INTERMEDIA ADVERTISING CONSULTANCY AGREEMENT
THIS INTERMEDIA ADVERTISING CONSULTANCY AGREEMENT (this
"Agreement") is entered into on May 7, 1997 (the "Effective Date"), by and
between ENTERPRISE INTER-MEDIA, a Ukrainan legal entity ("Intermedia"), and
LIMITED LIABILITY COMPANY "PRIORITET", a limited liability company organized
under the laws of Ukraine ("Prioritet").
WHEREAS, Intermedia wishes to engage Prioritet in connection
with advertising consultancy 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 Intermedia the consultancy
services as set forth in Article 2 hereof and Intermedia shall pay to Prioritet
the consultancy 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 Intermedia (which consent may be granted or withheld in Intermedia's 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 consultancy
services to Intermedia:
2.1.1 Commercial consultancy 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 advertising
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 consultancy 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 consultancy 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 Intermedia for the sale of such advertising time
by Intermedia on the Television Channel as may be specified from time
to time by the Finance Director of Intermedia, and carrying out all
preliminary and ancillary activities related to such contracts,
including (i) correspondence with Customers, (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 Intermedia with a view to obtaining the most favourable business results
for Intermedia.
Article 3
3.1 In consideration for the consultancy services provided to
Intermedia by Prioritet under this Agreement, Intermedia shall pay a monthly
consultancy fee (the "Consultancy Fee") to Prioritet. The Consultancy Fee shall
be based upon monthly invoices provided to Intermedia by Prioritet for
consultancy services performed by Prioritet, provided, that the Consultancy Fee
shall not be less than Ukrainian Hrivna 20,000.
3.2 Intermedia shall make payments to Prioritet within 90
days of the consultancy invoice date.
Article 4
4.1 In addition to the consultancy invoice provided in
accordance with Article 3, Prioritet shall submit to Intermedia at least one
month in advance of each new quarter a proposed business plan (the "Prioritet
Business Plan") setting forth Prioritet's proposals for the consultancy
services to be performed by Prioritet under Article 2 during such quarter,
including Prioritet's proposed budget for such quarter. Intermedia and
Prioritet shall jointly approve and finalize each Prioritet Business Plan
within two weeks of Intermedia's receipt thereof.
4.2 Prioritet shall provide Intermedia 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 Intermedia 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 Intermedia pursuant to
Article 5.2, or (iii) December 31, 2006.
5.2 Intermedia may terminate this Agreement upon two months'
written notice to Prioritet. Prioritet may not terminate this Agreement prior
to the completion of the term specified in Article 5.1.
Article 6
6.1 This Agreement shall be governed by and construed in
accordance with the laws of the Netherlands.
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
Intermedia 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 invalid,
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 promptly enter into good faith
negotiations to amend such provision 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 agreement 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. Intermedia 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:
Intermedia: Intermedia
Address:
Attn: Mr. Basil Danchuk
Tel: 380 44 224 5921/2219
Fax: 380 44 225 0280/2240
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
"PRIORITET" ENTERPRISE "INTER-MEDIA"
By: By:
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Name: Name:
Title: Title: