<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 3)(1)
Central European Media Enterprises Ltd.
(Name of Issuer)
Class A Common Stock, par value $.01 per share
(Title of Class of Securities)
G20045 10 3
(CUSIP Number)
Ronald S. Lauder
767 Fifth Avenue, Suite 4200
New York, New York 10153
(212) 572-4090
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 22, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7(b) for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 7 Pages)
- -----------------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO. G20045 10 3 13D Page 2 of 7 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Ronald S. Lauder
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 6,183,700 Shares
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 646,895 Shares
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 6,183,700 Shares
10 SHARED DISPOSITIVE POWER
646,895 Shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,830,595 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.4%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Page 3 of 7 Pages
Item 1. Security and Issuer.
This statement relates to the Class A Common Stock, par
value $0.01 per share (the "Class A Common Stock"), of Central European Media
Enterprises Ltd. (the "Issuer"), a Bermuda company. The Issuer's registered
offices are located at Clarendon House, Church Street, Hamilton, HM CX
Bermuda. Certain of the Central European Media Enterprises Ltd. group of
companies also maintain offices at 18 D'Arblay Street, London WIV 3FP,
England.
Item 2. Identity and Background.
(a) This statement is filed on behalf of Ronald S. Lauder
(the "Reporting Person").
(b) The address of the Reporting Person is c/o RSL
Investments Corporation, 767 Fifth Avenue, Suite 4200, New York, New York
10153.
(c) The Reporting Person's principal business occupations
are nonexecutive Chairman of the Board of the Issuer and Chairman of RSL
Communications, Ltd., an international telecommunications company, since 1994.
The Reporting Person has served as Chairman of Estee Lauder International and
Chairman of Clinique Laboratories, Inc., divisions of The Estee Lauder
Companies Inc. since 1987. The address of all of such companies is 767 Fifth
Avenue, New York, N.Y. 10153.
(d)(e) The Reporting Person has not during the last five
years: (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, Federal or State securities laws or finding any violation with respect to
such laws.
(f) The Reporting Person is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
On December 22, 1998, RSL Capital LLC ("RSL Capital"), a
company wholly-owned by the Reporting Person, made an equity investment of
$22.725 million in the Issuer in exchange for 1,515,000 shares of the Issuer's
Class B common stock, par value $.01 per share (the "Class B Common Stock"),
which is a price equal to $15.00 per share, pursuant to the terms of a Stock
Purchase Agreement, dated as of December 3, 1998, between the Issuer and RSL
Capital (the "Stock Purchase Agreement"). Each share of Class B Common Stock
is convertible at the option of the holder into one share of Class A Common
Stock. Pursuant to the terms of the Stock Purchase Agreement, the Issuer is
required to issue additional shares of the Class B Common Stock to RSL Capital
under certain circumstances. See Item 4.
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Page 4 of 7 Pages
Item 4. Purpose of Transaction.
While the Reporting Person may acquire additional shares of
the common stock of the Issuer, or dispose of some of his holdings, the
Reporting Person has no present plans or intentions which would result in or
relate to any of the transactions described in subparagraphs (a) through (j),
inclusive, of Item 4 of Schedule 13D except as described in the next sentence.
Pursuant to the Stock Purchase Agreement, if the last reported daily trading
price of the Class A Common Stock on the NASDAQ Stock Market does not equal or
exceed $15.00 for at least 20 consecutive trading days during the period that
commenced on November 13, 1998 and ending November 12, 1999 (the "Measurement
Period"), the Issuer will issue additional shares of Class B Common Stock to
RSL Capital for no additional consideration so that the average per share
price for the shares of Class B Common Stock acquired by RSL Capital pursuant
to the Stock Purchase Agreement will equal the average last reported daily
trading price of the Class A Common Stock during the Measurement Period,
provided, that, in no event shall the average price per share for the shares
of Class B Common Stock acquired by RSL Capital be less than $10.00 per share.
The purpose of the Reporting Person's acquisitions is long term investment.
However the Reporting Person beneficially owns securities of the Issuer
representing a majority of the voting power of the Issuer. Consequently, the
Reporting Person has the ability to control the election of the Board of
Directors of the Issuer and thus the direction and future operations of the
Issuer without the supporting vote of any other shareholder of the Issuer,
including decisions regarding acquisitions and other business opportunities
(except with respect to a "going private" transaction between the Issuer and
the Reporting Person), the declaration of dividends and the issuance of
additional shares of Class A Common Stock and other securities and to
implement most of the other transactions described in subparagraphs (b)
through (j), inclusive, of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of January 11, 1999, the aggregate number of shares
of Class A Common Stock beneficially owned by the Reporting Person was
6,830,595, approximately 27.4% of the total amount outstanding. Percentage
ownership is calculated pursuant to Rule 13-3(d)(1)(i) under the Securities
Exchange Act of 1934, as amended. This represents (i) 320,000 shares
underlying warrants for Class A Common Stock which are currently exercisable,
(ii) 5,000 shares underlying options for Class A Common Stock which are
currently exercisable, (iii) 50,000 shares of Class B Common Stock underlying
options which are currently exercisable, which Class B Common Stock is
convertible at the option of the Reporting Person into Class A Common Stock,
and (iv) 6,455,595 shares of Class B Common Stock convertible at the option of
the holder into Class A Common Stock which includes (a) 120,034 shares of
Class B Common Stock held directly by the Reporting Person, (b) 3,385,417
shares of Class B Common Stock held by RSL Investments Corporation, 1,515,000
shares of Class B Common Stock held by RSL Capital, and 577,788 shares of
Class B Common Stock held by Duna Investments, Inc., all of which are owned by
the Reporting Person, (c) 210,461 shares of Class B Common Stock held by RAJ
Family Partners L.P. and beneficially owned by the Reporting Person, and (d)
646,895 shares of Class B Common Stock held by EL/RSLG Media, Inc., of which
50% of the common
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Page 5 of 7 Pages
stock outstanding is beneficially owned by the 1995 Estee Lauder RSL Trust and
beneficially owned by the Reporting Person. Each share of Class B Common Stock
is convertible at the option of the holder into one share of Class A Common
Stock.
(b) As of January 11, 1999, the Reporting Person had sole
voting and dispositive power with respect to 6,183,700 shares of Class A
Common Stock. This represents (i) 320,000 shares underlying warrants for Class
A Common Stock which are currently exercisable, (ii) 5,000 shares underlying
options for Class A Common Stock which are currently exercisable, (iii) 50,000
shares of Class B Common Stock underlying options which are currently
exercisable, which Class B Common Stock is convertible at the option of the
Reporting Person into Class A Common Stock, and (iv) 5,808,700 shares of Class
B Common Stock convertible at the option of the Reporting Person into Class A
Common Stock which includes (a) 120,034 shares of Class B Common Stock held
directly by the Reporting Person, (b) 3,385,417 shares of Class B Common Stock
held by RSL Investments Corporation, 1,515,000 shares of Class B Common Stock
held by RSL Capital, and 577,788 shares of Class B Common Stock held by Duna
Investments, Inc., all of which are owned by the Reporting Person, and (c)
210,461 shares of Class B Common Stock held by RAJ Family Partners L.P. Each
share of Class B Common Stock is convertible at the option of the holder into
one share of Class A Common Stock.
The Reporting Person shares voting and dispositive power
with respect to 646,895 shares of the Class A Common Stock beneficially owned
and into which the 646,895 shares of the Class B Common Stock held by EL/RSLG
Media, Inc. are convertible. The 1995 Estee Lauder RSL Trust, of which the
Reporting Person is a co-trustee and beneficiary, owns one-half of the common
stock outstanding of EL/RSLG Media, Inc. The Reporting Person disclaims
beneficial ownership to the extent he does not have a pecuniary interest in
such shares. The Reporting Person shares voting and dispositive power with
respect to the 646,895 shares with Leonard A. Lauder, a co-trustee and
beneficiary of The 1995 Estee Lauder LAL Trust, which owns the other one-half
of the common stock outstanding of EL/RSLG Media, Inc. The address of Leonard
A. Lauder is c/o The Estee Lauder Companies, Inc., 767 Fifth Avenue, New York,
New York 10153. For information regarding Leonard A. Lauder as required by
Item 2, please see the Schedule 13D filed by Leonard A. Lauder on January 25,
1996 with respect to ownership of certain shares of the Issuer.
(c) No transactions in shares of Class A Common Stock were
effected during the past 60 days by the persons named in response to paragraph
(a) of this Item 5 except that RSL Capital received 1,515,000 shares of Class
B Common Stock on December 22, 1998 pursuant to the terms of the Stock
Purchase Agreement and for the consideration discussed in Item 3 of this
Schedule 13D.
(d) Leonard A. Lauder shares with the Reporting Person the
right to receive and the power to direct the receipt of dividends from, or the
proceeds from the sale of, the 646,895 shares of Class B Common Stock in which
the Reporting Person shares voting and dispositive power. Each share of the
Class B Common Stock is convertible at the option of the holder into one share
of the Class A Common Stock.
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Page 6 of 7 Pages
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
There are no contracts, arrangements, understandings or
relationships (legal or otherwise) among the person named in Item 2 or between
such person and any other person with respect to any securities of the Issuer
except that RSL Capital may under certain circumstances receive additional
shares of Class B Common Stock from the Issuer pursuant to the terms of the
Stock Purchase Agreement, as discussed in the response to Item 4 of this
Schedule 13D.
Item 7. Material to be filed as Exhibits
Exhibit 1. Stock Purchase Agreement between Central European
Media Enterprises Ltd. and RSL Capital LLC, dated as
of December 3, 1998.
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Page 7 of 7 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
January 18, 1999
----------------------
(Date)
/s/ Ronald S. Lauder
--------------------------
Ronald S. Lauder
<PAGE>
==============================================================================
STOCK PURCHASE AGREEMENT
between
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
and
RSL CAPITAL LLC
dated as of December 3, 1998
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
RECITALS....................................................................1
SECTION 1 SUBSCRIPTION AND ISSUANCE OF CLASS B SHARES...............1
1.1 Commitment....................................................1
1.2 Commitment Fee................................................1
1.3 Exercise of Commitment; Issuance and Sale of Shares...........2
1.4 Post-Closing Adjustment.......................................2
1.5 Legend........................................................3
SECTION 2 CONDITIONS................................................3
2.1 Representations, Performance..................................4
2.2 Delivery of Shares............................................4
2.3 Consents......................................................4
2.4 Injunction, etc...............................................4
2.5 No Material Adverse Effect....................................4
2.6 Opinion of Counsel............................................5
2.7 Corporate and Other Proceedings...............................5
2.8 Change of Control.............................................5
2.9 Buyer Expenses................................................5
2.10 Commitment Fee...............................................5
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............5
3.1 Corporate Existence and Power.................................5
3.2 Corporate and Governmental Authorization; No Contravention....5
3.3 Title to Shares, Capitalization, etc..........................6
3.4 Binding Effect................................................6
3.5 SEC Reports and Financial Statements..........................7
3.6 Absence of Undisclosed Liabilities............................7
3.7 Litigation....................................................8
3.8 Taxes.........................................................8
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE BUYER...............8
4.1 Organization and Authorization................................8
4.2 Binding Effect................................................8
4.3 Purchase for Investment.......................................8
SECTION 5 COVENANTS OF THE COMPANY..................................9
5.1 Conduct of Business...........................................9
5.2 Access and Information. .....................................9
<PAGE>
5.3 Financial Statements and Reports.............................10
5.4 Public Announcements.........................................10
5.5 Price Per Share Calculation; Additional Class B Shares.......10
5.6 Further Actions..............................................11
SECTION 6 INDEMNIFICATION..........................................11
SECTION 7 TERMINATION..............................................13
SECTION 8 DEFINITIONS..............................................13
SECTION 9 MISCELLANEOUS............................................17
9.1 Amendments and Waivers.......................................17
9.2 Successors and Assigns.......................................17
9.3 Notices......................................................17
9.4 Expenses.....................................................18
9.5 Survival of Representations and Warranties...................18
9.6 Severability.................................................19
9.7 Integration..................................................19
9.8 No Third Party Beneficiaries.................................19
9.9 Counterparts.................................................19
9.10 Governing Law and Jurisdiction..............................19
9.11 Trial Without Jury..........................................20
Exhibit A - Form of Exercise Notice
Exhibit B - Form of Officer's Certificate
Exhibit C - Form of Legal Opinion
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of December 3, 1998, by and among,
RSL Capital LLC, a New York limited liability company (the "Buyer"), and
Central European Media Enterprises Ltd., a company organized under the laws of
Bermuda (the "Company").
RECITALS:
WHEREAS, Ronald S. Lauder, the non-executive Chairman of the Company,
owns all the capital stock of and is the Chairman of the Buyer;
WHEREAS, the Company has requested to the Buyer to commit to
subscribe for 1,515,000 newly issued shares of the Company's Class B Common
Stock, $.01 par value per share ("Class B Shares"), at a price of $15 per
share (subject to adjustment as provided herein), and the Buyer has agreed to
make such a commitment on the terms and subject to the conditions set forth in
this Agreement; and
WHEREAS, all capitalized terms used herein without definition are
used as defined in Section 8;
NOW THEREFORE, and in consideration of the foregoing and the
covenants and conditions hereof, the Company and the Buyer (the "Parties")
agree as follows:
AGREEMENT:
SECTION 1
SUBSCRIPTION AND ISSUANCE OF CLASS B SHARES
1.1 Commitment. Subject to the terms and conditions of this
Agreement, upon written notice by the Company given on or prior to December
31, 1998 (the "Expiration Date"), the Buyer agrees to subscribe for 1,515,000
Class B Shares, for a subscription price per share of $15.00 (the "Per Share
Price"), subject to adjustment as set forth in Section 1.4, and an aggregate
subscription price of $22,725,000 (the "Subscription Price").
1.2 Commitment Fee. In consideration of the Buyer's willingness to
agree to subscribe for the Class B Shares, the Company shall pay the Buyer a
sum of $227,250 (the "Commitment Fee"), payable in cash on the earlier of the
Closing Date and January 4, 1999.
1.3 Exercise of Commitment; Issuance and Sale of Shares. (a) The
Company may exercise the commitment set forth in Section 1.1 by delivering to
the Buyer a written notice in the form set forth in Exhibit A hereto (an
"Exercise Notice") to such effect on or prior to the Expiration Date.
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2
(b) The closing of the subscription and purchase of the Class B
Shares (the "Closing") shall take place on the tenth Business Day following
the receipt by Buyer of the Exercise Notice (the "Closing Date") at 10:00 a.m.
at the offices of Debevoise & Plimpton, 875 Third Avenue, New York, New York,
or at such other time and place as the Parties shall agree.
(c) At the Closing, subject to the satisfaction of the conditions set
forth in Section 2, (i) the Buyer shall pay or cause to be paid the
Subscription Price to the Company by wire transfer of immediately available
funds to the account of the Company designated at least two Business Days
prior to the Closing Date and (ii) concurrently therewith the Company shall
issue and deliver to the Buyer (or to an Affiliate of the Buyer designated by
the Buyer no less than two Business Days prior to the Closing Date) one or
more certificates (as shall be designated by the Buyer) representing 1,515,000
Class B Shares, and shall take all such other actions as may be required to
vest legal title to the Class B Shares in the Buyer (or such Affiliate), free
and clear of all Liens, restrictions on sales or pre-emptive rights.
1.4 Post-Closing Adjustment. (a) Subject to paragraphs (b) and (c)
below, on November 19, 1999 (the "Adjustment Date"), the Company will issue to
the Buyer (or to an Affiliate of the Buyer designated in writing by the Buyer
no less than two Business Days prior to the Adjustment Date), for no
additional consideration, such number of additional Class B Shares that, when
added to the 1,515,000 Class B Shares issued to the Buyer on the Closing Date,
will result in the average Per Share Price for all Class B Shares issued to
the Buyer (and any Affiliate of the Buyer) pursuant to this Agreement being
equal to the average of the last reported trading price of the Company's Class
A Common Stock, $.01 par value per share, (the "Class A Shares") on NASDAQ
(the "Final Trading Price") for each NASDAQ trading day during the period from
and including November 13, 1998 to and including November 12, 1999 (the
"Measurement Period").
(b) If the last reported trading price of the Class A Shares on
NASDAQ equals or exceeds $15.00 for twenty or more consecutive NASDAQ trading
days during the Measurement Period, then there will be no adjustment to the
Per Share Price and no additional Class B Shares will be issued pursuant to
paragraph (a) of this Section 1.4.
(c) The maximum number of additional Class B Shares issuable to the
Buyer (or an Affiliate of the Buyer) pursuant to this Section 1.4 shall be
757,500 (corresponding to a Per Share Price of $10.00).
(d) In the event that any additional Class B Shares are issued to the
Buyer (or an Affiliate of the Buyer) pursuant to this Section 1.4, the Company
will deliver to the Buyer (or its Affiliate), on the Adjustment Date, one or
more certificates (as instructed by the Buyer) representing additional Class B
Shares and take all such other actions as may be required to vest legal title
to such additional Class B Shares in the Buyer (or its Affiliate), free and
clear of all Liens, restrictions on sales or pre-emptive rights.
<PAGE>
3
1.5 Legend. (a) Except as provided in Section 1.5(b), each
certificate for Class B Shares issued to the Buyer shall be stamped or
otherwise imprinted with a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED. NEITHER THESE SECURITIES NOR ANY INTEREST OR
PARTICIPATION THEREIN MAY BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED,
ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF EXCEPT
IN COMPLIANCE WITH THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND
THE APPLICABLE RULES AND REGULATIONS THEREUNDER.
(b) The legend requirements of Section 1.5(a) shall terminate (i)
when and so long as the Class B Shares in question shall have been effectively
registered under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act") and disposed of
pursuant thereto or (ii) when the Company shall have received an opinion of
counsel reasonably satisfactory to it that such legend is not required in
order to ensure compliance with the Securities Act.
SECTION 2
CONDITIONS
The obligations of the Buyer to consummate the transactions
contemplated hereby and to pay the Subscription Price to the Company shall be
subject to the fulfillment on or prior to the Closing Date of the following
additional conditions, which the Company agrees to use reasonable efforts to
cause to be fulfilled:
2.1 Representations, Performance. (a) The representations and
warranties of the Company contained in Section 3 shall be true and correct in
all material respects at and as of the date hereof, and shall be repeated and
shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though made on and as of the Closing Date.
(b) The Company shall have in all material respects duly performed
and complied with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by the Company prior to or on the
Closing Date.
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4
(c) The Company shall have delivered to the Buyer a certificate in
the form set forth in Exhibit B hereto, dated the Closing Date and signed by a
duly authorized officer of the Company.
2.2 Delivery of Shares. At the Closing, the Company shall have
delivered all of the certificates for the Class B Shares as provided in
Section 1.3 hereof.
2.3 Consents. All Consents of any Governmental Authority required to
be made or obtained by the Company in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby shall have been made or obtained.
2.4 Injunction, etc. The consummation of the transactions
contemplated hereby shall not have been restrained, enjoined or otherwise
prohibited or made illegal by any applicable Law, including any order,
injunction, decree or judgment of any court or other Governmental Authority;
and no such Law that would have such an effect shall have been promulgated,
entered, issued or determined by any court or other Governmental Authority to
be applicable to this Agreement. No action or proceeding shall be pending or
threatened by any Governmental Authority or other Person on the Closing Date
before any court or other Governmental Authority to restrain, enjoin or
otherwise prevent the consummation of the transactions contemplated hereby, or
to recover any material damages or obtain other material relief as a result of
such transactions, or that otherwise relates to the application of any such
Law.
2.5 No Material Adverse Effect. No event, occurrence, fact,
condition, change, development or effect shall exist or have occurred or come
to exist or been threatened since September 30, 1998 that, individually or in
the aggregate, has had or resulted in, or could reasonably be expected to
become or result in, a Material Adverse Effect.
2.6 Opinion of Counsel. The Buyer shall have received an opinion,
addressed to it and dated the Closing Date, from counsel to the Company, in
the form set forth in Exhibit C hereto.
2.7 Corporate and Other Proceedings. All corporate proceedings of the
Company in connection with the transactions contemplated by this Agreement,
and all documents and instruments incident thereto, shall be satisfactory in
form and substance to the Buyer and its counsel, and the Buyer and its counsel
shall have received all such documents and instruments, or copies thereof,
certified if requested, as may be reasonably requested.
2.8 Change of Control. No Change of Control of the Company shall have
occurred.
<PAGE>
5
2.9 Buyer Expenses. The Company shall have reimbursed the Buyer for
its reasonable out-of-pocket expenses referred to in Section 9.4 hereof.
2.10 Commitment Fee. The Company shall have paid the Commitment Fee
as provided in Section 1.2 hereof.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyer, as of the date
hereof and as of the Closing Date, as follows:
3.1 Corporate Existence and Power. The Company is a company duly
organized, validly existing and in good standing under the laws of Bermuda and
has all corporate, partnership or other applicable powers and all material
governmental licenses, authorizations, consents, and approvals required to
carry on its business as now conducted.
3.2 Corporate and Governmental Authorization; No Contravention. The
execution, delivery and performance by the Company of this Agreement is within
the Company's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
organizational documents of the Company or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company or
result in the creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries.
3.3 Title to Shares, Capitalization, etc. (a) Upon delivery of the
Class B Shares as provided for in Section 1.3 and Section 1.4, (i) such Class
B Shares will be duly authorized and validly issued, (ii) the Buyer (or its
Affiliate, as the case may be) will acquire good and valid title to all such
Class B Shares, free and clear of any Lien other than any Lien created by the
Buyer (or such Affiliate), and (iii) such Class B Shares shall be fully paid
and nonassessable.
(b) The authorized capital of the Company consists of (i) 100,000,000
Class A Shares, of which 18,070,789 are issued and outstanding, and (ii)
15,000,000 Class B Shares, 6,062,329 of which are issued and outstanding prior
to the issuance contemplated by Section 1.3 hereof and 7,577,329 of which will
be issued and outstanding upon the consummation of such issuance. All of the
issued and outstanding Class A Shares and Class B Shares have been duly
authorized and validly issued, are fully paid and nonassessable.
<PAGE>
6
(c) There are no preemptive or similar rights on the part of any
holders of any class of securities of the Company. Except for (i) this
Agreement, (ii) the options and warrants previously granted to the Buyer,
(iii) the options to purchase Class A Shares granted under the 1994 Amended
and Restated Stock Option Plan, (iv) the options to purchase Class A Shares
granted under the 1995 Amended and Restated Stock Option Plan, (v) the options
to purchase 32,500 Class A Shares granted to Herbert S. Schlosser, and (vi)
the warrants to purchase 100,000 Class A Shares granted to each of MAWA
Holding N.V., Lavender Foundation and Staffordshire Corporation N.V., there
are no subscription, option, warrant, conversion or other rights, agreements,
commitments, arrangements or understandings of any kind obligating the Company
or any Subsidiary or any other Person, contingently or otherwise, to issue or
sell, or cause to be issued or sold, any Class A Shares or any securities
convertible into or exchangeable for any Class A Shares, and no authorization
therefor has been given. There are no outstanding contractual or other rights
or obligations to or of the Company or any Subsidiary or any other Person to
repurchase, redeem or otherwise acquire any outstanding shares or other equity
interests of the Company or any Subsidiary.
3.4 Binding Effect. This Agreement has been duly and validly executed
and delivered by the Company, and assuming the due authorization, execution
and delivery by the Buyer, constitutes the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and by general principles of equity.
3.5 SEC Reports and Financial Statements. (a) The Company has filed
all required forms, reports and documents with the Securities Exchange
Commission (hereinafter collectively referred to as the "Company Reports")
required to be filed by it pursuant to the Securities Act and the Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"), all of which have complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act.
(b) None of the Company Reports, including, without limitation, any
financial statements or schedules included therein, at the time filed,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(c) The consolidated balance sheets and the related consolidated
statements of income, cash flow and shareholders' equity (including without
limitation the related notes thereto) of the Company and its consolidated
Subsidiaries included in the financial statements contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 (the "Company
10-K") and in the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998, June 30, 1998 and September 30, 1998 (the "Company
10-Qs"), present fairly the consolidated financial
<PAGE>
7
position of the Company and its consolidated Subsidiaries as of their
respective dates, and the results of consolidated operations and cash flows
for the periods then ended, all in conformity with United States generally
accepted accounting principles applied on a consistent basis, except as
otherwise noted therein and in the case of unaudited financial statements
subject to normal year-end audit adjustments, and except for certain footnote
disclosures required by United States generally accepted accounting
principles.
3.6 Absence of Undisclosed Liabilities. Except for liabilities
reflected or reserved against in the consolidated balance sheet of the Company
and its Subsidiaries as of September 30, 1998 or reflected in the notes
thereto, or as has been disclosed in the Company Reports, none of the Company
and its Subsidiaries has any liabilities or obligations (absolute or accrued
or contingent, whether accrued or unaccrued and whether due or to become due)
other than liabilities and obligations incurred in the ordinary course of
business since September 30, 1998 or liabilities or obligations which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
3.7 Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Company threatened against or affecting,
the Company or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
probability of an adverse decision that would have a Material Adverse Effect
or which in any manner draws into question the validity or enforceability of
this Agreement.
3.8 Taxes. Each of the Company and its Subsidiaries has filed or
caused to be filed all income tax returns and all other material tax returns
which are required to be filed and has paid (i) all taxes shown to be due and
payable on such returns and (ii) all taxes shown to be due and payable on any
assessments of which it has received notice made against it or any of its
property and all other taxes, fees or other governmental charges imposed on it
or any of its property and no tax Lien has been filed, and no claim is being
asserted, with respect to any such tax, fee or other charge (other than any
(x) taxes, fees or other charges with respect to which the failure to pay, in
the aggregate, would not have a Material Adverse Effect or (y) taxes, fees or
other charges the amount or validity of which are currently being contested in
good faith by appropriate proceedings diligently conducted and with respect to
which adequate reserves in accordance with United Stated generally accepted
accounting principles have been maintained).
<PAGE>
8
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE BUYER
4.1 Organization and Authorization. The Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws
of New York and the execution, delivery and performance by the Buyer of this
Agreement are within the Buyer's limited liability company powers and have
been duly authorized by all necessary limited liability company action.
4.2 Binding Effect. This Agreement has been duly and validly executed
and delivered by the Buyer and, assuming the due authorization, execution and
delivery by the Company, constitutes the valid and binding obligation of the
Buyer enforceable against the Buyer in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and by general principles of equity.
4.3 Purchase for Investment. The Buyer is purchasing the Class B
Shares solely for investment, with no present intention to resell such Class B
Shares. The Buyer hereby acknowledges that the Class B Shares have not been
registered pursuant to the Securities Act and may not be transferred in the
absence of such registration or an exemption therefrom under such Act.
SECTION 5
COVENANTS OF THE COMPANY
On and after the date hereof to the Closing Date (and in case of
Section 5.5, to the Adjustment Date), except as expressly permitted or
required by this Agreement:
5.1 Conduct of Business. The Company will, and will cause each
Subsidiary to:
(a) carry on its business in, and only in, the ordinary
course of business consistent with its past practice;
(b) not increase any obligations of the Company or any
Subsidiary with respect to Indebtedness, prepay any accounts payable,
delay payment of any trade payables other than in the ordinary course
of business, or make any other cash payments other than in the
ordinary course of business consistent with its past practice;
(c) comply in all material respects with all Laws applicable
to it or any of its properties, assets or business;
<PAGE>
9
(d) not merge or consolidate with, or agree to merge or
consolidate with, or purchase substantially all of the assets of, or
otherwise acquire, any business, business organization or division
thereof, or any other Person;
(e) promptly advise the Buyer in writing of any event,
occurrence, fact, condition, change, development or effect that,
individually or in the aggregate, could have or result in a Material
Adverse Effect or a breach of this Section 5.1; and
(f) not agree or otherwise commit to take any of the actions
described in the foregoing paragraphs (a) through (e).
5.2 Access and Information. The Company will give the Buyer and its
Representatives full access during reasonable business hours to all of the
Company's and its Subsidiaries' respective properties, assets, books,
contracts, commitments, reports and records, and furnish to them all such
documents, records and information and copies of any work papers relating
thereto as the Buyer shall from time to time reasonably request. The Company
will keep the Buyer generally informed as to the affairs of the Business.
5.3 Financial Statements and Reports. The Company will deliver to
Buyer:
(a) From the date hereof to and including the Closing Date,
monthly management reports in scope and detail consistent with those
management reports that have historically been distributed to the
Company's senior management and have previously been delivered to the
Buyer, and timely prepare, and promptly deliver to the Buyer, monthly
financial statements, to be in scope and detail consistent with such
monthly financial statements as historically distributed to the
Company's senior management and as previously delivered to the Buyer.
Each such financial statement shall present fairly the financial
position, assets and liabilities of the Company as at the date
thereof and the results of its operations and its cash flows for the
period then ended, in accordance with accounting policies and
procedures consistent with those historically used by the Company in
the preparation of such monthly financial statements;
(b) promptly upon the mailing thereof to the shareholders of
the Company generally, copies of all financial statements, reports
and proxy statements so mailed; and
(c) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission.
<PAGE>
10
5.4 Public Announcements. Except as required by applicable Law, the
Company shall not, and shall not permit any Subsidiary to, make any public
announcement in respect of this Agreement or the transactions contemplated
hereby without the prior written consent of the Buyer.
5.5 Price Per Share Calculation; Additional Class B Shares. (a) Not
later than one day prior to the Adjustment Date, the Company shall deliver to
Buyer its determination of the Final Trading Price for each day during the
Measurement Period, the average of all such Final Trading Prices, and the
number of additional Class B Shares, if any, to be issued to the Buyer on the
Adjustment Date pursuant to Section 1.4.
(b) The Company shall cause to be reserved 757,500 of Class B Shares
for issuance and delivery to the Buyer on the Adjustment Date in accordance
with Section 1.4 hereof. All such Class B shares shall be duly authorized and,
when issued upon the Per Share Price adjustment, shall be validly issued,
fully paid and nonassessable, free and clear of all Liens, restrictions on
sale and preemptive rights.
5.6 Further Actions. (a) The Company shall use all reasonable efforts
to take or cause to be taken all actions, and to do or cause to be done all
other things, necessary, proper or advisable in order for the Company to
fulfill and perform its obligations in respect of this Agreement, or otherwise
to consummate and make effective the transactions contemplated hereby.
(b) The Company shall, as promptly as practicable, (i) make, or cause
to be made, all filings and submissions required under any Law, and give such
reasonable undertakings as may be required in connection therewith, and (ii)
use all reasonable efforts to obtain or make, or cause to be obtained or made,
all Consents of any Governmental Authority necessary to be obtained or made by
it, in each case in connection with this Agreement, the sale and transfer of
the Class B Shares pursuant hereto, or the consummation of the other
transactions contemplated hereby.
(c) The Company shall coordinate and cooperate with the Buyer in
exchanging such information and supplying such reasonable assistance as may be
reasonably requested by the Buyer.
(d) At all times prior to the Closing Date, the Company shall
promptly notify the Buyer in writing of any fact, condition, event or
occurrence that could result in the failure of any of the conditions contained
in Section 2 to be satisfied, promptly upon becoming aware of the same.
<PAGE>
11
SECTION 6
INDEMNIFICATION
In the event that the Buyer or any of its officers, directors or
controlling Persons (each, an "Indemnified Party") becomes involved in any
capacity in any action, proceeding or investigation brought by or against any
Person, including, without limitation, the Company or any equity holders or
creditors of the Company, in connection with or as a result of any matter
referred to in this Agreement, including but not limited to the purchase by
the Buyer of Class B Shares, the Company periodically will reimburse such
Indemnified Party for all of its out-of-pocket legal, expert and other
expenses (including the out-of-pocket cost of any investigation and
preparation) incurred in connection therewith. The Company also will indemnify
and hold each Indemnified Party harmless against any and all losses, claims,
damages, expenses, actions, demands, assessments, costs, judgments, awards,
fines, sanctions, penalties, amounts paid in settlement, or liabilities
("Damages") to any such Person in connection with or as a result of any matter
referred to in this Agreement and without regard to the exclusive or
contributory negligence of any of the Indemnified Parties, except to the
extent that any such Damages is finally judicially determined to have resulted
from the gross negligence, willful misconduct or bad faith of such Indemnified
Party in connection with the subject matter of this Agreement (and in the
event of such a determination, the Indemnified Party will reimburse the
Company for any expenses advanced to such Indemnified Party by the Company
pursuant to the immediately preceding sentence). If for any reason the
foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold it harmless, then the Company shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Damages
in such proportion as is appropriate to reflect the relative economic
interests of the Company and its equity holders, on the one hand, and such
Indemnified Party, on the other hand, in the matters contemplated by this
Agreement as well as the relative fault of the Company, on the one hand, and
such Indemnified Party, on the other hand, with respect to such loss, claim,
damage or liability and any other relevant equitable considerations. The
reimbursement, indemnity and contribution obligations of the Company under
this Section 7 will be in addition to any liability which the Company may
otherwise have, shall extend upon the same terms and conditions to any
Affiliate of any Indemnified Party and the directors, agents, advisors,
employees and controlling Persons of such Indemnified Party and any such
Affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and Personal representatives of the Company, such
Indemnified Party, any such Affiliate and any such Person. The Company will
not be responsible, in connection with any one action or proceeding (or
separate but substantially similar proceedings arising out of the same general
allegations), for the fees and expenses of more than one firm of attorneys at
any time for all Indemnified Parties, except to the extent local counsel, in
addition to its regular counsel, is required to effectively defend against
such action, provided if counsel to the Indemnified Parties reasonably
determines that there is a conflict of interest among the Indemnified Parties,
then the Indemnified Party with respect to which such conflict of interest
relates may employ separate counsel at the cost and expense of the Company.
The Company also agrees that neither any Indemnified Party nor any of such
Affiliates,
<PAGE>
12
directors, agents, advisors, employees or controlling Persons will have any
liability based on its or their exclusive or contributory negligence or
otherwise to the Company, any Person asserting claims on behalf or in the
right of the Company, or any other Person in connection with or as a result of
any matter referred to in this Agreement except to the extent that any Damages
incurred by the Company result from the gross negligence, willful misconduct
or bad faith of such Indemnified Party in connection with the subject matter
of this Agreement. Prior to entering into any agreement or arrangement with
respect to, or effecting, any merger, statutory exchange or other business
combination or proposed sale, exchange, dividend or other distribution or
liquidation of all or a significant portion of its assets in one or a series
of transactions or any significant recapitalization, or reclassification of
its outstanding securities, the Company shall notify the Indemnified Parties
in writing thereof (if not previously so notified) and, if requested by the
Indemnified Parties, shall arrange in connection therewith alternative means
of providing for the obligations of the Company set forth in this Section 7
including the assumption of such obligations by another party, insurance,
surety bonds or the creation of an escrow, in each case in an amount and upon
terms and conditions satisfactory to the Indemnified Parties.
SECTION 7
TERMINATION
This Agreement shall terminate on January 1, 1999 if no Exercise
Notice is given on or prior to December 31, 1998. In addition, this Agreement
may be terminated at any time prior to the Closing:
(a) by the written agreement of the Company and the Buyer;
(b) upon notice given by the Buyer if the Company breaches
any material covenant or agreement in this Agreement or any other
document or agreement delivered pursuant to this Agreement or in
furtherance of the transactions contemplated herein (collectively,
the "Transaction Documents") or if any representation or warranty
made by the Company in or pursuant to any Transaction Document is
false in any material respect when made; or
(c) upon notice given by either the Company or the Buyer if
consummation of the transactions contemplated hereby would violate,
in whole or in part, any nonappealable final order, decree or
judgment of any court or governmental body having competent
jurisdiction.
If this Agreement is terminated as provided in this Section 7, this Agreement
shall become null and void and of no further force or effect, except for
Section 1.2 relating to the payment of the Commitment Fee, Section 5.4
relating to publicity, Section 6 relating to indemnification and Section 9.4
relating to certain expenses. Nothing in this Section 7 shall be deemed to
release either Party from any liability for any breach by such Party of the
terms and provisions of this Agreement or to impair the right of either Party
to compel specific performance by the other Party of its obligations under
this Agreement.
<PAGE>
13
SECTION 8
DEFINITIONS
In this Agreement, the following terms shall have the following
respective meanings:
"Adjustment Date" shall have the meaning assigned to it in Section
1.4(a).
"Affiliate" means, with regard to any person, any other person who,
individually or as a part of a "group" for purposes of Section 13(d) of the
Securities Exchange Act, controls, is controlled by or is under common control
with, such person.
"Agreement" means this Stock Purchase Agreement, including any
exhibits and schedules hereto, as it may be supplemented or amended from time
to time in accordance with its terms.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law
to close.
"Buyer" shall have the meaning assigned to it in the preamble.
"Change of Control of the Company" means the occurrence of any of the
following events:
(a) any "Person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all shares that any such Person has
the right to acquire within one year), directly or indirectly, of
more than eighteen percent (18%) of the total voting power of the
equity securities of the Company and obtains the contractual right to
elect or designate for election a majority of the Board of Directors
of the Company; or
(b) Permitted Holders cease to beneficially own, directly or
indirectly, such amount of the equity securities of the Company that
gives them over 50% of the total voting power of such securities.
<PAGE>
14
"Class A Shares" shall have the meaning assigned to it in Section
1.4(a).
"Class B Shares" shall have the meaning assigned to it in the
recitals.
"Closing" shall have the meaning assigned to it in Section 1.3(b).
"Closing Date" shall have the meaning assigned to it in Section
1.3(b).
"Commitment Fee" shall have the meaning assigned to it in Section
1.2.
"Commitment Letter" means the letter, dated November 12, 1998, from
the Buyer to the Company relating to the subject matter of this Agreement.
"Company" shall have the meaning assigned to it in the preamble.
"Company 10-K" shall have the meaning assigned to it in Section
3.5(c).
"Company 10-Qs" shall have the meaning assigned to it in Section
3.5(c).
"Consent" means any consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, certificate, exemption,
order, registration, declaration, filing, report or notice of, with or to any
Person.
"Damages" shall have the meaning assigned to it in Section 7.
"Exchange Act" shall have the meaning assigned to it in Section
3.5(a).
"Exercise Notice" shall have the meaning assigned to it in Section
1.3(a).
"Expiration Date" shall have the meaning assigned to it in Section
1.1.
"Final Trading Price" shall have the meaning assigned to it in
Section 1.4(a).
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government including, without limitation, the European Union.
"Indebtedness", as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money, (ii) all obligations evidenced by a
note, bond, debenture, letter of credit, draft or similar instrument, (iii)
that portion of obligations with respect to capital leases that is properly
classified as a liability on a balance sheet in conformity with GAAP, (iv)
notes payable and drafts accepted representing extensions of credit, (v) any
obligation owed for all or any part of the deferred purchase price of property
or services, which purchase price is due more
<PAGE>
15
than six months from the date of incurrence of the obligation in respect
thereof, and (vi) all indebtedness and obligations of the types described in
the foregoing clauses (i) through (vi) to the extent secured by any Lien on
any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
"Indemnified Party" shall have the meaning assigned to it in Section 7.
"Law" means all applicable provisions of all (i) constitutions,
treaties, statutes, laws (including the common law), codes, rules,
regulations, ordinances or orders of any Governmental Authority and (ii)
orders, decisions, injunctions, judgments, awards, Consents and decrees of or
agreements with any Governmental Authority.
"Lien" means any lien, mortgage, pledge, charge, security interest or
encumbrance of any kind.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business, operations, assets (taken as a whole),
liabilities (taken as a whole) or prospects of the Company and its
Subsidiaries, taken as a whole, or on the ability of the Company to perform
its obligations hereunder, provided that the results of Company's investments
and operations in Poland shall be excluded from the determination of a
Material Adverse Effect.
"Measurement Period" shall have the meaning assigned to it in Section
1.4(a).
"NASDAQ" means The Nasdaq National Market of The Nasdaq Stock Market
operated by The Nasdaq Stock Market, Inc., a wholly-owned subsidiary of the
National Association of Security Dealers, Inc.
"Party" shall have the meaning assigned to it in the recitals.
"Per Share Price" shall have the meaning assigned to it in Section
1.1.
"Permitted Holders" means Ronald S. Lauder and Persons with respect
to whom Ronald S. Lauder possesses the power to direct such Person's
management and policies, whether through the ownership of voting securities,
by contract or otherwise (which power shall be deemed to exist upon the
ownership of more than 50% of any class of voting securities or equity
interest in any such Person).
<PAGE>
16
"Person" means, an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
"Representatives" as to any Person, means its accountants, counsel,
consultants (including actuarial, environmental and industry consultants),
officers, directors, employees, agents and other advisors and representatives.
"Securities Act" shall have the meaning assigned to it in Section
1.5(b).
"Subscription Price" shall have the meaning assigned to it in Section
1.1.
"Subsidiary" means, as to any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total
voting power of shares of capital stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i)
such Person or (ii) one or more Subsidiaries of such Person.
"Transaction Documents" shall have the meaning assigned to it in
Section 7(b).
SECTION 9
MISCELLANEOUS
9.1 Amendments and Waivers. This Agreement cannot be altered or
otherwise amended except prior to the Closing pursuant to an instrument in
writing signed by Buyer and the Company. Any of the terms and conditions of
this Agreement may be waived in writing at any time on or prior to the Closing
by the Party entitled to the benefits thereof.
9.2 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company and the Buyer and their respective heirs,
personal representatives, successors and assigns, provided that any
assignment, by operation of law or otherwise, by the Company shall require the
prior written consent of the Buyer and any purported assignment or other
transfer without such consent shall be void and unenforceable.
9.3 Notices. All notices, requests and other communications to any
Party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be effective (i) if given by mail,
72 hours after such communication is deposited in the mail with first class
postage prepaid, or (ii) if given by any other means, when delivered at the
address specified below in this Section 9.3.
<PAGE>
17
The Company: Central European Media Enterprises Ltd.
c/o CME Development Corporation
18 D'Arblay Street
London W1V 3FP
United Kingdom
Attention: Legal Department
telecopy number: 011-44-171-292-7948
with a copy to:
Rosenman & Colin
575 Madison Avenue
New York, New York 10022
Attention: Robert Kohl, Esq.
telecopy number: 212-940-8776
The Buyer: RSL Capital LLC
767 Fifth Avenue, Suite 4200
New York, N.Y. 10153
Attention: Ronald S. Lauder
telecopy number: 212-572-6758
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Attention: Louis Begley
telecopy number: 212-909-6836
9.4 Expenses. The Company shall reimburse the Buyer for its
reasonable out-of-pocket expenses (including fees and disbursements of
Debevoise & Plimpton, counsel for the Buyer) incurred in connection with the
preparation of the Transaction Documents. The Company shall indemnify the
Buyer against any transfer taxes, documentary taxes, assessments or charges
made by any Governmental Authority by reason of the execution, delivery,
amendment or enforcement of any of the Transaction Documents.
9.5 Survival of Representations and Warranties. The representations
and warranties made by the Company and Buyer hereunder or in connection
herewith shall survive until the second anniversary of the Closing, provided
that the representations and warranties of the Company contained in Sections
3.1, 3.2, 3.3 and 3.8 shall survive without limitation (subject, in the case
of Section 3.8, to any statutes of limitations applicable to the particular
tax at issue).
<PAGE>
18
9.6 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without, to
the extent permitted by law, invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not, to the
extent permitted by law, invalidate or render unenforceable such provision in
any other jurisdiction.
9.7 Integration. This Agreement represent the entire agreement of the
Company and the Buyer with respect to the subject matter hereof, and supersede
any and all prior arrangements and understandings, oral or written, relating
to the subject matter hereof; provided that Section 2 of the Commitment Letter
(concerning payment of certain fees) and Exhibit B thereto (concerning
indemnification and other maters set forth therein) shall continue in full
force and effect.
9.8 No Third Party Beneficiaries. Except as provided in Section 6,
nothing in this Agreement shall confer any rights upon any Person or entity
which is not a Party or a successor or permitted assignee of a Party to this
Agreement.
9.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original but all of which
together shall constitute one and the same instrument.
9.10 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL FOR ALL PURPOSES BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF
CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR
PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY NEW
YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RELATING
THERETO, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED
BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
<PAGE>
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
9.11 Trial Without Jury. EACH OF THE COMPANY AND THE BUYER AGREES
THAT ANY LITIGATION GROWING OUT OF ANY CONTROVERSY WITH RESPECT TO, IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY NOTE OR ANY OTHER LOAN
DOCUMENT WILL BE TRIED BY A JUDGE SITTING WITHOUT A JURY AND HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL
PROCEEDING.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the date first above written:
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
By: /s/ Michel Delloye
---------------------------------------
Name: Michel Delloye
Title: President and Chief
Executive Officer
RSL CAPITAL LLC
By: /s/ Ronald S. Lauder
---------------------------------------
Name: Ronald S. Lauder
Title: Chairman
<PAGE>
Exhibit A
EXERCISE NOTICE
Pursuant to Section 1.3 of the Stock Purchase Agreement, dated as of
December __, 1998, by and among, RSL Capital LLC, a New York limited liability
company (the "Buyer"), and Central European Media Enterprises Ltd., a company
organized under the laws of Bermuda (the "Company"), the Company hereby
notifies the Buyer that it wishes to exercise the commitment set forth in
Section 1.1 of such Agreement and issue and sell to Buyer 1,515,000 Class B
Shares for the consideration set forth in such Agreement.
This notice is the Exercise Notice referred to in Section 1.3 of such
Agreement.
WITNESS the signature of the undersigned this __ day of ________
199_.
CENTRAL EUROPEAN MEDIA
ENTERPRISES LTD.
By:
----------------------------------------
Name:
Title:
<PAGE>
Exhibit B
OFFICER'S CERTIFICATE
The undersigned ________________, hereby certifies that he is the
_______________ of Central European Media Enterprises Ltd., a company
organized under the laws of Bermuda (the "Company"), and that, as such, he is
authorized to execute and deliver this Certificate on behalf of the Company
and, with reference to the Stock Purchase Agreement, dated as of December __,
1998, by and among, RSL Capital LLC, a New York limited liability company (the
"Buyer") and the Company (the "Stock Purchase Agreement"), further certifies,
represents and warrants on behalf of the Company as follows (each capitalized
term used herein without definition having the meaning specified in the Stock
Purchase Agreement):
1. As of the date hereof, the representations and warranties
of the Company set forth in Section 2 of the Stock Purchase
Agreement are true and correct in all material respects.
2. All of the agreements, covenants and conditions required
by the Stock Purchase Agreement to be performed or complied
with by the Company on or prior to the Closing Date have
been duly performed and complied with in all material
respects.
WITNESS the signature of the undersigned this __ day of ________ 199_
[insert Closing Date].
CENTRAL EUROPEAN MEDIA
ENTERPRISES LTD.
By:
--------------------------------
Name:
Title:
<PAGE>
Exhibit C
OPINION OF COUNSEL
A. OPINION OF A BERMUDA COUNSEL
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of Bermuda, and has full corporate power
and authority to own its properties and conduct its business.
2. The Stock Purchase Agreement has been duly authorized, executed
and delivered by the Company, and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium and similar laws affecting the rights of creditors generally and by
general equitable principles.
3. The Class B Shares have been duly and validly authorized by the
Company and, when such Class B Shares are issued and delivered on the Closing
Date, all such Class B Shares will be duly and validly issued, fully paid and
non-assessable and the issuance of such Class B Shares is not subject to any
presently existing preemptive or other similar rights.
[Need to expand to cover Class B Shares to be issued following the price
adjustment]
4. The execution and delivery by the Company of the Stock Purchase
Agreement, and the performance by the Company of its obligations thereunder,
will not contravene or conflict with the Bermuda Companies Act of 1981, any
other Bermuda law or regulation, any judgment, order, decree, rule or
regulation of any Bermuda court or arbitrator or governmental agency or body
having jurisdiction over the Company or any of its respective properties or
assets, or the memorandum of association or by-laws of the Company.
B. OPINION OF A NEW YORK COUNSEL
1. Assuming that the Stock Purchase Agreement has been duly
authorized, executed and delivered by the Company, the Stock Purchase
Agreement is a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium and similar laws
affecting the rights of creditors generally and by general equitable
principles.
<PAGE>
2. The execution and delivery by the Company of the Stock Purchase
Agreement, and the performance by the Company of its obligations thereunder,
will not contravene or conflict with any United States Federal or New York
statute or regulation, any judgment, order, decree, rule or regulation of any
United States Federal or New York court or arbitrator or governmental agency
or body having jurisdiction over the Company or any of its respective
properties or assets.
