09:07 TVB<00511> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Television Broadcasts Limited (Incorporated in Hong Kong with limited liability) CONNECTED TRANSACTION AND CONTINUING CONNECTED TRANSACTION WAIVER APPLICATION On 26 June 2002, TVBSE entered into a deal memorandum with MBNS for the supply of the TVB8 and Xing He channels to MBNS for broadcast on the pay television services operated by MBNS and its affiliate company from 16 April 2002 to 30 September 2004 in Brunei and Malaysia. The supply of TVB8 channel is on an exclusive basis whereas TVBSE may grant the Xing He channel to other parties for broadcast on free to air television stations in the territories. The parties have agreed to negotiate and enter into a formal agreement to set out the terms of the deal memorandum. As the transactions under the deal memorandum and the proposed agreement are to take place on an ongoing basis for the period from 16 April 2002 to 30 September 2004 in accordance with the provisions thereof, TVB has applied to the Stock Exchange for a conditional waiver from strict compliance with the requirements of the Listing Rules to issue further press announcements in respect of the transactions for the remainder of the term subject to a cap amount of HK$30 million and other conditions as set out in the section headed "Continuing Connected Transactions : Waiver Conditions" in this announcement. Details of the deal memorandum and the proposed agreement will be included in the next published annual report and accounts of TVB during the continuance of the transaction. DETAILS OF THE DEAL MEMORANDUM TVBSE is the owner and operator of the Mandarin language channels known as TVB8 and Xing He and has the sole control of the content of these channels. TVB8 and Xing He channels are broadcast by TVBSE worldwide. Pursuant to the deal memorandum entered into between TVBSE and MBNS on 26 June 2002, TVBSE agrees to supply TVB8 channel on an exclusive basis and Xing He channel (which TVBSE may grant rights to others to broadcast on free-to-air television stations) for broadcast on the pay television services operated by MBNS or its affiliate company in Malaysia and Brunei. The supply period is from 16 April 2002 to 30 September 2004 whereas the obligation to pay fees for TVB8 channel and Xing He channel commences from 16 April 2002 and 1 July 2002 respectively. Further, MBNS agrees not to edit and remove any content of the said channels unless it contravenes the censorship standards, laws, codes regulating advertising, sponsorship and branding of the respective territories. The amount of fees payable by MBNS for the broadcast right varied according to the number of residential subscribers of the pay television services in the territories whereas the amount of fees payable in respect of hotels and commercial establishments is a percentage share of the subscription fees received from the same by MBNS. In addition to the above, TVBSE will be entitled to a percentage share of such advertising revenue received by MBNS through advertisements, sponsorship and commercials after deduction of discounts, bonus and commissions given to advertisers and agents by MBNS. The parties have agreed to negotiate and enter into a formal agreement setting out the terms of the arrangement as described above.