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Ex. 10.4
 
 
SUBSCRIPTION AGREEMENT
 
BY AND AMONG
 
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.,
 
RONALD S. LAUDER
 
AND
 
RSL CAPITAL LLC
 
DATED AS OF APRIL 30, 2012
 
 
 

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SUBSCRIPTION AGREEMENT
 
SUBSCRIPTION     AGREEMENT (this “Agreement”), dated as of April 30, 2012, by
and among Ronald S. Lauder, RSL Capital LLC, a New York limited liability
company (“Investor”), and Central European Media Enterprises Ltd., a Bermuda
company (the “Company”).  Capitalized terms used in this Agreement have the
meaning set forth in Section 7.1.
 
RECITALS
 
WHEREAS, the Company intends to repurchase certain of its outstanding debt (the
“Repurchases”) for cash and/or newly issued shares of the Company’s Class A
Common Stock, par value $0.08 per share (the “Class A Common Stock”), in one or
more transactions, which may involve the commencement of a tender offer,
privately negotiated transactions, open market repurchases and exchanges of
newly issued securities of the Company for outstanding convertible debt
securities conducted pursuant to Section 3(a)(9) of the Securities Act of 1933,
as amended (the “Securities Act”);
 
WHEREAS, Investor has agreed to purchase from the Company newly issued Class A
Common Stock pursuant to this Agreement, the proceeds of which shall be used to
fund Repurchases;
 
WHEREAS, in connection with the contemplated purchase of Class A Common Stock by
Investor under this Agreement, the Company, Ronald S. Lauder, RSL Savannah LLC,
RSL Investments Corporation, Investor and Time Warner Media Holdings B.V. (“TW”)
intend to amend the terms of the Investor Rights Agreement;
 
WHEREAS, TW and the Company have entered into the TW Commitment Agreement,
pursuant to which the Company has agreed, among other things, to sell to TW the
TW Subscription Shares to fund, in part, Repurchases; and
 
WHEREAS, in connection with the contemplated purchase of Class A Common Stock by
Investor, the RSL Investors (as defined in the Investor Rights Agreement) and
the Company shall enter into a registration rights agreement substantially in
the form attached hereto as Exhibit A (the “Registration Rights Agreement”).
 
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
 
ARTICLE I
PURCHASE OF SHARES
 
1.1.           Purchase of Shares.  Upon the terms and subject to the conditions
set forth herein, Investor hereby subscribes for and agrees to purchase, and the
Company agrees to issue and sell to Investor, two million (2,000,000) shares
of  Class A Common Stock (the “Shares”) at a price per share of $7.51 (the “RSL
Purchase Price”) totaling aggregate proceeds to the Company of $15,020,000 (the
“Proceeds”).  The Proceeds shall be paid in full in immediately available funds
at the Closing (as defined below).
 
 
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1.2.           Closing.  
 
(a)           Subject to the satisfaction or waiver of each of the conditions
set forth in ARTICLE IV, unless this Agreement shall have been terminated
pursuant to its terms, the closing of the purchase and sale of the Shares (the
“Closing”) shall take place at the offices of Dewey & LeBoeuf LLP, 1301 Avenue
of the Americas, New York, New York 10019 on the later of (i) the date of the
closing of the purchase of the TW Subscription Shares, and (ii) the satisfaction
or waiver of the conditions set forth in ARTICLE IV (excluding conditions that,
by their nature, cannot be satisfied until the Closing, but subject to the
satisfaction or waiver of such conditions at the Closing) or at such date and
time as the parties may agree to in writing (the “Closing Date”).  
 
(b)           On the Closing Date, (a) the Company shall deliver to Investor
(i) a certificate representing the Shares to be purchased on such date,
registered in Investor’s name and bearing legends substantially in the form set
forth herein against payment by or on behalf of Investor of the Proceeds by wire
transfer in immediately available funds to the account designated by the Company
and shall register Investor in its register of shareholders as the holder of
such Shares and (ii) all other documents and certificates required to be
delivered to Investor pursuant to Section 4.2; and (b) Investor shall deliver
all documents and certificates required to be delivered to the Company pursuant
to Section 4.3.
 
1.3.           Adjustment of the Shares.  The number of Shares to be purchased
by Investor at the Closing pursuant to Sections 1.1 and 1.2 and the RSL Purchase
Price shall be proportionately adjusted for any subdivision or combination (by
stock split, reverse stock split, dividend, reorganization, recapitalization or
otherwise) of the Class A Common Stock that occurs during the period between the
date hereof and the Closing Date.
 
ARTICLE II
REPRESENTATIONS AND WARRANTIES
 
2.1.           Representations and Warranties of the Company.  As of the date of
this Agreement and the Closing Date, the Company represents and warrants to
Investor as follows:
 
(a)           Organization and Standing.  The Company is duly organized as an
exempted company, limited by shares, validly existing and in good standing under
the laws of Bermuda.  The Company has all requisite power and authority to
conduct its business as presently conducted and as disclosed in the Company
Reports.  Each of the Company’s Subsidiaries is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, with
full power and authority to conduct its business as currently conducted, except
where the failure of any Subsidiary to be duly organized, validly existing and
in good standing, individually or in the aggregate, would not have a Material
Adverse Effect.  The Company’s Memorandum of Association, as in effect on the
date hereof, and the Company’s Bye-laws, as in effect on the date hereof, are
each filed as exhibits to the Company Reports.
 
 
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(b)           Shares.  When the certificates evidencing the Shares have been
delivered to Investor against payment therefor as provided in this Agreement,
the Shares will be validly issued, fully paid and non-assessable shares of the
Company, free and clear of any and all security interests, pledges, liens,
charges, claims, options, restrictions on transfer, preemptive or similar
rights, proxies and voting or other agreements, or other encumbrances of any
nature whatsoever, other than restrictions on transfer imposed by federal or
state securities Laws and the Company’s Bye-laws, and the rights and
restrictions contemplated by the Company Agreements and the Voting Agreement.
Assuming the accuracy of all representations and warranties of Investor set
forth in Section 2.2, the offer and issuance by the Company of the Shares is
exempt from registration under all applicable securities Laws, including the
Securities Act and “blue sky” laws.
 
(c)           Authorization, Execution and Delivery and Enforceability.  The
Company has all requisite corporate power and corporate authority to enter into
and to perform its obligations under the Company Agreements, to consummate the
transactions contemplated hereby and thereby and to issue the Shares in
accordance with the terms thereof.  The execution and delivery of the Company
Agreements by the Company, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary action on the
part of the Company, including, without limitation, a special committee of the
Company’s board of directors comprised of directors independent from Investor
and TW.  Each of the Company Agreements has been duly executed and delivered by
the Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or similar Laws in effect
which affect the enforcement of creditor’s rights generally or (b) general
principles of equity, whether considered in a proceeding at Law or in equity.
 
(d)           Capitalization.  As of the date of this Agreement, the authorized
capital stock of the Company consists of (i) 100,000,000 shares of Class A
Common Stock, of which 56,892,114 shares are issued and outstanding,
(ii) 15,000,000 shares of Class B Common Stock, par value $0.08 per share, of
which 7,516,936 shares are issued and outstanding and (iii) 5,000,000 shares of
preferred stock, $0.08 par value, of the Company, of which no shares have been
designated or are outstanding.  All of the issued and outstanding shares of the
Company’s capital stock are duly and validly authorized and issued and are fully
paid and nonassessable.  Except as disclosed in the Company Reports filed prior
to the date hereof or as contemplated by the Company Agreements, the TW
Agreements and the Investor Rights Agreement, no stockholder of the Company is
entitled to any preemptive or similar rights to subscribe for shares of the
Company and no stockholder of the Company has any rights, contractual or
otherwise, to designate members of the Company’s Board of Directors.  Except as
disclosed in the Company Reports filed prior to the date hereof or as
contemplated by the Company Agreements, the TW Agreements and the TW
Registration Rights Agreement, the Company is not a party to any stockholder,
voting or other agreements relating to the rights and obligations of the
Company’s stockholders.  Except as disclosed in the Company Reports filed prior
to the date hereof or as contemplated by the Company Agreements and the TW
Registration Rights Agreement, no Person has the right to require the Company to
register any securities for sale under the Securities Act.
 
 
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(e)           Subsidiaries.  Except as disclosed in the Company Reports, (i)
none of the Company or any of its Subsidiaries has issued or is bound by any
outstanding subscriptions, options, warrants, calls, convertible or exchangeable
securities, rights, commitments or agreements of any character providing for the
issuance or disposition of any shares of capital stock, voting securities or
equity interests of any Subsidiary of the Company, and (ii) there are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock, voting securities or
equity interests (or any options, warrants or other rights to acquire any shares
of capital stock, voting securities or equity interests) of any Subsidiary of
the Company (other than any such obligation to the Company or any Subsidiary of
the Company arising from time to time in connection with any internal
restructuring or reorganizations of the Company’s Subsidiaries).
 
(f)           No Conflicts.  Neither the execution and delivery by the Company
of this Agreement, the other Company Agreements and the TW Agreements nor the
performance by the Company of any of its obligations under this Agreement, the
other Company Agreements and the TW Agreements, nor the consummation of the
transactions contemplated hereby and thereby, will violate, conflict with,
result in a breach, or constitute a default (with or without notice or lapse of
time or both) under, give to others any rights of consent, termination,
amendment, acceleration or cancellation of, (i) any provision of the governing
documents of the Company or its Subsidiaries, (ii) the material broadcast
licenses or franchises to which the Company or any of its Subsidiaries is a
party or by which any of their properties or assets are bound, (iii) any trust
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, contract, instrument, permit or concession to which the Company
or any of its Subsidiaries is a party or by which any of their properties or
assets are bound, or (iv) any Law applicable to the Company or its Subsidiaries
or to their properties or assets, except, with respect to clauses (ii),
(iii) and (iv) above, to the extent that any of the foregoing would not have a
Material Adverse Effect.
 
(g)           Consents and Approvals.  Except for such Consents and Governmental
Approvals that have been previously received and the Requisite Vote, no Consent
or Governmental Approval is required on the part of the Company or, in the case
of Investor, in Bermuda or as a result of the Company being listed on the Prague
Stock Exchange or, to the Company's knowledge, pursuant to the European
Commission Council Regulation on the control of concentrations between
undertakings (the EC Merger Regulation) or any Laws regulating the ownership of
broadcasting assets in the Czech Republic, Slovakia, Romania, Croatia, Bulgaria
and Slovenia, in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
 
 
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(h)           Company Reports.  The Company has timely filed all Company
Reports.  As of their respective dates, the Company Reports complied in all
material respects with the requirements of the Securities Exchange Act of 1934
(the “Exchange Act”) or the Securities Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder, and none of the Company
Reports, including any financial statements or schedules included or
incorporated by reference therein (the “Financial Statements”), at the time
filed or, if amended or superseded by a subsequent filing, as of the date of the
last such amendment or superseding filing made at least two (2) Business Days
prior to the date hereof, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The Financial Statements and the related notes
have been prepared in accordance with accounting principles generally accepted
in the United States, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in the Financial Statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may not include footnotes, may be condensed or summary statements or may conform
to the SEC’s rules and instructions for Quarterly Reports on Form 10-Q) and
fairly present in all material respects the consolidated financial position of
the Company and its Subsidiaries as of the dates thereof and the consolidated
results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments).
 
(i)            Brokers, Finders, etc.  All negotiations relating to this
Agreement and the transactions contemplated by this Agreement have been carried
on in such manner as to not give rise to any valid claim against Investor for
any brokerage or finder’s commission, fee or similar compensation based upon
arrangements made by or on behalf of the Company.
 
(j)            Regulation D.  Neither the Company nor any Person acting on its
behalf has offered to sell, or sold, the Shares by any form of general
solicitation or general advertising (as those terms are used within the meaning
of Regulation D (“Regulation D”) under the Securities Act).  Neither the Company
nor any Person acting on its behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under
circumstances that would cause the offering of the Shares to be integrated with
any prior offering by the Company in a manner that could require the
registration of the Shares under the Securities Act.
 
(k)           NASDAQ.  Shares of Class A Common Stock are registered pursuant to
Section 12(b) of the Exchange Act, and are listed on the NASDAQ Global Select
Market (“NASDAQ”), and trading in Class A Common Stock has not been suspended
and the Company has taken no action designed to terminate the registration of
the Class A Common Stock under the Exchange Act or to delist the Class A Common
Stock from the NASDAQ.
 
 
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(l)            No Litigation.  There are no actions, suits, investigations or
proceedings at law or in equity or by or on behalf of any Governmental Entity or
in arbitration now pending against, or to the knowledge of the Company
threatened against, the Company or any of its Subsidiaries or any business,
property, officers, directors or rights of any such Person relating to the
issuance by the Company of the Shares or the other transactions contemplated by
this Agreement, the other Company Agreements or the TW Agreements or that would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
(m)           Compliance with Law.  The Company and its Subsidiaries are in
compliance in all material respects with all applicable Laws, including, as
applicable, in compliance with the U.S. Foreign Corrupt Practices Act of 1977,
as amended.  The Company represents and warrants that (i) since April 1, 2007,
the Company has not, (ii) since the later of April 1, 2007 and the time a
Subsidiary became a Subsidiary, each Subsidiary has not, and (iii) to the
Company’s knowledge, each director, officer, agent, employee or other Person
authorized to act on behalf of the Company or any of its Subsidiaries, in the
course of its actions for, or on behalf of, the Company or any of its
Subsidiaries has not, used or promised to use, directly or indirectly, any funds
for any unlawful contribution, gift, entertainment or other unlawful payment to
any foreign or domestic government official or employee, or any political party,
party official, political candidate or official of any public international
organization.  No director, officer, agent, or senior manager of the Company is,
to the knowledge of the Company after reasonable due diligence, a foreign or
domestic government official or employee, except for such an official or
employee in a governmental position that has no relevance to the business of the
Company.  The Company makes no representation in this paragraph with respect to
Ronald S. Lauder or the directors of the Company who are RSL Related Persons.
 
(n)           Opinion of the Company’s Financial Advisor.  A copy of the
fairness opinion from J.P. Morgan Limited to the Special Committee of the
Company’s Board of Directors is included in the Company’s preliminary proxy
statement filed with the SEC on or about the date hereof.
 
(o)           TW Agreements.  The Company has provided Investor with true and
complete copies of the TW Agreements in the forms to be executed and delivered
by the parties thereto.
 
2.2.           Representations and Warranties of Investor.  As of the date of
this Agreement and the Closing Date, Investor represents and warrants to the
Company as follows:
 
(a)           Organization and Standing.  Investor is duly organized, validly
existing and in good standing under the laws of the State of Delaware.  Investor
has all requisite power and authority to enter into the Company Agreements to
which it is a party and to consummate the transactions contemplated hereby and
thereby.  Ronald S. Lauder beneficially owns all of the equity interests in
Investor.
 
 
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(b)           Authorization, Execution and Delivery and Enforceability.  The
execution and delivery by Investor of the Company Agreements to which it is a
party and the consummation of the transactions contemplated hereby and thereby,
have been duly authorized by all necessary action on the part of Investor.  Each
of the Company Agreements to which it is a party has been duly executed and
delivered by Investor and constitutes a valid and binding obligation of
Investor, enforceable against Investor in accordance with its terms, except as
such enforceability may be limited by (a) applicable bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or similar Laws in effect
which affect the enforcement of creditor’s rights generally or (b) general
principles of equity, whether considered in a proceeding at Law or in equity.
 
(c)           No Conflicts.  Neither the execution and delivery of the Company
Agreements to which it is a party by Investor, nor the performance by Investor
of any of its obligations hereunder or thereunder, nor the consummation of the
transactions contemplated hereby or thereby, will violate, conflict with, result
in a breach, or constitute a default (with or without notice or lapse of time or
both) under, give to others any rights of consent, termination, amendment,
acceleration or cancellation of  any provision of (i) the governing documents of
Investor, (ii) any trust agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, contract, instrument, permit,
concession, franchise, license to which Investor or any of its Affiliates is a
party or by which any of its properties or assets are bound, or (iii) any Law
applicable to Investor or to its properties or assets which, in each case, would
materially impair or delay the ability of Investor to consummate the
transactions contemplated in the Company Agreements to which it is a party.
 
(d)           Financial Capability.  At the Closing Date, Investor will have
available funds necessary to consummate the Closing on the terms and conditions
contemplated by this Agreement.
 
(e)           Consents and Approvals.  Except for (i) an amendment to its
Schedule 13D and a Form 4, (ii) any Consents and Governmental Approvals that may
be necessary pursuant to Bermuda law and (iii) the Consents and Governmental
Approvals that have previously been received, no Consent or Governmental
Approval is required on the part of Investor or its Affiliates in the United
States in connection with the execution and delivery of the Company Agreements
to which it is a party or the consummation of the transactions contemplated
hereby or thereby.  Except as publicly disclosed, none of Investor or any of its
Affiliates is a party to any stockholder, voting or other agreements relating to
the rights and obligations of the Company’s stockholders.
 
(f)            Brokers, Finders, etc.  All negotiations relating to this
Agreement and the transactions contemplated by this Agreement have been carried
on in such manner as to not give rise to any valid claim against the Company for
any brokerage or finder’s commission, fee or similar compensation based upon
arrangements made by or on behalf of Investor.
 
(g)           Purchase for Investment.  Investor acknowledges its understanding
that the offering and sale of the Shares to be purchased pursuant hereto by
Investor are intended to be exempt from registration under the Securities Act
and that the Company is relying upon the truth and accuracy of Investor’s
representations and warranties contained herein and Investor’s compliance with
this Agreement in order to determine the availability of such exemptions and the
eligibility of Investor to acquire the Shares in accordance with the terms and
provisions of this Agreement.  In furtherance thereof, Investor represents and
warrants to the Company that:
 
 
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(i)            Investor is an accredited investor within the meaning of
Regulation D promulgated under the Securities Act and, if there should be any
change in such status prior to the Closing Date, Investor will immediately
inform the Company of such change;
 
(ii)           Investor (A) has the financial ability to bear the economic risk
of its investment in the Shares to be purchased pursuant hereto, (B) can bear a
total loss of its investment therein at this time, (C) has no need for liquidity
with respect to its investment therein, (D) has adequate means for providing for
its current needs and contingencies, and (E) has such knowledge, experience and
skill in evaluating and investing in issues of equity securities, including
securities of new and speculative issuers, based on actual participation in
financial, investment and business matters, such that it is capable of
evaluating the merits and risks of an investment in the Company and the
suitability of the Shares as an investment for itself; and
 
(iii)          Investor has been given the opportunity to conduct a due
diligence review of the Company concerning the terms and conditions of the
offering of the Shares to be purchased by Investor and other matters pertaining
to an investment in the Shares, in order for Investor to evaluate the merits and
risks of an investment in the Shares to be purchased by Investor to the extent
the Company possesses such information or can acquire it without unreasonable
effort or expense.
 
(h)           No Registration.  Investor has been advised that the Shares have
not been registered under the Securities Act, or any non-U.S. securities, state
securities or blue sky laws, and therefore cannot be resold unless they are
registered under such laws or unless an exemption from registration thereunder
is available.  Investor is purchasing the Shares for its own account for
investment, and not with a view to, or for resale in connection with, the
distribution thereof, and has no present intention of distributing or reselling
any thereof.  In making the foregoing representations, Investor is aware that it
must bear, and represents that Investor is able to bear, the economic risk of
such investment for an indefinite period of time.
 
(i)            Restrictions on Shares.  Investor is aware of and familiar with
the restrictions imposed on the transfer of any Shares, including, without
limitation, the restrictions contained herein or in the Company’s Bye-laws and
the Company Agreements.
 
 
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(j)            Irrevocable Proxy.  Ronald S. Lauder, on behalf of TW and his
Affiliates who own voting securities of the Company, has executed and delivered,
and has caused to be executed and delivered, to the Company an irrevocable proxy
substantially in the form of Exhibit B hereto (the “Irrevocable Proxy”) in
respect of all voting securities of the Company, including Class B Common Stock,
held by each of RAJ Family Partners, L.P., RSL Investments Corporation, and
Ronald S. Lauder, and the 4,500,000 shares of Class B Common Stock held by an
Affiliate of TW and 14,500,000 shares of Class A Common Stock held by TW, and a
voting instruction letter in respect of 3,122,364 shares of Class A Common Stock
held by TW, to vote at the Company’s General Meeting for proposals for (a) the
amendment of the Company’s Bye-laws to increase the authorized share capital of
the Company from $9.6 million to $17.6 million by increasing the number of
authorized shares of Class A Common Stock from 100,000,000 shares to 200,000,000
shares, (b) the issuance of shares of Class A Common Stock in connection with
this Agreement, the TW Commitment Agreement, the Investor Rights Amendment and
the TW Side Letter, (c) the approval of an employee stock option exchange
program, (d) the adoption of amendments to the Company’s Amended and Restated
Stock Incentive Plan and (e) the appointment of Deloitte LLP as the independent
registered public accounting firm for the Company in respect of the fiscal year
ending December 31, 2012 and the authorization of the Board of Directors, acting
through the Audit Committee, to approve their fee.
 
ARTICLE III
COVENANTS
 
3.1.           Restrictive Legends.
 
(a)           Investor acknowledges and agrees that the Shares and any
securities issued or issuable with respect to such Shares by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, going private, tender offer,
amalgamation, change of control, other reorganization or otherwise, shall bear
restrictive legends in substantially the following form:
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OTHER THAN PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION SPECIFIED IN AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO CENTRAL EUROPEAN MEDIA ENTERPRISES LTD. (THE “COMPANY”) OR
OTHERWISE AS PERMITTED BY LAW.
 
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend and without cost to the holder of any such
Shares upon which it is stamped, if such Shares are registered for sale under an
effective registration statement filed under the Securities Act or if such
Shares are proposed to be sold pursuant to an exemption from registration and
the Company receives an opinion of counsel reasonably satisfactory to it with
respect to compliance with such exemption.
 
 
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(b)           The Shares and any securities issued or issuable with respect to
such Shares by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation, going private,
tender offer, amalgamation, change of control, other reorganization or
otherwise, shall bear a restrictive legend in substantially the following form
until the earlier of (i) such time as Investor Rights Agreement shall have been
terminated or (ii) such time as such Shares (or the holder thereof) shall no
longer be subject to the terms of Investor Rights Agreement (at which time such
legend shall be removed and the Company shall issue a certificate without such
legend and without cost to the holder of any such Shares upon which it is
stamped):
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS
CONTAINED IN AN INVESTOR RIGHTS AGREEMENT, DATED AS OF MAY 18, 2009, BY AND
AMONG THE COMPANY AND CERTAIN OF THE SHAREHOLDERS OF THE COMPANY, AS MODIFIED OR
SUPPLEMENTED FROM TIME TO TIME (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY).  ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
THAT CONTRAVENE SUCH RESTRICTIONS SHALL BE NULL AND VOID.
 
3.2.           Consents and Approvals.
 
(a)           From and after the date hereof, the Company shall use commercially
reasonable efforts to obtain, as promptly as practicable, any Consents and
Governmental Approvals required on the part of the Company in connection with
the transactions contemplated by the Company Agreements.  The fees and expenses
related to obtaining such Consents and Governmental Approvals on the part of the
Company shall be paid by the Company.
 
(b)           From and after the date hereof, Investor shall use commercially
reasonable efforts to obtain, as promptly as practicable, any Consents and
Governmental Approvals required on the part of Investor in connection with the
transactions contemplated by the Company Agreements to which it is a party.  The
fees and expenses related to obtaining such Consents and Governmental Approvals
on the part of Investor shall be paid by Investor, except as provided in Section
7.9.
 
3.3.           Securities Laws.  The Company shall timely make all filings and
reports relating to the offer and sale of the Shares required under applicable
securities Laws, including any “blue sky” laws of the states of the United
States.  The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section.
 
3.4.           Use of Proceeds.  The proceeds received by the Company from the
issuance and sale of the Shares shall be used by the Company to fund the
Repurchases.
 
 
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3.5.           TW Agreement.  The Company has provided Investor with true and
complete copies of the TW Commitment Agreement and TW Loan Agreement in the
forms to be executed and delivered by the parties thereto.
 
3.6.           Irrevocable Proxy.  None of Ronald S. Lauder or any of his
Affiliates shall execute any proxy after the date hereof relating to the matters
covered by the Irrevocable Proxy or take any other action that would result in
the revocation of the Irrevocable Proxy.  On behalf of himself and his
Affiliates, Ronald S. Lauder hereby acknowledges and agrees that TW shall be
deemed a third-party beneficiary of, and shall be entitled to enforce, this
covenant.
 
3.7.           Public Announcements.  The Company agrees to provide to Investor
a copy of any public release or announcement concerning this Agreement or the
transactions contemplated hereby, within a reasonable time for Investor to
review such public release or announcement prior to the issuance thereof.
 
ARTICLE IV
CONDITIONS TO THE CLOSING
 
4.1.           Conditions to the Obligations of the Company and Investor.  On or
prior to the Closing Date, the obligations of the Company and Investor to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or waiver of the following conditions:
 
(a)           No Injunction, etc.  Consummation of the transactions contemplated
hereby shall not have been restrained, enjoined or otherwise prohibited or made
illegal by any applicable Law.
 
(b)           Consents and Governmental Approvals.  The parties shall have
received all necessary Consents and Governmental Approvals.
 
(c)           Shareholder Approval.  The Requisite Vote shall have been
obtained.
 
4.2.           Conditions to the Obligations of Investor.  The obligation of
Investor to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or waiver by Investor on or prior to the Closing Date
of the following conditions:
 
(a)           Representations and Warranties.  (i) The representations and
warranties of the Company contained in this Agreement that are qualified as to
materiality or Material Adverse Effect shall be true at and as of the date
hereof and at and as of the Closing Date as if made at and as of such date
(except, in each case, as to such representations and warranties made as of a
specific date, which shall have been true at and as of such date) and (ii) the
other representations and warranties of the Company contained in this Agreement
and in any certificate or other writing delivered by the Company pursuant hereto
shall be true in all material respects at and as of the date hereof and at and
as of the Closing Date as if made at and as of such date (except, in each case,
as to such representations and warranties made as of a specific date, which
shall have been true at and as of such date), and Investor shall have received a
certificate signed by an officer of the Company to the foregoing effect.
 
 
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(b)           Material Adverse Change.  There shall not have been a Material
Adverse Change from the date hereof to the Closing Date, and Investor shall have
received a certificate signed by an officer of the Company to the foregoing
effect.
 
(c)           Performance of Obligations.  The Company shall have performed and
complied with, in all material respects, all of the obligations and conditions
in this Agreement required to be performed or complied with by it on or prior to
the Closing Date, and Investor shall have received a certificate signed by an
officer of the Company to the foregoing effect.
 
(d)           Issuance of Shares.  The Company shall issue the Shares to
Investor.
 
(e)           Issuance of TW Subscription Shares.  Prior to or contemporaneously
with the issuance referenced in subsection (d) above, the Company shall issue
the TW Subscription Shares to TW pursuant to the terms of the TW Commitment
Agreement.
 
(f)           NASDAQ Qualification.  The Shares shall have been approved for
listing on NASDAQ, subject to official notice of issuance.  The Class A Common
Stock shall not have been delisted on NASDAQ.
 
(g)           Investor Rights Amendment.  The Company and TW shall have executed
and delivered the Investor Rights Amendment and it shall be in full force and
effect.
 
(h)           Registration Rights Agreement. The Company shall have executed and
delivered the Registration Rights Agreement and it shall be in full force and
effect.
 
(i)           TW Loan Agreement.  The Company and TW shall have executed and
delivered the TW Loan Agreement and it shall be in full force and effect.
 
4.3.           Conditions to the Obligations of the Company.  The obligation of
the Company to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or waiver by the Company on or prior to the
Closing Date of the following conditions:
 
(a)           Representations and Warranties.  (i) The representations and
warranties of Investor contained in this Agreement that are qualified as to
materiality shall be true at and as of the date hereof and at and as of the
Closing Date as if made at and as of such date (except, in each case, as to such
representations and warranties made as of a specific date, which shall have been
true at and as of such date) and (ii) the other representations and warranties
of Investor contained in this Agreement and in any certificate or other writing
delivered by Investor pursuant hereto shall be true in all material respects at
and as of the date hereof and at and as of the Closing Date as if made at and as
of such date (except, in each case, as to such representations and warranties
made as of a specific date, which shall have been true at and as of such date),
and the Company shall have received a certificate signed by an authorized
officer of Investor to the foregoing effect.
 
(b)           Performance of Obligations.  Investor shall have performed and
complied with, in all material respects, all of the obligations and conditions
in this Agreement required to be performed or complied with by it on or prior to
the Closing Date (including in respect of Section 3.6), and the Company shall
have received a certificate signed by an authorized officer of Investor to the
foregoing effect.
 
 
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(c)           Payment of Proceeds.  Investor shall have paid the Proceeds to the
Company.
 
(d)           Issuance of TW Subscription Shares.  The Company shall have issued
the TW Subscription Shares to TW.
 
(e)           Investor Rights Amendment.  Ronald S. Lauder, Investor, RSL
Savannah LLC, and RSL Investments Corporation shall have executed and delivered
the Investor Rights Amendment.
 
(f)           Conversion Notice.  The Conversion Notice shall have been duly
executed and delivered to the Company and be effective.
 
ARTICLE V
INDEMNIFICATION
 
5.1.           Survival of Representations and Warranties.  All representations
and warranties under this Agreement shall survive the Closing until the
expiration of one (1) year following the Closing Date.  All agreements and
covenants contained in this Agreement shall survive the closing indefinitely
(except to the extent expressly provided in this Agreement).
 
5.2.           Indemnification.
 
(a)           Notwithstanding any investigation at any time made by or on behalf
of Investor or any of Investor’s members, officers, directors, employees,
agents, Affiliates and representatives (collectively with Investor, the
“Investor Indemnified Persons”) or any knowledge (other than the actual
knowledge (as demonstrated by the Company) of Ronald S. Lauder or any other
directors of the Company who are RSL Related Persons, based on information
contained in written materials provided to all similarly situated directors of
the Company in the context of their role as directors) or information that any
Investor Indemnified Person may now have or hereafter obtain, from and after the
Closing Date, the Company shall indemnify, defend and hold harmless the Investor
Indemnified Persons against, and shall compensate and reimburse such Investor
Indemnified Persons for, any and all losses, liabilities, damages, diminution in
value of the Shares (other than diminution in value of the Shares suffered or
sustained in the case of any indemnity obligations solely pursuant to clause
(iii)(x) of this Section 5.2(a)) and expenses, including all reasonable costs
and expenses related thereto or incurred in enforcing this ARTICLE V (“Losses”)
that any Investor Indemnified Person has suffered or sustained (regardless of
whether or not such Losses relate to a third party claim) (i) arising directly
from the breach of any of the representations or warranties of the Company
contained in this Agreement, (ii) arising directly from the breach of any
covenant or agreement of the Company contained in this Agreement, or (iii)
arising directly from any action, suit, claim, proceeding or investigation
instituted against such Investor Indemnified Person by any Governmental Entity,
any holder of equity securities of the Company who is not an Affiliate of such
Investor Indemnified Person, or any other Person (other than the Company) who is
not an Affiliate of such Investor Indemnified Person relating to (x) this
Agreement or the transactions contemplated by the Company Agreements (except to
the extent such action resulted from a breach of such Investor Indemnified
Person’s representations, warranties or agreements contained in any Company
Agreement or any violations by such Investor Indemnified Person of state or
federal securities laws or any conduct by such Investor Indemnified Person which
constitutes fraud) or (y) such Investor Indemnified Person’s execution of the
Irrevocable Proxy.
 
 
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(b)           From and after the Closing Date, and notwithstanding any
investigation at any time made by or on behalf of the Company or any Company
Indemnified Persons or any knowledge or information that the Company or any
Company Indemnified Person may now have or hereafter obtain, Investor shall
indemnify, defend and hold harmless the Company and its officers, directors,
employees, agents and representatives (collectively, the “Company Indemnified
Persons” and together with Investor Indemnified Persons, the “Indemnified
Persons”) against, and will compensate and reimburse such Company Indemnified
Persons for, any and all Losses that any Company Indemnified Person has suffered
or sustained (regardless of whether or not such Losses relate to a third party
claim) (i) arising from the breach of any of the representations or warranties
of Investor contained in this Agreement or (ii) arising from the breach of any
covenant or agreement of Investor contained in this Agreement and none of the
Company Indemnified Persons shall be liable to Investor or any holder of equity
securities of Investor for or with respect to any such Losses.
 
(c)           The parties hereto hereby acknowledge and agree that for purposes
of this ARTICLE V, in determining whether any representation or warranty has
been breached and for purposes of determining the amount of Losses resulting
therefrom, any and all “Material Adverse Effect,” “material adverse effect,”
“materiality” and similar exceptions and qualifiers set forth in any such
representations and warranties shall be disregarded.  The parties hereto hereby
further acknowledge and agree that any claim for indemnification made in writing
in accordance with the terms of this ARTICLE V on or prior to the applicable
expiration date with respect to any such claim as set forth herein shall survive
the closing and any such applicable expiration date until the final resolution
thereof.
 
(d)           In the case of any claim asserted by an Indemnified Person under
this Agreement, notice shall be given by such Indemnified Person to the party
required to provide indemnification (the “Indemnifying Party”) promptly after
such Indemnified Person has actual knowledge of any claim as to which indemnity
may be sought, and the Indemnified Person shall permit the Indemnifying Party
(at the expense of such Indemnifying Party) to assume the defense of any claim
or any litigation resulting therefrom, provided that (i) counsel for the
Indemnifying Party who shall conduct the defense of such claim or litigation
shall be reasonably satisfactory to the Indemnified Person, and the Indemnified
Person may participate in such defense at such Indemnified Person’s expense and
(ii) the failure of any Indemnified Person to give notice as provided herein
shall not relieve the Indemnifying Party of its indemnification obligation under
this Agreement, except to the extent that such failure results in a lack of
actual notice to the Indemnifying Party and such Indemnifying Party is
materially prejudiced as a result of such failure to give notice.  Any
settlement or compromise of such asserted claim by the Indemnifying Party shall
require the prior written consent of the Indemnified Person, which consent shall
not be unreasonably withheld, conditioned or delayed, provided that no such
consent shall be required as long as it is solely a monetary settlement (that
will be paid entirely by or on behalf of the Indemnifying Party) that provides a
full release of the Indemnified Person with respect to such matter and does not
contain an admission of liability on the part of the Indemnified Person and will
not have an ongoing adverse affect on the business or operations of the
Indemnified Person.
 
 
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(e)           Absent fraud, willful misconduct or gross negligence by the party
against whom a remedy is sought, from and after the Closing, the sole and
exclusive remedies with respect to any and all claims relating to the subject
matter of this Agreement shall be (a) monetary damages in accordance with the
indemnification provisions set forth in this ARTICLE V and (b) the remedies set
forth in Section 7.7.
 
(f)            Notwithstanding any provision herein to the contrary, the maximum
liability of the Company with respect to the Losses suffered by Investor
Indemnified Person as a result of any breach of any representation or warranty
shall be an aggregate amount equal to the Proceeds, provided that the Company
will be required to indemnify any Investor Indemnified Person for any breaches
of representations and warranties only if such Losses in the aggregate exceed US
$200,000 and then only to the extent such Losses exceed such amount.
 
(g)           Notwithstanding any other provision of this Agreement, the
liability for indemnification of any Indemnifying Party under this Agreement
shall not include consequential, indirect, punitive or exemplary damages.  The
foregoing shall not limit in any respect any claim based on diminution of value
of the Shares.
 
(h)           Any indemnification of an Indemnified Person by an Indemnifying
Party pursuant to this ARTICLE V shall be effected by wire transfer of
immediately available funds from the Indemnifying Party to an account designated
by the Indemnified Person within fifteen (15) Business Days after the
determination thereof.
 
ARTICLE VI
TERMINATION
 
6.1.           Termination.  This Agreement may be terminated at any time:
 
(a)           by the mutual written consent of the Company and Investor;
 
(b)           by either the Company or Investor if the Closing has not occurred
on or before February 1, 2013, provided that the right to terminate this
Agreement under this clause (b) will not be available to any party whose failure
to fulfill in any material respect any obligation under this Agreement has been
the cause of, or resulted in, the failure of such Closing to occur on or before
such date;
 
 
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(c)           by either the Company or Investor if any Governmental Entity shall
have issued an injunction or other ruling prohibiting the consummation of any of
the transactions contemplated by this Agreement and the Company Agreements and
such injunction or other ruling shall not be subject to appeal or shall have
become final and unappealable;
 
(d)           by Investor if the Company shall have materially breached the
terms of this Agreement and such breach is not cured within twenty (20) Business
Days after receiving notice thereof; or
 
(e)           by the Company if Investor shall have materially breached the
terms of this Agreement and such breach is not cured within twenty (20) Business
Days after receiving notice thereof.
 
6.2.           Effect of Termination.  In the event that this Agreement is
terminated under Section 6.1, all further obligations of the parties under this
Agreement, other than pursuant to this Section 6.2 and ARTICLE VII, and any
indemnification obligations pursuant to Article V in respect of an Investor
Indemnified Person’s execution of the Irrevocable Proxy, will be terminated
without further liability of any party to any other party, provided that such
termination will not relieve any party from liability for its breach of this
Agreement prior to such termination.
 
ARTICLE VII
DEFINITIONS AND MISCELLANEOUS
 
7.1.           Definitions.  As used in this Agreement, the following
capitalized terms have the respective meanings set forth below:
 
(a)           “Affiliate” of any Person, means any other Person that, directly
or indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with, such first Person; provided, that Investor
and its Affiliates shall not be Affiliates of the Company for purposes of this
Agreement.  As used in this definition, the term “control,” including the
correlative terms “controlling,” “controlled by” and “under common control
with,” means the possession, directly or indirectly, of the power to direct or
cause the direction of management or policies (whether through ownership of
securities or any partnership or other ownership interest, by contract or
otherwise).
 
(b)           “Business Day” ” means any day that is not a Saturday, Sunday or
other day on which banking institutions in New York City, London, Prague,
Frankfurt or Amsterdam are authorized or required by law to remain closed.
 
(c)           “Bye-laws” means the Amended and Restated Bye-Laws of the Company,
dated as of June 3, 2008.
 
(d)           “Company Agreements” means, collectively, this Agreement, the
Investor Rights Agreement and the RSL Registration Rights Agreement.
 
 
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(e)           “Company Reports” means the reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities Act
and the Exchange Act after January 1, 2011.
 
(f)            “Consents” means any consent, approval, authorization, waiver,
permit, grant, franchise, concession, agreement, license, certificate,
exemption, order, registration, declaration, filing, report or notice of, with
or to any Person.
 
(g)           “Conversion Notice” means a notice from each of RSL Investments
Corporation, RAJ Family Partners, L.P. and Ronald S. Lauder electing to convert
their shares of Class B Common Stock to shares of Class A Common Stock,
substantially in the form attached hereto as Exhibit C.
 
(h)           “General Meeting” means the 2012 annual general meeting of the
shareholders of the Company currently scheduled to take place on the date
provided in the Company’s preliminary proxy statement with respect thereto at
Citco (Bermuda) Limited, Mintflower Place, 4th Floor, 8 Par-La-Ville Road,
Hamilton, HM 08 Bermuda at 10 a.m. or any postponement or adjournment thereof.
 
(i)            “Governmental Approvals” means any Consent of, made with or
obtained from, any Governmental Entity.
 
(j)            “Governmental Entity” means any nation or government or
multinational body, any state, agency, commission, or other political
subdivision thereof or any entity (including a court) exercising executive,
legislative, judicial or administration functions of or pertaining to
government, any stock exchange or self-regulatory entity supervising, organizing
and supporting any stock exchange.
 
(k)           “Investor Rights Agreement” means that certain Investor Rights
Agreement, by and among the Company, Investor, Ronald S. Lauder, RSL Savannah
LLC, RSL Investment LLC and TW, dated as of May 18, 2009, as amended by the
Investor Rights Amendment and as it may further be amended from time to time.
 
(l)            “Investor Rights Amendment” means the amendment to the Investor
Rights Agreement in the form attached hereto as Exhibit D.
 
(m)          “Laws” means all laws, statutes, ordinances, rules, regulations,
judgments, injunctions, orders and decrees.
 
 
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(n)           “Material Adverse Effect” or “Material Adverse Change” means, with
respect to the Company, any effect, event, development or change that,
individually or together with any other event, development or change, is or is
reasonably expected to (A) be materially adverse to  the business, assets,
results of operations or financial condition of the Company and the Company’s
Subsidiaries, taken as a whole or (B) prevent or materially impair or materially
delay the ability of the Company to consummate the transactions contemplated by
the Company Agreements or to otherwise perform its obligations under the Company
Agreements; provided, however, that in no event shall any of the following,
alone or in combination, be deemed to constitute, nor shall any of the following
be taken into account in determining whether there has been, a Material Adverse
Effect or a Material Adverse Change:  (a) a change in the market price or
trading volume of the Class A Common Stock (provided that the underlying
changes, events, occurrences, state of facts or developments that caused or
contributed to any such change may otherwise be taken into consideration in
determining whether a Material Adverse Effect or Material Adverse Change has
occurred); (b) (i) changes in conditions in the global economy, the economies of
the countries in which the Company and the Company’s Subsidiaries operate or the
capital or financial markets generally, including changes in exchange rates;
(ii) changes in applicable Laws (provided that such changes in Laws do not
result in the cancellation of any broadcast license(s) or franchise(s) to which
the Company or any of its Subsidiaries is a party or by which any of their
properties or assets are bound the cancellation of which would be material as
indicated therein) or national or international political conditions (including
hostilities or terrorist attack); or (iii) changes generally affecting the
industry in which the Company and the Company’s Subsidiaries operate; in each
case with respect to clauses (i), (ii) and (iii), to the extent such changes or
developments referred to therein do not have a disproportionate impact on the
Company and its Subsidiaries, taken as a whole, relative to other industry
participants; (c) changes in United States generally accepted accounting
principles or other accounting principles after the date hereof; (d) the
negotiation, execution, announcement or pendency of this Agreement or the
transactions contemplated hereby or the consummation of the transactions
contemplated by this Agreement, including the impact thereof on relationships,
contractual or otherwise, with customers, suppliers, vendors, lenders, mortgage
brokers, investors, venture partners or employees, to the extent such changes or
developments can be directly attributed to the announcement or performance of
the Company Agreements and the transactions contemplated thereby; (e) natural
disasters; (f) any affirmative action knowingly taken by Investor that could
reasonably be expected to give rise to a Material Adverse Effect (without giving
effect to this clause (f) in the definition thereof); (g) any action taken by
the Company at the request or with the express consent of Investor; and (h) with
respect to Section 4.2(b) only, any adverse effect, event, development or change
to the business, results of operations or financial condition of the Company or
the Company’s Subsidiaries that is cured before the Closing Date.
 
(o)           “Person” means any individual, corporation, partnership, limited
liability company, association or trust or other entity or organization,
including a Governmental Entity.
 
(p)           “Requisite Vote” means the approval of (i) an increase in the
number of shares of Class A Common Stock which the Company is authorized to
issue and (ii) the transactions contemplated hereby and by the TW Agreements,
including the issuance of the Shares, in each case by a majority of the votes
cast by the holders of the Class A Common Stock and the Class B Common Stock
entitled to vote thereon, voting together as a single class.
 
(q)           “RSL Registration Rights Agreement” means that certain
Registration Rights Agreement, by and between the Company and RSL Capital LLC,
as amended.
 
 
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(r)            "RSL Related Persons" means (i) any employee of Investor or of
any Affiliate of Investor and (ii) Kelli Turner and Eric Zinterhofer.
 
(s)           “SEC” means the United States Securities and Exchange Commission
and any successor United States federal agency or governmental authority having
similar powers.
 
(t)           “Subsidiary” means, with respect to any Person, another Person of
which 50% or more of the voting power of the equity securities or equity
interests is owned, directly or indirectly, by such Person.
 
(u)           “TW Agreements” means the TW Commitment Agreement, the TW Loan
Agreement and the TW Side Letter.
 
(v)           “TW Commitment Agreement” means that certain Subscription and
Equity Commitment Agreement, dated as of the date hereof, by and between the
Company and TW.
 
(w)          “TW Loan Agreement” means that Term Loan Facilities Credit
Agreement, dated as of the date hereof, by and among Time Warner Inc., as
Administrative Agent, the Company and the Lender Parties thereto from time to
time.
 
(x)            “TW Registration Rights Agreement” means that certain
Registration Rights Agreement dated as of May 18, 2009 by and between the
Company and TW.
 
(y)           “TW Side Letter” means that certain letter agreement between the
Company and TW dated the date hereof.
 
(z)           “TW Subscription Shares” means, the Class A Common Stock issued to
TW pursuant to Article I of the TW Commitment Agreement.
 
(aa)         “Voting Agreement” means that certain Irrevocable Voting Deed and
Corporate Representative Appointment, by and among RSL Savannah LLC, an
Affiliate of TW and the Company, dated as of May 18, 2009, as amended.
 
7.2.           Notices.  All notices, consents, requests, instructions,
approvals and other communications provided for in this Agreement shall be in
writing and shall be deemed validly given upon personal delivery or one day
after being sent by overnight courier service or if sent by facsimile, to the
extent transmitted by 3:00 pm (local time of recipient) on a Business Day, will
be deemed to have been received on that Business Day, and if transmitted after
3:00 pm (local time of the recipient) on a Business Day or any other day, then
on the Business Day next following the day of transmittal (so long as for
notices or other communications sent by facsimile, the transmitting facsimile
machine records electronic conformation of the due transmission of the notice),
at the following address or facsimile number, or at such other address or
facsimile number as a party may designate to the other parties:
 
 
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                                 if to the Company, to:       Central European
Media Enterprises Ltd.   c/o CME Media Services Ltd.   Kříženeckého náměstí
1078/5   152 00  Prague 5 - Barrandov   Czech Republic       Facsimile: 
+420-242-464-483   Attention: Legal Counsel

 

                                 with a copy to (which shall not constitute
notice):       Dewey & LeBoeuf LLP   1301 Avenue of the Americas   New York, NY
10019   Attention:  Jeffrey A. Potash     Eric W. Blanchard     Christopher P.
Peterson   Facsimile:  (212) 259-6333

 

                                 if to Investor, to:       c/o RSL Investments
Corporation   767 Fifth Avenue, Suite 4200   New York, NY 10153   Attention: 
Kelli Turner   Facsimile:  (212) 572-4093

                                 with copy to (which shall not constitute
notice):       Debevoise & Plimpton LLP   919 Third Avenue   New York, NY 10022
  Attention:  Richard D. Bohm   Facsimile:  (212) 521-7226

                  
7.3.           Amendment.  This Agreement may be amended, modified or
supplemented only by a written instrument executed by each of the parties
hereto; provided, however, that Section 2.2(j) (and Section 4.3(a) as it relates
thereto), Section 3.6 and Section 7.11 may not be amended, modified,
supplemented or waived without the prior written consent of TW.
 
7.4.           Assignment.  Except as permitted herein, neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assignable or
otherwise transferable by either party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other party hereto;
provided, however, that Investor shall be entitled to assign its rights and
obligations hereunder to an RSL Permitted Transferee (as defined in the Investor
Rights Agreement), provided such RSL Permitted Transferee agrees to be bound by
the terms hereof and those of the RSL Registration Rights Agreement and the
Investor Rights Agreement.
 
 
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7.5.           Applicable Law; Consent to Jurisdiction.
 
(a)           THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
 
(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN
NEW YORK, NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK (EACH, A “NEW YORK COURT”), AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND APPELLATE COURTS FROM ANY THEREOF.  EACH PARTY HERETO HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF TO SUCH
PARTY BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT
REQUESTED, TO SUCH PARTY AT ITS ADDRESS SPECIFIED IN SECTION 7.2.  THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
 
7.6.           Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) IT UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER
VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVER IN THIS SECTION 7.6.
 
7.7.           Specific Performance.  The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that the parties shall be entitled to, in
addition to the other remedies provided herein, specific performance of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any New York Court in addition to the other remedies to which such parties
are entitled.
 
 
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7.8.           Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.  This Agreement,
once executed by a party, may be delivered to the other parties hereto by
facsimile or electronic transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
 
7.9.           Expenses.  Each party will be responsible for its own fees and
expenses related to this Agreement and the transactions contemplated hereby,
except the Company will pay the reasonable and documented fees and expenses of
Investor relating to Consents and Governmental Approvals that the Investor is
required to obtain in Bermuda or as a result of the Company being listed on the
Prague Stock Exchange or pursuant to the European Commission Council Regulation
on the control of concentrations between undertakings (the EC Merger Regulation)
or any Laws regulating the ownership of broadcasting assets in the Czech
Republic, Slovakia, Romania, Croatia, Bulgaria and Slovenia.
 
7.10.        Successors and Assigns.  This Agreement shall inure to the benefit
of the parties, and shall be binding upon the parties and their respective
successors, permitted assigns, heirs and legal representatives.
 
7.11.        No Third Party Beneficiaries.  Nothing in this Agreement will
confer any rights upon any person, other than Indemnified Persons with respect
to Article V and as provided in Section 3.6, that is not a party or a successor
or permitted assignee of a party to this Agreement.
 
7.12.        Entire Agreement.  This Agreement, together with the Company
Agreements, contain the entire agreement of the parties with respect to the
subject matter hereof and supersede all other prior agreements, understandings,
statements, representations and warranties, oral or written, express or implied,
between the parties and their respective Affiliates, representatives and agents
in respect of such subject matter.
 
 
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7.13.         Construction.  Whenever the context requires, the gender of all
words used in this Agreement includes the masculine, feminine, and neuter.  All
references to Articles and Sections refer to articles and sections of this
Agreement, and all references to Exhibits and Annexes are to exhibits and
annexes attached hereto, each of which is made a part hereof for all
purposes.  Where any provision in this Agreement refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision will
be applicable whether such action is taken directly or indirectly by such
Person, including actions taken by or on behalf of any Affiliate of such
Person.  All accounting terms used herein and not otherwise defined herein will
have the meanings accorded them in accordance with U.S. generally accepted
accounting principles and, except as expressly provided herein, all accounting
determinations will be made in accordance with such accounting principles in
effect from time to time.  Unless the context otherwise requires: (i) a
reference to a document includes all amendments, restatements or supplements to,
or replacements or novations of, that document; (ii) the use of the terms
“include” and “including” mean “include, without limitation” and “including,
without limitation”, respectively; (iii) the word “or” shall be disjunctive but
not exclusive; (iv) unless expressly provided otherwise, the measure of a period
of one month or year for purposes of this Agreement shall be that date of the
following month or year corresponding to the starting date; provided, that if no
corresponding date exists, the measure shall be that date of the following month
or year corresponding to the next day following the starting date (for example,
one month following February 18 is March 18, and one month following March 31 is
May 1); and (v) a reference to a statute, regulations, proclamation, ordinance
or by-law includes all statutes, regulations, proclamation, ordinances or
by-laws amending, consolidating or replacing it, whether passed by the same or
another Governmental Entity with legal power to do so, and a reference to a
statute includes all regulations, proclamations, ordinances and by-laws issued
under the statute.  The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction shall be applied against any party.
 
7.14.         Descriptive Headings.  The headings of the articles, sections and
subsections of this Agreement are inserted for convenience of reference only and
shall not be deemed to constitute a part hereof or affect the interpretation
hereof.
 
7.15.         Severability.  Every term and provision of this Agreement is
intended to be severable.  If any term or provision hereof is illegal or invalid
for any reason whatsoever, such term or provision will be enforced to the
maximum extent permitted by law and, in any event, such illegality or invalidity
shall not affect the validity of the remainder of this Agreement.
 
[SIGNATURE PAGE FOLLOWS]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
 

 
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
           
By:
/s/ David Sach       Name: David Sach       Title : Chief Financial Officer  

 
 
[RSL Subscription Agreement – Signature Page]
 
 
 

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RSL CAPITAL LLC
                   
By:
/s/ Ronald S. Lauder       Name: Ronald S. Lauder       Title : Sole Member and
President                 and for purposes of Sections 2.2(j), 3.6 and 7.11 only
 

 
 

  /s/ Ronald S. Lauder     Ronald S. Lauder  

 
 
[RSL Subscription Agreement – Signature Page (cont.)]
 
 

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