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Exhibit 10.40
TERMINATION
AGREEMENT
This
Agreement (this “ Agreement
”) is made this 31 st
day of January 2008 by and between:
(1) Aleksandr
Rodnyansky, a resident of the Russian Federation, registered
at 221, “Nikolino” complex, Tagankovo 7, 2-e
Uspenskoe shosse, Odintsovsky district, Moscow region, Russian
Federation, passport CH 316475, issued by Pechersk RU GU MVS
of Ukraine in the city of Kyiv on November 19, 1996 (“
RODNYANSKY
”);
(2) Boris
Fuchsmann, a citizen of Germany, residing at
Peter-Roos-Strasse 10, 40547 Düsseldorf, Germany,
passport PD 500449454, issued on 18 July 2005 (“
FUCHSMANN
”);
(3) International
Teleservices Ltd., a company organized under the laws of
Belize with its registered address at Morgan & Morgan
Trust Corporation (Belize) Limited, 35A Region Street, City of
Belize, Belize (together with any subsidiary or affiliate
thereof, “ ITS
”, and together with RODNYANSKY and FUCHSMANN, the
“ RF
Participants ”);
(4) Central
European Media Enterprises Ltd., a company organized under the
laws of Bermuda with its registered address at Clarendon
House, 2 Church Street, HM 11, Hamilton, Bermuda (“
CME
Ltd. ”);
(5) CME
Media Enterprises B.V., a company organized under the laws of
the Netherlands, located at: Dam 5b, 1012 JS Amsterdam, the
Netherlands (“ CME BV
”);
(6) CME
Ukraine Holding GmbH, an indirect wholly-owned subsidiary of
CME BV organized and existing under the laws of Austria,
located at Wagramer Str. 19, 19. Stock, 1220 Wien, Austria
(“ CME Ukraine
Holding ”);
(7) CET
21 s.r.o., a company incorporated under the laws of the Czech
Republic, located at: Krizeneckeho nam. 1078/5, PSC 152 00
Prague, Czech Republic, registered in the Commercial Register
of the Commercial Court of Prague, part C, Register-No.10581
(“ CET 21
”);
(8) Ukrainian
Media Services LLC, a limited liability company organized and
existing under the laws of Ukraine, identification code No.
33600071, located at 12 Melnykova Street, Kyiv, Ukraine
(“ UMS
”, and together with CME Ltd., CME BV, CME Ukraine
Holding and CET 21, the “ CME
Parties ”);
(9) Broadcasting
Company “Studio 1+1 LLC”, a limited liability
company organized and existing under the laws of Ukraine,
identification code No. 23729809, located at 7/11 Kreschatyk
Street, Kyiv, Ukraine (“ Studio 1+1
”);
(10) Foreign
Enterprise Inter-Media, a limited liability company organized
and existing under the laws of Ukraine, identification code
No. 23389360, located at 42 Melnykova Street, Kyiv, Ukraine
(“ Inter-Media
”);
(11) Innova
Film GmbH, a limited liability company organized and existing
under the laws of Germany, located at San Remo Str. 15,
D-40210 Dusseldorf, Germany (“ Innova
”);
(12) International
Media Services Ltd, a company limited by shares organized and
existing under the laws of Bermuda, located at Clarendon
House, 2 Church Street, HM 1022, Hamilton, Bermuda (“
IMS
”); and
(13) TV
Media Planet Ltd., a company organized under the laws of
Cyprus, located at Arch. Makariou III, 199, Neokleous House,
P.C. 3030, Limassol, Cyprus (“ TVMP
”, and together with Studio 1+1, Inter-Media,
Innova and IMS, the “ Studio 1+1
Group ”),
(individually
a “ Party
” and together the “ Parties
”).
WHEREAS:
A.
The Parties have on the date hereof entered into a Framework
Agreement (the “ Framework
Agreement ”), pursuant to which the Parties have
agreed to execute and deliver this Termination Agreement and
to perform the actions contemplated hereby.
B. In
connection with their respective shareholdings in, and
employment or other relationships with, members of the
Studio 1+1 Group, the RF Participants have in the past
entered into various agreements and arrangements, contractual
or otherwise, with the Studio 1+1 Group and the
CME Parties, including but not limited to the agreements
described in Annex 1
to this Agreement (the “ Group
Agreements ”).
C. In
connection with the transactions contemplated by the Framework
Agreement (and as a condition precedent to the closing of the
transactions thereunder), the Parties have agreed to terminate
the Group Agreements as provided in this Agreement and to
enter into the undertakings provided herein.
D. The
CME Parties have entered into the Framework Agreement in part
in reliance upon the representations, warranties and covenants
of the RF Participants set forth herein.
NOW,
THEREFORE, in consideration of the foregoing recitals and the
mutual representations, covenants, warranties and agreements
contained herein and in the Framework Agreement, and for other
good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereto,
intending to be legally bound, agree as follows:
1.
Definitions and
Interpretation .
(a) For
the purposes of this Agreement, and unless the context
requires otherwise, the following terms shall have the
meanings given to them below or in the Clauses indicated
below:
“
Affiliate
” of a Person means any Person that directly or
indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such
Party.
“
Amended Studio
1+1 Charter ” means the amended and restated
Charter of Studio 1+1 in the form attached hereto in Part 1 of
Annex 5
.
“
Business
Day ” means any day (other than a Saturday or a
Sunday) on which banks in London (England) and Kyiv, Ukraine
are open for business.
“
Claim
” means any action, cause of action, chose in action,
case, claim, potential claim, counterclaim, potential
counterclaim, right of set-off, indemnity, suit, debt, dues,
sum of money, account, guarantee, bond, covenant, controversy,
lien, contract, agreement, promise, representation, liability,
variance, trespass, injury, damage, harm, judgment, remedy,
demand, loss, right or interest of any kind or nature
whatsoever, at law, in equity or otherwise, including, without
limiting the generality of the foregoing, claims for damages,
attorney’s fees, interest, costs, expenses, penalties
and equitable relief, whether known or unknown, suspected or
unsuspected, however and whenever arising and in whatever
capacity and jurisdiction.
“
Consultancy
Agreements ” has the meaning set forth in Clause
7.
“
Control
” means the power to direct or cause the direction of
the management or policy of any Person, directly or
indirectly, through family relationship (if a natural person),
the holding of securities or other participation interests, by
virtue of an agreement or on other grounds, and “
Controlling
” and “ Controlled
” shall have the correlative meanings proceeding from
this term.
“
General
Meeting ” means the general meeting of
participants in Studio 1+1.
“
General Meeting
Resolution ” means the resolution of the General
Meeting attached hereto in Part 2 of Annex 5
.
“
Governmental
Authority ” means any state or any political
subdivision thereof; any entity, authority or body exercising
executive, legislative, judicial, regulatory or administrative
functions on behalf of the state or its political subdivision,
including, without limitation, any government authority,
ministry, agency, department, board, commission or
instrumentality and subdivisions thereof; any court, tribunal
or arbitrator; and any self-regulatory organization acting on
behalf of the state or itself pursuant to the rights granted
thereto by applicable Law.
“
Law
” means all applicable ( i
) provisions of all constitutions, treaties, statutes,
laws, customs, codes, rules, regulations, ordinances, orders
and official opinions and interpretations of any Governmental
Authority, ( ii
) approvals of any Governmental Authority, and (
iii
) orders, decisions, injunctions, judgments, awards and
decrees of or agreements with any Governmental
Authority.
“
Loan
and Pledge Agreements ” means the Group
Agreements set forth in items 6 through 10 (inclusive) of
Annex 1
.
“
Person
” or “ Persons
” means any physical person, corporation, general
partnership, simple partnership, limited partnership, limited
liability partnership, limited liability company,
proprietorship, other business organization, trust, union,
association or Governmental Authority, whether incorporated or
unincorporated.
“
Supervisory
Board ” has the meaning set forth in Clause 4 of
this Agreement.
(b) Unless
the context requires otherwise, capitalized terms used but not
defined in this Agreement shall have the respective meanings
set forth in the Framework Agreement.
2.
Terminations
. With effect on ( i ) the
Closing Date with respect to the Loan and Pledge Agreements
and ( ii ) the
date of execution of this Agreement with respect to all Group
Agreements other than the Loan and Pledge Agreements, without
further action by any Party and notwithstanding any provision
to the contrary, each and every provision of each such Group
Agreement shall terminate and no party to any such Group
Agreement shall have any right or obligation either under it
or as a consequence of any breach of it before, on or after
the date of this Agreement and any party that may have
undertaken (by deed of adherence or otherwise) to be bound by
all or any of its provisions shall cease to be so bound.
Without regard to the generality of the foregoing, the Parties
agree that to the extent any dispute may arise with respect to
any of the Group Agreements, such dispute will be resolved
pursuant to Clause 21 of this Agreement.
3.
Release and
Discharge .
(a) Subject
only to the occurrence of the Closing Date:
(i) Each
of the Parties for itself and on behalf of any parent,
subsidiary, Affiliate, officer, director, agent, attorney,
shareholder, partner, member, manager, representative,
employee, trustee predecessor, principal,
successor-in-interest, assignor or assignee of such party
(collectively, the “ Releasors
”) forever, knowingly, voluntarily and irrevocably
release, acquit and discharge each counter-party under any of
the Group Agreements to which it is a party, together with any
parent, subsidiary, Affiliate, officer, director, agent,
attorney, shareholder, partner, member, manager,
representative, employee, trustee predecessor, principal,
successor-in-interest, assignor or assignee of such
counter-party (collectively the “ Releasees
”) from any Claims of any nature whatsoever, at law, in
equity or otherwise, whether direct, indirect, derivative or
otherwise which have been asserted against any of the
Releasees or which, whether currently existing or not, known
or unknown, suspected or unsuspected, fixed or contingent, and
whether or not concealed or hidden, the Releasors ever could
have asserted or ever could assert, in any capacity, either
for themselves or as an assignee, heir, executor, trustee, or
otherwise, or for or on behalf of any other person, against
the Releasees, arising out of, relating to or concerning the
Group Agreements, including any and all rights under the Group
Agreements and each of the Claims (all such Claims,
collectively, the “ Released
Claims ”), and on behalf of the Releasors
unequivocally, unconditionally and irrevocably agrees not to
initiate or continue legal proceedings of any kind whatsoever
with respect to any Released Claim, or institute, assert, or
threaten to assert any Released Claim, provided
that this Clause 3 shall in no event have the effect to
exclude any liability whatsoever that arises as a result of
any fraudulent or criminal act or omission by any
Releasee.
(ii) Each
of the Parties further covenants and promises that it will
not, and will use its best efforts to cause the other
Releasors not to, file, pursue or bring any Released Claim in
any judicial, arbitral or administrative forum against any one
or more of the Releasees; provided, however, that nothing
herein will be construed or deemed to release any covenants
contained in, or claims for breach of, this Agreement or any
written amendments, supplements or modifications
thereto. The Parties hereto expressly agree that a
breach or an alleged breach of this Agreement will neither
give rise to nor resurrect any right to sue on the Released
Claims.
(iii)
Without prejudice to the generality of Clause 3(a)(i), it is
expressly agreed and accepted by the Parties that the
foregoing releases are and are intended to be a general
release of all claims of the Releasors against the Releasees
in respect of the matters referred to in that clause, and the
Parties hereby expressly waive any rights that they may have
with respect to any Claims which they do not know or suspect
to exist at the time of executing this Agreement, even those
Claims which if known might have materially affected this
Agreement. To the extent that legislation or any principles of
Law might provide otherwise than the first sentence of this
clause, such legislation and principles are (to the extent
permitted by Law) hereby expressly waived and excluded by each
of the Parties to this Agreement, who admit to full knowledge
and understanding of the consequences of such waiver and
exclusion.
(iv)
The Parties recognize that this Agreement was negotiated
between them as equals, that each was represented by competent
counsel of its own choosing and that no one of them will be
considered to have drafted this Agreement for purposes of
resolving any ambiguities against that party.
(b) The
Parties acknowledge that the
arbitration proceedings initiated against RODNYANSKY and
FUCHSMANN on December 23, 2005 (ICC case
№14181/RCH/JHN) , including the Cross Action
brought by RODNYANSKY and FUCHSMANN against the CME Parties on
September 4, 2007, and all related counter-claims,
cross-claims and other proceedings among the Parties (the
“ Arbitration
Proceedings ”) have been suspended until February
28, 2008, and agree that in the event that the Closing Date
has not occurred prior to such date, the Parties shall seek
such further extensions within five (5) Business Days of
expiration of any such extension period until the earlier of
the Closing Date and the termination of this Agreement. Within
five (5) Business Days of the Closing Date, the Parties agree
to take such steps as may be required to terminate the
Arbitration Proceedings, and the Parties further agree,
subject to the Closing Date occurring, that the obligations in
respect of ( i ) the
Studio 1+1 Agreement among RODNYANSKY, FUCHSMANN and CME
Ukraine Holding GmbH, dated December 23, 1998, and (
ii ) the
Key Agreement, dated December 23, 1998, among FUCHSMANN,
RODNYANSKY, Studio 1+1, Innova, IMS, Ukraine Advertising
Holding B.V., CME Ukraine Holding, and CME Ukraine B.V., shall
have been satisfied and each Party undertakes, subject to the
Closing Date occurring, not to claim or otherwise seek relief
from the other Parties for any damages arising out of or in
connection with any delay associated therewith, including
legal fees in respect of the Arbitration
Proceedings.
(c) Notwithstanding
anything herein to the contrary, the Parties acknowledge and
agree that the occurrence of the Closing Date shall not in any
way constitute a waiver of any of the rights of any of the CME
Parties hereunder or under any other Transaction
Document. No
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