THE AGREEMENT
On this 4 - th day of September 1996, in Warsaw, between
TVN Sp. z o.o. with its seat in Warsaw, hereinafter referred to as "TVN",
represented by Jan Wejchert, acting on the basis of the power-of-attorney from
September 2, 1996, and
Przedsiebiorstwo Realizacji i Koordynacji Budownictwa "REALBUD" Sp. z o.o. with
its seat in Cracow, hereinafter referred to as "REALBUD", represented by the
President of the management board Ryszard Sciborowski,
the following agreement was executed:
Whereas REALBUD possesses the controlling interest constituting 71.3 % of the
share capital of Telewizja Wisla Sp. z o.o. (hereinafter referred to as "Wisla")
and desires to gain for Wisla a strategic investor, which shall ensure further
development of Wisla's activity within the scope provided for in the concession
for broadcasting television programs;
Whereas TVN applied for a concession for broadcasting television programs in the
second concession procedure, and in case such concession is granted, TVN is
prepared, pursuant to suggestions of the National Board of Broadcasting and
Television, to participate in creation of a federation of regional broadcasters
of television programs;
Whereas TVN and Wisla, considering the process of creation of federation of
regional broadcasters of television programs as a significant factor for
survival on the market of regional broadcasters of television programs, signed
on May 7, 1996 the Letter of Intent envisaging the possibility of mutual
program, commercial and production cooperation;
Whereas, considering development of competition on the market of television
programs broadcasting, especially the entry of powerful cable television
broadcasters and satellite television broadcasters, such as HBO and CLT, as well
as Wisla's needs to obtain immediate financial means, the intensification of
efforts in respect to creation of a federation of regional broadcasters of
television programs becomes necessary;
Whereas TVN possesses proper human and financial resources and is prepared to
provide Wisla with program and financial support;
Now therefore the Parties hereto agree as follows:
Article 1
REALBUD hereby declares and ensures TVN that:
1) Wisla is a limited liability company registered in the commercial register
held by the District Court for Cracow-Sr--dmiescie, under No RHB
_________;
2) The share capital of Wisla amounts to 11,500,000 (eleven million and five
hundred thousand) PLN and is divided into 115,000 (one hundred and fifteen
thousand) equal and indivisible shares of the value of 100 (one hundred)
PLN each, which were entirely covered by contributions of shareholders who
acquired such shares. Current list of shareholders, delivered to the
register court, constitutes Enclosure No 1 to this agreement;
3) Equal rights and obligations are connected with all shares of Wisla's
share capital, and none of the shareholders exercises any particular and
personally granted rights;
4) REALBUD is the owner of 81,987 (eighty one thousand and nine hundred
eighty seven thousand) shares in the share capital of Wisla, which are
free of any liens or any other encumbrances relating to obligatory or
proprietary rights established to the benefit of third parties, except for
40,000 (forty thousand) shares pledged to the benefit of Bank Wsp--lpracy
Regionalnej as a security of Wisla's loan;
5) Wisla's assets amount to _________ million PLN, and its liabilities amount
to 17.5 million PLN, including 14.5 million PLN of obligations towards
banks, from which the main creditor is Bank Rozwoju Eksportu. Wisla's
statement of assets and liabilities signed by the President of the
management board of Wisla constitutes Enclosure No 2 to this agreement.
6) The profits of Wisla in 1995 did not exceed PLN equivalent of 5,000,000
(five million) ECU.
Article 2
1. REALBUD is hereby obligated to sell 56,350 shares in the share capital of
Wisla, constituting 49 % of this capital (hereinafter referred to as the
"Shares"), to the benefit of TVN, for the price being equivalent of
5,000,000 (five million) American dollars in accordance with the "fixing"
rate published by the National Bank of Poland (hereinafter referred to as
the "Rate") on a date, in which an agreement to sell the Shares shall be
executed, with reservation of provisions of art. 3 item 5.
2. TVN is hereby obligated to purchase the Shares from REALBUD for the price
specified in item 1 of this article.
3. REALBUD and TVN obligations provided for in item 1 and 2 shall, in respect
to the sale
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and purchase of the Shares, be deemed as preliminary agreement to sell the
Shares in the meaning of art. 389-390 of the Civil code, and the promised
Shares sale agreement should be executed until October 31, 1996, with
reservation of fulfillment of conditions specified in art. 3 and
fulfillment of obligations specified in art. 4, by REALBUD. TVN has the
right to unilateral written waiver of one or more conditions specified in
art. 3 items 1-2 and 5-6, which are deemed reserved for the benefit of
TVN.
4. REALBUD obligation to execute the promised Shares sale agreement shall be
deemed entirely fulfilled if, but not later than on the date on which the
agreement with REALBUD shall be executed, one or more from the rest of
shareholders of Wisla sell TVN the same number of shares in the share
capital of Wisla, which shares, with the shares sold to TVN by REALBUD,
shall constitute 49 % of the share capital of Wisla.
5. REALBUD obligation to execute the promised Shares sale agreement shall
also be deemed entirely fulfilled if, on the basis of a resolution
concerning increase of the share capital, adopted by the shareholders'
meeting of Wisla providing for acquisition, by TVN, of such number of
shares in an increased share capital which shall constitute 49 % of this
capital after increase, TVN acquires such shares and the register court
registers amendment to the by-laws of the company accompanying such share
capital increase, not later than within the period specified in item 3.
Article 3
Execution of the Shares sale agreement is subject to the following:
1) obtainment of a concession for television programs broadcasting by
Wisla, within the scope not narrower than the scope specified in the
decision of the Chairman of the National Board of Broadcasting and
Television from November 23, 1994, concerning grant of concession to
broadcast television program to Wisla, with reservation of
possibility of exclusion of transmitter in Katowice, however Wisla
shall use its best efforts in order to obtain such transmitter;
2) obtainment of a concession for television programs broadcasting by
TVN in present concession procedure commenced on the basis of the
announcement of the National Board of Broadcasting and Television
published in Gazeta Wyborcza dated February 25-26, 1995;
3) consent of TVN's supervisory board to acquire shares in the share
capital of Wisla or, amendment of the yearly budget and the plan of
activity by inclusion of acquisition of shares in the share capital
of Wisla by the shareholders' meeting of TVN;
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4) REALBUD shall obtain a consent from the remaining shareholders and
supervisory board of Wisla for proportional, or other agreed, sale
of the Shares to the benefit of TVN, and if one or more shareholders
does not participate in such sale, such shareholders shall not
exercise their pre-emption right in respect to the Shares.
5) final register court decision on registration of amendments to
Wisla's by-laws resulting in: (i) TVN shall obtain the right to
directly appoint the President of management board of Wisla and such
additional number of Wisla management and supervisory board members
which, in case of odd number of members of those bodies, shall
jointly be the highest number not exceeding the half number of
members of a given body; (ii) dismissal or suspension in its
activity of the President or members of the management or
supervisory board appointed by TVN shall require voting for adoption
of such resolution, respectively, by TVN as the shareholder of
Wisla, or members of the supervisory board appointed by TVN; and
(iii) representation of Wisla in respect to third parties shall
require cooperation of two members of the management board,
including the President of the management board; and in the event
specified in art. 2 item 5, amendment of the by-laws of the company
should also include the increase of the share capital;
6) conformity of declarations and statements of REALBUD, as provided
for in art. 1, with the factual and legal state for the date of the
Shares sale. In case if, on the basis of performed by an auditor
financial audit of Wisla, on TVN order, the actual financial state
of Wisla is worse (lower assets and/or higher liabilities) by more
than 10 % in comparison with declarations contained in art. 1 item
5, the sale price for the Shares specified in art. 2 item 1 shall be
decreased by the same %; in case the financial state of Wisla is
worse by more than 30 %, TVN has the right to rescind this
agreement.
Article 4
1. REALBUD is obligated following the date of this agreement execution:
1) to obtain, within 21 days from the date of this agreement execution,
a consent mentioned in art. 3 item 4, or cause a resolution
concerning increase of the share capital of Wisla, consistent with
the contents of art. 2 item 5, to be adopted;
2) not to sell or encumber with any obligation or proprietary rights
established for the benefit of third parties (including obligation
to sell) any shares possessed in the share capital of Wisla;
3) to exercise its pre-emption right in respect to all shares in the
share capital of
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Wisla which may by offered for sale by other shareholders;
4) to exercise all rights of the shareholder possessing the controlling
interest in the share capital of Wisla in order to ensure that Wisla
shall not perform any legal actions, without prior written consent
of TVN, which would result in (i) sale or encumbrance of Wisla's
assets of aggregate PLN value exceeding the amount of 50,000 (fifty
thousand) American dollars, calculated in accordance with the Rate
on the date of such legal actions performance or, (ii) Wisla's
liabilities exceeding in aggregate the equivalent in PLN of the
amount of 100,000 (one hundred thousand) American dollars,
calculated in accordance with the Rate on the date of performance of
such legal actions.
2. REALBUD is also obligated to designate a part of the sale price for the
Shares, being equivalent in PLN of the amount of 1,000,000 (one million)
American dollars, for the increase of the share capital of Wisla, which
shall be performed after receipt of the entire amount of price for the
Shares by REALBUD, and within the scope of such increase TVN shall perform
conversion specified in art. 6 item 2.
Article 5
1. Notwithstanding REALBUD's obligation to sell the Shares, in case the
Shares are sold, REALBUD is also obligated, subject to obtainment of the
National Board of Broadcasting and Television consent for taking control
over Wisla by TVN, to sell to TVN further shares constituting 2 % of the
share capital of Wisla on the date of sale agreement execution
(hereinafter referred to as the "Further Shares"). The price to be paid
for the Further Shares shall equal the product of the number of the
Further Shares and the unit price of the Share resulting from art. 2 item
1.
2. REALBUD's obligation contained in item 1 above shall be deemed as
preliminary agreement for the sale of the Further Shares in the meaning of
art. 389-390 of the Civil code, and the promised sale agreement of the
Further Shares should be executed until August 31, 1997, subject to
obtainment of the National Board of Broadcasting and Television consent,
specified in item 1.
3. REALBUD's obligation to execute the promised sale agreement of the Further
Shares shall be deemed entirely performed if Ryszard Sciborski, within the
period specified in item 1 above, alone or with other persons being
members of Wisla's authorities on the date of this agreement execution,
contributes the Further Shares to the share capital of TVN in exchange for
TVN's shares constituting 2 % of the share capital of TVN on the date of
adoption of a resolution concerning increase of the share capital of TVN
by the
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Further Shares.
Article 6
1. In exchange for obligations undertaken by REALBUD, TVN is obligated:
a) make an advance payment, subject to establishment of a pledge
mentioned in the next sentence, into the bank account of REALBUD in
ING Bank in Warsaw, amounting to PLN equivalent of the amount of
4,458,000 (four million four hundred fifty eight thousand) American
dollars, calculated in accordance with the Rate on the date of the
transfer, however a part of such advance payment, constituting PLN
equivalent of the amount of 2,958,000 (two million nine hundred
fifty eight thousand) American dollars, shall be transferred until
September 10, 1996, and a part of the advance payment, constituting
PLN equivalent of the amount of 1,500,000 (one million five hundred
thousand) American dollars, shall be transferred until September 16,
1996, subject to Wisla's obtainment of the concession mentioned in
art. 3 item 1.
In order to secure the repayment of the advance payment, in case the
promised Shares sale agreement is not executed, including return in
double amount if the promised sale agreement is not executed due to
the fault of REALBUD, REALBUD shall establish, after obtainment of
Wisla's supervisory board consent, a pledge to the benefit of ING
Bank Warsaw on all shares possessed in the share capital of Wisla,
which are not subject to the pledge pursuant to art. 1 item 4,
retaining the right to vote with respect to all pledged shares.
b) to arrange, within the period not longer than until September 16,
1996, subject to Wisla's obtainment of the concession mentioned in
art. 3 item 1, a loan from ING Bank Warsaw to the benefit of Wisla.
The loan to the benefit of Wisla shall amount to 1,000,000 (one
million) American dollars or equivalent of such amount in PLN. Wisla
shall transfer the ownership of agreed upon with the bank
transmitting equipment as a security for the loan repayment.
2. In case the Shares sale agreement is executed, TVN shall take over Wisla's
debt resulting from the loan mentioned in item 1 letter b). The amount of
all TVN's claim towards Wisla resulting from the loan shall be converted
into share capital of Wisla.
3. After transfer of the ownership of Shares to TVN, Wisla and REALBUD, with
participation of TVN, shall commence renegotiation of loan agreements
executed by Wisla with the banks. The purpose of renegotiations shall be
an assumption of guarantees relating to a part of Wisla loans from REALBUD
by TVN, so as the proportions of
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the amounts of loans guaranteed by TVN and REALBUD shall reflect the
proportions of TVN and REALBUD share in the share capital of Wisla (for
the purposes of determining this proportion the shares possessed by TVN
and REALBUD in Wisla constitute 100 % of its share capital).
Article 7
Taking into consideration the essence of the legal relationship between
the parties of this agreement in respect to obligations of REALBUD to sell
the Shares and the Further Shares, REALBUD hereby grants Altheimer & Gray
Polska Sp. z o.o an irrevocable power-of-attorney to execute sale
agreements of the Shares and the Further Shares in the name of REALBUD,
subject to fulfillment of conditions mentioned in art. 3 in respect to the
Shares, and art. 5 item 2 in respect to the Further Shares.
Article 8
All amendments of this agreement shall require written form, otherwise
they shall be null and void.
Article 9
This agreement was executed in one copy.
REALBUD Sp. z o.o. TVN Sp. z o.o.
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