SHAREHOLDERS' AGREEMENT, dated as of August 1, 1997, among
Federacja Sp. z o.o. ("Federation"), a company organized under the laws of
Poland, ITI Media Group N.V. ("ITI Media"), a company organized under the laws
of the Netherlands Antilles, and CME Media Enterprises B.V. ("CME"), CME Poland
B.V. ("CME Poland") and Unidome Beheer B.V. ("Unidome"), each a company
organized under the laws of the Netherlands.
RECITALS
A. Unidome is a wholly-owned subsidiary of ITI Media and CME
Poland is a wholly-owned subsidiary of CME.
B. Unidome and CME Poland have formed and capitalized
Federation for the purpose of providing Federated Television Stations (as
hereinafter defined) with certain services related to their television and media
business, including (i) the creation, purchase, sale and production of
television programming, (ii) the packaging and sale of advertising, and (iii)
the provision of technical, legal, management and research services (the
"Business").
C. Each of Unidome and CME Poland (each a "Shareholder," and
together, the "Shareholders") holds legal and beneficial title to 50% of the
capital of Federation (the "Federation Shares").
Federation Shareholder Agreement
D. Unidome and CME Poland have caused articles of
incorporation in the form attached as Exhibit A to be adopted as the articles of
incorporation of Federation (as amended from time to time, the "Articles") and
intend to amend such articles of incorporation, as promptly as practicable
following the date hereof, in a manner so as to give the fullest possible effect
to the provisions of this Agreement.
E. Unidome and CME Poland have agreed upon an initial
long-term business plan relating to Federation (the "Business Plan") in the form
attached as Exhibit B.
F. Unidome and CME Poland intend that Federation enter into
television services agreements to supply programming and other services to each
of TVN Sp. z o.o. and Telewizja Wisla Sp. z o.o. (such agreements, and any other
television services agreement of a similar nature entered into by Federation and
any Federated Television Station (as hereinafter defined), are referred to
herein as "Television Services Agreements").
G. Unidome and CME Poland desire to set forth their agreement
as to the management of Federation, transfers of Federation Shares and certain
other matters relating to Federation.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, the parties hereto agree as follows:
ARTICLE I
SHAREHOLDERS' APPROVAL
Federation Shareholder Agreement
I.1. Fundamental Actions. None of the following actions shall
be taken without the approval of the Shareholders, at a duly convened meeting of
shareholders of Federation at which at least 51% of the outstanding Federation
Shares is represented and voted:
(1) any merger, split-up, liquidation, dissolution or similar
transaction by or involving Federation or any subsidiary of Federation;
(2) any recapitalization, capital increase or capital
reduction by Federation or issuance or repurchase of (i) any equity
securities of Federation, (ii) any securities convertible into or
exchangeable for equity securities of Federation, or (iii) any options
to acquire any of the foregoing;
(3) any change or deviation from the dividend policy set forth
in Section 5.4 and entering into any agreement limiting the authority
of the shareholders' meeting to declare and pay dividends; and
(4) any amendment to the Articles.
ARTICLE II
SUPERVISORY BOARD
II.1. Supervisory Board. Each of CME Poland and Unidome shall
have the right to appoint and remove one half of the members (each a "Director")
of the Supervisory Board. The position of Chairman of the Supervisory Board
shall be filled on an annual, rotating basis by a Director chosen by Unidome and
CME Poland,
Federation Shareholder Agreement
respectively, with the position filled initially by a Director chosen by CME
Poland. Directors shall serve a two-year renewable term.
II.2. Meetings of the Supervisory Board. (a) The Supervisory
Board shall meet at least once in each fiscal quarter of the Company, and
otherwise when requested by any two Directors following at least 14 days' prior
notice to each other Director.
(b) The Chairman of the Supervisory Board shall prepare and
furnish to each other Director, at least ten days prior to any meeting of the
Supervisory Board, an agenda for such meeting, which agenda shall include any
proposed action that any Director shall request by notice to the Chairman no
later than 14 days prior to such meeting. Meetings may be held by telephone
conference.
2.3. Decisions by the Supervisory Board. None of the following
actions may validly be taken by or on behalf of Federation without the prior
approval of at least two Directors appointed by Unidome and at least two
Directors appointed by CME Poland.
(1) any agreement or transaction between Federation and any
Shareholder (or any Affiliate (as hereinafter defined) of such
Shareholder), or any amendment thereto, other than any agreement or
transaction involving aggregate payment obligations of Federation of
less than US$ 50,000 or equivalent, which are entered into on arms'
length terms and in the ordinary course of business;
(2) amendment or termination of any Television Services
Agreement, or decision not to enforce any Television Services Agreement
following a breach thereof by a Federated Television Station;
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(3) any incurrence of debt (including, without limitation, the
issuance or incurrence of any guaranty or similar contingent
obligation) involving, in the aggregate, in excess of US$ 1 million or
equivalent, or any material waiver or amendment of any provision of any
loan or other financing agreement by which Federation is bound;
(4) commencement or settlement by Federation of any suit,
action or other proceeding outside the ordinary course of business,
provided that, in the case of any suit, action or proceeding with
respect to any agreement or obligation of any Shareholder or Affiliate
of such Shareholder with or in favor of Federation, a majority of the
Directors who were not designated by such Shareholder shall be
sufficient to authorize Federation to enforce its rights under, or
settle any action or proceeding with respect to, such agreement or
obligation, and any such action or proceeding shall be conducted in
accordance with the instruction of such Directors and provided further,
that any dispute or controversy between Federation and any Shareholder
or Affiliate of such Shareholder and not involving a third party, if
not resolved within 30 days by the parties acting in good faith, shall
be submitted to arbitration in accordance with the provisions of
Section 6.4;
(5) entry by Federation into any significant business activity
not related to the Business;
(6) entry by Federation into any joint venture, partnership or
similar arrangement with any other Person (as hereinafter defined)
other than television co-production arrangements and Television
Services Agreements in the ordinary course of business and consistent
with the then applicable business plan;
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(7) modification of the Business Plan and adoption or
modification of subsequent annual business plans (but always in
accordance with resolutions made by the Shareholders from time to time
relating to such business plans);
(8) purchase, lease or other acquisition of any asset or group
of related assets, in a single transaction or series of related
transactions, if after giving effect thereto, Federation would have
expended more than US$500,000 or equivalent on such purchases, leases
or other acquisitions during the applicable fiscal year, or entered
into any agreement to do the foregoing;
(9) sale, lease or other disposition of any asset or group of
related assets of Federation, in a single transaction or series of
related transactions, if after giving effect thereto, Federation would
have sold, leased or otherwise disposed of assets (other than
inventory) during the applicable fiscal year, having a fair market
value in excess of the lesser of (i) 5% of the fair market value of the
consolidated assets of Federation, or (ii) US$500,000 or equivalent, or
entering into any agreement involving the foregoing;
(10) entering into (i) any material agreement having a term in
excess of three years, or (ii) any agreement having aggregate payment
obligations of Federation reasonably expected to exceed US$ 200,000 or
equivalent, in either case, to the extent not constituting an agreement
or transaction described in any of the preceding clauses (1), (3), (8)
or (9);
(11) decision on any matter proposed at a meeting of the
Supervisory Board that was not contained in the agenda for such meeting
previously furnished
Federation Shareholder Agreement
to each Director in accordance with Section 2.2(b); and
(12) the adoption or modification of any material accounting
or tax principle or practice, or tax election, of Federation.
ARTICLE III
OFFICERS; MANAGEMENT BOARD
III.1. Officers. (a) The executive officers of Federation
shall include a General Director, a Deputy General Director, a Finance Director,
a Director of Sales, a Director of Legal Affairs, a Director of Research, a
Director of Administration and Personnel, and a Director of Production, Cable
and Affiliates Relations. The nominees for the positions of Director of
Research, Director of Administration and Personnel and Director of Production,
Cable and Affiliates Relations shall be qualified individuals appointed and
removed by Unidome. If Unidome and CME Poland are unable to agree on one nominee
to fill a vacancy in any such position, Unidome shall have the right to appoint
the successor. The nominees for the positions of Finance Director, Deputy
General Director, Director of Sales and Director of Legal Affairs shall be
qualified individuals appointed and removed by CME Poland. If CME Poland and
Unidome are unable to agree on a nominee to fill a vacancy in any such position,
CME Poland shall have the right to appoint the successor.
(b) Operating budgets for each of the departments of
Federation shall be developed and supervised by the respective executive
officers heading such departments.
Federation Shareholder Agreement
(c) Having been mutually appointed by Unidome and CME Poland,
Mr. Mariusz Walter shall serve as the initial General Director pursuant to an
executive services agreement approved by the parties. Any General Director may
be removed from the office for Cause (as hereinafter defined) by each of Unidome
and CME Poland, and in the event that either of Unidome or CME Poland shall have
exercised its right to remove the General Director, the other party shall take
all necessary action (including, without limitation, voting its shares and
approving resolutions in support of such removal in meetings of the governing
bodies of Federation) to enable such removal to proceed. Except to the extent
otherwise provided in Section 3.2(a), any successor to Mr. Walter shall be
appointed by mutual agreement of Unidome and CME Poland. Pending the appointment
of such successor, the Deputy General Director shall serve as an interim General
Director and Unidome shall be entitled to appoint an interim Deputy General
Director, and the affairs of Federation shall continue to be conducted in
accordance with the Business Plan (if still in effect) and the annual business
then in effect.
(d) Nominees for all other senior management positions shall
be appointed by mutual agreement of Unidome and CME Poland.
(e) Any banking transaction of Federation, and any
transaction, or series of related transactions, involving obligations of
Federation in excess of US$40,000 or equivalent, shall require the approval of
the General Director and the Finance Director, provided that any such
transaction shall require the approval of the
Federation Shareholder Agreement
General Director, the Deputy General Director and the Finance Director during
the tenure of any interim General Director appointed in conformity with Section
3.1(c).
III.2. Management Board. (a) For so long as each Shareholder
holds legal and beneficial title to 50% of the Federation Shares and no
Competitor of ITI (as hereinafter defined) shall be entitled to appoint,
directly or indirectly, a majority of the board of directors of CME Poland, the
Management Board shall consist of two members to be appointed and removed by
Unidome and three members to be appointed and removed by CME Poland. In the
event that any Competitor of ITI shall be entitled to appoint, directly or
indirectly, a majority of the board of directors of CME Poland, then (i) the
Management Board shall consist of two members to be appointed and removed by
Unidome and two members to be appointed and removed by CME Poland, and (ii)
thereafter, Unidome shall be entitled to appoint and remove the General
Director. The General Director, Deputy General Director and Finance Director
shall be the members of the Management Board at all times.
(b) The Management Board shall have an authority to act in all
matters not otherwise reserved, either by virtue of this Agreement, the Articles
or applicable Polish laws, to the Supervisory Board or the Shareholders. Two
members of the Management Board, one designated by Unidome and one designated by
CME Poland, acting jointly, shall have the power to represent Federation in
dealings with third parties.
(c) The Management Board shall meet and take its decisions in
the manner provided in its regulations, which shall be adopted by decision of
the Supervisory Board taken with the approval of at least two Directors chosen
by Unidome and two Directors chosen by CME Poland as soon as practicable after
the date of this Agreement and in any event within 120 days hereof.
Federation Shareholder Agreement
ARTICLE IV
TRANSFERS OF FEDERATION SHARES
IV.1. Restrictions on Transfer of the Federation Shares. (a)
Neither of Unidome nor CME Poland may Transfer (as hereinafter defined) any
Federation Shares to any Person, without the prior written consent of the other
party, which consent may be withheld in such other party's sole and absolute
discretion, except:
(i) in a Transfer of all Federation Shares owned by it to a
Permitted Transferee (as hereinafter defined) in which event,
and after such Permitted Transferee shall have delivered a
notice in appropriate form to Federation, agreeing to be bound
by the provisions of this Agreement, such Permitted Transferee
shall be considered a Shareholder hereunder,
(ii) following the fifth anniversary of the date of establishment
of Federation, in a Transfer of all (but not less than all) of
the Federation Shares owned by it, in compliance with the
procedures set forth in clause (b) of this Section 4.1, and
(iii) following the fifth anniversary of the date of establishment
of Federation, in a Transfer of less than all of the
Federation Shares owned by it , in compliance with the
procedures set forth in clause (c) of this Section 4.1.
(b) Following the fifth anniversary of the date of
establishment of Federation, in the event that either of Unidome and CME Poland
(or a Permitted Transferee of either of them) (for purposes of this Section 4.1,
a "Transferring Shareholder") wishes to Transfer all (but not less than all) of
the Federation Shares owned by it, it shall deliver a notice (a "Transfer
Offer") to the other party (the "Offeree") setting forth a price at which it is
willing to sell such Federation Shares and the name of
Federation Shareholder Agreement
any third party purchaser, if any, from whom it has received an indication of
interest in purchasing such Federation Shares, whereupon the Offeree shall be
entitled to elect, by delivering a notice (a "Response Notice") to the
Transferring Shareholder, within 45 days of delivery of such Transfer Offer: (i)
to purchase from the Transferring Shareholder all of such Federation Shares for
cash at the price specified in such Transfer Offer, or (ii) to sell to the
Transferring Shareholder all of such Federation Shares at such price. Each of
Unidome and CME Poland agrees that, in the event that it shall have delivered a
Transfer Offer, in proper form, to the other party:
(x) in the event that it receives a timely Response Notice
indicating that the Offeree has elected to purchase all of such
Federation Shares, it shall sell and deliver all such Federation Shares
to the Offeree, accompanied by all instruments, stock powers, transfer
stamps and other documents necessary to transfer full legal and
beneficial ownership of such Federation Shares to the Offeree, free and
clear of all Liens, against payment by the Offeree of the purchase
price therefor, by wire transfer to it in cash in immediately available
funds, at a closing to be held on a date agreed with the Offeree (but
in no event later than 60 days following the date of delivery of such
Response Notice),
(y) in the event that it receives a timely Response Notice
indicating that the Offeree has elected to sell to it all of such
Federation Shares owned by the Offeree, it shall pay to the Offeree the
purchase price specified in such Transfer Offer, by wire transfer to
the Offeree of cash in immediately available funds, against delivery to
it by the Offeree of all such Federation Shares, accompanied by all
instruments, stock powers, transfer stamps and other documents
necessary to transfer to it full legal and beneficial ownership of such
Federation Shares, free
Federation Shareholder Agreement
and clear of all Liens, at a closing to be held on a date agreed with
the Offeree (but in no event later than 60 days following the date of
delivery of such Response Notice),
(z) in the event that either (p) the Offeree shall not have
delivered to it a Response Notice within 45 days following the date of
delivery of such Transfer Offer, (q) it receives a Response Notice that
fails to indicate whether the Offeree has elected either to buy or to
sell all of such Federation Shares, or (r) following delivery of a
Response Notice in which the Offeree has elected to buy all of such
Federation Shares, the Offeree shall not have participated in a closing
on or prior to a date that is not later than 60 days following the date
of delivery of such Response Notice, it shall be entitled to sell to
the third party specified in the Transfer Offer for cash all (but not
less than all) of the Federation Shares owned by it at the same price
and on the same terms specified in the Transfer Offer, provided that if
the sale to such third party has not been completed within 150 days
following the date of delivery of such Transfer Offer, it shall not be
permitted to Transfer Federation Shares without again complying with
this Section 4.1.
(c) Following the fifth anniversary of the date of
establishment of Federation, in the event that a Transferring Shareholder
desires to Transfer less than all of the Federation Shares owned by it to a
third party, such Transferring Shareholder shall deliver a notice (a "Refusal
Notice") to the Offeree setting forth the identity of such third party and the
price at which such Transferring Shareholder is willing to sell such number of
Federation Shares, whereupon the Offeree shall be entitled to elect, by
delivering a notice (a "Refusal Response") to the Transferring Shareholder
within 45 days of delivery of the Refusal Notice: (i) to consent to the Transfer
of such number of Federation Shares
Federation Shareholder Agreement
to such third party, or (ii) to purchase from the Transferring Shareholder such
number of Federation Shares at the same price and on the same terms as specified
in the Refusal Notice. Each of Unidome and CME Poland agrees that, in the event
that it shall have delivered a Refusal Notice, in proper form, to the other
party:
(m) in the event that it receives a timely Refusal Response
indicating that the Offeree has elected to purchase the Federation
Shares specified in the Refusal Notice, it shall sell and deliver such
Federation Shares to the Offeree, accompanied by all instruments, stock
powers, transfer stamps and other documents necessary to transfer full
legal and beneficial ownership of such Federation Shares to the
Offeree, free and clear of all Liens, against payment by the Offeree of
the purchase price therefor, by wire transfer to it in cash in
immediately available funds, at a closing to be held on a date agreed
with the Offeree (but in no event later than 60 days following the date
of delivery of such Refusal Response Notice), and
(n) in the event that either (s) the Offeree shall have
delivered to it a Refusal Response consenting to the Transfer referred
to in such Refusal Notice, (t) the Offeree shall not have delivered to
it a Refusal Response within 45 days following delivery of such Refusal
Notice, or (u) following delivery to it of a Refusal Response in which
the Offeree has elected to purchase the number of Federation Shares
specified in such Refusal Notice, the Offeree shall not have
participated in a closing on or prior to a date that is not later than
60 days following the date of delivery of such Refusal Response, it
shall be entitled to sell such number of Federation Shares to the third
party specified in such Refusal Notice for cash, at the same price and
on the same terms specified in such Refusal Notice, provided that if
the sale to such third party has not been completed within
Federation Shareholder Agreement
150 days following the date of delivery of such Refusal Notice, it
shall not be permitted to Transfer Federation Shares without again
complying with this Section 4.1.
(d) To the fullest extent of its powers under applicable law,
Federation shall refuse to recognize any Transfer of Federation Shares in
violation of this Agreement.
IV.2. Notation of Transfer Restrictions. Each of Unidome and
CME Poland shall cause appropriate notations and entries to be made in
Federation's share registry and the Articles to reflect that the Federation
Shares are subject to transfer restrictions contained in this Agreement.
ARTICLE V
CERTAIN COVENANTS AND AGREEMENTS
V.1. Books and Records; Inspection. (a) The Shareholders shall
cause Federation to keep true and accurate accounting books and records of all
operations. In addition to any other books and records as may be required under
Polish law, books and records for Federation shall be kept in English and in
U.S. Dollars and in accordance with the standards of U.S. GAAP (as hereinafter
defined) and the International Accounting Standards Committee, in each case
applied on a consistent basis.
(b) Each Shareholder and its authorized representatives
(including its internal and independent auditors) shall be permitted the equal
opportunity to (i) visit and inspect any of the properties and assets of
Federation, (ii) inspect any books and records of Federation, and make copies
and take extracts therefrom, and (iii) discuss the affairs,
Federation Shareholder Agreement
finances and accounts of Federation with Federation's officers and independent
auditors (and Federation shall authorize its independent auditors to discuss
with CME Poland and Unidome and such representatives the affairs, finances and
accounts of Federation), all at such reasonable times and as often as may be
reasonably requested.
(c) The Shareholders shall cause Federation to deliver to each
of ITI Media and CME (i) as soon as practicable, but not later than 45 days
following the end of each fiscal year, consolidated annual financial statements
audited by an internationally recognized accounting firm selected by the
Shareholders; (ii) as soon as practicable, but not later than 25 days following
the end of each fiscal quarter, quarterly unaudited financial statements of
Federation reviewed by an internationally recognized accounting firm selected by
CME; and (iii) not later than 10 days following the end of each month, monthly
financial reports as required by Polish laws and regulations. The financial
statements referred to above shall be prepared in accordance with standards
applied on a consistent basis, and, in the case of the Financial Statements
referred to in (i) and (ii) above, shall be prepared in accordance with the
standards of U.S. GAAP and the International Accounting Standards Committee, and
shall also be suitable for filing with appropriate regulatory and tax
authorities.
(d) The Shareholders shall cause Federation to deliver to any
Shareholder, at the request of such Shareholder, such information as may be
reasonably requested to enable such Shareholder or its Affiliates to comply with
applicable tax filing requirements, and for other legitimate purposes related to
taxes. In the case of any withholding taxes on payments to CME Poland or
Unidome, the Shareholders shall cause Federation to furnish promptly official
tax receipts evidencing such withholding in respect of such payments.
Federation Shareholder Agreement
(e) CME Poland (or its representative) shall be entitled to
prepare all U.S. tax filings in connection with Federation, and CME Poland shall
be the "Tax Matters Partner" of Federation for U.S. tax purposes.
V.2. Continued Ownership. (a) For as long as each of Unidome
and CME Poland owns any Federation Shares, neither ITI Media nor CME shall
Transfer the shares of capital stock of Unidome or CME Poland, respectively,
that are owned by it or allow Unidome or CME Poland, respectively, as the case
may be, to Transfer to any Person any shares of its own capital stock (or, if
Unidome or CME Poland shall have transferred the shares of Federation owned by
it to a Permitted Transferee, allow such Permitted Transferee to Transfer to any
Person any shares of its own capital stock), or Transfer securities or other
instruments convertible into, or exchangeable or exercisable for, shares of such
capital stock, or rights to purchase such capital stock or any other rights,
voting or otherwise, applicable thereto except:
i. by pledge to a financial institution as security for financing
from such institution, provided that such institution agrees
in advance in writing to be bound by the terms of this Section
5.2;
ii. if, after giving effect to such Transfer, ITI Media or CME, as
the case may be, shall continue to own more than 50% of the
outstanding capital stock of Unidome or CME Poland,
respectively, as the case may be (or any Permitted Transferee
thereof); or
iii. in a Control Transfer (as hereinafter defined) for cash in
compliance with clause (b) of this Section 5.2.
Federation Shareholder Agreement
For purposes of this Section 5.2, a "Control Transfer" shall mean any Transfer
of the shares of capital stock of Unidome or CME Poland (or of the capital stock
of any Permitted Transferee of either of them that owns Federation Shares),
including any Transfer by a financial institution following foreclosure upon a
pledge of such capital stock, if, after giving effect to such Transfer, ITI
Media or CME, as the case may be, would not own, directly or indirectly, at
least 50% of the outstanding capital stock of Unidome or CME Poland (or of any
Permitted Transferee of either of them), respectively.
(b) In the event that either of ITI Media or CME desires to
make a Control Transfer for cash to a third party, it shall provide written
notice (a "Control Transfer Notice") to the other party (the "Parent Offeree")
in advance of such Control Transfer, specifying in detail the identity of such
third party and the price and other terms of the transaction. The Parent Offeree
shall then be entitled to elect, by delivering notice to the transferring party
within 45 days of delivery of the Control Transfer Notice, to purchase all (but
not less than all) of the shares that are the subject of such Control Transfer
at the lesser of (i) fair market value and (ii) the price being offered to such
third party. If the Parent Offeree shall not have delivered such notice within
such 45-day period, the transferring party shall be entitled to Transfer to such
third party all (but not less than all) of such shares, provided that if the
Transfer to such third party shall not have been completed within 120 days of
the delivery of the Control Transfer Offer, the transferring party shall not be
permitted to Transfer such shares without again complying with this Section
5.2(b).
(c) For purposes of this Section 5.2, if it is necessary to
determine the fair market value of any shares of capital stock, such fair market
value shall be determined by KPMG Peat Marwick, or if KPMG Peat Marwick is not
considered by either of
Federation Shareholder Agreement
Unidome or CME Poland to be an appropriate firm to conduct such determination,
due to a conflict of interest involving one or more of the parties hereto (or
any of their respective Affiliates), then the parties shall endeavor to agree
upon another public accounting firm of recognized international standing (any
such firm, a "Valuation Firm") to conduct such valuation. In the event that CME
Poland and Unidome cannot agree upon a single Valuation Firm before the expiry
of such 45-day period, each of them shall be entitled to appoint a Valuation
Firm and such two firms shall agree upon a third Valuation Firm to conduct such
valuation. The two resulting appraisals which are closest in value to one
another shall be averaged to determine such fair market value. In the event that
either CME Poland or Unidome shall not have appointed a Valuation Firm within 30
days following the expiry of such 45-day period, the determination of fair
market value prepared by the Valuation Firm selected by the other party shall be
binding upon the parties.
V.3. Covenant of ITI Media. ITI Media shall not, and shall
procure that none of its Affiliates shall, prepare financial statements under or
in accordance with U.S. GAAP, for so long as (i) no Competitor of ITI (as
hereinafter defined) shall be entitled to appoint, directly or indirectly, a
majority of the board of
Federation Shareholder Agreement
directors of CME Poland, and (ii) CME and its Affiliates continue to own at
least 50% of the capital of Federation.
V.4. Dividend Policy. The Shareholders agree that it shall be
the policy of Federation to declare and pay dividends to the maximum extent
possible, subject to any legal or contractual restrictions on dividends and to
the Business Plan and any subsequent annual business plan, provided that,
notwithstanding the foregoing, no dividends or other distributions to
Shareholders shall be declared or paid by Federation at any time if, at such
time, any balance (including principal and accrued interest) is owed to any
Shareholder on account of shareholder loans extended to Federation or any Joint
Company.
V.5. Public Announcements. Except as required by law, without
the prior written consent of the other party, neither Unidome nor CME Poland
shall, and each shall cause its respective Affiliates and Federation not to,
issue any press release or public statement with respect to this Agreement, any
other agreements entered into by the parties with or relating to Federation or
the business and affairs of Federation; provided that nothing herein shall
prohibit any party from making required disclosures to its shareholders or to
regulatory authorities. If any party is required by law to issue a press release
or other public statement relating to the foregoing matters, it shall deliver
prior notice to the other party of such requirement and of the disclosure
proposed to be made.
V.6. Further Assurances. Each of CME, CME Poland, ITI Media
and Unidome will cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances (including, without
limitation, as may be related to the finalization of amendments to the Articles
and the
Federation Shareholder Agreement
completion of any matters concerning corporate records) as may from time to time
be reasonably requested by ITI Media, Unidome, CME or CME Poland, as the case
may be, in order to carry out the intent and purposes of the Agreement and the
transactions contemplated hereby.
ARTICLE VI
MISCELLANEOUS
VI.1. Definitions. In this Agreement, the following terms, not
defined elsewhere in the text hereof, 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 under
common control with, such Person.
"Agreement" means this Shareholders' Agreement, including any
exhibits and schedules hereto, as it may be supplemented or amended from time to
time in accordance with its terms.
"Cause" means, with respect to any individual Person, (i)
conduct adverse to the interests of Federation or the Federated Television
Stations, (ii) conduct involving moral turpitude, or (iii) an inability of such
Person to discharge duties for 120 or more consecutive days.
"Competitor of ITI" means any Person, other than CME, any
consolidated subsidiary of CME, ITI Holdings S.A. or any Affiliate of ITI
Holdings
Federation Shareholder Agreement
S.A., engaged in the ownership, operation or management of television
stations.
"Control" means the possession of the power, directly or
indirectly, to direct the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise (which power shall be
deemed to exist upon the ownership of more than 50% of any class of voting
securities or equity interest in such Person).
"Federated Television Station" means any television station
delivering or distributing television programming in Poland, whether by means of
terrestrial broadcasting, cable, satellite transmission or otherwise, with which
Federation has entered into one or more Television Services Agreements.
"Permitted Transferee" means, with respect to any Shareholder:
(i) any direct or indirect wholly-owned subsidiary of such Shareholder, (ii) any
Person of which such Shareholder is the direct or indirect wholly-owned
subsidiary, or (iii) any Person which is a direct or indirect wholly-owned
subsidiary of a Person of which such Shareholder is the direct or indirect
wholly-owned subsidiary.
"Person" means an individual, corporation, partnership, trust
or other entity, including a governmental or political subdivision or an agency
or an instrumentality thereof.
"Transfer" means any sale, transfer, assignment, pledge,
mortgage, hypothecation or other disposition, whether effected directly or
indirectly.
"US$" means United States Dollars.
Federation Shareholder Agreement
"U.S. GAAP" means the accounting principles generally accepted
from time to time in the United States.
VI.2. Termination. This Agreement shall remain in effect until
terminated (a) by mutual agreement of Unidome and CME Poland, (b) by delivery of
notice by CME Poland to any other Shareholders, in the event that Unidome (or a
Permitted Transferee thereof) ceases to be a Shareholder, or (c) by delivery of
notice by Unidome to any other Shareholders, in the event that CME Poland (or a
Permitted Transferee thereof) ceases to be a Shareholder.
VI.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.
VI.4. Arbitration. (a) General. Any controversy or claim
arising out of or relating to this Agreement or any breach thereof 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 London Court of International Arbitration 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 panel shall
consist of three arbitrators, each of whom shall be a practicing attorney or a
professor of law. The party initiating arbitration (the "Claimant") shall
appoint its arbitrator in its demand (the "Demand"). The other party (the
"Respondent") shall appoint its
Federation Shareholder Agreement
arbitrator within 30 days of receipt of the Demand (whether the Demand is
received from the Claimant or from the London Court of International
Arbitration) and shall notify the Claimant of such appointment in writing. If
the Respondent fails to appoint an arbitrator within such 30-day period, the
arbitrator named in the Demand shall decide the controversy or claim as a sole
arbitrator. Otherwise, the two arbitrators appointed by the parties shall
appoint a third arbitrator within 30 days after the Respondent has notified
Claimant of the appointment of the Respondent's arbitrator. When the arbitrators
appointed by the Claimant and Respondent have appointed a third arbitrator and
the third arbitrator has accepted the appointment, the two arbitrators shall
promptly notify the parties of the appointment of the third arbitrator. If the
two arbitrators appointed by the parties fail or are unable so to appoint a
third arbitrator and so notify the parties, either party may request the London
Court of International Arbitration to appoint the third arbitrator. The London
Court of International Arbitration shall appoint the third arbitrator within 30
days after such request and shall notify the parties of the appointment. The
third arbitrator shall act as Chairman of the panel.
If there are more than two parties to a dispute, each party
shall propose to the other parties by notice the names of one or more persons,
one or more of whom would serve as an arbitrator. If the parties are unable to
agree on all three arbitrators within thirty days of the first notice given
under the preceding sentence, then the remaining arbitrators shall be appointed
by the London Court of International Arbitration.
(c) Interim Orders. In addition to the authority conferred on
the arbitrators by the Rules of the London Court of International Arbitration
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
Federation Shareholder Agreement
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 1(3)(b) of the United Kingdom Arbitration Act 1979 (the
"1979 Act"), or under section 69 of the 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 section 1(5)(b) of the 1976 Act with respect to any
award, nor application made under section 2(1)(a) of the 1979 Act or section 45
of the 1996 Act with respect to any question of law.
VI.5. Amendment, Assignment, etc. Neither this Agreement nor
any term hereof may be amended, changed, waived, discharged or terminated,
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 be binding upon the respective successors and
permitted assigns of the parties hereto. This Agreement shall not be assignable
or otherwise transferable by a party without the prior written consent of the
other parties hereto and any attempt to so assign or transfer this Agreement
without such consent shall be void and of no effect.
Federation Shareholder Agreement
VI.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 and may be given by hand delivery,
telecopy or courier mail:
(a) if to Federation, at:
Powsinska 4
02-920 Warsaw
Poland
telecopy number: 011-48-22-640-4423
(b) if to ITI Media, at:
Landhuis Joonchi
Kaya Richard J. Beaujon z/r
Curacao
Netherlands Antilles
with a copy to:
ITI Management Ltd.
Beustweg 12
8032 Zurich
Switzerland
telecopy number: 011-41-1-258-8888
Federation Shareholder Agreement
(c) if to Unidome, at:
De Roelelaau 7
1083 HJ Amsterdam
The Netherlands
with a copy to:
ITI Management Ltd.
Beustweg 12
8032 Zurich
Switzerland
telecopy number: 011-41-1-258-8888
(d) if to CME and/or CME Poland, at:
18 D'Arblay Street
London W1V 3FP
England
Attention: Legal Department
telecopy number: 011-44-171-292-7948
with a copy to:
Louis Begley
c/o Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Federation Shareholder Agreement
telecopy number: (212) 909-6836
or at such other address and telecopy number as CME, CME Poland, ITI Media or
Unidome may designate by written notice to the other Shareholders; and if to any
other Shareholder, at such address and telecopy number as such Shareholder may
designate by written notice to the other Shareholders.
VI.7. Survival of Representations and Warranties. All
representations and warranties contained or incorporated in this Agreement or
made in writing by or on behalf of any Shareholder in connection with the
transactions contemplated by this Agreement shall survive the execution and
delivery of this Agreement.
VI.8. Expenses. Except as otherwise specifically provided in
this Agreement, or as otherwise agreed by the parties, 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.
VI.9. Severability; Invalidity. (a) 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 Agreement in
that jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction.
Federation Shareholder Agreement
(b) If any provision of the Articles is at any time in
conflict with any of the provisions of this Agreement, the parties shall
exercise all voting and other rights and powers available to them as
stockholders and otherwise so as to give effect to the provisions of this
Agreement and shall further, if necessary, procure any required amendment of the
Articles. Without limiting the generality of the foregoing, the Shareholders
shall take all actions necessary to cause the Articles to be at all times
consistent with, and to give full affect to, the provisions of this Agreement
and shall vote their shares and take all other reasonable measures to cause such
amendment to be filed with and approved by the appropriate governmental
authority in Poland as soon as practicable following the date of this Agreement.
VI.10. Authority of Shareholders Limited. Except as expressly
set forth herein, none of the Shareholders shall have any authority to represent
or to bind the other Shareholders in any manner whatsoever, and each Shareholder
shall be solely responsible and liable for its own acts.
VI.11. 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.
VI.12. 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.
VI.13. Integration; Section Headings; Counterparts; 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
Federation Shareholder Agreement
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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
ITI MEDIA GROUP N.V.
By
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Name:
Title:
UNIDOME BEHEER B.V.
By
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Name:
Title:
CME MEDIA ENTERPRISES B.V.
By
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Name:
Title:
CME POLAND B.V.
Federation Shareholder Agreement
By
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Name:
Title:
FEDERACJA SP. Z O.O.
By
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Name:
Title: