) to any and all CME nominees to
the management board and supervisory board of TV Wisla and EndemolNeovision Sp.
Zo.o. of their respective duties during the fiscal year 1997.
5.14. Public Announcements. On the date hereof, following the
completion of the deliveries and actions set forth in Section 2 hereof, the
parties will issue the joint press release set forth as Exhibit L hereto. Except
as required by law or the regulations of any stock exchange, and except for
communications with shareholders and market analysts conducted in the regular
course of business, ITI Holdings shall not make, and will not allow any of its
Affiliates to make, any other public announcement in respect of the transactions
provided herein without the prior written consent of CME, in which case CME
shall have the right to review such public announcement prior to publication.
6. Certain Representations and Covenants of CME.
6.1. Representations Relating to Programming Contracts.
CME represents and warrants to ITI Holdings as follows:
(a) Schedule 5.1(a) contains a true and complete list of all
currently outstanding programming commitments entered into by CME
and/or its Affiliates on behalf of TVN and Federation.
(b) All amounts identified in Schedule 5.1(a) as having been
paid by CME and/or its Affiliates, including any related taxes required
to be paid by CME or its Affiliates, have been so paid.
(c) The amounts identified in Schedule 5.1(a) as being
outstanding to distributors are the only amounts currently due from CME
and/or its Affiliates under the Programming Contracts.
(d) To the knowledge of CME, all of the Programming Contracts
are in full force and effect and constitute the valid and binding
obligations of the parties thereto, enforceable in accordance with
their terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights,
and general principles of equity.
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(e) To the knowledge of CME, none of the other parties to the
Programming Contracts is in default of their obligations to CME and/or
its Affiliates.
6.2. Representations Relating to Satellite Contracts. CME
represents and warrants to ITI Holdings as follows:
(a) The Satellite Contracts, true and complete copies of which
have previously been furnished to ITI Holdings, constitute the only
currently outstanding commitments undertaken by CME or any of its
Affiliates with regard to the use of the Hot Bird 3 and Hot Bird 5
satellites.
(b) All amounts due and payable through November 30, 1998
under the Satellite Contracts have been paid by CME and/or its
Affiliates.
(c) To the knowledge of CME, the Satellite Contracts are in
full force and effect and constitute the valid and binding obligations
of the parties thereto, enforceable in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights, and general principles
of equity.
(d) To the knowledge of CME, none of the other parties to the
Satellite Contracts is in default of their obligations to CME and/or
its Affiliates.
6.3. Public Announcements. On the date hereof, following the
completion of the deliveries and actions set forth in Section 2 hereof, the
parties will issue the joint press release set forth as Exhibit L hereto. Except
as required by law or the regulations of any stock exchange, and except for
communications with shareholders and market analysts conducted in the regular
course of business, CME shall not make, and will not allow any of its Affiliates
to make, any other public announcement in respect of the transactions provided
herein without the prior written consent of ITI Holdings, in which case ITI
Holdings shall have the right to review such public announcement prior to
publication.
7. Miscellaneous.
7.1. Definitions. In this Agreement, the following terms
shall have the following respective meanings:
"Affiliate" means, with regard to any person, any other person
who, individually or as a part of a "group" for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended, controls, is
controlled by or is
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<PAGE>
under common control with, such person, provided that for purposes of
this Agreement Federation and TVN shall not be considered to be
Affiliates of CME.
"Agreement" means this Sale and Purchase Agreement, including
any exhibits and schedules hereto, as it may be supplemented or amended
from time to time in accordance with its terms.
"BPH Guarantee" shall have the meaning assigned to it in
Recital G.
"BPH Guarantee Release" shall have the meaning assigned to it
in Section 2(m).
"BRE Guarantee" shall have the meaning assigned to it in
Recital G.
"BRE Guarantee Release" shall have the meaning assigned to it
in Section 2(n).
"BT" shall have the meaning assigned to it in Section 5.1(b).
"Claimant" shall have the meaning assigned to it in Section
7.3(b).
"CME" shall have the meaning assigned to it in the preamble.
"CME Development" shall have the meaning assigned to it in
Recital F.
"CME Media" shall have the meaning assigned to it in Recital
A.
"CME Poland" shall have the meaning assigned to it in Recital
A.
"CME Programming" shall have the meaning assigned to it in
Recital E.
"CMEPS BV" shall have the meaning assigned to it in Recital E.
"CME Release" shall have the meaning assigned to it in Section
2(o).
"Conversion Amount" shall have the meaning assigned to it in
Section 3.4.
"Event of Default" shall have the meaning assigned to it in
Section 3.12.
"Exchange Notes" shall have the meaning assigned to it in
Section 3.10.
"Federation" shall have the meaning assigned to it in Recital
A.
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"Federation Guarantee" shall have the meaning assigned to it
in Recital C.
"Federation Loans" shall have the meaning assigned to it in
Recital C.
"Federation Management Agreement" shall have the meaning
assigned to it in Recital F.
"Federation Release" shall have the meaning assigned to it in
Section 2(p).
"Federation Shares" shall have the meaning assigned to it in
Recital A.
"Final Maturity Date" shall have the meaning assigned to it in
Section 3.1.
"FT" shall have the meaning assigned to it in Section 5.1(b).
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government including, without limitation,
the European Union.
"Holder" shall have the meaning assigned to it in Section 3.3.
"Hot Bird 3 Contract" shall have the meaning assigned to it in
Section 5.1(b).
"Hot Bird 5 Contract" shall have the meaning assigned to it in
Section 5.1(b).
"Interlink" shall have the meaning assigned to it in Section
5.3.
"ITI Holdings" shall have the meaning assigned to it in the
preamble.
"ITI Holdings Release" shall have the meaning assigned to it
in Section 2(o).
"ITI Media" shall have the meaning assigned to it in Recital
B.
"ITI Media Shares" shall have the meaning assigned to it in
Recital B.
"ITI Ordinary Shares" shall have the meaning assigned to it in
Section 3.3.
"ITI TV" shall have the meaning assigned to it in Section 1.
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"Liabilities" shall have the meaning assigned to it in Section
5.1(d).
"Liens" shall mean any liens, pledges, mortgages, encumbrances
or other adverse claims.
"Mandatory Redemption Amount" shall have the meaning assigned
to it in Section 3.8.
"Market Price" shall have the meaning assigned to it in
Section 3.6.
"Neovision" shall have the meaning assigned to it in Recital
B.
"Neovision Shares" shall have the meaning assigned to it in
Recital B.
"Non-ITI Holder" shall have the meaning assigned to it in
Section 3.8.
"Optional Redemption Amount" shall have the meaning assigned
to it in Section 3.9.
"Person" means, an individual, corporation, partnership,
association, trust or other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
"Programming Contracts" shall have the meaning assigned to it
in Section 5.1(a).
"Philips" shall have the meaning assigned to it in Section
5.2.
"Philips Agreement" shall have the meaning assigned to it in
Section 5.2.
"Programming Notes" shall have the meaning assigned to it in
Section 2(k).
"Request" shall have the meaning assigned to it in Section
7.3(b).
"Respondent" shall have the meaning assigned to it in Section
7.3(b)
"Satellite Contracts" shall have the meaning assigned to it in
Section 5.1(b).
"Senior Convertible Notes" shall have the meaning assigned to
it in Section 2(j).
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"Subsidiary" means, as to any Person, any corporation,
association, partnership or other business entity of which more than
50% of the total voting power of shares of capital stock or other
interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person or (ii) one or
more Subsidiaries of such Person.
"Termination Agreements" shall have the meaning assigned to it
in Section 2(r).
"Transaction Document" means this Agreement, the Senior
Convertible Notes, the BPH Guarantee Release, the BRE Guarantee
Release, the CME Release, the ITI Holdings Release, the TVN Release,
the Federation Release, the Termination Agreements, and each other
document, agreement, certificate or instrument to be executed and
delivered in connection with the transactions referred to herein.
"TVN" shall have the meaning assigned to it in Recital A.
"TVN Loans" shall have the meaning assigned to it in Recital
D.
"TVN Management Agreement" shall have the meaning assigned to
it in Recital F.
"TVN Release" shall have the meaning assigned to it in Section
2(p).
"TVN Shares" shall have the meaning assigned to it in Recital
A.
"Unidome" shall have the meaning assigned to it in Section 1.
"1996 Act" shall have the meaning assigned to it in Section
7.3(f).
7.2. Tax Matters. (a) CME and ITI Holdings have agreed on the
allocation of the consideration received by CME and its Affiliates hereunder,
and the parties shall use such allocation for all tax reporting purposes.
(b) ITI Holdings shall permit CME to control any United States
tax audit, examination or administrative or judicial proceeding concerning any
of Neovision, TVN, ITI Media and Federation with respect to any taxable period
ending before or including the date hereof. ITI Holdings shall execute such
documents as CME may reasonably request to enable CME to exercise such control.
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(c) CME and ITI Holdings shall, and shall cause each of their
respective Affiliates to, cooperate with each other, and shall supply
information to each other as may reasonably be requested, in connection with
compliance with tax filing requirements, defending against tax audits and other
legitimate matters relating to taxes.
(d) If any amounts payable under this Agreement are subject to
deduction or withholding on account of taxes, the relevant payor shall pay such
additional amounts as may be necessary such that, after taking into account such
withholding, the recipient receives the amount it would have received had no
such deduction or withholding been imposed.
7.3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the conflict of law rules thereof.
7.4. Arbitration. (a) General. Subject to Section 7.4(g), any
controversy or claim arising out of or relating to this Agreement or the Senior
Convertible Notes, including any question regarding their respective existence,
validity, interpretation or breach, shall be settled by arbitration. The
arbitration shall be held in London, England and, except to the extent
inconsistent with this Agreement, shall be conducted in accordance with the
Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
(b) Selection of the Arbitrators. The arbitration tribunal
shall consist of three arbitrators each of whom shall be a practicing lawyer or
professor of law. The party initiating arbitration (the "Claimant") shall
nominate its arbitrator in its request for arbitration (the "Request"). The
other party (the "Respondent") shall nominate its arbitrator within 30 days of
receipt of the Request (whether the Request is received from the Claimant or
from the LCIA Arbitration International ) and shall notify the Claimant of such
nomination in writing. If the Respondent fails to nominate an arbitrator within
such 30-day period, the arbitrator named in the Request shall decide the
controversy or claim as a sole arbitrator. Otherwise, the two arbitrators
nominated by the parties shall nominate a third arbitrator within 30 days after
the Respondent has notified Claimant of the nomination of the Respondent's
arbitrator. When the arbitrators nominated by the Claimant and Respondent have
nominated a third arbitrator and the third arbitrator has accepted the
nomination, the two arbitrators shall promptly notify the parties of the
nomination of the third arbitrator. If the two arbitrators nominated by the
parties fail or are unable so to nominate a third arbitrator and so notify the
parties, either party may request the LCIA Arbitration International to appoint
the third arbitrator. The LCIA Arbitration International shall select the third
arbitrator within 30 days after such request,
24
<PAGE>
and shall thereafter notify the parties of the appointment of the tribunal. The
third arbitrator shall act as Chairman of the tribunal.
(c) Interim Orders. In addition to the authority conferred on
the arbitrators by the Rules of the LCIA Arbitration International and by law,
the arbitrators shall have the authority to order such discovery and production
of documents, including the deposition of party witnesses, and to make such
orders for interim relief, including injunctive relief, as they deem just and
equitable.
(d) The Award. The arbitral award may grant any relief
available under the applicable law, including, without limitation, specific
performance. The arbitral award shall state the reasons for the award and relief
granted, shall be final and binding on the parties to the arbitration, and may
include an award of costs, including reasonable attorneys' fees and
disbursements.
(e) Specific Enforcement. The foregoing agreement to arbitrate
shall be specifically enforceable.
(f) No Appeal. The parties expressly agree that leave to
appeal under section 69 of the English Arbitration Act 1996 (the "1996 Act") may
not be sought with respect to any question of law arising from an award, nor
application made under 45 of the 1996 Act with respect to any question of law.
(g) Notwithstanding anything in this Section 7.4 to the
contrary, any disagreement as to the Mandatory Redemption Premium set forth in
the last sentence of Section 3.8, will be submitted for definitive resolution by
Louis Begley, Esq., acting ex aequo et bono, the parties hereby agreeing
irrevocably to discharge him and Debevoise & Plimpton and indemnify each of them
from any claim, liability or loss with regard to such determination as he may
make.
7.5. Amendment, Assignment, etc. Neither this Agreement nor
any term hereof may be amended, changed, waived, discharged or terminated
orally, except by an instrument in writing, signed by the party against which
enforcement of such amendment, change, waiver, discharge or termination is
sought. This Agreement shall inure to the benefit of CME and ITI Holdings, their
heirs, personal representatives, successors and assigns and shall be binding
upon CME and ITI Holdings and their respective successors and assigns. ITI
Holdings may not assign or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of CME. CME may assign
and transfer this Agreement or any of its rights hereunder to any person to whom
any Senior Convertible Note is transferred, to any Affiliate of CME, and to any
successor of CME (including without limitation any person to whom CME may
transfer all or substantially all of its assets), provided that CME shall notify
ITI Holdings in writing of any such assignment by it.
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7.6. Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein shall be in writing and
shall be deemed validly given when received (or, if not received on a day that
is a business day in the location of receipt, on the first such business day
following such receipt) and may be given by hand delivery, telecopy or courier
mail:
if to ITI Holdings, at:
ITI Holdings S.A.
16 rue Eugene Ruppert
L-2453 Luxembourg
with a copy to:
ITI Management Ltd.
Beustweg 12
8032 Zurich
Switzerland
telecopy number: 011-41-1-258-8899
if to CME, at:
c/o CME Development Corporation
18 D'Arblay Street
London WIV 3FP
England
Attention: Legal Department
telecopy number: 011-44-171-292-7948
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Attention: Louis Begley
telecopy number: (212) 909-6836
or at such other addresses and telecopy numbers as any of the parties may
designate by written notice to the other parties hereto.
7.7. Survival. The representations and warranties of the
parties hereto contained in this Agreement and in any Transaction Document shall
survive the Closing hereunder until the third anniversary hereof.
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<PAGE>
7.8. Expenses. Except as otherwise specifically provided in
this Agree ment, each party hereto shall pay all its own costs and expenses
incident to this Agreement and the transactions contemplated hereby, including
legal and accounting fees and disbursements.
7.9. Severability; Invalidity. If any provision of this
Agreement is held to be unenforceable for any reason, it shall be adjusted
rather than voided, if possible, in order to achieve the intent of the parties
to this Agreement to the extent possible. In any event, the invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Agree ment in
that jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction.
7.10. No Third Party Beneficiaries. Nothing in this Agreement
shall be construed as giving any Person, other than the parties hereto and their
successors and permitted assigns, any right, remedy or claim under or in respect
of this Agreement or any provision hereof.
7.11. Translation. This Agreement has been concluded in the
English language and in the event of any inconsistency between the original
English version and any translation, such English version shall govern.
7.12. Further Assurances. Each of ITI Holdings and CME will
cause to be promptly and duly taken, executed, acknowledged and delivered all
such further actions, documents and assurances as may from time to time
reasonably be required in order to carry out the intent and the purposes of this
Agreement, the other Transaction Documents, and the transactions contemplated
hereby and thereby.
7.13. Integration; Section Headings; Counterparts; Agency;
etc. This Agreement (including the schedules and exhibits hereto) and the other
documents delivered pursuant hereto constitute the entire agreement of the
parties relating to the subject matter hereof and supersede any and all prior
agreements, arrangements and understandings relating thereto. The section
headings of this Agreement are for convenience of reference only and are not to
be considered in construing this Agreement. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument. Neither this Agreement
nor any transaction contemplated herein shall create the relationship of
partners, joint venturers or principal and agent among the parties hereto or any
of their respective Affiliates, except as expressly provided herein or therein.
None of the parties hereto have any authority to represent or bind the other
parties in any manner whatever, except as provided expressly herein or otherwise
agreed in writing among the parties.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
INTERNATIONAL TRADING AND
INVESTMENTS HOLDINGS S.A.
By: /s/ Bruno Valsangiacomo
--------------------------------
Name: Bruno Valsangiacomo
Title:
CENTRAL EUROPEAN MEDIA
ENTERPRISES LTD.
By: /s/ Michel Delloye
--------------------------------
Name: Michel Delloye
Title: President and Chief Executive
Officer
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<PAGE>
Exhibit A
[FORM OF SENIOR CONVERTIBLE NOTE]
INTERNATIONAL TRADING AND INVESTMENT HOLDINGS S.A.
SENIOR CONVERTIBLE NOTE
DUE DECEMBER 10, 2001
U.S. $_____________ December 10, 1998
International Trading and Investment Holdings S.A., a company
organized under the laws of Luxembourg (the "Company"), for value received and
intending to be legally bound, hereby unconditionally promises to pay to the
registered holder hereof, in immediately available funds, the principal sum
hereof on December 10, 2001 upon presentation and surrender of this Note, and to
pay interest on such amount at a rate of 5% per annum, from and including
December 10, 1998 to but excluding December 10, 2001. Interest shall be payable
semiannually in arrears on June 10, 1999 and December 10 1999 and thereafter
quarterly in arrears on March 10, June 10, September 10 and December 10 of years
2000 and 2001.
This Note is one of the Senior Convertible Notes of the
Company issued in the original aggregate principal amount of U.S. $40,000,000
pursuant to the Sale and Purchase Agreement dated December 10, 1998 (the
"Agreement") between the Company and Central European Media Enterprises Ltd. and
is subject to the applicable provisions of the Agreement as though they were
fully set out herein. Reference is made to the Agreement for a statement of the
rights and benefits accruing to the holder of this Note, including, without
limitation, a statement of the circumstances in which and the terms upon which
this Note may be converted into Ordinary Shares of ITI (as defined in the
Agreement).
Notwithstanding any provision of this Note or the Agreement to
the contrary, it is the intent of the Company and the holder that the holder
shall not at any time be entitled to receive, collect or apply, and the Company
and the holder shall not be deemed to have contracted for, as interest on the
principal indebtedness evidenced hereby, any amount in excess of the maximum
rate of interest permitted to be charged by applicable law, and in the event the
holder ever receives, collects or applies as interest any such excess, such
excess shall be deemed partial payment of the principal indebtedness evidenced
hereby, and if such principal shall be paid in full, any such excess shall
forthwith be paid to the Company.
<PAGE>
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive diligence, presentment, demand, protest and notice of any kind whatsoever,
to the extent permitted by applicable law. The nonexercise by the holder of this
Note of any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.
This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note and the rights and obligations of the parties
hereunder shall be governed and construed in accordance with the laws of the
State of New York, without giving effect to its principles or rules of conflict
of laws to the extent such principles or rules would require or permit the
application of the laws of another jurisdiction.
THE COMPANY AND THE HOLDER HEREOF AGREE THAT ANY DISPUTE,
CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS NOTE WILL BE FINALLY
SETTLED BY ARBITRATION AS SET FORTH IN THE AGREEMENT.
THE COMPANY WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE, SET-OFF
OR COUNTERCLAIM OF ANY NATURE WITH RESPECT TO THIS NOTE, INCLUDING BUT NOT
LIMITED TO ANY DEFENSE, SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION IN
CONNECTION WITH THE PAYMENT OF THE INDEBTEDNESS EVIDENCED HEREUNDER IN WHICH THE
HOLDER SHALL BE AN ADVERSE PARTY. FURTHERMORE, WITHOUT LIMITING THE FOREGOING,
THE COMPANY WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF
LIMITATIONS OR ANY CLAIM OF LACHES.
INTERNATIONAL TRADING AND
INVESTMENT HOLDINGS S.A.
By_______________________________
Name:
Title:
<PAGE>
Exhibit B
AGREEMENT FOR THE SALE OF SHARES
This Agreement has been concluded on December 10, 1998 in
London, England between CME MEDIA ENTERPRISES B.V., having its seat in Amsterdam
(the "Seller"), represented by Erik T. Moe, by power of attorney, and ITI TV
HOLDINGS Sp. z o.o., having its seat in Warsaw, Poland (the "Buyer"),
represented by Romano Faconi, by power of attorney (each of the Seller and the
Buyer are referred to herein as a "Party" and collectively, the "Parties").
WHEREAS:
A. The Seller is the owner of 184,800 shares, each with a
nominal value of PLN 100.00 (one hundred zlotys) in the share capital of TVN Sp.
z o.o., a limited liability company having its seat in Warsaw; and
B. TVN Sp. z o.o. is duly existing under Polish law and
registered in the Commercial Register of the District Court in Warsaw (the
"Company");
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
Article 1
Sale of Shares
1. The Seller hereby sells and the Buyer hereby buys 184,800 shares in
the share capital of the Company, together with all shareholder rights and
claims attached thereto (the "Shares").
2. The total price for the Shares is PLN 38,687,659.50, which is the
equivalent, as of the date of this Agreement, of USD 11,053,617.00.
3. The Seller hereby acknowledges receipt of the total purchase price
for the Shares.
4. The Buyer acquires ownership of the Shares upon receipt by the
Seller of the total purchase price referred to in point 1. of this Article 1.
Article 2
Representations and Warranties of the Seller
The Seller hereby warrants and represents to the Buyer as
follows:
<PAGE>
1. The Shares being sold pursuant to this Agreement are owned by the
Seller and are free of any pledges, securities or other encumbrances existing
under the law or under agreements concluded with third parties.
2. The Seller has full power, legal authority and all necessary
consents and approvals to enter into this Agreement and all transactions
contemplated hereunder.
Article 3
Representations and Warranties of the Buyer
The Buyer hereby warrants and represents to the Seller that it
is fully authorized and properly empowered to conclude and perform this
Agreement and that the obligations contained herein are legally valid and
binding upon the Buyer.
Article 4
Applicable Law and Settlement of the Disputes
1. This Agreement is subject of the Polish law. The provisions
of the Polish Commercial Code and Civil Code shall apply to all matters not
regulated by this Agreement.
2. Any controversy or claim arising out of or relating to this
Agree ment, including any question regarding its existence, validity,
interpretation or breach, shall be settled by arbitration. The arbitration shall
be held in London, England and, except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the Rules of the LCIA
Arbitration International in effect at the time of the arbitration. The
arbitration shall be conducted in the English language. The arbitration
proceedings, all documents and all testimony, written or oral, produced in
connection therewith, and the arbitration award shall be confidential.
3. The arbitration tribunal shall consist of three arbitrators
each of whom shall be a practicing lawyer or professor of law. The party
initiating arbitration (the "Claimant") shall nominate its arbitrator in its
request for arbitration (the "Request"). The other party (the "Respondent")
shall nominate its arbitrator within 30 days of receipt of the Request (whether
the Request is received from the Claimant or from the LCIA Arbitration
International ) and shall notify the Claimant of such nomination in writing. If
the Respondent fails to nominate an arbitrator within such 30-day period, the
arbitrator named in the Request shall decide the controversy or claim as a sole
arbitrator. Otherwise, the two arbitrators nominated by the parties shall
nominate a third arbitrator within 30 days after the Respondent has notified
Claimant of the nomination of the Respondent's arbitrator. When the arbitrators
nominated by the Claimant and Respondent have nominated a third arbitrator and
the third arbitrator has accepted the nomination, the two arbitrators shall
promptly notify the parties of the nomination of the third arbitrator. If the
two arbitrators
2
<PAGE>
nominated by the parties fail or are unable so to nominate a third arbitrator
and so notify the parties, either party may request the LCIA Arbitration
International to appoint the third arbitrator. The LCIA Arbitration
International shall select the third arbitrator within 30 days after such
request, and shall thereafter notify the parties of the appointment of the
tribunal. The third arbitrator shall act as Chairman of the tribunal.
4. In addition to the authority conferred on the arbitrators
by the Rules of the LCIA Arbitration International and by law, the arbitrators
shall have the authority to order such discovery and production of documents,
including the deposition of party witnesses, and to make such orders for interim
relief, including injunctive relief, as they deem just and equitable.
5. The arbitral award may grant any relief available under the
applicable law, including, without limitation, specific performance. The
arbitral award shall state the reasons for the award and relief granted, shall
be final and binding on the parties to the arbitration, and may include an award
of costs, including reasonable attorneys' fees and disbursements.
6. The foregoing agreement to arbitrate shall be specifically
enforceable.
7. The Parties expressly agree that leave to appeal under
section 69 of the English Arbitration Act 1996 (the "1996 Act") may not be
sought with respect to any question of law arising from an award, nor
application made under 45 of the 1996 Act with respect to any question of law.
Article 5
Confidentiality Clause
1. Each party to this Agreement undertakes not to disclose to
any third person any information relating to the other Party or the Company that
is not available to the public.
2. The restriction set out in point 1. of this Article 5 shall
not apply to the disclosure of information to governmental agencies to the
extent required by the law.
3
<PAGE>
Article 6
Final Provisions
1. The Buyer shall bear the stamp duty payable in Poland
associated with this Agreement.
2. Concurrently with the execution of this Agreement, the
Seller shall execute and deliver to the Buyer a letter to the Management Board
of the Company set forth in Attachment 1 hereto, and the Buyer shall promptly
deliver such letter to the Management Board of the Company.
3. Any amendment to this Agreement must be in writing and
shall require mutual consent of the Parties, upon pain of invalidity.
4. This Agreement has been executed in three original
counterparts in the English language. The Seller shall receive one original of
this Agreement and the Buyer shall receive two such counterparts.
NOW, IN WITNESS WHEREOF the Parties have executed this
Agreement by their duly authorized representatives
FOR THE SELLER FOR THE BUYER
- --------------------------- ---------------------------
Name: Erik T. Moe Name: Romano Fanconi
Title: Attorney in Fact Title: Attorney in Fact
4
<PAGE>
Attachment 1 to Exhibit B
[Letterhead of CME Media Enterprises B.V.]
December 10, 1998
Management Board of TVN Sp. z o.o.
02-981 Warsaw
ul. Augustowka 3
Poland
Dear Sirs:
This is to inform you that CME Media Enterprises B.V. has sold today
all of its shares in TVN Sp. z o.o. to ITI TV Holdings Sp. z .o.o and is no
longer a shareholder of TVN Sp. z o.o.
Sincerely,
- --------------------------
Name: Michel Delloye
Title: Managing Director
5
<PAGE>
Exhibit C
AGREEMENT FOR THE SALE OF SHARES
This Agreement has been concluded on December 10, 1998 in
London, England between CME POLAND B.V., having its seat in Amsterdam (the
"Seller"), represented by Erik T. Moe, by power of attorney, and UNIDOME BEHEER
B.V., having its seat in Amsterdam (the "Buyer"), represented by Romano Fanconi,
by power of attorney (each of the Seller and the Buyer are referred to herein as
a "Party" and collectively, the "Parties").
WHEREAS:
A. The Seller is the owner of 364,584 shares, each with a
nominal value of PLN 50.00 (fifty zlotys) in the share capital of Federacja Sp.
z o.o., a limited liability company having its seat in Warsaw; and
B. Federacja Sp. z o.o. is duly existing under Polish law and
registered in the Commercial Register of the District Court in Warsaw (the
"Company");
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
Article 1
Sale of Shares
1. The Seller hereby sells and the Buyer hereby buys 364,584 shares in
the share capital of the Company, together with all shareholder rights and
claims attached thereto (the "Shares").
2. The total price for the Shares is PLN3.50, which is the equivalent,
as of the date of this Agreement, of USD1.00.
3. The Seller hereby acknowledges receipt of the total purchase price
for the Shares.
4. The Buyer acquires ownership of the Shares upon receipt by the
Seller of the total purchase price referred to in point 1. of this Article 1.
Article 2
Representations and Warranties of the Seller
The Seller hereby warrants and represents to the Buyer as
follows:
<PAGE>
1. The Shares being sold pursuant to this Agreement are owned by the
Seller and are free of any pledges, securities or other encumbrances existing
under the law or under agreements concluded with third parties.
2. The Seller has full power, legal authority and all necessary
consents and approvals to enter into this Agreement and all transactions
contemplated hereunder.
Article 3
Representations and Warranties of the Buyer
The Buyer hereby warrants and represents to the Seller that it
is fully authorized and properly empowered to conclude and perform this
Agreement and that the obligations contained herein are legally valid and
binding upon the Buyer.
Article 4
Applicable Law and Settlement of the Disputes
1. This Agreement is subject of the Polish law. The provisions
of the Polish Commercial Code and Civil Code shall apply to all matters not
regulated by this Agreement.
2. Any controversy or claim arising out of or relating to this
Agree ment, including any question regarding its existence, validity,
interpretation or breach, shall be settled by arbitration. The arbitration shall
be held in London, England and, except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the Rules of the LCIA
Arbitration International in effect at the time of the arbitration. The
arbitration shall be conducted in the English language. The arbitration
proceedings, all documents and all testimony, written or oral, produced in
connection therewith, and the arbitration award shall be confidential.
3. The arbitration tribunal shall consist of three arbitrators
each of whom shall be a practicing lawyer or professor of law. The party
initiating arbitration (the "Claimant") shall nominate its arbitrator in its
request for arbitration (the "Request"). The other party (the "Respondent")
shall nominate its arbitrator within 30 days of receipt of the Request (whether
the Request is received from the Claimant or from the LCIA Arbitration
International ) and shall notify the Claimant of such nomination in writing. If
the Respondent fails to nominate an arbitrator within such 30-day period, the
arbitrator named in the Request shall decide the controversy or claim as a sole
arbitrator. Otherwise, the two arbitrators nominated by the parties shall
nominate a third arbitrator within 30 days after the Respondent has notified
Claimant of the nomination of the Respondent's arbitrator. When the arbitrators
nominated by the Claimant and Respondent have nominated a third arbitrator and
the third arbitrator has accepted the nomination, the two arbitrators shall
promptly notify the parties of the nomination of the third arbitrator. If the
two arbitrators
2
<PAGE>
nominated by the parties fail or are unable so to nominate a third arbitrator
and so notify the parties, either party may request the LCIA Arbitration
International to appoint the third arbitrator. The LCIA Arbitration
International shall select the third arbitrator within 30 days after such
request, and shall thereafter notify the parties of the appointment of the
tribunal. The third arbitrator shall act as Chairman of the tribunal.
4. In addition to the authority conferred on the arbitrators
by the Rules of the LCIA Arbitration International and by law, the arbitrators
shall have the authority to order such discovery and production of documents,
including the deposition of party witnesses, and to make such orders for interim
relief, including injunctive relief, as they deem just and equitable.
5. The arbitral award may grant any relief available under the
applicable law, including, without limitation, specific performance. The
arbitral award shall state the reasons for the award and relief granted, shall
be final and binding on the parties to the arbitration, and may include an award
of costs, including reasonable attorneys' fees and disbursements.
6. The foregoing agreement to arbitrate shall be specifically
enforceable.
7. The Parties expressly agree that leave to appeal under
section 69 of the English Arbitration Act 1996 (the "1996 Act") may not be
sought with respect to any question of law arising from an award, nor
application made under 45 of the 1996 Act with respect to any question of law.
Article 5
Confidentiality Clause
1. Each party to this Agreement undertakes not to disclose to
any third person any information relating to the other Party or the Company that
is not available to the public.
2. The restriction set out in point 1. of this Article 5 shall
not apply to the disclosure of information to governmental agencies to the
extent required by the law.
3
<PAGE>
Article 6
Final Provisions
1. The Buyer shall bear the stamp duty payable in Poland
associated with this Agreement.
2. Concurrently with the execution of this Agreement, the
Seller shall execute and deliver to the Buyer a letter to the Management Board
of the Company set forth in Attachment 1 hereto, and the Buyer shall promptly
deliver such letter to the Management Board of the Company.
3. Any amendment to this Agreement must be in writing and
shall require mutual consent of the Parties, upon pain of invalidity.
4. This Agreement has been executed in three original
counterparts in the English language. The Seller shall receive one original of
this Agreement and the Buyer shall receive two such counterparts.
NOW, IN WITNESS WHEREOF the Parties have executed this
Agreement by their duly authorized representatives
FOR THE SELLER FOR THE BUYER
- --------------------------- ---------------------------
Name: Erik T. Moe Name: Romano Fanconi
Title: Attorney in Fact Title: Attorney in Fact
4
<PAGE>
Attachment 1 to Exhibit C
[Letterhead of CME Poland B.V.]
December 10, 1998
Management Board of Federacja Sp. z o.o.
02-981 Warsaw
ul. Powsinska 4
Poland
Dear Sirs:
This is to inform you that CME Poland B.V. has sold today all of its
shares in Federacja Sp. z o.o. to Unidome Beheer B.V. and is no longer a
shareholder of Federacja Sp. z o.o.
Sincerely,
- ------------------------
Name: Michel Delloye
Title: Managing Director
5
<PAGE>
Exhibit D-1
SHARE TRANSFER AGREEMENT
The Undersigned,
1. CME Media Enterprises B.V.
Nieuwe Spiegelstraat 26
1017 DG AMSTERDAM
The Netherlands
(hereinafter be referred to as: SELLER)
and
2. International Trading and Investments Holdings S.A.
16, rue Eugene Ruppert
L-1014 Luxembourg
LUXEMBOURG
(hereinafter to be referred to as: BUYER)
WHEREAS (A) SELLER is holder of the full title of property of
19.600 (nineteen thousand six hundred) shares,
numbered through 19.600, of nominally NLG 1,00 each
in the capital of Neovision Holding B.V., a company
formed and existing under the laws of Netherlands,
(hereinafter to be referred to as: THE SHARES);
WHEREAS (B) SELLER is desirous to sell THE SHARES to BUYER and
BUYER is desirous to buy THE SHARES from SELLER;
WHEREAS (C) parties hereto wish to conclude an agreement to this
effect in writing;
NOW, THEREFORE, DO HEREBY DECLARE TO HAVE AGREED AS FOLLOWS:
Article 1
The preambles constitute an integral part of this Agreement.
<PAGE>
Article 2
SELLER hereby declares to have sold to BUYER THE SHARES whereas BUYER hereby
declares to have bought from SELLER THE SHARES, under the following stipulations
and conditions:
1. the transfer price will be USD 1,00 (one United States Dollar) and has
been paid by BUYER to SELLER and for which SELLER gives full discharge
to BUYER;
2. the transfer of THE SHARES will be effectuated by notarial deed of
transfer, to be passed before one of the civil law notaries of the
office of Jacobse Hulsebosch Van Loenen & Doorduyn, with offices at
Zoetermeer;
3. SELLER has the obligation to transfer THE SHARES in full and free
property i.e. not subject to pledge, usufruct or any other encumbrance;
4. parties shall waive their rights of cancellation and annulment
regarding this agreement in the notarial deed of transfer of THE
SHARES;
5. as from today all profits and losses of THE SHARES are for the account
of BUYER.
Article 3
SELLER hereby constitutes and appoints BUYER as his true and lawful attorney in
fact to act in his name, place and stead with respect to the exercising of the
voting rights attached to THE SHARES.
Article 4
This agreement will be governed by Dutch Law and any controversy or claim
arising out of or relating to this Agreement, including any question regarding
its existence, validity, interpretation or breach, shall be settled by
arbitration. The arbitration shall be held in London, England and, except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of whom shall
be a practicing lawyer or professor of law. The party initiating arbitration
(the "Claimant") shall nominate
2
<PAGE>
its arbitrator in its request for arbitration (the "Request"). The other party
(the "Respondent") shall nominate its arbitrator within 30 days of receipt of
the Request (whether the Request is received from the Claimant or from the LCIA
Arbitration International ) and shall notify the Claimant of such nomination in
writing. If the Respondent fails to nominate an arbitrator within such 30-day
period, the arbitrator named in the Request shall decide the controversy or
claim as a sole arbitrator. Otherwise, the two arbitrators nominated by the
parties shall nominate a third arbitrator within 30 days after the Respondent
has notified Claimant of the nomination of the Respondent's arbitrator. When the
arbitrators nominated by the Claimant and Respondent have nominated a third
arbitrator and the third arbitrator has accepted the nomination, the two
arbitrators shall promptly notify the parties of the nomination of the third
arbitrator. If the two arbitrators nominated by the parties fail or are unable
so to nominate a third arbitrator and so notify the parties, either party may
request the LCIA Arbitration International to appoint the third arbitrator. The
LCIA Arbitration International shall select the third arbitrator within 30 days
after such request, and shall thereafter notify the parties of the appointment
of the tribunal. The third arbitrator shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by the Rules of the
LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to make such orders for interim relief,
including injunctive relief, as they deem just and equitable.
The arbitral award may grant any relief available under the applicable law,
including, without limitation, specific performance. The arbitral award shall
state the reasons for the award and relief granted, shall be final and binding
on the parties to the arbitration, and may include an award of costs, including
reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of the English
Arbitration Act 1996 (the "1996 Act") may not be sought with respect to any
question of law arising from an award, nor application made under 45 of the 1996
Act with respect to any question of law.
THUS SIGNED THIS 10th DAY OF DECEMBER 1998
- -------------------------- ---------------------------
CME Media Enterprises B.V. International Trading and
Investments Holdings S.A.
3
<PAGE>
THE UNDERSIGNED
Neovision Holding B.V., declares to acknowledge the above-mentioned transfer of
19.600 shares in it's capital and to enter this transfer in the Company's
Shareholders Register.
- ----------------------
Neovision Holding B.V.
4
<PAGE>
Exhibit D-2
PROXY
The Undersigned,
CME Media Enterprises B.V.
Nieuwe Spiegelstraat 26
1017 DG AMSTERDAM
The Netherlands
hereby constitutes and appoints
Dumatrust Management Services B.V. any civil notary awaiting appointment of
Notary office Jacobse Hulsebosch van Loenen & Doorduyn, Notarissen at Zoetermeer
as its true and lawful attorneys in fact to:
- - sign the Share Purchase Agreement between International Trading and
Investments Holdings S.A. and the Undersigned, regarding the transfer
of 19.600 shares of nominally NLG 1,00 each in the capital of Neovision
Holding B.V., a company formed and existing under the laws of the
Netherlands;
- - effectuate in the name, place and stead of the Undersigned the
above-mentioned share transfer;
- - sign the notarial deed of transfer relating to the above-mentioned
transfer to be passed before one of the civil law notaries of Jacobse
Hulsebosch Van Loenen & Doorduyn, with offices in Zoetermeer.
The attorneys in fact are hereby authorized and directed to carry out any and
all acts and to execute in the name, place and stead of the Undersigned the
notarial deed and any and all documents necessary for the above-mentioned
purpose, with full power of substitution.
This proxy will be governed by Dutch Law.
Thus signed this 10th day of December 1998.
- -----------------------------------
CME Media Enterprises B.V.
<PAGE>
Exhibit D-3
PROXY
The Undersigned,
International Trading and Investments Holdings S.A.
16, rue Eugene Ruppert
L-1014 Luxembourg
LUXEMBOURG
hereby constitutes and appoints
Dumatrust Management Services B.V. any civil notary awaiting appointment of
Notary office Jacobse Hulsebosch van Loenen & Doorduyn, Notarissen at Zoetermeer
as its true and lawful attorneys in fact to:
- - sign the Share Purchase Agreement between CME Media Enterprises B.V.
and the Undersigned, regarding the transfer of 19.600 shares of
nominally NLG 1,00 each in the capital of Neovision Holding B.V., a
company formed and existing under the laws of the Netherlands;
- - accept in the name, place and stead of the Undersigned the
above-mentioned share transfer;
- - sign the notarial deed of transfer relating to the above-mentioned
transfer to be passed before one of the civil law notaries of Jacobse
Hulsebosch Van Loenen & Doorduyn, with offices in Zoetermeer.
The attorneys in fact are hereby authorized and directed to carry out any and
all acts and to execute in the name, place and stead of the Undersigned the
notarial deed and any and all documents necessary for the above-mentioned
purpose, with full power of substitution.
This proxy will be governed by Dutch Law.
Thus signed this 10th day of December 1998.
- ---------------------------------------------------
International Trading and Investments Holdings S.A.
<PAGE>
Exhibit D-4
W A I V E R
The Undersigned,
Dumatrust Management Services B.V.
in its capacity of holder of the legal ownership of 1 share in the capital of
Neovision Holding B.V.
hereby waives its preferential right in connection with the Purchase and Sale
and Transfer of 19.600 shares in the capital of Neovision Holding B.V. from CME
Media Enterprises B.V. to International Trading and Investments S.A.
Thus signed this 10th day of December, 1998
Dumatrust Management Services B.V.
<PAGE>
Exhibit E-1
SHARE TRANSFER AGREEMENT
The Undersigned,
1. CME Poland B.V.
Nieuwe Spiegelstraat 26
1017 DG AMSTERDAM
The Netherlands
(hereinafter to be referred to as: SELLER)
and
2. International Trading and Investments Holdings S.A.
16, rue Eugene Ruppert
L-1014 Luxembourg
LUXEMBOURG
(hereinafter to be referred to as: BUYER)
WHEREAS (A) SELLER is holder of the full title of property of 600
(six hundred) shares, numbered 5.401 through 6.000,
of nominally USD 1,00 each in the capital of ITI
Media Group N.V., a company formed and existing under
the laws of the Netherlands Antilles, (hereinafter to
be referred to as: THE SHARES);
WHEREAS (B) SELLER is desirous to sell THE SHARES to BUYER and
BUYER is desirous to buy THE SHARES from SELLER;
WHEREAS (C) parties hereto wish to conclude an agreement to this
effect in writing;
<PAGE>
NOW, THEREFORE, DO HEREBY DECLARE TO HAVE AGREED AS FOLLOWS:
Article 1
The preambles constitute an integral part of this Agreement.
Article 2
SELLER hereby declares to have sold to BUYER THE SHARES whereas BUYER hereby
declares to have bought from SELLER THE SHARES, under the following stipulations
and conditions:
1. the transfer price will be USD 10,000,000 and has been paid by BUYER to
SELLER and for which SELLER gives full discharge to BUYER;
2. the transfer of THE SHARES will be effectuated by this deed of
transfer;
3. SELLER has the obligation to transfer THE SHARES in full and free
property i.e. not subject to pledge, usufruct or any other encumbrance;
4. parties shall waive their rights of cancellation and annulment
regarding this agreement in the notarial deed of transfer of THE
SHARES;
5. as from today all profits and losses of THE SHARES are for the account
of BUYER.
Article 3
This agreement will be governed by The Netherlands Antilles law and any
controversy or claim arising out of or relating to this Agreement, including any
question regarding its existence, validity, interpretation or breach, shall be
settled by arbitration. The arbitration shall be held in London, England and,
except to the extent inconsistent with this Agreement, shall be conducted in
accordance with the Rules of the LCIA Arbitration International in effect at the
time of the arbitration. The arbitration shall be conducted in the English
language. The arbitration proceedings, all documents and all testimony, written
or oral, produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of whom shall
be a practicing lawyer or professor of law. The party initiating arbitration
(the "Claimant") shall nominate its arbitrator in its request for arbitration
(the "Request"). The other party (the
2
<PAGE>
"Respondent") shall nominate its arbitrator within 30 days of receipt of the
Request (whether the Request is received from the Claimant or from the LCIA
Arbitration International ) and shall notify the Claimant of such nomination in
writing. If the Respondent fails to nominate an arbitrator within such 30-day
period, the arbitrator named in the Request shall decide the controversy or
claim as a sole arbitrator. Otherwise, the two arbitrators nominated by the
parties shall nominate a third arbitrator within 30 days after the Respondent
has notified Claimant of the nomination of the Respondent's arbitrator. When the
arbitrators nominated by the Claimant and Respondent have nominated a third
arbitrator and the third arbitrator has accepted the nomination, the two
arbitrators shall promptly notify the parties of the nomination of the third
arbitrator. If the two arbitrators nominated by the parties fail or are unable
so to nominate a third arbitrator and so notify the parties, either party may
request the LCIA Arbitration International to appoint the third arbitrator. The
LCIA Arbitration International shall select the third arbitrator within 30 days
after such request, and shall thereafter notify the parties of the appointment
of the tribunal. The third arbitrator shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by the Rules of the
LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to make such orders for interim relief,
including injunctive relief, as they deem just and equitable.
The arbitral award may grant any relief available under the applicable law,
including, without limitation, specific performance. The arbitral award shall
state the reasons for the award and relief granted, shall be final and binding
on the parties to the arbitration, and may include an award of costs, including
reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of the English
Arbitration Act 1996 (the "1996 Act") may not be sought with respect to any
question of law arising from an award, nor application made under 45 of the 1996
Act with respect to any question of law.
3
<PAGE>
THUS SIGNED THIS 10th DAY OF DECEMBER 1998
- -------------------------------- ------------------------------
CME Poland B.V. International Trading and
Investments Holdings S.A.
4
<PAGE>
Exhibit F-1
ASSIGNMENT OF RECEIVABLES AGREEMENT
This assignment of receivables agreement (the "Agreement") has been entered into
on this 10th day of December 1998 by and between
CME Media Enterprises B.V., a limited liability company organized and operating
under the laws of the Netherlands, with its registered seat at Nieuwe
Spiegelstraat 26, 1017 DG Amsterdam, the Netherlands (hereinafter referred to as
the "Assignor")
and
International Trading and Investments Holdings S.A. ("ITI"), a joint stock
company organized and operating under the laws of Luxembourg, with its seat at
16 Rue Eugene Ruppert, Luxembourg (hereinafter referred to as the "Assignee").
WHEREAS:
A. TVN Sp. zo.o., a limited liability company organized and operating under the
laws of the Republic of Poland with its seat at Augustowka Street 3, Warsaw,
Poland (hereinafter referred to as the "Debtor"),owes the Assignor an aggregate
amount of 607,962 U.S. Dollars in respect to certain payments made by Assignor
on behalf of the Debtor (the "Receivables")
B. Pursuant to the terms of the Sale and Purchase Agreement dated December 10,
1998, entered into between Central European Media Enterprises Ltd. ("CME") and
the Assignee, CME has undertaken an obligation to cause that the Assignor
assigns to the Assignee the Receivables for the agreed upon consideration;
NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Assignment
For good and valuable consideration of USD 607,962, the receipt and
sufficiency of which is hereby confirmed, the Assignor hereby irrevocably and
unconditionally assigns to the Assignee the Receivables together with all
accrued thereon interest and other payables and the Assignee hereby accepts such
assignment.
2. Notice of Assignment
The Assignor shall forthwith execute a notice of assignment of the
Loans addressed to the Debtor attached hereto.
<PAGE>
3. Costs and taxes
Any transfer or stamp duties payable in connection with the execution
of this Assignment Agreement shall be borne by the Assignee.
4. Governing Law and Settlement of Disputes
This agreement will be governed by Dutch law and any controversy or
claim arising out of or relating to this Agreement, including any question
regarding its existence, validity, interpretation or breach, shall be settled by
arbitration. The arbitration shall be held in London, England and, except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of
whom shall be a practicing lawyer or professor of law. The party initiating
arbitration (the "Claimant") shall nominate its arbitrator in its request for
arbitration (the "Request"). The other party (the "Respondent") shall nominate
its arbitrator within 30 days of receipt of the Request (whether the Request is
received from the Claimant or from the LCIA Arbitration International ) and
shall notify the Claimant of such nomination in writing. If the Respondent fails
to nominate an arbitrator within such 30-day period, the arbitrator named in the
Request shall decide the controversy or claim as a sole arbitrator. Otherwise,
the two arbitrators nominated by the parties shall nominate a third arbitrator
within 30 days after the Respondent has notified Claimant of the nomination of
the Respondent's arbitrator. When the arbitrators nominated by the Claimant and
Respondent have nominated a third arbitrator and the third arbitrator has
accepted the nomination, the two arbitrators shall promptly notify the parties
of the nomination of the third arbitrator. If the two arbitrators nominated by
the parties fail or are unable so to nominate a third arbitrator and so notify
the parties, either party may request the LCIA Arbitration International to
appoint the third arbitrator. The LCIA Arbitration International shall select
the third arbitrator within 30 days after such request, and shall thereafter
notify the parties of the appointment of the tribunal. The third arbitrator
shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by the Rules
of the LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to make such orders for interim relief,
including injunctive relief, as they deem just and equitable.
The arbitral award may grant any relief available under the applicable
law, including, without limitation, specific performance. The arbitral award
shall state the
2
<PAGE>
reasons for the award and relief granted, shall be final and binding on the
parties to the arbitration, and may include an award of costs, including
reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of
the English Arbitration Act 1996 (the "1996 Act") may not be sought with respect
to any question of law arising from an award, nor application made under 45 of
the 1996 Act with respect to any question of law.
CME Media Enterprises B.V. International Trading and Investments
Holdings S.A.
By: By:
Name: Name:
Title: Title:
3
<PAGE>
Notice of Assignment
December 10, 1998
To: TVN Sp. z.o.o.
ul. Augustowka 3
Warszawa
CME Media Enterprises B.V. ("CME Media") hereby notifies that, pursuant to the
Assignment Agreement dated December 10, 1998 between CME Media and ITI Holdings
S.A. ("ITI"), CME Media has agreed and assigned to ITI all of its receivables in
respect to certain payments made by CME Media on behalf of TVN in aggregate
amount of 607,292 U.S. Dollars (the "Receivables").
In view of the above any payments related to the Receivables should be made by
you directly to ITI pursuant to its instructions. ITI alone will be authorized
and empowered to request the payment of the Loans and the Receivables.
CME Media Enterprises B.V.
By:
Name:
Title:
4
<PAGE>
Exhibit F-2
ASSIGNMENT OF RECEIVABLES AGREEMENT
This assignment of receivables agreement (the "Agreement") has been entered into
on this 10th day of December 1998 by and between
CME Media Enterprises B.V., a limited liability company organized and operating
under the laws of the Netherlands, with its registered seat at Nieuwe
Spiegelstraat 26, 1017 DG Amsterdam, the Netherlands (hereinafter referred to as
the "Assignor")
and
International Trading and Investments Holdings S.A. ("ITI"), a joint stock
company organized and operating under the laws of Luxembourg, with its seat at
16 Rue Eugene Ruppert, Luxembourg (hereinafter referred to as the "Assignee").
WHEREAS:
A. Federacja Sp. z.o.o., a limited liability company organized and operating
under the laws of the Republic of Poland with its seat at Federacja Sp. z.o.o.
Warszawa Powsinska Street 4, Warsaw, Poland (hereinafter referred to as the
"Debtor"), owes the Assignor an aggregate amount of 49,656 U.S. Dollars in
respect to certain payments made by Assignor on behalf of the Debtor (the
"Receivables")
B. Pursuant to the terms of the Sale and Purchase Agreement dated December 10,
1998, entered into between Central European Media Enterprises Ltd. ("CME") and
the Assignee, CME has undertaken an obligation to cause that the Assignor
assigns to the Assignee the Loans and the Receivables for the agreed upon
consideration;
NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Assignment
For good and valuable consideration of USD 14,781, the receipt and
sufficiency of which is hereby confirmed, the Assignor hereby irrevocably and
unconditionally assigns to the Assignee the Receivables and the Assignee hereby
accepts such assignment.
2. Notice of Assignment
The Assignor shall forthwith execute a notice of assignment of the
Loans addressed to the Debtor attached hereto.
<PAGE>
3. Costs and taxes
Any transfer or stamp duties payable in connection with the execution
of this Assignment Agreement shall be borne by the Assignee.
4. Governing Law and Settlement of Disputes
This agreement will be governed by Dutch law and any controversy or
claim arising out of or relating to this Agreement, including any question
regarding its existence, validity, interpretation or breach, shall be settled by
arbitration. The arbitration shall be held in London, England and, except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of
whom shall be a practicing lawyer or professor of law. The party initiating
arbitration (the "Claimant") shall nominate its arbitrator in its request for
arbitration (the "Request"). The other party (the "Respondent") shall nominate
its arbitrator within 30 days of receipt of the Request (whether the Request is
received from the Claimant or from the LCIA Arbitration International ) and
shall notify the Claimant of such nomination in writing. If the Respondent fails
to nominate an arbitrator within such 30-day period, the arbitrator named in the
Request shall decide the controversy or claim as a sole arbitrator. Otherwise,
the two arbitrators nominated by the parties shall nominate a third arbitrator
within 30 days after the Respondent has notified Claimant of the nomination of
the Respondent's arbitrator. When the arbitrators nominated by the Claimant and
Respondent have nominated a third arbitrator and the third arbitrator has
accepted the nomination, the two arbitrators shall promptly notify the parties
of the nomination of the third arbitrator. If the two arbitrators nominated by
the parties fail or are unable so to nominate a third arbitrator and so notify
the parties, either party may request the LCIA Arbitration International to
appoint the third arbitrator. The LCIA Arbitration International shall select
the third arbitrator within 30 days after such request, and shall thereafter
notify the parties of the appointment of the tribunal. The third arbitrator
shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by the Rules
of the LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to make such orders for interim relief,
including injunctive relief, as they deem just and equitable.
The arbitral award may grant any relief available under the applicable
law, including, without limitation, specific performance. The arbitral award
shall state the
2
<PAGE>
reasons for the award and relief granted, shall be final and binding on the
parties to the arbitration, and may include an award of costs, including
reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of
the English Arbitration Act 1996 (the "1996 Act") may not be sought with respect
to any question of law arising from an award, nor application made under 45 of
the 1996 Act with respect to any question of law.
CME Media Enterprises B.V. International Trading and Investments
Holdings S.A.
By: By:
Name: Name:
Title: Title:
3
<PAGE>
Notice of Assignment
December 10, 1998
To: Federacja Sp. z.o.o.
ul. Powsinska 4
Warszawa
CME Media Enterprises B.V. ("CME Media") hereby notifies that, pursuant to the
Assignment Agreement dated December 10, 1998 between CME Media and ITI Holdings
S.A. ("ITI"), CME Media has agreed and assigned to ITI all of its receivables in
respect to certain payments made by CME Media on behalf of Federacja in
aggregate amount of 49,656 U.S. Dollars (the "Receivables").
In view of the above any payments related to the Receivables should be made by
you directly to ITI pursuant to its instructions. ITI alone will be authorized
and empowered to request the payment of the Receivables.
CME Media Enterprises B.V.
By:
Name:
Title:
4
<PAGE>
Exhibit F-3
ASSIGNMENT OF RECEIVABLES AGREEMENT
This assignment of receivables agreement (the "Agreement") has been entered into
on this 10th day of December 1998 by and between
CME Poland B.V., a limited liability company organized and operating under the
laws of the Netherlands, with its registered seat at Nieuwe Spielgelstraat 26,
1017 DG Amsterdam, the Netherlands (hereinafter referred to as the "Assignor")
and
International Trading and Investments Holdings S.A. ("ITI"), a joint stock
company organized and operating under the laws of Luxembourg, with its seat at
16 Rue Eugene Ruppert, Luxembourg (hereinafter referred to as the "Assignee").
WHEREAS:
A. The Assignor has extended to Federacja Sp. z.o.o., a limited liability
company organized and operating under the laws of the Republic of Poland with
its seat at Powsinska Street 4, Warsaw, Poland (hereinafter referred to as the
"Debtor"), loans in the principal amount of 12,000,000 U.S. Dollars pursuant to
two separate loan agreements dated February 13, 1998 (the "Loans");
B. Pursuant to the terms of the Sale and Purchase Agreement dated December 10,
1998, entered into between Central European Media Enterprises Ltd. ("CME") and
the Assignee, CME has undertaken an obligation to cause that the Assignor
assigns to the Assignee the Loans for the agreed upon consideration;
NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Assignment
For good and valuable consideration of USD1.00, the receipt and
sufficiency of which is hereby confirmed, the Assignor hereby irrevocably and
unconditionally assigns to the Assignee the Loans together with all accrued
thereon interest and other payables and the Assignee hereby accepts such
assignment.
2. Notice of Assignment
The Assignor shall forthwith execute a notice of assignment of the
Loans addressed to the Debtor attached hereto.
<PAGE>
3. Costs and taxes
Any transfer or stamp duties payable in connection with the execution
of this Assignment Agreement shall be borne by the Assignee.
4. Governing Law and Settlement of Disputes
This agreement will be governed by Dutch law and any controversy or
claim arising out of or relating to this Agreement, including any question
regarding its existence, validity, interpretation or breach, shall be settled by
arbitration. The arbitration shall be held in London, England and, except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of
whom shall be a practicing lawyer or professor of law. The party initiating
arbitration (the "Claimant") shall nominate its arbitrator in its request for
arbitration (the "Request"). The other party (the "Respondent") shall nominate
its arbitrator within 30 days of receipt of the Request (whether the Request is
received from the Claimant or from the LCIA Arbitration International ) and
shall notify the Claimant of such nomination in writing. If the Respondent fails
to nominate an arbitrator within such 30-day period, the arbitrator named in the
Request shall decide the controversy or claim as a sole arbitrator. Otherwise,
the two arbitrators nominated by the parties shall nominate a third arbitrator
within 30 days after the Respondent has notified Claimant of the nomination of
the Respondent's arbitrator. When the arbitrators nominated by the Claimant and
Respondent have nominated a third arbitrator and the third arbitrator has
accepted the nomination, the two arbitrators shall promptly notify the parties
of the nomination of the third arbitrator. If the two arbitrators nominated by
the parties fail or are unable so to nominate a third arbitrator and so notify
the parties, either party may request the LCIA Arbitration International to
appoint the third arbitrator. The LCIA Arbitration International shall select
the third arbitrator within 30 days after such request, and shall thereafter
notify the parties of the appointment of the tribunal. The third arbitrator
shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by the Rules
of the LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to make such orders for interim relief,
including injunctive relief, as they deem just and equitable.
The arbitral award may grant any relief available under the applicable
law, including, without limitation, specific performance. The arbitral award
shall state the
2
<PAGE>
reasons for the award and relief granted, shall be final and binding on the
parties to the arbitration, and may include an award of costs, including
reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of
the English Arbitration Act 1996 (the "1996 Act") may not be sought with respect
to any question of law arising from an award, nor application made under 45 of
the 1996 Act with respect to any question of law.
CME Poland B.V. International Trading and Investments
Holdings S.A.
By: By:
Name: Name:
Title: Title:
3
<PAGE>
Notice of Assignment
December 10, 1998
To: Federacja Sp. z.o.o.
ul. Powsinska 4
Warszawa
CME Poland B.V. ("CME") hereby notifies that, pursuant to the Assignment
Agreement dated December 10, 1998 between CME and ITI Holdings S.A. ("ITI"), CME
has agreed to and assigned to ITI all of its receivables under the two separate
loan agreements dated February 13, 1998 for the principal amount of 12,000,000
U.S. Dollars extended by CME to Federacja Sp. z.o.o. (the "Loans").
In view of the above any payments related to the Loans should be made by you
directly to ITI pursuant to its instructions. ITI alone will be authorized and
empowered to request the payment of the Loans.
CME Poland B.V.
By:
Name:
Title:
4
<PAGE>
Exhibit F-4
ASSIGNMENT OF RECEIVABLES AGREEMENT
This assignment of receivables agreement (the "Agreement") has been entered into
on this 10th day of December 1998 by and between
CME Poland B.V., a limited liability company organized and operating under the
laws of the Netherlands, with its registered seat at Nieuwe Spielgelstraat 26,
1017 DG Amsterdam, the Netherlands (hereinafter referred to as the "Assignor")
and
International Trading and Investments Holdings S.A. ("ITI"), a joint stock
company organized and operating under the laws of Luxembourg, with its seat at
16 Rue Eugene Ruppert, Luxembourg (hereinafter referred to as the "Assignee").
WHEREAS:
A. TVN Sp. zo.o., a limited liability company organized and operating under the
laws of the Republic of Poland with its seat at Augustowka Street 3, Warsaw,
Poland (hereinafter referred to as the "Debtor"), is indebted to the Assignor
with respect to loans in the principal amount of 19,050,000 U.S. Dollars
pursuant to loan agreements dated as of May 7, 1997, May 27, 1997, July 1, 1997,
July 15, 1997, September 29, 1997, October 16, 1997 and December 15, 1997 (the
"Loans");
B. Pursuant to the terms of the Sale and Purchase Agreement dated December 10,
1998, entered into between Central European Media Enterprises Ltd. ("CME") and
the Assignee, CME has undertaken an obligation to cause that the Assignor
assigns to the Assignee the Loans for the agreed upon consideration;
NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Assignment
For good and valuable consideration of USD 21,219,610, the receipt and
sufficiency of which is hereby confirmed, the Assignor hereby irrevocably and
unconditionally assigns to the Assignee the Loans together with all accrued
thereon interest and other payables and the Assignee hereby accepts such
assignment.
2. Notice of Assignment
The Assignor shall forthwith execute a notice of assignment of the
Loans addressed to the Debtor attached hereto.
<PAGE>
3. Costs and taxes
Any transfer or stamp duties payable in connection with the execution
of this Assignment Agreement shall be borne by the Assignee.
4. Governing Law and Settlement of Disputes
This agreement will be governed by Dutch law and any controversy or
claim arising out of or relating to this Agreement, including any question
regarding its existence, validity, interpretation or breach, shall be settled by
arbitration. The arbitration shall be held in London, England and, except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of
whom shall be a practicing lawyer or professor of law. The party initiating
arbitration (the "Claimant") shall nominate its arbitrator in its request for
arbitration (the "Request"). The other party (the "Respondent") shall nominate
its arbitrator within 30 days of receipt of the Request (whether the Request is
received from the Claimant or from the LCIA Arbitration International ) and
shall notify the Claimant of such nomination in writing. If the Respondent fails
to nominate an arbitrator within such 30-day period, the arbitrator named in the
Request shall decide the controversy or claim as a sole arbitrator. Otherwise,
the two arbitrators nominated by the parties shall nominate a third arbitrator
within 30 days after the Respondent has notified Claimant of the nomination of
the Respondent's arbitrator. When the arbitrators nominated by the Claimant and
Respondent have nominated a third arbitrator and the third arbitrator has
accepted the nomination, the two arbitrators shall promptly notify the parties
of the nomination of the third arbitrator. If the two arbitrators nominated by
the parties fail or are unable so to nominate a third arbitrator and so notify
the parties, either party may request the LCIA Arbitration International to
appoint the third arbitrator. The LCIA Arbitration International shall select
the third arbitrator within 30 days after such request, and shall thereafter
notify the parties of the appointment of the tribunal. The third arbitrator
shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by the Rules
of the LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to make such orders for interim relief,
including injunctive relief, as they deem just and equitable.
The arbitral award may grant any relief available under the applicable
law, including, without limitation, specific performance. The arbitral award
shall state the
2
<PAGE>
reasons for the award and relief granted, shall be final and binding on the
parties to the arbitration, and may include an award of costs, including
reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of
the English Arbitration Act 1996 (the "1996 Act") may not be sought with respect
to any question of law arising from an award, nor application made under 45 of
the 1996 Act with respect to any question of law.
CME Poland B.V. International Trading and Investments
Holdings S.A.
By: By:
Name: Name:
Title: Title:
3
<PAGE>
Notice of Assignment
December 10, 1998
To: Federacja Sp. z.o.o.
ul. Powsinska 4
Warszawa
CME Poland B.V. ("CME") hereby notifies that, pursuant to the Assignment
Agreement dated December 10, 1998 between CME and ITI Holdings S.A. ("ITI"), CME
has agreed to and assigned to ITI all of its receivables under the loan
agreements dated as of May 7, 1997, May 27, 1997, July 1, 1997, July 15, 1997,
September 29, 1997, October 16, 1997 and December 15, 1997 (the "Loans") for the
principal amount of 19,050,000 U.S. Dollars extended by CME Media to TVN Sp.
z.o.o. (the "Loans").
In view of the above any payments related to the Loans should be made by you
directly to ITI pursuant to its instructions. ITI alone will be authorized and
empowered to request the payment of the Loans.
CME Poland B.V.
By:
Name:
Title:
4
<PAGE>
Exhibit G-1
ASSIGNMENT OF RECEIVABLES AGREEMENT
This assignment of receivables agreement (the "Agreement") has been entered into
on this 10th day of December 1998 by and between
CME Programming Services Inc., a corporation organized and operating under the
laws of Delaware, USA with its office at 18 D'Arblay Street, London W1V 3FP
(hereinafter referred to as the "Assignor")
and
International Trading and Investments Holdings S.A. ("ITI"), a joint stock
company organized and operating under the laws of Luxembourg, with its seat at
16 Rue Eugene Ruppert, Luxembourg (hereinafter referred to as the "Assignee").
WHEREAS:
A. The Assignor and Federacja Sp. z.o.o., a limited liability company organized
and operating under the laws of the Republic of Poland with its seat at
Powsinska Street 4, Warsaw, Poland (hereinafter referred to as the "Debtor"),
have entered into the Programming Services Agreement dated as of August 1, 1997
("Programming Services Agreement"), under the terms of which the Assignor
rendered various services for the benefit of the Debtor;
B. The Assignor has not received full payment for its services performed under
the Programming Services Agreement and the outstanding payments due to the
Assignor from the Debtor as of November 30, 1998 amount to 12,969,753.00 U.S.
Dollars (the "Receivables")
C. Pursuant to the terms of the Sale and Purchase Agreement dated December 10,
1998, entered into between Central European Media Enterprises Ltd. ("CME") and
the Assignee, CME has undertaken an obligation to cause that the Assignor
assigns to the Assignee the Receivables for the agreed upon consideration;
NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Assignment
For good and valuable consideration of USD 3,860,568.00, the receipt
and sufficiency of which is hereby confirmed, the Assignor hereby irrevocably
and unconditionally assigns to the Assignee the Receivables and the Assignee
hereby accepts such assignment.
<PAGE>
2. Notice of Assignment
The Assignor shall forthwith execute a notice of assignment of
Receivables addressed to the Debtor attached hereto.
3. Costs and taxes
Any transfer taxes or stamp duties payable in connection with the
execution of this Assignment Agreement shall be borne by the Assignee.
4. Governing Law and Settlement of Disputes
This agreement will be governed by Dutch law and any controversy or
claim arising out of or relating to this Agreement, including any question
regarding its existence, validity, interpretation or breach, shall be settled by
arbitration. The arbitration shall be held in London, England and, except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of
whom shall be a practicing lawyer or professor of law. The party initiating
arbitration (the "Claimant") shall nominate its arbitrator in its request for
arbitration (the "Request"). The other party (the "Respondent") shall nominate
its arbitrator within 30 days of receipt of the Request (whether the Request is
received from the Claimant or from the LCIA Arbitration International ) and
shall notify the Claimant of such nomination in writing. If the Respondent fails
to nominate an arbitrator within such 30-day period, the arbitrator named in the
Request shall decide the controversy or claim as a sole arbitrator. Otherwise,
the two arbitrators nominated by the parties shall nominate a third arbitrator
within 30 days after the Respondent has notified Claimant of the nomination of
the Respondent's arbitrator. When the arbitrators nominated by the Claimant and
Respondent have nominated a third arbitrator and the third arbitrator has
accepted the nomination, the two arbitrators shall promptly notify the parties
of the nomination of the third arbitrator. If the two arbitrators nominated by
the parties fail or are unable so to nominate a third arbitrator and so notify
the parties, either party may request the LCIA Arbitration International to
appoint the third arbitrator. The LCIA Arbitration International shall select
the third arbitrator within 30 days after such request, and shall thereafter
notify the parties of the appointment of the tribunal. The third arbitrator
shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by the Rules
of the LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to
2
<PAGE>
make such orders for interim relief, including injunctive relief, as they deem
just and equitable.
The arbitral award may grant any relief available under the applicable
law, including, without limitation, specific performance. The arbitral award
shall state the reasons for the award and relief granted, shall be final and
binding on the parties to the arbitration, and may include an award of costs,
including reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of
the English Arbitration Act 1996 (the "1996 Act") may not be sought with respect
to any question of law arising from an award, nor application made under 45 of
the 1996 Act with respect to any question of law.
CME Programming Services, Inc. International Trading and Investments
Holdings S.A.
By: By:
Name: Name:
Title: Title:
3
<PAGE>
Notice of Assignment
December 10, 1998
To: Federacja Sp. z o.o.
ul. Powsinska 4
Warszawa
CME Programming Services Inc. ("CMEPS") hereby notifies that, pursuant to the
Assignment Agreement dated December 10, 1998 between CMEPS and ITI Holdings S.A.
("ITI"), CMEPS has agreed to and assigned to ITI all of its receivables
outstanding as of November 30, 1998 under the Programming Services Agreement
dated as of August 1, 1997, executed by and between CMEPS and Federacja Sp. z
o.o. (the "Receivables").
In view of the above the Receivables should be paid by you directly to ITI
pursuant to its instructions. ITI alone will be authorized and empowered to
request the payment of the Receivables.
CME PROGRAMMING SERVICES Inc.
By:
Name:
Title:
4
<PAGE>
Exhibit G-2
ASSIGNMENT OF RECEIVABLES AGREEMENT
This assignment of receivables agreement (the "Agreement") has been entered into
on this 10th day of December 1998 by and between
CME Programming Services Inc., a corporation organized and operating under the
laws of Delaware, USA with its office at 18 D'Arblay Street, London W1V 3FP
(hereinafter referred to as the "Assignor")
and
International Trading and Investments Holdings S.A. ("ITI"), a joint stock
company organized and operating under the laws of Luxembourg, with its seat at
16 Rue Eugene Ruppert, Luxembourg (hereinafter referred to as the "Assignee").
WHEREAS:
A. The Assignor and TVN Sp. z.o.o., a limited liability company organized and
operating under the laws of the Republic of Poland with its seat at Augustowka
Street 3, Warsaw, Poland (hereinafter referred to as the "Debtor"), have entered
into the Programming Services Agreement dated as of December 1, 1996
("Programming Services Agreement"), under the terms of which the Assignor
rendered various services for the benefit of the Debtor;
B. The Assignor has not received full payment for its services performed under
the Programming Services Agreement and the outstanding payments due to the
Assignor from the Debtor as of November 30, 1998 amount to 1,082,033 U.S.
Dollars (the "Receivables")
C. Pursuant to the terms of the Sale and Purchase Agreement dated December 10,
1998, entered into between Central European Media Enterprises Ltd. ("CME") and
the Assignee, CME has undertaken an obligation to cause that the Assignor
assigns to the Assignee the Receivables for the agreed upon consideration;
NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Assignment
For good and valuable consideration of USD 1,082,033, the receipt and
sufficiency of which is hereby confirmed, the Assignor hereby irrevocably and
unconditionally assigns to the Assignee the Receivables and the Assignee hereby
accepts such assignment.
<PAGE>
2. Notice of Assignment
The Assignor shall forthwith execute a notice of assignment of
Receivables addressed to the Debtor attached hereto.
3. Costs and taxes
Any transfer taxes or stamp duties payable in connection with the
execution of this Assignment Agreement shall be borne by the Assignee.
4. Governing Law and Settlement of Disputes
This agreement will be governed by Dutch law and any controversy or
claim arising out of or relating to this Agreement, including any question
regarding its existence, validity, interpretation or breach, shall be settled by
arbitration. The arbitration shall be held in London, England and, except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of
whom shall be a practicing lawyer or professor of law. The party initiating
arbitration (the "Claimant") shall nominate its arbitrator in its request for
arbitration (the "Request"). The other party (the "Respondent") shall nominate
its arbitrator within 30 days of receipt of the Request (whether the Request is
received from the Claimant or from the LCIA Arbitration International ) and
shall notify the Claimant of such nomination in writing. If the Respondent fails
to nominate an arbitrator within such 30-day period, the arbitrator named in the
Request shall decide the controversy or claim as a sole arbitrator. Otherwise,
the two arbitrators nominated by the parties shall nominate a third arbitrator
within 30 days after the Respondent has notified Claimant of the nomination of
the Respondent's arbitrator. When the arbitrators nominated by the Claimant and
Respondent have nominated a third arbitrator and the third arbitrator has
accepted the nomination, the two arbitrators shall promptly notify the parties
of the nomination of the third arbitrator. If the two arbitrators nominated by
the parties fail or are unable so to nominate a third arbitrator and so notify
the parties, either party may request the LCIA Arbitration International to
appoint the third arbitrator. The LCIA Arbitration International shall select
the third arbitrator within 30 days after such request, and shall thereafter
notify the parties of the appointment of the tribunal. The third arbitrator
shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by the Rules
of the LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to
2
<PAGE>
make such orders for interim relief, including injunctive relief, as they deem
just and equitable.
The arbitral award may grant any relief available under the applicable
law, including, without limitation, specific performance. The arbitral award
shall state the reasons for the award and relief granted, shall be final and
binding on the parties to the arbitration, and may include an award of costs,
including reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of
the English Arbitration Act 1996 (the "1996 Act") may not be sought with respect
to any question of law arising from an award, nor application made under 45 of
the 1996 Act with respect to any question of law.
CME Programming Services, Inc. International Trading and Investments
Holdings S.A.
By: By:
Name: Name:
Title: Title:
3
<PAGE>
Notice of Assignment
December 10, 1998
To: TVN Sp. z o.o.
ul. Augustowka 3
Warszawa
CME Programming Services Inc. ("CMEPS") hereby notifies that, pursuant to the
Assignment Agreement dated December 10, 1998 between CMEPS and ITI Holdings S.A.
("ITI"), CMEPS has agreed to and assigned to ITI all of its receivables
outstanding as of November 30, 1998 under the Programming Services Agreement
dated as of December 1, 1996, executed by and between CMEPS and TVN Sp. z o.o.
(the "Receivables").
In view of the above the Receivables should be paid by you directly to ITI
pursuant to its instructions. ITI alone will be authorized and empowered to
request the payment of the Receivables.
CME PROGRAMMING SERVICES Inc.
By:
Name:
Title:
4
<PAGE>
Exhibit H-1
ASSIGNMENT OF RECEIVABLES AGREEMENT
This Assignment of receivables agreement (the "Agreement") has been entered into
on this 10th day of December 1998 by and between
CME Development Corporation, a corporation organized and operating under the
laws of Delaware, USA with its office at 18 D'Arblay Street, London WIV 3FP
(hereinafter referred to as the "Assignor")
and
International Trading and Investments Holdings S.A. ("ITI"), a joint stock
company organized and operating under the laws of Luxembourg, with its seat at
16 Rue Eugene Ruppert, Luxembourg (hereinafter referred to as the "Assignee").
WHEREAS:
A. The Assignor and Federacja Sp. z o.o., a limited liability company organized
and operating under the laws of the Republic of Poland with its seat at
Powsinska Street 4, Warsaw, Poland (hereinafter referred to as the "Debtor"),
have entered into the Management Services Agreement dated as of August 1, 1997
("Management Services Agreement"), under the terms of which the Assignor
rendered various services for the benefit of the Debtor;
B. The Assignor has not received full payment for its services performed under
the Management Services Agreement and the outstanding payments due to the
Assignor from the Debtor as of November 30, 1998 amount to 2,637,527.00 U.S.
Dollars (the "Receivables");
C. Pursuant to the terms of the Sale and Purchase Agreement dated December 10,
1998, entered into between Central European Media Enterprises Ltd. ("CME") and
the Assignee, CME has undertaken an obligation to cause that the Assignor
assigns to the Assignee the Receivables for the agreed upon consideration;
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
<PAGE>
1. Assignment
For good and valuable consideration of USD 785,085.00, the
receipt and sufficiency of which is hereby confirmed, the Assignor hereby
irrevocably and unconditionally assigns to the Assignee the Receivables and the
Assignee hereby accepts such assignments.
2. Notice of Assignment
The Assignor shall forthwith execute a notice of assignment of
Receivables addressed to the Debtor attached hereto.
3. Costs and taxes
Any transfer taxes or stamp duties payable in connection with
the execution of this Assignment Agreement shall be borne by the Assignee.
4. Governing Law and Settlement of Disputes
This agreement will be governed by Dutch law and any controversy or
claim arising out of or relating to this Agreement, including any question
regarding its existence, validity, interpretation or breach, shall be settled by
arbitration. The arbitration shall be held in London, England and, except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Rules of the LCIA Arbitration International in effect at the time of the
arbitration. The arbitration shall be conducted in the English language. The
arbitration proceedings, all documents and all testimony, written or oral,
produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators each of
whom shall be a practicing lawyer or professor of law. The party initiating
arbitration (the "Claimant") shall nominate its arbitrator in its request for
arbitration (the "Request"). The other party (the "Respondent") shall nominate
its arbitrator within 30 days of receipt of the Request (whether the Request is
received from the Claimant or from the LCIA Arbitration International ) and
shall notify the Claimant of such nomination in writing. If the Respondent fails
to nominate an arbitrator within such 30-day period, the arbitrator named in the
Request shall decide the controversy or claim as a sole arbitrator. Otherwise,
the two arbitrators nominated by the parties shall nominate a third arbitrator
within 30 days after the Respondent has notified Claimant of the nomination of
the Respondent's arbitrator. When the arbitrators nominated by the Claimant and
Respondent have nominated a third arbitrator and the third arbitrator has
accepted the nomination, the two arbitrators shall promptly notify the parties
of the nomination of the third arbitrator. If the two arbitrators nominated by
the parties fail or are unable so to nominate a third arbitrator and so notify
the parties, either party may request the LCIA Arbitration International to
appoint the third
2
<PAGE>
arbitrator. The LCIA Arbitration International shall select the third arbitrator
within 30 days after such request, and shall thereafter notify the parties of
the appointment of the tribunal. The third arbitrator shall act as Chairman of
the tribunal.
In addition to the authority conferred on the arbitrators by the Rules
of the LCIA Arbitration International and by law, the arbitrators shall have the
authority to order such discovery and production of documents, including the
deposition of party witnesses, and to make such orders for interim relief,
including injunctive relief, as they deem just and equitable.
The arbitral award may grant any relief available under the applicable
law, including, without limitation, specific performance. The arbitral award
shall state the reasons for the award and relief granted, shall be final and
binding on the parties to the arbitration, and may include an award of costs,
including reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically enforceable.
The Parties expressly agree that leave to appeal under section 69 of
the English Arbitration Act 1996 (the "1996 Act") may not be sought with respect
to any question of law arising from an award, nor application made under 45 of
the 1996 Act with respect to any question of law.
CME Development, Inc. International Trading and Investments Holdings S.A.
By: By:
Name: Name:
Title: Title:
3
<PAGE>
Notice of Assignment
December 10, 1998
To: Federacja Sp. z o.o.
ul. Powsinska 4
Warszawa
CME Development Corporation ("CMED") hereby notifies that, pursuant to the
Assignment Agreement dated December 10, 1998 between CMED and ITI Holdings S.A.
("ITI"), CMED has agreed to and assigned to ITI all of its receivables
outstanding as of November 30, 1998 under the Management Services Agreement
dated as of August 1, 1997, executed by and between CMED and Federacja Sp. z
o.o. (the "Receivables").
In view of the above the Receivables should be paid by you directly to ITI
pursuant to its instructions. ITI alone will be authorized and empowered to
request the payment of the Receivables.
CME DEVELOPMENT CORPORATION
By:
Name:
Title:
<PAGE>
Exhibit H-2
ASSIGNMENT OF RECEIVABLES AGREEMENT
This Assignment of receivables agreement (the "Agreement") has been entered into
on this 10th day of December 1998 by and between
CME Development Corporation, a corporation organized and operating under the
laws of Delaware, USA with its office at 18 D'Arblay Street, London WIV 3FP
(hereinafter referred to as the "Assignor")
and
International Trading and Investments Holdings S.A. ("ITI"), a joint stock
company organized and operating under the laws of Luxembourg, with its seat at
16 Rue Eugene Ruppert, Luxembourg (hereinafter referred to as the "Assignee").
WHEREAS:
A. The Assignor and TVN Sp. z o.o., a limited liability company organized and
operating under the laws of the Republic of Poland with its seat at Augustowka
Street 3, Warsaw, Poland (hereinafter referred to as the "Debtor"), have entered
into a management services agreement dated as of August 1, 1997 ("Management
Services Agreement"), under the terms of which the Assignor rendered various
services for the benefit of the Debtor;
B. The Assignor has not received full payment for its services performed under
the Management Services Agreement and the outstanding payments due to the
Assignor from the Debtor as of November 30, 1998 amount to 1,376,341.00 U.S.
Dollars (the "Receivables");
C. Pursuant to the terms of the Sale and Purchase Agreement dated December 10,
1998, entered into between Central European Media Enterprises Ltd. ("CME") and
the Assignee, CME has undertaken an obligation to cause that the Assignor
assigns to the Assignee the Receivables for the agreed upon consideration;
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Assignment
For good and valuable consideration of 1,376,341.00, the
receipt and sufficiency of which is hereby confirmed, the Assignor hereby
irrevocably and unconditionally assigns to the Assignee the Receivables and the
Assignee hereby accepts such assignment.
<PAGE>
2. Notice of Assignment
The Assignor shall forthwith execute a notice of assignment of
Receivables addressed to the Debtor attached hereto.
3. Costs and taxes
Any transfer taxes or stamp duties payable in connection with
the execution of this Assignment Agreement shall be borne by the Assignee.
4. Governing Law and Settlement of Disputes
This agreement will be governed by Dutch law and any
controversy or claim arising out of or relating to this Agreement, including any
question regarding its existence, validity, interpretation or breach, shall be
settled by arbitration. The arbitration shall be held in London, England and,
except to the extent inconsistent with this Agree ment, shall be conducted in
accordance with the Rules of the LCIA Arbitration International in effect at the
time of the arbitration. The arbitration shall be conducted in the English
language. The arbitration proceedings, all documents and all testimony, written
or oral, produced in connection therewith, and the arbitration award shall be
confidential.
The arbitration tribunal shall consist of three arbitrators
each of whom shall be a practicing lawyer or professor of law. The party
initiating arbitration (the "Claimant") shall nominate its arbitrator in its
request for arbitration (the "Request"). The other party (the "Respondent")
shall nominate its arbitrator within 30 days of receipt of the Request (whether
the Request is received from the Claimant or from the LCIA Arbitration
International ) and shall notify the Claimant of such nomination in writing. If
the Respondent fails to nominate an arbitrator within such 30-day period, the
arbitrator named in the Request shall decide the controversy or claim as a sole
arbitrator. Otherwise, the two arbitrators nominated by the parties shall
nominate a third arbitrator within 30 days after the Respondent has notified
Claimant of the nomination of the Respondent's arbitrator. When the arbitrators
nominated by the Claimant and Respondent have nominated a third arbitrator and
the third arbitrator has accepted the nomination, the two arbitrators shall
promptly notify the parties of the nomination of the third arbitrator. If the
two arbitrators nominated by the parties fail or are unable so to nominate a
third arbitrator and so notify the parties, either party may request the LCIA
Arbitration International to appoint the third arbitrator. The LCIA Arbitration
International shall select the third arbitrator within 30 days after such
request, and shall thereafter notify the parties of the appointment of the
tribunal. The third arbitrator shall act as Chairman of the tribunal.
In addition to the authority conferred on the arbitrators by
the Rules of the LCIA Arbitration International and by law, the arbitrators
shall have the authority to order such discovery and production of documents,
including the deposition of party witnesses,
2
<PAGE>
and to make such orders for interim relief, including injunctive relief, as they
deem just and equitable.
The arbitral award may grant any relief available under the
applicable law, including, without limitation, specific performance. The
arbitral award shall state the reasons for the award and relief granted, shall
be final and binding on the parties to the arbitration, and may include an award
of costs, including reasonable attorneys' fees and disbursements.
The foregoing agreement to arbitrate shall be specifically
enforceable.
The Parties expressly agree that leave to appeal under section
69 of the English Arbitration Act 1996 (the "1996 Act") may not be sought with
respect to any question of law arising from an award, nor application made under
45 of the 1996 Act with respect to any question of law.
CME Development Corporation International Trading and Investments
Holdings S.A.
By: By:
Name: Name:
Title: Title:
3
<PAGE>
Notice of Assignment
December 10, 1998
To: TVN Sp. z o.o.
ul. Augustowka 3
Warszawa
CME Development Corporation ("CMED") hereby notifies that, pursuant to the
Assignment Agreement dated December 10, 1998 between CMED and ITI Holdings S.A.
("ITI"), CMED has agreed to and assigned to ITI all of its receivables
outstanding as of November 30, 1998 under the management service agreement dated
as of August 1, 1997 executed by and between CMED and TVN Sp. z o.o. (the
"Receivables").
In view of the above the Receivables should be paid by you directly to ITI
pursuant to its instructions. ITI alone will be authorized and empowered to
request the payment of the Receivables.
CME DEVELOPMENT CORPORATION
By:
Name:
Title:
<PAGE>
Exhibit I-1
R E L E A S E
KNOW ALL MEN BY THESE PRESENTS, that, each of CENTRAL EUROPEAN
MEDIA ENTERPRISES LTD., a company organized under the laws of Bermuda, CME MEDIA
ENTERPRISES B.V., a company organized under the laws of the Netherlands, CME
POLAND B.V., a company organized under the laws of the Netherlands, CME
DEVELOPMENT CORPORATION, a company organized under the laws of the State of
Delaware, CME PROGRAMMING SERVICES, a company organized under the laws of the
State of Delaware, and CME PROGRAMMING SERVICES B.V., a company organized under
the laws of the Netherlands, (the "Releasors"), for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged;
RELEASES AND FOREVER DISCHARGES INTERNATIONAL
TRADING AND INVESTMENTS HOLDINGS S.A., a company organized under the
laws of Luxembourg, and each of its subsidiaries and affiliates and each of
their respective officers, directors, shareholders, principals, agents,
employees, representatives, heirs, successors and assigns, including without
limitation all persons appointed by ITI Holdings or any affiliate of ITI
Holdings to the management boards and supervisory boards of TVN Sp. Z O.O.,
Federacja Sp. Z O.O., Neovision Holding B.V. and ITI Media Group N.V.
(collectively, the "Releasees");
FROM ANY AND ALL claims, counterclaims, actions, causes of
action, suits, debts, dues, sums of money, accounts, rents, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions and demands of any kind or
nature whatsoever, in law, admiralty or equity, whether known or unknown, which
the Releasors ever had, now have or hereafter can, shall or may have against the
Releasees by reason of any matter, cause or thing from the beginning of the
world to the date of this Release, excepting only actual fraud.
IN FURTHERANCE OF THE FOREGOING RELEASE, the Releasor hereby
covenants and agrees to indemnify and hold harmless each of the Releasees from
and against any and all liabilities, obligations, losses, costs and damages,
whether absolute, accrued, conditional or otherwise (any of the foregoing,
"Liabilities"), resulting from or arising out of any action taken by the
Releasor or any of its officers, directors, shareholders, principals, agents,
employees, representatives, heirs, successors, assigns and affiliates
inconsistent with this Release. In the event that any Releasee is required to
make any payment under or otherwise incurs any Liability with respect to its
actions or failures to act covered by this Release, Releasor shall pay to such
entity or person on demand such amount as shall result in such entity or person
receiving from the Releasor an amount in cash equal to such payment or
Liability.
THIS RELEASE may not be modified except by a writing signed by
duly authorized representatives of the party against which enforcement of such
modification is sought.
<PAGE>
THIS RELEASE shall be governed by, and interpreted and
enforced in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law rules thereof.
IN WITNESS WHEREOF, the Releasors have executed this Release
by its duly authorized officers on December 10, 1998.
CENTRAL EUROPEAN MEDIA CME POLAND B.V.
ENTERPRISES LTD.
By: _________________________ By: _________________________
Name: Name:
Title: Title:
CME DEVELOPMENT CORP. CME PROGRAMMING SERVICES INC.
By: _________________________ By: _________________________
Name: Name:
Title: Title:
CME MEDIA ENTERPRISES B.V. CME PROGRAMMING SERVICES B.V.
By: __________________________ By: _________________________
Name: Name:
Title: Title:
2
<PAGE>
Exhibit I-2
R E L E A S E
KNOW ALL MEN BY THESE PRESENTS, that each of ITI TRADING AND
INVESTMENTS HOLDINGS S.A., a company organized under the laws of Luxembourg, ITI
MEDIA GROUP N.V., a company organized under the laws of the Netherlands
Antilles, N-VISION B.V., a company organized under the laws of the Netherlands,
NEOVISION HOLDING B.V., a company organized under the laws of the Netherlands,
UNIDOME BEHEER B.V., a company organized under the laws of the Netherlands, and
ITI TV HOLDINGS SP. Z O.O., a company organized under the laws of Poland
(collectively, the "Releasors"), for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged;
RELEASES AND FOREVER DISCHARGES CENTRAL EUROPEAN MEDIA
ENTERPRISES LTD., a company organized under the laws of Bermuda ("CME"), each of
its subsidiaries and affiliates, and each of their respective officers,
directors, shareholders, principals, agents, employees, representatives, heirs,
successors and assigns, including without limitation all persons appointed by
CME or any affiliate of CME to the management boards and supervisory boards of
TVN Sp. Z O.O., Federacja Sp. Z O.O. and Endemol Neovision Sp. Z O.O.
(collectively, the "Releasees");
FROM ANY AND ALL claims, counterclaims, actions, causes of
action, suits, debts, dues, sums of money, accounts, rents, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions and demands, of any kind
of nature whatsoever, in law, admiralty or equity, whether known or unknown,
which the Releasors ever had, now have or hereafter can, shall or may have
against the Releasees by reason of any matter, cause or thing from the beginning
of the world to the date of this Release, excepting only fraud.
IN FURTHERANCE OF THE FOREGOING RELEASE, the Releasor hereby
covenants and agrees to indemnify and hold harmless each of the Releasees from
and against any and all liabilities, obligations, losses, costs and damages,
whether absolute, accrued, conditional or otherwise (any of the foregoing,
"Liabilities"), resulting from or arising out of any action taken by the
Releasor or any of its officers, directors, shareholders, principals, agents,
employees, representatives, heirs, successors, assigns and affiliates
inconsistent with this Release. In the event that any Releasee is required to
make any payment under or otherwise incurs any Liability with respect to its
actions or failures to act covered by this Release, Releasor shall pay to such
entity or person on demand such amount as shall result in such entity or person
receiving from the Releasor an amount in cash equal to such payment or
Liability.
THIS RELEASE may not be modified except by a writing signed by
duly authorized representatives of the party against which enforcement of such
modification is sought.
<PAGE>
THIS RELEASE shall be governed by, and interpreted and
enforced in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law rules thereof.
IN WITNESS WHEREOF, each of the Releasors has executed this
Release by its duly authorized officer on December 10, 1998.
INTERNATIONAL TRADING AND NEOVISION HOLDING B.V.
INVESTMENTS HOLDINGS S.A.
By: _________________________ By: _________________________
Name: Name:
Title: Title:
ITI MEDIA GROUP N.V. UNIDOME BEHEER B.V.
By: _________________________ By: _________________________
Name: Name:
Title: Title:
N-VISION B.V. ITI TV HOLDINGS SP. Z O.O.
By: _________________________ By: _________________________
Name: Name:
Title: Title:
2
<PAGE>
Exhibit J-1
R E L E A S E
KNOW ALL MEN BY THESE PRESENTS, that TVN SP. Z O.O., a company
organized under the laws of Poland (the "Releasor"), for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged;
RELEASES AND FOREVER DISCHARGES (i) Central European Media
Enterprises Ltd., a company organized under the laws of Bermuda and its
officers, directors, shareholders, principals, agents, employees,
representatives, heirs, successors and assigns, (ii) each of its subsidiaries
and affiliates and each of their respective officers, directors, shareholders,
principals, agents, employees, representatives, heirs, successors and assigns,
and (iii) each of the nominees of any of entities or persons included in the
foregoing clauses (i) and (ii) who has ever served as an officer, employee or
member of the supervisory board or management board of the Releasor
(collectively, the "Releasees");
FROM ANY AND ALL claims, counterclaims, actions, causes of
action, suits, debts, dues, sums of money, accounts, rents, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions and demands of any kind or
nature whatsoever, in law, admiralty or equity, whether known or unknown, which
the Releasor ever had, now has or hereafter can, shall or may have against the
Releasees by reason of any matter, cause or thing from the beginning of the
world to the date of this Release, excepting only fraud.
IN FURTHERANCE OF THE FOREGOING RELEASE, the Releasor hereby
covenants and agrees to indemnify and hold harmless each of the Releasees from
and against any and all liabilities, obligations, losses, costs and damages,
whether absolute, accrued, conditional or otherwise (any of the foregoing,
"Liabilities"), resulting from or arising out of any action taken by the
Releasor or any of its officers, directors, shareholders, principals, agents,
employees, representatives, heirs, successors, assigns and affiliates
inconsistent with this Release. In the event that any Releasee is required to
make any payment under or otherwise incurs any Liability with respect to its
actions or failures to act covered by this Release, Releasor shall pay to such
entity or person on demand such amount as shall result in such entity or person
receiving from the Releasor an amount in cash equal to such payment or
Liability.
THIS RELEASE may not be modified except by a writing signed by
duly authorized representatives of the party against which enforcement of such
modification is sought.
<PAGE>
THIS RELEASE shall be governed by, and interpreted and
enforced in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law rules thereof.
IN WITNESS WHEREOF, the Releasor has executed this Release by
its duly authorized officer on December 10, 1998.
TVN SP. Z O.O.
By: _________________________
Name:
Title:
2
<PAGE>
Exhibit J-2
R E L E A S E
KNOW ALL MEN BY THESE PRESENTS, that FEDERACJA SP. Z O.O., a
company organized under the laws of Poland (the "Releasor"), for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged;
RELEASES AND FOREVER DISCHARGES (i) Central European Media
Enterprises Ltd., a company organized under the laws of Bermuda and its
officers, directors, shareholders, principals, agents, employees,
representatives, heirs, successors and assigns, (ii) each of its subsidiaries
and affiliates and each of their respective officers, directors, shareholders,
principals, agents, employees, representatives, heirs, successors and assigns,
and (iii) each of the nominees of any of entities or persons included in the
foregoing clauses (i) and (ii), who has ever served as an officer, employee or
member of the supervisory board or management board of the Releasor
(collectively, the "Releasees");
FROM ANY AND ALL claims, counterclaims, actions, causes of
action, suits, debts, dues, sums of money, accounts, rents, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions and demands of any kind or
nature whatsoever, in law, admiralty or equity, whether known or unknown, which
the Releasor ever had, now has or hereafter can, shall or may have against the
Releasees by reason of any matter, cause or thing from the beginning of the
world to the date of this Release, excepting only fraud.
IN FURTHERANCE OF THE FOREGOING RELEASE, the Releasor hereby
covenants and agrees to indemnify and hold harmless each of the Releasees from
and against any and all liabilities, obligations, losses, costs and damages,
whether absolute, accrued, conditional or otherwise (any of the foregoing,
"Liabilities"), resulting from or arising out of any action taken by the
Releasor or any of its officers, directors, shareholders, principals, agents,
employees, representatives, heirs, successors, assigns and affiliates
inconsistent with this Release. In the event that any Releasee is required to
make any payment under or otherwise incurs any Liability with respect to its
actions or failures to act covered by this Release, Releasor shall pay to such
entity or person on demand such amount as shall result in such entity or person
receiving from the Releasor an amount in cash equal to such payment or
Liability.
THIS RELEASE may not be modified except by a writing signed by
duly authorized representatives of the party against which enforcement of such
modification is sought.
THIS RELEASE shall be governed by, and interpreted and
enforced in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law rules thereof.
<PAGE>
IN WITNESS WHEREOF, the Releasor has executed this Release by
its duly authorized officer on December 10, 1998.
FEDERACJA SP. Z O.O.
By: _________________________
Name:
Title:
2
<PAGE>
Exhibit L
JOINT PRESS RELEASE
Central European Media Enterprises Ltd. (CME) and
International Trading and Investments Holdings S.A. (ITI) announced today that
CME has sold its interest in the TVN television project in Poland to the ITI
affiliates for consideration consisting of approximately $10 million dollars in
cash, a three-year note in a principal amount of $40 million that is convertible
into equity securities of ITI, and the assumption by ITI of various obligations
of CME and its affiliates in respect of programming, satellite and bank
financing relating to the Polish television project.
Michel Delloye, the CEO of CME said: "Differences of view
between CME and our ITI partners concerning the direction of the Polish
television project made it desirable to arrange for an amicable separation,
which both we and ITI consider highly beneficial for the parties. We wish TVN
every success."
Mariusz Walter, the Chairman of TVN said: "We are gratified to
have acquired one hundred percent ownership of the TVN media properties and look
forward to their continued development and growth."
<PAGE>
Schedule 2(r)
Agreements To Be Terminated
1. Federacja Sp. z o.o. Shareholders Agreement, dated August 1, 1997, among ITI
Media Group N.V., Unidome Beheer B.V., CME Media Enterprises B.V., CME Poland
B.V. and Federacja Sp. z o.o.
2. ITI Media Group N.V. Shareholders Agreement, dated August 1, 1997, among
International Trade and Investments Holdings S.A., ITI Media Group N.V., ITI
Media Group N.V. and CME Poland B.V.
3. Investment Agreement, dated as of August 1, 1997, among International Trade
and Investments Holdings S.A., ITI Media Group N.V., Unidome Beheer B.V., CME
Poland B.V. and CME Media Enterprises B.V.
4. TVN Sp. z o.o. Shareholder Agreement, dated as of May 25, 1995, between ITI
TV Holdings Sp. z o.o and CME Media Enterprises B.V.
5. Programming Services Agreement, dated as of December 1, 1996, between CME
Programming Services Inc. and TVN Sp. z o.o.
6. Programming Services Agreement, dated as of August 1, 1997, between CME
Programming Services Inc. and Federacja Sp. z o.o.
7. Management Services Agreement, dated as of August 1, 1997, between CME
Development Corporation and TVN Sp. z o.o.
8. Management Services Agreement, dated as of August 1, 1997, between CME
Development Corporation and Federacja Sp. z o.o.
<PAGE>
SCHEDULE 5.1(a)
CME Programming Commitments on behalf of TVN and Federacja
as of December 1, 1998
(amounts in US$)
<TABLE>
<CAPTION>
DEC 1, 1998
AMOUNTS
CONTRACT TOTAL AMOUNTS OUTSTANDING
NUMBER CONTRACT NO. OF COMMITMENT PAID TO
SUPPLIER if applicable DATE HOURS (NOTE 1) TO DEC. 1, 1998 DISTRIBUTORS
-------- ------------- -------- ------ ---------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BBDO N/A 7/19/97 408.5 1,001,550 828,194 173,356
BEYOND 4489 1/29/97 13.0 45,500 45,500 0
BEYOND 4490 1/29/97 13.0 45,500 45,500 0
BRITE 8/6/97 117,000 114,750 2,250
BRITE 9648 80.0 205,000 164,000 41,000
CINE FILMS N/A 9/1/97 90.0 820,000 820,000 0
DARO 7515/12/96 12/12/96 88.5 259,500 259,500 0
FOX (Fire Co. 132) 88105 9/19/97 13.0 39,000 39,000 0
FOX (Buffy 1) 88106 9/19/97 12.0 36,000 36,000 0
FOX (Temp. Yours) 88107 9/19/97 6.0 9,000 9,000 0
FOX (Pauly) 88108 9/19/97 3.5 10,500 10,500 0
FOX (L.A. Law 3-8) 88109 9/19/97 130.0 195,000 195,000 0
FOX (Millenium 1) 88131 9/19/97 22.0 132,000 132,000 0
FOX (Pacific Drive) 88443 9/19/97 130.0 130,000 105,413 24,587
FOX (Buffy 2) -- 3/13/98 22.0 132,000 26,400 105,600
FOX (Millenium 2) -- 3/13/98 23.0 195,500 39,100 156,400
FOX (specials) 88104 9/19/97 10.0 19,500 19,500 0
FOX (When Disaster -- 3/13/98 2.0 6,000 1,200 4,800
Strikes)
FOX MOVIES 88090/A 9/19/97 300.0 1,800,000 1,440,000 360,000
HAMBLETON RIGEL LD R502 5/6/97 6.0 90,000 21,200 68,800
HAMBLETON RIGEL Various 5/6/97 117.0 440,000 74,400 365,600
ICON 97-104-1/2/3/4 7/1/97 82.0 500,000 424,564 75,436
ICON 2 97-146-1/2/3 10/2/97 34.0 113,000 166,600 (53,600)
KELLER N/A 11/11/96 57.5 145,750 117,150 28,600
MGM 97-0631 6/1/97 549.5 4,146,000 4,146,000 0
MEDIASET Various 12/2/96 953.9 1,899,500 1,440,890 458,610
ORION/MGM -- 4/22/97 198.0 728,629 0 728,629
SABAN 8160/97 12/1/97 -- 5,000,000 465,110 4,534,890
SUMMIT Various 5/1/97 46.0 342,000 342,000 0
VISION N/A 4/1/97 60.0 390,000 390,000 0
WARNER BROS 1210420 8/21/97 158.5 1,101,000 1,101,000 0
N/A
TOTAL 20,094,429 13,019,471 7,074,958
<CAPTION>
JAN 31, 1999
Payment schedule
AMOUNTS
Amounts due and Amounts due OUTSTANDING
outstanding through in TOTAL TO
SUPPLIER December 1, 1998 January 1999 DISTRIBUTORS
-------- ------------------- ------------ ----- ------------
<S> <C> <C> <C> <C>
BBDO 173,356 173,356 0
BEYOND 0 0 0 0
BEYOND 0 0 0 0
BRITE 0 0 2,250
BRITE 29,250 0 29,250 11,750
CINE FILMS 0 0 0 0
DARO 0 0 0 0
FOX (Fire Co. 132) 0 0 0 0
FOX (Buffy 1) 0 0 0 0
FOX (Temp. Yours) 0 0 0 0
FOX (Pauly) 0 0 0 0
FOX (L.A. Law 3-8) 0 0 0 0
FOX (Millenium 1) 0 0 0 0
FOX (Pacific Drive) 24,587 0 24,587 0
FOX (Buffy 2) 79,200 0 79,200 26,400
FOX (Millenium 2) 117,300 0 117,300 39,100
FOX (specials) 0 0 0 0
FOX (When Disaster 3,600 0 3,600 1,200
Strikes)
FOX MOVIES 360,000 0 360,000 0
HAMBLETON RIGEL LD 36,000 18,000 54,000 14,800
HAMBLETON RIGEL 36,800 0 36,800 328,800
ICON 0 0 0 75,436
ICON 2 0 0 0 (53,600)
KELLER 26,500 0 26,500 2,100
MGM 0 0 0 0
MEDIASET 458,610 0 458,610 0
ORION/MGM 0 0 0 728,629
SABAN 0 1,201,556 1,201,556 3,333,334
SUMMIT 0 0 0 0
VISION 0 0 0 0
WARNER BROS 0 0 0 0
TOTAL 1,171,847 1,392,912 2,564,759 4,510,199
</TABLE>
NOTES
"N/A" indicates that distributors did not issue an identification number for the
related contract.
(1) The information above is not necessarily fixed. Prices and hours may
increase or decrease due to additional episodes provided under a contract or
titles are canceled.
<PAGE>
Schedule 5.1(c)
Other Agreements and Documents
1. Letter dated July 31, 1998 from CME Poland B.V. to Endemol Entertainment
International B.V.
2. Distribution Agreement among Endemol-Neovision Sp. z o.o, Endemol
Entertainment International B.V. and CME Programming Services Inc.
<PAGE>
Exhibit 99.1
[CME LOGO]
FOR IMMEDIATE RELEASE
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. SELLS OWNERSHIP
STAKE IN TVN IN POLAND TO ITI
HAMILTON, BERMUDA, December 10, 1998 - Central European Media Enterprises
Ltd. (CME) (Nasdaq:CETV) and International Trading and Investments Holdings S.A.
(ITI) announced today that CME has sold its interest in the TVN television
operation in Poland to ITI for $10 million dollars in cash, a three-year note in
a principal amount of $40 million that is convertible into equity securities of
ITI, the release of a $10 million bank guarantee and the assumption by ITI of
various obligations of CME and its affiliates in respect of programming and
satellite relating to TVN. As a result, CME will record a write-down of $25
million relating to the TVN sale in its fourth quarter financial results.
Michel Delloye, President and Chief Executive Officer of CME said, "As
previously reported, we have been in discussions with our partners at ITI for
some time regarding TVN's development strategy and financing. Differences of
view between CME and ITI concerning the direction of TVN has led both parties to
arrange for an amicable seperation, which both ITI and CME consider preferable.
We wish TVN every success."
Mariusz Walter, the Chairman of TVN said, "We are excited to have acquired
one hundred percent ownership of the TVN media properties and look forward to
their continued development and growth."
ITI is the leading Polish Media and Entertainment Group active in
television broadcasting, television commercials production, advertising,
theatrical and home video distribution, Multiplex cinema development and
operation as well as snack food. Multikino, a joint-venture between ITI and UCI,
has opened in summer 1998 with great success the first out of 15 Multiplex
cinemas in Poznan which has made ITI the cinema market leader in Poland.
International Trading and Investments Holdings S.A. (ITI) is quoted on the
Luxembourg Stock Exchange (Reuters Ticker Symbol ITIH.LU).
Central European Media Enterprises, Ltd. is the leading commercial
television company in Central and Eastern Europe. The Company's national private
television stations and networks in the Czech Republic, Slovakia, Slovenia and
Ukraine had the leading average nationwide audience shares for the first nine
months of 1998 and the Company's television network in Romania had the leading
average audience share within its area of broadcast reach for the same period.
Central European Media Enterprises is traded on the Nasdaq National Market in
the U.S. under the symbol "CETV".
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