CLOSING AGREEMENT
This Closing Agreement dated as of December 7, 2001 (this "Agreement")
is hereby made by and among:
United Pan-Europe Communications N.V., a corporation organized under
the laws of The Netherlands, having its principal executive office at Xxxxxx
Xxxxxx 00, 0000 XX Xxxxxxxx Rijk, The Netherlands ("UPC");
Groupe Canal+ S.A., a corporation organized under the laws of France,
having its principal executive office at 00/00, xxxx Xxxxx Xxxxxxx, 00000 Xxxxx
Xxxxx 00, Xxxxxx ("Canal+");
UPC Polska Inc., a corporation organized under the laws of the State
of Delaware, having its principal executive office at 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, XX 00000 XXX ("UPC Polska");
Polska Telewizja Cyfrowa TV Sp. z o.o., a limited liability organized
under the laws of the Republic of Poland, having its principal executive office
at xx. Xxxxxxxxx 0X 00-000 Xxxxxx, Xxxxxx ("PTC"); and
Telewizyjna Korporacja Partycypacyjna S.A., a joint stock company
organized under the laws of the Republic of Poland, having its registered office
at Xxxxxxxxx Xx. 0, 00-000 Xxxxxx, Xxxxxx ("TKP", and together with Canal+, UPC,
UPC Polska and PTC, each a "Party" and together the "Parties"); and
Polcom Invest S.A., a joint stock company organized under the laws of
the Republic of Poland, having its registered office at xx. Xxxxxxxx 00,Xxxxxx,
Xxxxxx ("PolCom"), intervening for purposes of Article 2.1 hereof.
RECITALS
WHEREAS, the Parties entered into a Contribution and Subscription
Agreement on August 10, 2001 (the "Contribution and Subscription Agreement")
whereby they decided to combine the operations of TKP and the satellite
direct-to-home ("DTH") broadcasting activities of UPC Polska in Poland in order
to create a common DTH broadcasting platform for the distribution of programming
and services targeted to audiences in Poland;
WHEREAS, the UPC, Canal+, PTC and PolCom entered into a Shareholders
Agreement on August 10, 2001 (the "Shareholders Agreement") whereby they set
forth their agreements with respect to the management of TKP and their
respective rights and obligations as shareholders of TKP, as of the Closing
Date;
WHEREAS, on November 10, 2001, the Polish Office for Competition and
Consumer Protection issued a decision granting its consent to the concentration
as described in the antimonopoly notification of August 14, 2001, and the
Parties have determined that no
Polish broadcasting regulatory approvals are necessary in respect of the
transactions, in each case as contemplated by the Contribution and Subscription
Agreement;
WHEREAS, in the interest of time and for the benefit of each Party's
business interests, the Parties wish, as permitted under Polish law, to hold a
preliminary closing in respect of certain of their obligations prior to the
registration by the Polish Commercial Court of the resolutions of TKP's general
meeting of shareholders authorizing the share capital increase and the
amendments to TKP's statutes referred to in Article 3.1 of the Contribution and
Subscription Agreement;
WHEREAS, at such preliminary closing, among other things, PTC shall
contribute Wizja TV Sp. z o.o. ("Wizja") and UPC Broadcast Centre Ltd. ("UPC
Broadcast") to TKP and UPC Polska shall assign to Canal+ its debt receivable
under its (euro)150 million shareholder loan to Wizja in return for
consideration in the amount of (euro)150 million;
WHEREAS, the Parties agree to such preliminary closing, subject to the
terms and conditions set forth herein, which are intended to supplement and
amend the Contribution and Subscription Agreement;
NOW, THEREFORE, the Parties have agreed as follows:
ARTICLE I
The Preliminary Closing
1.1 The Parties have carried out the following transactions at a
closing (the "Preliminary Closing") on the date hereof (the "Preliminary Closing
Date"):
(a) Subscription by PTC for Shares of TKP. PTC has subscribed, at a
price of 2,149.61 Polish zlotys per share, for 317,189 shares of TKP, which
shall represent 25% of the outstanding share capital of TKP immediately
following the issuance of such shares.
(b) Contribution by PTC of Shares of the Contributed Companies. In
accordance with the terms of the share contribution agreement dated the date
hereof, PTC has contributed to TKP and TKP has accepted 100% of the share
capital of Wizja and 100% of the share capital of UPC Broadcast.
(c) (euro)150 Million UPC Shareholder Loan. UPC Polska has assigned
its debt receivable under its (euro)150 million shareholder loan to Wizja, as
amended (the "UPC Shareholder Loan") to Canal+ in consideration for a payment of
(euro)150 million (the "UPC Loan Assignment").
(d) Assignment of Programming Rights and Obligations. In accordance
with the terms and conditions of the Programming Rights Agreement dated the date
hereof (the "Programming Rights Agreement"), Wizja TV B.V. has provided to
Cyfra+ and Wizja TV Sp. z o.o., and Cyfra+ and Wizja TV Sp. z o.o. have assumed,
the programming rights and obligations that directly relate to the UPC Polska
DTH Business, to the extent and in the manner provided in Article 3.1(h) of the
Contribution and Subscription Agreement.
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(e) Assumption of Guarantees. In accordance with the terms and
conditions of the Programming Rights Agreement and the Deed of Guarantee dated
the date hereof, TKP has assumed UPC Polska's obligations under certain
guarantees relating to UPC Polska's DTH business in accordance with Article
3.1(e) of the Contribution and Subscription Agreement.
(f) Amendment of TKP Statute. Amendments to TKP's statutes in respect
of PTC's shareholding have been approved and adopted by a resolution of the
general meeting of the shareholders of TKP on the date hereof as set forth in
Exhibit I hereto, which come into force on the date of their registration with
the Commercial Court of Warsaw.
(g) Appointment of Members to the Supervisory Board of TKP. By a
resolution of the general meeting of the shareholders of TKP on the date hereof,
as set forth in Exhibit I hereto, two members of the Supervisory Board were
dismissed from office and two persons selected by PTC were appointed by the
shareholders of TKP. At the same meeting the shareholders approved a conditional
resolution, as set forth Exhibit I hereto, dismissing all members of the
Supervisory Board upon the issuance of the shares described in Article 1 hereof
to PTC.
(h) Agreement to Uplink UPC's Central European DTH Business. In
accordance with Article 4.3(a)(v) of the Contribution and Subscription
Agreement, the Parties entered into a letter agreement dated the date hereof
whereby TKP agreed to continue to provide UPC's Central European DTH Business
with certain uplink facilities and services.
1.2 These steps completed at the Preliminary Closing shall be deemed
to have occurred simultaneously. The Parties agree that Article III of the
Contribution and Subscription Agreement is hereby amended to eliminate from the
transactions required to be carried out at the Closing (as defined in Article
3.3 of the Contribution Agreement, the "Closing") those transactions carried out
at the Preliminary Closing.
ARTICLE II
Interim Undertakings in Respect of the Contributed Companies
2.1 During the period between the Preliminary Closing and the Closing,
Canal+, PolCom and PTC agree that PTC shall enjoy the following rights under the
Shareholders Agreement, as if such Shareholders Agreement were already effective
and PTC were a holder of twenty five percent (25%) of the issued and outstanding
shares of TKP:
(a) All proposals made in accordance with Article 2.2 of the
Shareholders Agreement shall be sent in writing to UPC in the same manner as to
the TKP shareholders. UPC shall have the opportunity at any time prior to each
such meeting to express its support of any proposal and in the event that UPC
does not give written notice of its support of any such proposal, it may only be
approved with the affirmative vote of the required majority of the votes cast,
treating PTC's 25% of the shares as not having been voted in support of the
decision, proposal or action;
(b) Articles 2.5, 2.6 and 2.8 of the Shareholders Agreement shall
apply as between the parties to the Shareholders Agreement;
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(c) Articles 3.1, 3.2 and 3.4 of the Shareholders Agreement shall
apply as between the parties to the Shareholders Agreement, and the rights and
obligations of the parties in respect of the purchase or sale of such shares
shall take effect immediately upon Closing; and
(d) Articles 4.10 and 4.11 of the Shareholders Agreement and all of
Article 5 shall apply as between the parties to the Shareholders Agreement.
2.2 PolCom hereby undertakes not to transfer (as defined in the
Shareholders Agreement), directly or indirectly, any of its shares in TKP
between the Preliminary Closing and the Closing.
2.3 For the avoidance of doubt, the rights granted to PTC pursuant to
Article 2.1 above shall be in addition to PTC's rights and obligations under
Articles 4.2, 4.4, 4.5 and 4.6 of the Contribution and Subscription Agreement,
as amended by this Agreement, which shall continue to remain in full force and
effect until the Closing.
2.4 Canal+ and PolCom hereby undertake that, between the date hereof
and the Closing, the persons selected by PTC and appointed to the Supervisory
Board of TKP by the general meeting of shareholders of TKP, as described in
Article 1.1(g) herein, shall not be dismissed or replaced without the prior
written consent of PTC.
2.5 The Parties agree that Article 4.5(b) of the Contribution and
Subscription Agreement shall no longer apply after the Preliminary Closing.
2.6 The Parties agree that none of the transactions carried out in the
Preliminary Closing shall be deemed to violate the standstill provisions set
forth in Article 4.5 of the Contribution and Subscription Agreement.
ARTICLE III
Interim Undertakings in Respect of the Amount of the UPC Shareholder Loan
Upon receipt of (euro)150 million in consideration for the UPC Loan
Assignment, UPC Polska agrees to deposit (euro)30 million in an escrow account
with Fortis Bank N.V., providing that such (euro)30 million may be used solely:
(a) to finance PTC's obligation to provide funding in such amount at the Closing
to TKP, or (b) to reimburse Canal+ for a portion of its consideration paid to
UPC Polska for the UPC Loan Assignment in the event the transactions
contemplated by this Agreement are unwound as contemplated in Article IV below.
The funds in escrow will be held at Fortis Bank N.V., in an account to be
identified by UPC Polska as per the escrow agreement entered into as of the date
hereof. Any interest accruing on the amounts deposited into escrow shall be for
the account of UPC Polska.
ARTICLE IV
Failure of Registration
4.1 In the event that, for whatever reason, the application to the
Commercial Court of Warsaw to register the TKP share capital increase subscribed
to by PTC is denied, the Parties shall cooperate to cure the reason for such
rejection of the application and/or to reapply for such registration, provided
that such cure does not
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substantially affect the commercial and legal basis of
the transactions contemplated by the Contribution and Subscription Agreement and
this Agreement. If the Parties are unsuccessful in curing such rejection after a
period of six (6) months from the date the application was first rejected, or
the Parties are otherwise required to unwind the transactions pursuant to Polish
law, then the Parties shall unwind all of the transactions set forth in Article
I of this Agreement as soon as practicable under the circumstances. In
particular, and without prejudice to the generality of the foregoing:
(a) TKP shall re-transfer 100% of the shares of Wizja and UPC
Broadcast to PTC in accordance with all applicable law and on a cash-free and
debt-free basis (except for the UPC Shareholder Loan and trade payables in the
same amount as at the time of the initial transfer); and
(b) UPC Polska shall pay Canal+ (euro)150 million and Canal+ shall
reassign the UPC Shareholder Loan to UPC Polska. Canal+ hereby grants its
consent to the use by UPC Polska of the (euro)30 million held in escrow pursuant
to Article III of this Agreement to repay Wizja pursuant to this Article 4.1.
4.2 The Parties hereby agree to resolve in good faith any issues and
to equitably allocate any costs arising out of the unwinding of the transactions
set forth in Article I of this Agreement as contemplated in this Article IV;
provided, that this shall be without prejudice to the Parties' existing and
continuing rights and obligations under the Contribution and Subscription
Agreement and all other provisions of this Agreement.
ARTICLE V
General Undertakings and Additional Amendments
to the Contribution and Subscription Agreement
5.1 The Parties hereby amend the Contribution and Subscription
Agreement such that when the term "Closing" and "Closing Date" are used in the
definition of "Transition Period" in Article I of the Contribution and
Subscription Agreement they shall be replaced by "Preliminary Closing" and
"Preliminary Closing Date", respectively, as defined in this Agreement.
5.2 The Parties hereby amend the Contribution and Subscription
Agreement by deleting in its entirety the text of Article 3.1(c) and replacing
it with the following:
"Assignment of UPC Shareholder Loan. (i) At the time of the
contribution referred to in Article 3.1(a)(i), the Contributed Companies shall
be cash free and debt free except for trade payables to third party trade
creditors incurred in the ordinary course of business and the following:
(A) one shareholder loan from UPC Polska to Wizja TV Sp. z o.o. in an
amount of(euro)150 million including interest (the "UPC
Shareholder Loan");
(B) trade payables of Wizja TV Sp.z o.o. to Wizja TV B.V. not to
exceed three million six hundred and fifty thousand U.S. dollars
(U.S.$3,650,000.00);
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(C) indebtedness to subsidiaries of UPC not to exceed in an amount of
one hundred and ninety two million five hundred and thirty four
thousand one hundred Polish Zloty (PLN 192,534,100.00), which UPC
shall, or shall cause its subsidiaries to forgive on January 2,
2002;
(D) in UPC Broadcast Centre Ltd., approximately two million seven
hundred thousand pounds sterling (GBP 2,700,000.00) in cash and
an equal amount of debt to UPC Polska; and
(E) an amount payable by Wizja TV Sp. z o.o. to Philips Polska Sp. z
o.o. totaling PLN 2,900,000 and a receivable of Wizja TV Sp. z
o.o. from Philips Polska Sp. z o.o. totaling US$1,000,000.
(ii) At the Preliminary Closing, UPC Polska shall assign its
receivable under the UPC Shareholder Loan to Canal+ for consideration of
(euro)150 million (the "UPC Loan Assignment").
(iii) The amount of trade payables set forth in in Article
3.1(c)(i)(B) shall be settled by payment of such amount by Wizja TV Sp z o.o. to
Wizja B.V. in three equal installments of US$ 1,216,666.70 on the dates which
are 30, 60 and 90 days following the Preliminary Closing Date.
(iv) If the amount ultimately received by Wizja TV Sp. z o.o. from
Philips Polska Sp. z o.o. pursuant to Article 3.1(c)(i)(E) is less than PLN
2,900,000, UPC shall indemnify TKP for the difference between PLN 2,900,000 and
the amount received and if such amount received is greater than PLN 2,900,000,
TKP shall cause Wizja TV Sp. z o.o. to pay UPC for the difference between PLN
2,900,000 and the amount received. The Parties expressly agree that any payment
made pursuant to this provision shall not be subject to the limitations set
forth in Article 10.4 herein."
5.3 For the avoidance of doubt, the Parties' obligation pursuant to
Article 3.1(d) of the Contribution and Subscription Agreement to extend funding
to TKP shall arise on the Closing Date and not immediately following the capital
increase and subscription described in Article 3.1(a)(ii) of the Contribution
and Subscription Agreement.
5.4 The Parties hereby agree to the reduction of Canal+'s share of the
funding obligations pursuant to Article 3.1(d) of the Contribution and
Subscription Agreement in an amount equal to the cash balance of the TKP Group
as of December 7, 2001, representing unallocated cash reserves of TKP as of the
Preliminary Closing that were provided by Canal+ and that shall be used by TKP
to enable it to meet its funding requirements following the Preliminary Closing.
5.5 The Parties hereby amend the Contribution and Subscription
Agreement such that each time the term "Closing" or "Closing Date" is used in
Article 3.1(h) of the Contribution and Subscription Agreement it shall be
replaced by "Preliminary Closing" or "Preliminary Closing Date" (as applicable),
as defined in this Agreement.
5.6 The Parties hereby amend Article 3.3 of the Contribution and
Subscription Agreement by replacing the first sentence thereof with the
following:
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"The closing of the transactions provided for in this Agreement (the
"Closing") shall be held on the second business day after the receipt by PTC of
a copy of the official confirmation from the Commercial Court of Warsaw that the
share capital increase subscribed to by PTC has been registered with such
Commercial Court."
5.7 As soon as possible following the Preliminary Closing, TKP shall
file a motion with the Commercial Court of Warsaw to register the resolutions of
the general meeting shareholders of TKP approving the share capital increase,
amending the statutes of the company and appointing two new members to the
Supervisory Board. TKP shall make diligent inquiries as to the status of its
motion and shall inform PTC immediately following receipt of official
confirmation from the Commercial Court of Warsaw that the share capital increase
subscribed to by PTC has been registered with such Commercial Court, which shall
be issued in the form of an excerpt from the National Court Register.
5.8 The Parties hereby amend the Contribution and Subscription
Agreement to provide that the actions specified in Articles 4.1(a), 4.1(b),
4.1(c) and 4.1(e) of the Contribution and Subscription Agreement shall be
undertaken by the Parties on or before the Preliminary Closing.
5.9 The Parties hereby amend the Contribution and Subscription
Agreement to eliminate Canal+'s obligation under Article 4.1(d) of the
Contribution and Subscription Agreement.
5.10 The Parties hereby amend the Contribution and Subscription
Agreement such that the term "Closing" in Article 4.3(c)(i) of the Contribution
and Subscription Agreement shall be replaced by "Preliminary Closing", as
defined in this Agreement.
5.11 The Parties hereby amend the Contribution and Subscription
Agreement to eliminate the Parties' obligation under Article 4.3(a)(iii) of the
Contribution and Subscription Agreement to enter into an agreement relating to a
Cryptoworks license.
5.12 The Parties hereby agree that Article 5.1(c) of the Contribution
and Subscription Agreement shall apply at the time of the Preliminary Closing
and not at the time of the Closing. For the avoidance of doubt, the Net Asset
Value of the Contributed Companies and the TKP Companies for the purposes of
subsection (x) of such Article shall be calculated as at the Preliminary Closing
rather than as at the Closing.
5.13 The Parties hereby amend the Contribution and Subscription
Agreement such that each time the term "Closing Date" is used in Article 5.1(d)
of the Contribution and Subscription Agreement it shall be replaced by
"Preliminary Closing", as defined in this Agreement.
5.14 The Parties hereby amend and clarify Article VII of the
Contribution and Subscription Agreement as follows:
(a) Article 7.3(b) of the Contribution and Subscription Agreement
shall be amended to replace the term "Closing" with "Preliminary Closing", as
defined in this Agreement. Exhibit 4.1 shall be amended to replace the phrase
"776,918 shares of TKP" with the phrase "951,568 shares of TKP".
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(b) Article 7.5(e) of the Contribution and Subscription Agreement
shall be amended to replace the term "Closing Date" with "Preliminary Closing
Date", as defined in this Agreement.
(c) Article 7.13 of the Contribution and Subscription Agreement shall
be amended to replace the term "Closing Date" with "Preliminary Closing Date",
as defined in this Agreement.
5.15 The Parties hereby amend Article VIII of the Contribution and
Subscription Agreement as follows:
(a) Article 8.3(a) of the Contribution and Subscription Agreement
shall be amended to replace the term "Closing" with "Preliminary Closing", as
defined in this Agreement.
(b) Article 8.5(a) and (e) of the Contribution and Subscription
Agreement shall be amended to replace the term "Closing Date" with "Preliminary
Closing Date", as defined in this Agreement.
(c) Schedule 8.7 is hereby amended to add the following:
"4. A potential claim by Polymus Dystrybucja Sp. z o.o. against Wizja TV Sp. z
o.o. seeking damages for loss of income under the distribution agreement."
UPC hereby indemnifies Canal+ and its affiliates for any damages arising under
such claim relating to actions taken by UPC or any of its affiliates prior to
the Preliminary Closing.
(d) Article 8.13 of the Contribution and Subscription Agreement shall
be amended to replace the term "Closing Date" with "Preliminary Closing Date",
as defined in this Agreement.
5.16 The Parties hereby amend Article X of the Contribution and
Subscription Agreement as follows:
(a) all references to the term "Closing", either alone or as part of
another defined term, shall be replaced and read as meaning the "Preliminary
Closing", as defined in this Agreement. For the avoidance of doubt, it is the
intention of the Parties that the post-closing adjustment procedure and related
provisions set forth in Article X be carried out immediately following the
Preliminary Closing and take, as a valuation date and date for the preparation
of financial accounts, the Preliminary Closing Date.
5.17 The Parties hereby agree that all provisions of Contribution and
Subscription Agreement, except for those expressly waived or amended herein,
remain in full force and effect.
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ARTICLE VI
Miscellaneous
6.1 Confidentiality.
The Parties agree and acknowledge that the provisions regarding
confidentiality of information set forth in Article 11.1 of the Contribution and
Subscription Agreement shall apply, mutatis mutandis, to the terms and
provisions of this Agreement.
6.2 Governing Law; Disputes.
The mutual obligations of the Parties hereunder shall be governed by
Belgian law (excluding Belgian conflict of laws rules) and any other provision
of Belgian corporate law under which any provision hereof may be deemed
unenforceable. Accordingly, the Parties hereby irrevocably waive their right to
invoke against each other any applicable mandatory provision of Polish law that
may conflict with the provisions of this Agreement.
Any dispute arising in connection with this Agreement shall be finally
settled under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce (the "ICC") as existing as of the date of commencement of
the arbitration proceedings by an arbitral tribunal composed of three (3)
arbitrators designated by the ICC in accordance with said Rules. The arbitration
proceedings shall take place in Brussels, Belgium and shall be conducted in the
English language. The arbitral award shall be binding upon the parties to the
arbitration and judgment upon any award rendered may be entered in any court
having jurisdiction. The prevailing party in the arbitration shall be paid the
arbitration fees and reasonable attorneys fees and expenses incurred by it.
Notwithstanding the provisions of this Article 11.2, the Parties agree
that, prior to any Party submitting to arbitration of any claim, dispute or
disagreement (each, a "Disagreement") arising in connection with this Agreement,
such Party shall notify such Disagreement to the other Party, after which the
senior management of the Parties shall negotiate in good faith for a period of
thirty (30) days to resolve such Disagreement. If at the end of such thirty (30)
day period, the Disagreement persists, there shall be a fifteen (15) day
cooling-off period, after which there shall be a further period of thirty (30)
days of negotiations which shall include at least one face-to-face meeting of
the chief executive officer, chief operating officer and/or chief financial
officer of each of Canal+ and UPC.
6.3 Severance.
If any provisions of this Agreement or any part thereof are rendered
void, illegal or unenforceable in any respect, the Parties shall use their
reasonable efforts to substitute for such provisions valid provisions that in
their economic effect come so close to the original provisions that it can
reasonably be assumed that the Parties would have executed this Agreement
including the new provisions. In the event that such provisions cannot be found,
the invalidity, illegality or unenforceability of any provision of this
Agreement shall not affect the validity of the Agreement as a whole, unless the
invalid provisions are of such essential importance to this Agreement that it
can be reasonably assumed that the Parties would not have executed this
Agreement without the invalid provisions.
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6.4 Entire Agreement.
This Agreement and the Contribution and Subscription Agreement
constitute the entire agreement among the Parties. To the extent there is a
conflict between the terms of this Agreement and the Contribution and
Subscription Agreement, the terms of this Agreement shall prevail.
This Agreement may not be modified or terminated except by an
instrument in writing signed by each of the Parties and, in respect of Article
2.1, by PolCom.
6.5 Headings and Defined Terms
The headings contained herein are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement. Capitalized terms not otherwise defined herein shall have the meaning
attributed to them in the Contribution and Subscription Agreement.
6.6 Language.
It is expressly provided that as between the Parties, the original
English version of this Agreement shall be the only binding document and that,
in the event of any discrepancy between the original English version and its
Polish translation, the former shall prevail.
6.7 Notices.
All notices to be given by any Party to the others in connection with
this Agreement shall be given in writing in English in the manner and to the
address provided in Article 11.12 of the Contribution and Subscription
Agreement.
6.8 Counterparts.
This Agreement may be executed in counterparts. Each separate
counterpart together with such other counterparts having the signatures of all
Parties shall form one original.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
five (5) original counterparts as of the date first indicated hereof.
GROUPE CANAL+ S.A.
By:
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UNITED PAN-EUROPE COMMUNICATIONS N.V.
By:
----------------------------------------
By:
----------------------------------------
TELEWIZYJNA KORPORACJA PARTYCYPACYJNA S.A.
By:
----------------------------------------
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UPC POLSKA, INC.
By:
----------------------------------------
By:
----------------------------------------
POLSKA TELEWIZJA CYFROWA WIZJA TV SP. Z O.O.
By:
----------------------------------------
By:
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Agreed to for the purposes of Article 2.1 only
PolCom Invest S.A.
By:
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EXHIBIT I
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