Exhibit
10.68
 
 
 20
January 2010
 
 
 HARLEY
TRADING LIMITED
 
 IGOR
VALERYEVICH KOLOMOISKY
 
 CENTRAL
EUROPEAN MEDIA ENTERPRISES LTD.
 
 CME
CYPRUS HOLDING II LIMITED
 
 
 
 
  
  CONTENTS
 Clause
                Page1.
                Definitions
      and Interpretation
                22.
                Sale
      and Purchase
                103.
                Warranties
                154.
                Certain
      Covenants
                155.
                Termination;
      Termination Amount
                216.
                Indemnities
      and Liabilities
                227.
                Controlling
      Parties; Guarantee
                258.
                Confidentiality
                279.
                Assignment
                2810.
                Miscellaneous
                2811.
                Governing
      Law and Arbitration
                30
 Schedules
 
 Schedule
1 – Warranties
 Schedule
2 – Budget
 Schedule
3 – Actions Pending Closing
 Schedule
4 – Buyer Parties' Deliverables
 Schedule
5 – Seller Parties' Deliverables
 Schedule
6 – Studio 1+1 and Kino Group Corporate Structure
 Schedule
7 – Existing Inter-Company Debt
 Schedule
8 – Applicable Accounting Principles
 
 Exhibits
 
 Exhibit A
– Form of Assignment Agreement
 Exhibit B
– Form of Seller Disclosure Letter
 Exhibit C
– Form of Loan Facility Agreement
  
  THIS SHARE PURCHASE AGREEMENT
(this "Agreement") is
made this 20th day of January, 2010 by and among:
 
 1.
              Harley Trading
      Limited, a company organized and existing under the Laws
      of  Belize, with its registered address at 35 Barrack Road,
      Belize City, Belize, registration number 57,747 ("Buyer");
 
 2.
              Igor Valeryevich
      Kolomoisky, a citizen of Israel residing at St. Galey Thelet 48,
      Herzeliya, Israel, 46640, passport No. 10905729, issued on 2 October 2005
      ("Kolomoisky", and
      together with Buyer, the"Buyer
      Parties");
 
 3.
              Central European Media
      Enterprises Ltd., a company organized under the Laws of Bermuda
      with its registered address at Mintflower Place, 4th
      Floor, 8 Par-La-Ville Road, Hamilton, Bermuda ("Seller");
      and
 
 4.
              CME Cyprus Holding II
      Limited, a wholly-owned subsidiary of Seller and a limited
      liability company organized and existing under the Laws of Cyprus,
      identification code 256396, located at Arch. Makariou III, 195, Neocleous
      House, P.C. 3030, Limassol, the Republic of Cyprus (the "Company", and together
      with Seller, the "Seller
      Parties"),
 
 (individually
a "Party" and together
the "Parties").
 
 WHEREAS:
 
 (A)
              Seller
      is the sole Beneficial Owner of 100% of the issued share capital of the
      Company and is the indirect owner of the Studio 1+1 and Kino Group (as
      defined below).
 
 (B)
              The
      Company is the direct or indirect owner of 100% of the ownership interests
      of each of (i) Studio 1+1
      LLC, a limited liability company organized and existing under the Laws of
      Ukraine identification code 23729809 ("Studio 1+1"), (ii) Gravis-Kino
      LLC, a limited liability company organized and existing under the Laws of
      Ukraine identification code 36257228 ("Gravis"), (iii) TOR LLC, a
      limited liability company organized and existing under the Laws of Ukraine
      identification code 19384641 ("TOR"), (iv) ZHYSA LLC,
      a limited liability company organized and existing under the Laws of
      Ukraine identification code 20727448 ("ZHYSA"), (v) TV Stimul
      identification code 30462482 ("Stimul"), a limited
      liability company organized and existing under the Laws of Ukraine, (vi)
      Ukrpromtorg-2003 LLC identification code 32426708 ("Ukrpromtorg"), a limited
      liability company organized and existing under the Laws of Ukraine, (vii) Ukrainian
      Media Services LLC, a limited liability company organized and existing
      under the Laws of Ukraine identification code 33600071 ("UMS"), (viii) 1+1
      Production LLC, a limited liability company organized and existing under
      the Laws of Ukraine identification code 23389360 ("1+1 Production"), (ix) TV Media
      Planet Limited, a limited liability company organized and existing under
      the Laws of Cyprus identification code 155804 ("TV Media Planet"),
      (x)
      International Media Services Ltd., a company limited by shares organized
      and existing under the Laws of Bermuda identification code EC22571 ("IMS"), (xi) Innova Film
      GmbH, a limited liability company organized and existing under the Laws of
      Germany identification code HRB 27705 ("Innova Film"), (xii) Grintwood
      Investments Limited, a limited liability company organized and existing
      under the Laws of Cyprus identification code 226117 ("Grintwood"), and (xiii) Grizard
      Investments Limited, a limited liability company organized and existing
      under the Laws of Cyprus identification code 226142 ("Grizard"), (xiv) CME
      Ukraine Holding II B.V., a limited liability company organized and
      existing under the Laws of the Netherlands identification code 34362824
      ("Ukraine Holding
      II"), (xv) CME Cyprus Holding Limited, a limited liability company
      organized and existing under the Laws of Cyprus identification code 155308
      ("CME Cyprus", and
      together with Studio 1+1, Gravis, TOR, ZHYSA, Stimul, Ukrpromtorg, UMS,
      1+1 Production, TV Media Planet, IMS, Innova Film, Grintwood, Grizard and
      Ukraine Holding II, the "Studio 1+1 and Kino
      Group"), which companies conduct television, broadcasting, media
      production and advertising business in Ukraine.  The Studio 1+1
      and Kino Group corporate structure is set out in Schedule
    6.
  1
  (C)
              Kolomoisky
      is the sole Beneficial Owner (as defined below) of 100% of the issued
      share capital of Buyer.
 
 (D)
              Kolomoisky
      and Seller, inter
      alios, entered into the Framework Agreement, dated 2 July 2009 and
      the First Amended and Restated Framework Agreement, dated 22 July 2009
      (the "Amended Framework
      Agreement"), with the intention to form a joint venture to conduct
      television business in Ukraine on the basis of the Company and its
      Subsidiaries (as defined below).
 
 (E)
              Immediately
      preceding entry into this Agreement, all of the parties to the Amended
      Framework Agreement, including, inter alios, Seller and
      Kolomoisky, entered into an agreement terminating the Amended Framework
      Agreement in accordance with its terms and without any effect for any of
      the parties thereto.
 
 (F)
              Seller
      now desires to sell to Buyer, and Buyer desires to purchase from Seller,
      all of the Closing Date Inter-Company Debt and the Shares (as defined
      below) on the terms and conditions set forth in this
      Agreement.
 
 NOW THEREFORE, in
consideration of the foregoing recitals and the mutual representations,
covenants, warranties and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
 
 1.         
  DEFINITIONS AND INTERPRETATION
 
 1.1           Definitions.
 
 For the
purposes of this Agreement, and unless the context requires otherwise, the
following terms have the meanings given to them below:
 
 "1+1 Production" has the
meaning set forth in the Recitals;
 
 "Adjusted Aggregate
Consideration" means the Aggregate Consideration plusthe Pre-Closing Approved
Investment Debt minus
the Balance Amount (if any);
 
 "Affiliate" means, with respect
to a specified Person, any Person that directly or indirectly Controls, is
Controlled by or is under common Control with the specified Person. For the
purposes of this Agreement, Kolomoisky is an Affiliate of Buyer;
 
 "Aggregate Consideration" means
US$300,000,000.00;
 
 "Agreement" has the meaning set
forth in the preamble;
 
 "Amended Framework Agreement"
has the meaning set forth in the Recitals;
 
 "Anticipated Closing Date" has
the meaning set forth in Clause 2.3;
 
 "Anti-Money Laundering Laws"
has the meaning set forth in Section 1.8 of Part B of Schedule 1;
 
 "Applicable Laws" has the
meaning set forth in Section 1.5 of Part B of Schedule 1;
  2
  "Articles" means the articles
of association of the Company as amended from time to time in accordance with
this Agreement and any other Transaction Documents;
 
 "Assets" means any of the
assets (real and personal, tangible and intangible, including all Intellectual
Property (including the trade marks and registered brands of Studio 1+1, Gravis
and other marks of any of the Studio 1+1 and Kino Group Entities other than any
Seller Marks) that are used or held for use in connection with the business of
any Studio 1+1 and Kino Group Entity or the Company, as applicable;
 
 "Assignment Agreement" means
any assignment agreement(s) pursuant to which Seller and its Affiliates will
assign all of the Closing Date Inter-Company Debt to the Buyer on the Closing
Date, each such agreement substantially in the form set out in Exhibit A hereto
(with such amendments required to ensure the operation of such assignment
agreement(s) in accordance with Dutch Law);
 
 "Balance Amount" means the
excess, if any of Current Liabilities over Current Assets, provided that (i) Inter-Company Debt
and (ii) all
Tax assets and Tax liabilities of the Company and the Studio 1+1 and Kino Group
shall be excluded from Current Liabilities or Current Assets, as applicable, for
purposes of the calculation of such amount; for the avoidance of doubt, if
Current Assets exceed Current liabilities the Balance Amount is
zero;
 
 "Beneficial Owner" means, in
respect of any Person, the Person(s) with ultimate effective Control over the
first Person;
 
 "Budget" means the budget of
the Company and the Studio 1+1 and Kino Group as attached hereto as Schedule
2;
 
 "Business Day" means a day, not
being a Saturday or Sunday, when banks are open in Nicosia (Cyprus), London
(England) and Kyiv (Ukraine) for commercial business;
 
 "Buyer" has the meaning set
forth in the preamble;
 
 "Buyer Indemnitee" has the meaning
set forth in Clause 6.1;
 
 "Buyer Parties" has the meaning
set forth in the preamble;
 
 "Buyer Parties' Deliverables"
means those Closing deliverables set out in Schedule 4;
 
 "Buyer Warranty" means each
representation and warranty given by Buyer pursuant to Clause 3.1 and 3.2 hereof
in relation to each statement applicable to it contained in Part A of Schedule 1
and each statement contained in Section 1 of Part B of Schedule 1, and "Buyer Warranties" means all of
those representations and warranties;
 
 "Cap" has the meaning set forth
in Clause 7.2(a);
 
 "Closing" has the meaning set
forth in Clause 2.3;
 
 "Closing Date" has the meaning set
forth in Clause 2.3;
 
 "Closing Date Documents" means
the Buyer Parties' Deliverables, the Seller Parties' Deliverables, the
Assignment Agreements and any other Transaction Documents that Buyer, Seller and
the Company may agree are to be exchanged at Closing;
 
 "Closing Date Payment" has the
meaning set forth in Clause 2.4(a);
  3
  "Closing Date Inter-Company
Debt" means the aggregate of all (i) Existing
Inter-Company Debt, together with accrued interest thereon, and (ii) the Pre-Closing
Investment Debt existing as at the Closing Date as set forth on the Pre-Closing
Accounting Notice;
 
 "Closing Memorandum" has the meaning
set forth in Clause 2.3(a);
 
 "CME Cyprus" has the meaning
set forth in the preamble;
 
 "Company" has the meaning set
forth in the preamble;
 
 "Company Warranty" means each
representation and warranty given by the Company pursuant to Clause 3.1 hereof
in relation to each statement applicable to it contained in Part A of Schedule
1, and "Company
Warranties" means all of those representations and
warranties;
 
 "Constitutional Documents"
means, in respect of any legal Person, the charter, memorandum and articles of
association and/or other organizational documents of such Person, as
applicable;
 
 "Control" means the power to
direct or cause the direction of the management or policy of any Person,
directly or indirectly, through family or other 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" have the
correlative meanings proceeding from this term;
 
 "Current Assets" means the
consolidated current assets of the Company and the Studio 1+1 and Kino Group
determined in U.S. dollars in accordance with U.S. GAAP as consistently applied
as set forth in the financial statements as at 31 March 2010;
 
 "Current Liabilities" means the
consolidated current liabilities of the Company and the Studio 1+1 and Kino
Group determined in U.S. dollars in accordance with U.S. GAAP as consistently
applied as set forth in the financial statements as at 31 March
2010;
 
 "Designated Account" has the
meaning set forth in Clause 2.4(b);
 
 "Earned Interest" means
interest actually earned on the Pre-Closing Payment from the Pre-Closing Payment
Date to the earlier of (i) the date that this
Agreement is terminated pursuant to Clause 5.1 and (ii) the Business Day
immediately preceding the Closing Date;
 
 "Exchange Act" means the U.S.
Securities Exchange Act of 1934, as amended;
 
 "Existing Dispute" has the
meaning set forth in Clause 11.2(c);
 
 "Existing Inter-Company Debt"
means the Inter-Company Debt existing as at the date hereof, the principal
amount of which and the accrued interest thereon as of the date hereof is as set
out in Schedule 7;
 
 "Extra-budgetary Expenditure"
has the meaning set forth in Clause 4.2(a);
 
 "FSMA" means the Financial
Services and Markets Act 2000;
  4
  "Fundamental Studio 1+1 and Kino Group
Warranty" means each representation and warranty given by Seller and the
Company pursuant to Clause 3.3 hereof in relation to each statement contained in
Section 1 (Capacity and
Authority), 2 (The
Company), 3 (Studio 1+1
and Kino Group Entities' Shares) and 14
(Tax Matters) of Part C
of Schedule 1, and "Fundamental
Studio 1+1 and Kino Group Warranties" means all those representations and
warranties;
 
 "Fundamental Warranties" means
any of the Seller Warranties, Company Warranties, Buyer Warranties, Kolomoisky
Warranties or the Fundamental Studio 1+1 and Kino Group Warranties;
 
 "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 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;
 
 "Gravis" has the meaning set
forth in the Recitals;
 
 "Grintwood" has the meaning set
forth in the Recitals;
 
 "Grizard" has the meaning set
forth in the Recitals;
 
 "IMS" has the meaning set forth
in the Recitals;
 
 "Indemnified Party" has the
meaning set forth in Clause 6.3(a);
 
 "Indemnifying Party" has the
meaning set forth in Clause 6.3(a);
 
 "Indemnitee" has the meaning
set forth in Clause 6.2;
 
 "Indemnity Claim" has the
meaning set forth in Clause 6.3(a);
 
 "Innova Film" has the meaning
set forth in the Recitals;
 
 "Inquiring Party" has the
meaning set forth in Clause 4.1(c);
 
 "Intellectual Property" means
all trademarks, service marks, trade names, trade dress, including all goodwill
associated with the foregoing, domain names, copyrights, software, Internet
sites, mask works and other semiconductor chip rights, and similar rights, and
registrations and applications to register or renew the registration of any of
the foregoing, patents and patent applications, trade secrets and all
similar intellectual property rights;
 
 "Inter-Company Debt" means, in
respect of the Company and each Studio 1+1 and Kino Group Entity, the principal
amount and any accrued interest thereon together with existing penalties (if
any) thereon of any obligations of such Person for borrowed money, or with
respect to deposits or advances of any kind, owed to Seller or any Non-Company
Affiliate;
 
 "Inter-Company Debt Purchase
Price" has the meaning set forth in Clause 2.1(b);
 
 "Kino Entities" means Gravis,
Ukrpromtorg, TOR, ZHYSA and Stimul;
 
 "Kolomoisky" has the meaning
set forth in the preamble;
 
 "Kolomoisky Warranty" means
each representation and warranty given by Kolomoisky pursuant to Clause 3.1
hereof in relation to each statement applicable to Kolomoisky contained in Part
A of Schedule 1, and "Kolomoisky Warranties" means
all of those representations and warranties;
  5
  "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 having the force of law, (ii) approvals of any
Governmental Authority, and (iii) orders,
decisions, injunctions, judgments, awards and decrees of or agreements with any
Governmental Authority;
 
 "LCIA Rules" has the meaning set
forth in Clause 11.2(a);
 
 "Lien" means any mortgage,
pledge, deed of trust, hypothecation, right of third Persons, claim, security
interest, title defect, title retention agreement, lease, sublease, license
agreement, occupancy agreement, easement, covenant, condition, encroachment,
voting trust agreement, interest, option, right of first offer, proxy, lien,
charge or other restrictions or limitations of any nature
whatsoever;
 
 "Litigation" means any action,
cease and desist letter, demand, suit, arbitration proceeding, administrative or
regulatory proceeding, citation, summons or subpoena of any nature, civil,
criminal, regulatory or otherwise, in law or in equity;
 
 "Loan Facility Agreement" means
the loan facility agreement(s) substantially in the form set out in Exhibit C
hereto to be entered into by Seller or any Non-Company Affiliate, as lender, and
CME Cyprus, as borrower, evidencing any Pre-Closing Expenses paid or funded by
Seller or any Non-Company Affiliate, which loan facility agreement shall provide
for repayment not earlier than six months from the date of such
agreement;
 
 "Long Stop Date" means 23 April
2010;
 
 "Losses" has the meaning set
forth in Clause 6.1;
 
 "Material Adverse Effect" means
a material adverse effect on or material adverse change to the business, results
of operations, condition (financial or otherwise), prospects, Assets or
liabilities of the Studio 1+1 and Kino Group or the Company (as applicable)
taken as a whole;
 
 "Material Contract" has the
meaning set forth in Section 8.2 of Part C of Schedule 1;
 
 "Non-Company Affiliate" means
any Affiliate of Seller other than the Company and its
Subsidiaries;
 
 "Obligations" has the meaning
set forth in Clause 7.2(a);
 
 "Owned Intellectual Property"
has the meaning set forth in Section 11.1 of Part C of Schedule 1;
 
 "Party" has the meaning set
forth in the preamble;
 
 "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;
 
 "Pre-Closing Accounting Date"
has the meaning set forth in Clause 4.3(d);
 
 "Pre-Closing Accounting Notice"
has the meaning set forth in Clause 4.3(d);
 
 "Pre-Closing Approved Expense"
means any amount paid or funded after the date of this Agreement by Seller or
any Non-Company Affiliate to or on behalf of the Company or any Studio 1+1 and
Kino Group Entity in respect of (i) any cash
expenditure made in accordance with the Budget or (ii) any expenditure
made in accordance with Clause 4.2(a), in each case provided that any
such amount paid or funded by Seller or any Non-Company Affiliate shall be
evidenced by a Loan Facility Agreement or drawing thereunder;
  6
  "Pre-Closing Approved Investment
Debt" means the aggregate amount of all principal and interest
outstanding in respect of all Pre-Closing Approved Expenses;
 
 "Pre-Closing Expenses" means
(i) Pre-Closing
Approved Expenses or (ii) any amount paid
or funded after the date of this Agreement by Seller or any Non-Company
Affiliate to or on behalf of the Company or any Studio 1+1 and Kino Group Entity
in respect of any expenditure made in accordance with Clause 4.2(b), provided that any
such amount paid or funded by Seller or any Non-Company Affiliate shall be
evidenced by a Loan Facility Agreement or drawing thereunder;
 
 "Pre-Closing Payment" has the
meaning set forth in Clause 2.4(a);
 
 "Pre-Closing Payment Date" has
the meaning set forth in Clause 2.4(b);
 
 "Pre-Closing Investment Debt"
means the aggregate amount of all principal and interest outstanding in respect
of all Pre-Closing Expenses;
 
 "Related Dispute" has the
meaning set forth in Clause 11.2(c);
 
 "Relevant Reference Date"
means, with respect to each Studio 1+1 and Kino Group Warranty given in respect
of (i) the
Studio 1+1 Entities, 1 January 2000, and (ii) the Kino
Entities, 1 January 2006;
 
 "Replacement Buyer" has the
meaning set forth in Clause 2.7(a);
 
 "Responding Party" has the
meaning set forth in Clause 4.1(c);
 
 "SEC Filed Ukrainian
Information" has the meaning set forth in Section 6 of Part C of Schedule
1;
 
 "Securities Act" means the U.S.
Securities Act of 1933, as amended;
 
 "Seller" has the meaning set
forth in the preamble;
 
 "Seller Disclosure Letter"
means (i) in respect of Warranties given at signing, the Signing Date Seller
Disclosure Letter and (ii) in respect of Warranties given at Closing, the
Signing Date Seller Disclosure Letter and, if any, the Updated Seller
Disclosure Letter;
 
 "Seller Indemnitee" has the meaning
set forth in Clause 6.2;
 
 "Seller Marks" means any
trademarks, service marks, brand names or trade, corporate or business names of
Seller or any Non-Company Affiliate;
 
 "Seller Parties" has the
meaning set forth in the preamble;
 
 "Seller Parties' Deliverables"
means those Closing deliverables set out in Schedule 5;
 
 "Seller Restructuring" means
the restructuring undertaken by Seller to alter the holding structure of the
Studio 1+1 and Kino Group in connection with the transaction contemplated by the
Amended and Restated Framework Agreement;
  7
  "Seller Warranty" means each
representation and warranty given by Seller pursuant to Clause 3.1 hereof in
relation to each statement applicable to it contained in Part A of Schedule 1,
and "Seller Warranties"
means all of those representations and warranties;
 
 "Share Purchase Price" means
the Adjusted Aggregate Consideration minus the amount of the
Inter-Company Debt Purchase Price;
 
 "Shares" means all of the
issued ordinary shares (being 2,601 shares) of nominal value of one (1) EURO
each in the capital of the Company issued by the Company from time to time;
"Share" means any and
each of the Shares;
 
 "Signing Date Seller Disclosure
Letter" has the meaning set forth in Clause 4.4;
 
 "Stimul" has the meaning set
forth in the Recitals;
 
 "Studio 1+1" has the meaning
set forth in the Recitals;
 
 "Studio 1+1 and Kino Group" has
the meaning set forth in the Recitals;
 
 "Studio 1+1 and Kino Group
Entities" means the members of the Studio 1+1 and Kino Group and their
Subsidiaries;
 
 "Studio 1+1 and Kino Group
Licenses" has the meaning set forth Section 4.2 of Part C of Schedule
1;
 
 "Studio 1+1 and Kino Group
Warranty" means each representation and warranty given by Seller and the
Company pursuant to Clause 3.3 hereof in relation to each statement contained in
Part C of Schedule 1, and "Studio 1+1 and Kino Group
Warranties" means all those representations and warranties;
 
 "Studio 1+1 and Kino Group Tax
Warranty" means each representation and warranty given by Seller and the
Company pursuant to Clause 3.3 hereof in relation to each statement contained in
Section 14 of Part C of Schedule 1, and "Studio 1+1 and Kino Group Tax
Warranties" means all those representations and warranties;
 
 "Studio 1+1 Entities" means Studio 1+1,
1+1 Production, UMS, Innova Film, TV Media Planet, IMS, Grintwood, Grizard, CME
Cyprus and Ukraine Holding II;
 
 "Subsidiary" means with respect
to any Person, at the time in question, any other Person who, directly or
indirectly through one or more intermediaries, is Controlled by such first
Person;
 
 "Tax" means any federal,
national, state, local or foreign income, alternative, minimum, accumulated
earnings, personal holding company, franchise, capital stock, profits, windfall
profits, gross receipts, sales, use, value added, transfer, registration, stamp,
premium, excise, customs duties, severance, environmental, real property,
personal property, ad valorem, occupancy, license, occupation, employment,
payroll, social security, disability, unemployment, workers' compensation,
withholding, estimated or other similar tax, duty, fee, assessment or other
governmental charge or deficiencies thereof (including all interest and
penalties, surcharges and fines thereon and additions thereto);
 
 "Tax Returns" means any
federal, national, state, local or foreign tax return, declaration, statement,
report, schedule, form or information return or any amendment to any of the
foregoing relating to Taxes;
 
 "Termination Amount" has the
meaning set forth in Clause 5.2(a);
  8
  "Third Party Claim" has the
meaning set forth in Clause 6.3(b);
 
 "Third Party Financial Debt"
means (i) the
aggregate principal amount of (x) any obligations of
the Company and the Studio 1+1 and Kino Group, other than Existing Inter-Company
Debt and Pre-Closing Investment Debt, for borrowed money and (y) all other
obligations of the Company and the Studio 1+1 and Kino Group, other than
Existing Inter-Company Debt and Pre-Closing Investment Debt, evidenced by bonds,
debentures, notes or similar instruments, and (ii) any accrued
interest thereon together with existing penalties (if any) thereon; for both (i)
and (ii) determined in U.S. dollars on consolidated basis for the Company and
the Studio 1+1 and Kino Group in accordance with U.S. GAAP as consistently
applied (for the avoidance of doubt, any amounts outstanding between any members
of the Studio 1+1 and Kino Group shall be excluded in the determination of
"Third Party Financial
Debt");
 
 "TOR" has the meaning set forth
in the Recitals;
 
 "Transaction Documents" means
this Agreement, the Assignment Agreement and any other document or agreement
which the Parties execute to implement the transactions contemplated hereby and
designate as such;
 
 "Transfer" means, in respect of
any Person, to sell, transfer, pledge, loan, encumber, create a usufruct or
other interest for the benefit of any third party in, or otherwise dispose of
any share, or of any interest in or option over any shares, of such
Person;
 
 "TV Media Planet" has the
meaning set forth in the Recitals;
 
 "Ukraine Holding II" has the
meaning set forth in the preamble;
 
 "Ukrpromtorg" has the meaning
set forth in the Recitals;
 
 "UMS" has the meaning set forth
in the Recitals;
 
 "Updated Seller Disclosure
Letter" means the disclosure letter of Seller and the Company (if any),
substantially in the form set forth in Exhibit B, which may be delivered to and
agreed and accepted (but only if agreed and accepted) by Buyer in accordance
with Clause 4.4;
 
 "U.S. GAAP" means generally
accepted accounting principles in the United States;
 
 "VI Arbitration" has the
meaning set forth in Clause 4.5(e);
 
 "VI Request" has the meaning
set forth in 4.5(e)(i)(1);
 
 "Warranty" means any of the
Seller Warranties, Company Warranties, Buyer Warranties, Kolomoisky Warranties
or Studio 1+1 and Kino Group Warranties; and
 
 "ZHYSA" has the meaning set
forth in the Recitals.
 
 1.2           Interpretation and Rules of
Construction.
 
 In this
Agreement, except to the extent otherwise provided or that the context otherwise
requires:
 
 (a)
              when
      a reference is made in this Agreement to a Clause, Exhibit or Schedule,
      such reference is to a Clause of, or an Exhibit or Schedule to, this
      Agreement, unless otherwise
indicated;
  9
  (b)
              the
      table of contents and headings for this Agreement are for reference
      purposes only and do not affect in any way the meaning or interpretation
      of this Agreement;
 
 (c)
              whenever
      the words "include," "includes," or "including" are used in this
      Agreement, they are deemed to be followed by the words "without
      limitation";
 
 (d)
              a
      reference to "US Dollar" or "US $" means the lawful currency of the United
      States of America;
 
 (e)
              a
      reference to "EURO" or "EUR" means the lawful currency of the European
      Union;
 
 (f)
              the
      words "hereof," "herein," and "hereunder" and words of similar import,
      when used in this Agreement, refer to this Agreement as a whole and not to
      any particular provision of this
Agreement;
 
 (g)
              all
      terms defined in this Agreement have the defined meanings when used in any
      certificate or other document made or delivered pursuant hereto, unless
      otherwise defined therein;
 
 (h)
              references
      in the singular shall include references in the plural and vice versa,
      words denoting any gender shall include any other gender and words
      denoting natural persons shall include any other
  Persons;
 
 (i)
              references
      to a Person are also to its successors and permitted
    assigns;
 
 (j)
              references
      to this Agreement and/or any other agreement are deemed to be references
      to such agreement, as amended, modified or supplemented from time to
      time;
 
 (k)
              references
      to "shares" shall be deemed to include any type of ownership interest
      applicable to a Person under the Laws of the jurisdiction of incorporation
      of such Person; and
 
 (l)
              the
      use of "or" is not intended to be exclusive unless expressly indicated
      otherwise.
 
 2.            SALE
AND PURCHASE
 
 2.1           Sale and
Purchase.
 
 Subject
to the terms and conditions hereof, at the Closing:
 
 (a)
              Seller
      shall sell, and Buyer shall purchase, the Shares for the Share Purchase
      Price;
 
 (b)
              Seller
      and certain Non-Company Affiliates shall assign to Buyer the Closing Date
      Inter-Company Debt for an aggregate price equal to the aggregate amount of
      the Closing Date Inter-Company Debt (the "Inter-Company Debt Purchase
      Price"); and
 
 (c)
              Buyer
      and Seller agree that the Adjusted Aggregate Consideration in respect of
      the aggregate amount of the Inter-Company Debt Purchase Price and the
      Share Purchase Price shall be payable in accordance with Clauses 2.4 and
      2.3(b) hereof.
 
 2.2           Conditions
Precedent.
 
 Completion
of the sale and purchase contemplated by Clause 2.1 shall be subject to the
fulfillment and satisfaction (or waiver in writing by the relevant Party or
Parties) of each of the following conditions precedent:
  10
  (a)
              General
      conditions precedent to the performance by the Parties of their respective
      obligations on the Closing Date:
 
 (i)
              Buyer
      shall have received all required antimonopoly or merger control approvals
      or consents so required on or prior to the Closing Date, in accordance
      with all applicable Laws, and no such approvals or consents shall have
      been revoked;
 
 (ii)
              all
      of the material broadcasting licenses of the Studio 1+1 and Kino Group
      Entities shall remain in full force and effect and shall not have been
      revoked;
 
 (iii)
              no
      Governmental Authority shall have notified any Party of its intention to
      commence, or recommend the commencement of, Litigation and no Law shall
      have been enacted, entered, enforced, promulgated or issued with respect
      to or deemed applicable, which in any case seeks or purports to challenge,
      prohibit, materially interfere with, materially limit, delay, restrain,
      impose damages or other material obligations in connection with the
      consummation of the transactions contemplated by this Agreement and the
      other Transaction Documents; and
 
 (iv)
              consummation
      of the transactions contemplated hereby and by the other Transaction
      Documents shall not have been restrained, enjoined or otherwise prohibited
      or made illegal by any applicable Law, including any court order, and no
      such Law or order that would have such an effect shall have been
      promulgated, entered, issued or determined by any court or other
      Governmental Authority to be applicable to this Agreement or any other
      Transaction Document.
 
 (b)
              Conditions
      precedent to the performance by the Company and Seller of their respective
      obligations on the Closing Date:
 
 (i)
              there
      shall have been no material breach of any Buyer Warranty or Kolomoisky
      Warranty, in each case at and as of the date when first given and at and
      as of the Closing Date with the same effect as though made at and as of
      the Closing Date, it being understood that, for purposes of determining
      the accuracy of any such Warranty, all monetary thresholds and other
      materiality qualifications set forth in such Warranty shall be
      disregarded.  Each of Kolomoisky and Buyer shall have in all
      material respects duly performed and complied with all agreements,
      covenants and conditions required by this Agreement to be performed or
      complied with by it at or prior to Closing.  Buyer shall have
      delivered to each of Seller and the Company a certificate, dated the
      Closing Date and signed by a duly authorized officer to the effect set
      forth above in this
Clause 2.2(b)(i);
 
 (ii)
              Seller
      shall have received the full amount of the Pre-Closing Payment from Buyer
      in the Designated Account in accordance with Clause 2.4(b), and such
      receipt shall not have been challenged or enjoined by any legal, judicial,
      regulatory or governmental process;
and
 
 (iii)
              each
      of Kolomoisky and Buyer shall have executed all of the Closing Date
      Documents to which it is a party and such Closing Date Documents shall be
      ready for exchange at Closing.
 
 (c)
              Conditions
      precedent to the performance by Buyer of its obligations on the Closing
      Date:
  11
  (i)
              there
      shall have been no material breach of any Seller Warranty, Company
      Warranty or Fundamental Studio 1+1 and Kino Group Warranty and no material
      breach of any other Studio 1+1 and Kino Group Warranty, in each case at
      and as of the date when first given and at and as of the Closing Date with
      the same effect as though made at and as of the Closing Date, it being
      understood that, for purposes of determining the accuracy of any such
      Warranty, all monetary thresholds and other materiality qualifications set
      forth in such Warranty shall be disregarded.  Each of Seller and
      the Company shall have in all material respects duly performed and
      complied with all agreements, covenants and conditions required by this
      Agreement to be performed or complied with by it at or prior to
      Closing.  Each of Seller and the Company shall have delivered to
      Buyer a certificate, dated the Closing Date and signed by a duly
      authorized officer to the effect set forth above in this
      Clause 2.2(c)(i);
 
 (ii)
              Seller
      shall have delivered to Buyer the Pre-Closing Accounting Notice in
      accordance with Clause 4.3(d);
 
 (iii)
              no
      event, occurrence, fact, condition, change, development or effect shall
      exist or have occurred or come to exist or been threatened in respect of
      any of the Company or any Studio 1+1 and Kino Group Entity since the date
      of this Agreement that, individually or in the aggregate, has resulted in
      or would reasonably be expected to result in a Material Adverse Effect;
      and
 
 (iv)
              each
      of Seller and the Company shall have executed all of the Closing Date
      Documents to which it is a party and such Closing Date Documents shall be
      ready for exchange at the Closing.
 
 2.3           Closing
Date.
 
 Subject
to the satisfaction or waiver of the conditions of Clause 2.2, the Parties
intend that the closing of the sale and purchase of the Shares and the Closing
Date Inter-Company Debt (the "Closing") shall take place at
9:00 a.m. (Cyprus time) at the offices of the Company's counsel in Limassol,
Cyprus on 20 April 2010, unless another time, date or place is agreed in writing
by the Parties (the "Anticipated Closing
Date").  The date on which the Closing actually occurs is
referred to hereinafter as the "Closing Date".  At
the Closing the following actions shall take place:
 
 (a)
              each
      of Buyer, Seller, and the Company shall execute a letter agreement (the
      "Closing
      Memorandum") confirming
that:
 
 (i)
              all
      of the conditions precedent applicable to it set forth in Clause 2.2 are
      satisfied or waived;
 
 (ii)
              the
      Pre-Closing Accounting Notice has been duly delivered by Seller and is
      accepted by Buyer in accordance with Clause 4.3(d);
  and
 
 (iii)
              it
      is satisfied with the Buyer Parties' Deliverables or Seller Parties'
      Deliverables (as the case may be) delivered to
  it;
 
 (b)
              following
      execution of the Closing Memorandum pursuant to Clause 2.3(a), Buyer shall
      deliver to Seller, by wire transfer of immediately available funds to the
      Designated Account, the Closing Date Payment calculated in accordance with
      Clause 2.4(a) on the basis of the amounts set forth in the Pre-Closing
      Accounting Notice; and
  12
  (c)
              following
      transfer of the funds pursuant to Clause 2.3(b), the following shall
      occur:
 
 (i)
              each
      of Seller and Buyer shall execute, or if applicable shall cause any of
      their respective Affiliates to execute, all relevant Assignment Agreements
      in respect of the Closing Date Inter-Company Debt, and Seller shall
      deliver to Buyer any instruments and documents representing or evidencing
      all of their respective rights in the Closing Date Inter-Company Debt.
      Physical delivery of such instruments and documents shall take place at
      the offices of the Company.
 
 (ii)
              Seller
      shall deliver to Buyer, free and clear of any Liens, one or more
      certificates representing all of the Shares, duly endorsed in blank or
      accompanied by stock powers or other instruments of transfer duly executed
      in blank, and bearing or accompanied by all requisite stock transfer
      stamps;
 
 (iii)
              the
      Buyer Parties shall deliver to the Seller Parties the Buyer Parties'
      Deliverables; and
 
 (iv)
              the
      Seller Parties shall deliver to the Buyer Parties the Seller Parties'
      Deliverables.
 
 2.4           Payments.
 
 (a)
              Buyer
      shall pay the Adjusted Aggregate Consideration in two (2)
      payments.  The first payment shall be made in the amount of
      US$30,000,000 (the "Pre-Closing Payment") on
      the Pre-Closing Payment Date, and the second payment shall be made on the
      Closing Date in an amount calculated in accordance with this Clause 2.4(a)
      (the "Closing Date
      Payment"), in all cases in accordance with Clause 2.4(b) below. The
      amount of the Closing Date Payment shall equal the Adjusted Aggregate
      Consideration minusthe amount of the Pre-Closing Payment received in the Designated
      Account minus the
      amount of any Earned Interest. For the avoidance of doubt, Seller shall
      retain the amount of all Earned Interest after
  Closing.
 
 (b)
              The
      Pre-Closing Payment shall be made by wire transfer of immediately
      available funds on 1 February 2010 (the "Pre-Closing Payment
      Date") and the Closing Date Payment shall be made by wire transfer
      of immediately available funds on the Closing Date, in each case into an
      account of Seller designated for such purpose by Seller (the "Designated Account"),
      provided
      that Seller shall have no obligation to transfer any interest in or
      Control of the Company or the Shares to Buyer until the Adjusted Aggregate
      Consideration has been paid in full in accordance with this
      Agreement.
 
 (c)
              Seller
      shall make available for Buyer's review copies of the documents listed in
      Schedule 5 at least three (3) Business Days prior to the Closing Date
      other than those documents which will not be produced until the Closing
      Date (e.g., item (s)).
 
 (d)
              Seller
      hereby covenants not to withdraw any funds in respect of the Pre-Closing
      Payment from the Designated Account until the Closing Date other than to
      pay or fund any Pre-Closing Expenses made in accordance with this
      Agreement.
 
 2.5           Withholding.  Notwithstanding
any other provision of this Agreement, Buyer shall make all payments under this
Agreement free and clear of all deductions and withholdings in respect of non
U.S. Taxes and, if any such deduction or withholding with respect to a payment
is required by Law, Buyer shall increase the amount of such payment by an amount
necessary such that Seller receives the amount it would have received had no
such deduction or withholding been required, and Buyer shall promptly furnish
Seller with official receipts (or copies thereof) evidencing the payment of such
Taxes.
  13
  2.6           Anticipated Closing Date and
Long Stop Date.
 
 (a)
              The
      Parties intend that Closing Date shall be the Anticipated Closing
      Date.  Each of the Parties shall use its reasonable best efforts
      to ensure that all of the conditions set out in Clause 2.2 are satisfied
      on or prior to such date.
 
 (b)
              In
      the event that any of the conditions set out in Clause 2.2 have not been
      fulfilled by the Long Stop Date, any Party shall be entitled to terminate
      this Agreement by written notice to the other Parties, provided that such
      non-fulfillment of any condition was not the direct result of any breach
      by the Party seeking to terminate or any of its
  Affiliates.
 
 2.7           Buyer and Replacement
Buyer.
 
 (a)
              At
      any time prior to the date that is fifteen (15) Business Days prior to the
      Anticipated Closing Date, Kolomoisky shall have the right to substitute
      another Person to perform the obligations of Buyer under this Agreement in
      the place of Harley Trading Limited (a "Replacement Buyer") by
      written notice to Seller, provided
      that
 
 (i)
              any
      Replacement Buyer shall only be either (i) Kolomoisky or (ii) a Person
      Controlled by Kolomoisky;
 
 (ii)
              Kolomoisky
      shall have provided and certified all such information as Seller
      reasonably determines to be necessary or appropriate to comply with the
      anti-money laundering Laws, rules and regulations of any applicable
      jurisdiction (including the Anti-Money Laundering Laws), to respond to
      requests for information concerning the identity of the proposed
      Replacement Buyer's shareholders from any Governmental Authority,
      self-regulatory organization or financial institution in connection with
      its anti-money laundering compliance procedures, or to update such
      information; and
 
 (iii)
              in
      the event of the substitution of a Replacement Buyer pursuant to this
      Clause 2.7(a), Kolomoisky shall procure that, and such substitution shall
      not be effective until, (i) such
      Replacement Buyer shall promptly adhere to the terms of this Agreement as
      if it were a party hereto pursuant to a deed of adherence, and (ii) Harley
      Trading Limited shall (subject to its replacement by the Replacement Buyer
      pursuant to this Clause 2.7(a)) promptly unconditionally and irrevocably
      release the Parties hereto from any liability incurred prior to the date
      of such substitution pursuant to a release agreement, in the case of both
      (i) and (ii) in a form acceptable to the Seller Parties.  For
      the avoidance of doubt, the Replacement Buyer shall have the same rights
      and liabilities incurred by or accrued to Harley Trading Limited pursuant
      to this Agreement prior to such
substitution.
 
 (b)
              For
      the avoidance of doubt, subject to Clause 2.7(a), after the execution of
      the agreements referred to in Clause 2.7(a)(iii), any references to Buyer
      in this Agreement shall apply to Replacement
  Buyer.
  14
  3.        
   WARRANTIES
 
 3.1           General
Warranties.
 
 Each of
the Parties represents and warrants to the other Parties that each statement
applicable to it contained in Part A of Schedule 1 is true and accurate in every
respect and not misleading as at the date of this Agreement and on the Closing
Date.
 
 3.2           Buyer
Warranties.
 
 Without
limitation to the foregoing Clause 3.1, Buyer represents and warrants to the
other Parties that each statement contained in Section 1 of Part B of Schedule 1
is true and accurate in every respect and not misleading as at the date of this
Agreement and on the Closing Date.
 
 3.3           Studio 1+1 and Kino Group
Warranties.
 
 The
Company and Seller, jointly and severally, warrant to Buyer that, save to the
extent fairly disclosed in the corresponding Section of (i) on the date of
this Agreement, the Signing Date Seller Disclosure Letter, and (ii) on the Closing
Date, the Updated Seller Disclosure Letter, in each case with sufficient detail
so as to enable a reasonable Buyer to understand the facts, matters or
information being disclosed and to make an accurate assessment of the impact on
the Studio 1+1 and Kino Group Entities of the matter being disclosed, each
statement contained in Part C of Schedule 1 shall be true and accurate in every
respect and not misleading as at the date of this Agreement and on the Closing
Date, with the exception of Sections 2 and 3 of Part C of Schedule 1, which
shall be true and accurate in every respect and not misleading on the Closing
Date only.
 
 3.4           Independent
Warranties.
 
 Each
Warranty shall be construed independently and (except where this Agreement
provides otherwise) is not limited by a provision of this Agreement or another
Warranty.  Each of the Parties acknowledges that the other Parties are
entering into this Agreement in reliance on each Warranty.
 
 3.5           Knowledge.
 
 (a)
              Where
      any Warranty is qualified by the expression "so far as Seller or the
      Company is aware" or "to the knowledge of Seller or the Company" or any
      similar expression, that statement or reference shall mean so far as is
      within the actual knowledge of any of Adrian Sarbu, Oliver Meister, Mr.
      Tkachenko and the general directors, finance directors and chief legal
      officers of any Studio 1+1 and Kino Group Entity, in each case having made
      all reasonable enquiries.
 
 (b)
              Neither
      Seller nor the Company shall be liable in respect of any claim for breach
      of Warranty where or to the extent that Kolomoisky had knowledge (actual,
      constructive or imputed) of the facts, matters or circumstances giving
      rise to such Warranty claim in his capacity as a member of the board of
      directors of Seller and a member of the supervisory boards of Studio 1+1
      and 1+1 Production.
 
 4.           CERTAIN
COVENANTS
 
 4.1           Pre-Closing
Conduct.
 
 (a)
              From
      the date of this Agreement (or, if different, from the date the relevant
      Warranty is given hereunder) until Closing, Kolomoisky and Buyer agree
      to:
  15
  (i)
              ensure
      that no action is taken by Buyer the effect of which would, to the
      knowledge of Buyer, cause a Buyer Warranty or Kolomoisky Warranty to be
      untrue, inaccurate or misleading in any material respect if given in
      respect of the facts or circumstances as at
  Closing;
 
 (ii)
              notify
      Seller promptly if it becomes aware of a fact or circumstance which
      constitutes or which would or would reasonably be expected to constitute a
      breach of any Buyer Warranty or Kolomoisky Warranty or Clause 4.1(a)(i),
      or which would or might reasonably be expected to cause a Buyer Warranty
      or Kolomoisky Warranty to be untrue, inaccurate or misleading in any
      material respect in relation to the facts or circumstances as at Closing;
      and
 
 (iii)
              without
      limitation to the generality of Clause 2.2(b) and any remedies available
      to Seller or the Company as a result of violation of any Warranty, take
      any and all action necessary in order to cure violation of any Buyer
      Warranty or Kolomoisky Warranty so as to ensure that by the Closing Date
      all Buyer Warranties or Kolomoisky Warranties are true and correct in all
      material respects.
 
 (b)
              From
      the date of this Agreement (or, if different, from the date the relevant
      Warranty is given hereunder) until Closing, the Company and Seller agree
      to:
 
 (i)
              comply
      with, and ensure that each Studio 1+1 and Kino Group Entity and the
      Company complies with, Schedule 3 and ensure that no action is taken by
      the Company, Seller or any Studio 1+1 and Kino Group Entity the effect of
      which would, to the knowledge of Seller or the Company, cause a Studio 1+1
      or Kino Group Warranty, Seller Warranty or Company Warranty to be untrue,
      inaccurate or misleading in any material respect if given in respect of
      the facts or circumstances at
Closing;
 
 (ii)
              not
      Transfer or assign, and ensure that no Non-Company Affiliate Transfers or
      assigns, any Existing Inter-Company Debt or Pre-Closing Investment Debt
      held by such Person to any third
party;
 
 (iii)
              notify,
      and ensure that each Studio 1+1 and Kino Group Entity notifies, Buyer
      promptly if it becomes aware of a fact or circumstance which constitutes
      or which would or would reasonably be expected to cause any Studio 1+1 and
      Kino Group Warranty, Seller Warranty or Company Warranty to be untrue,
      inaccurate or misleading in any material respect if given in respect of
      the facts or circumstances at Closing or a breach of Clause 4.1(b)(i) or
      4.1(b)(ii); and
 
 (iv)
              without
      limitation to the generality of Clause 2.2(c) and any remedies available
      to Buyer or Kolomoisky as a result of violation of any Warranty, take any
      and all action necessary in order to cure violation of any Studio 1+1 and
      Kino Group Warranty, Seller Warranty or Company Warranty so as to ensure
      that by the Closing Date all Studio 1+1 and Kino Group Warranties, Seller
      Warranties and Company Warranties are true and correct in all material
      respects. Each of the Company or Seller shall take all actions reasonably
      necessary in order to rectify any material problems and violations that
      may have a detrimental effect on the Studio 1+1 and Kino Group
      Entities.
 
 (c)
              If,
      in the period prior to Closing, any Party (acting reasonably) considers
      that there may have been a breach of any Warranty (an "Inquiring Party") by any
      other Party (the "Responding Party"), the
      Inquiring Party may by written notice given to the Responding Party prior
      to Closing require the Responding Party to provide to such Inquiring
      Party, and/or procure the provision to such Inquiring Party of all
      information as such Inquiring Party may reasonably require in order to
      ascertain whether such a breach has occurred. The Responding Party shall
      as soon as reasonably practicable provide or procure the provision of all
      such information.
  16
  4.2           Actions Pending Closing;
Budget.
 
 (a)
              From
      the date of this Agreement until Closing, Buyer, the Company and Seller
      agree that the operations of the Company shall be conducted in accordance
      with Schedule 2. Subject to Clause 4.2(b) below, Buyer, the Company and
      Seller agree that the Company and the Studio 1+1 and Kino Group Entities
      shall not make any dispositions of funds not provided in the Budget in
      excess of 110% of the corresponding amount in the Budget (an "Extra-budgetary
      Expenditure") without the prior written consent of Buyer and
      Seller, not to be unreasonably withheld or delayed.  Any of the
      Company, Seller or Buyer may, by written notice to the other Parties,
      request that the Company make an Extra-budgetary
      Expenditure.  Any Extra-budgetary Expenditure shall be made as
      soon as reasonably practicable after receipt by the Company of the written
      notice requesting such Extra-budgetary
  Expenditure.
 
 (b)
              In
      the event that Buyer is not required to consent to an Extra-budgetary
      Expenditure, then such Extra-budgetary Expenditure may nonetheless be
      incurred, provided that it shall not be considered a Pre-Closing Approved
      Expense, and accordingly shall not be included in the calculation of the
      Adjusted Aggregate Consideration.
 
 (c)
              Seller
      or any Non-Company Affiliate may pay or fund any expense of the Company or
      any Studio 1+1 and Kino Group Entity contemplated by Clause 4.2(a) or
      4.2(b) above by providing loans under a Loan Facility
      Agreement.
 
 (d)
              Seller
      estimates that the aggregate amount of all Pre-Closing Approved Expenses
      incurred from the date of this Agreement to the Anticipated Closing Date
      shall be US$19,000,000.
 
 (e)
              Promptly
      following a drawing under a Loan Facility Agreement, Seller shall provide
      to Buyer details of the same, including the date and amount of such
      payment, a copy of the relevant request from CME Cyprus, if any, and a
      copy of the bank statement of CME Cyprus showing the receipt of the
      relevant funds.
 
 4.3           Satisfaction of Conditions;
Anti-Monopoly Clearance; Board Appointments; Pre-Closing
Accounting.
 
 (a)
              From
      the date of this Agreement until Closing, each Party shall use its
      reasonable best efforts to take or cause to be taken all actions, and to
      do or cause to be done all other things necessary, proper or advisable in
      order for such Party to fulfill and perform its obligations in respect of
      this Agreement (including its obligations pursuant to this Clause 4) and
      the other Transaction Documents to which it is a party, to cause the
      conditions to its obligations set forth in Clause 2.1 to be fulfilled and
      otherwise to consummate and make effective the transactions contemplated
      hereby and thereby.
 
 (b)
              The
      Buyer Parties shall submit all required antimonopoly or merger control
      applications or notifications required by the transactions contemplated
      hereby to occur at Closing to the relevant Governmental Authorities on or
      prior to 15 February 2010.
 
 (c)
              Buyer
      shall as soon as practicable and no later than ten (10) Business Days
      prior to the Anticipated Closing Date provide written notice to Seller
      with a complete list of the names of Buyer's nominees to be named
      directors, members of the supervisory board or any equivalent (and, where
      applicable, secretaries and bank account signatories) of the Company and
      any Studio 1+1 and Kino Group
Entity.
  17
  (d)
              On
      the date that is ten (10) Business Days prior to the Anticipated Closing
      Date (the "Pre-Closing
      Accounting Date"), Seller shall deliver to Buyer a notice
      containing (i) the Balance
      Amount and calculation thereof; (ii) the amount
      of any Third Party Financial Debt; (iii) the exact
      amount of any Pre-Closing Approved Expenses and any other Pre-Closing
      Expenses together with copies of the Loan Facility Agreements and drawdown
      notices thereunder and copy extracts of the bank statements of CME Cyprus
      evidencing such Pre-Closing Expenses; (iv) the amount
      of Earned Interest; (v) a
      calculation of the Aggregate Adjusted Consideration; and (vi) a
      calculation of the Closing Date Payment (the "Pre-Closing Accounting
      Notice").  The Parties agree that the accounting
      principles set forth on Schedule 8 shall apply in respect of the
      calculation of the Balance Amount.  Buyer shall have five (5)
      Business Days from the date of receipt of the Pre-Closing Accounting
      Notice to make inquiries to Seller in respect of any amounts of any items
      set forth therein.  Buyer shall confirm acceptance of the
      Pre-Closing Accounting Notice (subject to any amendments thereto as may be
      mutually agreed by the Seller and Buyer, each acting reasonably) in the
      Closing Memorandum.
 
 4.4           Seller Disclosure
Letter.
 
 (a)
              Seller
      shall deliver on the date hereof a disclosure letter substantially in the
      form attached as Exhibit B (the "Signing Date Seller Disclosure
      Letter") disclosing those matters that would, without such
      disclosure, cause any Seller Warranty, Company Warranty or Studio 1+1 and
      Kino Group Warranty to be untrue, inaccurate or misleading in any material
      respect in relation to the facts or circumstances as at the date of this
      Agreement.
 
 (b)
              Seller
      and the Company may, at any time prior to the date that is ten (10)
      Business Days prior to the Anticipated Closing Date, deliver to Buyer a
      draft Updated Seller Disclosure Letter for the purpose of disclosing those
      matters that:
 
 (i)
              in
      respect of each Warranty in Sections 2 and 3 and (to the extent relating
      to matters above US$225,000) the Warranty in Section 5(h) of Part C of
      Schedule 1, have occurred at any time prior to the date of the Updated
      Seller Disclosure Letter; and
 
 (ii)
              in
      respect of any other Warranties of Part C of Schedule 1 have occurred
      since the date of this Agreement and were not known by Seller or the
      Company as of such date,
 
 and
which, in the case of each of (i) and (ii) would, without such disclosure,
result in the failure of the condition set forth in Clause 2.2(c)(i) being
fulfilled.  The Parties acknowledge that Buyer shall be entitled to
accept or reject the draft Updated Seller Disclosure Letter and that the draft
Updated Seller Disclosure Letter may raise issues that Buyer believes should be
addressed by way of amendment of this Agreement or the other Transaction
Documents.  For the avoidance of doubt but without limiting any rights
in respect of prior breach or Warranty or covenant, if a draft Updated Seller
Disclosure Letter is proposed, the Parties shall not be required to consummate
the transactions to be consummated at Closing unless such draft Updated Seller
Disclosure Letter is agreed.
  18
  4.5           Certain Post-Closing
Covenants.
 
 (a)
              Except
      as otherwise provided in Clause 4.5(e), from and after the Closing,
      Seller, on the one hand, and Buyer, on the other hand, shall in respect of
      all other matters, promptly afford such other Party and its respective
      agents reasonable access to their respective books and records,
      information, employees and auditors (and, in the case of Buyer, including
      those books and records, information, employees and auditors of the
      Company and each of the Studio 1+1 and Kino Group Entities) to the extent
      necessary or useful for the party requesting such access in connection
      with any audit, investigation, dispute or Litigation, provided that
      the party requesting such access agrees to reimburse the other party
      promptly for all reasonable and documented out-of-pocket costs and
      expenses incurred in connection with any such
  request.
 
 (b)
              Except
      as otherwise provided in Clause 4.5(e), and notwithstanding anything to
      the contrary in Clause 4.5(a), (i) the access
      rights set forth in Clause 4.5(a) shall be exercised in such manner as not
      to interfere unreasonably with the conduct of the business of the Party
      granting such access, (ii) the Party
      granting access may withhold any document (or portions thereof) or
      information (A) that is
      subject to the terms of a non-disclosure agreement with a third party,
      (B) that
      may constitute privileged attorney-client communications or attorney work
      product and the transfer of which, or the provision of access to which, as
      reasonably determined by such Party's counsel, constitutes a waiver of any
      such privilege or (C) if the
      provision of access to such document (or portion thereof) or information,
      as determined by such party's counsel, would reasonably be expected to
      conflict with applicable Laws and (iii) neither
      Seller nor any of its Affiliates or representatives shall have any
      obligation to provide Buyer or its representatives (A) access
      to any Tax Return filed by Seller or any of its Affiliates, or any related
      materials, in each case not relating exclusively to the Company and its
      Subsidiaries or (B) access
      to any individual personnel or payroll records, in each case not relating
      exclusively to the Company and its
Subsidiaries.
 
 (c)
              Except
      as otherwise provided in Clause 4.5(e), from and after the
      Closing:  (i) Seller, on
      the one hand, and each of the Buyer Parties, on the other hand, shall, and
      shall cause their respective Affiliates and representatives to, maintain
      in confidence this Agreement and the Transaction Documents and any
      written, oral or other information related to the negotiation hereof and
      thereof, (ii) Seller
      shall, and shall cause its respective Affiliates and representatives to,
      maintain in confidence any written, oral or other information relating to
      the Company and its Subsidiaries obtained by virtue of Seller's ownership
      of the Company and its Subsidiaries prior to the Closing and (iii) each of
      the Buyer Parties shall, and shall cause its Affiliates and
      representatives to, maintain in confidence any written, oral or other
      information of or relating to Seller (other than information relating to
      the Company and its Subsidiaries) obtained by virtue of Buyer's ownership
      of the Company and its Subsidiaries from and after the Closing, except, in
      each case, to the extent that the applicable Party is required to disclose
      such information by judicial or administrative process or pursuant to
      applicable Law or such information can be shown to have been in the public
      domain through no fault of the applicable
      party.  Notwithstanding the foregoing, after the Closing, each
      of the Buyer Parties shall, and shall cause its Affiliates and
      representatives to, use commercially reasonable efforts to promptly (and
      in any event within thirty days after the Closing) remove, erase, delete
      or otherwise destroy all information of or relating to Seller (other than
      information relating to the Company and its Subsidiaries) (whether in
      print, electronic or other forms) in the possession of any employee of the
      Company or its Subsidiaries.
 
 (d)
              Except
      as otherwise provided in Clause 4.5(e), and subject to Clause 4.5(c),
      Seller and its Affiliates shall have the right to retain copies of all
      books, data, files, information and records in any media (including, for
      the avoidance of doubt, Tax Returns and other information and documents
      relating to tax matters) of the Company and its Subsidiaries relating to
      periods ending on or prior to the Closing Date (i) relating to
      information (including employment and medical records) regarding the
      Company employees, (ii) as may be
      required by any Governmental Authority, including pursuant to any
      applicable Law or regulatory request or (iii) as may be
      necessary for Seller or its Affiliates to perform their respective
      obligations pursuant to this Agreement or any of the Transaction
      Documents, in each case subject to compliance with all applicable privacy
      Laws.  Each of the Buyer Parties agrees that, with respect to
      all original books, data, files, information and records of the Company
      and its Subsidiaries existing as of the Closing Date, it will (x) comply
      in all material respects with all applicable Laws relating to the
      preservation and retention of records, (y) apply
      preservation and retention policies that are no less stringent than those
      generally applied by Buyer to its own books and records and (z) for at least
      three (3) years after the Closing Date, preserve and retain all such
      original books, data, files, information and records, and will use
      reasonable best efforts to preserve and retain all such original books,
      data, files, information and records for an additional four (4) years
      thereafter, and thereafter dispose of such original books, data, files,
      information and records only after it shall have given Seller ninety days'
      prior written notice of such disposition and the opportunity (at Seller's
      expense) to remove and retain such
information.
  19
  (e)
              Buyer
      hereby acknowledges that CME Media Enterprises B.V., a Non-Company
      Affiliate of Seller, is on the date hereof currently engaged in an
      on-going arbitration with CJSC Video International Company Group relating
      to the termination of an agreement between CME Media Enterprises B.V. and
      CJSC Video International Company Group (the "VI
      Arbitration").  Notwithstanding anything to the contrary
      in Clauses 4.5(a), 4.5(b), 4.5(c) and 4.5(d) or Clause 8 hereof, from and
      after Closing:
 
 (i)
              Buyer
      shall, and shall cause the Company and each of the Studio 1+1 and Kino
      Group Entities to, promptly:
 
 (1)
              afford
      Seller and its agents access to all books and records, information
      (including electronic information and e-mails), accounts, employees and
      auditors of the Company and its Subsidiaries that Seller requests to
      advance Seller's legitimate interests in the VI Arbitration (a "VI Request"), provided that
      Seller agrees to (x) notify Buyer
      in writing that a particular request for access is a VI Request only and
      (y) give
      Buyer reasonable prior notice of any access required hereunder;
      and
 
 (2)
              (x) waive any
      rights any of the Company or any Studio 1+1 and Kino Group Entity may have
      in respect of any document (or portions thereof) obtained as a result of
      or in connection with a VI Request that may constitute privileged
      attorney-client communications or attorney work product, provided that
      the document (or portion thereof) that is subject to such waiver
      originates from a date prior to the Closing Date, or (y) permit
      employees of any Studio 1+1 and Kino Group Entity on reasonable prior
      notice to provide evidence in the VI Arbitration, in each case if
      requested and to the extent required by Seller to advance Seller's
      legitimate interests in the VI
Arbitration,
 
 provided that Seller
agrees to reimburse Buyer promptly for all reasonable and documented
out-of-pocket costs and out-of-pocket expenses incurred in connection with any
VI Request or pursuant to Clause 4.5(e)(i)(2).
  20
  (ii)
              Seller
      and its Affiliates shall have the right to retain, use and disclose, as
      applicable, (i) the
      existence of this Agreement and the Transaction Documents, (ii) any
      written, oral or other information (including electronic information and
      e-mails) relating to the Company and its Subsidiaries obtained as a result
      of or in connection with any VI Request and (iii) any copies
      of written, oral or other information relating to the Company and its
      Subsidiaries obtained by virtue of Seller's ownership of the Company and
      its Subsidiaries prior to the Closing, provided that
      (x) the
      same is retained, used or disclosed in connection with the VI Arbitration
      and (y)
      Seller shall provide Buyer prior notice of use or
    disclosure.
 
 (f)
              Corporate
      Names.
 
 Within
one month following the Closing, Buyer shall cause the Company, its Subsidiaries
and any other Person in which the Company has a direct or indirect interest to
change its corporate name so that it does not contain any of "CME", "Central
European Media Enterprises" or any derivation thereof.
 
 5.       
    TERMINATION; TERMINATION AMOUNT
 
 5.1           Termination.
 
 This
Agreement may be terminated:
 
 (a)
              at
      any time by mutual written consent of all of the Parties;
    or
 
 (b)
              at
      any time after the Pre-Closing Payment Date by Seller in the event that
      the Pre-Closing Payment is not paid in accordance with Clause 2.4(b);
      or
 
 (c)
              by
      any of the Parties pursuant to
  Clause 2.6(b).
 
 5.2           Termination
Amount.
 
 (a)
              If
      this Agreement is terminated pursuant to Clause 5.1(a), then within five
      (5) Business Days after the receipt of notice of such termination, Seller
      shall transfer the full amount of the Termination Amount (as defined
      below) to an account designated by
Buyer.
 
 (b)
              If
      this Agreement is terminated pursuant to Clause 5.1(b), Buyer shall pay to
      Seller, or Seller shall be entitled to retain from any Pre-Closing Payment
      if such payment is made prior to the date of such termination the
      aggregate amount of the Pre-Closing Payment plus any Earned
      Interest (the "Termination
      Amount").
 
 (c)
              If
      this Agreement is terminated by any Party pursuant to Clause
      5.1(c):
 
 (i)
              as
      a consequence of a failure by Seller or any of its Affiliates to fulfill
      any of the conditions set forth in Clauses 2.2(c)(i), 2.2(c)(ii)
      2.2(c)(iii) (except where such Material Adverse Effect arises due to the
      failure to fulfill any of the conditions set forth in Clause 2.2(a)(ii),
      2.2(a)(iii) or 2.2(a)(iv)) and 2.2(c)(iv), or a breach by Seller of any of
      its material obligations on the Closing Date pursuant to Clause 2.3, then
      within five (5) Business Days after the receipt of notice of such
      termination, Seller shall transfer the full amount of the Termination
      Amount to an account designated by
Buyer;
  21
  (ii)
              as
      a consequence of a failure by Buyer or any of its Affiliates to fulfill
      any of the conditions set forth in Clause 2.2(b), or a breach by Buyer of
      any of its material obligations on the Closing Date pursuant to Clause
      2.3, then Seller shall be entitled to retain the full amount of the
      Termination Amount;
 
 (iii)
              as
      a consequence of a failure of the condition set forth in Clause 2.2(a)(i),
      then (x)
      Seller shall be entitled to retain from the Termination Amount the full
      amount of all Pre-Closing Approved Expenses and, if applicable, (y) within five
      (5)  Business Days after receipt of notice of such termination,
      Seller shall transfer to an account designated by Buyer the amount equal
      to the difference of the Termination Amount minus the Pre-Closing
      Approved Expenses;
 
 (iv)
              as
      a consequence of a failure of the conditions set forth in Clause
      2.2(a)(ii), 2.2(a)(iii) or 2.2(a)(iv), then (x) Seller shall
      be entitled to retain from the Termination Amount the amount equal to
      one-half (1/2) of all Pre-Closing Approved Expenses and, if applicable,
      (y)
      within five (5) Business Days after receipt of notice of such termination,
      Seller shall transfer to an account designated by Buyer the amount equal
      to the difference of the Termination Amount minusthe amount equal
      to one-half (1/2) of all Pre-Closing Approved
  Expenses;
 
 (d)
              The
      Pre-Closing Payment is a deposit paid in consideration of Seller's entry
      into this Agreement and is not refundable in whole or in part except as
      expressly provided pursuant to this Clause 5.2.  The Buyer
      Parties acknowledge and agree that the agreements contained in this Clause
      5.2 are an integral part of the transactions contemplated by this
      Agreement and that, without these agreements, Seller would not enter into
      this Agreement.  Each of the Parties hereto further acknowledges
      that the payment or retention (as applicable) of the Termination Amount is
      not a penalty and is without prejudice to any other rights Seller or Buyer
      may have at the time of any
termination.
 
 5.3           Survival.
 
 Any
termination or expiry of this Agreement shall be without prejudice to any rights
accruing prior to such termination.  Clauses 1, 6, 7, 8, 9, 10 and 11
shall survive termination of this Agreement.
 
 6.            INDEMNITIES
AND LIABILITIES
 
 6.1           Seller
Indemnity.
 
 Seller
agrees that, from and after thedateofthis
Agreement, it shall defend, indemnify and hold harmless Buyer, its respective
Affiliates, and its Affiliates' representatives, officers, directors,
shareholders and Controlling Persons (the "Buyer Indemnitees") from and
against, and pay or reimburse the Buyer Indemnitees for, any bona fide claims
(by any Person that is not an Affiliate of Buyer or Kolomoisky), obligations,
debts, damages (including any damages arising from or related to business
interruption or loss of profits, consequential, indirect, speculative or
punitive damages), liquidated damages, liabilities, costs, expenses and
reasonable legal fees, whether or not involving a third party claim
(collectively, "Losses")
whatsoever resulting from (a) any material
inaccuracy in or material breach of any representation or warranty when made or
deemed made by Seller in or pursuant to this Agreement or (b) any material
breach or default in performance by Seller of any of its covenants or agreements
(including those covenants and agreements that relate to the Company) set forth
in this Agreement.
  22
  6.2           BuyerIndemnity.
 
 Buyer
agrees that, from and after the date of this Agreement, it shall defend,
indemnify and hold harmless Seller, its Non-Company Affiliates, and its and
their respective representatives, officers, directors, shareholders and
Controlling Persons (the "Seller Indemnitees", and
together with the Buyer Indemnitees, each, an "Indemnitee") from and against,
and pay or reimburse the Seller Indemnitees for, any Losses (for these purposes
a bona fide claim means a claim by any Person that is not an Affiliate of any of
the Seller Parties) whatsoever resulting from (a) any material
inaccuracy in or material breach of any representation or warranty when made or
deemed made by Buyer or Kolomoisky in or pursuant to this Agreement or (b) any material
breach or default in performance by Buyer or Kolomoisky of any of their
covenants or agreements set forth in this Agreement.
 
 6.3           Indemnification
Procedure.
 
 (a)
              A
      claim (which shall include any claim in respect of a breach of any
      Warranty) hereunder (an "Indemnity Claim") shall
      be asserted by written notice from the Party asserting such Indemnity
      Claim (the "Indemnified
      Party") to the Party from whom indemnification is sought (the
      "Indemnifying
      Party").  Such notice shall include information regarding
      the nature and basis for the Indemnity Claim and an estimate of the amount
      of Losses demanded (including, to the extent practicable, a calculation of
      the alleged Losses).
 
 (b)
              If
      the Indemnity Claim relates to any claim by a third party (a "Third Party Claim"), the
      Indemnified Party shall state in the notice to the Indemnifying Party the
      nature and basis of the Third Party Claim and the amount thereof, to the
      extent known or estimable.  The Indemnifying Party shall be
      entitled at its own expense to assume the defense of the Third Party
      Claim, using legal advisers reasonably approved by the Indemnified
      Party.  The Indemnified Party shall provide the Indemnifying
      Party and its advisers with such information and assistance as the
      Indemnifying Party shall reasonably request at the cost of the
      Indemnifying Party.  If the Indemnifying Party does not promptly
      assume the defense of such Third Party Claim following notice thereof, the
      Indemnified Party shall be entitled to assume and control such
      defense.  The Indemnifying Party shall not, without the prior
      written consent of the Indemnified Party (which shall not be unreasonably
      withheld), consent to a settlement, compromise or discharge of, or the
      entry of any judgment arising from, any Third Party Claim, unless such
      settlement, compromise or discharge does not involve any finding or
      admission of any violation of Law or admission of any wrongdoing by the
      Indemnified Party and the Indemnifying Party shall (i) pay or cause
      to be paid all amounts arising out of such settlement or judgment
      concurrently with the effectiveness of such settlement, (ii) not
      encumber any of the assets of any Indemnified Party or agree to any
      restriction or condition that would apply to or adversely affect any
      Indemnified Party and (iii) obtain, as
      a condition of any settlement or other resolution, a complete and
      unconditional release of each Indemnified Party from any and all liability
      in respect of such Third Party
Claim.
 
 (c)
              The
      obligation of an Indemnifying Party shall not extend to any liability
      arising from the settlement or compromise of any action or claims brought
      against the Indemnified Party, or the admission by the Indemnified Party
      of any claim or the taking by the Indemnified Party of any action (unless
      required by Law or applicable process), which might reasonably be expected
      to prejudice the successful defense of the action or claim without, in any
      such case, the prior written consent of the Indemnifying
      Party.
  23
  6.4           Obligation to
Mitigate.
 
 Each of
the Parties agrees that each Indemnified Party shall take all commercially
reasonable steps to mitigate any Losses upon and after becoming aware of any
event or condition that would reasonably be expected to give rise to any
indemnification rights hereunder in order for any other Indemnifying Party to
have a corresponding obligation to indemnify for such Losses pursuant to Clause
6.1 or 6.2.
 
 6.5           Time
Limits.
 
 (a)
              The
      Studio 1+1 and Kino Group Warranties (other than the Fundamental Studio
      1+1 and Kino Group Warranties) shall survive the Closing until the second
      anniversary of the Closing Date.  The Studio 1+1 and Kino Group
      Tax Warranties shall survive until sixty (60) days following the
      expiration of the relevant statute of
  limitations.
 
 (b)
              Any
      Indemnity Claim notified under this Clause 6 is principal and continuing
      and accordingly shall remain in full force and effect regardless of the
      legality, validity or enforceability of any other provisions of this
      Agreement and notwithstanding the winding-up, liquidation or dissolution
      of any Party or any of its Affiliates or other incapacity or limitation of
      any Party or any of its Affiliates or any change in the status, control or
      ownership thereof.
 
 6.6           Financial
Limits.
 
 (a)
              Except
      in the case of fraud or any Termination Amount payable under Clause 5.2,
      the maximum aggregate liability of the Seller Parties, on the one hand,
      and the Buyer Parties, on the other hand, for any and all Indemnity Claims
      or other claims arising in respect of this Agreement and made prior to
      Closing shall not exceed US$500,000.  For the avoidance of
      doubt, this limitation shall be inapplicable for all such claims if the
      Closing occurs.
 
 (b)
              A
      Party shall be liable in respect of an Indemnity Claim made after Closing
      in respect of a Warranty only if the amount payable (but for this Clause
      6.6(b)) in respect of such Indemnity
Claim:
 
 (i)
              exceeds
      US$500,000; and
 
 (ii)
              when
      taken with every other Indemnity Claim for which the liability of the
      relevant Party or its Affiliates individually exceeds the relevant
      threshold for such Indemnity Claim in Clause 6.6(b)(i) and 6.6(c)(i), and
      all Indemnity Claims also exceed in aggregate US$4,000,000, in which case
      the Party shall be liable for the whole amount of all such Indemnity
      Claims and not only for the excess,
 
 provided that the
foregoing limitations shall not apply (1) in respect of any
Indemnity Claim related to any Fundamental Warranty or (2) in respect of any
Indemnity Claim made prior to Closing.
 
 (c)
              A
      Party shall be liable in respect of an Indemnity Claim made after Closing
      in respect of any Fundamental Warranty only if the amount payable (but for
      this Clause 6.6(c)) in respect of such Indemnity
  Claim:
 
 (i)
              exceeds
      US$100,000; and
  24
  (ii)
              when
      taken with every other Indemnity Claim in respect of any Fundamental
      Warranty for which the liability of the relevant Party or its Affiliates
      individually exceeds US$100,000, also exceeds in aggregate US$2,000,000,
      in which case the Party shall be liable for the whole amount of all such
      Indemnity Claims and not only for the
excess,
 
 provided that any
amount(s) payable in respect of any Indemnity Claim made pursuant to this Clause
6.6(c) shall be included in the aggregate total for the purposes of Clause
6.6(b)(ii), and provided further that
none of the foregoing limitations shall apply in respect of any Indemnity Claim
made prior to Closing.
 
 (d)
              For
      the purpose of Clauses 6.6(b) and 6.6(c) above two or more Indemnity
      Claims arising from the same set of facts, matters or circumstances or a
      series of related facts, matters or circumstances shall be treated as a
      single Indemnity Claim.
 
 (e)
              Except
      for Indemnity Claims in respect of Fundamental Warranties and except in
      the case of fraud, the maximum aggregate liability of any Party for any
      and all Indemnity Claims shall not exceed
  US$100,000,000.
 
 (f)
              The
      maximum aggregate liability of any Party for any and all Indemnity Claims
      arising out of or in connection with any breach of Warranty shall not
      exceed US$300,000,000, except in the case of fraud, in which case no
      limits shall apply.
 
 (g)
              For
      purposes of the calculation of Losses pursuant to this Clause 6, any
      materiality or similar qualification (including any monetary threshold)
      referred to in the relevant Warranty which is the subject of an Indemnity
      Claim shall be ignored.
 
 7. CONTROLLING
PARTIES; GUARANTEE
 
 7.1           Controlling
Parties.
 
 The
Parties hereby acknowledge and agree that Kolomoisky shall cause each of Buyer
and any of Kolomoisky's Affiliates, as applicable, to perform under this
Agreement and any other Transaction Documents, and Seller shall or shall cause
the Company and any of Seller's Affiliates, as applicable, to perform under this
Agreement and any other Transaction Documents.
 
 7.2           Guarantee.
 
 (a)
              Kolomoisky
      hereby absolutely, unconditionally and irrevocably undertakes to Seller as
      follows:
 
 (i)
              on
      the Pre-Closing Payment Date and on the Closing Date, as applicable, Buyer
      will have sufficient funds to pay the Pre-Closing Payment and the Closing
      Date Payment, as applicable;
 
 (ii)
              Buyer
      will pay the Adjusted Aggregate Consideration in accordance with Clause
      2.4(a)
 
 (Clauses
7.2(a)(i) and 7.2(a)(ii), collectively, the "Obligations")
  25
  provided that in no
event shall Kolomoisky’s liability under this Clause 7.2(a) exceed US$30,000,000
(the "Cap").  In
furtherance of the foregoing, Kolomoisky acknowledges that his liability
hereunder shall extend to the full amount of the Obligations, and that Seller
may, in its sole discretion, bring and prosecute a separate action or actions
against Kolomoisky for the full amount of any Obligations, subject in each case
to the Cap, regardless of whether action is brought against Buyer or any other
Person liable with respect to the Obligations or whether Buyer or any other such
Person is joined in any such action or actions.  Seller shall not be
obligated to seek any payment of the Obligations from Buyer or file any claim
relating to any Obligation in the event that Buyer becomes subject to a
bankruptcy, reorganization or similar proceeding, and the failure of Seller to
seek such payment or to file shall not affect Kolomoisky's obligations
hereunder.  If any discharge, release or arrangement (whether in
respect of the obligations of Buyer or any other person or any security for
those obligations or otherwise) is made by the Seller in whole or in part on the
faith of any payment, security or other disposition which is avoided or must be
restored in insolvency, liquidation, administration, bankruptcy or otherwise,
without limitation, then the liability of Kolomoisky under this Clause 7.2(a)
will continue or be reinstated as if the discharge, release or arrangement had
not occurred.  This is an unconditional guarantee of payment and not
of collectibility.  Kolomoisky agrees that the obligations of
Kolomoisky hereunder shall not be released or discharged, in whole or in part,
or otherwise affected by (i) the failure of
Seller to assert any claim or demand or to enforce any right or remedy against
Buyer or any other Person liable with respect to any Obligation or interested in
the transactions contemplated by this Agreement; (ii) any change in the
time, place or manner of payment of any Obligation or any rescission, waiver,
compromise, consolidation or other amendment or modification of any of the terms
or provisions of this Clause 7.2(a) or any other agreement evidencing, securing
or otherwise executed in connection with any Obligation; (iii) the addition,
substitution or release of any Person for the Obligation; (iv) any change in the
corporate existence, structure or ownership of Buyer or any other Person liable
with respect to any Obligation; (v) any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
Buyer or any other Person liable with respect to any Obligation; (vi) any lack of
validity or enforceability of this Agreement or any agreement or instrument
relating thereto; (vii) the existence of
any claim, set-off or other right that the Kolomoisky may have at any time
against Buyer or Seller or any of its Affiliates, whether in connection with any
Obligation or otherwise; (viii) the adequacy of
any other means Seller may have of obtaining payment of any Obligation; (ix) any other act or
omission that might in any manner or to any extent vary the risk of Kolomoisky
or otherwise operate as a release or discharge of Kolmoisky; or (x) any other event or
circumstance, whether similar or dissimilar to the foregoing (other than final
payment in full of an Obligation).  To the fullest extent permitted by
law, Kolomoisky hereby expressly waives any and all rights or defenses arising
by reason of any law which would otherwise require any election of remedies by
Seller.  Kolomoisky acknowledges that he will receive substantial
direct and indirect benefits from the transactions contemplated by this
Agreement and that the waivers set forth in this Clause 7.2(a) are knowingly
made in contemplation of such benefits.  Kolomoisky hereby
unconditionally and irrevocably agrees not to exercise any rights that it may
now have or hereafter acquire against Buyer or any other Person liable with
respect to any Obligations that arise from the existence, payment, performance
or enforcement of Kolomoisky’s obligation under or in respect of this Clause
7.2(a) or any other agreement in connection therewith, including without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of Seller
against Buyer or such other Person, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including without
limitation, the right to take or receive from Buyer or such other Person,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
all amounts payable under this Clause 7.2(a) shall have been paid in full in
cash (or the Obligations have been discharged).  If any amount shall
be paid to Kolomoisky in violation of the immediately preceding sentence at any
time prior to the payment in full in cash of all amounts payable under this
Clause 7.2(a), such amount shall be received and held in trust for the benefit
of Seller, shall be segregated from other property and funds of Kolomoisky and
shall forthwith be paid or delivered to Seller in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
amounts payable under this Clause 7.2(a), in accordance with the terms of this
Agreement, whether matured or unmatured, or to be held as collateral for amounts
payable under this Clause 7.2(a) thereafter arising.  Neither
Kolomoisky nor Seller may assign its rights, interests or obligations under this
Clause 7.2(a) to any other person (except by operation of law) without the prior
written consent of Seller (in the case of an assignment by Kolomoisky) or
Kolomoisky (in the case of an assignment by Seller); provided that Seller
may assign its rights, interests or obligations under this Clause 7.2(a) to any
Affiliate of Seller.
  26
  (b)
              For
      the avoidance of doubt, notwithstanding any other provision of this
      Agreement, the maximum aggregate liability of Kolomoisky for any and all
      liabilities, costs, obligations, damages and expenses arising under or in
      respect of this Agreement and any other Transaction Document shall not
      exceed US$30,000,000.
 
 8.       
    CONFIDENTIALITY
 
 8.1           Obligation.
 
 The
Parties acknowledge and agree that they (whether acting by themselves or through
their respective legal advisers, directors, officers, servants or agents or any
of them or through any company or howsoever) shall keep confidential and shall
not provide a copy of any Transaction Document or disclose, disseminate and/or
publicize, or cause or permit to be disclosed, disseminated and/or publicized,
any of the terms and conditions of any Transaction Document, and/or the
existence of any and all of the circumstances leading to this Agreement, to any
individual and/or entity not a Party to this Agreement, except to the extent
described below:
 
 (a)
              in
      response to an order of a court of competent jurisdiction, or in response
      to an appropriate subpoena or discovery request issued in the course of
      Litigation;
 
 (b)
              in
      response to (i) an inquiry
      to which by Law a response must be given or, on advice of counsel, to
      which a response is advisable or (ii) any order
      issued by a Governmental Authority or supra-governmental agency of
      competent jurisdiction;
 
 (c)
              to
      the extent necessary to report income to appropriate taxing authorities
      and/or to contest the imposition of any Tax by appropriate taxing
      authorities;
 
 (d)
              to
      such Party's respective accountants and legal advisers and to any broker
      or insurer or relevant reinsurer or retrocessionaire in all cases (other
      than disclosure to legal advisers) as may be required by contract and/or
      by Law;
 
 (e)
              in
      connection with any Litigation or arbitration proceedings between the
      Parties relating to this Agreement or any other Transaction Document;
      and
 
 (f)
              to
      the extent required or (on advice of counsel) appropriate in order to
      comply with applicable Law or stock exchange
  rules.
 
 In the
event disclosure is necessary pursuant to any of the Clauses above, the
disclosing Party shall (to the extent permitted by applicable Law) apprise the
third party to whom such disclosure is made of the confidential nature of the
information and said disclosing Party shall use its reasonable and good faith
efforts to secure the confidentiality of the information provided to any third
party.
  27
  8.2           Public
Domain.
 
 The
requirements of Clause 8.1 shall not apply to any information or data to
the extent such information has already entered the public domain (provided
always that it has not entered the public domain by reason of the disclosing
Party's breach of this Agreement, including any action by such Party's
Subsidiary).
 
 9.          
 ASSIGNMENT
 
 Except as
expressly provided herein, none of the rights of the Parties under this
Agreement may be assigned or transferred without the prior written consent of
the other Parties.
 
 10.          MISCELLANEOUS
 
 10.1         Further
Assurances.
 
 The
Parties agree that, from and after the date hereof, each of them shall, and
shall cause their respective Subsidiaries to, execute and deliver such further
instruments of conveyance and transfer and take such other action as may be
reasonably requested by any Party to carry out the purposes and intents
hereof.  The provisions of this Clause 10.1 shall survive the
Closing Date.
 
 10.2         Modification; Waiver;
Severability.
 
 Except as
specifically provided herein, this Agreement may be modified only by a written
instrument executed by all of the Parties .  If any provision of this
Agreement is held to be unenforceable for any reason, the Parties shall, acting
in good faith and using best efforts, seek to agree adjustments to such
provision, so that such provision is not avoided and in order to achieve the
intent of the Parties 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 this Agreement,
including that provision, in any other competent jurisdiction. If any provision
of this Agreement is or becomes invalid or unenforceable, in whole or in part,
this shall not affect the validity of the remaining provisions
hereof.
 
 10.3         Third Party
Rights.
 
 No term
of this Agreement shall be enforceable under the Contracts (Rights of Third
Parties) Act 1999 by any Person who is not a Party, except that the Buyer
Indemnitees and the Seller Indemnitees shall be entitled to enforce the
provisions of Clause 6 pursuant to such act as if they were a party
hereto.
 
 10.4         Entire
Agreement.
 
 This
Agreement, together with the other Transaction Documents and the documents
herein referred to, constitute the entire agreement among the Parties and
supersedes and replaces any prior agreement, understanding, undertaking or
arrangement with respect to the subject matter hereof, including for the
avoidance of doubt the Amended Framework Agreement, provided that this
Clause 10.4 shall in no event have the effect to exclude liability for
fraud.
  28
  10.5         Preparation.
 
 Each
Party acknowledges and confirms that the preparation of this Agreement has been
a joint effort of all Parties and counsel for all Parties and that it shall not
be construed for or against any individual Party on the basis solely that this
Agreement or any part thereof was drafted by or on behalf of that
Party.
 
 10.6         Specific
Performance.
  The
Parties acknowledge and agree that a breach by any Party of any of the terms of
this Agreement is likely to result in irreparable and continuing damage to the
other Parties for which there may or will be no adequate remedy at law and/or
for which damages will not be an adequate remedy, and that in the event of such
breach, any of the Parties shall be entitled to apply for injunctive relief
and/or a decree for specific performance and such other or further relief as may
be appropriate.  Notwithstanding the foregoing, the sole remedy for
any breach hereof prior to Closing shall be to seek monetary damages, which
shall be subject to the limitation set forth in Clause 6.6(a).
 
 10.7         Costs.
 
 Each
Party shall bear its own costs, including lawyers' fees, notarial fees, filing
and registration costs in relation to the preparation and negotiation of this
Agreement and any other Transaction Document, except that Buyer
shall be responsible for all Taxes arising out of or in connection with this
Agreement other than Taxes which Seller is required by law to pay or Taxes which
are levied on or relate to any date prior to the Closing Date (for which Seller
only shall be responsible).
 
 10.8     
   Notices.
 
 All
notices and other communications made in connection with this Agreement shall be
in writing.  Any notice or other communication in connection herewith
shall be deemed duly delivered and given to any other Party one (1) Business Day
after it is sent by fax, confirmed by letter sent by a reputable express courier
service, in each case, to the regular mail addresses and fax numbers set forth
below or to such other regular mail address and/or fax number as may be
specified in writing to the other Parties:
 
 if to
Buyer:
 
 Stadiou,
37A
 Aglantzia
 P.C.
2103
 Nicosia
 Cyprus
 Attn:  Michalakis
Tsitsekkos
 
 Fax:  ++357
22 336 464
  29
  if to
Kolomoisky:
 
 Igor
Valeryevich Kolomoisky
 office
602
 32,
Naberezhnaya Pobedy, 49094
 Dnipropetrovsk,
Ukraine
 Attn:  Timur
Novikov
 
 Tel.:  +380
567161551
 Fax:  +380
567161551
 
 with a
copy to Buyer.
 
 
 if to
Seller:
 
 c/o CME
Development Corporation
 52
Charles Street
 London
W1J 5EU
 Attn:
General Counsel
 
 Tel: +44
20 7127 5834
 Fax: +44
20 7127 5801
 
 
 if to the
Company:
 
 CME
Cyprus Holdings II Limited
 Arch.
Makariou III, 195
 Neocleous
House
 P.C.
3030, Limassol, Republic of Cyprus
 
 Tel.:  +357
2536 2818
 Fax: +357
2535 9262
 
 with a
copy to Seller prior to the Closing Date and to Buyer from the Closing
Date.
 
 Any Party
may give any notice or other communication in connection herewith using any
other means (including personal delivery, messenger service, facsimile, telex or
regular mail), but no such notice or other communication shall be deemed to have
been duly delivered and given unless and until it is actually received by the
individual for whom it is intended.
 
 10.9         Counterparts.
 
 This
Agreement may be executed in several counterparts, each of which shall be deemed
an original and all of which shall together constitute one and the same
agreement.
 
 11.          GOVERNING
LAW AND ARBITRATION
 
 11.1     
   Governing
Law.
 
 This
Agreement is governed by and shall be construed in accordance with English
Law.
  30
  11.2         Arbitration.
 
 (a)
              General.  Any
      dispute, controversy or claim arising out of or relating to this
      Agreement, including any question regarding its existence, validity,
      interpretation, performance or termination, shall be finally resolved by
      arbitration in accordance with the then existing Rules of Arbitration of
      the London Court of International Arbitration (the "LCIA Rules"), which are
      deemed to be incorporated by reference into this Clause 11.2, except
      to the extent modified by this Clause 11.2.  The tribunal
      shall consist of three arbitrators.  Subject to the provisions
      of Clause 11.2(c) the parties to any such arbitration shall each be
      entitled to nominate one arbitrator and the third arbitrator shall be
      appointed by the two party-nominated arbitrators.  In a
      multi-dispute the tribunal shall be appointed by the LCIA Court, unless
      the parties to such arbitration agree in writing that, for the purpose of
      Article 8.1 of the LCIA Rules, the disputant parties represent two
      separate sides for the formation of the tribunal as claimant and
      respondent respectively.  The parties expressly agree that leave
      to appeal under section 69(1) or an application for the determination of a
      preliminary point of law under section 45 of the Arbitration Act 1996 may
      not be sought with respect to any question of law arising out of an award
      or in the course of the
proceedings.
 
 (b)
              Seat and
      Language.  The seat of the arbitration shall be London,
      England.  The language of the arbitration shall be English
      except that any party to the arbitration may submit testimony or
      documentary evidence in Ukrainian or Russian and shall furnish a
      translation or interpretation of any such evidence into
      English.
 
 (c)
              Related
      Disputes.  If any dispute arising out of or relating to
      this Agreement (hereinafter referred to as a "Related Dispute") raises
      issues which are substantially the same as or connected with issues raised
      in another dispute which has already been referred to arbitration under
      this Agreement or any other Transaction Document (an "Existing Dispute"), the
      tribunal appointed or to be appointed in respect of any such Existing
      Disputes shall also be appointed as the tribunal in respect of any such
      Related Dispute.  Where, pursuant to the foregoing provisions,
      the same tribunal has been appointed in relation to two or more disputes,
      the tribunal may, with the agreement of all the parties concerned or upon
      the application of one of the parties, being a party to each of the
      disputes, order that the whole or part of the matters at issue shall be
      heard together upon such terms or conditions as the tribunal thinks
      fit.  The tribunal shall have power to make such directions and
      any interim or partial award as it considers just and
      desirable.
  31
  IN
WITNESS WHEREOF, this Agreement has been duly executed by the Parties and on the
date first written above.
  CENTRAL
      EUROPEAN MEDIA ENTERPRISES LTD.By:
                /s/ Adrian SarbuName:
                Adrian
      SarbuTitle:
                President
      and Chief Executive OfficerHARLEY
      TRADING LIMITEDBy:
                /s/ Agathoulla
  ConstantinouName:
                Agathoulla
      ConstantinouTitle:
                DirectorIGOR
      VALERYEVICH KOLOMOISKY/s/ Igor KolomoiskyCME
      CYPRUS HOLDING II LIMITEDBy:
                /s/ David SturgeonName:
                David
      SturgeonTitle:
                Director
  32
  Schedule
1
  Warranties
 
 Part
A
 
 Natural
Person Warranties1
 
 1.
              CAPACITY
      AND AUTHORITY
 
 1.1           He
has the necessary power and authority (including full legal and dispositive
capacity) to enter into, deliver, and perform his obligations under this
Agreement and each of the other Transaction Documents to which he is
party.
 
 2.
              GENERAL
      REPRESENTATIONS AND WARRANTIES
 
 2.1           The
execution and delivery by him of this Agreement and each of the other
Transaction Documents to which he is a party constitute valid and legally
binding obligations, enforceable against him in accordance with the terms
thereof, and will not violate any provision of and will not result in a breach
of the terms of (i) any Law, rule or
regulation of any Governmental Authority applicable to him or (ii) any contract,
indenture, agreement or commitment to which he is a party or bound;
 
 2.2           All
proceedings that are required to be taken, and all approvals that are required
to be obtained, by him to authorize him to execute, deliver and perform the
terms of this Agreement and each of the other Transaction Documents to which he
is a party have been taken or approved; and
 
 2.3           No
additional consent by any other Person is required to be obtained by him in
connection with his execution or performance of this Agreement or any other
Transaction Document.
 
 Legal Entity Warranties2
 
 1.
              CAPACITY
      AND AUTHORITY
 
 1.1           It
is a company duly organized and validly existing under the Laws of its
jurisdiction;
 
 1.2           It
has the necessary corporate power and authority to enter into and perform its
obligations under this Agreement and each of the other Transaction Documents to
which it is a party, and to consummate the transactions contemplated thereby;
and
 
 1.3           Each
Person signing this Agreement and any other Transaction Document on its behalf
is duly appointed and authorized to sign each such document pursuant to its
constitutional documents and/or a power of attorney duly issued to such Person
and such appointment and authorization is effective and valid.
 
 2.
              GENERAL
      REPRESENTATIONS AND WARRANTIES
 
 2.1           The
execution and delivery by it of this Agreement and each of the other Transaction
Documents to which it is a party constitute valid and legally binding
obligations, enforceable against it in accordance with the terms thereof, and
will not violate any provision of and will not result in a breach of the terms
of (i) any Law,
rule or regulation of any Governmental Authority applicable to it or (ii) any contract,
indenture, agreement or commitment to which it is a party or bound;
   1
                Applicable
      to Kolomoisky.
 2
                Applicable to Buyer, the Company
      and Seller.
 33
 2.2           All
proceedings that are required to be taken, and all approvals that are required
to be obtained, by it to authorize it to execute, deliver and perform the terms
of this Agreement and each of the other Transaction Documents to which it is a
party have been taken or approved; and
 
 2.3           Save
for approvals which may be required in connection with the Seller Restructuring
or this Agreement, as applicable, no additional consent by any other Person is
required to be obtained by it in connection with its execution or performance of
this Agreement or any other Transaction Document.
  34
  Part
B
 
 1.
              REPRESENTATIONS
      AND WARRANTIES RELATING TO BUYER OR THE
SHARES
 
 1.1           As
of the date of this Agreement and as of the Closing Date, 100% of the share
capital of Buyer is Beneficially Owned by Kolomoisky, and Buyer is under the
exclusive Control of Kolomoisky.  As of the date of this Agreement and
the Closing Date, Kolomoisky holds beneficial  title to all shares in
the capital of Buyer, free and clear of any Liens, other than Liens arising
under applicable Law.
 
 1.2           On
the Pre-Closing Payment Date and on the Closing Date, as applicable, Buyer will
have sufficient funds to pay the Pre-Closing Payment and the Closing Date
Payment, as applicable, and to effect all other transactions contemplated by
this Agreement and the Transaction Documents.  The Buyer Parties have
no knowledge of any facts or circumstances that are reasonably likely to result
in the funding contemplated in Clause 7.2 not being made available to Buyer on a
timely basis in order to consummate the transactions contemplated by this
Agreement.
 
 1.3           Buyer
has reviewed all material information in relation to its investment under this
Agreement, and it understands the risks of, and other considerations relating
to, the acquisition of the Shares and the Existing Inter-Company
Debt.
 
 1.4           It
is: (i) able, by
reason of business and financial experience, to protect its own interests in
connection with the transactions contemplated by this Agreement; (ii) able to
afford the entire loss of its investment in the Shares and the Existing
Inter-Company Debt; (iii) an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D
under the Securities Act; (iv) not a
broker-dealer or an affiliate of a broker-dealer registered pursuant to Section
15 of the Exchange Act and (v) acquiring the
Shares and the Existing Inter-Company Debt for its own account or for the
account of another institutional accredited investor with respect to which it
exercises sole investment discretion.
 
 1.5           Buyer
is acquiring the Shares and the Existing Inter-Company Debt for investment
purposes only and is not acquiring any Shares or the Existing Inter-Company Debt
with a view to or for sale in connection with any distribution of all or any
part of such Shares or the Existing Inter-Company Debt, and it will not,
directly or indirectly, Transfer all or any part of its Shares or the Existing
Inter-Company Debt (or solicit any offers to buy, purchase or otherwise acquire
or take a pledge of all or any part of such Shares or the Existing Inter-Company
Debt) except in accordance with (and to the extent applicable) (i) the registration
provisions of the Securities Act or an exemption from such registration
provisions, (ii) any applicable
state or non-U.S. securities Laws, (iii) the terms of
this Agreement, (iv) any other
applicable securities or financial services Laws and regulations of any
jurisdiction and (v) the FSMA and
subordinated legislation, rules and guidance promulgated or issued thereunder
and any other applicable Laws and regulations of the United Kingdom (all the
foregoing being collectively referred to as "Applicable
Laws").
 
 1.6           Buyer
understands that it must bear the economic risk of its investment in the Shares
and the Existing Inter-Company Debt for an indefinite period of time because,
among other reasons, the offering and sale of the Shares and the Existing
Inter-Company Debt have not been registered under the Securities Act, and the
Company has not been registered with or approved by any regulatory authority
and, therefore, the Shares and the Existing Inter-Company Debt cannot be sold
other than through a privately negotiated transaction unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available or the Issuer is subsequently registered with or
approved by a regulatory authority such that the Shares and the Existing
Inter-Company Debt may be sold other than pursuant to an applicable private
placement exemption.  It further understands that Transfers of the
Shares and the Existing Inter-Company Debt may be restricted by applicable state
and non-U.S. securities Laws, and that no market exists or is expected to
develop for the Shares and the Existing Inter-Company Debt.
  35
  1.7           None
of the cash or property that Buyer has paid or contributed, or will pay or will
contribute prior to the Closing Date, to the Company has been, or shall be,
derived from, or related to, any activity that is deemed criminal under U.K.
Law, U.S. Law, Bermuda Law, Cypriot Law or the Law of the jurisdiction in which
such activity takes place.  No contribution or payment by it to the
Company to the extent that such contribution or payment is within its control,
shall cause the Company to be in violation of any of the Anti-Money Laundering
Laws (as defined below) or the anti-money laundering Laws, rules or regulations
of any other applicable jurisdiction.
 
 1.8           Buyer
also acknowledges that (i) Seller and
its Affiliates, including the Company, may be required to comply with all
applicable anti-money laundering Laws, including the U.K. Proceeds of Crime Act
2003, Terrorism Act 2000 and Money Laundering Regulations 2003 and (ii) Seller may
be required to comply with the anti-money laundering rules of the SEC, the
NASDAQ and/or the Prague Stock Exchange (the legislation and rules referred to
in (i) and (ii) being collectively referred to as the "Anti-Money Laundering
Laws").  In addition, neither it nor any Person under its
Control is a Person identified as a terrorist organization on any relevant lists
maintained by a Governmental Authority.
  36
  Part
C – Studio 1+1 and Kino Group Warranties
 
 1.
              CAPACITY
      AND AUTHORITY
 
 1.1           Each
of the Studio 1+1 and Kino Group Entities is duly incorporated under the Laws of
its country of incorporation; and has (or will have at Closing) obtained all
material consents, licenses, approvals or authorizations of, exemptions by or
registrations with or declarations by, any Governmental Authority required by it
with respect to this Agreement and the business of the Studio 1+1 and Kino Group
as currently conducted and such consents, licenses, approvals or authorizations
of, exemptions by or registrations with or declarations by any Governmental
Authority will not be contravened by the execution or performance of this
Agreement by such Studio 1+1 or Kino Group Entity.
 
 1.2           The
execution of and the consummation of the transactions contemplated by this
Agreement or any other Transaction Document will not: violate any Law,
regulation, rule, judgment, order or other restriction of any Governmental
Authority or court to which any of the Seller Parties and any Studio 1+1 and
Kino Group Entity is subject or by which any of the Assets or their properties
are bound; or conflict with or constitute a breach of any terms or provisions of
their Constitutional Documents or other corporate documents; or conflict with or
constitute a breach of or result in a default under any contract, or any
license, permit, certificate, authorization, approval, registration or consent
granted by any Governmental Authority to which any of the Seller Parties and any
Studio 1+1 and Kino Group Entity is a party or by which any of its Assets or
properties are bound.
 
 2.
              THE
      COMPANY
 
 2.1           Immediately
prior to Closing, Seller has title and is the sole legal and Beneficial Owner of
all Shares in the Company and of all of the Closing Date Inter-Company
Debt.
 
 2.2           Other
than in connection with the acquisition of the shares or other assets of the
Studio 1+1 and Kino Group Entities pursuant to the Seller Restructuring, the
Company has never engaged in the carrying on of any trade or business or in any
activities of any sort except in connection with its incorporation, the
appointment of its officers, its providing inter-company loans to the Studio 1+1
and Kino Group Entities and the filing of documents pursuant to the Laws of the
Republic of Cyprus; and otherwise the Company does not have, and never has had,
any indebtedness, mortgages, charges, debentures, guarantees or other
commitments or liabilities (present or contingent) outstanding; does not have,
and never has had, any employees; is not, and never has been, party to any
contract; is not, and never has been, a party to any Litigation or arbitration
proceedings; is not, and never has been, the lessee of any property; and is not,
and never has been, the owner of, or interested in, any Assets whatsoever,
including the share capital of any other body corporate that is engaged in
carrying on any trade or business (other than shares of the Studio 1+1 and Kino
Group Entities).
 
 2.3           The
record books of the Company have been properly kept, are in its possession and
contain an accurate and complete record of the matters which should be dealt
with in those books in accordance with the Laws of the Republic of Cyprus and no
notice alleging that any of them is incorrect or should be rectified has been
received.
 
 2.4           All
returns, particulars, resolutions and other documents required to be filed under
relevant legislation by the Company have been duly filed and all legal
requirements in connection with the formation of the Company and issues of its
shares have been satisfied.
 
 2.5           There
are no outstanding rights, warrants, options, subscriptions, agreements or
commitments giving any Person any right to subscribe for or acquire any share
capital or other securities of the Company.
 
 3.
              STUDIO
      1+1 AND KINO GROUP ENTITIES'
SHARES
  37
  3.1           Since
the Relevant Reference Date, the Company, its Affiliates, or any Studio 1+1 and
Kino Group Entity has title to and is the legal and Beneficial Owner of its
shares in the Studio 1+1 and Kino Group Entities free and clear of any Liens
(and there is no agreement to make them subject to any Liens), other than Liens
set forth in the relevant Person's Constitutional Documents and arising under
applicable Law.
 
 3.2           The
information relating to the Studio 1+1 and Kino Group Entities listed in the
corresponding Section of the Seller Disclosure Letter is accurate and complete
in all material respects.
 
 3.3           The
shares of the Studio 1+1 and Kino Group Entities: have been duly authorized and
validly issued in compliance with all share issue procedures established by all
applicable Laws; are fully paid up; represent the entire share capital of the
relevant Studio 1+1 and Kino Group Entity; and since the Relevant Reference Date
were acquired by the registered shareholders in compliance with all applicable
Laws. Since the Relevant Reference Date, all share issuances of the relevant
Studio 1+1 and Kino Group Entities were properly and timely registered with the
appropriate authorities competent for registration of the issuance
thereof.
 
 3.4           The
Seller Restructuring has been performed and completed in compliance with all
applicable Laws (including timely compliance with any notice or notification
requirements) and no material liabilities remain outstanding in respect
therewith other than liabilities permitted by this Agreement.  So far
as Seller is aware, there are no actions, claims, proceedings, demands or
disputes in connection with the Seller Restructuring.
 
 3.5           Each
Studio 1+1 and Kino Group Entity has been duly registered with any and all local
state or municipal authorities as required by all applicable Laws; any and all
statements, certificates, excerpts, notices or other similar notifications,
including any changes and/or re-issuances thereof made since the Relevant
Reference Date when required, have been duly obtained, requested and/or notified
by each Studio 1+1 and Kino Group Entity.
 
 3.6           Since
the Relevant Reference Date, any and all payments, contributions or similar
transfers ( whether in cash or in kind) made to the share capital of each Studio
1+1 and Kino Group Entity or any other share capital increases and/or decreases
of each Studio 1+1 and Kino Group Entity have been duly performed and completed
in compliance with all applicable Laws (including timely compliance with any
notice or notification requirements).
 
 3.7           Save
for the provisions of the relevant Person's Constitutional Documents and save
for the provisions of imperative provisions of Ukrainian Law or the Law of the
jurisdiction in which the relevant Studio 1+1 and Kino Group Entity is
incorporated, the shares of the Studio 1+1 and Kino Group Entities are not
subject to any pre-emption or similar rights.
 
 3.8           Since
the Relevant Reference Date, any and all Transfers of shares of any of the
Studio 1+1 and Kino Group Entities have been duly completed in compliance with
all applicable Laws (including compliance with any and all notice or
notification requirements, rights of first refusal and/or pre-emption rights
and/or similar rights and spousal consent requirements); at all times only fully
paid shares of the Studio 1+1 and Kino Group Entities have been disposed; at all
such times considerations for all transferred shares of the Studio 1+1 and Kino
Group Entities have been duly paid to the respective vendors and there are no
outstanding liabilities in connection with any such Transfer.
 
 3.9           There
are no outstanding or authorized purchase rights, subscription rights,
conversion rights, exchange rights, rights of first refusal, pre-emptive rights
or other similar rights or commitments that could require any of the Studio 1+1
and Kino Group Entities to issue, sell, or otherwise cause to become outstanding
any shares of its capital stock or any loan capital.
 
 3.10         The
Studio 1+1 and Kino Group Entities have no Subsidiaries that are not identified
herein.
  38
  3.11         There
are no outstanding options, warrants or other rights entitling any Person or
entity to purchase or otherwise acquire from Studio 1+1 and Kino Group Entities
any shares of its capital stock or any loan capital.
 
 3.12         The
Studio 1+1 and Kino Group Entities are not holders of shares or other security
of any other company (other than the shares or other securities of other Studio
1+1 and Kino Group Entities), and none of them is a member of any partnership,
joint venture, consortium or other incorporated association (other than
memberships in trade associations).
 
 4.
              LICENSES
 
 4.1           All
of the Studio 1+1 and Kino Group Entities are and since the Relevant Reference
Date have been in compliance in all material respects with applicable Laws, and,
to the knowledge of Seller, after reasonable inquiry, are not under
investigation with respect to any material violation of any applicable
Laws.  No Laws have been proposed or enacted that would reasonably be
expected to require a material modification in the manner in which the business
of the Studio 1+1 and Kino Group is currently conducted.
 
 4.2           All
material licenses and permits required for carrying on the business of the
Studio 1+1 and Kino Group by the Studio 1+1 and Kino Group Entities (the "Studio 1+1 and Kino Group
Licenses") have been obtained by them (or will be so obtained by the
Closing Date) and are and will be on the Closing Date in full force and effect
and there are no circumstances indicating that any of those licenses or permits
is likely to be revoked or not renewed in the ordinary course.
 
 4.3           All
Studio 1+1 and Kino Group Licenses have been issued to the Studio 1+1 and Kino
Group Entities in material compliance with Ukrainian Law and in accordance with
the procedures set by Ukrainian Law and there are no evident deficiencies in the
issuance of (or criminal actions in obtaining) such Studio 1+1 and Kino Group
Licenses.
 
 4.4           No
actions, claims, proceedings, demands, disputes or liabilities in respect of the
grant or re-issuance of any of the Studio 1+1 and Kino Group Licenses are
currently pending and, so far as Seller is aware, no disputes in respect of the
holding of the Studio 1+1 and Kino Group Licenses have been filed and are
currently pending against the Studio 1+1 and Kino Group Entities.
 
 4.5           All
Studio 1+1 and Kino Group Licenses are subject to no non-compliance with any
legal or regulatory requirements which may result in the termination, revocation
or suspension of such license or permit. There is no material non-compliance
under any such Studio 1+1 and Kino Group License that has not been duly
cured.
 
 5.
              ABSENCE
      OF CERTAIN CHANGES
 
 Since 31
December 2009, the business of the Studio 1+1 and Kino Group Entities (except of
actions required due to the Seller Restructuring or as disclosed to the
supervisory board of Studio 1+1) has been conducted in the ordinary course
consistent with past practice and, to the knowledge of Seller, there has not
been:
 
 (a)
              any
      incurrence of any indebtedness by any Studio 1+1 and Kino Group Entity
      other than Inter-Company Debt;
 
 (b)
              any
      creation or other incurrence of any Lien on any material Asset of any
      Studio 1+1 and Kino Group Entity;
 
 (c)
              any
      loan, advance or capital contribution to or investment in any Person by
      any Studio 1+1 and Kino Group Entity, other than to or in a wholly-owned
      Subsidiary of any Studio 1+1 and Kino Group Entity in the ordinary course
      of business consistent with past practice or as permitted under the
      Agreement;
  39
  (d)
              any
      material damage, destruction or other casualty loss (whether or not
      covered by insurance) affecting the Studio 1+1 and Kino Group
      Entities;
 
 (e)
              any
      change in any method of accounting or accounting principles or practices
      by any Studio 1+1 and Kino Group Entity except for any such change
      required by reason of a concurrent change in U.S.
  GAAP;
 
 (f)
              any
      material Tax election made or changed, any annual Tax accounting period
      changed, any method of Tax accounting adopted or changed, any material
      amended Tax filings or claims for material Tax refunds filed, any material
      closing agreement entered into, any material proposed Tax adjustments or
      assessments, any material Tax claim, audit or assessment settled, or any
      right to claim a material Tax refund, offset or other reduction in Tax
      liability surrendered, in each case, by any Studio 1+1 and Kino Group
      Entity;
 
 (g)
              any
      sale, transfer, lease, exclusive license or other disposition of any Asset
      in excess of US$225,000, except for inventory sold in the ordinary course
      of business consistent with past practice of the Studio 1+1 and Kino Group
      Entities;
 
 (h)
              any
      amendment, cancellation, compromise or waiver of any material claim or
      right of any Studio 1+1 and Kino Group Entity; for the purposes of this
      sub-section, "material" means (i) on the date
      of this Agreement, US$500,000 and (ii) on the
      Closing Date, US$225,000; or
 
 (i)
              any
      event, development or state of circumstances that has had or would
      reasonably be expected to have, individually or in the aggregate, a
      Material Adverse Effect.
 
 6.
              CERTAIN
      FILINGS; FINANCIAL STATEMENTS
 
 6.1           Seller
is a reporting company and files annual and quarterly reports with the U.S.
Securities and Exchange Commission (the "SEC").  To the
Company's knowledge, none of the information about the Studio 1+1 and Kino Group
contained in filings of Seller made with the SEC as required by Law (the "SEC Filed Ukrainian
Information"), at the time it was filed with the SEC, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
 
 6.2           The
Studio 1+1 and Kino Group Entities have devised and maintained systems of
internal accounting controls with respect to the operations of the Studio 1+1
and Kino Group Entities sufficient to provide reasonable assurances that (i) all
transactions are executed in accordance with management's general or specific
authorization, (ii) all
transactions are recorded as necessary to permit the preparation of financial
statements in conformity with U.S. GAAP and to maintain proper accountability
for items, (iii) access to
their property and assets is permitted only in accordance with management's
general or specific authorization and (iv) recorded
accountability for items is compared with actual levels at reasonable intervals
and appropriate action is taken with respect to any differences.
 
 7.
              ASSETS
 
 7.1           All
or substantially all Assets used or employed by the Studio 1+1 and Kino Group
Entities are owned or leased by the Studio 1+1 and Kino Group Entities, free
from any Liens (other than under any leasing, hiring, or hire purchase agreement
or agreement for payment on deferred terms or factoring or other similar
agreement) and all such Assets are in the possession or under the control of the
Studio 1+1 and Kino Group Entities.
  40
  7.2           All
or substantially all Assets owned, possessed or used by the Studio 1+1 and Kino
Group Entities have been maintained in material compliance with applicable legal
requirements and the business practices customary in the television industry in
Ukraine.
 
 8.
              MATERIAL
      CONTRACTS
 
 8.1           Other
than as set forth in the Seller Disclosure Letter, no Studio 1+1 and Kino Group
Entity is a party to or bound by:
 
 (a)
              any
      agreement relating to any indebtedness (whether incurred, assumed,
      guaranteed or secured by any asset) other than Inter-Company Debt or any
      indebtedness owed by one Studio 1+1 and Kino Group Entity to any other
      Studio 1+1 and Kino Group Entity;
 
 (b)
              any
      joint venture, partnership, limited liability company or other similar
      agreements or arrangements (including any agreement providing for joint
      research, development or
marketing);
 
 (c)
              any
      agreement or series of related agreements, including any option agreement,
      relating to the acquisition or disposition of any business, capital stock
      or Assets of any other Person or any material real property (whether by
      merger, sale of stock, sale of Assets or
  otherwise);
 
 (d)
              any
      agreement relating to any interest rate, derivatives or hedging
      transaction;
 
 (e)
              any
      agreement (including any "take-or-pay" or keepwell agreement) under which
      (A) any
      Person has directly or indirectly guaranteed any liabilities or
      obligations of any of the Studio 1+1 and KinoGroup
      Entities or (B) any
      Studio 1+1 and KinoGroup Entity has directly or indirectly guaranteed any liabilities
      or obligations of any other Person (in each case other than endorsements
      for the purpose of collection in the ordinary course of
      business);
 
 (f)
              any
      other agreement, commitment, arrangement or plan that is (A) not
      made in the ordinary course of business or (B) material
      to the Studio 1+1 and KinoGroup Entities, taken as a whole;
or
 
 (g)
              any
      agreement that limits the freedom of any Studio 1+1 and Kino Group Entity
      to conduct its business in all material respects as it is currently being
      conducted.
 
 8.2           Each
agreement, commitment, arrangement or plan referred to in Section 8.1 above and
disclosed in the corresponding Section of the Seller Disclosure Letter (each a
"Material Contract") is
a valid and binding agreement of the Studio 1+1 and Kino Group Entities and is
in full force and effect, and none of the Studio 1+1 and Kino Group Entities
nor, to the knowledge after reasonable inquiry of Seller, any other party
thereto is in default or breach in any material respect under (or is alleged to
be in default or breach in any material respect under) the terms of, or has
provided or received any notice of any intention to terminate, any such Material
Contract, and, to the knowledge of Seller after reasonable inquiry, no event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute an event of default thereunder or result in a termination thereof or
would cause or permit the acceleration or other change of any material right or
obligation or the loss of any material benefit thereunder.
 
 9.
              UNDISCLOSED
      LIABILITIES; DEBTS AND
BORROWING
  41
  9.1           So
far as Seller is aware, the Studio 1+1 and Kino Group Entities have no
outstanding obligations for the payment or repayment of money, except (i) Existing
Inter-Company Debt, (ii) indebtedness owed
by a Studio 1+1 and Kino Group Entity to any other Studio 1+1 and Kino Group
Entity or (iii)
obligations which (x) were incurred
after 31 December 2009 in the ordinary course of business consistent with past
practice and (y) individually and
in the aggregate, are not materially adverse to the Studio 1+1 and Kino Group
Entities, taken as a whole.
 
 9.2           The
Studio 1+1 and Kino Group Entities do not have subsisting over the whole or any
part of their present or future revenues or Assets any Lien or any other
agreement or arrangement having a similar effect securing obligations exceeding
US$225,000.
 
 9.3           The
Studio 1+1 and Kino Group Entities are in material compliance with all
applicable Ukrainian currency control requirements.
 
 9.4           As
at the date of this Agreement, the Company and the Studio 1+1 and Kino Group
have no outstanding Third Party Financial Debt.  As at the Closing
Date, the Company and the Studio 1+1 and Kino Group have no outstanding Third
Party Financial Debt other than as permitted by this Agreement.
 
 9.5           The
transactions to be undertaken pursuant to the Transaction Documents will not
cause any breach of the terms of any Inter-Company Debt or cause any
Inter-Company Debt to become due before its stated maturity. The terms of such
Inter-Company Debt have been provided to and reviewed by the
Buyer.  No Inter-Company Debt is currently in default, and no lender
thereunder has made any claims for the bankruptcy, liquidation, winding up or
dissolution of the relevant borrower.
 
 10.
              LITIGATION
 
 10.1         Except
as disclosed in the Seller Disclosure Letter, the Studio 1+1 and Kino Group
Entities are not engaged or proposing to engage in any material Litigation,
arbitration, prosecution or other legal proceedings and, to the knowledge of
Seller after reasonable inquiry, there are no claims or actions (whether
criminal or civil) in progress, outstanding or pending against any of the Studio
1+1 and Kino Group Entities or any of their material Assets or
properties.
 
 10.2         To
the knowledge of Seller after reasonable inquiry, no governmental or official
investigation or inquiry concerning any Studio 1+1 and Kino Group Entity is in
progress and there are no circumstances which are reasonably likely to give rise
to any such investigation or inquiry.
 
 10.3         Neither
the Company nor any Studio 1+1 or Kino Group Entity is a party to the VI
Arbitration.
 
 11.
              INTELLECTUAL
      PROPERTY
 
 11.1         As
far as Seller is aware, all Persons (including current and former employees and
independent contractors) who create or contribute to material proprietary
Intellectual Property owned by any Studio 1+1 and Kino Group Entity ("Owned Intellectual Property")
have validly and irrevocably assigned to a Studio 1+1 and Kino Group Entity in
writing all of their rights therein that did not initially vest with such Studio
1+1 and Kino Group Entity by operation of Law.  Except as disclosed in
the Seller Disclosure Letter, the Owned Intellectual Property is free and clear
of any Liens.  Any material Intellectual Property used by any Studio
1+1 and Kino Group Entity but not owned by such Person is used pursuant to a
currently effective license.
 
 11.2         The
Studio 1+1 trademark and the Kino trademark are owned by a Studio 1+1 and Kino
Group Entity.
  42
  11.3         To
the knowledge of Seller after reasonable inquiry, the conduct of the on-going
business of the Studio 1+1 and Kino Group does not infringe or otherwise
conflict with the rights of any Person in respect of any Intellectual
Property.  As far as Seller is aware, none of the Owned Intellectual
Property is being infringed or otherwise used or being made available for use by
any Person without a license or permission from the Company.
 
 11.4 
       To the knowledge of Seller after
reasonable inquiry, the Studio 1+1 and Kino Group Entities have taken all
actions reasonably necessary to ensure full protection of the Owned Intellectual
Property under any applicable Law (including making and maintaining in full
force and effect all necessary filings, registrations and
issuances).  Each of the Studio 1+1 and Kino Group Entities has taken
all actions reasonably necessary to maintain the secrecy of all confidential
Intellectual Property used in the on-going business of the Studio 1+1 and Kino
Group.  To the knowledge of Seller after reasonable inquiry, none of
Studio 1+1 and Kino Group Entities is using any materialOwned
Intellectual Property in a manner that would reasonably be expected to result in
the cancellation or unenforceability of such Owned Intellectual
Property.
 
 11.5         To
the knowledge of Seller after reasonable inquiry, each Studio 1+1 and Kino Group
Entity is in compliance with all applicable contractual and legal requirements
pertaining to data protection or information privacy and security, including any
privacy policy concerning the collection or use of such data or information used
in the on-going business of the Studio 1+1 and Kino Group.
 
 12.
              EMPLOYEES;
      LABOR MATTERS
 
 12.1         Since
1 January 2006, there has not occurred or been threatened any material strike,
slowdown, picketing, work stoppage, concerted refusal to work overtime or other
similar labor activity with respect to any employees of any Studio 1+1 and Kino
Group Entity.  Each Studio 1+1 and Kino Group Entity is in material
compliance with all applicable Laws respecting labor, employment, fair
employment practices, terms and conditions of employment, workers' compensation,
occupational safety and health requirements, plant closings, wages and hours,
withholding of taxes, employment discrimination, disability rights or benefits,
equal opportunity, labor relations, employee leave issues and unemployment
insurance and related matters. Except for instances that would not be,
individually or in the aggregate, material, no Studio 1+1 and Kino Group Entity
has received notice of any charge or complaint against it pending before any
Governmental Authority responsible for the prevention of unlawful employment
practices, or any complaint or lawsuit against any Studio 1+1 and Kino Group
Entity concerning employees or former employees of any Studio 1+1 and Kino Group
Entity alleging employment discrimination or violations of occupational safety
and health requirements pending before a court of competent
jurisdiction.
 
 12.2      
  There are no members of the management of the Seller or its
Affiliates who might be entitled to any fee or commission from the Company or
any of its Subsidiaries as a result of this Agreement.
 
 13.
              AFFILIATE
      TRANSACTIONS
 
 Any
transaction between any Studio 1+1 or Kino Group Entity, on the one hand, and
the Seller or Non-Company Affiliate, on the other hand, that will be in force
after the Closing Date is on arms’ length terms.
 
 14.
              TAX
      MATTERS
 
 14.1         All
Tax Returns required to be filed by, on behalf of or with respect to any Studio
1+1 and Kino Group Entity have been duly and timely filed and are complete and
correct in all material respects.  All Taxes (whether or not reflected
on such Tax Returns) required to be paid with respect to, or that could give
rise to a Lien on the Assets of any Studio 1+1 and Kino Group Entity have been
duly paid and all Taxes required to be withheld by any Studio 1+1 and Kino Group
Entity have been duly and timely withheld, and such withheld Taxes have been
either duly and timely paid to the proper Governmental Authority or properly set
aside in accounts for such purpose, except where any such Taxes are being
contested in good faith (which contest is documented by a contemporaneous
writing).
  43
  14.2         All
accounting entries (including charges and accruals) for Taxes with respect to
any Studio 1+1 and Kino Group Entity reflected on the books of such Studio 1+1
and Kino Group Entity (excluding any provision for deferred income taxes
reflecting either differences between the treatment of items for accounting and
income tax purposes or carryforwards) are adequate to cover any material Tax
liabilities accruing through the end of the last period for which such Studio
1+1 and Kino Group Entity ordinarily records items on their respective
books.  Each Studio 1+1 and Kino Group Entity is in possession and
control of all records and documentation that it is required by Law to hold,
preserve and retain for any Tax purpose and of information reasonably required
and customarily held to enable it to compute its liability to Tax incurred on or
before the Closing Date.
 
 14.3         No
Studio 1+1 and Kino Group Entity (i) has, as far
as Seller is aware, received or applied for a Tax ruling that would be binding
upon any Studio 1+1 and Kino Group Entity after the Closing Date, (ii) is or has
been a member of any affiliated, consolidated, combined or unitary group for
purposes of filing Tax Returns or paying Taxes or (iii) has any
liability for the Taxes of any person, whether pursuant to any Tax sharing,
indemnity agreement or other contractual agreement or otherwise.
 
 14.4         Except
as disclosed in the Seller Disclosure Letter, no Taxes with respect to any
Studio 1+1 and Kino Group Entity are currently under audit, examination or
investigation by any Governmental Authority or the subject of any judicial or
administrative proceeding.
 
 15.
              POWERS
      OF ATTORNEY
 
 Except as
disclosed in the Seller Disclosure Letter, as at Closing, there are no powers of
attorney issued by any Studio 1+1 and Kino Group Entity or the Company which
authorize a Person to act on behalf of such Studio 1+1 and Kino Group Entity or
the Company other than in the ordinary course of business.
 
 16.
              DISCLOSURE
      OF INFORMATION
 
 Seller
has not, to its knowledge, intentionally concealed from the Buyer Parties any
fact or circumstance of which it was aware relating to the Studio 1+1 and Kino
Group Entities or fraudulently misled the Buyer Parties in their responses to
information requests and due diligence enquiries.
 
 17.
              NO
      BROKERS
 
 There is
no investment banker, broker, finder or other intermediary retained by or
authorized to act on behalf of the Company, Seller or any Studio 1+1 and Kino
Group Entity who might be entitled to any fee or commission from the Company or
any of its Subsidiaries upon consummation of the transactions contemplated by
this Agreement.
 
 18.
              PRE-CLOSING
      ACCOUNTING NOTICE
 
 As at the
Closing Date, the Pre-Closing Accounting Notice shall have been prepared in good
faith in accordance with Schedule 8 with no mathematical errors.
  
 44