Exhibit(10)(W)
CONTRACT
(DRAFT)
which was established between: on one hand, the HUNGARIAN BROADCASTING
CORPORATION TELEVISION PLC., 1118
BUDAPEST, KELENHEGYI UT 39.
tax no:
account no.:
as the user (from now on: the USER),
on the other hand, the ANTENNA HUNGARIA HUNGARIAN PROGRAM TRANSMITTER AND
RADIOTELECOMMUNICATIONS PLC, 1119. Budapest, XI.ker, Petzval Jozsef utca 31-33.,
Postal address: H-1519 Budapest, Post Box No.447.
tax no.:00000000-2-44
account no.: Magyar Kulkereskedelmi Bank Rt. 00000000-00000000-00003285
as the provider of service, (from now on: the PROVIDER), together: contracting
parties (from now on: Contracting Parties), in the subject of digital satellite
program distribution.
I
SUBJECT AND CLASSIFICATION OF SERVICE
1./ The Provider undertakes the distribution of one television program signal
(one video and one sound signal) under the obligations of the service providing
contract according to the following:
a./ The Provider provides channel no.1 (from now on: Channel) on the transponder
of the XXXX satellite designated by SPACECOM from 00:00 to 24:00 o'clock daily,
from 26th of June 1997 during the time interval of the contracts obligation, for
the User.
B./ The Provider undertakes, under the obligations of the present service
contract, to forward the program signals provided by the User (from now on:
Program Signals) on the microwave connection developed by the Provider, from
the studio of the User to the Budapest collecting center of the Provider, the
National Microwave Center (from now
on: OMK).
c./ The Provider digitalized and compresses the Program Signals according to the
MPEG2([)VB Standard. The Provider forwards the digitalized Program Signals with
QPSK modulation complying to the DVB Standard, from the OMK to the satellite
transponder rented by the Provider, which irradiates the cable television head
stations with adequate field strength.
d./ The Provider undertakes, under the obligations of the present service
contract, to provide one base-band PAL composite video- and one analog sound
channel given out by the professional IRD (Integrated Receiver Decoder)
installed in the cable television head stations listed in APPENDIX 1, with the
contents provided by the User.
e./ The Provider undertakes to forward the Program Signals from the OMK on the
A-3 channel of the AM-micro distribution system in Budapest, with the conditions
determined in the radio permission, and in the studio permission no.
136.438/1993.
f./ The Provider undertakes to provide a Teletext service as an option,
following the establishment of the technical conditions.
2./ Classification of the service according to the List of Services:
List of Services No. Rate of Value Added Tax
For points I. 1/a-d For point I.1/e
0952 0953
25% 12%
II
SERVICE CHARGES
1./ The service charge items:
a./ For the services determined in point I./1./a
Rental fee of Channel 40,000 USD/MONTH
that is forty thousand USD/month
b./ For the services determined in point I./1/b
for providing the microwave connection way 350.000 FT/MONTH
that is three hundred thousand Forints/month
c./ For the services determined in point I./1./b
forwarding to the satellite 1.800.000 FT/MONTH
that is one million eight hundred thousand
forints/month
d./ For the services determined in point I./1./d
reception fee 20.000 FT/MONTH
RECEPTION PLACE
that is twenty thousand forints/month/reception place
e./ For the services determined in point I./1./e
the fee of AM-micro system program distribution
1.500.000 FT/MONTH
that is one million five hundred thousand forints/month
f./ For the services determined in point I.1./f
optional teletext service charge
in case of actual use 100.000 FT/MONTH
that is hundred thousand forints/month
2./ The charge items in point IT/1 do not include VALUE ADDED TAX
3./ The User is offered a discount of 16.25% from the rental fee of the Channel
determined in point 11.1/a, that is, the rental fee of the S: Channel is:
33.500 USD/MONTH, THAT IS THIRTY-THREE THOUSAND FIVE HUNDRED
USD/MONTH.
The amount of discount is reviewed yearly, coming into effect on the 1st of
January.
4./ The User is obliged to pay the service charge from the availability of the
service (26TH OF JUNE 1997), according to the following:
a./ for the time interval of the experimental service (from the 26th
of June, 1997 to the l0th of July, 1997)
Channel rental fee 16.750 USD, that is sixteen thousand
seven hundred and fifty USD a fee for forwarding to
satellite is not charged by the Provider, the reception fee
for Tandberg-make equipment 3.000 Ft/reception place that
is, three thousand forints/reception place
b./ from the beginning of permanent services (11th of July, 1997) User
pays the fees determined in point II./1.
III.
PAYMENT CONDITIONS
1./ User transfers a security amount of 3 month's charges (II. l/a-e), at the
time of signing this present contract, but at latest at the beginning of the
permanent services (11th of July, 1997) to the account of the Provider.
2./ The Provider issues an invoice for the services listed in I. 1/b-f until the
10th day of the month following the given month, the settlement of which is done
by bank transfer. The User undertakes to settle the invoice within 8 banking
days from the receiving of the invoice.
3./ The Provider invoices the Channel rental fee according to the invoice of the
satellite-operator, within 5 days from receiving that invoice, in Forints, on
the MKB exchange rate valid on the issuance day of the Provider's invoice, to
the User.
User must settle the invoice by bank transfer within 8 banking days. In case of
payment within deadline, the Provider does not invoice the exchange rate loss
between the day of issuance and the settlement of the invoice, if the loss does
not exceed 0.5 %. In case of late settlement of invoice, the Provider has the
right to charge the User with the exchange rate loss between the day of the
invoice issuance and the day of the transferred amount arriving on the account
of the Provider, so that the exchange rate loss is endorsed in the next upcoming
invoice.
4./ The Provider has the right, regarding the fees II./1./b-f, to enforce the
domestic sales price index of the previous year published in the publication of
the Central Statistical Office, from the 1st of January every year, earliest the
1st of January 1998.
5./ The Provider regards any other cost factors, apart from the above, e.g
frequency usage fee, official fees etc. as run-through items and will shift
them to the User at the time of their incident.
6./ The User is obliged to pay the service charge from the 11TH OF JULY 1997 for
those satellite reception equipment which are installed at the cable television
companies listed in Appendix 1. The Provider will make this list available at
tile time of entering into the contract. In case of new connections, the fee
payment obligation is valid from the following day after the connection.
7./ The Provider does not charge anything - connected with the reception of the
program subject in this contract - for the installment, maintenance or repair of
the satellite reception equipment, from the program distributors having a legal
relationship with the User and listed in APPENDIX 1.
8./ The Provider obliges itself, not to charge any reception fee from the
program distributors having a legal relationship with the User, for the use of
the satellite reception equipment, in case of the reception of the program
subject in this contract.
9./ The Provider undertakes to pay a refund to the User with the method and
amount determined in APPENDIX 6 for any interruption exceeding the amount
determined in point IV.9 for the services listed in points I.1/a-d, and for any
interruption exceeding the amount determined in point IV.11 for the services
listed in point I1./e., if the given interruption can be regarded as the
Provider's fault. The Provider does not have any other compensation obligation
above the amount of the fee refund. The calculation of reliability is done
according to APPENDIX 4.
10./ The amount of lag from the limit determined in IV.9 and IV.11 and the
amount of fee refund is calculated and settled once in a year, in the first
month of the following year after the given year.
11./ The Provider has the right, in case of late payment by the User, to charge
1.25 times the central bank's base interest rate as a default interest
12./ In case the User does not fulfill its payment obligation, despite any
warning, within 30 days from the due date, the Provider has the right to cancel
the contract with immediate effect.
IV.
THE RIGHTS AND OBLIGATIONS OF THE PROVIDER
1./ The Provider provides the services listed in points I. 1/a,c,d
experimentally FROM 26TH OF JUNE 1997, and permanently from the 11th of July,
1997. THE Provider is not responsible for the postponement of this, if the
Provider cannot hold the deadline because of a delay in obtaining any of tile
necessary official permissions, through no fault of His.
2./ The Provider provides the services listed in points I. 1/b,e permanently
from THE 26TH OF JUNE, 1997.
3./ The Provider ensures the possibility of satellite reception of the program
created by the User, with IDR equipment installed on the cable television head
stations listed in APPENDIX 1 within 15 working days after the announcement of
the signed contract between the User and the cable television companies.
4./ The Provider undertakes to provide the satellite service with conditions and
quality limit values determined in APPENDIX 2.
5./ The Provider undertakes to forward the MPEG2/DVB signal according to the
technical specifications and parameters given by the operators of the satellite
rented by the Provider.
6./ The Provider forwards the MPEG2/DVB signal to the transponder with a
scrambling that conforms to the legal rules and the licenses of the Parties.
7./ The Provider forwards a MPEG2/DVB signal scrambled by a Tandberg signal
protection system to the transponder at the beginning of the service according
to the order of the User.
8./ The Provider grants the User from the transmit capacity of the transponder
according to the sharing plans of the capacity of the applied transponder.
9./ The Provider provides the services listed in points I.1./a-d with a
reliability of 97%, on a yearly level, in 24-hours-a-day working time.
10./ The Provider undertakes to provide the program distribution quality on the
AM-micro system according to the "Technical specifications of the AM-micro radio
equipment," no. MA-1/93 of the Chief Supervision of Telecommunications.
11./ The Provider provides the service described in point I.1/e with a
reliability of 99.5% on a yearly level, in the program time determined in the
permission for studio establishment. The reliability does not include any
interruption caused by any fault of the microwave connection described in point
I. 1/b.
12./ In case the service interruption is not the fault of the Provider, then
this interruption is not included in the faults from which the reliability is
calculated.
The following are not the fault of the Provider:
- natural catastrophe, act of God (vis major),
- the impossibility of approaching the cable televisions head
stations because of extreme weather conditions, - an interrupt
in the electric supply network (on the transmitter side of the
microwave connection, and at the reception equipment) - an
interrupt as a fault of the User,
- breakdown of the satellite, and any interruption because of
the maintenance work done by the operators of the satellite, -
if the outside unit of the cable televisions head station does
not give an adequate signal to the input of the receiver
inspite of the satisfying power density on the Earth surface
(e.g. fault, antenna covered with snow) - reception failure
because of extreme weather conditions.
13./ The reliability is calculated from the working interruptions. An
interruption begins when the User and Provider mutually record the times and
dates in files. The Parties confirm the time of fault announcement subsequently
in writing (in letter or fax) according to APPENDIX 5.
14./ The control of satellite modulation is done by the Provider according to
point 4./ of APPENDIX 2.
15./ The Provider ensures the appropriate technical conditions of the
transmitter and receiver equipment needed for the service, according to the
maintenance plan detailed in APPENDIX 3. The User makes it possible to do the
maintenance work at the times of the yearly maintenance plan previously agreed
and detailed in APPENDIX 3 of the contract.
16./ The Provider determines the places for fault announcement, and repair
centers, connected to the receiver sides, in Appendix 1. The claim for repair
can be announced by either the User or any program distributor having a legal
relationship with the User.
17./ In case of breakdown, the Provider completes the reparation within 3
working days from the announcement of the breakdown.
l 8./ If the Provider decides to transfer Its digital, coded, satellite program
distribution service to another satellite, then the Provider is to inform the
User about this accordingly, at least 60 days before the change, and does
everything that can be expected, to ensure the interruptless transfer.
19./ The Provider undertakes to satisfy any claim for installation of new
receiver equipment apart from the already installed equipment listed in APPENDIX
1, in case of an order from the User, within 60 days following the order.
V.
THE RIGHTS AND OBLIGATIONS OF THE USER
1./ The User determines and informs the Provider continuously in writing about
the address of the cable television head stations, according to APPENDIX 1, with
which the User has contracted for program distribution, in order to put the IRD
receiver equipment in working order.
2./ The User announces that the User demands the services of the Provider
continuously, 24 hours a day, for the services listed in I.1/a-d., and according
to the contents of the permission for studio establishment for the service
detailed in point I.1/e.
3./ The User ensures for the Provider, the necessary conditions for the
operation of the receiver equipment (e.g. place, electric supply, having an
insurance for the IRD reception equipment, entering premises, and adequate
reception signals to the inputs of the equipment).
4./ The User must declare and prove authentically, before signing the contract,
that It fulfilled the contents of paragraph no.113, article /1/, of the 1st law
in 1996.
5./ In case XXXX denies to acknowledge the registration of the satellite program
service, the User is obliged to inform the Provider about this without delay,
and to compensate for the justified damage of the Provider.
6./ The User undertakes that Its technical assistant makes a connection with the
Switching Service of the OMK 30 minutes before the start of AM-micro radiation,
to check the quality of the connection. The Switching Service records the
results of the checking according to the operation procedures.
7./ The User is obliged to inform the technical assistant of the Switching
Service of the OMK about any technical and quality problems during the program
transmission, too. They decide together about the solution after the checking.
8./ The User undertakes to transmit the signals with the nominal video- and
sound signal levels given in APPENDIX 2 BY the Provider, onto the analog signal
forwarding-transmission spot of the Provider.
9./ The User undertakes not to transmit any video signal with bad timing, or
which does not conform to the CCIR recommendation, to the forwarding station of
the Provider.
10./ The User undertakes to transmit, to the forwarding station of the Provider,
a video and a sound signal containing program identification information,
outside the active program time interval, too.
11./ The User has the right, in case of a failure of the whole system, to use
any alternative permitted solution methods for that time, on His own risk and
costs without any negative consequences regarding this present contract.
12./ The User undertakes to inform the subscribers in advance about the changes
in the service, in the normal program time, through the program distributors
having a contract relationship with the User.
13./ The User accepts that the irradiation of the destination area is determined
by the radiation properties of the rented transponder.
VI.
OTHER MATTERS
1./ The Provider as well as the User undertake to maintain a duty service to
ensure the continuous and unobjectionable service.
2./ The Provider as well as the User agree to cooperate with each other and the
other companies taking part in the service to ensure the continuous and
unobjectionable service.
3./ The User cannot re-sell any elements or the whole of the service to a third
party without the agreement of the Provider.
4./ This present contract comes into effect on the day of both parties signing
the contract and is valid for a term of 8 years. The Parties inform each other
about their plans with regard to the continuation of the service 3 months before
the termination of the contract. The parts of the contract with regard to the
service detailed in I.1/e are valid up to the termination date of the 1st of
July, 2000 ,written in the permission for studio establishment, except if the
User signs the program service contract with XXXX until the above date.
5./ The contract cannot be cancelled with normal notice in the first 5 years of
taking advantage of the service, except in case of changing satellites according
to the point 111.17/. After the first 5 years the time of notice is 6 months. In
case the User does not accept the change of satellites, He can cancel the
contract referring to this with a notice time of 30 days.
6./ The User has the night to cancel the contract immediately, if the Provider
cannot provide the service continuously for 11 days on any of the reception
spots for reasons blamable on the Provider.
7./ The contract is cancelled if:
a./ if its term expires
b./ the Parties mutually agree on cancelling it
c./ it is cancelled with normal notice according to the point V.15.
d./ it is cancelled with immediate notice according to point II./13.,
e./ it is cancelled with immediate notice according to point V./6.,
f./ if XXXX denies the acknowledgement of the registration of program
service for the User.
8./ Following the signing of this present contract, the service contract no.OMK
95019 signed on the 2nd of July, 1995, becomes invalid with a notice date of
25th of June, 1997.
9./ In case of the event described in point VI.7/f, the User and Provider make a
new contract for the services detailed in points I.1/b,e.
10./ The present contract has 6 pieces of Appendix, and the declaration
connected to point V./4., attached to IT, which are undetachable parts of the
contract.
11./ The updating of APPENDIX 1 is the duty of the Provider, and with the
modification of the Appendix the contract is modified without confirmation. The
certificate of modification is the record of putting the receiving equipment
into operation.
12./ The contract is made in Hungarian language, and an English translation is
made after the signing.
13./ In the matters not regulated in this contract, the regulations in the Book
of Civil Law of the Hungarian Republic, the LXXII. law of 1992 about
Telecommunications, and the I. Law of 1996 about Radios and Televisions are
authoritative.
The contract was completed in 4 copies in Hungarian, which are signed by the
Contracting Parties with their approval.
Budapest, 30th of May, 1997
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Provider User
