IMS ADVERTISING SERVICES AGREEMENT
THIS IMS ADVERTISING SERVICES AGREEMENT (this "Agreement") is
entered into on May 7, 1997 (the "Effective Date"), by and between INTERNATIONAL
MEDIA SERVICES LTD., a limited liability company organized under the laws of
Bermuda ("IMS"), and LIMITED LIABILITY COMPANY "PRIORITET", a limited liability
company organized under the laws of Ukraine ("Prioritet").
WHEREAS, IMS wishes to engage Prioritet in connection with
advertising services with respect to broadcasting on the Ukrainian television
channel two (the "Television Channel"), including the development of
advertising business with potential and existing advertisers, advertising
agencies and other customers (collectively, "Customers");
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
Article 1
1.1 Prioritet shall provide to IMS the services as set forth
in Article 2 hereof and IMS shall pay to Prioritet the service fee as set forth
in Article 3 hereof.
1.2 Prioritet shall bear all costs related to its activities
contemplated in this Agreement.
1.3 Prioritet may not assign, delegate or otherwise transfer
any of its rights and obligations hereunder without the prior written consent
of IMS (which consent may be granted or withheld in IMS' sole discretion). In
the event of such assignment, delegation or other transfer, Prioritet shall
continue to be liable for the obligations which have been assigned, delegated
or transferred and for the actions of its assignee, delegate or transferee.
Article 2
2.1 Prioritet shall provide the following services to IMS:
2.1.1 Commercial services consisting of:
(a) development of business and pricing proposals which will
result in the maximum cooperation possible between the Television
Channel and Customers through the marketing and sale of ad vertising
time on the Television Channel;
(b) carrying out of activities designed to maximize turnover
from the sale of advertising time on the Television Channel; and
(c) development of proposals regarding the marketing policy
of the Television Channel (subject to the requirements of the
professional advertising market in Ukraine);
2.1.2 Marketing services consisting of:
(a) application of Prioritet's marketing experience in the
sales of advertising time in the mass-media;
(b) carrying out of short- and long-term marketing research
with respect to the Television Channel, its programs and their
potential audience, including selection of appropriate methods for the
performance of qualitative and quantitative research; and
(c) the introduction of the Television Channel to potential
professional partners who are active in advertising markets.
2.1.3 Organizational and technical services consisting of:
(a) coordinating with all Customers advertisements to be
broadcast on the Television Channel, taking into account their
specific features and the Customers' wishes;
(b) conducting contingency planning for the placement of all
Customers' advertisements;
(c) ensuring that all advertisements which it prepares for
broadcast on the Television Channel
comply with all applicable Ukrainian laws;
(d) taking responsibility for the receipt, confirmation and
final review of advertising notices, and for ensuring that the
advertisements are broadcast as agreed; and
(e) negotiating and preparing for execution contracts
(containing payment and other terms no more lenient than terms
customary in the industry for similar contracts in respect of Ukraine)
between Customers and IMS for the sale of such advertising time by IMS
on the Television Channel as may be specified from time to time by the
Finance Director of IMS (or his appointee), and carrying out all pre
liminary and ancillary activities related to such contracts, including
(i) correspondence with Cus tomers, (ii) the acceptance, execution,
distribution and confirmation of advertising orders of Customers,
(iii) the delivery of invoices, and (iv) placement of advertisements
on the air.
2.2 Price-lists and rules for the broadcast of advertising
which are provided to all Customers shall be established jointly by Prioritet
and IMS with a view to obtaining the most favourable business results for IMS.
Article 3
3.1 In consideration for the services provided to IMS by
Prioritet under this Agreement, IMS shall pay a monthly service fee (the
"Service Fee"). The Service Fee shall be based upon monthly invoices provided
to IMS by Prioritet for services performed by Prioritet, provided that the
Service Fee shall not be less than $2,000.
3.2 IMS shall make payments within 90 days of the
invoice date.
Article 4
4.1 In addition to the invoice provided by Prioritet in
accordance with Article 3, Prioritet shall provide IMS with monthly written
reports accounting in reasonable detail for (i) all contracts arranged by
Prioritet, (ii) all advertisements of Customers placed by Prioritet on the
Television Channel, (iii) all monies
received and receivable under such contracts, and (iv) any other information
which IMS may from time to time reasonably request.
Article 5
5.1 This Agreement shall terminate upon the earlier of (i)
the mutual agreement of the parties, (ii) termination by IMS pursuant to
Article 5.2, or (iii) December 31, 2006.
5.2 IMS may terminate this Agreement upon two months' written
notice to Prioritet. Prioritet may not terminate this Agreement prior to
December 31, 2006.
Article 6
6.1 This Agreement shall be governed by and construed in
accordance with the laws of Bermuda.
6.2 Subject to Article 6.3, the parties shall make a good
faith effort to resolve by negotiation among themselves any dispute,
controversy or claim arising out of, relating to, or in connection with, this
Agreement, or the breach, termination or validity hereof (a "Dispute").
6.3 Any Dispute which the parties shall not have been able to
resolve in accordance with Article 6.2 within thirty (30) days after such
Dispute has arisen shall be finally settled by arbitration in accordance with
such arbitration agreement as shall be currently in effect binding the parties
hereto.
6.4 The provisions of this Article 6 shall survive the
termination of this Agreement.
Article 7
7.1 Any notice required or permitted by this Agreement shall
be in writing. Such notices shall be written in English when given to IMS and
in English or Ukrainian when given to Prioritet. Notices shall be deemed to
have been given (i) when delivered personally, (ii) twenty-four hours after
being transmitted by telecopy (facsimile) or (iii) seven days after being sent
by air courier, subject to confirmation of receipt. Notices sent to the parties
shall be to the addresses or numbers specified in Article 8.
7.2 If any provision of this Agreement is in valid,
ineffective, unenforceable or illegal for any reason, such decision shall not
affect the validity or enforceability of any or all of the remaining
provisions. The parties agree that should any provision of this Agreement be
invalid or unenforceable, they shall prompt ly enter into good faith
negotiations to amend such pro vision in such a way that, as amended, it is
valid and legal and to the maximum extent possible carries out the original
intent of the parties as to the issue or issues in question.
7.3 The failure of a party to exercise any right or power
given to it under this Agreement, or to insist upon strict compliance with the
terms of this Agreement by the other party, shall not constitute a waiver of
the terms and conditions of this Agreement with respect to any subsequent
breach thereof, nor a waiver by either of the parties of its rights at any time
thereafter to require strict compliance with all the terms of this Agreement.
7.4 This Agreement may be executed in several counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
7.5 This Agreement contains the entire agree ment between the
parties with respect to the subject matter hereof and cancels and invalidates
all prior commitments or representations which may have been made by the
parties either orally or in writing with respect to the subject matter hereof.
7.6 This Agreement may be amended, modified or supplemented
only by a written instrument authorized and executed on behalf of each party
hereto. IMS may assign, delegate or transfer any of its rights or obligations
under this Agreement without the prior consent of Prioritet.
7.7 The terms and provisions of this Agreement shall be
binding on the legal successors and permitted assigns, transferees and
delegatees of each party hereto.
7.8 Each party hereto shall execute and deliver such other
documents and take such other actions as may reasonably be requested by the
other party hereto in order to consummate or implement the transactions
contemplated hereby.
Article 8
8.1 The addresses of the parties are as
follows:
IMS: International Media Services
Ltd.
Gotthardstrasse 3
C/o Nick & Ineichen
6304 Zug
Switzerland
Attn: Mr. Arthur G. Nick
Tel: 41 41 726 8010
Fax: 41 41 726 8011
Prioritet: Limited Liability Company
"Prioritet"
141 Heckarkevin
Kiev, Ukraine
Attn: General Director Ihor
Pouryshev
Tel:
Fax:
IN WITNESS WHEREOF, the parties hereto have
caused their duly authorized representatives to execute this Agreement on the
date first above written.
LIMITED LIABILITY COMPANY INTERNATIONAL MEDIA
"PRIORITET" SERVICES LTD.
By: By:
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