EXHIBIT 2.23
SHARE PURCHASE AGREEMENT
BY AND AMONG
IXL HOLDINGS, INC.,
iXL-MADRID, S.A.,
XXXXXXX NEW MEDIA, S.L.
THE OTHER MEDIA, S.L.
AND
THE XXXXXXX COMPANIES BENEFICIAL OWNERS
THE XXXXXXX COMPANIES SHAREHOLDERS
DATED AS OF JULY 28, 1998
SHARE PURCHASE AGREEMENT
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THIS SHARE PURCHASE AGREEMENT is entered into as of this 28th day of July,
1998, by and among Xxxxxxx New Media, S.L., a Spanish corporation ("Xxxxxxx"),
The Other Media, S.L., a Spanish corporation ("The Other Media"; collectively
with Xxxxxxx, the "Xxxxxxx Companies"), IXL Holdings, Inc., a Delaware
corporation ("Parent"), iXL-Madrid, S.A., a Spanish corporation, or its
successors or assigns ("Sub"), the respective shareholders of the Xxxxxxx
Companies as listed on the signature page hereto (collectively, the "Xxxxxxx
Companies Shareholders"), and the beneficial owners of the Xxxxxxx Companies as
listed on the signature page hereto (collectively, the "Xxxxxxx Companies
Owners"; collectively with the Xxxxxxx Companies Shareholders, the "Xxxxxxx
Companies Sellers").
R E C I T A L S:
- - - - - - - -
A. The Xxxxxxx Companies are engaged in the business of programming for
electronic equipment, electronic commerce, interactive marketing, developing
internet sites and furnishing internet services, including website design and
maintenance (the "Xxxxxxx Companies Business").
B. Parent and the Xxxxxxx Companies have entered into a Letter of Intent,
dated March 6, 1998, with respect to the purchase, by Sub from the Xxxxxxx
Companies Shareholders, of all of the Xxxxxxx Companies Stock (the
"Acquisition").
C. Parent and the Xxxxxxx Companies Sellers have entered into a non-
disclosure agreement dated as of June 25, 1998 (the "Confidentiality
Agreement").
D. The Xxxxxxx Companies Shareholders collectively own 100% of the issued
and outstanding capital stock of the Xxxxxxx Companies (the "Xxxxxxx Companies
Stock").
E. The Xxxxxxx Companies Owners beneficially own, collectively, 100% of
the Xxxxxxx Companies Stock.
F. On July 23, 1998, Sub was incorporated as a vehicle for the
Acquisition.
G. The respective Boards of Directors of Parent, Sub and each of the
Xxxxxxx Companies, and the respective shareholders of Sub and each of the
Xxxxxxx Companies, have approved the Acquisition, upon the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, benefits,
conditions and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is hereby agreed as follows:
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ARTICLE I
THE ACQUISITION
1.1 CLOSING AND CLOSING DATE. Unless this Share Purchase Agreement shall
have been terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 7.1 hereof, and subject to the satisfaction or
waiver of the conditions set forth in Article V hereof; the closing of the
Acquisition (the "Closing") will take place as promptly as practicable (and in
any event within five business days after satisfaction of the conditions set
forth in Sections 5.1 and 5.2 hereof) (the "Closing Date") at the offices of
Price Waterhouse Juridico y Fiscal, Xxxxx xx xx Xxxxxxxxxx 00,00000 Xxxxxx,
Xxxxx, unless another date or place is agreed to by the parties.
1.2 ACQUISITION CONSIDERATION. As of the Closing Date:
(a) All shares of Xxxxxxx Companies Stock owned by Xxxxxxx Companies
shall be canceled and retired and shall cease to exist, and no consideration
shall be delivered in exchange therefor.
(b) Each issued and outstanding share of Xxxxxxx Companies Stock
shall, when the public deed of purchase of shares is granted and, accordingly,
the transfer of shares is officially consummated, be exchanged for, (i) a number
of shares of validly issued, fully paid and nonassessable Class B Common Stock
of Parent, $.01 par value (the "Parent Stock") based on the following equation:
PS= 40,800-D
-
$5
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S
where:
PS = the number of shares of Parent Stock (valued, as of the
Closing, at $5 per share) for which each share of Xxxxxxx
Companies Stock shall be exchanged pursuant to the
Acquisition
D = the outstanding indebtedness of the Xxxxxxx Companies (the
"Xxxxxxx Companies Debt"), including debt for borrowed money
and accrued interest thereon, capital leases, accounts
payable and accrued expenses, all to be determined as of
three business days prior to the Closing Date and all as
determined in accordance with generally accepted accounting
principles ("GAAP")
S = the number of issued and outstanding shares of Xxxxxxx
Companies Stock on the Closing Date; and
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(ii) an amount of cash based on the following equation:
C= $36,000
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S
where:
C = the amount of cash for which each share of Xxxxxxx Companies
Stock shall be exchanged pursuant to the Acquisition
and other terms are as defined above.
1.3 CLOSING OF XXXXXXX COMPANIES' TRANSFER BOOKS. As of the Closing Date,
the stock transfer books of the Xxxxxxx Companies shall be closed and no
transfer of Xxxxxxx Companies Stock shall be made thereafter. If thereafter,
certificates for Xxxxxxx Companies Stock are presented to Sub, they shall be
canceled and exchanged for a consideration as set forth in Section 1.2 hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF XXXXXXX COMPANIES
The Xxxxxxx Companies, and the Xxxxxxx Companies Sellers, jointly and
severally, represent and warrant to Parent and Sub as follows, which
representations and warranties shall survive the Closing in accordance with
Section 8.1 hereof.
2.1 ORGANIZATION AND QUALIFICATION. Each of the Xxxxxxx Companies is a
corporation duly organized, validly existing and in good standing under the laws
of Spain. Xxxxxxx was incorporated on 3rd December, 1996 and The Other Media on
27th October, 1995. Xxxxxxx'x and The Other Media's constitutions are entered
in the Madrid Mercantile Register, at volume 11645, folio 92, section 8, item
number M-182870, entry 1, and at volume 10730, folio 86, section 8, item number
M-169766, entry 1, respectively. Each of the Xxxxxxx Companies has the requisite
corporate power and authority to carry on the Xxxxxxx Companies Business as it
is now being conducted and is duly qualified or licensed to do business and is
in good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary. Complete and correct copies of the By-Laws of the
Xxxxxxx Companies as in effect on the date hereof are attached to Exhibits "C-1"
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and "C-2" hereto. The minute books of the Xxxxxxx Companies, a true and
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complete copy of each of which has been delivered to Parent, (a) accurately
reflect all action taken by the directors and shareholders of the respective
Xxxxxxx Companies at meetings of the Xxxxxxx Companies' respective Board of
Directors or shareholders, as the case may be; and (b) contain true and complete
copies, or originals, of the respective minutes of all meetings or consent
actions of the directors or
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shareholders. The Xxxxxxx Companies have deposited their annual accounts with
the Mercantile Registry of Madrid on a timely basis since their respective dates
of incorporation, and there will not be any fine in respect thereof.
2.2 AUTHORITY. Each of the Xxxxxxx Companies has the necessary corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery hereof and the
consummation of the transactions contemplated hereby by the Xxxxxxx Companies
have been duly and validly authorized and approved by Xxxxxxx Companies'
respective Boards of Directors and Shareholders, and no other corporate or
shareholder proceedings on the part of the Xxxxxxx Companies, their respective
Boards of Directors or any of the Xxxxxxx Companies Shareholders is necessary to
authorize or approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Xxxxxxx Companies and each Xxxxxxx Companies Seller, and assuming the due
authorization, execution and delivery hereof by Parent and Sub, constitutes the
valid and binding obligation of Xxxxxxx Companies and each Xxxxxxx Companies
Seller, enforceable against Xxxxxxx Companies and each Xxxxxxx Companies Seller
in accordance with its terms, subject, in each case, to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting creditors' rights and to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing.
2.3 CAPITALIZATION
(a) The authorized capital stock of the Xxxxxxx Companies consists
of (i) for Xxxxxxx, share capital of 500,000 Pesetas, comprising 500 shares of
1,000 Pesetas face value each, all of which are validly issued and outstanding,
fully paid and nonassessable; and (ii) for The Other Media, share capital of
600,000 Pesetas, comprising 600 shares of 1,000 Pesetas face value each, all of
which are validly issued and outstanding, fully paid and nonassessable. This is
as reflected in the public deeds of incorporation. All outstanding capital stock
of the Xxxxxxx Companies was issued in accordance with applicable securities
laws. No share certificates have been issued. There are no options, warrants,
calls, convertible notes, agreements, commitments or other rights presently
outstanding that would obligate the Xxxxxxx Companies or any of the Xxxxxxx
Companies Shareholders to issue, deliver or sell shares of its capital stock, or
to grant, extend or enter into any such option, warrant, call, convertible note,
agreement, commitment or other right. In addition to the foregoing, as of the
date hereof; the Xxxxxxx Companies have no bonds, debentures, notes or other
indebtedness issued or outstanding that have voting rights in either of the
Xxxxxxx Companies. Schedule 2.3(a) sets forth a list of (i) all holders of
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record of Xxxxxxx Companies Stock; (ii) the number of shares held by each
Xxxxxxx Companies Shareholder; and (iii) which shares are held by which such
Shareholder.
(b) All of the issued and outstanding shares of capital stock of the
Xxxxxxx Companies are validly issued, fully paid and nonassessable. Except as
set forth on Schedule 2.3(b) hereto, each Xxxxxxx Companies Shareholder
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represents and warrants that the Xxxxxxx Companies Stock held by such Xxxxxxx
Companies Shareholder is free and clear of any lien,
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charge, security interest, pledge, option, right of first refusal, voting proxy
or other voting agreement, or encumbrance of any kind or nature other than
restrictions on transfer imposed by applicable securities laws (any of the
foregoing, a "Lien").
(c) The Xxxxxxx Companies Owners are not the official owners of
Xxxxxxx Companies Stock. Nonetheless, such Owners hereby consent to the
Acquisition. Such Owners do not claim any entitlement to any payment or other
consideration from Parent or Sub hereunder, or otherwise, in connection with the
Acquisition. Upon Closing of the Acquisition, such Owners hereby waive any
right, title or interest in any such Stock.
2.4 SUBSIDIARIES. The Xxxxxxx Companies have no subsidiaries and do not
otherwise own or control, directly or indirectly, any equity interest, or any
security convertible into an equity interest, in any corporation, partnership,
limited liability company, joint venture, association or other business entity
(any of the foregoing, an "Entity").
2.5 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS. Except as set forth on
Schedule 2.5 hereto, none of (i) the execution and delivery of this Agreement
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by the Xxxxxxx Companies or the Xxxxxxx Companies Sellers, (ii) the consummation
by the Xxxxxxx Companies and the Xxxxxxx Companies Sellers of the transactions
contemplated hereby or (iii) compliance by the Xxxxxxx Companies with any of the
provisions hereof will:
(a) conflict with or violate the public deed of incorporation or By-
Laws of the Xxxxxxx Companies;
(b) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to the Xxxxxxx Companies or any
of the Xxxxxxx Companies Sellers, or by which the Xxxxxxx Companies or any of
their properties or assets may be bound or affected;
(c) result in a violation or breach of; or constitute a default (or
an event that, with notice or lapse of time or both, would become a default)
under, or give to any other any right of termination, amendment, acceleration or
cancellation of; any note, bond, mortgage, indenture, or any material contract,
agreement, arrangement, lease, license, permit, judgment, decree, franchise or
other instrument or obligation, to which either of the Xxxxxxx Companies is a
party or by which either of the Xxxxxxx Companies or any of their properties or
assets may be bound or affected;
(d) result in the creation of any Lien on any of the property or
assets of the Xxxxxxx Companies; or
(e) require any consent, waiver, license, approval, authorization,
order, permit, registration or filing with, or notification to (any of the
foregoing being a "Consent"), (i) any government or subdivision thereof; whether
domestic or foreign, or any administrative, governmental, or regulatory
authority, agency, commission, court, tribunal or body, whether Spanish, foreign
or multinational (any of the foregoing, a "Governmental Entity"); or (ii) any
other
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individual or Entity (collectively, a "Person").
2.6 FINANCIAL STATEMENTS. Attached as Schedule 2.6 hereto are, for each
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of the Xxxxxxx Companies, (i) balance sheet as of three business days prior to
the Closing Date, (ii) unaudited financial statement (including profit and loss
accounts and notes) for the year ended December 31, 1997, and (iii) unaudited
financial statement for the six month period ended June 30, 1998. The Xxxxxxx
Companies have heretofore furnished Parent with a true and complete copy of (a)
the unaudited financial statements of each of the Xxxxxxx Companies for the
years ended December 31, 1995, 1996 and 1997; and (b) the unaudited financial
statements of each of the Xxxxxxx Companies for the four month period ended
April 30, 1998 (all of the foregoing collectively herein referred to as the
"Xxxxxxx Companies Financial Statements"). Except as disclosed therein, the
Xxxxxxx Companies Financial Statements have been prepared in accordance with
GAAP (except for the absence of footnotes and normal year end adjustments)
consistently followed throughout the period indicated, and present fairly, in
all material respects, the financial position and operating results of Xxxxxxx
Companies as of the dates, and during the periods, indicated therein.
2.7 ABSENCE OF CHANGES. Except as provided in Schedule 2.7 hereto and
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except as contemplated hereby, since December 31, 1997 (a) neither of the
Xxxxxxx Companies has entered into any transaction that was not in the ordinary
course of business; (b)except for sales of services and licenses of software in
the ordinary course of business, there has been no sale, assignment, transfer,
mortgage, pledge, encumbrance or lease of any material asset or property of the
Xxxxxxx Companies; (c) there has been (i) no declaration or payment of a
dividend, or any other declaration, payment or distribution of any type or
nature to any shareholder of the Xxxxxxx Companies in respect of their stock,
whether in cash or property, and (ii) no purchase or redemption of any share of
the capital stock of the Xxxxxxx Companies; (d) there has been no declaration,
payment, or commitment for the payment, by either of the Xxxxxxx Companies, of a
bonus or other additional salary, compensation, or benefit to any employee or
administrator of the Xxxxxxx Companies that was not in the ordinary course of
business, except for normal year-end bonuses paid in the ordinary course of
business; (e) there has been no release, compromise, waiver or cancellation of
any debt to or claim by the Xxxxxxx Companies, or waiver of any right of the
Xxxxxxx Companies; (f) there have been no capital expenditures in excess of
$10,000 for any single item, or $25,000 in the aggregate; (g) there has been no
change in accounting methods or practices or revaluation of any asset of the
Xxxxxxx Companies (other than Xxxxxxx Companies Accounts Receivable as defined
in Section 2.26 hereof) written down in the ordinary course of business in
excess of $10,000 for any single Xxxxxxx Companies Accounts Receivable, or
$25,000 in the aggregate); (h) there has been no material damage, or
destruction to, or loss of, physical property (whether or not covered by
insurance) adversely affecting the Xxxxxxx Companies Business or the operations
of the Xxxxxxx Companies; (i) there has been no loan by the Xxxxxxx Companies,
or guaranty by the Xxxxxxx Companies of any loan, to any employee or
administrator of the Xxxxxxx Companies; (j)neither of the Xxxxxxx Companies has
ceased to transact business with any customer that, as of the date of such
cessation, represented more than 5% of the annual gross revenues of that Xxxxxxx
Company; (k) there has been no termination or resignation of any key employee,
administrator or officer of the Xxxxxxx Companies, and to the knowledge of
Xxxxxxx Companies, no such termination or
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resignation is threatened; (1) there has been no amendment or termination of any
material oral or written contract, agreement or license related to the Xxxxxxx
Companies Business, to which either of the Xxxxxxx Companies is a party or by
which it is bound, except in the ordinary course of business, or except as
expressly contemplated hereby; (m) neither of the Xxxxxxx Companies has failed
to satisfy any of its debts, obligations or liabilities related to the Xxxxxxx
Companies Business or the assets of the Xxxxxxx Companies as the same become due
and owing (except for Xxxxxxx Companies Accounts Payable (as defined in Section
2.27 hereof) payable in accordance with past practices and in the ordinary
course of business); (n) there has been no agreement or commitment by Xxxxxxx
Companies to do any of the foregoing; and (o) there has been no other event or
condition of any character pertaining to and materially and adversely affecting
the assets, business or financial condition of the Xxxxxxx Companies.
2.8 UNDISCLOSED LIABILITIES. Except as set forth on Schedule 2.8 hereto,
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neither of the Xxxxxxx Companies has any debt, liability or obligation of any
kind, whether accrued, absolute or otherwise, including any liability or
obligation on account of taxes or any governmental charge or penalty, interest
or fine, except (a) liabilities incurred in the ordinary course of business
after December 31, 1997, that would not, whether individually or in the
aggregate, have a material adverse impact on the business or financial condition
of that Xxxxxxx Company; (b) liabilities reflected on the Xxxxxxx Companies
Financial Statements; and (c) liabilities incurred as a result of the
transactions contemplated hereby.
2.9 TITLE TO PROPERTIES. Except as set forth on Schedule 2.9 hereto, the
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Xxxxxxx Companies have good and marketable title to all tangible property and
assets used in the Xxxxxxx Companies Business, and good and valid title to their
leasehold interests, in each case, free and clear of any and all Liens other
than Permitted Liens (as defined in Section 8.9 hereof).
2.10 EQUIPMENT. Xxxxxxx Companies have heretofore furnished Parent with a
true and correct list of all items of tangible personal property (including
computer hardware) necessary for or used in the operation of the Xxxxxxx
Companies Business in the manner in which it has been and is now operated by
Xxxxxxx Companies ("the Xxxxxxx Companies Equipment"), except for personal
property having a net book value of less than $1,000. Except as set forth on
Schedule 2.10 hereto, each material item of Xxxxxxx Companies Equipment is in
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good condition and repair, ordinary wear and tear excepted.
2.11 INTELLECTUAL PROPERTY.
(a) The Xxxxxxx Companies have heretofore furnished Parent with a
true and complete list of all material proprietary technology, patents, patent
rights, trademarks, trademark rights, trade names, trade name rights, service
marks, service xxxx rights, and copyrights (and all pending applications for any
of the foregoing) used by Xxxxxxx Companies in the conduct of the Xxxxxxx
Companies Business (together with trade secrets and know how used in the conduct
of the Xxxxxxx Companies Business, the "Xxxxxxx Companies Intellectual Property
Rights"). The Xxxxxxx Companies own, or are validly licensed or otherwise have
the right to use or exploit, as currently used or exploited, all of the Xxxxxxx
Companies Intellectual Property Rights, free of any
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obligation to make any payment (whether of a royalty, license fee, compensation
or otherwise). No claims are pending or, to the knowledge of Xxxxxxx Companies,
threatened, that either of the Xxxxxxx Companies is infringing or otherwise
adversely affecting the rights of any Person with regard to any Xxxxxxx
Companies Intellectual Property Right. No Person is infringing the rights of
either of the Xxxxxxx Companies with respect to any Xxxxxxx Companies
Intellectual Property Right. Neither the Xxxxxxx Companies nor any employee,
administrator, agent or independent contractor of the Xxxxxxx Companies, in
connection with the performance of such Person's services with the Xxxxxxx
Companies, has used, appropriated or disclosed, directly or indirectly, any
trade secret or other proprietary or confidential information of any other
Person, or otherwise violated any confidential relationship with any other
Person.
(b) The Xxxxxxx Companies have heretofore furnished Parent with a
true and complete list of all material computer software used by the Xxxxxxx
Companies in the conduct of the Xxxxxxx Companies Business (the "Xxxxxxx
Companies Software"). Xxxxxxx Companies currently licenses, or otherwise has the
legal right to use, all of the Xxxxxxx Companies Software (including any
upgrade, alteration or enhancement with respect thereto), and all of the Xxxxxxx
Companies Software is being used in compliance with any applicable license or
other agreement.
2.12 REAL PROPERTY. Except as set forth on Schedule 2.12 hereto:
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(a) The Xxxxxxx Companies have a good and valid leasehold interest
in all real property (including all buildings, improvements and fixtures
thereon) used in the operation of the Xxxxxxx Companies Business (the "Xxxxxxx
Companies Real Property"). The Xxxxxxx Companies own no real property. Except
for Permitted Liens, and for the items set forth on Schedule 2.12, there are no
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Liens on Xxxxxxx Companies' interest in any of the Xxxxxxx Companies Real
Property.
(b) There are no parties in possession of any portion of the Xxxxxxx
Companies Real Property other than Xxxxxxx Companies, whether as sublessees,
subtenants at will or trespassers.
(c) To the knowledge of Xxxxxxx Companies, there is no law,
ordinance, order, regulation or requirement now in existence or under active
consideration by any Governmental Entity, that would require, under the
provisions of any of the Xxxxxxx Companies Leases (as hereinafter defined), any
material expenditure by the Xxxxxxx Companies to modify or improve any of the
Xxxxxxx Companies Real Property to bring it into compliance therewith.
2.13 LEASES. Schedule 2.13 hereto sets forth a list of all leases pursuant
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to which either of the Xxxxxxx Companies leases, as lessor or lessee, real or
personal property used in operating the Xxxxxxx Companies Business or otherwise
(the "Xxxxxxx Companies Leases"). Copies of the Xxxxxxx Companies Leases, all of
which have previously been provided to Parent, are true and complete copies
thereof. All of the Xxxxxxx Companies Leases are valid, binding and enforceable
against Xxxxxxx Companies and, to the knowledge of Xxxxxxx Companies, against
the other parties thereto, in accordance with their respective terms, and there
is not under any such Xxxxxxx
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Companies Lease any existing default by Xxxxxxx Companies, or, to the knowledge
of Xxxxxxx Companies, by any other party thereto, or any condition or event
that, with notice or lapse of time or both, would constitute a default. The
Xxxxxxx Companies have not received notice that the lessor of any of the Xxxxxxx
Companies Leases intends to cancel, suspend or terminate such Xxxxxxx Companies
Lease or to exercise or not exercise any option thereunder.
2.14 CONTRACTS. Schedule 2.14 hereto sets forth a true and complete list
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of all contracts, agreements and commitments (whether written or oral) to which
either of the Xxxxxxx Companies is, directly or indirectly, a party (in its own
name or as a successor in interest), or by which it or any of its properties or
assets is otherwise bound, including any service agreements, customer
agreements, supplier agreements, agreements to lend or borrow money, shareholder
agreements, employment agreements, agreements relating to Xxxxxxx Companies
Intellectual Property Rights and the like (collectively, the "Xxxxxxx Companies
Contracts"); excepting only those Xxxxxxx Companies Contracts which involve less
than $10,000 and are cancelable, without penalty, on no more than 90 days'
notice. The aggregate value of all payment obligations and rights to receive
payments, under agreements, contracts and commitments (whether oral or in
writing) to which Xxxxxxx Companies is a party or by which it or any of its
properties or assets is otherwise bound, and that are not listed on Schedule
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2.14, is less than $50,000 (calculating such value by adding together the value
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of rights and obligations, and not by determining the net amount thereof).
True and complete copies of all Xxxxxxx Companies Contracts (or a true and
complete narrative description of any oral Xxxxxxx Companies Contract) have
previously been provided to Parent. Neither the Xxxxxxx Companies nor, to the
knowledge of Xxxxxxx Companies, any other party to any of the Xxxxxxx Companies
Contracts (x) is in default under (nor does there exist any condition that, with
notice or lapse of time or both, would cause such a default under) any of the
Xxxxxxx Companies Contracts, or (y) has waived any right it may have under any
of the Xxxxxxx Companies Contracts, the waiver of which would have a material
adverse effect on the business, assets or financial condition or prospects of
Xxxxxxx Companies. All of the Xxxxxxx Companies Contracts constitute the valid
and binding obligations of the Xxxxxxx Company that is a party thereto,
enforceable in accordance with their respective terms, and, to the knowledge of
Xxxxxxx Companies, of the other parties thereto.
2.15 DIRECTORS AND OFFICERS. Schedule 2.15 hereto sets forth a list, as of
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the Closing Date, of the name of each director and officer of the Xxxxxxx
Companies and the position(s) held by each.
2.16 PAYROLL INFORMATION. Attached to Schedule 2.16 hereto is a true and
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complete copy of the payroll report of the Xxxxxxx Companies dated June 30,
1998, showing all current employees and administrators of Xxxxxxx Companies and
their current levels of compensation, other than bonuses and other extraordinary
compensation, all of which bonuses and extraordinary compensation are set forth
on Schedule 2.16. Xxxxxxx Companies has paid all compensation required to be
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paid to employees or administrators of Xxxxxxx Companies on or prior to the date
hereof other than compensation accrued in the current pay period.
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2.17 LITIGATION. Except as set forth on Schedule 2.17 hereto, there is no
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suit, action, claim, investigation or proceeding pending or, to the knowledge of
Xxxxxxx Companies, threatened against or affecting either of the Xxxxxxx
Companies or the Xxxxxxx Companies Business, nor is there any judgment, decree,
injunction or order of any applicable Governmental Entity, mediator or
arbitrator outstanding against either of the Xxxxxxx Companies.
2.18 EMPLOYEE BENEFIT PLANS/LABOR RELATIONS.
(a) Except as disclosed in Schedule 2.18 hereto, there are no
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employee benefit plans, agreements or arrangements maintained by the Xxxxxxx
Companies (collectively, "Xxxxxxx Companies Benefit Plans"), including (i)
current or deferred compensation, pension, profit sharing, vacation or severance
plans or programs; or (ii) medical, hospital, accident, disability or death
benefit plans. All Xxxxxxx Companies Benefit Plans are administered in
accordance with, and are in material compliance with, all applicable laws and
regulations. No default exists with respect to the obligations of the Xxxxxxx
Companies under any Xxxxxxx Companies Benefit Plan.
(b) Neither of the Xxxxxxx Companies is a party to any collective
bargaining agreement; no collective bargaining agent has been certified as a
representative of any of the employees of the Xxxxxxx Companies; no
representation campaign or election is now in progress with respect to any
employee of the Xxxxxxx Companies; and there are no labor disputes, grievances,
controversies, strikes or requests for union representation pending, or, to the
knowledge of Xxxxxxx Companies, threatened, relating to or affecting the Xxxxxxx
Companies Business. To the knowledge of Xxxxxxx Companies, no event has occurred
that could give rise to any such dispute, controversy, strike or request for
representation.
2.19 LIABILITY UNDER BENEFIT PLANS.
(a) Except as disclosed in Schedule 2.19 hereto or pursuant to the
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terms of the Xxxxxxx Companies Benefit Plans, neither the execution and delivery
hereof nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation or golden
parachute) becoming due to any director, administrator or other employee of the
Xxxxxxx Companies, (ii) increase any benefit otherwise payable under any Xxxxxxx
Companies Benefit Plan or (iii) result in the acceleration of the time of
payment or vesting of any such benefit to any extent.
(b) Neither of the Xxxxxxx Companies has incurred any liability to
any Governmental Entity in respect of (i) social security withholdings or
payments, or (ii) any Xxxxxxx Companies Benefit Plan, that remains unpaid.
2.20 TAXES.
(a) Each of the Xxxxxxx Companies has duly and timely filed all
federal, provincial and local income, value added, economic activities,
franchise, excise, real and personal property and other tax returns and reports,
including extensions, required to have been filed by it on
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or prior to the Closing Date. Each of the Xxxxxxx Companies has duly and timely
paid all taxes and other governmental charges, and all interest and penalties
with respect thereto, required to be paid by it (whether by way of withholding
or otherwise) to any federal, provincial, local or other taxing authority
(except to the extent the same are being contested in good faith, and adequate
reserves therefor have been provided in the Xxxxxxx Companies Financial
Statements). As of the Closing Date, all deficiencies proposed as a result of
any audit have been paid or settled.
(b) Neither of the Xxxxxxx Companies is a party to, or bound by, or
otherwise in any way obligated under, any tax sharing or similar agreement.
2.21 COMPLIANCE WITH APPLICABLE LAWS. The Xxxxxxx Companies hold all
material permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary to own, lease or operate all of the assets and
properties of Xxxxxxx Companies, as appropriate, and to carry on the Xxxxxxx
Companies Business as now conducted (the "Xxxxxxx Companies Permits"). To the
knowledge of Xxxxxxx Companies, the Xxxxxxx Companies are in material compliance
with all applicable laws, ordinances and regulations and the terms of the
Xxxxxxx Companies Permits. Except as set forth on Schedule 2.21 hereto, the
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Acquisition and the transactions contemplated hereby do not violate, or
necessitate any notice, consent or approval under, any of the Xxxxxxx Companies
Permits. Schedule 2.21 sets forth a true and complete list of all Xxxxxxx
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Companies Permits, true and complete copies of which have previously been
provided to Parent.
2.22 BOARD OF DIRECTORS/SHAREHOLDER CONSENT. The respective Boards of
Directors of the Xxxxxxx Companies, and the Xxxxxxx Companies Shareholders, have
adopted and approved this Agreement and the transactions contemplated hereby
(including the Acquisition).
2.23 BROKERS. Except as set forth on Schedule 2.23 hereto, no broker or
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finder is entitled to any broker's or finder's fee or other commission in
connection with the transactions contemplated hereby as a result of arrangements
made by or on behalf of the Xxxxxxx Companies.
2.24 ENVIRONMENTAL MATTERS.
(a) To the knowledge of Xxxxxxx Companies, no real property currently
or formerly owned or operated by either of the Xxxxxxx Companies is contaminated
with any Hazardous Substance (as hereinafter defined).
(b) Neither of the Xxxxxxx Companies is a party to any litigation or
administrative proceeding nor, to the knowledge of Xxxxxxx Companies, is any
litigation or administrative proceeding threatened against it, that, in either
case, asserts or alleges that it (i) violated any Environmental Law (as
hereinafter defined); (ii) is required to clean up, remove or take remedial or
other responsive action due to the disposal, deposit, discharge, leak or other
release of any Hazardous Substance; or (iii) is required to pay all or a portion
of the cost of any past, present or future cleanup, removal or remedial or other
action that arises out of or is related to the disposal, deposit, discharge,
leak or other release of any Hazardous Substance.
11
(c) To the knowledge of Xxxxxxx Companies, there are not now nor have
there previously been tanks or other facilities on, under, or at any real
property owned, leased, used or occupied by the Xxxxxxx Companies containing
materials that, if known to be present in soil or ground water, would require
cleanup, removal or other remedial action under Environmental Law.
(d) To the knowledge of Xxxxxxx Companies, neither of the Xxxxxxx
Companies is subject to any judgment, order or citation related to or arising
out of any Environmental Law and has not been named or listed as a potentially
responsible party by any Governmental Entity in a matter related to or arising
out of any Environmental Law.
(e) For purposes hereof, (i) the term "Environmental Law" means any
applicable multinational, federal, provincial or local law (including statutes,
regulations, ordinances, codes, rules, judicial opinions and other governmental
restrictions and requirements) relating to the discharge of air pollutants,
water pollutants, noise, odors or process waste water, or otherwise relating to
the environment or hazardous or toxic substances; and (ii) the term "Hazardous
Substance" means any toxic or hazardous substance that is regulated by or under
authority of any Environmental Law, including any petroleum products, asbestos
or polychlorinated biphenyls.
2.25 INTEREST IN CUSTOMERS, SUPPLIERS AND COMPETITORS. Except as provided
in Schedule 2.25 hereto, no officer, director, administrator, shareholder or
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employee of the Xxxxxxx Companies and no family member (including a spouse,
parent, sibling or lineal descendent of any of the foregoing), has any direct or
indirect material interest in any material customer, supplier or competitor of
the Xxxxxxx Companies, or in any Person from whom or to whom the Xxxxxxx
Companies lease any real or personal property, or in any other Person with whom
the Xxxxxxx Companies are doing business whether directly or indirectly
(including as a debtor or creditor), whether in existence as of the Closing Date
or proposed, other than the ownership of stock of publicly traded corporations.
2.26 ACCOUNTS RECEIVABLE. All accounts, notes, contracts and other
receivables of the Xxxxxxx Companies (collectively, "Xxxxxxx Companies Accounts
Receivable") were acquired by the Xxxxxxx Companies in the ordinary course of
business arising from bona fide transactions. To the knowledge of Xxxxxxx
Companies, there are no set-offs, counterclaims or disputes asserted with
respect to any Xxxxxxx Companies Accounts Receivable that would result in claims
in excess of the reserve for bad debts set forth on the Xxxxxxx Companies
Financial Statements and, to the knowledge of Xxxxxxx Companies and subject to
such reserve, all Xxxxxxx Companies Accounts Receivable are collectible in full.
The Xxxxxxx Companies have previously furnished Parent with a true and complete
aging report prepared as of April 30, 1998 which shows the time elapsed since
invoice date for all Xxxxxxx Companies Accounts Receivable as of such date.
2.27 ACCOUNTS PAYABLE. All material accounts, notes, contracts and other
amounts payable of the Xxxxxxx Companies (collectively, "Xxxxxxx Companies
Accounts Payable") are currently within their respective terms, and are neither
in default nor otherwise past due by more
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than 90 days. The Xxxxxxx Companies have previously provided Parent with a true
and complete aging report prepared as of April 30, 1998 which shows the time
elapsed since invoice date for all Xxxxxxx Companies Accounts Payable as of such
date.
2.28 INSURANCE. The Xxxxxxx Companies currently maintain, in full force
and effect, all insurance policies that are required to be maintained for the
conduct of the Xxxxxxx Companies Business or the ownership of Xxxxxxx Companies'
property (both real and personal) (collectively, the "Xxxxxxx Companies
Insurance Policies"). The Xxxxxxx Companies Insurance Policies are listed on
Schedule 2.28 hereto, and true and complete copies of all Xxxxxxx Companies
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Insurance Policies have previously been provided to Parent. The Xxxxxxx
Companies (a) are not in default regarding the provisions of any Xxxxxxx
Companies Insurance Policy; (b) have paid all premiums due thereunder; and (c)
have not failed to present any notice or material claim thereunder in a due and
timely fashion.
2.29 BANKRUPTCY. The Xxxxxxx Companies have not filed a petition or
request for reorganization or protection or relief under applicable bankruptcy
laws, made any general assignment for the benefit of creditors, or consented to
the appointment of a receiver or trustee, including a custodian under applicable
bankruptcy laws, whether such receiver or trustee is appointed in a voluntary or
involuntary proceeding.
2.30 XXXXXXX COMPANIES DEBT. As of the date hereof, the Xxxxxxx Companies
Debt is not in excess of $18,463.
2.31 NON-U.S. PERSONS; INVESTMENT PURPOSE. Each Xxxxxxx Companies Seller
represents that he is a Spanish national and not a "U.S. person" as such term is
defined in the Securities Act of 1933, as amended (the "Securities Act"). Each
Xxxxxxx Companies Shareholder further represents that he (a) has been offered
and is acquiring the Parent Stock outside the United States and solely for his
own account and benefit for investment and not with a view to, or for sale in
connection with, any distribution thereof; and (b) will not, directly or
indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of
any Parent Stock (or solicit any offers to buy, purchase or otherwise acquire or
take a pledge of any such shares) in the United States or to or for the benefit
or account of any U.S. person, or otherwise, or conduct any hedging transaction
involving Parent Stock, except in compliance with the Securities Act and
Regulation S or the other rules and regulations thereunder; other applicable
laws, rules and regulations; and the Second Amended and Restated Stockholders'
Agreement of Parent, dated December 17, 1997 (the "Stockholders' Agreement) It
is understood and agreed by the parties hereto that Parent is required to refuse
to register any transfer of Parent Stock not made in accordance with the
provisions of said Regulation S, or pursuant to registration under the
Securities Act or to an exemption therefrom.
2.32 RESTRICTIONS ON TRANSFER. Each Xxxxxxx Companies Shareholder
acknowledges that (a) the Parent Stock received by him hereunder has not been
registered under the Securities Act; (b) the Parent Stock may be required to be
held indefinitely, and he must continue to bear the economic risk of the
investment in such shares unless such shares are subsequently registered under
the Securities Act or Regulation S thereunder or another exemption from such
registration is
13
available; (c) there may not be any public market for the Parent Stock in the
foreseeable future; (d) Rule 144 promulgated under the Securities Act is not
presently available with respect to sales of any securities of Parent, and such
Rule is not anticipated to be available in the foreseeable future; (e) when and
if Parent Stock may be disposed of without registration in reliance upon Rule
144, such disposition can be made only in limited amounts and in accordance with
the terms and conditions of such Rule; (f) if the exemption afforded by Rule 144
is not available, public sale without registration will require the availability
of an exemption under the Securities Act; (g) the Parent Stock is subject to the
terms and conditions of the Stockholders' Agreement; (h) restrictive legends
shall be placed on the certificates representing Parent Stock; and (i) a
notation shall be made in the appropriate records of Parent indicating that
Parent Stock is subject to restrictions on transfer and, if Parent should in the
future engage the services of a stock transfer agent, appropriate stop-transfer
instructions will be issued to such transfer agent with respect to Parent Stock.
2.33 ABILITY TO BEAR RISK; ACCESS TO INFORMATION; SOPHISTICATION. Each
Xxxxxxx Companies Shareholder represents and warrants that (a) his financial
situation is such that he can afford to bear the economic risk of holding Parent
Stock acquired by him hereunder for an indefinite period; (b) he can afford to
suffer the complete loss of such Parent Stock; (c) he has been granted the
opportunity to ask questions of, and receive answers from, representatives of
Parent concerning the terms and conditions of the Parent Stock and to obtain any
additional information that he deems necessary; (d) his knowledge and experience
in financial business matters is such that he is capable of evaluating the
merits and risk of ownership of the Parent Stock; (e) he has carefully reviewed
the terms of the Stockholders' Agreement and has evaluated the restrictions and
obligations contained therein; and (f) he (i) has reviewed the Private Placement
Memorandum of Parent dated July__, 1998 (the "Memorandum"), (ii) has carefully
examined the Memorandum and has had an opportunity to ask questions of; and
receive answers from, representatives of Parent, and to obtain additional
information concerning Parent and its Subsidiaries (as hereinafter defined), and
(iii) does not require additional information regarding Parent or its
Subsidiaries in connection with the Acquisition.
2.34 DISCLOSURE. No statement of fact by either of the Xxxxxxx Companies
or any Xxxxxxx Companies Seller contained herein and no written statement of
fact furnished by either of the Xxxxxxx Companies or any Xxxxxxx Companies
Seller to Parent or Sub in connection herewith contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements herein or therein contained not materially misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Each of Parent and Sub jointly and severally represents and warrants to the
Xxxxxxx Companies and the Xxxxxxx Companies Sellers, which representations and
warranties shall survive the Closing in accordance with Section 8.1 hereof, as
follows:
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3.1 ORGANIZATION AND QUALIFICATION. Each of Parent and its Subsidiaries
(as defined in Section 8.9 hereof) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each of Parent and its Subsidiaries has the requisite corporate
power and authority to carry on its business as it is now being conducted and is
duly qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary. Complete and
correct copies of the Certificates of Incorporation and Bylaws of Parent and the
public deed of incorporation and By-Laws of Sub, as in effect on the date
hereof, are attached to Exhibits "A-1" and "A-2" hereto, respectively.
-----------------------
3.2 AUTHORITY. Each of Parent and Sub has the necessary corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery hereof and the
consummation of the transactions contemplated hereby by each of Parent and Sub
have been duly and validly authorized and approved by their respective board of
directors and by Sub's sole shareholder, and no other corporate or shareholder
proceedings on the part of either Parent or Sub, or their respective board of
directors or shareholders, are necessary to authorize or approve this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of Parent and Sub, and assuming the due
authorization, execution and delivery by the Xxxxxxx Companies and the Xxxxxxx
Companies Sellers, constitutes the valid and binding obligation of each of
Parent and Sub, enforceable against each of Parent and Sub in accordance with
its terms, subject, in each case, to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general application relating to or affecting
creditors' rights and to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing.
3.3 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS. Except as set forth on
Schedule 3.3 hereto, none of the execution and delivery of this Agreement by
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Parent or Sub, the consummation by Parent and Sub of the transactions
contemplated hereby, or compliance by Parent and Sub with any of the provisions
hereof, will:
(a) conflict with or violate the Certificate of Incorporation or Bylaws
of Parent or the public deed of incorporation or By-Laws of Sub, or the
organizational documents of any other Subsidiaries;
(b) result in a violation of any statute, ordinance, rule, regulation,
order, judgment or decree applicable to Parent or its Subsidiaries, or by which
Parent, any of its Subsidiaries, or their respective properties or assets may be
bound or affected;
(c) result in a violation or breach of, or constitute a default (or an
event that, with notice or lapse of time or both, would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any note, bond, mortgage, indenture, or any material contract,
agreement, arrangement, lease, license, permit, judgment, decree, franchise or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which Parent, any of its Subsidiaries or their respective properties
may be bound or affected;
15
(d) result in the creation of any Lien on any of the property or
assets of Parent or any of its Subsidiaries; or
(e) require any Consent of (i) any Governmental Entity (except for
compliance with any applicable requirements of any applicable securities laws);
or (ii) any other Person.
3.4 LITIGATION. Except as set forth on Schedule 3.4 hereto, there is no
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suit, action, claim, investigation or proceeding pending or, to the knowledge of
Parent, threatened against or affecting Parent or its Subsidiaries, nor is there
any judgment, decree, injunction or order of any applicable Governmental Entity
or arbitrator outstanding against Parent or its Subsidiaries that, either
individually or in the aggregate, would have a material adverse effect on the
assets, business or financial condition of Parent and its Subsidiaries, taken as
a whole.
3.5 BROKERS. Except as disclosed on Schedule 3.5 hereto, no broker or
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finder is entitled to any broker's or finder's fee in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Parent or Sub.
3.6 PARENT STOCK.
(a) As of the date hereof the authorized capital stock of Parent
consists of (i) (A) 75,000,000 shares of Class A Common Stock, $.01 par value,
of which no shares are validly issued and outstanding, and (B) 100,000,000
shares of Class B Common Stock, $.01 par value, of which 11,826,525 shares are
validly issued and outstanding (without taking into account any shares of Parent
Stock to be issued pursuant hereto), fully paid and nonassessable; (ii) 750,000
shares of blank check preferred stock, (A) 250,000 of which have been designated
as Class A Convertible Preferred Stock, of which 174,526 shares are validly
issued and outstanding, fully paid and nonassessable, (B) 200,000 of which have
been designated as Class B Convertible Preferred Stock, of which 98,767 shares
are validly issued and outstanding, fully paid and nonassessable, and (C) 15,000
of which have been designated as Class C Convertible Preferred Stock, of which
9,232 shares are validly issued and outstanding, fully paid and nonassessable.
Except as set forth on Schedule 3.6 hereto, there are no options, warrants,
------------
calls, agreements, commitments or other rights presently outstanding that would
obligate Parent to issue, deliver or sell shares of its capital stock, or to
grant, extend or enter into any such option, warrant, call, agreement,
commitment or other right. In addition to the foregoing, as of the Closing Date,
Parent has no bonds, debentures, notes or other indebtedness issued or
outstanding that have voting rights in Parent.
(b) When delivered to the Xxxxxxx Companies Shareholders in accordance
with the terms hereof, the Parent Stock will be (i) duly authorized, fully paid
and nonassessable, and (ii) free and clear of all Liens other than restrictions
imposed by the Stockholders' Agreement and by United States federal and state
securities laws.
3.7 SUBSIDIARIES. Except as set forth on Schedule 3.7 hereto, Parent has
------------
no subsidiaries and does not otherwise own or control, directly or indirectly,
any equity interest in,
16
or any security convertible into an equity interest in, any Entity. Schedule 3.7
------------
lists the name of each of the Subsidiaries of Parent, and indicates their
respective jurisdictions of incorporation.
3.8 FINANCIAL STATEMENTS. Parent has heretofore furnished the Xxxxxxx
Companies with a true and complete copy of (a) the audited financial statements
of iXL Interactive Excellence, Inc. (n/k/a iXL, Inc.) for the years ended
December 31, 1993, 1994 and 1995, and for the four month period ended April 30,
1996; (b) the audited combined financial statements for Creative Video, Inc.
(n/k/a iXL, Inc.), Creative Video Library, Inc. and Entrepreneur Television,
Inc. for the years ended December 31, 1993, 1994 and 1995, and for the four
month period ended April 30, 1996; (c) the audited consolidated financial
statements for Parent and its Subsidiaries for the eight months ended December
31, 1996 and for the year ended December 31, 1997; and (d) the unaudited
consolidated financial statements for Parent and its Subsidiaries for the three
month period ended March 31, 1998 (all of the foregoing, collectively, "Parent
Financial Statements"). The Parent Financial Statements present fairly in all
material respects the consolidated financial position, results of operations,
shareholders' equity and cash flow of Parent at the respective dates or for the
respective periods to which they apply. Except as disclosed therein, such
statements and related notes have been prepared in accordance with GAAP
consistently applied throughout the periods involved (except, in the case of the
unaudited financial statements, for the exclusion of footnotes and normal year
end adjustments).
3.9 UNDISCLOSED LIABILITIES. Except as set forth on Schedule 3.9 hereto,
------------
neither Parent nor any of its Subsidiaries has any debt, liability or obligation
of any kind, whether accrued, absolute or otherwise, including any liability or
obligation on account of taxes or any governmental charges or penalty, interest
or fines, except (a) liabilities incurred in the ordinary course of business
after December 31, 1997 that would not, whether individually or in the
aggregate, have a material adverse impact on the business or financial condition
of Parent and its Subsidiaries, taken as a whole; (b)liabilities reflected on
the Parent Financial Statements; and (c) liabilities incurred as a result of the
transactions contemplated hereby.
3.10 COMPLIANCE WITH APPLICABLE LAWS. Parent or its Subsidiaries hold all
material permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary to own, lease or operate all of the assets and
properties of Parent and its Subsidiaries, as appropriate, and to carry on
Parent's business as now conducted (the "Parent Permits"). To the knowledge of
Parent, Parent and its Subsidiaries are in material compliance with all
applicable laws, ordinances and regulations and the terms of the Parent Permits.
3.11 BOARD OF DIRECTORS/SHAREHOLDER CONSENT. The board of directors of
Parent, and both the board of directors and shareholder of Sub, have, by
unanimous written consent or other action, adopted and approved this Agreement
and the transactions contemplated hereby (including the Acquisition).
3.12 BANKRUPTCY. Neither Parent nor any of its Subsidiaries has filed a
petition or request for reorganization or protection or relief under the
bankruptcy laws of the United States or any state or territory thereof, made any
general assignment for the benefit of creditors, or consented
17
to the appointment of a receiver or trustee, including a custodian under the
United States bankruptcy laws, whether such receiver or trustee is appointed in
a voluntary or involuntary proceeding.
3.13 ABSENCE OF CHANGES. Except as provided in Schedule 3.13 hereto,
-------------
since December 31, 1997, there has not been (a) any transaction, commitment,
dispute or other event or condition (financial or otherwise) of any character
(whether or not in the ordinary course of business) individually or in the
aggregate that has had, or would reasonably be expected to have, a material
adverse effect on the business, properties, assets, condition (financial or
otherwise), liabilities or results of operations of Parent and its Subsidiaries,
taken as a whole; (b) any damage, destruction or loss, whether or not covered by
insurance, which has had, or would reasonably be expected to have, a material
adverse effect on the business, properties, assets, condition (financial or
otherwise), liabilities or results of operations of Parent and its Subsidiaries,
taken as a whole; (c) any entry into any commitment or transaction material to
Parent and its Subsidiaries, taken as a whole (including any borrowing or sale
of assets) except in the ordinary course of business consistent with past
practice; (d) any declaration, setting aside or payment of any dividend or
distribution (whether in cash, stock or property) with respect to Parent's
capital stock; (e) any material change in Parent's accounting principles,
practices or methods; (f) any split, combination or reclassification of any of
Parent's capital stock, or the issuance or authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for, shares of
Parent's capital stock; or (g) any agreement (whether or not in writing),
arrangement or understanding to do any of the foregoing.
3.14 TAXES. Parent and its Subsidiaries have duly and timely filed all
federal, state and local income, franchise, excise, real and personal property
and other tax returns and reports, including extensions, required to have been
filed by Parent and its Subsidiaries on or prior to the Closing Date. Parent and
its Subsidiaries have duly and timely paid all taxes and other governmental
charges, and all interest and penalties with respect thereto, required to be
paid by Parent and its Subsidiaries (whether by way of withholding or otherwise)
to any federal, state, local or other taxing authority (except to the extent the
same are being contested in good faith, and adequate reserves therefor have been
provided in the applicable Parent Financial Statement). As of the Closing Date,
all deficiencies proposed as a result of any audits have been paid or settled.
3.15 DISCLOSURE. No statement of fact by Parent or Sub contained herein
and no written statement of fact furnished or to be furnished by Parent or Sub
to the Xxxxxxx Companies in connection herewith contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements herein or therein contained not
misleading.
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ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 CONDUCT OF BUSINESS BY THE XXXXXXX COMPANIES PENDING THE ACQUISITION.
From and after the date hereof, prior to the Closing Date, except as
contemplated hereby, unless Parent shall otherwise agree in writing, each of the
Xxxxxxx Companies shall carry on its business in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted, use reasonable
efforts to preserve intact its present business organization, keep available the
services of its employees and preserve its relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with the Xxxxxxx Companies to the end that their goodwill and on-going
businesses shall not be impaired in any material respect at the Closing Date.
Without limiting the generality of the foregoing, and except as contemplated
hereby, unless Parent shall otherwise agree in writing, prior to the Closing
Date, neither of the Xxxxxxx Companies shall, directly or indirectly:
(a) (i) declare, set aside, or pay any dividend on, or make any other
distribution in respect of, any of its capital stock, (ii) split, combine or
reclassify any of its capital stock, or issue or authorize the issuance of any
other securities in respect of; in lieu of or in substitution for, shares of its
capital stock, or (iii) purchase, redeem or otherwise acquire, any share of
capital stock of the Xxxxxxx Companies or any other equity security thereof or
any right, warrant, or option to acquire any such share or other security;
(b) issue, deliver, sell, pledge or otherwise encumber any share of
its capital stock, any other voting security issued by the Xxxxxxx Companies or
any security convertible into, or any right, warrant or option to acquire any
such share or voting security;
(c) amend its public deed of incorporation, By-Laws or other
comparable organizational documents;
(d) acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets of; or by any other manner,
any business or any Entity or division thereof; or (ii) any assets that are
material, individually or in the aggregate, to the Xxxxxxx Companies;
(e) subject to a Lien or sell, lease or otherwise dispose of any of
its properties or assets;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person or issue or sell any debt security of the Xxxxxxx
Companies, guarantee any debt security of another Person or enter into any "keep
well" or other agreement to maintain the financial condition of another Person,
make any loan, advance or capital contribution to, or investment in, any other
Person, or settle or compromise any material claim or litigation; or
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(g) authorize any of; or commit or agree to take any of; the foregoing
actions.
4.2 ACCESS TO INFORMATION. From the date hereof through the Closing Date,
the Xxxxxxx Companies and Parent shall afford to the other of them and the
other's accountants, counsel and other representatives reasonable access during
normal business hours (and at such other times as the parties may mutually
agree) upon reasonable prior notice and approval, which shall not be
unreasonably withheld, to its properties, books, contracts, commitments, records
and personnel and, during such period, shall furnish promptly to the other of
them all information concerning its business, properties and personnel as the
other may reasonably request. Parent and the Xxxxxxx Companies, and their
respective accountants, counsel and other representatives, shall, in the
exercise of the rights described in this Section 4.2, not unduly interfere with
the operation of the business of the other of them.
4.3 FILINGS; TAX ELECTIONS. The Xxxxxxx Companies shall promptly provide
Parent with copies of all filings made by the Xxxxxxx Companies with any
Governmental Entity in connection herewith and the transactions contemplated
hereby. The Xxxxxxx Companies shall, before settling or compromising any
material income tax liability of the Xxxxxxx Companies, consult with Parent and
its advisors as to the positions and elections that will be taken or made with
respect to such matter.
4.4 PUBLIC ANNOUNCEMENTS. The parties agree that, except as may otherwise
be required to comply with applicable laws and regulations (including applicable
securities laws) or to obtain consents required hereunder, public disclosure of
the transactions contemplated hereby shall be made only upon or after the
consummation of the Acquisition. Any such disclosure shall be coordinated by
Parent, and none of the Xxxxxxx Companies Shareholders shall make any such
disclosure without the prior written consent of Parent.
4.5 INDIRECT TAXES AND EXPENSES. Parent agrees that, to the extent it is
legally able to do so, Sub will pay all documentary stamps, filing fees and
recording fees, if any, and any penalties or interest with respect thereto,
payable in connection with consummation of the Acquisition.
4.6 FURTHER ASSURANCES. From time to time after the Closing Date, upon
the reasonable request of any party hereto, the other party or parties hereto
shall execute and deliver or cause to be executed and delivered such further
instruments, and take such further action, as the requesting party may
reasonably request in order to effectuate fully the purposes, terms and
conditions hereof. The Xxxxxxx Companies Sellers shall cooperate to ensure that
(a) each Sole Administrator of the Xxxxxxx Companies shall resign as such as
soon as possible; (b) they promptly deliver all documents and items of the
Xxxxxxx Companies (including, by way of example only, client lists, software,
shareholders books, minute books, keys and invoices) to Sub; (c) they furnish
any information regarding the Xxxxxxx Companies that is requested by Sub from
time to time; and (d) they cooperate with Sub at its request from time to time
in relationships with banks, clients and other Persons.
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4.7 FUTURE EMPLOYMENT. Messrs. Xxxxxxxxx Xxxxxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxxx Xxxxxxx and Xxxxxx Xxxxxx Xxxxxx Xxxxxx shall, effective as of the
Closing Date, each enter into an employment agreement with Sub, substantially in
the form of Exhibit "E" hereto ("Employment Agreements") or in such other form
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as agreed between each of them and Sub.
4.8 POST CLOSING.
(a) Within a reasonable period of time after the Closing, Sub will
permit the Xxxxxxx Companies Shareholders, or one or more Persons designated by
such Shareholders and approved by Parent, to subscribe to up to 10% of Sub's
then issued and outstanding share capital, and will if necessary amend its By-
Laws accordingly to provide for an increase in its share capital.
(b) If; within one year of the Closing Date, Parent receives a written
offer from a third party to Purchase Sub as a stand-alone Entity, then Parent
will furnish the Xxxxxxx Companies Shareholders notice thereof; providing them a
right of first negotiation. Parent may accept such third party offer unless (i)
within 10 business days of such notice, it has received a written offer from
such Shareholders, which in Parent's reasonable judgment at least matches each
term of such third party offer; and (ii) in accordance with the terms of that
matching offer, the transaction with such Shareholders actually closes within 30
days thereafter.
ARTICLE V
CONDITIONS PRECEDENT
5.1 CONDITIONS TO OBLIGATION OF THE XXXXXXX COMPANIES AND THE XXXXXXX
COMPANIES SHAREHOLDERS TO EFFECT THE ACQUISITION. The obligations of the Xxxxxxx
Companies and the Xxxxxxx Companies Shareholders to effect the Acquisition shall
be subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Parent and Sub shall have performed in all material respects their
respective agreements contained herein required to be performed at or prior to
the Closing Date, and the representations and warranties of Parent and Sub
contained herein shall be true when made and (except for representations and
warranties made as of a specified date, which need only be true as of such date)
at and as of the Closing Date as if made at and as of such time, except as
contemplated hereby;
(b) (i) the appropriate officers of Parent shall have executed and
delivered to the Xxxxxxx Companies at the Closing, a closing certificate and
incumbency certificate, substantially in the form of Exhibit "A-1" hereto, and
------------
(ii) the appropriate officers of Sub shall have executed and delivered to the
Xxxxxxx Companies at the Closing, a closing certificate and incumbency
certificate, substantially in the form of Exhibit "A-2" hereto;
------------
(c) Parent shall have obtained all of the Consents, if any, listed on
Schedule
--------
21
5.1(c) hereto;
-----
(d) there shall have been delivered to each of the Xxxxxxx Companies
Shareholders at the Closing, duly executed by Parent, an Agreement to be Bound
to the Registration Rights Agreement of Parent, dated as of the Closing Date
(the "Agreement to be Bound to the Registration Rights Agreement"), in the form
of Exhibit "B" hereto;
----------
(e) The Employment Agreements shall have been executed by Sub and
delivered to the respective employees; and
(f) Xxxxxxx Companies shall have received from Parent and Sub such
other documents as Xxxxxxx Companies' counsel shall have reasonably requested,
in form and substance reasonably satisfactory to Xxxxxxx Companies' counsel.
5.2 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT THE ACQUISITION.
The obligations of Parent and Sub to effect the Acquisition shall be subject to
the fulfillment, at or prior to the Closing Date, of the following conditions:
(a) The Xxxxxxx Companies and the Xxxxxxx Companies Sellers shall have
performed in all material respects their respective agreements contained herein
required to be performed at or prior to the Closing Date, and the
representations and warranties of the Xxxxxxx Companies and the Xxxxxxx
Companies Sellers contained herein shall be true when made and (except for
representations and warranties made as of a specified date, which need only be
true as of such date) at and as of the Closing Date as if made at and as of such
time, except as contemplated hereby;
(b) the appropriate officers of each of the Xxxxxxx Companies shall
have executed and delivered to Parent at the Closing, a closing certificate and
incumbency certificate, substantially in the form of Exhibits "C-1" and "C-2"
------------------------
hereto;
(c) The Xxxxxxx Companies and the Xxxxxxx Companies Sellers shall have
obtained or caused to be obtained all of the Consents, if any, listed on
Schedule 5.2(c) hereto;
--------------
(d) there shall have been delivered to Parent at the Closing, duly
executed by each of the Xxxxxxx Companies Shareholders and countersigned by
Xxxxxx Xxxxxxxxx Xxxxxxx, (i) an Agreement to be Bound to the Stockholders'
Agreement, in the form of Exhibit "D" hereto; and (ii) an Agreement to be Bound
----------
to the Registration Rights Agreement;
(e) as of the date three business days prior to the Closing Date the
Xxxxxxx Companies Debt shall be no greater than $18,463;
(f) The Employment Agreements shall have been executed by the
respective employees and delivered to Sub;
22
(g) Parent shall have received from the Xxxxxxx Companies or the
Xxxxxxx Companies Sellers, as the case may be, such other documents as Parent's
counsel shall have reasonably requested, in form and substance reasonably
satisfactory to Parent's counsel; and
(h) Parent shall have received evidence satisfactory to it that at the
Closing the assets and properties used in the Xxxxxxx Companies Business are
free and clear of all Liens other than Permitted Liens (as hereinafter defined).
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION BY PARENT.
(a) Parent shall indemnify and hold the Xxxxxxx Companies Sellers and
the Xxxxxxx Companies' directors, officers and employees (collectively, the
"Xxxxxxx Companies Indemnified Parties") harmless from and against, and agree
promptly to defend each of the Xxxxxxx Companies Indemnified Parties from and
reimburse each of the Xxxxxxx Companies Indemnified Parties for, any and all
losses, damages, costs, expenses, liabilities, obligations and claims of any
kind (including reasonable attorney fees and other legal costs and expenses)
(collectively, a "Xxxxxxx Companies Loss") that any of the Xxxxxxx Companies
Indemnified Parties may at any time suffer or incur, or become subject to, as a
result of or in connection with:
(i) any breach or inaccuracy of any of the representations and
warranties made by Parent or Sub in or pursuant hereto, or in any instrument,
certificate or affidavit delivered by Parent or Sub at the Closing in accordance
with the provisions hereof;
(ii) any failure by Parent or Sub to carry out, perform,
satisfy and discharge any of its respective covenants, agreements, undertakings,
liabilities or obligations hereunder or under any of the documents and materials
delivered by Parent pursuant hereto; and
(iii) any suit, action or other proceeding arising out of; or in
any way related to, any of the matters referred to in this Section 6.1(a).
(b) Notwithstanding any other provision hereof to the contrary,
Parent shall not have any liability under Section 6.1(a)(i) above (i) unless the
aggregate of all Xxxxxxx Companies Losses fore which Parent would be liable but
for this sentence exceeds, on a cumulative basis, an amount equal to $25,000,
and then only to the extent of such excess, (ii) for amounts in excess of
$240,000 in the aggregate, and (iii) unless the Xxxxxxx Companies Shareholders
have asserted a claim with respect to the matters set forth in Section
6.1(a)(i), or 6.1(a)(iii) to the extent applicable to Section 6.1(a)(i), within
two years of the Closing Date. Notwithstanding any implication to the contrary
contained herein, the parties acknowledge and agree that a decrease in the value
of Parent Stock would not, by itself; constitute a Xxxxxxx Companies Loss,
unless and to the extent a
23
decrease in the value of Parent Stock has been demonstrated to be as a result of
any event described in Sections 6.1(a)(i), (ii) or (iii) above.
6.2 INDEMNIFICATION BY THE XXXXXXX COMPANIES SELLERS.
(a) The Xxxxxxx Companies Sellers, jointly and severally, shall
indemnify and hold Parent, Sub, Surviving Corporation and their respective
shareholders, directors, officers and employees (collectively, the "Parent
Indemnified Parties") harmless from and against, and agree to defend promptly
each of the Parent Indemnified Parties from and reimburse each of the Parent
Indemnified Parties for, any and all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind (including reasonable attorneys'
fees and other legal costs and expenses) (collectively, a "Parent Loss") that
any of the Parent Indemnified Parties may at any time suffer or incur, or become
subject to, as a result of or in connection with:
(i) any breach or inaccuracy of any of the representations
and warranties made by Xxxxxxx Companies or the Xxxxxxx Companies Shareholders
or Owners in or pursuant hereto, or in any instrument certificate or affidavit
delivered by any of the same at the Closing in accordance with the provisions
hereof;
(ii) any failure by Xxxxxxx Companies or any of the Xxxxxxx
Companies Shareholders to carry out, perform, satisfy and discharge any of their
respective covenants, agreements, undertakings, liabilities or obligations
hereunder or under any of the documents and materials delivered by Xxxxxxx
Companies pursuant hereto; and
(iii) any suit, action or other proceeding arising out of;
or in any way related to, any of the matters referred to in this Section 6.2.
(b) Notwithstanding the above, none of the Xxxxxxx Companies Sellers
shall have any liability under Section 6.2(a)(i) above (i) unless the aggregate
of all Parent Losses for which the Xxxxxxx Companies Sellers would be liable but
for this sentence exceeds, on a cumulative basis, an amount equal to $25,000,
and then only to the extent of such excess, (ii) for amounts in excess of
$240,000 in the aggregate, and (iii) unless Parent has asserted a claim with
respect to the matters set forth in Sections 6.2(a)(i), or 6.2(a)(iii) (to the
extent applicable to Section 6.2(a)(i)) within two years of the Closing Date,
except with respect to the matters arising under Sections 2.18, 2.19, 2.20 or
2.24 hereof; in which event Parent must have asserted a claim within the
applicable statute of limitations. Notwithstanding any implication to the
contrary contained herein, the parties acknowledge and agree that a decrease in
the value of Parent Stock would not, by itself; constitute a Parent Loss, unless
and to the extent a decrease in the value of Parent Stock has been demonstrated
to be as a result of any event described in Sections 6.2(a)(i), (ii) or (iii)
above.
6.3 NOTIFICATION OF CLAIMS; ELECTION TO DEFEND
(a) A party entitled to be indemnified pursuant to Section 6.1 or 6.2
hereof; as the case may be (the "Indemnified Party"), shall notify the party
liable for such indemnification (the
24
"Indemnifying Party") in writing of any claim or demand (a "Claim") that the
Indemnified Party has determined has given or could give rise to a rights of
indemnification hereunder. Subject to the Indemnifying Party's rights to defend
in good faith third party claims as hereinafter provided, the Indemnifying Party
shall satisfy its obligations under this Article VI within 30 days after the
receipt of written notice thereof from the Indemnified Party. Any amounts paid
thereafter shall include interest thereon for the period commencing at the end
of such 30-day period and ending on the actual date of payment, at a rate of 15%
per annum, or, if lower, at the highest rate of interest permitted by applicable
law at the time of such payment.
(b) If the Indemnified Party shall notify the Indemnifying Party of
any Claim pursuant to Section 8.3(a) hereof, and if such Claim relates to a
Claim asserted by a third party against the Indemnified Party that the
Indemnifying Party acknowledges is a Claim for which it must indemnify or hold
harmless the Indemnified Party under Section a 6.1 or 6.2 hereof, as the case
may be, the Indemnifying Party shall have the right, at its sole cost and
expense, to employ counsel of its own choosing to defend any such Claim asserted
against the Indemnified Party. Notwithstanding anything to the contrary in the
preceding sentence, if the Indemnified Party (i) reasonably believes that its
interests with respect to a Claim (or any material portion thereof) are in
conflict with the interests of the Indemnifying Party with respect to such Claim
(or portion thereof), and (ii) promptly notifies the Indemnifying Party, in
writing, of the nature of such conflict, then the Indemnified Party shall be
entitled to choose, at the sole cost and expense of the Indemnifying Party,
independent counsel to defend such Claim (or the conflicting portion thereof).
The Indemnified Party shall have the right to participate in the defense of any
Claim at its own expense (except to the extent provided in the preceding
sentence), but the Indemnifying Party shall retain control over such litigation
(except as provided in the preceding sentence). The Indemnifying Party shall
notify the Indemnified Party in writing, as promptly as possible (but in any
case before the due date for the answer or response to a Claim) after receipt of
the notice of Claim given by the Indemnified Party to the Indemnifying Party
under Section 6.3(a) hereof, of its election to defend in good faith any such
third party Claim. For so long as the Indemnifying Party is defending in good
faith any such Claim asserted by a third party against the Indemnified Party,
the Indemnified Party shall not settle or compromise, such Claim without the
prior written consent of the Indemnifying Party. The Indemnified Party shall
cooperate with the Indemnifying Party in connection with any such defense and
shall make available to the Indemnifying Party or its agents all records and
other materials in the Indemnified Party's possession reasonably required by it
for its use in contesting any third party Claim; provided, however, that the
Indemnifying Party shall have agreed, in writing, to keep such records and other
materials confidential except (i) to the extent required for defense of the
relevant Claim, or (ii) as required by law or court order. Whether or not the
Indemnifying Party elects to defend any such Claim, the Indemnified Party shall
have no obligations to do so. Within 30 days after a final determination
(including a settlement) has been reached with respect to any Claim contested
pursuant to this Section 6.3(b), the Indemnifying Party shall satisfy its
obligations hereunder with respect thereto. Any amount paid thereafter shall
include interest thereon for the period commencing at the end of such 30-day
period and ending on the actual date of payment, at a rate of 15% per annum, or,
if lower, at the highest rate of interest permitted by applicable law at the
time of such payment.
25
6.4 PAYMENTS. Any amount payable under this Article VI shall be paid in
U.S. Dollars.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Acquisition Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of Parent and the Xxxxxxx Companies;
(b) by the Xxxxxxx Companies, upon a material breach hereof on the
part of Parent or Sub which has not been cured and which would cause any
condition set forth in Section 5.1 hereof to be incapable of being satisfied by
July 31, 1998;
(c) by Parent, upon a material breach hereof on the part of either of
the Xxxxxxx Companies or any of the Xxxxxxx Companies Shareholders which has not
been cured and which would cause any condition set forth in Section 5.2 hereof
to be incapable of being satisfied by July 31, 1998;
(d) by Parent or the Xxxxxxx Companies if any court of competent
jurisdiction shall have issued, enacted, entered, promulgated or enforced any
order, judgment, decree, injunction or ruling which restrains, enjoins or
otherwise prohibits the Acquisition and such order, judgment, decree, injunction
or ruling shall have become final and nonappealable; or
(e) by either Parent or the Xxxxxxx Companies if the Acquisition shall
not have been consummated on or before July 31, 1998 (provided the terminating
party is not otherwise in material breach of its representations, warranties or
obligations hereunder).
7.2 FEES AND EXPENSES.
(a) If the Acquisition is consummated, or if the Acquisition is not
consummated for a reason other than the willful and material breach hereof by a
party, all fees and expenses (including agents, counsel and other advisors)
incurred in connection herewith and the transactions contemplated hereby shall
be paid by the party incurring such fees or expenses.
(b) If the Acquisition is not consummated because of a willful and
material breach hereof by any party, the nonbreaching party or parties shall be
entitled to pursue all legal and equitable remedies against the breaching party
for such breach including specific performance and all fees and expenses
incurred by the nonbreaching party or parties in connection with enforcing its
or their rights hereunder with respect to such breach shall be paid by the
breaching party.
26
7.3 AMENDMENT. This Acquisition Agreement may be amended by Parent, Sub,
the Xxxxxxx Companies and the Xxxxxxx Companies Sellers, but only by an
instrument in writing signed on behalf of them.
7.4 WAIVER. At any time prior to the Closing Date, the parties hereto may,
to the extent permitted by applicable law, (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto,
(ii) waive any inaccuracies in the representations and warranties by any other
party contained herein or in any documents delivered by any other party pursuant
hereto and (iii) waive compliance with any of the agreements of any other party
or with any conditions to its own obligations contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
8.1 SURVIVAL; RECOURSE. None of the agreements contained herein shall
survive the Acquisition, except that (i) the covenants contained in Article IV
hereof and the obligations to indemnify contained in Article VI hereof shall
survive the Acquisition (except to the extent a shorter period of time is
explicitly specified therein) and (ii) the representations and warranties made
in Articles II and III hereof shall survive the Acquisition, and shall survive
any independent investigation by the parties, and any dissolution, merger or
consolidation of the Xxxxxxx Companies or Parent, and shall bind the legal
representatives, assigns and successors of the Xxxxxxx Companies, the Xxxxxxx
Companies Shareholders and Parent, for a period of two years after the Closing
Date (other than the representations and warranties contained in Sections 2.18,
2.19,2.20 and 2.24 hereof, which shall survive for the applicable statute of
limitations).
8.2 NOTICES. All notices or other communications under this Agreement
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in Person, by telecopy (with confirmation of
receipt), or by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to Xxxxxxx Companies: Xxxxxxx New Media, S.L./ The Other Media, S.L.
Tinte no.2,28802 Xxxxxx de Henares
Madrid, Spain
Attn.: Xx. Xxxxxx X. Xxxxxx Xxxxxx
Mr. Xxxxxxxxx Xxxxxxxxx Xxxxxxx
Telephone: (00-00) 000-0000
Telecopy: (00-00) 000-0000
If to the Sellers: To the address listed under the signature
line of the applicable Xxxxxxx Companies Seller
27
If to Parent or Sub: IXL Holdings, Inc.
Two Park Place
0000 Xxxxx Xx., 0xx Xxxxx
Xxxxxxx, XX 00000 XXX
Attention: Xxxxx X. Xxxxxx
Telecopy: 404/267-3801
Telephone: 404/000-0000
With copies to: Xxxxxx & Xxxxxx, A Professional Corporation
One Buckhead Plaza
3060 Peachtree Rd., Ste. 1100
Xxxxxxx, XX 00000 XXX
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: 404/233-5824
Telephone: 404/000-0000
and to: Xxxxx & Company
000 Xxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000 XXX
Attention: Xxxxx X. Xxxxxxx XX, Esq.
Telecopy: 212/223-2379
Telephone: 212/000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
8.3 ENTIRE AGREEMENT. The exhibits and schedules hereto are incorporated
herein by reference. This Agreement and the documents, schedules and instruments
referred to herein and to be delivered pursuant hereto constitute the entire
agreement between the parties pertaining to the subject matter hereof, and
supersede all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof,
except for the Non-Disclosure Agreement dated as of June 25, 1998, which is
incorporated herein by reference. There are no other representations or
warranties, whether written or oral, between the parties in connection the
subject matter hereof, except as expressly set forth herein.
8.4 ASSIGNMENTS; PARTIES IN INTEREST. Neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that the rights, interests, and
obligations of Sub hereunder may be assigned to any direct wholly owned Spanish
subsidiary of Parent without such prior consent. Subject to the preceding
sentence, this Agreement shall be binding upon and inure solely to the benefit
of each party hereto, and nothing herein, express or implied, is intended to or
shall confer upon any Person not a party hereto any right, benefit or remedy of
any nature whatsoever under or by reason hereof, except as otherwise
28
provided herein.
8.5 GOVERNING LAW; ARBITRATION. The language of this Agreement is English.
This Agreement shall be governed by common Spanish law.
The parties agree to submit the solution of all disputes arisen or which
may arise as a result of the interpretation of or compliance with this Agreement
to legal arbitration, pursuant to Law 36/1988 of 5 December.
(a) The arbitration group and the experts--The parties agree that such
legal arbitration will be resolved by an arbitrator. The arbitrator shall
necessarily be a practicing lawyer with at least 10 years' experience, belonging
to the Professional Association of Lawyers of Madrid. The arbitrator will be
appointed by agreement of the parties and, in default of agreement of the
parties, by the Xxxx of the Bar Association of Madrid. If the arbitrator is
unable to perform his function, either before the arbitration proceedings begin
or in the course thereof, then his substitute shall be appointed in accordance
with the procedure established for appointing the arbitrator according to the
preceding sentence. In the event that any of the contingencies subject to
arbitration arises, either of the parties may require that the arbitration
proceedings commence, by giving notice hereunder to the other party. The
arbitrator shall be responsible for issuing notices to the parties and for the
receipt of briefs and documents. In the course of its functions, the arbitrator
may obtain the assistance of as many experts as he deems necessary. These
experts shall advise the arbitrator on the issues within their field of
knowledge. Both the arbitrator and the experts, if applicable, shall have the
right to receive fees in remuneration. The arbitrator and, if applicable, the
experts, prior to commencement of the arbitration proceedings, may ask the
parties for a sum on account of their final fees as a provision of funds. Half
of this sum shall be paid by each party. The arbitrator shall be obliged to
carry out his duty of resolving the conflict submitted for his consideration in
the form and term established by law and herein, and the arbitrator who does not
thus comply shall be held liable.
(b) The arbitration proceedings shall take place in Madrid and shall
be conducted in Spanish. The arbitration proceedings shall be subject to the
principles of hearing, contradiction and equality between the parties and shall
be divided into three different phases: allegations, evidence and conclusions.
The maximum term for completing the arbitration proceedings shall be four
calendar months as from the date on which the parties receive notice of the
acceptance by the arbitrator of his position. If they consider it necessary,
then the parties may agree in writing to extend the above mentioned term. The
parties may themselves participate in the proceedings or may be represented by a
practising lawyer.
(i) Allegations. The allegations shall be filed in writing by
the parties within the term indicated by the arbitrator for this purpose. If the
arbitrator considers it convenient, then it may, during this phase, request the
parties to provide complementary clarifications.
(ii) Evidence. The evidence proposed by the parties and admitted
as pertinent by the arbitrator shall be brought. The arbitrator may resolve
whether evidence which has
29
not been requested by the parties also be brought.
(iii) Conclusions. The conclusion phase may be oral or written, as
decided by the arbitrator.
(c) The award--The proceedings shall conclude with a reasoned majority
award issued by the arbitrator. It shall be put into writing and signed by the
arbitrator. The award shall contain at least the points set forth in Articles 32
and 35 of the Arbitration Law. The award shall be certified by a notary before
the above mentioned period of four months or, if applicable, the extension
thereof, has elapsed. After certification by a notary, the award shall be
notified to the parties hereunder. The parties undertake to accept and comply
with the arbitration award issued.
(d) Subsidiary legislation and jurisdiction--For all issues not
specifically provided for in the present arbitration agreement, the rules and
provisions contained in the Law 36/1988 of 5 December on Arbitration shall be
followed. If, for any reason, the arbitration is not concluded pursuant to the
above, then the parties agree to submit themselves to the jurisdiction and
competency of the Courts and Tribunals of the city of Madrid, expressly waiving
any other jurisdiction.
8.6 HEADINGS. The descriptive headings herein are inserted for convenience
of reference only and are not intended to be part of or to affect the meaning or
interpretation hereof.
8.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute a single agreement.
8.8 SEVERABILITY. If any term or other provision hereof is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions hereof shall nevertheless remain in full force
and effect so long as the economics or legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse to any
party. Upon determination that any term or other provision hereof is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
8.9 CERTAIN DEFINITIONS. As used herein:
(a) the term "Permitted Liens" shall mean (a) Liens for taxes,
assessments or other governmental charges or levies not yet due; (b) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other Liens imposed by law created in the ordinary course of business for
amounts not yet due; (c) Liens incurred or deposits made in the ordinary course
of business in connection with worker's compensation, unemployment insurance or
other types of social security; (d) minor defects of title, easements, rights-
of-way, restrictions and
30
other similar charges or encumbrances not materially detracting from the value
of the Xxxxxxx Companies Real Property or interfering with the ordinary conduct
of any of the Xxxxxxx Companies Business; and (e) those Liens listed on Schedule
--------
8.9;
---
(b) (i) any representation or warranty stated to be made "to the
knowledge" of a party shall refer to such party's knowledge following reasonable
inquiry as to the matter in question; and (ii) any representation or warranty
stated to be made "to the knowledge of Xxxxxxx Companies" shall refer to the
knowledge, subject to clause (i) above, of any of the Xxxxxxx Companies
Shareholders; and
(c) the term "Subsidiary" or "Subsidiaries" means any Entity of which
Parent (either alone or through or together with any other Subsidiary) owns,
directly or indirectly, stock or other equity interests the holders of which are
entitled to more than 50% of the vote for the election of the board of directors
or other governing body of such Entity (including Sub); provided, however, that
with respect to the Parent, the terms "Subsidiary" and "Subsidiaries" shall not
include the Xxxxxxx Companies or University Netcasting, Inc.
8.10 CONFIDENTIALITY. The Confidentiality Agreement is incorporated herein
by reference.
- SIGNATURES ON THE FOLLOWING PAGE -
31
IN WITNESS WHEREOF, Parent, Sub and the Xxxxxxx Companies have caused this
Agreement to be signed and delivered by their respective duly authorized
officers, and each Xxxxxxx Companies Seller has signed and delivered this
Agreement, all as of the date first written above.
"XXXXXXX"
Xxxxxxx New Media, S.L., a Spanish corporation
By: /s/ Xxxxxx Xxxxxx Xxxxxx
----------------------------------------------
Title:___________________________________________
"THE OTHER MEDIA"
The Other Media, S.L., a Spanish corporation
By: /s/ Xxxxxxxxx Xxxxxxxxx Xxxxxxx
----------------------------------------------
Title: SOLE ADMINISTRATOR
-------------------------------------------
"PARENT"
IXL Holdings, Inc., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Title: Xxxxx X. Xxxxxx, Executive Vice President
"SUB"
iXL-Madrid, S.A., a Spanish corporation
By: Xxxx X. Xxxxxxx
----------------------------------------------
Title: Xxxx X. Xxxxxxx, Managing Director
- SIGNATURES CONTINUE ON THE FOLLOWING PAGE -
32
"XXXXXXX COMPANIES SHAREHOLDERS"
/s/ Xxxxxx Xxxxxx Xxxxxx Xxxxxx
--------------------------------------------------
Xx. Xxxxxx Xxxxxx Xxxxxx Xxxxxx
Address: Spanish Passport Xx. 0000000-X
Xxxx xx Xxxxxxx, 0-0X
Xxxxxx de Henares, E28805, Madrid
/s/ Xxxxxxxxx Xxxxxxxxx Xxxxxxx
--------------------------------------------------
Mr. Xxxxxxxxx Xxxxxxxxx Xxxxxxx
Address: Spanish Passport No. 8975203-M
Xxxx Astrana Marin, 8-5 Izda.
Xxxxxx de Henares, E28807, Madrid
"XXXXXXX COMPANIES OWNERS"
/s/ Xxxxxxxxx Xxxxxxxxx Xxxxxxx
--------------------------------------------------
Mr. Xxxxxxxxx Xxxxxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxx Xxxxxx Xxxxxx
--------------------------------------------------
Xx. Xxxxxx Xxxxxx Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxxxx Xxxxxxx
--------------------------------------------------
Xx. Xxxxxx Xxxxxxxxx Xxxxxxx
Address: Spanish Passport Xx. 0000000-X
Xxxxx Xxx Xxxxxxxxx xx Xxxx 00-0X
Xxxxxx xx Xxxxxxx, X00000, Madrid
33
Exhibits
--------
Parent's Closing Certificate.................................... Exhibit A-1
Sub's Closing Certificate....................................... Exhibit A-2
Agreement to be Bound to the Registration Rights Agreement...... Exhibit B
Closing Certificate of Xxxxxxx Companies........................ Exhibit C-1
Incumbency Certificate of Xxxxxxx Companies..................... Exhibit C-2
An Agreement to be Bound to the Stockholders Agreement.......... Exhibit D
Employment Agreements........................................... Exhibit E
List of Schedules
-----------------
Schedule 2.3(a) Capitalization of Xxxxxxx
Schedule 2.3(b) Liens on Xxxxxxx Stock
Schedule 2.5 Conflicts, Required Filings & Consents
Schedule 2.6 Financial Statements
Schedule 2.7 Exceptions to Absence of Changes
Schedule 2.8 Undisclosed Liabilities of Xxxxxxx
Schedule 2.9 Exceptions to Title to Properties
Schedule 2.10 Bad Equipment of Xxxxxxx
Schedule 2.12 Liens on Xxxxxxx Real Property
Schedule 2.13 Leases of Xxxxxxx
Schedule 2.14 Contracts of Xxxxxxx
Schedule 2.15 Directors and Officers of Xxxxxxx
Schedule 2.16 Payroll Report
Schedule 2.17 Litigation of Xxxxxxx
Schedule 2.18 Employee Benefit Plans/Labor Relations
Schedule 2.19 Liability under Benefit Plans
Schedule 2.21 Xxxxxxx Permits
Schedule 2.23 Xxxxxxx Brokers
Schedule 2.25 Interest in Customers, Suppliers & Competition
Schedule 2.28 Xxxxxxx Insurance
Schedule 3.3 Conflicts, Required Filings & Consents of
Parent or Sub
Schedule 3.4 Parent Litigation
Schedule 3.5 Brokers of Parent or Sub
Schedule 3.6 Outstanding Obligations to issue options,
warrants or other Parent Stock Rights
Schedule 3.7 Parent Subsidiaries
Schedule 3.9 Parent Undisclosed Liabilities
Schedule 3.13 Exceptions to Parent Absence of Changes
Schedule 5.1(c) Parent Consents
Schedule 5.2(c) Xxxxxxx Companies Consents
Schedule 8.9 Permitted Liens
