<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 29, 1996
REGISTRATION NO. 333-
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
BERMUDA NOT APPLICABLE
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
CLARENDON HOUSE
CHURCH STREET
HAMILTON HM/CX
BERMUDA
(441) 296-1431
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
LEONARD M. FERTIG
CHIEF EXECUTIVE OFFICER
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
C/O CME DEVELOPMENT CORPORATION
18 D'ARBLAY STREET
LONDON W1V 3FP ENGLAND
44-171-292-7900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:
<TABLE>
<S> <C>
ROBERT L. KOHL, ESQ. ALAN SIEGEL, ESQ.
ROSENMAN & COLIN LLP AKIN, GUMP, STRAUSS,
575 MADISON AVENUE HAUER & FELD, L.L.P.
NEW YORK, NY 10022 399 PARK AVENUE
(212) 940-8800 NEW YORK, NY 10022
(212) 872-1000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
[CAPTION]
<TABLE>
<S> <C> <C> <C> <C>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1) SHARE PRICE(2) FEE
<S> <C> <C> <C> <C>
Class A Common Stock, $0.01 par
value per share................... 920,000 $28.00 $2,576,000 $7,806
</TABLE>
(1) Includes 120,000 shares that the Underwriters have the option to purchase to
cover over-allotments, if any.
(2) Solely for purpose of calculating the registration fee pursuant to Rule
457(c).
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
The contents of Amendment No. 2 to the Registration Statement on Form S-3
(333-12699) filed by Central European Media Enterprises Ltd. pursuant to the
Securities Act of 1933, as amended, are hereby incorporated into this
Registration Statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, New York on October 29, 1996.
CENTRAL EUROPEAN MEDIA ENTERPRISES
LTD.
By: /s/ John A. Schwallie
_________________________________
John A. Schwallie
Vice President-Finance, Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- - ------------------------------------------ ---------------------------------------- -------------------
<C> <S> <C>
Chairman of the Board of Directors October 29, 1996
- - ------------------------------------------
Ronald S. Lauder
/s/ Leonard M. Fertig President, Chief Executive Officer and October 29, 1996
- - ------------------------------------------ Director (Principal Executive Officer)
Leonard M. Fertig
/s/ John A. Schwallie Vice President--Finance, October 29, 1996
- - ------------------------------------------ Chief Financial Officer
John A. Schwallie (Principal Accounting and
Principal Financial Officer)
/s/ Andrew Gaspar Director and Authorized U.S. October 29, 1996
- - ------------------------------------------ Representative
Andrew Gaspar
/s/ Herbert Schlosser Director October 29, 1996
- - ------------------------------------------
Herbert Schlosser
/s/ Nicolas Trollope Director October 29, 1996
- - ------------------------------------------
Nicolas Trollope
/s/ Robert A. Rayne Director October 29, 1996
- - ------------------------------------------
Robert A. Rayne
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- - ------ ----------------------------------------------------------------------------------------------------------
<C> <C> <S>
1.01 -- Form of Underwriting Agreement
4.01 -- Specimen Class A Common Stock Certificate (incorporated by reference to Exhibit 4.01 to Amendment
No.1 to the Company's Registration Statement No. 33-80344 on Form S-1, filed on August 19, 1994)
5.01 -- Opinion of Conyers, Dill & Pearman
23.01 -- Consent of Conyers, Dill & Pearman (included in Exhibit 5.01)
23.02 -- Consent of Rosenman & Colin LLP (incorporated by reference to Exhibit 23.02 to Amendment No.1 to the
Company's Registration Statement No. 333-12699 on Form S-3, filed on October 9, 1996)
23.03 -- Consent of Arthur Andersen & Co. (included at page II-3)
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated March 28, 1996
and March 4, 1996 and included in Central European Media Enterprises Ltd.'s Form
10-K for the year ended December 31, 1995 and to all references to our firm
included in or made a part of this registration statement.
ARTHUR ANDERSEN & CO.
Hamilton, Bermuda
October 29, 1996
</TABLE>
<PAGE>
Central European Media Enterprises Ltd.
4,800,000 Shares
Class A Common Stock
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
New York, New York
October __, 1996
SCHRODER WERTHEIM & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
As Representatives of
the several Underwriters
named in Schedule I hereto
c/o Schroder Wertheim & Co. Incorporated
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
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 4,800,000 shares of Class A Common Stock, par
value $.01 per share (the "Common Stock"). The 4,800,000 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 720,000 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) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act") and 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
<PAGE>
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 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
"Original 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 Original Registration Statement, together
with pricing-related information, a term sheet or an abbreviated term
sheet, being herein called the "Prospectus");
(b) The Company may also file with the Commission a
registration statement pursuant to Rule 462(b) of the Rules for the
purpose of registering certain additional Securities (any such
registration statement, including any preliminary prospectus or
prospectus incorporated therein at the time such registration
statement becomes effective, being herein called a "Rule 462(b)
Registration Statement", and together with the Original Registration
Statement, the "Registration Statement"), which shall be effective
upon filing with the Commission and copies of which shall be delivered
to you, and with the exception of exhibits, if any, to you for each
other Underwriter;
(c) No order preventing or suspending the use of any
Preliminary Prospectus or Prospectus has been issued by the
Commission, and each Preliminary Prospectus and 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;
(d) If the Company has elected to rely on Rule 462(b) of the
Rules and the Rule 462(b) Registration Statement has not been declared
effective (i) the Company has filed a Rule 462(b) Registration
Statement with the Commission which is in compliance with and which is
effective upon filing pursuant to Rule 462(b) of the Rules and has
received confirmation from the Commission of its receipt, and (ii) the
Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under
the Act or the Commission has received payment of such filing fee;
(e) 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 at the Time of Delivery (as defined in Section 4 hereof)
and on any Option Securities Delivery Date (as defined in Section 4
hereof), 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 as in effect on such date (or,
with respect to documents incorporated therein by reference, on the
date of filing of such document), 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 as of such dates (or, with respect to documents
incorporated by reference, on the date of filing
-2-
<PAGE>
of such document); 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;
(f) 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;
(g) 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 change, in or affecting the
general affairs, management, financial position, stockholders' 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;
(h) 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 would not, singly or in the
aggregate, have a material adverse effect on the Company and its
Subsidiaries taken as a whole, 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 described or contemplated by the Prospectus or such exceptions as
would not, singly or in the aggregate, have a material adverse effect
on the Company and its Subsidiaries taken as a whole;
(i) 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 Time of Delivery
(as defined in Section 4 hereof), 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;
-3-
<PAGE>
(j) 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 or lease 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, with power and
authority (corporate and other) to own or lease its properties and to
conduct its business as described in the Prospectus 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;
(k) 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 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 as
described in the Prospectus as being owned by 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, except such as are described in the Prospectus or
such as would not, singly, or in the aggregate, have a material
adverse effect on the Company and its Subsidiaries, taken as a whole;
and there are no outstanding options, warrants or other rights calling
for the issuance of 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,
except such as are described in the Prospectus or such as would not,
singly or in the aggregate, have a material adverse effect on the
Company and its Subsidiaries, taken as a whole;
(l) The Securities to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized,
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 Stock
Market's National Market 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;
(m) 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
-4-
<PAGE>
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;
(n) 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, except as set forth in the Prospectus, 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;
(o) 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;
(p) 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 and in the jurisdictions in which
they conduct such businesses; 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;
(q) Arthur Andersen & Co. who have certified certain
consolidated financial statements of (i) the Company and its
consolidated Subsidiaries, (ii) 1A TV Beteiligungsgesellschaft GmbH &
Co. Betriebs KG ("PULS") and (iii) Franken Funk & Fernsehen GmbH
("FFF") are independent public accountants as required by the Act and
the Rules;
(r) The consolidated financial statements of the Company and
the financial statements of PULS, FFF and any other unconsolidated
associated company in which the Company has a financial interest (the
"Unconsolidated Associated Companies") included in the Registration
Statement (or incorporated by reference therein) 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
-5-
<PAGE>
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 (or incorporated by reference therein)
and the Prospectus;
(s) 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;
(t) 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 businesses 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;
(u) In addition to the rights described in paragraph (t)
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;
(v) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its Memorandum of Association or
bye-laws or equivalent corporate governance documents, 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 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;
(w) 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 except
such as is disclosed in the Prospectus or such as would not, singly or
in the aggregate, have a material adverse effect on the Company and
its Subsidiaries taken as a whole;
(x) The Company and its Subsidiaries, other than the Romanian
Subsidiary (as defined below), 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, other than the Romanian
Subsidiary; the Company and its Subsidiaries, other than the Romanian
Subsidiary, 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, other than the Romanian
-6-
<PAGE>
Subsidiary, 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;*
(y) During the period of 120 days after the date hereof,
except pursuant to this Agreement and to its 1994 and 1995 Stock
Option Plans or in connection with warrants and options to purchase
375,000 shares of Class A Common Stock as described in the Prospectus,
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.
(z) 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;
(aa) 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;
(bb) 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;
(cc) The indemnification and contribution provisions set
forth in Section 8 hereof do not contravene Bermuda law or public
policy;
(dd) 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;
(ee) 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;
(ff) 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,
- - --------
* [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.] The Romanian
Subsidiary has failed to timely pay certain VAT and related
penalties and withholding taxes in Romania, which taxes and
penalties, if not paid or relieved following a successful
appeal to the Romanian taxation authorities, could have a
material adverse effect on the Romanian Subsidiary, but would
not have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
-7-
<PAGE>
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;
(gg) 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;
and
(hh) 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
Prentice-Hall Corporation System, Inc. as its agent for service of
process.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the several Underwriters an aggregate of 4,800,000
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
720,000 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 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
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<PAGE>
checks, payable in Federal or other same-day 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
__________________, 1996, 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 Federal or other same-day 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 six 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),
7(p) and 7(r), provided, that if the Option Securities Delivery Date and the
Time of Delivery 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 Original Registration Statement has become effective, to
promptly file the Rule 430A Prospectus with the Commission in
accordance with the provisions of such rule; to make no further
amendment or any supplement to the Original Registration Statement or
Prospectus or file any Rule 462(b) Registration Statement which shall
be reasonably disapproved by you after reasonable notice thereof; to
advise you, 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 or Rule 462(b) Registration
Statement 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
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<PAGE>
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 deliver to you and, with the exception of exhibits, to
you for each other Underwriter, copies of the Original Registration
Statement, each Rule 462(b) 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 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 or in connection with warrants to purchase 375,000 shares
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<PAGE>
of Class A Common Stock as described in the Prospectus, 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 Original
Registration Statement and the Prospectus and (except as otherwise provided in
Section 5(c) hereof) amendments and supplements thereto and any Rule 462(b)
Registration Statement 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
and in Sections 8 and 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:
(a) The Original Registration Statement and, if the Company
has elected to rely on Rule 462(b), the Rule 462(b) Registration
Statement shall have been declared effective, and you shall have
received notice thereof with respect to the Original Registration
Statement, and time confirmation thereof with respect to any Rule
462(b) Registration Statement, 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, Hauer & Feld, L.L.P., counsel to the Underwriters, and Akin,
Gump, Strauss, Hauer & Feld, L.L.P. shall have been furnished with
such papers
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<PAGE>
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, or any Rule 462(b) Registration Statement 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) Conyers, Dill & Pearman, 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 and
lease 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;
(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 bye-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;
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<PAGE>
(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 bye-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 Prospectus 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 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 any 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 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 Conyers, Dill & Pearman in its opinion to you
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<PAGE>
delivered pursuant to this subsection, shall state that such counsel are
satisfactory to them and Conyers, Dill & Pearman has no reason to believe that
you and they are not entitled to so rely);
(e) Baker & McKenzie, 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 corporation 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;
(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 in accordance
with the terms hereof and of the Agreement Among
Underwriters) 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;
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<PAGE>
(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 is required to
be disclosed in the Registration Statement and Prospectus or
to be held as an exhibit to the Registration Statement that
is not disclosed therein or filed as required, and each
contract governed by the laws of the State of New York or
U.S. Federal law summarized in the Registration Statement and
Prospectus 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 Time
of Delivery, 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.
(g) Baker & McKenzie, 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 Prospectus
and to own and lease its properties;
-15-
<PAGE>
(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 Prospectus;
(iv) the Partnership Agreement for 1A 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 Dr. Dietmar Straube, 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
and of the Agreement Among Underwriters (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
Prospectus (the "German Licenses"); except for pending
litigation disclosed and correctly summarized in the
Prospectus, 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; 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 and correctly
summarized in the Prospectus) which would lead any regulatory
authorities 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" in the Prospectus relate 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, such statements correctly describe such legal
matters and such legal effect; and
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<PAGE>
(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) Radvan & Co., 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 organized
as a limited liability company under the laws of the Czech
Republic and Radio Alfa, a.s. ("Radio Alfa") has been duly
incorporated or organized as a joint stock company under the
laws of the Czech Republic;
(ii) each of the Czech Subsidiary and Radio Alfa has
the power and authority required to carry on its business as
it is stated to be carried on in the Prospectus 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 fully paid, 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 Prospectus;
(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. (CET 21) the
Loan Agreement and Transfer Agreements relating to the
transfer of 2% of the Participation Interest in the Czech
Subsidiary between the CME BV and Czech Savings Bank all
dated August 1, 1996; the Loan Agreement, Transfer Agreements
and Trusteeship Agreement between the CME BV and Dr. Zelezny
regarding the transfer of Participation Interests in CET 21
all dated August 1, 1996; and all other material agreements
reviewed by such counsel relating to the rights and
obligations of the Company with respect to the Czech
Subsidiary (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, as
supplemented by the several Supplemental Loan Agreements
(collectively, the "Loan Agreements"); each of the Agreements
on Future Agreement between CME BV and IDOS, spel. s.r.o. and
Releas a.s. relating to options to purchase additional
interests in Radio Alfa (collectively, the "Option
Agreements"); and all other material agreements reviewed by
such counsel relating to the rights and obligations of the
Company and any Subsidiary with respect to Radio Alfa created
(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 of the Agreement Among Underwriters (a) will not require
any consent, approval, authorization or other order of any
Czech
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<PAGE>
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) CET 21 and Radio Alfa have obtained the
Licenses required under applicable laws of the Czech Republic
for purposes of carrying on their respective broadcast
operations as described in the Prospectus (collectively the
"Czech Licenses") and the Czech Subsidiary has acquired from
CET 21 the exclusive right to use CET 21's License to
broadcast the Czech Subsidiary's programming in the Czech
Republic, except for the administrative proceedings disclosed
and correctly summarized in the Prospectus regarding an
alleged inconsistency between the present registration of the
scope of business activity of the Czech Subsidiary, to the
best knowledge of such counsel, there are no orders
outstanding which have been made against CET 21, 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 there
have been no breaches of the terms of the Czech Licenses
(except as disclosed and correctly summarized in the
Prospectus) which would lead any regulatory authorities to
take any action under their respective powers in relation
thereto;
(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" in the Prospectus 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) Radvan & Co., 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
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 Prospectus and to own and lease its
properties;
(iii) all of the shares or other interests, in the
capital of the Slovak Subsidiary which have been issued or
granted to a subsidiary of the Company have been validly
created, allotted and issued and fully paid, 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;
-18-
<PAGE>
(iv) the Memorandum of Association and Articles of
Association each dated September 28, 1995 of the Slovak
Subsidiary; the Participants Agreement dated September 28,
1995 between CME BV and Markiza - Slovakia s.r.o.
("Markiza"); the agreement between CME BV and Markiza dated
October 1, 1995 regarding CME BV's contributions; the Mandate
Agreement between Markiza and the Czech Subsidiary
(collectively the "STS Agreements"); and all other material
agreements reviewed by such counsel relating to the rights
and obligations of the Company and any Subsidiary with
respect to the Slovak Subsidiary (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 of 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 broadcast operations as described in the Prospectus (the
"Slovak License") and STS has acquired from Markiza the
exclusive right to use the License such that television
programming produced by STS is broadcast under the Slovak
License by Markiza; to the best of such counsel's knowledge,
there are 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 there have been no breaches of the terms of the
Slovak License (except as disclosed and correctly summarized
in the Prospectus) 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" in the Prospectus 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) Jadek & Pensa, 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:
(i) Prodkcija Plus d.o.o. Ljubljana ( "Pro Plus" or
the "Slovenian Subsidiary") has been duly incorporated or
organized as a limited liability company under the laws of
Slovenia;
(ii) the Slovenian Subsidiary has the powertus and
to own and lease its properties;
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<PAGE>
(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 Prospectus;
(iv) the Partnership Agreement dated February 10,
1995 among CME BV, MMTV 1 d.o.o., Ljubljana ("MMTV") and Tele
59 d.o.o., Maribor ("Tele 59"); the Share Purchase Agreement
dated April 8, 1995 by and between CME BV and Zdenka Meglic,
Zorgova 70, Ljublana ("Meglic"); the Preliminary Agreement
dated December 7, 1995 by and between CME BV and Tele 59; and
all other material agreements reviewed by such counsel
relating to the rights and obligations of the Company and any
Subsidiary with respect to the Slovenian Subsidiary
(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 of 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) to the best knowledge of such counsel there
are no winding up petitions against the Slovenian Subsidiary,
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
Prospectus (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; to the best knowledge of such
counsel 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 there have been no breaches
of the terms of the Slovenian Licenses (except as disclosed
and correctly summarized in the Prospectus) which would lead
any regulatory authorities 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 Slovenia: POP TV"
in the Prospectus 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 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.
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<PAGE>
(k) Liana Petrovici, 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 organized as a
joint stock company 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 Prospectus 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 Prospectus;
(iv) the Cooperation Agreement dated August 1995
among CME BV, Ion Tiriac and Adrian Sarbu; the various Loan
Agreements between CME BV and Pro TV, S.R.L.; and all other
material agreements reviewed by such counsel relating to the
rights and obligations of the Company and any Subsidiary with
respect to the Romanian Subsidiary (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 of 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 Prospectus 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 Prospectus (the "Romanian Licenses"); to the
best knowledge of such counsel, 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 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 there have been no breaches of the terms of the
Romanian Licenses (except as disclosed and correctly
summarized in the Prospectus) which would lead any regulatory
authorities 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" in
the Prospectus 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
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<PAGE>
subject matter of this Agreement or is required to be
disclosed in the Prospectus which is not disclosed and
correctly summarized therein.
(l) Andrea Kozma, 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) Each of 2002 Kft. ("2002") and its subsidiaries
in Hungary, Veszprem TV Kft. ("Veszprem TV"), Magyarhang Kft.
("Magyarhang") and Videovox Studio Kft. ("Videovox")
(collectively, the "Hungarian Subsidiaries") has been duly
incorporated or duly organized as a partnership or other
Legal Entity under the laws of Hungary;
(ii) Each of the Hungarian Subsidiaries has the
power and authority required to carry on its business as it
is stated to be carried on in the Prospectus and to own and
lease its properties;
(iii) all of the issued shares or other interests in
the capital of each of the Hungarian Subsidiaries 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
each of the Hungarian Subsidiaries disclosed in the
Prospectus.
(iv) the material agreements set forth in Schedule I
to such counsel's opinion relating to the rights and
obligations of the Company and any Subsidiary with respect to
each Hungarian Subsidiary (collectively, the "Hungarian
Constituent Documents,") 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 of 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 any
of the Hungarian Subsidiaries;
(vii) each of Veszprem TV and 2002 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 Prospectus (collectively, the "Hungarian
Licenses"); to the best knowledge of such counsel, there are
no orders outstanding which have been made against any
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 any
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 any Hungarian License, or the imposition of any
administrative sanction; and there have been no breaches of
the terms of any Hungarian License (except as disclosed and
correctly summarized in the Prospectus) which would lead any
regulatory authorities to take any action under their
respective powers in relation thereto;
(viii) insofar as the statements under the captions
"The Company" and "Business "Business - Broadcast Operations
Under Development - Hungary" in the Prospectus 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
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<PAGE>
(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 or is required to be
disclosed in the Prospectus which is not disclosed and
correctly summarized therein.
(m) Altheimer & Gray, 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 Prospectus 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 Prospectus;
(iv) all material agreements scheduled in such
counsel's opinion relating to the rights and obligations of
the Company and any Subsidiary with respect to the Polish
Subsidiary (collectively, the "Polish Constituent Documents,"
) 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 of 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;
(vi) to the best knowledge of such counsel, there
are no winding up petitions against the Polish Subsidiary;
(vii) Televisja Wisla Sp.z.o.o. ("TV Wisla") has
been issued the License required under applicable Polish law
for the purposes of carrying on its broadcast operations as
described in the Prospectus (collectively, the "Polish
License"); to the best knowledge of such counsel, there are
no orders outstanding which have been made against the Polish
Subsidiary or TV Wisla; no application, action or proceeding
is 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 there have been no breaches of the terms of the
Polish License (except as disclosed and correctly summarized
in the Prospectus) which would lead any regulatory
authorities 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" in the Prospectus constitute a summary
of
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<PAGE>
Polish law and insofar as they purport to describe the legal
effect of the Polish 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 or is required to be
disclosed in the Prospectus which is not disclosed and
correctly summarized in the Prospectus.
(n) Baker & McKenzie, 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) to the best knowledge of such counsel each of
the companies comprising the Studio 1+1 Group of Companies
(the "Ukrainian Subsidiary") has been duly incorporated or
organized as a partnership or other Legal Entity under the
laws of the jurisdiction of its organization;
(ii) to the best knowledge of such counsel each of
the companies comprising the Ukrainian Subsidiary has the
power and authority required to carry on its business as it
is stated to be carried on in the Prospectus 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 Prospectus.
(iv) all material agreements scheduled in such
counsel's opinion relating to the rights and obligations of
the Company and any Subsidiary with respect to the Ukrainian
Subsidiary (collectively, the "Ukrainian Constituent
Documents") are valid and binding agreements and are
enforceable in accordance with their terms;
(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 of 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) to the best knowledge of such counsel there are
no winding up petitions against
any of the companies comprising 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 Prospectus (the "Broadcast Rights"); to the best
knowledge of such counsel, there are no orders outstanding
which have been made against any of the companies comprising
the Ukrainian Subsidiary; no application, action or
proceeding is or will be pending or threatened that may
result in the revocation, modification, nonrenewal or
suspension of any Broadcast Right, 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 any Broadcast
Right, or the imposition of any administrative sanction; and
there
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<PAGE>
have been no breaches of the terms of the Broadcast Rights
(except as disclosed in the Registration Statement) which
would lead any regulatory authorities 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" in the Prospectus 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, Hauer & Feld, 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, Arthur Andersen & Co. 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
(or incorporated by reference therein) 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 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(p), included
in the Registration Statement for them to be in
conformity with generally accepted accounting
principles; and
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<PAGE>
(ii) The unaudited consolidated
financial statements described in this Section 7(p)
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 25, 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 25, 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 25, 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 25,
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 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;
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<PAGE>
(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, EL/RSLG Media,
Inc., 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 120 days after the date of this
Agreement, without the prior written consent of the Schroder Wertheim
& Co. Incorporated.
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 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.
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<PAGE>
(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,
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 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
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<PAGE>
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 Schroder Wertheim & 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 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.
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<PAGE>
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.
11. This Agreement may be terminated with respect to the Firm
Securities or any Option Securities in the sole discretion of the Underwriters
by notice to the Company given prior to the Time of Delivery or Option
Securities Delivery Date, as the case may be, 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 Time of Delivery or Option Securities
Delivery Date, as the case may be, 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
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<PAGE>
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 Stock Market's 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/o Schroder Wertheim & Co. Incorporated at 787 Seventh
Avenue, New York, New York, 10019, Attention: Syndicate Department; provided,
however, that any notice to any Underwriter 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 the Company at 18 D'Arblay Street, London W1V 3FP
England, Attention: General Counsel.
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,
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<PAGE>
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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<PAGE>
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,
SCHRODER WERTHEIM & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
By: Schroder Wertheim & Co. Incorporated
By:
-----------------------------
Managing Director
For themselves and as Representatives
of the Underwriters
<PAGE>
SCHEDULE I
Underwriter Number of Shares
Schroder Wertheim & Co. Incorporated........................
Prudential Securities Incorporated..........................
Smith Barney Inc............................................
Total.............................................. 4,800,000
<PAGE>
[LETTERHEAD OF CONYERS DILL & PEARMAN]
October 29, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
We have been requested by Central European Media Enterprises Ltd., (the
'Company'), a Bermuda company, to furnish our opinion in connection with the
registration statement (the 'Registration Statement') on Form S-3, with respect
to the registration of 920,000 shares (the 'Shares') of the Company's Class A
common stock, par value $.01 per share.
We have made such examination as we have deemed necessary for the purpose
of this opinion. Based upon such examination, it is our opinion that, when the
Registration Statement has become effective under the Securities Act of 1933,
when the Shares have been qualified as required under the laws of those
jurisdictions in which they are to be issued and sold and when the Shares have
been sold, issued and paid for in the manner described in the Registration
Statement, the Shares will have been validly issued and will be fully paid and
non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Conyers, Dill & Pearman
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CONYERS, DILL & PEARMAN
