Central European Media Enterprises Ltd. 2,200,000 Shares of Class A Common Stock Underwriting Agreement
2,200,000 Shares
of
Class A Common Stock
March
23,
2006
▇.▇.
▇▇▇▇▇▇ Securities Ltd.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
Brothers Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
ING
Bank
N.V. London Branch
▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇
Česká
spořitelna, a.s.
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇/▇▇
▇▇▇
▇▇
▇▇▇▇▇▇
▇
Ladies
and Gentlemen:
Central
European Media Enterprises Ltd. a company organized under the laws of Bermuda
(the “Company”), proposes to issue and sell to the several Underwriters listed
in Schedule 1 hereto (the “Underwriters”), for whom you are acting as
representatives (the “Representatives”), an aggregate of 2,200,000 shares
of
Class A Common Stock, par value $0.08 per share, of the Company (the
“Underwritten Shares”) and, at the option of the Underwriters, up to an
additional 330,000 shares of Class A Common Stock of the Company (the “Option
Shares”). The Underwritten Shares and the Option Shares are herein referred to
as the “Shares”. The shares of Class A Common Stock of the Company to be issued
and outstanding after giving effect to the sale of the Shares are herein
referred to as the “Stock”.
The
Company hereby confirms its agreement with the several Underwriters concerning
the purchase and sale of the Shares, as follows:
1. Registration
Statement. The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Securities Act”), a registration statement (File No.
333-132448) including a prospectus, relating to the Shares. Such registration
statement, including the information, if any, deemed pursuant to Rule 430A,
430B
or 430C under the Securities Act to be part of the registration statement at
the
time of its effectiveness (“Rule 430 Information”), is referred to herein as the
“Registration Statement”; and as used herein, the term “Preliminary Prospectus”
means the prospectus included in the Registration Statement at the time of
its
effectiveness that omits Rule 430 Information, and the term “Prospectus” means
the final prospectus as filed with the Commission pursuant to Rule 424(b).
Any
reference in this Agreement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act, as of the effective date of the Registration Statement
or the date of such Preliminary Prospectus or the Prospectus, as the case may
be
and any reference to “amend”, “amendment” or “supplement” with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall
be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of
the Commission thereunder (collectively, the “Exchange Act”) that are deemed to
be incorporated by reference therein. Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Registration Statement
and the Prospectus.
2
The
Company has prepared and obtained the approval by the Czech Securities
Commission (the “Czech Commission”) of a prospectus relating to the offering of
the Shares (the “Czech Prospectus”), pursuant to Act No. 256/2004 Coll. on
Conducting Business on the Capital Markets, as amended.
At
or
prior to the time when sales of the Shares were first made (the “Time of Sale”),
the Company had prepared the following information (collectively with the number
of shares and share price set forth on Exhibit B the “Time of Sale
Information”): a Preliminary Prospectus dated March 15, 2006, and each
“free-writing prospectus” (as defined pursuant to Rule 405 under the Securities
Act) listed on Exhibit B hereto.
2. Purchase
of the Shares by the Underwriters. The Company agrees to issue and sell the
Shares to the several Underwriters as provided in this Agreement, and each
Underwriter, on the basis of the representations, warranties and agreements
set
forth herein and subject to the conditions set forth herein, agrees, severally
and not jointly, to purchase from the Company the respective number of
Underwritten Shares set forth opposite such Underwriter's name in Schedule
1
hereto at a price per share the “Purchase Price” of $66.92.
In
addition, the Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis
of the representations, warranties and agreements set forth herein and subject
to the conditions set forth herein, shall have the option to purchase, severally
and not jointly, from the Company the Option Shares at the Purchase
Price.
If
any
Option Shares are to be purchased, the number of Option Shares to be purchased
by each Underwriter shall be the number of Option Shares which bears the same
ratio to the aggregate number of Option Shares being purchased as the number
of
Underwritten Shares set forth opposite the name of such Underwriter in Schedule
1 hereto (or such number increased as set forth in Section 9 hereof) bears
to
the aggregate number of Underwritten Shares being purchased from the Company
by
the several Underwriters, subject, however, to such adjustments to eliminate
any
fractional Shares as the Representatives in their sole discretion shall
make.
The
Underwriters may exercise the option to purchase the Option Shares at any time
in whole, or from time to time in part, on or before the thirtieth day following
the date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares
as to
which the option is being exercised and the date and time when the Option Shares
are to be delivered and paid for which may be the same date and time as the
Closing Date (as hereinafter defined) but shall not be earlier than the Closing
Date nor later than the tenth full business day (as hereinafter defined) after
the date of such notice (unless such time and date are postponed in accordance
with the provisions of Section 10 hereof). Any such notice shall be given at
least two Business Days prior to the date and time of delivery specified
therein.
3
(b)
The
Company understands that the Underwriters intend to make a public offering
of
the Shares in the United States as soon after the effectiveness of this
Agreement as in the judgment of the Representatives is advisable, and initially
to offer the Shares on the terms set forth in the Prospectus. The Company
acknowledges and agrees that the Underwriters may offer and sell Shares to
or
through any affiliate of an Underwriter and that any such affiliate may offer
and sell Shares purchased by it to or through any Underwriter.
(c)
Payment
for the Shares shall be made by wire transfer in immediately available funds
to
the account specified by the Company to the Representatives in the case of
the
Underwritten Shares, at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP no
later than 10:00 a.m. New
York
City time on March 28, 2006, or at such other time or place on the same or
such
other date, not later than the fifth business day thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of
the
Option Shares, on the date and at the time and place specified by the
Representatives in the written notice of the Underwriters’ election to purchase
such Option Shares. The time and date of such payment for the Underwritten
Shares is referred to herein as the “Closing Date” and the time and date for
such payment for the Option Shares, if other than the Closing Date, are herein
referred to as the “Additional Closing Date”.
Payment
for the Shares to be purchased on the Closing Date or the Additional Closing
Date, as the case may be, shall be made against delivery to the Representatives
for the respective accounts of the several Underwriters of the Shares to be
purchased on such date in definitive form registered in such names and in such
denominations as the Representatives shall request in writing not later than
two
full business days prior to the Closing Date or the Additional Closing Date,
as
the case may be, with any transfer taxes payable in connection with the sale
of
the Shares duly paid by the Company. The certificates for the Shares will be
made available for inspection and packaging by the Representatives at the office
of ▇.▇. ▇▇▇▇▇▇ Securities Ltd. set forth above not later than 1:00 P.M., New
York City time, on the business day prior to the Closing Date or the Additional
Closing Date, as the case may be.
(d)
The Company acknowledges and agrees that the Underwriters are acting solely
in
the capacity of an arm's length contractual counterparty to the Company with
respect to the offering of Shares contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial advisor
or a
fiduciary to, or an agent of, the Company or any other person. Additionally,
neither the Representatives nor any other Underwriter is advising the Company
or
any other person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company shall consult with its own advisors
concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the Company with
respect thereto. Any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Underwriters and shall not be on behalf
of the Company.
4
3. Representations
and Warranties of the Company. The Company represents and warrants to each
Underwriter that:
(a)
Preliminary
Prospectus.
No
order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission, and each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the Securities Act and did
not
contain any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty
with
respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use in any
Preliminary Prospectus.
(b)
Time
of Sale Information.
The
Time of Sale Information, at the Time of Sale did not, and at the Closing Date
and as of the Additional Closing Date, as the case may be, will not, contain
any
untrue statement of a material fact or omit 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; provided
that the
Company makes no representation and warranty with respect to any statements
or
omissions made in reliance upon and in conformity with information relating
to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use in such Time of Sale Information. No
statement of material fact included in the Prospectus has been omitted from
the
Time of Sale Information and no statement of material fact included in the
Time
of Sale Information that is required to be included in the Prospectus has been
omitted therefrom.
(c)
Issuer
Free Writing Prospectus. Other
than the Preliminary Prospectus and the Prospectus, the Company (including
its
agents and representatives, other than the Underwriters in their capacity as
such) has not made, used, prepared, authorized, approved or referred to and
will
not prepare, make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the Securities Act) that
constitutes an offer to sell or solicitation of an offer to buy the Shares
(each
such communication by the Company or its agents and representatives (other
than
a communication referred to in clause (i) below) an “Issuer Free Writing
Prospectus”) other than (i) any document not constituting a prospectus pursuant
to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities
Act or (ii) the documents listed on Exhibit B hereto and other written
communications approved in writing in advance by the Representatives. Each
such
Issuer Free Writing Prospectus complied in all material respects with the
Securities Act, has been filed in accordance with the Securities Act (to the
extent required thereby) and, when taken together with the Preliminary
Prospectus accompanying, or delivered prior to delivery of, such Issuer Free
Writing Prospectus, did not, and at the Closing Date and as of the Additional
Closing Date, as the case may be, will not, contain any untrue statement of
a
material fact or omit 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; provided
that the
Company makes no representation and warranty with respect to any statements
or
omissions made in each such Issuer Free Writing Prospectus in reliance upon
and
in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly
for
use in any Issuer Free Writing Prospectus.
5
(d)
Registration
Statement and Prospectus.
The
Registration Statement is an “automatic shelf registration statement” as defined
under Rule 405 of the Securities Act that has been filed with the Commission
on
March 15, 2006; and no notice of objection of the Commission to the use of
such
registration statement or any post-effective amendment thereto pursuant to
Rule
401(g)(2) under the Securities Act has been received by the Company. No order
suspending the effectiveness of the Registration Statement has been issued
by
the Commission and no proceeding for that purpose has been initiated or
threatened by the Commission; as of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement
complied and any amendment thereto will comply in all material respects with
the
Securities Act, and the Registration Statement did not and any amendment thereto
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and as of the applicable filing date of
the
Prospectus and any amendment or supplement thereto and as of the Closing Date
and as of the Additional Closing Date, as the case may be, the Prospectus will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty
with
respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement
thereto.
(e)
Incorporated
Documents.
The
documents incorporated by reference in the Registration Statement, the
Prospectus or the Time of Sale Information, when they became effective or were
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act of 1934,
as amended, and the rules and regulation of the Commission thereunder
(collectively, the “Exchange Act”), as applicable, and none of such documents
contained any untrue statement of a material fact or omitted 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;
and any further documents so filed and incorporated by reference in the
Registration Statement, the Prospectus or the Time of Sale Information, when
such documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the Act
or
the Exchange Act, as applicable, and will not contain any 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.
(f)
Financial
Statements.
The
financial statements and the related notes thereto of the Company and its
consolidated subsidiaries included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the Prospectus comply
in all material respects with the applicable requirements of the Securities
Act
and the Exchange Act, as applicable, and present fairly the financial position
of the Company and its subsidiaries as of the dates indicated and the results
of
their operations and the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered thereby, and the supporting schedules included or incorporated
by reference in the Registration Statement present fairly the information
required to be stated therein; and the other financial information included
or
incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus have been derived from the accounting records
of
the Company and its subsidiaries and presents fairly the information shown
thereby; and the pro forma
financial information and the related notes thereto included or incorporated
by
reference in the Registration Statement, the Time of Sale Information and the
Prospectus have been prepared in accordance with the applicable requirements
of
the Securities Act and the Exchange Act, as applicable, and the assumptions
underlying such pro forma
financial information are reasonable and are set forth in the Registration
Statement, the Time of Sale Information and the Prospectus.
6
(g)
No
Material Adverse Change.
Since
the date of the most recent financial statements of the Company included or
incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus, (i) there has not been any change in the share
capital (other than pursuant to the exercise of existing employee options)
or
long-term debt (other than pursuant to the existing Pro Plus facility in
Slovenia and translation adjustments to the amount borrowed under the Senior
Notes) of the Company or any of its subsidiaries, or any dividend or
distribution of any kind declared, set aside for payment, paid or made by the
Company on any class of share capital, or any material adverse change in the
business, properties, financial position, results of operations, shareholders’
equity (except as may be the result of cumulative translation adjustments),
cashflows or prospects of the Company and its subsidiaries taken as a whole;
(ii) neither the Company nor any of its subsidiaries has entered into any
transaction or agreement that is material to the Company and its subsidiaries
taken as a whole or incurred any liability or obligation, direct or contingent,
that is material to the Company and its subsidiaries taken as a whole and that
would be required to be filed as an Exhibit to the Registration Statement;
and
(iii) neither the Company nor any of its subsidiaries has sustained any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor disturbance
or
dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case as otherwise disclosed
in the Registration Statement, the Time of Sale Information and the
Prospectus.
(h)
Organization
and Good Standing.
The
Company and each of its subsidiaries have been duly organized and are validly
existing and in good standing under the laws of their respective jurisdictions
of organization, are duly qualified to do business, and where applicable, are
in
good standing in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a material adverse effect
on
the business, properties, financial position, results of operations,
shareholders’ equity, cashflow or prospects of the Company and its subsidiaries
taken as a whole (a “Material Adverse Effect”). None of the Company or any of
its subsidiaries is in bankruptcy, liquidation or receivership or subject to
any
similar proceeding except as described in the Prospectus. The Company does
not
own or control, directly or indirectly, any corporation, company, association
or
other entity other than the subsidiaries listed in Exhibit 21 to the Form 10-K
of the Company for the year ended December 31, 2005.
(i)
Capitalization.
The
Company has a capitalization as set forth in the Registration Statement, the
Time of Sale Information and the Prospectus under the heading “Capitalization”.
All of the issued and outstanding shares of capital stock or other equity
interests of the Company have been duly and validly authorized and issued,
are
fully paid and non-assessable (which term means when used herein that no further
sums are required to be paid by the holders thereof in connection with the
issue
of such shares) and are not subject to any pre-emptive or similar rights. Except
as otherwise disclosed in the Prospectus all the issued and outstanding shares
or other equity interests of each direct and indirect subsidiary of the Company
are owned directly or indirectly by the Company, free and clear of any lien,
charge, encumbrance, security interest, restriction on voting or transfer or
any
other claim of any third party (except for the share pledges in connection
with
the Senior Notes of the Company due 2012 and issued on May 5, 2005 (the “Senior
Notes”), except as otherwise disclosed in the Prospectus have been duly and
validly authorized and issued, are fully paid and non-assessable and are not
subject to any pre-emptive or similar rights; except as described in or
expressly contemplated by the Time of Sale Information and the Prospectus,
there
are no outstanding rights (including, without limitation, pre-emptive rights),
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company or
any
of its subsidiaries, or any contract, commitment, agreement, understanding
or
arrangement of any kind to which the Company or any of its subsidiaries is
a
party relating to the issuance of any share capital of the Company or any such
subsidiary, any such convertible or exchangeable securities or any such rights,
warrants or options; the share capital of the Company conforms in all material
respects to the description thereof contained in the Registration Statement,
the
Time of Sale Information and the Prospectus; and except as otherwise disclosed
in the Prospectus all the issued and outstanding shares of capital stock or
other equity interests of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of any lien, charge,
encumbrance, security interest, restriction on voting or transfer or any other
claim of any third party.
7
(j)
Due
Authorization.
The
Company has the necessary corporate power and authority to execute and deliver
this Agreement and any other agreement or instrument entered into in respect
of
the offering of the Shares (collectively, the “Transaction Documents”) and to
perform its obligations hereunder and thereunder; and all action required to
be
taken for the due and proper authorization, execution and delivery of each
of
the Transaction Documents and the consummation of the transactions contemplated
thereby has been duly and validly taken.
(k)
Underwriting
Agreement.
This
Agreement has been duly authorized, executed and delivered by the
Company.
(l)
The
Shares.
The
Shares have been duly authorized by the Company and, when issued and delivered
and paid for as provided herein, will be duly and validly issued and will be
fully paid and nonassessable and will conform to the descriptions thereof in
the
Time of Sale Information and the Prospectus; and the issuance of the Shares
is
not subject to any preemptive or similar rights.
(m)
Descriptions
and Fair Summaries of the Transaction Documents.
Each
Transaction Document conforms in all material respects to the description
thereof contained in the Registration Statement, the Time of Sale Information
and the Prospectus. The descriptions in the Prospectus of statutes, legal,
governmental and regulatory proceedings and contracts and other documents are
accurate in all material respects; the statements in the Prospectus under the
headings “Material United States federal and Bermuda income tax considerations”
fairly summarize the matters therein described in all material
respects.
8
(n)
No
Violation or Default.
Neither
the Company nor any of its subsidiaries is (i) in violation of its memorandum
of
association, charter or bye-laws or similar organizational documents; (ii)
in
default, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any
of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its
subsidiaries is subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of clauses (ii) and (iii) above,
for any such default or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(o)
No
Conflicts.
The
authorization, execution, delivery and performance by the Company of each of
the
Transaction Documents to which it is a party, the issuance and sale of the
Shares and the consummation of the transactions contemplated by the Transaction
Documents will not (i) conflict with or result in a breach or violation of
any
of the terms or provisions of, or constitute a default under, or result in
the
creation or imposition of any lien, charge or encumbrance upon any property
or
assets of the Company or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets
of
the Company or any of its subsidiaries is subject, (ii) result in any violation
of the provisions of the memorandum of association, charter or bye-laws or
similar organizational documents of the Company or any of its subsidiaries
or
(iii) result in the violation of any law or statute or any judgment, order,
rule
or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (i) and (iii) above, for any such
conflict, breach or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.
(p)
No
Consents Required.
No
consent, approval, authorization, order, registration or qualification of or
with any court or arbitrator or governmental or regulatory authority is required
for the execution, delivery and performance by the Company of each of the
Transaction Documents to which each is a party, the issuance and sale of the
Shares and the consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable securities
laws in connection with the purchase and distribution of the Shares by the
Underwriters.
(q)
Legal
Proceedings.
Except
as described in the Registration Statement, the Time of Sale Information and
the
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company or
any
of its subsidiaries is or may be the subject that, individually or in the
aggregate, if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect or materially
and
adversely affect the ability of the Company to perform its obligations under
the
Transaction Documents; and to the best knowledge of the Company no such
investigations, actions, suits or proceedings are threatened by any governmental
or regulatory authority or by others; and (i) there are no current or pending
legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Prospectus or the
Registration Statement that are not so described in the Registration Statement,
the Time of Sale Information and the Prospectus and (ii) there are no statutes,
regulations or contracts or other documents that are required under the
Securities Act to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus that are not so filed
as exhibits to the Registration Statement or described in the Registration
Statement, the Time of Sale Information and the Prospectus.
9
(r)
Independent
Accountants.
Deloitte & Touche LLP, who have audited certain financial statements of the
Company and its subsidiaries, are independent public accountants with respect
to
the Company and its subsidiaries as required by the Securities Act. KPMG Ceska
Republika s.r.o., who have audited certain financial statements of the TV Nova
Group and its subsidiaries, are, for the period up to June 30, 2005, independent
public accountants with respect to the TV Nova Group and its subsidiaries as
required by the Chamber of Auditors of the Czech Republic. The audit report
of
Deloitte & Touche LLP on the audited financial statements of the Company and
its subsidiaries incorporated by reference in the Registration Statement and
the
Prospectus does not contain any limitation or restriction on the ability of
the
Underwriters to rely upon such report. The report of KPMG Ceska Republika s.r.o.
on the audited financial statements of the TV Nova Group incorporated by
reference in the Registration Statement and the Prospectus does not contain
any
limitation or restriction on the ability of the Underwriters to rely upon such
report.
(s)
Title
to Real and Personal Property.
The
Company and its subsidiaries have good and marketable title in fee simple to,
or
have valid rights to lease or otherwise use, all items of real and personal
property that are material to the respective businesses of the Company and
its
subsidiaries, in each case free and clear of all liens, encumbrances, claims
and
defects and imperfections of title except those that (i) relate to the Senior
Notes, (ii) do not materially interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries or (iii) could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(t)
Title
to Intellectual Property.
The
Company and its subsidiaries own or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary
or
confidential information, systems or procedures) necessary for the conduct
of
their respective businesses except where the failure to possess, or own such
rights would not have a Material Adverse Effect; and the conduct of their
respective businesses will not conflict in any material respect with any such
rights of others, and the Company and its subsidiaries have not received any
notice of any claim of infringement of or conflict with any such rights of
others and are unaware of any facts which would form a reasonable basis for
any
such claim, except as to such conduct or infringement which would not have
a
Material Adverse Effect.
(u)
No
Undisclosed Relationships.
No
relationship, direct or indirect, exists between or among the Company or any
of
its subsidiaries, on the one hand, and the directors, officers, shareholders
or
other affiliates of the Company or any of its subsidiaries, on the other, that
is required by the Securities Act to be described in the Registration Statement
and the Prospectus and that is not so described.
(v)
Investment
Company Act.
The
Company is not and, after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Registration
Statement, the Time of Sale Information and the Prospectus, will not be required
to register as an “investment company” or an entity “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission thereunder
(collectively, “Investment Company Act”).
10
(w)
Taxes.
Except
as could not reasonably be expected to have a Material Adverse Effect, the
Company and its subsidiaries have paid all national, state, local regional
and
foreign taxes and filed all tax returns required to be paid or filed through
the
date hereof; and except as otherwise disclosed in the Registration Statement,
the Time of Sale Information and the Prospectus, there is no tax deficiency
that
has been, or could reasonably be expected to be, asserted against the Company
or
any of its subsidiaries or any of their respective properties or
assets.
(x)
Licenses
and Permits.
The
Company and its subsidiaries possess all licenses, certificates, permits and
other authorizations issued by, and have made all declarations and filings
with,
the appropriate national, federal, regional, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership
or
lease of their respective properties or the conduct of their respective
businesses as described in the Registration Statement, the Time of Sale
Information and the Prospectus, except where the failure to possess or make
the
same would not, individually or in the aggregate, have a Material Adverse
Effect; and except as described in the Registration Statement, the Time of
Sale
Information and the Prospectus, neither the Company nor any of its subsidiaries
has received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that any
such
license, certificate, permit or authorization will not be renewed in the
ordinary course except where receipt of such notice of any revocation or
modification of any such license, certificate, permit or authorization would
not
have a Material Adverse Effect.
(y)
No
Labor Disputes.
No
labor disturbance by or dispute with employees of the Company or any of its
subsidiaries exists or, to the best knowledge of the Company, is threatened
which could, individually or in the aggregate, have a Material Adverse Effect;
to the best knowledge of the Company, no labor disturbance by or dispute with
employees or agents of suppliers or customers of the Company or any of its
subsidiaries is threatened which could, individually or in the aggregate, have
a
Material Adverse Effect.
(z)
Compliance
With Environmental Laws.
The
Company and its subsidiaries (i) are in compliance with any and all applicable
federal, national and international, state, local and foreign laws, rules,
regulations, decisions and orders relating to the protection of human health
and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (collectively, “Environmental Laws”); (ii) have received and are
in compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
(collectively “Environmental Permits”); and (iii) have not received notice of
any actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants
or
contaminants, except in any such case for any such failure to comply, or failure
to receive required permits, licenses or approvals, or liability as would not,
individually or in the aggregate, have a Material Adverse Effect and the Company
and its subsidiaries are not aware of any pending investigation which might
reasonably be expected to lead to a claim of such liability, except any such
liability as would not, individually or in the aggregate, have a Material
Adverse Effect.
11
(aa)
Compliance
With Employee Arrangements.
Except
as would not be reasonably expected to have a Material Adverse Effect, each
benefit and compensation plan, agreement, policy and arrangement that is
maintained, administered or contributed to by the Company or any of its
subsidiaries for current or former employees or directors of, or independent
contractors with respect to, the Company or any of its subsidiaries, or with
respect to which any of such entities could reasonably be expected to have
any
current, future or contingent liability or responsibility, has been maintained
in compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations; the Company and each of its subsidiaries and
each
of their respective affiliates have complied with all applicable statutes,
orders, rules and regulations in regard to such plans, agreements, policies
and
arrangements.
(bb)
Insurance.
Except
as could not reasonably be expected to have a Material Adverse Effect, the
Company and its subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, including business
interruption insurance, which insurance is in amounts and insures against such
losses and risks as are adequate to protect the Company and its subsidiaries
and
their respective businesses; and except as could not reasonably be expected
to
have a Material Adverse Effect, neither the Company nor any of its subsidiaries
has (i) received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in
order
to continue such insurance or (ii) 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 at reasonable cost from similar insurers as may
be
necessary to continue its business.
(cc)
No
Unlawful Payments.
Neither
the Company nor any of its subsidiaries nor, to the best knowledge of the
Company, any director, officer, agent, employee or other person associated
with
or acting on behalf of the Company or any of its subsidiaries has (i) used
any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977 or any applicable law
or
regulation implementing the OECD convention on Combating Bribery of Foreign
Public Officials in International Business Transactions; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(dd)
Money
Laundering.
The
operations of the Company and its subsidiaries are and have been conducted
at
all times in compliance with applicable financial record keeping and reporting
requirements of Bermuda and the European Union, so far as the Company is aware,
and any related or similar statutes, rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
(ee)
No
Restrictions on Subsidiaries.
Except
as would not be reasonably expected to have a Material Adverse Effect no
subsidiary of the Company is currently prohibited, directly or indirectly,
under
any agreement or other instrument to which it is a party or is subject, from
paying any dividends to the Company, from making any other distribution on
such
subsidiary’s capital stock, from repaying to the Company any intercompany loans
or advances to such subsidiary from the Company or from transferring any of
such
subsidiary’s properties or assets to the Company or any other subsidiary of the
Company.
12
(ff)
No
Broker's Fees.
Neither
the Company nor any of its subsidiaries is a party to any contract, agreement
or
understanding with any person (other than this Agreement) that would give rise
to a valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Shares.
(gg)
No
Registration Rights.
No
person has the right to require the Company or any of its subsidiaries to
register any securities for sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issuance and
sale of the Shares.
(hh)
No
Stabilization.
The
Company has not taken, directly or indirectly, any action designed to or that
could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Shares.
(ii)
Business
With Cuba.
The
Company has complied with all provisions of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida) relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
(jj)
Forward-Looking
Statements.
No
forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in the Registration
Statement, the Time of Sale Information and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith. The statements and financial information (including the assumptions
described herein) included in the Registration Statement, the Time of Sale
Information and the Prospectus relating to financial and other projections
or
incorporated by reference therein from the Company's Annual Report on Form
10-K
for the year ended December 31, 2005 as amended by the Company’s Form 10-K/A
filed with the Commission on March 15, 2006 (under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Future Trends") (the "Projections") (i) are within the coverage of the safe
harbor for forward looking statements set forth in Section 27A of the Securities
Act, Rule 175(b) under the Securities Act or Rule 3b-6 under the Exchange Act,
as applicable, (ii) were made by the Company with a reasonable basis and in
good
faith and reflect the Company's good faith best estimate of the matters
described therein, and (iii) have been prepared in accordance with Item 10
of
Regulation S-K under the Securities Act; all assumptions material to the
Projections are set forth in the Registration Statement, the Time of Sale
Information and the Prospectus; the assumptions used in the preparation of
the
Projections are reasonable; and none of the Company or its subsidiaries are
aware of any business, economic or industry developments inconsistent with
the
assumptions underlying the Projections.
(kk)
Statistical
and Market Data.
The
industry, statistical and market-related data included in the Registration
Statement, the Time of Sale Information and the Prospectus is based on or
derived from sources that the Company and believes to be reliable and accurate
in all material respects.
(ll)
Sarbanes
Oxley Act.
I.
Except as otherwise disclosed in the Prospectus, the Company and each of its
subsidiaries other than the companies of the TV Nova Group and the Company’s
Slovakian subsidiaries (i) make and keep accurate books and records and (ii)
maintain and has maintained effective internal control over financial reporting
as defined in Rule 13a-15 under the Exchange Act.
13
II.
Except as otherwise disclosed in the Prospectus, the Company has
established and maintains disclosure controls and procedures (as such term
is
defined in Rule 13a-15 under the Exchange Act), and such disclosure controls
and
procedures are designed to ensure that the information required to be disclosed
by the Company in the reports they file or submit under the Exchange Act is
accumulated and communicated to the management of the Company, including their
respective principal executive officers and principal financial officers, as
appropriate, to allow timely decisions regarding required disclosure to be
made;
III.
Accounting
Controls Disclosure. Except
as
otherwise disclosed in the Prospectus, since the date of the most recent balance
sheet of the Company and its consolidated subsidiaries reviewed or audited
by
Deloitte & Touche LLP and the audit committee of the board of directors of
the Company, (i) the Company has not identified (A) any significant
deficiencies in the design or operation of internal controls that could
adversely affect the ability of the Company and each of its subsidiaries to
record, process, summarize and report financial data, or any material weaknesses
in internal controls, other than those disclosed in the Registration Statement
and the Prospectus and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the internal
controls of the Company and each of its subsidiaries, and (ii) since that date,
there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
(mm) Status
under the Securities Act.
The
Company is not an ineligible issuer and is a well-known seasoned issuer, in
each
case as defined under the Securities Act, in each case at the times specified
in
the Securities Act in connection with the offering of the Shares. The Company
has paid the registration fee for this offering pursuant to Rule 456 (b) (1)
under the Securities Act or will pay such fees within the time period required
by such rule (without giving effect to the proviso therein) and in any event
prior to the Closing Date.
(nn)
Czech
Prospectus.
The
Company has obtained the approval of the Czech Prospectus by the Czech
Commission.
4. Further
Agreements of the Company. The Company covenants and agrees with each
Underwriter that:
(a)
Prospectuses.
The
Company will file the final Prospectus with the Commission within the time
periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the
Securities Act, will file any Issuer Free Writing Prospectus to the extent
required by Rule 433 under the Securities Act; and will file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so long
as
the delivery of a prospectus is required in connection with the offering or
sale
of the Shares; and the Company will furnish copies of the Prospectus and each
Issuer Free Writing Prospectus (to the extent not previously delivered) to
the
Underwriters, on the business day next succeeding the date of this Agreement
in
such quantities as the Representatives may reasonably request.
14
(b)
Delivery
of Copies.
The
Company will deliver, without charge, (i) to the Representatives, four signed
copies of the Registration Statement as originally filed and each amendment
thereto, in each case including all exhibits and consents filed therewith and
documents incorporated by reference therein; and (ii) to each Underwriter (A)
a
conformed copy of the Registration Statement as originally filed and each
amendment thereto (without exhibits) and (B) during the Prospectus Delivery
Period, as many copies of the Prospectus (including all amendments and
supplements thereto and documents incorporated by reference therein) and each
Issuer Free Writing Prospectus as the Representatives may reasonably request.
As
used herein, the term “Prospectus Delivery Period” means such period of time
after the first date of the public offering of the Shares as in the opinion
of
counsel for the Underwriters a prospectus relating to the Shares is required
by
law to be delivered (or required to be delivered but for Rule 172 under the
Securities Act) in connection with sales of the Shares by any Underwriter or
dealer.
(c)
Amendments
or Supplements, Issuer Free Writing Prospectuses.
Before
preparing, using, authorizing, approving, referring to or filing any Issuer
Free
Writing Prospectus, and before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the time
that
the Registration Statement becomes effective, the Company will furnish to the
Representatives and counsel for the Underwriters a copy of the proposed Issuer
Free Writing Prospectus amendment or supplement for review and will not prepare,
use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such Issuer Free Writing Prospectus or file any such
proposed amendment or supplement to which the Representatives reasonably object
unless such amendment or supplement is required to be made or distributed by
applicable provisions of the U.S. federal securities laws.
(d)
Notice
to the Representatives.
The
Company will advise the Representatives promptly, and confirm such advice in
writing, (i) when any amendment to the Registration Statement has been filed
or
becomes effective; (ii) when any supplement to the Prospectus or any Issuer
Free
Writing Prospectus or any amendment to the Prospectus has been filed; (iii)
of
any request by the Commission for any amendment to the Registration Statement
or
any amendment or supplement to the Prospectus or the receipt of any comments
from the Commission relating to the Registration Statement or any other request
by the Commission for any additional information; (iv) of the issuance by the
Commission of any order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus
or
the Prospectus or the initiation or threatening of any proceeding for that
purpose; (v) of the occurrence of any event within the Prospectus Delivery
Period as a result of which the Prospectus, the Time of Sale Information or
any
Issuer Free Writing Prospectus as then amended or supplemented would include
any
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary in order to make the statements therein, in
the
light of the circumstances existing when the Prospectus, the Time of Sale
Information or any such Issuer Free Writing Prospectus is delivered to a
purchaser, not misleading; (vi) of the receipt by the Company of any notice
of
objection of the Commission to the use of the Registration Statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities
Act; and (vii) of the receipt by the Company of any notice with respect to
any suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its best efforts to prevent the issuance
of
any such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification of the Shares and, if any such order is
issued, will use its best efforts to obtain as soon as possible the withdrawal
thereof.
15
(e)
Ongoing
Compliance of the Prospectus.
(1) If during the Prospectus Delivery Period, as set out in the Securities
Act, (i) any event shall occur or condition shall exist 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 a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not
misleading or (ii) it is necessary to amend or supplement the Prospectus to
comply with law, the Company will promptly notify the Underwriters thereof
and
forthwith prepare and, subject to paragraph (c) above, file with the Commission
and furnish to the Underwriters and to such dealers as the Representatives
may
designate, such amendments or supplements to the Prospectus as may be necessary
so that the statements in the Prospectus as so amended or supplemented will
not,
in the light of the circumstances existing when the Prospectus is delivered
to a
purchaser, be misleading or so that the Prospectus will comply with law and
(2)
if at any time prior to the Closing Date (i) any event shall occur or condition
shall exist as a result of which the Time of Sale Information as then amended
or
supplemented would include any untrue statement of a material fact or omit
to
state any material fact necessary in order to make the statements therein,
in
the light of the circumstances, not misleading or (ii) it is necessary to amend
or supplement the Time of Sale Information to comply with law, the Company
will
immediately notify the Underwriters thereof and forthwith prepare and, subject
to paragraph (c) above, file with the Commission (to the extent required) and
furnish to the Underwriters and to such dealers as the Representatives may
designate, such amendments or supplements to the Time of Sale Information as
may
be necessary so that the statements in the Time of Sale Information as so
amended or supplemented will not, in the light of the circumstances, be
misleading or so that the Time of Sale Information will comply with
law.
(f)
Blue
Sky Compliance.
The
Company will qualify the Shares for offer and sale under the securities or
Blue
Sky laws of such jurisdictions as the Representatives shall reasonably request
and will continue such qualifications in effect so long as required for
distribution of the Shares provided
that the
Company shall not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would
not
otherwise be required to so qualify, (ii) file any general consent to service
of
process in any such jurisdiction or (iii) subject itself to taxation in any
such
jurisdiction if it is not otherwise so subject.
(g)
Earning
Statement.
The
Company will make generally available to its security holders and the
Representatives as soon as practicable an earning statement that satisfies
the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months beginning
with the first fiscal quarter of the Company occurring after the “effective
date” (as defined in Rule 158) of the Registration Statement.
(h)
Clear
Market.
For a
period of 90 days after the date of the initial public offering of the Shares,
the Company will not (i) file or cause to be filed a registration statement,
including any amendments, with respect to the registration of any shares of
Class A Common Stock or securities convertible, exercisable or exchangeable
into
Class A Common Stock or any other securities of the Company, (ii) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of, directly
or
indirectly, any shares of Stock or any securities convertible into or
exercisable or exchangeable for Stock or (iii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Stock, whether any such transaction described in clause
(ii)
or (iii) above is to be settled by delivery of Stock or such other securities,
in cash or otherwise, without the prior written consent of the Representatives,
other than the Shares to be sold hereunder and any shares of Stock of the
Company issued under the Company’s 1995 Amended Stock Option
Plan.
16
(i)
Use
of Proceeds.
The
Company will apply the net proceeds from the sale of the Shares as described
in
the Registration Statement, the Time of Sale Information and the Prospectus
under the heading “Use of Proceeds”.
(j)
No
Stabilization.
The
Company will not take, directly or indirectly, any action designed to or that
could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Shares.
(k)
Exchange
Listing.
The
Company will use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations National Market
(the “Nasdaq National Market”) and on the Prague Stock Exchange.
(l)
Reports.
So long
as the Shares are issued and outstanding, the Company will furnish to the
Representatives or make available electronically, as soon as they are available,
copies of all reports or other communications (financial or other) furnished
to
holders of the Shares, and copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange
or
automatic quotation system.
(m) Record
Retention.
The
Company will, pursuant to reasonable procedures developed in good faith, retain
copies of each Issuer Free Writing Prospectus that is not filed with the
Commission in accordance with Rule 433 under the Securities Act.
5. Certain
Agreements of the Underwriters. Each Underwriter hereby represents and agrees
that:
(a)
It
has
not and will not use, authorize use of, refer to, or participate in the planning
for use of, any “free writing prospectus”, as defined in Rule 405 under the
Securities Act (which term includes use of any written information furnished
to
the Commission by the Company and not incorporated by reference into the
Registration Statement and any press release issued by the Company) other than
(i) a free writing prospectus that includes no issuer information other than
issuer information contained in a free writing prospectus previously filed
with
the Commission (other than a free writing prospectus permitted under Clause
(b)), (ii) any Issuer Free Writing Prospectus listed on Annex B or prepared
pursuant to Section 3(c) or Section 4(c) above, (iii) any free writing
prospectus prepared by such underwriter and approved by the Company in advance
in writing (each such free writing prospectus referred to in clauses (i) or
(iii), an “Underwriter Free Writing Prospectus”) and (iv) any free writing
prospectus permitted by clause (b) hereof.
(b)
It
has
not and will not, without the prior written consent of the Company, use any
free
writing prospectus that contains the final terms of the Shares unless such
terms
have previously been included in a free writing prospectus filed with the
Commission; provided
that
Underwriters may use a term sheet substantially in the form of Exhibit B hereto
without the consent of the Company; provided
further
that any
Underwriter using such term sheet shall notify the Company, and provide a copy
of such term sheet to the Company, prior to, or substantially concurrently
with,
the first use of such term sheet.
17
(c)
It
will,
pursuant to reasonable procedures developed in good faith, retain copies of
each
free writing prospectus used or referred to by it, in accordance with Rule
433
under the Securities Act.
(d)
It
is not
subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such
proceeding against it is initiated during the Prospectus Delivery
Period).
6. Conditions
of Underwriters' Obligations. The obligation of each Underwriter to purchase
the Underwritten Shares on the Closing Date or the Option Shares on the
Additional Closing Date, as the case may be as provided herein is subject to
the
performance by the Company of its covenants and other obligations hereunder
and
to the following additional conditions:
(a)
Registration
Compliance; No Stop Order.
No
order suspending the effectiveness of the Registration Statement shall be in
effect, and no proceeding for such purpose, pursuant to Rule 401(g)(2) shall
be
pending before or to the Company’s knowledge threatened by the Commission; the
Prospectus and each Issuer Free Writing Prospectus shall have been timely filed
with the Commission under the Securities Act (in the case of an Issuer Free
Writing Prospectus, to the extent required by Rule 433 under the Securities
Act)
and in accordance with Section 4(a) hereof; and all requests by the Commission
for additional information shall have been complied with to the reasonable
satisfaction of the Representatives.
(b)
Representations
and Warranties.
The
representations and warranties of the Company contained herein shall be true
and
correct on the date hereof and on and as of the Closing Date or the Additional
Closing Date, as the case may be; and the statements of the Company and its
officers made in any certificates delivered pursuant to this Agreement shall
be
true and correct on and as of the Closing Date or the Additional Closing Date,
as the case may be and the Company has complied with all agreements and all
conditions to be performed or satisfied on their part hereunder at or prior
to
the Closing Date.
(c)
No
Downgrade.
Subsequent to the execution and delivery of this Agreement, (i) no downgrading,
which shall include imposing a condition on the Company retaining any rating
assigned to the Company, shall have occurred in the rating accorded to any
securities or preferred stock issued or guaranteed by the Company by ▇▇▇▇▇’▇
Investor Services, Inc. (“Moody’s”)
or
Standard & Poors, a part of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (“S&P”) or
any other “internationally recognized statistical rating organization,” as such
term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act and (ii) no such organization shall have publicly announced
that
it has under surveillance or review, or has changed its outlook with respect
to,
its rating of any other debt securities or preferred shares issued or guaranteed
by the Company or any of its subsidiaries (other than an announcement with
positive implications of a possible upgrading).
(d)
No
Material Adverse Change.
Subsequent to the execution and delivery of this Agreement, no event or
condition of a type described in Section 3(g) hereof shall have occurred or
shall exist, which event or condition is not described in the Time of Sale
Information (excluding any amendment or supplement thereto) and the Prospectus
(excluding any amendment or supplement thereto) and the effect of which in
the
sole judgment of the Representatives makes it impracticable or inadvisable
to
proceed with the offering, sale or delivery of the Shares on the Closing Date
or
the Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the
Prospectus.
18
(e)
Officer's
Certificate.
The
Representatives shall have received on and as of the Closing Date or the
Additional Closing Date, as the case may be, a certificate of the chief
financial officer or chief accounting officer of the Company and one additional
senior executive officer of the Company who is satisfactory to the
Representatives (i) confirming that such officers have carefully reviewed
the
Registration Statement, the Time of Sale Information and the Prospectus and,
to
the best knowledge of such officers, the representations set forth in Sections
3(b) and 3(d) hereof are true and correct, (ii) confirming that the other
representations and warranties of the Company in this Agreement are true
and
correct and that the Company has complied with all agreements and satisfied
all
conditions on its part to be performed or satisfied hereunder at or prior
to
such Closing Date and (iii) to the effect set forth in paragraphs (a), (c)
and
(d) above.
(f)
Comfort
Letters.
On the
date of this Agreement and on the Closing Date or the Additional Closing
Date,
as the case may be, Deloitte & Touche LLP shall have furnished to the
Representatives, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representatives, containing statements
and information of the type customarily included in accountants’ “comfort
letters” to underwriters with respect to the financial statements and certain
financial information contained or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus; provided, that
the
letter delivered on the Closing Date or the Additional Closing Date, as the
case
may be shall use a “cut-off” date no more than three business days prior to such
Closing Date or such Additional Closing Date, as the case may be.
(g)
Opinion
of Counsel for the Company.
Each of
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, U.S. counsel for the Company, ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇, special Bermuda counsel for the Company, and ▇▇▇▇▇▇ ▇▇▇▇, Esq.,
general
counsel to the Company, shall have furnished to the Representatives, at the
request of the Company, their written opinion, dated the Closing Date or
the
Additional Closing Date, as the case may be, and addressed to the Underwriters,
in form and substance reasonably satisfactory to the Representatives. Such
opinions of counsel shall not contain any statement purporting to limit the
liability of such counsel with respect to such opinion or specify that any
such
liability must be adjudicated by a court in the jurisdiction of such counsel
or,
to the extent that the laws of the jurisdiction of such counsel provide for
any
limitation or forum of adjudication, such opinion shall expressly waive such
provisions to the fullest extent permitted by applicable law.
(h)
Opinion
of Counsel for the Underwriters.
The
Representatives shall have received on and as of the Closing Date or the
Additional Closing Date, as the case may be, an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
&
▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, with respect to such matters
as the
Representatives may reasonably request, and such counsel shall have received
such documents and information as they may reasonably request to enable them
to
pass upon such matters.
(i)
No
Legal Impediment to Issuance.
No
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date or
the
Additional Closing Date, as the case may be, prevent the issuance or sale
of the
Shares; and no injunction or order of any federal, state or foreign court
shall
have been issued that would, as of the Closing Date or the Additional Closing
Date, as the case may be, prevent the issuance or sale of the
Shares.
19
(j)
Good
Standing.
The
Representatives shall have received on and as of the Closing Date or the
Additional Closing Date, as the case may be, satisfactory evidence of, where
applicable, the good standing of the Company, CME Development Corporation,
CME
Media Enterprises B.V. and Central European Media Enterprises N.V. in their
respective jurisdictions of organization and their good standing as foreign
entities in such other jurisdictions as the Representatives may reasonably
request, in each case in writing or any standard form of telecommunication
from
the appropriate Governmental Authorities of such jurisdictions.
(k)
Exchange
Listing.
The
Shares to be delivered on the Closing Date or Additional Closing Date, as
the
case may be, shall have been approved for listing on NASDAQ and on the Prague
Stock Exchange.
(l)
Lock-up
Agreements.
The
“lock-up” agreements, each substantially in the form of Exhibit A hereto,
between you and certain shareholders, officers and directors of the Company
relating to sales and certain other dispositions of shares of Stock or certain
other securities, delivered to you on or before the Closing Date, shall be
full
force and effect on the Closing Date or Additional Closing Date, as the case
may
be.
(m)
Transaction
Documents.
On the
Closing Date, the Transaction Documents (in the form reasonably satisfactory
to
the Representatives) shall have been duly and validly executed and delivered
by
the Company.
(n)
Additional
Documents.
On or
prior to the Closing Date or the Additional Closing Date, as the case may
be,
the Company shall have furnished to the Representatives such further
certificates and documents as the Representatives may reasonably
request.
All
opinions, letters, certificates and evidence mentioned above or elsewhere
in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel
for
the Underwriters.
20
7. Indemnification
and Contribution. (a) Indemnification
of the Underwriters.
The
Company agrees to indemnify and hold harmless each Underwriter, its affiliates,
directors and officers and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), joint or several, that
arise
out of, or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or the Prospectus
(or
any amendment or supplement thereto) or any Preliminary Prospectus, Issuer
Free
Writing Prospectus or Time of Sale Information, or caused by any omission
or
alleged omission to state therein 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, except insofar
as such
losses, claims, damages or liabilities arise out of, or are based upon, any
untrue statement or omission or alleged untrue statement or omission made
in
reliance upon and in conformity with any information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein, it being understood and agreed
that
the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below provided, that with
respect to any such untrue statement or alleged untrue statement in or omission
from any Preliminary Prospectus, the indemnity agreement contained in this
paragraph (a) shall not inure to the benefit of any Underwriter to the extent
that the sale to the person asserting any such loss, claim, damage or liability
was an initial resale by such Underwriter and any such loss, claim, damage
or
liability of or with respect to such Underwriter results from the fact that
both
(i) to the extent required by applicable law, a copy of the Prospectus was
not
sent or given to such person at the Time of Sale to such person and (ii)
the
untrue statement in or omission from such Preliminary Prospectus was corrected
in the Prospectus, which Prospectus was filed with the Commission at or prior
to
the Time of Sale to such person and the timely delivery of such corrected
Prospectus would have constituted a complete defense to the claim asserted
by
such person unless, in either case, such failure to deliver the Prospectus
was a
result of non-compliance by the Company with the provisions of Section 4(b)
hereof, including the failure by the Company to furnish the Underwriters
copies
of the corrected Prospectus in requisite quantities and sufficiently in advance
to permit delivery of such corrected Prospectus to such person at or prior
to
the Time of Sale to such Person.
(b)
Indemnification
of the Company.
Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, its directors, its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent
as
the indemnity set forth in paragraph (a) above, but only with respect to
any
losses, claims, damages or liabilities that arise out of, or are based upon,
any
untrue statement or omission or alleged untrue statement or omission made
in
reliance upon and in conformity with any information relating to such
Underwriter furnished to the Company in writing by such Underwriter through
the
Representatives expressly for use in the Registration Statement, the Prospectus
(or any amendment or supplement thereto), any Preliminary Prospectus, Issuer
Free Writing Prospectus or any Time of Sale Information, it being understood
and
agreed upon that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the statements set forth in the third, eighth, ninth, tenth,
eleventh and twelfth paragraphs under the heading
“Underwriting”.
21
(c)
Notice
and Procedures.
If any
suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any
person
in respect of which indemnification may be sought pursuant to either paragraph
(a) or (b) above, such person (the “Indemnified Person”) shall promptly notify
the person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing; provided
that the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under this Section 7 except to the extent that
it has
been materially prejudiced (through the forfeiture of substantive rights
or
defenses) by such failure; and provided, further, that the failure to notify
the
Indemnifying Person shall not relieve it from any liability that it may have
to
an Indemnified Person otherwise than under this Section 7. If any such
proceeding shall be brought or asserted against an Indemnified Person and
it
shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall be entitled to participate in, and assume the defense of, such proceeding
with counsel reasonably satisfactory to the Indemnified Person and shall
pay the
fees and expenses of such counsel related to such proceeding, as incurred.
In
any such proceeding, any Indemnified Person shall have the right to retain
its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified
Person
shall have reasonably concluded that there may be legal defenses available
to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is
understood and agreed that the Indemnifying Person shall not, in connection
with
any proceeding or related proceeding in the same jurisdiction, be liable
for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses
shall
be paid or reimbursed as they are incurred provided that the Indemnifying
Person
shall be reimbursed for such fees and expenses if such Indemnified Person
is not
found liable by final non-appealable judgment and the Indemnified Person
has
actually received reimbursement for such fees and expenses from a third party.
Any such separate firm for any Underwriter, its affiliates, directors and
officers and any control persons of such Underwriter shall be designated
in
writing by ▇.▇. ▇▇▇▇▇▇ Securities Ltd. and any such separate firm for the
Company, its directors, its officers who signed the Registration Statement
and
any control persons of the Company shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of
any
proceeding effected without its written consent. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested that
an
Indemnifying Person reimburse the Indemnified Person for fees and expenses
of
counsel as contemplated by this paragraph, the Indemnifying Person 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
the
Indemnifying Person of such request and (ii) the Indemnifying Person shall
not
have reimbursed the Indemnified Person in accordance with such request prior
to
the date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or has
been
a party and indemnification has been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter
of
such proceeding and (y) does not include any statement as to or any admission
of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d)
Contribution.
If the
indemnification provided for in paragraphs (a) and (b) above is unavailable
to
an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a
result
of such losses, claims, damages or liabilities (i) in such proportion as
is
appropriate to reflect the relative benefits received by the Company on the
one
hand and the Underwriters on the other from the offering of the Shares or
(ii)
if the allocation provided by clause (i) is not permitted by applicable law,
in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company on the
one
hand and the Underwriters on the other in connection with the statements
or
omissions that resulted in such losses, claims, damages or liabilities, as
well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be
deemed
to be in the same respective proportions as the net proceeds (before deducting
expenses) received by the Company from the sale of the Shares and the total
underwriting discounts and commissions received by the Underwriters in
connection therewith, in each case as set forth in the table on the cover
of the
Prospectus, bear to the aggregate offering price of the Shares. The relative
fault of the Company on the one hand and the Underwriters on the other shall
be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state
a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission.
22
(e)
Limitation
on Liability.
The
Company and the Underwriters agree that it would not be just and equitable
if
contribution pursuant to this Section 6 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or
by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable
by
an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to
the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with any such action or claim. Notwithstanding
the provisions of this Section 7, in no event shall an Underwriter be required
to contribute any amount in excess of the amount by which the total underwriting
discounts and commissions received by such Underwriter with respect to the
offering of the Shares exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
purchase obligations hereunder and not joint.
(f)
Non-Exclusive
Remedies.
The
remedies provided for in this Section 7 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any Indemnified
Person at law or in equity.
8. Effectiveness
of Agreement. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
9. Termination.
This Agreement may be terminated in the absolute discretion of the
Representatives, by notice to the Company, if after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall
have
been suspended or materially limited on the New York Stock Exchange, the
London
Stock Exchange, the Prague Stock Exchange or the over-the-counter market,
(ii)
trading of any securities issued or guaranteed by the Company shall have
been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities shall have been declared by U.S.
Federal or New York State authorities or by the competent governmental or
regulatory authorities in the United Kingdom or the Czech Republic, (iv)
there
shall have occurred any outbreak or escalation of hostilities or acts of
terrorism or any change in financial markets or any calamity, crisis, or
emergency either within or outside the United States that, in the judgment
of
the Representatives, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares
on the
terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Prospectus or (v) exchange controls shall have been imposed
by the United States, the United Kingdom or the ▇▇▇▇▇
▇▇▇▇▇▇▇▇.
▇▇
▇▇. Defaulting
Underwriter. (a) If, on the Closing Date or the Additional Closing Date, as
the case may be, any Underwriter defaults on its obligation to purchase the
Shares that it has agreed to purchase hereunder on such date, the non-defaulting
Underwriters may in their discretion arrange for the purchase of such Shares
by
other persons satisfactory to the Company on the terms contained in this
Agreement. If, within 36 hours after any such default by any Underwriter,
the
non-defaulting Underwriters do not arrange for the purchase of such Shares,
then
the Company shall be entitled to a further period of 36 hours within which
to
procure other persons satisfactory to the non-defaulting Underwriters to
purchase such Shares on such terms. If other persons become obligated or
agree
to purchase the Shares of a defaulting Underwriter, either the non defaulting
Underwriters or the Company may postpone the Closing Date or the Additional
Closing Date, as the case may be, for up to five full business days in order
to
effect any changes that in the opinion of counsel for the Company or counsel
for
the Underwriters may be necessary in the Registration Statement and the
Prospectus or in any other document or arrangement, and the Company agrees
to
promptly prepare any amendment or supplement to the Registration Statement
and
the Prospectus that effects any such changes. As used in this Agreement,
the
term “Underwriter” includes, for all purposes of this Agreement unless the
context otherwise requires, any person not listed in Schedule 1 hereto that,
pursuant to this Section 10, purchases Shares that a defaulting Underwriter
agreed but failed to purchase.
(b)
If,
after
giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company
as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case
may
be does not exceed one-eleventh of the aggregate number of Shares to be
purchased on such date, then the Company shall have the right to require
each
non-defaulting Underwriter to purchase the number of Shares that such
Underwriter agreed to purchase hereunder on such date plus such Underwriter’s
pro rata share (based on the number of Shares that such Underwriter agreed
to
purchase on such date) of the Shares of such defaulting Underwriter or
Underwriters for which such arrangements have not been made.
(c)
If,
after
giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company
as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case
may
be, exceeds one-eleventh of the aggregate amount of Shares to be purchased
on
such date, or if the Company shall not exercise the right described in paragraph
(b) above, then this Agreement or, with respect to any Additional Closing
Date,
the obligation of the Underwriters to purchase Shares on the Additional Closing
Date, as the case may be shall terminate without liability on the part of
the
non-defaulting Underwriters. Any termination of this Agreement pursuant to
this
Section 10 shall be without liability on the part of the Company, except
that
the Company will continue to be liable for the payment of expenses as set
forth
in Section 11 hereof and except that the provisions of Section 7 hereof shall
not terminate and shall remain in effect.
24
(d)
Nothing
contained herein shall relieve a defaulting Underwriter of any liability
it may
have to the Company or any non-defaulting Underwriter for damages caused
by its
default.
11. Payment
of Expenses. (a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will
pay
or cause to be paid all costs and expenses incident to the performance of
its
obligations hereunder, including without limitation, (i) the costs incident
to
the authorization, issuance, sale, preparation and delivery of the Shares
and
any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement, the Preliminary Prospectus, any Issuer Free Writing Prospectus,
any
Time of Sale Information and the Prospectus (including all exhibits, amendments
and supplements thereto) and the distribution thereof; (iii) the costs of
reproducing and distributing each of the Transaction Documents; (iv) the
fees
and expenses of the Company's counsel and independent accountants; (v) the
fees
and expenses incurred in connection with the registration or qualification
and
determination of eligibility for investment of the Shares under the laws
of such
jurisdictions as the Representatives may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Underwriters); (vi) the cost of preparing share
certificates; (vii) the costs and charges of any transfer agent and any
registrar; (viii) all expenses and application fees incurred in connection
with
any filing with, and clearance of the offering by, the National Association
of
Securities Dealers, Inc.; (ix) all expenses incurred by the Company in
connection with any “road show” presentation to potential investors; and (x) all
expenses and application fees related to the listing of the Shares on the
NASDAQ
Market and on the Prague Stock Exchange.
(b)
If
(i)
this Agreement is terminated pursuant to Section 9, (ii) the Company for
any
reason fails to tender the Shares for delivery to the Underwriters or (iii)
the
Underwriters decline to purchase the Shares for any reason permitted under
this
Agreement, the Company agrees to reimburse the Underwriters for all
out-of-pocket costs and expenses (and in case of (ii) and (iii) including
the
fees and expenses of their counsel) reasonably incurred by the Underwriters
in
connection with this Agreement and the offering contemplated
hereby.
12. Persons
Entitled to Benefit of Agreement. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors
and
the officers and directors and any controlling persons referred to in Section
7
hereof. Nothing in this Agreement is intended or shall be construed to give
any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein. No purchaser of Shares
from
any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
13. Survival.
The respective indemnities, rights of contribution, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf of the Company or the Underwriters pursuant to this
Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Shares and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation
made by or on behalf of the Company or the Underwriters.
14. Certain
Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term "affiliate" has the meaning set forth in Rule
405
under the Securities Act; (b) the term "business day" means any day other
than a
day on which banks are permitted or required to be closed in New York City;
and
(c) the term "subsidiary" has the meaning set forth in Rule 405 under the
Securities Act.
25
15. Research
Analyst Independence.
The
Company acknowledges that the Underwriters’ research analysts and research
departments are required to be independent from their respective investment
banking divisions and are subject to certain regulations and internal policies,
and that such Underwriters’ research analysts may hold views and make statements
or investment recommendations and/or publish research reports with respect
to
the Company and/or the offering that differ from the views of their respective
investment banking divisions. The Company hereby waives and releases, to
the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect to any conflict of interest that may arise
from
the fact that the views expressed by their independent research analysts
and
research departments may be different from or inconsistent with the views
or
advice communicated to the Company by such Underwriters’ investment banking
divisions. The Company acknowledges that each of the Underwriters is a full
service securities firm and as such from time to time, subject to applicable
securities laws, may effect transactions for its own account or the account
of
its customers and hold long or short positions in debt or equity securities
of
the companies that may be the subject of the transactions contemplated by
this
Agreement.
16. Miscellaneous.
(a)
Notices.
All
notices and other communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed or transmitted and confirmed by
any
standard form of telecommunication. Notices to the Underwriters shall be
given
to the Representative ▇.▇. ▇▇▇▇▇▇ Securities Ltd., ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇
▇▇▇ (fax: ▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇; Attention: Equity Capital Markets
Syndicate Desk); ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Fax - [·]
,
Attention - ECM Syndicate Desk with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, CityPoint, One ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ (fax:
▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.) Notices to the
Company shall be given to it in care of CME Development Corporation,
8th
Floor,
Aldwych House, ▇▇-▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, (fax: ▇▇▇ (▇) ▇▇▇
▇▇▇
▇▇▇▇; Attention: ▇▇▇▇▇▇ ▇▇▇▇, Esq.); with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ Rosenman
LLP,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ (fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇; Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.)
(b)
Submission
to Jurisdiction.
The
Company irrevocably submits to the non-exclusive jurisdiction of any U.S.
Federal or New York State court in the Borough of Manhattan in the City,
County
and State of New York, United States of America, in any legal suit, action
or
proceeding based on or arising under this Agreement and agrees that all claims
in respect of such suit or proceeding may be determined in any such court.
The
Company irrevocably waives the defense of an inconvenient forum or objections
to
personal jurisdiction with respect to the maintenance of such legal suit,
action
or proceeding. To the extent permitted by law, the Company hereby waives
any
objections to the enforcement by any competent court in Bermuda of any judgment
validly obtained in any such court in New York on the basis of any such legal
suit, action or proceeding. The Company shall, on or before the Closing Date,
have appointed CT Corporation System (the “Authorized
Agent”)
as its
authorized agent upon whom process may be served in any such legal suit,
action
or proceeding. Such appointment shall be irrevocable. The Authorized Agent
shall
have agreed to act as said agent for service of process and the Company agrees
to take any and all action, including the filing of any and all documents
and
instruments that may be necessary to continue such appointment in full force
and
effect as aforesaid. The Company further agrees that service of process upon
the
Authorized Agent and written notice of said service to the Company shall
be
deemed in every respect effective service of process upon the Company in
any
such legal suit, action or proceeding. Nothing herein shall affect the right
of
any Initial Purchaser or any person controlling any Initial Purchaser to
serve
process in any other manner permitted by law. The provisions of this Section
13(b) are intended to be effective upon the execution of this Agreement without
any further action by the Company and the introduction of a true copy of
this
Agreement into evidence shall be conclusive and final evidence as to such
matters.
26
(c)
Waiver
of Immunity.
To the
extent the Company or any of its properties, assets or revenues may have
or may
hereafter become entitled to, or has attributed to it, any right of immunity,
on
the grounds of sovereignty or otherwise, from any legal action, suit or
proceeding, from the giving of any relief in any such legal action, suit
or
proceeding, from set-off or counterclaim, from the competent jurisdiction
of any
court, from service of process, from attachment upon or prior to judgment,
from
attachment in aid of execution of judgment, or from execution of judgment,
or
other legal process or proceeding for the giving of any relief or for the
enforcement of any judgment, in any competent jurisdiction in which proceedings
may at any time be commenced, with respect to its obligations, liabilities
or
any other matter under or arising out of or in connection with this Agreement,
any of the Transaction Documents or any of the transactions contemplated
hereby
or thereby, the Company hereby irrevocably and unconditionally waives, and
agrees not to plead or claim, any such immunity and consent to such relief
and
enforcement.
(d)
Currency.
Any
payment on account of an amount that is payable to the Underwriters in a
particular currency (the “Required
Currency”)
that
is paid to or for the account of the Underwriters in lawful currency of any
other jurisdiction (the “Other
Currency”),
whether as a result of any judgment or order or the enforcement thereof or
the
liquidation of the Company or for any other reason shall constitute a discharge
of the obligation of such obligor only to the extent of the amount of the
Required Currency which the recipient could purchase in the New York or London
foreign exchange markets with the amount of the Other Currency in accordance
with normal banking procedures at the rate of exchange prevailing on the
first
day (other than a Saturday or Sunday) on which banks in New York or London
are
generally open for business following receipt of the payment first referred
to
above. If the amount of the Required Currency that could be so purchased
(net of
all premiums and costs of exchange payable in connection with the conversion)
is
less than the amount of the Required Currency originally due to the recipient,
then the Company shall jointly and severally indemnify and hold harmless
the
recipient from and against all loss or damage arising out of or as a result
of
such deficiency. This indemnity shall constitute an obligation separate and
independent from the other obligations of the Company, shall give rise to
a
separate and independent cause of action, shall apply irrespective of any
indulgence granted by any person owed such obligation from time to time and
shall continue in full force and effect notwithstanding any judgment or order
for a liquidated sum in respect of an amount due hereunder or any judgment
or
order.
(e)
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York.
(f)
Counterparts.
This
Agreement may be signed in counterparts (which may include counterparts
delivered by any standard form of telecommunication), each of which shall
be an
original and all of which together shall constitute one and the same
instrument.
27
(g)
Amendments
or Waivers.
No
amendment or waiver of any provision of this Agreement, nor any consent or
approval to any departure therefrom, shall in any event be effective unless
the
same shall be in writing and signed by the parties hereto.
(h)
Headings.
The
headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
28
If
the
foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided
below.
|
Very
truly yours,
|
|||
|
By:
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇
|
||
|
Title:
Chief Executive Officer
|
|||
|
Accepted:
March 23, 2006
|
||
|
▇.▇.
▇▇▇▇▇▇ SECURITIES LTD.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
|
|
Authorized
Signatory
|
||
|
▇▇▇▇▇▇
BROTHERS INC.
|
||
|
By:
|
/s/
▇▇▇▇▇▇ ▇▇▇▇
|
|
|
Authorized
Signatory
|
||
|
ING
BANK N.V., LONDON BRANCH
|
||
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Authorized
Signatory
|
||
|
Česká
Spořitelna, a.s.
|
||||||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
and
|
By:
|
/s/
Marketa Mühlhoferová
|
||
|
Authorized
Signatory
|
Authorized
Signatory
|
|||||
Schedule
1
|
Underwriter
|
Number
of Shares
|
|||
|
▇.▇.
▇▇▇▇▇▇ Securities Ltd.
|
660,000
|
|||
|
▇▇▇▇▇▇
Brothers Inc.
|
550,000
|
|||
|
ING
Bank N.V., London Branch
|
330,000
|
|||
|
Ĉeská
spořitelna, a.s.
|
440,000
|
|||
|
ThinkEquity
Partners LLC
|
110,000
|
|||
|
▇▇▇▇▇▇▇▇▇
& Company, Inc.
|
110,000
|
|||
|
Total
|
2,200,000
|
|||
EXHIBIT
A
FORM
OF
LOCK-UP AGREEMENT
March
23,
2006
▇.▇.
▇▇▇▇▇▇ Securities Ltd.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
Brothers Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
ING
Bank
N.V. London Branch
▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇
As
Representatives of the several
Underwriters
listed in Schedule I
to
the
Underwriting Agreement
referred
to below
|
Re:
|
Central
European Media Enterprises Ltd.
--- Public Offering
|
Ladies
and Gentlemen:
The
undersigned understands that you, as representatives of the several Underwriters
(the “Representatives”) propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Central
European Media Enterprises Ltd., a Bermuda
company (the "Company"), providing for the public offering (the "Public
Offering") by the
several Underwriters named in Schedule I to the Underwriting Agreement
(the
"Underwriters"), of shares of Class A Common Stock, of the Company (the
"Securities"). Capitalized terms used herein and not otherwise defined
shall
have the meanings set forth in the Underwriting Agreement.
In
consideration of the Underwriters' agreement to purchase and make the Public
Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees
that,
without the prior written consent of the Representatives (which may not
be
unreasonably withheld), the undersigned will not, during the period ending
90
days after the date of the prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, announce the intention to sell, contract
to
sell, grant any option, right or warrant to purchase, or otherwise transfer
or
dispose of, directly or indirectly, any shares of Class A Common Stock,
$0.08 per
share
par value, or any shares of Class B Common Stock, $0.08 per
share
par value, of the Company (the "Common Shares") or any securities convertible
into or exercisable or exchangeable for Common Shares (including without
limitation, Common Shares which may be deemed to be beneficially owned
by the
undersigned in accordance with the rules and regulations of the Securities
and
Exchange Commission and securities which may be issued upon exercise of
a stock
option or warrant) or (2) enter into any swap or other agreement that transfers,
in whole or in part, any of the economic consequences of ownership of the
Common
Shares, whether any such transaction described in clause (1) or (2) above
is to
be settled by delivery of Common Shares or such other securities, in cash
or
otherwise. In addition, the undersigned agrees that, without the prior
written
consent of the Representatives, it will not, during the period ending
90 days
after the date of the Prospectus, make any demand for or exercise any right
with
respect to, the registration of any Common Shares or any security convertible
into or exercisable or exchangeable for Common Shares.
EXHIBIT
A
Notwithstanding
the foregoing, the undersigned may transfer Common Shares (i) without the
prior written consent of the Representatives pursuant to the laws of descent
and
distribution, provided that the distributee or heir agrees to be bound in
writing by the restrictions set forth herein, or (ii) to any trust for the
direct or indirect benefit of the undersigned or the immediate family of the
undersigned, provided that the trustee of the trust agrees to be bound in
writing by the restrictions set forth herein, and provided further that any
such
transfer shall not involve a disposition for value. For purposes of this Letter
Agreement, "immediate family" shall mean any relationship by blood, marriage
or
adoption, not more remote than first cousin.
In
furtherance of the foregoing, the Company, and any duly appointed transfer
agent
for the registration or trans4fer of the securities described herein, are hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this Letter Agreement.
The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Letter Agreement. All authority herein
conferred or agreed to be conferred and any obligations of the undersigned
shall
be binding upon the successors, assigns, heirs or personal representatives
of
the undersigned.
The
undersigned understands that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment
for
and delivery of the Common Shares to be sold thereunder, the undersigned shall
be released form all obligations under this Letter Agreement.
The
undersigned understands that the Underwriters are entering into the Underwriting
Agreement and proceeding with the Public Offering in reliance upon this Letter
Agreement.
EXHIBIT
A
This
lock-up agreement shall be governed by and construed in accordance with the
laws
of the State of New York.
|
Very
truly yours,
|
|||
|
[NAME
OF SHAREHOLDER]
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
EXHIBIT
B
Issuer
Free Writing Prospectus
(Supplementing
Preliminary Prospectus dated March 15, 2006)
Filed
pursuant to Rule 433 under the Securities Act of 1933
Registration
Statement No. 333-132448
Issuer
Free Writing Prospectus dated March 24, 2006
(Supplementing
Preliminary Prospectus Dated March 15, 2006)
The
information in this Issuer Free Writing Prospectus supplements the information
contained in Central European Media Enterprises Ltd.’s Corporation’s Preliminary
Prospectus dated March 15, 2006.
|
Issuer:
|
||
|
Total
shares offered:
|
2,200,000
shares of Common Stock.
|
|
|
Over-allotment
option:
|
330,000
shares of Common Stock.
|
|
|
Last
reported sale price of common stock on the Nasdaq National Market
on March
23, 2006:
|
$71.87
per share
|
|
|
Public
offering price:
|
$70.00
per share
|
|
|
Proceeds
to CME:
|
Approximately
$146.5 million (after deducting underwriting discounts and commissions
and
estimated offering expenses). This is an amount equal to approximately
$2.3 million more than the amount set forth in the Preliminary
Prospectus.
|
|
|
Common
stock outstanding after this offering:
|
33,257,994
shares (33,587,994 if the underwriters exercise their over-allotment
option in full).
|
The
issuer has filed a registration statement (including a prospectus) with the
SEC
for the offering to which this communication relates. Before you invest,
you
should read the prospectus in that registration statement and other documents
the issuer has filed with the SEC for more complete information about the
issuer
and this offering. You may get these documents for free by visiting ▇▇▇▇▇
on the
SEC Web site at ▇▇▇.▇▇▇.▇▇▇.
Alternatively, the issuer, any underwriter or any dealer participating in
the
offering will arrange to send you the prospectus if you request it by calling
toll free 1-800 . Copies of the final prospectus may be accessed at the issuer’s
website (▇▇▇▇://▇▇▇.▇▇▇▇-▇▇▇.▇▇▇)
or may
be obtained by email at the following address:
▇▇▇▇▇▇_▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇.