Central European Media Enterprises Ltd.
3,000,000 Shares
Class A Common Stock
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
New York, New York
October __, 1996
XXXXXXXX XXXXXXXX & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
As Representatives of
the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxx Xxxxxxxx & Co. Incorporated
Equitable Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
Central European Media Enterprises Ltd., a Bermuda company (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters"), an aggregate of 3,000,000 shares of Class A Common Stock, par
value $.01 per share (the "Common Stock"). The 3,000,000 shares of Common Stock
to be sold by the Company are herein referred to as the "Firm Securities." In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional 450,000 shares of Common Stock (the "Option
Securities"), on the terms and for the purposes set forth in Section 2 hereof.
The Firm Securities and the Option Securities are herein collectively referred
to as the "Securities."
1. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-12699),
and as a part thereof a preliminary prospectus, in respect of the
Securities, has been filed with the Securities and Exchange Commission
(the "Commission") in the form heretofore delivered to you and, with
the exception of exhibits to the registration statement, to you for
each of the other Underwriters; if such registration statement has not
become effective, an amendment (the "Final Amendment") to such
registration statement, including a form of final prospectus, necessary
to permit such registration statement to become effective, will
promptly be filed by the Company with the Commission; if such
registration statement has become effective and any post-effective
amendment to such registration statement has been filed with the
Commission prior to the execution and delivery of this Agreement, which
amendment or amendments shall be in form acceptable to you, the most
recent such amendment has been declared effective by the Commission; if
such
registration statement has become effective, a final prospectus (the
"Rule 430A Prospectus") relating to the Securities containing
information permitted to be omitted at the time of effectiveness by
Rule 430A of the General Rules and Regulations of the Commission (the
"Rules") under the Securities Act of 1933, as amended (the "Act"), will
promptly be filed by the Company pursuant to Rule 424(b) of the Rules
(any preliminary prospectus filed as part of such registration
statement being herein called a "Preliminary Prospectus," such
registration statement as amended at the time that it becomes or became
effective, or, if applicable, as amended at the time the most recent
post-effective amendment to such registration statement filed with the
Commission prior to the execution and delivery of this Agreement became
effective (the "Effective Date"), including all documents incorporated
by reference into the Rule 430A Prospectus or the Prospectus and all
exhibits thereto and all information deemed to be a part thereof at
such time pursuant to Rule 430A of the Rules, being herein called the
"Registration Statement" and the final prospectus (including all
documents incorporated therein by reference) relating to the Securities
in the form first filed pursuant to Rule 424(b)(1) or (4) of the Rules
or, if no such filing is required, the form of final prospectus
included in the Registration Statement, together with pricing-related
information, a term sheet or an abbreviated term sheet, being herein
called the "Prospectus");
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the Rules, and did
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through you expressly for use therein;
(c) On the Effective Date and the date the Prospectus is filed
with the Commission, and when any further amendment or supplements
thereto become effective or are filed with the Commission, as the case
may be, and on the Firm Closing Date and any Option Closing Date, the
Registration Statement, the Prospectus and such amendment or
supplements did and will conform in all material respects to the
requirements of the Act and the Rules, and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through you expressly for use therein;
(d) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement; the
execution, delivery and performance by the Company of its obligations
under this Agreement have been duly and validly authorized by all
requisite corporate action of the Company; and this Agreement has been
executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms;
(e) Neither the Company nor any of its Subsidiaries has
sustained since December 31, 1995, any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, which loss or interference is
material to the Company and its Subsidiaries, taken as a whole; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been, and
prior to the Time of Delivery (as defined in Section 4 hereof) there
will not be, any change in the capital stock or any material increase
in short-term debt or long-term debt of the Company or any of its
Subsidiaries, or any material adverse change, or any development
involving a prospective material adverse exchange, in or affecting the
general affairs, management, financial position, stockholders'
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equity or results of operations of the Company and its Subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus. The term "Subsidiary" as used herein shall mean any person,
firm, partnership or corporation ("Legal Entity") in which the Company
has a direct or indirect equity or voting interest;
(f) The Company and its Subsidiaries have good and marketable
title to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects, except such as are described or
contemplated by the Prospectus, or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
Subsidiaries, and any real property and buildings held under lease by
the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such real property and buildings by the Company and its
Subsidiaries;
(g) Each license pursuant to which the Company conducts its
broadcast operations ("License") has been duly and validly issued to
the Legal Entity specified in the Registration Statement as holding
such License pursuant to the licensing procedures of the jurisdiction
granting the same, and each such License is in full force and effect.
To the best of the Company's knowledge, except as disclosed in the
Prospectus, where broadcast properties are in operation, the broadcast
property to which each such License pertains is being operated
substantially in accordance with the terms of the applicable License
and the relevant legislation of the issuing jurisdiction or pursuant to
applicable exemptions or other relief therefrom, which exemptions or
other relief have been described in the Prospectus. To the best of the
Company's knowledge, at this time and as of the closing date (the
"Closing Date"), except as set forth or contemplated in the Prospectus
(i) no application, action or proceeding is or will be pending for the
modification of any License, (ii) no application, action or proceeding
is or will be pending or threatened that may result in the revocation,
modification, nonrenewal or suspension of any License, or the
imposition of any administrative sanction, and (iii) the issuance and
sale of the Securities hereunder will not lead to the revocation,
modification, nonrenewal or suspension of any License, or the
imposition of any administrative sanction;
(h) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Bermuda,
with power and authority (corporate and other) to own its properties
and to conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases property, or conducts any
business, so as to require such qualification (except where the failure
to so qualify would not have a material adverse effect on the Company
or the Company and its Subsidiaries considered as a whole); and each of
the Company's Subsidiaries has been duly incorporated or, if not a
corporation, duly organized, and is validly existing as a corporation
or other legal Entity in good standing under the laws of its
jurisdiction of incorporation or organization, and has been duly
qualified as a foreign corporation or other Legal Entity for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases property, or conducts any
business, so as to require such qualification (except where the failure
to so qualify would not have a material adverse effect on the Company
and its Subsidiaries considered as a whole); and the Company has all
necessary corporate power and all governmental authorizations, permits
and approvals required to own its properties and conduct its business
as described in the Prospectus;
(i) The Company has an authorized, issued and outstanding
capitalization as set forth in the Registration Statement, and all the
issued shares of Common Stock have been duly and validly authorized and
issued, are fully paid and non-assessable, are free of any preemptive
or similar rights, were issued and sold in compliance with the
applicable federal, foreign and state securities laws and conform in
all material respects to the description in the Prospectus; except as
described in the Prospectus, there are no outstanding options, warrants
or other rights calling for the issuance of, and there are no
commitments, plans or
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arrangements to issue, any shares of capital stock of the Company or
any security convertible or exchangeable or exercisable for capital
stock of the Company; there are no holders of securities of the Company
who, by reason of the filing of the Registration Statement have the
right (and have not waived such right) to request the Company to
include in the Registration Statement securities owned by them; and all
of the issued shares or other interests in the capital of each
Subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned by the Company
or one or more of the Company's Subsidiaries free and clear of all
liens, encumbrances, equities or claims; and there are not outstanding
options, warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue, any shares of
capital stock of any Subsidiary or any security convertible or
exchangeable or exercisable for capital stock of any Subsidiary;
(j) The Securities to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable, and will not
be subject to any lien, encumbrance, preemptive right or any other
claim and conform in all material respects to the description of the
Common Stock in the Prospectus are duly authorized for quotation and
will be quoted, subject to official notice of issuance, on Nasdaq
National Market;
(k) The performance of this Agreement and the consummation of
the transactions herein contemplated will not conflict with, or result
in a breach or violation of, any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound or to which any of the property or assets of
the Company or any of its Subsidiaries is subject, nor will such action
result in any violation of the provisions of the Memorandum of
Association or the bye-laws or any other equivalent corporate
governance document, in each case as amended, of the Company or any of
its Subsidiaries, or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is required for the
issue and sale of the Securities or the consummation of the other
transactions contemplated by this Agreement, except the registration
under the Act of the Securities, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state or foreign securities or Blue Sky laws in connection with
the purchase and distribution of the Securities by the Underwriters;
(l) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its Subsidiaries is a party or of which any property of the Company
or any of its Subsidiaries is the subject, other than litigation
incident to the business conducted by the Company and its Subsidiaries
which will not individually or in the aggregate have a material adverse
effect on the financial position, stockholders' equity or results of
operations of the Company and its Subsidiaries considered as a whole;
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened or
contemplated by others; and neither the Company nor any of its
Subsidiaries is involved in any labor dispute, nor, to the Company's
knowledge, is any labor dispute threatened;
(m) The Company and its Subsidiaries have such licenses,
permits and other approvals or authorizations of and from governmental
or regulatory authorities ("Permits") as are necessary under applicable
law to own their prospective properties and to conduct their respective
businesses in the manner now being conducted and as described in the
Prospectus; and the Company and its Subsidiaries have fulfilled and
performed all of their respective obligations with respect to such
Permits, and no event has occurred which allows, or after notice or
lapse of time, or both, would allow, revocation or termination thereof
or result in any other material impairment of the rights of the holder
of any such Permits;
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(n) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its Subsidiaries taken as a
whole, except as described in or contemplated by the Prospectus;
(o) Xxxxxx Xxxxxxxx & Co. who have certified certain
consolidated financial statements of (i) the Company and its
consolidated Subsidiaries, (ii) XXXX, and (iii) Xxxxxxx Xxxx &
Fernsehen GmbH ("FFF") are independent public accountants as required
by the Act and the Rules;
(p) The consolidated financial statements of the Company and
the financial statements of XXXX, FFF and any other unconsolidated
associated company in which the Company has a financial interest (the
"Unconsolidated Associated Companies") included in the Registration
Statement and the Prospectus present fairly the financial condition,
the results of operations and the cash flows of the Company (including
its predecessor), its consolidated Subsidiaries and the Unconsolidated
Associated Companies as of the dates and for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as
otherwise stated therein; and the other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus is accurately presented and, to the extent such information
and data is derived from the financial statements and books and records
of the Company and its consolidated Subsidiaries, and the
Unconsolidated Associated Companies, no other financial statements are
required to be included in the Registration Statement and the
Prospectus;
(q) The Company is aware of no statutes or governmental
regulations, or any contracts or other documents that are required to
be described in or filed as exhibits to the Registration Statement
which are not described therein or filed or incorporated by reference
as exhibits thereto;
(r) The Company and its Subsidiaries own or possess adequate
patent rights or licenses or other rights to use patent rights,
inventions, trademarks, service marks, trade names and copyrights
necessary to conduct the general business now operated by them and
neither the Company nor any of its Subsidiaries has received any notice
of infringement of, or conflict with, asserted rights of others with
respect to any patent, patent rights, inventions, trademarks, service
marks, trade names or copyrights which, singly or in the aggregate,
could materially adversely affect the business, operations, financial
condition, income or business prospects of the Company and its
Subsidiaries considered as a whole;
(s) In addition to the rights described in paragraph (s)
hereof, the Company and its Subsidiaries have rights under appropriate
binding agreements to broadcast the programming they currently
broadcast, and are scheduled to broadcast. To the best of the Company's
knowledge, broadcasting of these programs by the Company and its
Subsidiaries pursuant to the rights granted under such agreements does
not and will not violate any copyright or other laws relating to the
use of another party's intellectual property;
(t) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of their Memorandum of Association
or bye-laws or equivalent corporate governance document, in each case
as amended to the date hereto, or of any law, ordinance, administrative
or governmental rule or regulation applicable to the Company or any of
its Subsidiaries, or of any decree of any court or
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governmental agency or body having jurisdiction over the Company or any
of its Subsidiaries, the violation of which could have a material
adverse effect on the Company or any of its Subsidiaries;
(u) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, bank loan or credit agreement,
lease or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which any of them is bound;
(v) The Company and its Subsidiaries have timely filed all
necessary tax returns and notices and have paid all federal, state,
county, local and foreign taxes of any nature whatsoever for all tax
years through December 31, 1995, to the extent such taxes have become
due. The Company has no knowledge, or any reasonable grounds to know,
of any tax deficiencies which would have a material adverse effect on
the Company or any of its Subsidiaries; the Company and its
Subsidiaries have paid all taxes which have become due, whether
pursuant to any assessments, or otherwise, and there is no further
liability (whether or not disclosed on such returns) or assessments for
any such taxes, and no interest or penalties accrued or accruing with
respect thereto, except as may be set forth or adequately reserved for
in the financial statements included in the Registration Statement; the
amounts currently set up as provisions for taxes or otherwise by the
Company and its Subsidiaries on their books and records are sufficient
for the payment of all their unpaid federal, foreign, state, county and
local taxes accrued through the dates as of which they speak, and for
which the Company and its Subsidiaries may be liable in their own
right, or as a transferee of the assets of, or as successor to any
other corporation, association, partnership, joint venture or other
Legal Entity;*
(w) During the period of 120 days after the date hereof,
except pursuant to this Agreement and to its 1994 and 1995 Stock Option
Plans, the Company will not offer, sell or otherwise dispose of any
capital stock of the Company, directly or indirectly, without the prior
written consent of the Representatives.
(x) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences;
(y) No labor disturbance by the employees of the Company or
any of its Subsidiaries exists or, to the best knowledge of the
Company, is imminent which might be expected to have a material adverse
effect on the business, properties, financial condition, results of
operations or prospects of the Company and its Subsidiaries considered
as a whole;
(z) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or
on behalf of the Underwriters to Bermuda or to any political
subdivision or taxing authority thereof or therein in connection with
the sale and delivery by the Underwriters of the Securities to the
initial purchasers thereof;
--------
* The Company has not paid its Netherlands tax because the
amount due has not been determined. The Company does not
believe this will result in a material penalty.
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(aa) The indemnification and contribution provisions set forth
in Section 8 hereof do not contravene Bermuda law or public policy;
(ab) Neither the Company nor any of its Subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any of
its Subsidiaries has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of
a character required to be disclosed in the Prospectus;
(ac) The Company is not an investment company or a company
controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended;
(ad) Neither the Company nor any of its Subsidiaries will be a
Foreign Personal Holding Company ("FPHC") as defined in Section 552 of
the Internal Revenue Code of 1986, as amended (the "Code"), for its
taxable year ending December 31, 1996, and to the best of the Company's
knowledge, neither the Company nor any of its Subsidiaries will become
FPHCs in the future by reason of the nature of their income. In
addition, neither the Company nor any of its Subsidiaries will be a
Passive Foreign Investment Company ("PFIC"), as defined in Section 1296
of the Code, for its taxable year ending December 31, 1996, and to the
best of the Company's knowledge, neither the Company nor its
Subsidiaries will become PFICs in the future by reason of the nature of
their income or assets. The Company will take such reasonable efforts
as are necessary to structure its and its Subsidiaries' operations to
avoid any of them becoming an FPHC or a PFIC. Should the Company or any
of its Subsidiaries become a PFIC in any year, the Company will provide
sufficient information to its shareholders to enable them to elect to
have the PFIC treated as a qualified electing fund for purposes of
Section 1295 of the Code;
(ae) The Company has not taken and will not take, directly or
indirectly, any action designed to, or which has constituted or that
might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities, in each case as defined under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the General Rules and Regulations of the Commission thereunder;
(af) The Company has validly and irrevocably submitted to the
jurisdiction of any U.S. Federal or State court located in the Borough
of Manhattan, the City of New York, and has designated The
Xxxxxxxx-Xxxx Corporation System, Inc. as its agent for service of
process; and
(ag) The Company is eligible to use Form S-3 to register the
offer and sale of the Securities under the Act.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the several Underwriters an aggregate of 3,000,000
Firm Securities, and each of the Underwriters agrees to purchase from the
Company, at a purchase price of $______ per share, the respective aggregate
number of Firm Securities determined in the manner set forth below. The
obligation of each Underwriter to the Company shall be to purchase that portion
of the number of shares of Common Stock to be sold by the Company pursuant to
this Agreement as the number of Firm Securities set forth opposite the name of
such Underwriter on Schedule I bears to the total number of Firm Securities to
be purchased by the Underwriters pursuant to this Agreement, in each case
adjusted by you such that no Underwriter shall be obligated to purchase Firm
Securities other than in 100 share amounts. In making this Agreement, each
Underwriter is contracting severally and not jointly.
In addition, subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriters, as required (for the sole
purpose of covering over-allotments in the sale of the Firm Securities), up to
450,000 Option Securities at the purchase price per share of the Firm Securities
being sold by the Company as stated in the preceding paragraph. The right to
purchase the Option Securities may be exercised by your giving
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48 hours' prior written notice to the Company of your determination to purchase
all or a portion of the Option Securities. Such notice may be given at any time
within a period of 30 days following the date of this Agreement. Option
Securities shall be purchased severally for the account of each Underwriter in
proportion to the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule I hereto. No Option Securities shall be delivered to or
for the accounts of the Underwriters unless the Firm Securities shall be
simultaneously delivered or shall theretofore have been delivered as herein
provided. The respective purchase obligations of each Underwriter shall be
adjusted by you so that no Underwriter shall be obligated to purchase Option
Securities other than in 100 share amounts. The Underwriters may cancel any
purchase of Option Securities at any time prior to the Option Securities
Delivery Date (as defined in Section 4 hereof) by giving written notice of such
cancellation to the Company.
3. Upon the authorization by you of the release of the
Securities, the Underwriters propose to offer the Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Firm Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable in New York Clearing House funds, to the
order of the Company, for the purchase price of the Firm Securities being sold
by the Company in New York, New York, at 9:30 A.M., New York City time, on
November 14, 1995, or at such other time, date and place as you and the Company
may agree upon in writing, such time and date being herein called the "Time of
Delivery."
Certificates in definitive form for the Option Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price thereof by certified or
official bank check or checks, payable in New York Clearing House funds, to the
order of the Company, for the purchase price of the Option Securities, in New
York, New York, at such time and on such date (not earlier than the Time of
Delivery nor later than ten business days after giving of the notice delivered
by you to the Company with reference thereto) and in such denominations and
registered in such names as shall be specified in the notice delivered by you to
the Company with respect to the purchase of such Option Securities. The date and
time of such delivery and payment are herein sometimes referred to as the
"Option Securities Delivery Date." The obligations of the Underwriters shall be
subject, in their discretion, to the condition that there shall be delivered to
the Underwriters on the Option Securities Delivery Date opinions and
certificates, dated such Option Securities Delivery Date, referring to the
Option Securities, instead of the Firm Securities, but otherwise to the same
effect as those required to be delivered at the Time of Delivery pursuant to
Section 7(d), 7(e), 7(f), 7(g), 7(h), 7(i), 7(j), 7(k), 7(l), 7(m), 7(n), 7(o)
and 7(q), provided, that if the Option Securities Delivery Date and the Closing
Date are the same, additional deliveries described by this section shall not be
required.
Certificates for the Firm Securities and the Option Securities so to be
delivered will be in good delivery form, and in such denominations and
registered in such names as you may request not less than 48 hours prior to the
Time of Delivery and the Option Securities Delivery Date, respectively. Such
certificates will be made available for checking and packaging in New York, New
York, at least 24 hours prior to the Time of Delivery and the Option Securities
Delivery Date.
5. The Company agrees with each of the Underwriters:
(a) If the Registration Statement has not become effective, to
promptly file the Final Amendment with the Commission and use its best
efforts to cause the Registration Statement to become effective; if the
Registration Statement has become effective, to promptly file the Rule
430A Prospectus with the Commission; to make no further amendment or
any supplement to the Registration Statement or Prospectus which shall
be reasonably disapproved by you after reasonable notice thereof; to
advise you,
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promptly after it receives notice thereof of the time when the
Registration Statement, or any amendment thereto, or any amended
Registration Statement has become effective or any supplement to the
Prospectus or any amended Prospectus has been filed, of the issuance by
the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of
the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any
such qualification to use promptly its best efforts to obtain
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction, and
in each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by
the laws of such jurisdiction to continue each qualification in effect
for a period of not less than one year from the Effective Date;
(c) To furnish the Underwriters with copies of the
Registration Statement (two of which will be signed and will include
all exhibits), each Preliminary Prospectus, the Prospectus and all
amendments or supplements thereto and all documents incorporated by
reference into the Registration Statement in such quantities and in
such form or forms as you may from time to time reasonably request, and
if delivery of a prospectus is required by law in connection with sales
of Securities at any time prior to the expiration of nine months after
the time of issue of the Prospectus and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make statements
therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or if for any other
reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Act, to notify you and upon your request to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Securities at any
time nine months or more after the time of issue of the Prospectus,
upon your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of
the Act;
(d) To make generally available to its stockholders as soon as
practicable, but in any event not later than 90 days after the close of
the period covered thereby, an earnings statement in form complying
with the provisions of Section 11(a) of the Act and Rule 158 of the
Rules covering a period of 12 consecutive months beginning not later
than the first day of the Company's fiscal quarter next following the
Effective Date;
(e) To file promptly all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act
subsequent to the Effective Date and during any period when the
Prospectus is required to be delivered;
(f) For a period of five years from the Effective Date, to
furnish to its stockholders after the end of each fiscal year an annual
report (including a combined or consolidated balance sheet and
statements
-9-
of income, cash flow and stockholders' equity of the Company and its
Subsidiaries certified by independent public accountants) and, as soon
as practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the
Effective Date), to file with the Commission combined or consolidated
summary financial information of the Company and its Subsidiaries for
such quarter in reasonable detail;
(g) During a period of five years from the Effective Date, to
furnish to you copies of all reports or other communications (financial
or other) furnished to its stockholders, and deliver to you (i) as soon
as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and
(ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably
request in connection with your obligations hereunder;
(h) During the period of 120 days after the date hereof,
except pursuant to this Agreement and to its 1994 and 1995 Stock Option
Plans, the Company will not offer, sell or otherwise dispose of any
capital stock of the Company, directly or indirectly, without the prior
written consent of the Representatives; and
(i) That it will not take, directly or indirectly, any action
designed to, or that might reasonably be expected to cause or result
in, stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Securities.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid: (i) the fees, disbursements and
expenses of counsel and accountants for the Company, and all other expenses, in
connection with the preparation, printing and filing of the Registration
Statement and the Prospectus and (except as otherwise provided in Section 5(c)
hereof) amendments and supplements thereto and the furnishing of copies thereof,
including charges for mailing, air freight and delivery and counting and
packaging thereof and of any Preliminary Prospectus and related offering
documents to the Underwriters and dealers; (ii) the cost of printing this
Agreement, the Agreement Among Underwriters, the Selling Agreement,
communications among the Company, the Underwriters and the selling group and the
Preliminary and Supplemental Blue Sky Memoranda; (iii) all expenses in
connection with the qualification of the Securities for offering and sale under
state securities laws provided in Section 5(b) hereof, including filing and
registration fees and the fees, disbursements and expenses for counsel for the
Underwriters in connection with such qualification and in connection with Blue
Sky surveys; (iv) the filing fees incident to securing any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Securities; and (v) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section 6, including the fees of the Company's Transfer Agent and
Registrar, the cost of any stock transfer taxes on sale of the Securities to the
Underwriters, the cost of the Company's personnel and other internal costs, the
cost of printing and engraving the certificates representing the Securities and
all expenses and taxes incident to the sale and delivery of the Securities to be
sold by the Company to the Underwriters hereunder.
It is understood, however, that, except as provided in this Section 6,
Section 8 and Section 12 hereof, the Underwriters will pay all their own costs
and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all its
obligations hereunder theretofore to be performed, and the following additional
conditions:
-10-
(a) The Registration Statement shall have become effective,
and you shall have received notice thereof not later than 10:00 P.M.,
New York City time, on the date of execution of this Agreement, or at
such other time as you and the Company may agree; if required, the
Prospectus shall have been filed in accordance with Rule 424(b)(1) or
(4) of the Rules not later than 48 hours following the execution of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission;
and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable
satisfaction;
(b) All corporate proceedings and related legal and other
matters in connection with the organization of the Company and the
registration, authorization, issue, sale and delivery of the Securities
shall have been reasonably satisfactory to Akin, Gump, Strauss, Xxxxx &
Xxxx, L.L.P., counsel to the Underwriters, and Akin, Gump, Strauss,
Xxxxx & Xxxx, L.L.P. shall have been furnished with such papers and
information as they may reasonably have requested to enable them to
pass upon the matters referred to in this subsection;
(c) You shall not have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact or omits to state a fact
which in your judgment is in either case material and in the case of an
omission is required to be stated therein or is necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(d) Xxxxxxx, Xxxx & Xxxxxxx, Bermuda counsel to the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly and validly
incorporated and is validly existing as a corporation in good
standing under the laws of Bermuda (meaning, among other
things, that the Company has not failed to make any filing
with any Bermuda governmental authority or to pay any Bermuda
governmental fee or tax, the failure of which would make the
Company liable to be struck from the Register of Companies and
thereby cease to exist under the laws of Bermuda); and the
Company has all necessary corporate power to own its
properties and conduct its business as described in the
Prospectus;
(ii) The Company has an authorized capitalization as
set forth in the Registration Statement and all the issued
shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and
nonassessable and are free of any preemptive rights. The
Securities being sold by the Company have been duly and
validly authorized and, when duly countersigned by the
Company's Transfer Agent and Registrar and issued and
delivered in accordance with the provisions of the
Registration Statement and this Agreement, will be duly and
validly issued, fully paid and nonassessable; and the
Securities conform to the description of the Common Stock in
the Prospectus;
(iii) This Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid
and binding agreement of the Company enforceable in accordance
with its terms, except as enforceability of the same may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally
and except as enforceability of those provisions relating to
indemnity may be limited by the securities laws and principles
of public policy in Bermuda or in the United States;
-11-
(iv) The Company has full corporate power and
authority to execute, deliver and perform this Agreement, and
the execution, delivery and performance of this Agreement, the
consummation of the transactions herein contemplated and the
issue and sale of the Securities and the compliance by the
Company with all the provisions of this Agreement will not
result in any violation of the provisions of the Memorandum of
Association or the by-laws, in each case as amended, of the
Company, any statute or, to the best of such counsel's
knowledge, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Company;
(v) No consent, approval, authorization, order,
registration or qualification of or with any Bermuda court,
regulatory authority or other Bermuda governmental body is
required which has not been duly obtained in accordance with
Bermuda law for the issue and sale of the Securities or the
consummation of the other transactions contemplated by this
Agreement;
(vi) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting of, any Securities pursuant to the Company's Memorandum
of Association or by-laws, in each case as amended;
(vii) No stamp or other issuance or transfer taxes or
duties and no capital gains, income, withholding or other
taxes are payable by or on behalf of the Underwriters to
Bermuda or to any political subdivision or taxing authority
thereof or therein in connection with the sale and delivery by
the Underwriters of the Securities to the initial purchasers
thereof;
(viii) The statements in the Registration Statement
relating to Bermuda law, including but not limited to those
under the captions "Risk Factors - Enforcement of Civil
Liabilities and Judgments," "Risk Factors - Bermuda Corporate
Law," "Description of Capital Stock," "Certain Tax
Considerations - Bermuda Taxation," "Management - Executive
Officers and Directors" and "Underwriting" in the Prospectus
and Item 15 of Part II of the Registration Statement, insofar
as such statements constitute a summary of matters of Bermuda
law and regulation or legal conclusions with respect thereto,
are accurate in all material respects;
(ix) The indemnification and contribution
provisions set forth in Section 8 of this Agreement do not
contravene Bermuda law or public policy;
(x) Assuming the validity of such actions under
applicable federal and state laws in the United States, under
the laws of Bermuda relating to submission to jurisdiction,
the Company has validly and irrevocably submitted to the
jurisdiction of any U.S. Federal or State court located in the
Borough of Manhattan, the City of New York, and the service of
process effected in the manner set forth in this Agreement
will be effective, insofar as Bermuda law is concerned, to
confer valid personal jurisdiction over the Company; and
(xi) Any judgment obtained in the U.S. federal or
state court of competent jurisdiction sitting in New York City
arising out of or in relation to the obligations of the
Company under this Agreement would be enforced against the
Company in Bermuda courts, provided that, inter alia, (a) such
judgment is obtained in compliance with legal requirements of
the jurisdiction of the court rendering such judgment and in
compliance with all legal requirements of this Agreement; (b)
such judgment is strictly for the payment of a certain sum of
money based on an in personam (rather than an in rem) action,
provided that pursuant to Bermuda law, obligations payable in
Bermuda in a foreign currency, whether by agreement or by a
judgment of a Bermuda court, may be discharged in Bermuda
currency at the rate of exchange for such currency prevailing
at the time of payment; (c) service of process was made
personally on the
-12-
Company or on the appropriate process agent; (d) such judgment
does not contravene Bermuda public policy, Bermuda law,
international treaties or agreements binding upon Bermuda or
generally accepted principles of international law; (e) the
applicable procedure under the laws of Bermuda with respect to
the enforcement of foreign judgments (including the issuance
of a letter rogatory by the competent authority of such
jurisdiction in accordance with the laws thereof) is complied
with; (f) such judgment is final in the jurisdiction where it
was obtained; and (g) the U.S. federal or state courts
recognize the principles of reciprocity in connection with the
enforcement of Bermuda judgments in the United States or the
State of New York, as the case may be.
In rendering their opinions set forth in Section 7(d) above, such
counsel may rely, to the extent deemed advisable by such counsel, (a) upon
certificates of state officials, and (b) on opinions of counsel (provided,
however, that you shall have received a copy of each of such opinions which
shall be dated the Time of Delivery, addressed to you or otherwise authorizing
you to rely thereon; and that Xxxxxxx, Xxxx & Xxxxxxx in its opinion to you
delivered pursuant to this subsection, shall state that such counsel are
satisfactory to them and Xxxxxxx, Xxxx & Xxxxxxx has no reason to believe that
you and they are not entitled to so rely);
(e) Xxxxx & XxXxxxxx, special Netherlands counsel to the
Company, shall have furnished to you their written opinion, dated the
Time of Delivery, in the form and substance satisfactory to you, to the
effect that:
(i) CME Media Enterprises B.V. ("CME BV") and
Central European Media Enterprises N.V. (collectively, the
"Dutch and Netherlands Antilles Subsidiaries") have each been
duly incorporated or duly organized as a limited liability
company or other Legal Entity under the laws of the Kingdom of
the Netherlands and the Netherlands Antilles, respectively;
(ii) all of the issued shares or other interests in
the capital of the Dutch and Netherlands Antilles Subsidiaries
which have been issued or granted to the Company have been
validly created, allotted and issued, and the Company is the
direct or indirect registered holder of all of the issued
share capital or other interests of the Dutch and Netherlands
Antilles Subsidiaries;
(iii) such counsel does not know of any litigation or
any governmental proceeding pending or threatened in the
Kingdom of the Netherlands or the Netherlands Antilles against
the Company or any Subsidiary which would affect the subject
matter of this Agreement or is required to be disclosed in the
Prospectus which is not disclosed and correctly summarized
therein; and
(f) Rosenman & Colin LLP, U.S. counsel to the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) each of the Subsidiaries listed on Schedule I to
such counsel's opinion (which Schedule shall set forth all of
the United States Subsidiaries) (collectively, the "United
States Subsidiaries") has been duly incorporated or duly
organized as a partnership or other Legal Entity under United
States law;
(ii) the statements under the caption "Certain Tax
Considerations - United States" in the Prospectus insofar as
such statements constitute a summary of matters of U.S. tax
law and regulations or legal conclusions with respect thereto,
are accurate in all material respects;
-13-
(iii) assuming due authorization, execution and
delivery by the parties thereto, this Agreement is a valid and
binding agreement of the Company enforceable in accordance
with its terms, including but not limited to the choice of law
provision contained in paragraph 15 hereof;
(iv) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the consummation of the transactions
contemplated hereby (including, without limitation, the
issuance and sale of the Shares) will not require any consent,
approval authorization or other order of any U.S. court,
regulatory body, administrative agency or other governmental
body (except such as may be required under the Act or other
securities or Blue Sky laws), or violate or conflict with any
U.S. laws, administrative regulations or rulings or court
decrees applicable to the Company or any of the Subsidiaries,
except where failure to receive any such consent, approval,
authorization or any such conflict, breach or default would
not have a material adverse effect on the business and
financial condition of the Company and the Subsidiaries taken
as a whole;
(v) the Registration Statement has become effective
under the Act, any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) under the Act,
has been made in the manner and within the time period
required by Rule 424(b) under the Act, and no stop order
suspending its effectiveness has been issued and no
proceedings for the purpose are, to the knowledge of such
counsel, pending before or contemplated by the Commission;
(vi) to such counsel's knowledge, no holders of
securities of the Company have rights to the registration
thereof under the Registration Statement or, if any such
holders have such rights, such holders have waived such
rights;
(vii) the Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended;
(viii) to such counsel's knowledge, no contract or
other document or U.S. statute or regulation required to be
summarized or disclosed in the Registration statement and
Prospectus, or filed therewith, has not been so summarized or
disclosed, or so filed, and to the best of such counsel's
knowledge, each of such contracts or documents is in full
force and effect;
(ix) such counsel does not know of any U.S.
governmental legal proceeding pending or threatened against
the Company or any Subsidiary which would affect the subject
matter of this Agreement or is required to be disclosed in the
Prospectus which is not disclosed and correctly summarized
therein; and
(x) (1) the Registration Statement and the Prospectus
and any supplement or amendment thereto (except for financial
statements and other financial and statistical data, as to
which no belief will be expressed) comply as to form in all
material respects with the Act and (2) no facts have come to
the attention of such counsel which lead such counsel to
believe that (except for financial statements and other
financial and statistical data, as to which no belief will be
expressed) the Registration Statement and the Prospectus
included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein
in order to make the statements therein not misleading, and
that the Prospectus, as amended or supplemented, if applicable
(except for financial statements and other financial and
statistical data, as to which no belief will be expressed), as
of its date and as of the Closing Date, contained any untrue
statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
-14-
(g) ____________________________, special German counsel to
the Company, shall have furnished to you their written opinion, dated
the Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) each of the Subsidiaries listed on Schedule I to
such counsel's opinion (collectively, the "German
Subsidiaries") is validly existing as a partnership or other
Legal Entity under German law;
(ii) each of the German Subsidiaries has the
corporate power and authority required to carry on its
business as it is stated to be carried on in the Registration
Statement and to own and lease its properties;
(iii) to such counsel's knowledge, all of the issued
shares or other interests in the capital of the German
Subsidiaries which have been issued or granted to Central
European Media Enterprises N.V., a Netherlands Antilles
company, and CME Media Enterprises B.V., a Netherlands company
(together, the "Dutch Companies") have been validly created,
allotted and issued, and the Dutch Companies are, directly or
indirectly, the holders of the percentage of the issued share
capital or other interests of such German Subsidiaries
disclosed in the Registration Statement;
(iv) the Partnership Agreement for IA TV
Beteiligungsgesellschaft GmbH & Co. Betriebs KG among the
partners named therein dated May 14, 1993 (the "1A Berlin
Partnership Agreement"); the Agreement on the Establishment of
a Silent Partnership dated April 19, 1994, as amended, between
Xx. Xxxxxxx Xxxxxxx, CEDC Management Services GmbH & Co. Media
Enterprises KG and FFF (the "Nuremberg Partnership
Agreement"); the Agreement of September 1995, by and between
CME Medienbeteiligungen GmbH & Co. Media Enterprises KG and
Sachsen Funk und Fernsehen GmbH (the "Leipzig and Dresden
Agreement"); and all other agreements relating to the rights
and obligations of the Company or the German Subsidiaries
created under the 1A Berlin Partnership Agreement, the
Nuremberg Partnership Agreement and the Leipzig and Dresden
Agreement (collectively, the "German Constituent Documents,"
which may be specified in a schedule to such counsel's
opinion) are valid and binding agreements and are enforceable
in accordance with their terms;
(v) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the issuance and sale of the
Securities by the Company in accordance with the terms hereof
(a) will not require any consent, approval, authorization or
other order of any German court, regulatory body or other
German governmental body to be obtained and (b) will not
violate any German law or regulation with the proviso that
because there are no rulings or decisions relating to this
issue, it is not without doubt;
(vi) no orders for the opening of bankruptcy
proceedings or resolutions of dissolution have been registered
in the respective commercial register with respect to any of
the German Subsidiaries and such counsel is not aware of any
such proceedings having been applied for or any such
resolution having been passed with respect to any of them;
(vii) the German Subsidiaries have been issued the
Licenses required by them under the applicable laws of each of
the German states granting such Licenses for the purposes of
carrying on their broadcast operations as described in the
Registration Statement (the "German Licenses"); to such
counsel's knowledge, no application, action or proceeding is
or will be pending or threatened that may result in the
revocation, modification, nonrenewal or suspension of the
German Licenses, or the imposition of any administrative
sanction except for litigation
-15-
pending as disclosed in the Registration Statement; the
issuance and sale of the Securities hereunder will not lead to
the revocation, modification, nonrenewal or suspension of the
German Licenses, or the imposition of any administrative
sanction; and such counsel are not aware of any breaches of
the terms of the German Licenses (except as disclosed in the
Registration Statement) which would lead them to take any
action under their respective powers in relation thereto;
(viii) insofar as the statements under the captions
"The Company" and "Business Operations in Germany: The German
Stations" are relating to agreements governed by German law or
to German provisions of law ("German legal matters") referred
to therein and insofar as they purport to describe the legal
effect of the German Constituent Documents, correctly describe
such legal matters and such legal effect; and
(ix) such counsel is not aware of any litigation or
any governmental proceeding pending or threatened in Germany
against the Company or any Subsidiary which would affect the
subject matter of this Agreement or is required to be
disclosed in the Prospectus which is not disclosed and
correctly summarized therein.
(h) , special Czech counsel to the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in the form and substance satisfactory to you, to the effect
that:
(i) Ceska Nezavisla Televizni Spolecnost s.r.o.
(the "Czech Subsidiary") has been duly incorporated or duly
organized as a limited liability company under the laws of the
Czech Republic;
(ii) the Czech Subsidiary has the power and authority
required to carry on its business as it is stated to be
carried on in the Registration Statement and to own and lease
its properties;
(iii) all of the issued shares or other interests in
the capital of the Czech Subsidiary which have been issued or
granted to a subsidiary of the Company have been validly
created, allotted and issued, and the Company is, directly or
indirectly, the registered holder of the percentage of the
issued share capital or other interests of such Czech
Subsidiary disclosed in the Registration Statement;
(iv) the Memorandum of Association and Investment
Agreement dated, May 4, 1993, as amended, by and between
Central European Development Corporation Management Services
GmbH, Ceska Sporitelna, a.s. and CET 21 s.r.o. (the "Nova
Agreement") and all other material agreements relating to the
rights and obligations of the Company with respect to the
Czech Subsidiary created under the Nova Agreement
(collectively, the "Nova Documents") are valid and binding
agreements and are enforceable in accordance with their terms;
(v) the Consultancy Agreement (the "Consultancy
Agreement"), dated February 9, 1995, by and between CME BV and
Radio Alfa a.s. ("Radio Alfa"); the Loan Agreement, dated
February 9, 1995, between CME BV and Radio Alfa (the "Loan
Agreement"); the Supplementary Loan Agreement, dated March 20,
1995, between CME BV and Radio Alfa (the "Supplementary Loan
Agreement"); the Option and Purchase Agreement, dated May 24,
1995, between CME BV and Releas a.s. (the "Releas Option
Agreement"); the Second Supplementary Loan Agreement, dated
July 14, 1995, between CME BV and Radio Alfa (the "Second
Supplementary Loan Agreement"); the Loan Agreement, dated
August 1, 1996, between Dr. Xxxxxxxx Xxxxxxx and CME BV (the
"CS Agreement") and all other material agreements relating to
the rights and
-16-
obligations of the Company and any Subsidiary with respect to
Radio Alfa created under the Consultancy Agreement, the Loan
Agreement, the Supplementary Loan Agreement, the Releas Option
Agreement, the Second Supplementary Loan Agreement and the CS
Agreement (collectively, the "Radio Alfa Documents," and
together with the Nova Documents, the "Czech Constituent
Documents," which may be specified in a schedule to such
counsel's opinion) are valid and binding agreements and are
enforceable in accordance with their terms;
(vi) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the issuance and sale of the
Securities by the Company in accordance with the terms hereof
and the Agreement Among Underwriters (a) will not require any
consent, approval, authorization or other order of any Czech
court, regulatory body or other Czech governmental body to be
obtained and (b) will not violate any Czech law or regulation;
(vii) there are no winding up petitions against the
Czech Subsidiary or, to the best of such counsel's knowledge,
against Radio Alfa;
(viii) Radio Alfa has been issued and the Czech
Subsidiary has acquired from CET 21, s.r.o. the exclusive
right to use the Licenses required under applicable Czech law
for the purposes of carrying on their respective broadcast
operations as described in the Registration Statement (the
"Czech Licenses"); there are no orders outstanding which have
been made against the Czech Subsidiary or Radio Alfa; no
application, action or proceeding is or will be pending or
threatened that may result in the revocation, modification,
nonrenewal or suspension of the Czech Licenses, or the
imposition of any administrative sanction; the issuance and
sale of the Securities hereunder will not lead to the
revocation, modification, nonrenewal or suspension of the
Czech Licenses, or the imposition of any administrative
sanction; and such counsel are not aware of any breaches of
the terms of the Czech Licenses which are likely to have a
material adverse effect on the Company;
(ix) insofar as the statements under the captions
"The Company," "Business Operations in the Czech Republic:
Nova TV" and "Business - Operations in the Czech Republic:
Radio Nova Alfa" constitute a summary of Czech law and insofar
as they purport to describe the legal effect of the Czech
Constituent Documents, such statements fairly describe
relevant Czech law and such legal effect; and
(x) such counsel is not aware of any litigation or
any governmental proceeding pending or threatened in the Czech
Republic against Radio Alfa, the Company or any Subsidiary
which would affect the subject matter of this Agreement or is
required to be disclosed in the Prospectus which is not
disclosed and correctly summarized therein.
(i) , special Slovak counsel to the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in the form and substance satisfactory to you, to the effect
that:
(i) Slovenska televizna spolocnost, s.r.o ("STS" or
the "Slovak Subsidiary") has been duly incorporated or duly
organized as a limited liability company under the laws of the
Slovak Republic;
(ii) the Slovak Subsidiary has the power and
authority required to carry on its business as it is stated to
be carried on in the Registration Statement and to own and
lease its properties;
-17-
(iii) all of the issued shares or other interest, in
the capital of the Slovak Subsidiary which has been issued or
granted to a subsidiary of the Company have been validly
created, allotted and issued, and the Company is, directly or
indirectly, the registered holder of the percentage of the
issued share capital or other interests of such Slovak
Subsidiary disclosed in the Registration Statement;
(iv) the Memorandum of Association, Articles of
Association and Participants Agreement, dated September 28,
1995, between CME BV and Markiza - Slovakia s.r.o. ("Markiza")
(the "STS Agreement") and all other material agreements
relating to the rights and obligations of the Company and any
Subsidiary with respect to the Slovak Subsidiary created under
the STS Agreement (collectively, the "Slovak Constituent
Documents", which may be specified in a schedule to such
counsel's opinion) are valid and binding agreements and are
enforceable in accordance with their terms;
(v) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the issuance and sale of the
Securities by the Company in accordance with the terms hereof
and the Agreement Among Underwriters (a) will not require any
consent, approval, authorization or other order of any Slovak
court, regulatory body or other Slovak governmental body to be
obtained and (b) will not violate any Slovak law or
regulation;
(vi) there are, to the best of such counsel's
knowledge, no winding up petitions against the Slovak
Subsidiary, or Markiza;
(vii) Markiza has obtained the License required by it
under applicable Slovak law for purposes of carrying on its
television broadcast operations as described in the
Registration Statement (the "Slovak License") and has agreed
to grant STS the exclusive right to use the License such that
the television programming produced by STS is broadcast under
the License by Markiza; there are, to the best of such
counsel's knowledge, no orders outstanding which have been
made against STS or Markiza; no application, action or
proceeding is pending or threatened that may result in the
revocation, modification, nonrenewal or suspension of the
Slovak License, or the imposition of any administrative
sanction; the issuance and sale of the Securities hereunder
will not lead to the revocation, modification, nonrenewal or
suspension of the Slovak License, or the imposition of any
administrative sanction; and such counsel are not aware of any
breaches of the terms of the Slovak License (except as
disclosed in the Registration Statement) which would lead them
to take any action under their respective powers in relation
thereto;
(viii) insofar as the statements under the captions
"The Company" and "Business - Operations in the Slovak
Republic: Markiza TV" constitute a summary of Slovak law and
insofar as they purport to describe the legal effect of the
Slovak Constituent Documents, such statements fairly describe
relevant Slovak law and such legal effect; and
(ix) such counsel does not know of any litigation or
any governmental proceeding pending or threatened in the
Slovak Republic against STS, Markiza, the Company or any
Subsidiary which would affect the subject matter of this
Agreement or is required to be disclosed in the Prospectus
which is not disclosed and correctly summarized therein.
(j) , special Slovenian counsel to the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in the form
and substance satisfactory to you, to the effect that:
-18-
(i) Prodkcija Plus d.o.o. Ljubljana ( "Pro Plus" or
the "Slovenian Subsidiary") has been duly incorporated or duly
organized as a partnership or other Legal Entity under the
laws of Slovenia;
(ii) the Slovenian Subsidiary has the power and
authority required to carry on its business as it is stated to
be carried on in the Registration Statement and to own and
lease its properties;
(iii) all of the issued shares or other interests in
the capital of the Slovenian Subsidiary which have been issued
or granted to a subsidiary of the Company have been validly
created, allotted and issued, and the Company is, directly or
indirectly, the registered holder of the percentage of the
issued share capital or other interests of such Slovenian
Subsidiary disclosed in the Registration Statement;
(iv) the Partnership Agreement, dated May 4, 1993,
among CME BV, Boutique MMTV d.o.o., Ljubljana ("MMTV") and
Tele 59 d.o.o., Maribor ("Tele 59") (the "Pro Plus Partnership
Agreement"); the Share Purchase Agreement, dated April 8,
1995, by and between CME BV, and Xxxxxx Xxxxxx, Xxxxxxx 00,
Xxxxxxxx ("Xxxxxx") (the "MMTV Share Purchase Agreement"); the
Preliminary Agreement, dated December 7, 1995, by and between
CME BV and Tele 59 (the "Tele 59 Agreement"); and all other
material agreements relating to the rights and obligations of
the Company and any Subsidiary with respect to the Slovenian
Subsidiary created under the Pro Plus Partnership Agreement,
the MMTV Share Purchase Agreement and the Tele 59 Agreement
(collectively, the "Slovenian Constituent Documents," which
may be specified in a schedule to such counsel's opinion) are
valid and binding agreements and are enforceable in accordance
with their terms;
(v) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the issuance and sale of the
Securities by the Company in accordance with the terms hereof
and the Agreement Among Underwriters (a) will not require any
consent, approval, authorization or other order of any
Slovenian court, regulatory body or other Slovenian
governmental body to be obtained and (b) will not violate any
Slovenian law or regulation;
(vi) there are no winding up petitions against the
Slovenian Subsidiary, or to the best of such counsel's
knowledge, MMTV, Meglic or Tele 59;
(vii) MMTV and Tele 59 have been issued the Licenses
required under applicable Slovenian law for the purposes of
carrying on their broadcast operations as described in the
Registration Statement (the "Slovenian Licenses"), and have
agreed to (a) order the production of television programs
exclusively from the Slovenian Subsidiary, (b) broadcast only
programs provided by the Slovenian Subsidiary, and (c) grant
the Slovenian Subsidiary the exclusive right to sell
advertising during their broadcasts; there are no orders
outstanding which have been made against the Slovenian
Subsidiary; no application, action or proceeding is pending or
threatened that may result in the revocation, modification,
nonrenewal or suspension of the Slovenian Licenses, or the
imposition of any administrative sanction; the issuance and
sale of the Securities hereunder will not lead to the
revocation, modification, nonrenewal or suspension of the
Slovenian Licenses, or the imposition of any administrative
sanction; and such counsel are not aware of any breaches of
the terms of the Slovenian Licenses (except as disclosed in
the Registration Statement) which would lead them to take any
action under their respective powers in relation thereto;
-19-
(viii) insofar as the statements under the captions
"The Company" and "Business - Operations in Slovenia: POP TV"
constitute a summary of Slovenian law and insofar as they
purport to describe the legal effect of the Slovenian
Constituent Documents, such statements fairly describe
relevant Slovenian law and such legal effect; and
(ix) such counsel does not know of any litigation or
any governmental proceeding pending or threatened in Slovenia
against Meglic MMTV, Tele 59, the Company or any Subsidiary
which is required to be disclosed in the Prospectus which is
not disclosed and correctly summarized therein.
(k) Xxxxx Xxxxxxxxx, special Romanian counsel to the
Company, shall have furnished to you their written opinion, dated the Time of
Delivery, in the form and substance satisfactory to you, to the effect that:
(i) Media Pro International S.A. (the "Romanian
Subsidiary") has been duly incorporated or duly organized as a
partnership or other Legal Entity under the laws of Romania;
(ii) the Romanian Subsidiary has the power and
authority required to carry on its business as it is stated to
be carried on in the Registration Statement and to own and
lease its properties;
(iii) all of the issued shares or other interests in
the capital of the Romanian Subsidiary which have been issued
or granted to a subsidiary of the Company have been validly
created, allotted and issued, and the Company is, directly or
indirectly, the registered holder of the percentage of the
issued share capital or other interests of such Romanian
Subsidiary disclosed in the Registration Statement;
(iv) the Cooperation Agreement, dated August 1995,
among CME BV, Xxx Xxxxxx and Xxxxxx Xxxxx (the "Cooperation
Agreement"); the Loan Agreement in the principal amount of US
$104,881, dated as of June 6, 1995, by and between CME BV and
Pro TV, S.R.L. ("Pro TV") and the Loan Agreement in the
principal amount of US$1.23 million, dated as of August 25,
1995, by and between CME BV and Pro TV (collectively the "Pro
TV Loan Agreements"); and all other material agreements
relating to the rights and obligations of the Company and any
Subsidiary with respect to the Romanian Subsidiary created
under the Cooperation Agreement and the Pro TV Loan Agreements
(collectively, the "Romanian Constituent Documents," which may
be specified in a schedule to such counsel's opinion) are
valid and binding agreements and are enforceable in accordance
with their terms;
(v) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the issuance and sale of the
Securities by the Company in accordance with the terms hereof
and the Agreement Among Underwriters (a) will not require any
consent, approval, authorization or other order of any
Romanian court, regulatory body or other Romanian governmental
body to be obtained and (b) will not violate any Romanian law
or regulation;
(vi) there are no winding up petitions against the
Romanian Subsidiary;
(vii) those entities which constitute the "Pro TV
Network" as described in the Registration Statement have been
issued the Licenses required by them under applicable Romanian
law for the purposes of carrying on their broadcast operations
as described in the Registration Statement (the "Romanian
Licenses"); there are no orders outstanding which have been
made
-20-
against such entities; no application, action or proceeding is
or will be pending or threatened that may result in the
revocation, modification, nonrenewal or suspension of the
Romanian Licenses, or the imposition of any administrative
sanction; the issuance and sale of the Securities hereunder
will not lead to the revocation, modification, nonrenewal or
suspension of the Romanian Licenses, or the imposition of any
administrative sanction; and such counsel are not aware of any
breaches of the terms of the Romanian Licenses (except as
disclosed in the Registration Statement) which would lead them
to take any action under their respective powers in relation
thereto;
(viii) insofar as the statements under the captions
"The Company" and "Business Operations in Romania: PRO TV"
constitute a summary of Romanian law and insofar as they
purport to describe the legal effect of the Romanian
Constituent Documents, such statements fairly describe
relevant Romanian law and such legal effect; and
(ix) such counsel does not know of any litigation or
any governmental proceeding pending or threatened in Romania
against the Company or any Subsidiary which would affect the
subject matter of this Agreement or is required to be
disclosed in the Prospectus which is not disclosed and
correctly summarized therein.
(l) Law Offices of Utvardi and Xxxxx, special Hungarian counsel to
the Company, shall have furnished to you their written opinion, dated
the Time of Delivery, in the form and substance satisfactory to you, to
the effect that:
(i) 2002 Kft. ("2002" or the "Hungarian Subsidiary")
has been duly incorporated or duly organized as a partnership
or other Legal Entity under the laws of Hungary;
(ii) the Hungarian Subsidiary has the power and
authority required to carry on its business as it is stated to
be carried on in the Registration Statement and to own and
lease its properties;
(iii) all of the issued shares or other interests in
the capital of the Hungarian Subsidiary which have been issued
or granted to a subsidiary of the Company have been validly
created, allotted and issued, and the Company is, directly or
indirectly, the registered holder of the percentage of the
issued share capital or other interests of such Hungarian
Subsidiary disclosed in the Registration Statement;
(iv) the Shareholders Agreement, dated March 1, 1995,
between CME BV and Xxxxxx Xxxx (the "2002 Shareholders
Agreement") and all other material agreements relating to the
rights and obligations of the Company and any subsidiary with
respect to the Hungarian Subsidiary created under the 2002
Shareholders Agreement (collectively, the "Hungarian
Constituent Documents," which may be specified in a schedule
to such counsel's opinion) are valid and binding agreements
and are enforceable in accordance with their terms;
(v) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the issuance and sale of the
Securities by the Company in accordance with the terms hereof
and the Agreement Among Underwriters (a) will not require any
consent, approval, authorization or other order of any
Hungarian court, regulatory body or other Hungarian
governmental body to be obtained and (b) will not violate any
Hungarian law or regulation;
(vi) there are no winding up petitions against the
Hungarian Subsidiary;
-21-
(vii) the Hungarian Subsidiary has been issued the
License required by it under applicable Hungarian law for the
purposes of carrying on its broadcast operations as described
in the Registration Statement (the "Hungarian License"); there
are no orders outstanding which have been made against the
Hungarian Subsidiary; no application, action or proceeding is
or will be pending or threatened that may result in the
revocation, modification, nonrenewal or suspension of the
Hungarian License, or the imposition of any administrative
sanction; the issuance and sale of the Securities hereunder
will not lead to the revocation, modification, nonrenewal or
Suspension of the Hungarian License, or the imposition of any
administrative sanction; and such counsel are not aware of any
breaches of the terms of the Hungarian License (except as
disclosed in the Registration Statement) which would lead them
to take any action under their respective powers in relation
thereto;
(viii) insofar as the statements under the captions
"The Company" and "Business - Broadcast Operations
Under Development - Hungary" constitute a summary of
Hungarian law and insofar as they purport to describe the
legal effect of the Hungarian Constituent Documents, such
statements fairly describe relevant Hungarian law and such
legal effect; and
(ix) such counsel does not know of any litigation or
any governmental proceeding pending or threatened in Hungary
against the Company or any Subsidiary which would affect the
subject matter of this Agreement which is not disclosed and
correctly summarized in the Prospectus.
(m) ___________, special Polish counsel to the Company, shall
have furnished to you their written opinion, dated the Time of
Delivery, in the form and substance satisfactory to you, to the effect
that:
(i) TVN Sp.t.o.o. ("TVN" or the "Polish Subsidiary")
has been duly incorporated or duly organized as a partnership
or other Legal Entity under the laws of Poland;
(ii) the Polish Subsidiary has the power and
authority required to carry on its business as it is stated to
be carried on in the Registration Statement and to own and
lease its properties;
(iii) all of the issued shares or other interests in
the capital of the Polish Subsidiary which have been issued or
granted to a subsidiary of the Company have been validly
created, allotted and issued, and the Company is, directly or
indirectly, the registered holder of the percentage of the
issued share capital or other interests of such Polish
Subsidiary disclosed in the Registration Statement;
(iv) The _________ and all other material agreements
relating to the rights and obligations of the Company and any
subsidiary with respect to the Polish Subsidiary created under
the _________ Agreement (collectively, the "Polish Constituent
Documents," which may be specified in a schedule to such
counsel's opinion) are valid and binding agreements and are
enforceable in accordance with their terms;
(v) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the issuance and sale of the
Securities by the Company in accordance with the terms hereof
and the Agreement Among Underwriters (a) will not require any
consent, approval, authorization or other order of any Polish
court, regulatory body or other Polish governmental body to be
obtained and (b) will not violate any Polish law or
regulation;
-22-
(vi) there are no winding up petitions against the
Polish Subsidiary;
(vii) the Polish Subsidiary has been issued the
License required by it under applicable Polish law for the
purposes of carrying on its broadcast operations as described
in the Registration Statement (the "Polish License"); there
are no orders outstanding which have been made against the
Polish Subsidiary; no application, action or proceeding is or
will be pending or threatened that may result in the
revocation, modification, nonrenewal or suspension of the
Polish License, or the imposition of any administrative
sanction; the issuance and sale of the Securities hereunder
will not lead to the revocation, modification, nonrenewal or
suspension of the Polish License, or the imposition of any
administrative sanction; and such counsel are not aware of any
breaches of the terms of the Polish License (except as
disclosed in the Registration Statement) which would lead them
to take any action under their respective powers in relation
thereto;
(viii) insofar as the statements under the captions
"The Company" and "Business - Broadcast Operations
Under Development - Poland" constitute a summary of Polish law
and insofar as they purport to describe the legal effect of
the Hungarian Constituent Documents, such statements fairly
describe relevant Polish law and such legal effect; and
(ix) such counsel does not know of any litigation or
any governmental proceeding pending or threatened in Poland
against the Company or any Subsidiary which would affect the
subject matter of this Agreement which is not disclosed and
correctly summarized in the Prospectus.
(n) , special Ukrainian counsel to
the Company, shall have furnished to you their written opinion, dated
the Time of Delivery, in the form and substance satisfactory to you, to
the effect that:
(i) the Company holds a 50.0% interest in the
Studio 1+1 Group of Companies (the "Ukrainian Subsidiary").
(ii) the Ukrainian Subsidiary has the power
and authority required to carry on its business as it is
stated to be carried on in the Registration Statement and
to own and lease its properties;
(iii) all of the issued shares or other interests
in the capital of the companies comprising the Ukrainian
Subsidiary which have been issued or granted to a subsidiary
of the Company have been validly created, allotted and
issued, and the Company is, directly or indirectly,
the registered holder of the percentage of the issued
share capital or other interests of such companies comprising
the Ukrainian Subsidiary disclosed in the Registration
Statement;
(iv) [the Formation and Acquisition
Agreements dated (the "Agreements")];
(v) the execution, delivery and performance
of the Agreements by the Company, compliance by the Company
with all the provisions hereof and the issuance and sale of
the Securities by the Company in accordance with the terms
hereof and the Agreement Among Underwriters (a) will
not require any consent, approval, authorization or
other order of any Ukrainian court, regulatory body or
other Ukrainian governmental body to be obtained and
(b) will not violate any Ukrainian law or regulation;
(vi) there are no winding up petitions
against the Ukrainian Subsidiary;
(vii) the Ukrainian Subsidiary has the right until
July 2000 to broadcast programming and sell advertising on
one of Ukraine's public television stations for a specified
number of hours per week, including prime time, as described
in the Registration Statement (the "Broadcast Rights");
there are no orders outstanding which have been made against
such entities; no application, action or proceeding is or
will be pending or threatened that may result in the
revocation, modification, nonrenewal or suspension of the
Broadcast Rights, or the imposition of any administrative
sanction; the issuance and sale of the Securities hereunder
will not lead to the revocation, modification, nonrenewal or
suspension of the Broadcast Rights, or the imposition of any
administrative sanction; and such counsel are not aware of
any breaches of the terms of the Broadcast Rights (except as
disclosed in the Registration Statement) which would lead
them to take any action under their respective powers in
relation thereto;
(viii) insofar as the statements under the
captions "The Company" and "Business - Operations in
Ukraine: Studio 1+1" constitute a
summary of Ukrainian law and insofar as they purport
to describe the legal effect of the Ukrainian
Constituent Documents, such statements fairly describe
relevant Ukrainian law and such legal effect; and
(ix) such counsel does not know of any
litigation or any governmental proceeding pending or
threatened in Ukraine against the Company or any
Subsidiary which would affect the subject matter of
this Agreement or is required to be disclosed in the
Prospectus which is not disclosed and correctly
summarized therein.
(o) Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel to the
Underwriters, shall have furnished to you their written opinion, dated
the Time of Delivery, in form and substance satisfactory to you, with
respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other
related matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(p) At the time this Agreement is executed and also at the
Time of Delivery, Xxxxxx Xxxxxxxx & Co. LLP shall have furnished to you
a letter or letters, dated the date of this Agreement and the Time of
Delivery, in form and substance satisfactory to you, to the effect,
that:
(1) They are independent certified public accountants
with respect to the Company and each Unconsolidated Associated
Company within the meaning of the Act and the applicable
published rules and regulations thereunder;
(2) In their opinion, the consolidated financial
statements of the Company and the financial statements of each
Unconsolidated Associated Company (including the related
schedules and notes) included in the Registration Statement
and Prospectus and covered by their reports included therein
comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder;
(3) On the basis of specified procedures as of a
specified date not more than five days prior to the date of
their letter (which procedures do not constitute an
examination made in accordance with generally accepted
auditing standards), consisting of a reading of the latest
available unaudited interim consolidated financial statements
of the Company and the unaudited financial statements of each
Unconsolidated Associated Company (with an indication of the
date or dates of each such latest available financial
statements), inquiries of officials of the Company who have
responsibility for financial and accounting matters, and such
other procedures or
-23-
inquiries as are specified in such letter, nothing came to
their attention that caused them to believe that:
(A) (i) Any material modifications should be
made to the unaudited consolidated financial
statements described in this Section 7(n), included
in the Registration Statement for them to be in
conformity with generally accepted accounting
principles; and
(ii) The unaudited consolidated
financial statements described in this Section 7(n)
do not comply as to form in all material respects
with the applicable accounting requirements of the
Act and the related published rules and regulations.
(B) (i) At October 3, 1996, there was any
change in the capital stock, increase in long-term
debt, or decrease in net current assets or
shareholders' equity of the Company or any
Unconsolidated Associated Company as compared with
amounts shown in the June 30, 1995 unaudited
consolidated balance sheet included in the
Registration Statement other than as shown in the
Registration Statement; or
(ii) for the period from July 1,
1996 to October 3, 1996, there was any change as
compared to the corresponding period in the preceding
year, in combined net revenues or in the total or
per-share amounts of income (loss) before
extraordinary items or of net income (loss), except
in all instances for changes, increase, or decreases
that the Registration Statement discloses have
occurred or may occur.
(C) Based solely on inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters and minutes of
meetings of stockholders, the board of directors and
the compensation committee of the Company, nothing
came to their attention that caused them to believe
(i) at October 3, 1996 there was any change in the
capital stock, increase in long-term debt or any
decreases in net current assets or stockholders'
equity of the Company or any Unconsolidated
Associated Company as compared with amounts shown on
the June 30, 1996, unaudited consolidated balance
sheet included in the Registration Statement or (ii)
for the period from July 1, 1996 to October 3, 1996,
there were any decreases, as compared with the
corresponding period in the preceding year, in net
revenues or in the total or per share amounts of
income (loss) before extraordinary items or of net
income (loss) other than as disclosed in the
Registration Statement.
(4) In addition to the examination referred to in
their reports included in the Registration Statement and the
Prospectus and the limited procedures referred to in clause
(4) above, they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information which are derived from
the general accounting records of the Company and its
consolidated Subsidiaries which appear in the Prospectus under
the captions which have been specified by you, and have
compared such amounts and financial information with the
accounting records of the Company, its consolidated
Subsidiaries and the Unconsolidated Associated Companies and
have found them to be in agreement and have proved the
mathematical accuracy of certain specified percentages; and
(q) (1) Neither the Company nor any of its consolidated
Subsidiaries shall have sustained since December 31, 1995, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree; and (2) since
the respective dates as of which information is given in the
Prospectus, there
-24-
shall not have been any change in the capital stock or short-term debt
or long-term debt of the Company or any of its consolidated
Subsidiaries nor any change or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its consolidated Subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (1) or (2), is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in
the manner contemplated in the Prospectus;
(r) The Company shall have furnished or caused to be furnished
to you at the Time of Delivery certificates signed by the chief
executive officer and the chief financial officer, on behalf of the
Company, satisfactory to you as to such matters as you may reasonably
request and as to (1) the accuracy of the Company's respective
representations and warranties herein at and as of the time of Delivery
and (2) the performance by the Company of all of its respective
obligations hereunder to be performed at or prior to the Time of
Delivery; the Company shall have furnished or caused to be furnished to
you at the Time of Delivery certificates signed by the chief executive
officer and the chief financial officer, on behalf of the Company, as
to (1) the fact that they have carefully examined the Registration
Statement and Prospectus and, (a) as of the Effective Date, the
statements contained in the Registration Statement and the Prospectus
were true and correct and neither the Registration Statement nor the
Prospectus omitted to state a material fact required to be stated
therein or necessary to make the statement therein not misleading and
(b) since the Effective Date, no event has occurred that is required by
the Act or the Rules to be set forth in an amendment of, or a
supplement to, the Prospectus that has not been set forth in such an
amendment or supplement; and (2) the matters set forth in subsection
(a) of this Section 7; and
(s) Each director and officer of the Company, The EJL
Corporation, Xxxxxxx X. Xxxxxx, and any Legal Entity under their
respective control shall have delivered to you an agreement not to
offer, sell or otherwise dispose of any shares of Common Stock (or
securities convertible or exchangeable into shares of Common Stock),
directly or indirectly into the public market, for a period of 180 days
after the date of this Agreement, without the prior written consent of
the Representatives.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement made
by the Company in Section 1 of this Agreement, (ii) any untrue statement or
alleged untrue statement of a material fact contained or incorporated by
reference in any Preliminary Prospectus, and not corrected in the Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, or in any Blue Sky application or other document executed by the
Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order to
qualify any or all the Securities under the securities laws thereof or filed
with the Commission or any securities association or securities exchange (each,
an "Application"), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made or incorporated by reference therein not misleading, or (iii) the
employment by the Company of any device, scheme or artifice to defraud, or the
engaging by the Company in any act, practice or course of business which
operates or would operate as a fraud or deceit, or any conspiracy with respect
thereto, in which the Company shall participate, in connection with the issuance
and sale of any of the Securities, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating, preparing to defend, defending or appearing as a third-party
witness in connection with any such action or claim; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission relating to an
Underwriter made in any Preliminary Prospectus, the Registration Statement, the
Prospectus or such amendment or supplement or any Application in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein; and provided, further, that
-25-
the indemnity agreements contained in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) on account of any losses, claims, damages,
liabilities or litigation arising from the sale of Securities to any person, if
such Underwriter fails to send or give a copy of the Prospectus, as the same may
be then supplemented or amended, to such person, within the time required by the
Act and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, unless such failure is the result of noncompliance
by the Company with Section 5(c) hereof.
(b) In addition to any obligations of the Company under
Section 8(a), the Company agrees that it shall perform indemnification
obligations under Section 8(a) (as modified by the last paragraph of this
Section 8(b)) with respect to counsel fees and expenses and other expenses
reasonably incurred by making payments within 45 days to the Underwriter in the
amount of the statements of the Underwriter's counsel or other statements which
shall be forwarded by the Underwriter, and that they shall make such payments
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligation to reimburse the Underwriters for such expenses
and the possibility that such payment might later be held to have been improper
by a court and a court orders return of such payments, in which event, after a
final order to such effect from which no appeal may be taken, such amounts will
be returned to the Company, with such interest, if any, as the court may order.
The indemnity agreement in Section 8(a) shall be in addition to any
liability which the Company shall otherwise have and shall extend upon the same
terms and conditions to each person, if any, who controls any Underwriter within
the meaning of the Act or the Exchange Act.
(c) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or any Application, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statement
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement, the
Prospectus or such amendment or supplement or any Application in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter relating to such Underwriter through you expressly for use therein,
and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
action or claim.
The indemnity agreement in this Section 8(c) shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company within the meaning
of the Act or the Exchange Act.
(d) Promptly after receipt by an indemnified party under
Section 8(a) or 8(c) of notice of the commencement of any action (including any
governmental investigation), such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party under Section 8(a) or 8(c)
except to the extent it was unaware of such action and has been prejudiced in
any material respect by such failure or from any liability which it may have to
any indemnified party otherwise than under such Section 8(a) or 8(c). In case
any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to
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assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. If, however, (i) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party and (ii) an indemnified party
shall have reasonably concluded that representation of such indemnified party
and the indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct due to actual or potential
differing interests between them and the indemnified party so notifies the
indemnifying party, then the indemnified party shall be entitled to employ
counsel different from counsel for the indemnifying party at the expense of the
indemnifying party and the indemnifying party shall not have the right to assume
the defense of such indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
local counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same set of allegations or circumstances. The counsel with respect to which
fees and expenses shall be so reimbursed pursuant to the second preceding
sentence shall be designated in writing by Xxxxxxxx Xxxxxxxx & Co. Incorporated
in the case of parties indemnified pursuant to Section 8(a) and by the Company
in the case of parties indemnified pursuant to Section 8(c). The respective
indemnity and contribution agreements by the Underwriters and the Company
contained in Section 8(a), 8(b), and 8(c) and this Section 8 shall be in
addition to any liability which the Underwriters and the Company may otherwise
have.
If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 8(b), the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(e) In order to provide for just and equitable contribution
under the Act in any case in which (i) any Underwriter (or any person who
controls any Underwriter within the meaning of the Act or the Exchange Act)
makes claim for indemnification pursuant to Section 8(a) hereof, but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that Section 8(a) provides for indemnification in such
case or (ii) contribution under the Act may be required on the part of any
Underwriter or any such controlling person in circumstances for which
indemnification is provided under Section 8(c), then, and in each such case, the
Company and such Underwriter shall contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject as an indemnifying party
hereunder (after contribution from others) in such proportion so that such
Underwriter is responsible for the portion represented by the percentage that
the underwriting discount appearing on the cover page of the Prospectus bears to
the public offering price appearing thereon and the Company is responsible for
the remaining portion; provided, however, that, in any such case (x) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Securities purchased by such Underwriter
and (y) no person guilty of a fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to a contribution from any person
who was not guilty of such fraudulent misrepresentation. The amount paid or
payable by an Underwriter as a result of this Section 8(e) shall be deemed to
include any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, preparing to defend or defending any such claim.
(f) Promptly after receipt by any party to this Agreement of
notice of the commencement of any action, suit or proceeding, such party will,
if a claim for contribution in respect thereof is to be made against
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another party (the "contributing party"), notify the contributing party of the
commencement thereof; but the omission so to notify the contributing party will
not relieve it from any liability which it may have to any other party for
contribution under the Act except to the extent it was unaware of such action
and has been prejudiced in any material respect by such failure or from any
liability which it may have to any other party other than for contribution under
the Act. In case any such action, suit or proceeding is brought against any
party, and such party notifies a contributing party of the commencement thereof,
the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Firm Securities on the terms contained herein. If the aggregate number of Firm
Securities as to which Underwriters default is more than one-eleventh of the
aggregate number of all the Firm Securities and within 36 hours after such
default by any Underwriter you do not arrange for the purchase of such Firm
Securities, then the Company shall be entitled to a further period of 36 hours
within which to procure another party or other parties satisfactory to you to
purchase such Firm Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Firm Securities, or the Company notifies you that it
has so arranged for the purchase of such Firm Securities, you or the Company
shall have the right to postpone the Time of Delivery for a period of not more
than 7 days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with the like effect as if such person
had originally been a party to this Agreement with respect to such Firm
Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Firm Securities of such defaulting Underwriter or Underwriters
by you or the Company or both as provided in subsection (a) above, the aggregate
number of such Firm Securities which remain unpurchased does not exceed
one-eleventh of the aggregate number of all the Firm Securities, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of the Firm Securities which such Underwriter agreed to
purchase hereunder and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Firm Securities which
such Underwriter agreed to purchase hereunder) of the Firm Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Securities of a defaulting Underwriter or Underwriters by
you or the Company as provided in subsection (a) above, the aggregate number of
such Firm Securities which remain unpurchased exceeds one-eleventh of the
aggregate number of all the Firm Securities, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Firm Securities of a defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate without liability on
the part of any non-defaulting Underwriter or the Company and, except for the
expenses to be borne by the Company and the Underwriters as provided in Section
6 hereof and the indemnity agreement in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or an officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
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11. This Agreement may be terminated with resect to the Firm Securities
or any Option Securities in the sole discretion of the Underwriters by notice to
the Company given prior to the Closing Date in the event that the Company shall
have failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Closing Date there shall have occurred any
material adverse change in the financial or securities markets in the United
States or elsewhere, or in political, financial or economic conditions in the
United States or any country in which the Company has existing broadcast
operations, or any outbreak or material escalation of hostilities or other
calamity or crisis, the effect of which is such as to make it, in the judgment
of the Representatives, impracticable to market the Securities or to enforce
contracts for the resale of Securities or if any event shall have occurred
resulting in (1) trading in securities generally on the New York Stock Exchange
being suspended or limited or minimum or maximum prices being generally
established on such exchange, (2) trading in the Common Stock shall have been
suspended by the Commission or Nasdaq National Market, (3) additional material
governmental restrictions, not in force on the date of this Agreement, being
imposed upon trading in securities generally by such exchange or by order of the
Commission or any court or other governmental authority, (4) a general banking
moratorium being declared by either Federal or New York authorities, or (5) the
bringing of an action or proceeding against any of the Company's Subsidiaries
which, if determined adversely to such Subsidiary, could result in the
revocation, modification, nonrenewal or suspension of any of the Licenses, or
the imposition of any administrative sanction which could result in the loss or
material curtailment of the right of any of the Company's Subsidiaries to
conduct commercial broadcast operations in any of the jurisdictions in which the
Company is presently operating.
12. This Agreement shall become effective (a) if the Registration
Statement has not heretofore become effective, at the earlier of 12:00 Noon, New
York City time, on the first full business day after the Registration Statement
becomes effective, or at such time after the Registration Statement becomes
effective as you may authorize the sale of the Securities to the public by the
Underwriters or other securities dealers, or (b) if the Registration Statement
has heretofore become effective, at the earlier of 24 hours after the filing of
the Prospectus with the Commission or at such time as you may authorize the sale
of the Securities to the public by the Underwriters or securities dealers,
unless, prior to any such time you shall have received notice from the Company
that it elects that this Agreement shall not become effective, or you, or
through you such of the Underwriters as have agreed to purchase in the aggregate
fifty percent or more of the Firm Securities hereunder, shall have given notice
to the Company that you or such Underwriters elect that this Agreement shall not
become effective; provided, however, that the provisions of this Section and
Section 6 and Section 8 hereof shall at all times be effective.
If this Agreement shall be terminated pursuant to Section 9 or 11
hereof, or if this Agreement, by election of you or the Underwriters, shall not
become effective pursuant to the provisions of this Section, the Company shall
not then be under any liability to any Underwriter except as provided in Section
6 and Section 8 hereof, but if this Agreement becomes effective and is not so
terminated but the Securities are not delivered by or on behalf of the Company
as provided herein because the Company has been unable for any reason beyond its
control and not due to any default by it to comply with the terms and conditions
hereof, the Company will reimburse the Underwriters through you, for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Securities, but the
Company shall then be under no further liability to any Underwriters, except as
provided in Section 6 and Section 8 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter, if the
same shall have been made or given by you.
All statements, requests, notices and agreements hereunder shall be in
writing or by written telecommunication, and shall be sufficient in all respects
if delivered or sent by registered mail, if to the Underwriters, to the
Representatives, c/x Xxxxxxxx Wertheim & Co. Incorporated at 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000, Attention: Syndicate Department; provided, however,
that any notice to any Underwriter
-29-
pursuant to Section 8(d) hereof shall be delivered or sent by registered mail to
such Underwriter at its address set forth in its Underwriters' Questionnaire
delivered to the Company; and if to the Company, to Xxxxxx Xxxxxx, R.S.
Xxxxxx, Xxxxxx & Co., LP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in Section
8 and Section 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriters shall be deemed a successor or
assign by reason merely of such purchase.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York (without reference to the conflicts of
laws provisions thereof).
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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If the forgoing is in accordance with your understanding, please sign
and return to us a counterpart hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement Among
Underwriters, manually or facsimile executed counterparts of which, to the
extent practicable and upon request, shall be submitted to the Company for
examination, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
CENTRAL EUROPEAN MEDIA
ENTERPRISES LTD.
By:
---------------------------------
Accepted as of the date hereof,
XXXXXXXX XXXXXXXX & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
By: Xxxxxxxx Xxxxxxxx & Co. Incorporated
By:
-----------------------------
Managing Director
For themselves and as Representatives
of the Underwriters
SCHEDULE I
Underwriter Number of Shares
----------- ----------------
Xxxxxxxx Wertheim & Co. Incorporated.........................
Prudential Securities Incorporated...........................
Xxxxx Xxxxxx Inc.............................................
Total............................................... 3,000,000
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