ST&B Draft 12/2/99
8,200,000 SHARES
EL SITIO, INC.
COMMON SHARES
UNDERWRITING AGREEMENT
December __, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX BROTHERS INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX BARNEY INC.
WIT CAPITAL CORPORATION
As Representatives of the several
Underwriters named in Schedule 1
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
El Sitio, Inc., a British Virgin Islands company (the "Company"),
proposes to sell to the Underwriters named in Schedule 1 hereto (the
"Underwriters"), for which Credit Suisse First Boston Corporation ("CSFBC"),
Xxxxxx Brothers Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
Xxxxxxx Xxxxx Barney Inc. and Wit Capital Corporation are acting as
Representatives (the "Representatives"), 8,200,000 common shares, par value
U.S.$0.01 per share (the "Common Shares") (such 8,200,000 Common Shares being
referred to herein as the "Firm Shares"). In addition, the Company proposes to
grant to the Underwriters an option to purchase up to an additional 1,230,000
Common Shares on the terms and for the purposes set forth in Section 2 hereof
(the "Option Shares"). The Firm Shares and the Option Shares, if purchased, are
hereinafter collectively called the "Shares".
As part of the offering contemplated by this Agreement, Xxxxxx Brothers
Inc. (the "Designated Underwriter") has agreed to reserve out of the Firm Shares
to be purchased by it pursuant to this Agreement, up to 820,000 Shares, for sale
to the Company's directors, officers, employees and other persons associated
with the Company (collectively, "Directed Share Participants"), as set forth in
the Prospectus (as defined herein) under the heading "Underwriting" (the
"Directed Share Program"). The Firm Shares to be sold by the Designated
Underwriter pursuant to the Directed Share Program (the "Directed Shares") will
be sold by the Designated Underwriter
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pursuant to this Agreement at the public offering price. Any Directed Shares not
orally confirmed for purchase by a Directed Share Participant by the end of the
business day on which this Agreement is executed will be offered to the public
by the Underwriters as set forth in the Prospectus.
This is to confirm the agreement concerning the purchase of the Shares
from the Company by the Underwriters.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:
(a) A registration statement on Form F-1 (Registration No.
333-91263), and one or more amendments thereto, with respect to the
Shares have (i) been prepared by the Company in conformity with the
requirements of the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the U.S. Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act; and
a second registration statement on Form F-1 with respect to the Shares
(i) may also be prepared by the Company in conformity with the
requirements of the Securities Act and the Rules and Regulations and
(ii) if to be so prepared, will be filed with the Commission under the
Securities Act pursuant to Rule 462(b) of the Rules and Regulations on
the date hereof. Copies of the first such registration statement and the
amendments to such registration statement, together with the form of any
such second registration statement, have been delivered by the Company
to the Representatives. As used in this Agreement, "Effective Time"
means (i) with respect to the first such registration statement, the
date and the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared effective
by the Commission and (ii) with respect to any second registration
statement, the date and time as of which such second registration
statement is filed with the Commission, and "Effective Times" is the
collective reference to both Effective Times; "Effective Date" means (i)
with respect to the first such registration statement, the date of the
Effective Time of such registration statement and (ii) with respect to
any second registration statement, the date of the Effective Time of
such second registration statement, and "Effective Dates" is the
collective reference to both Effective Dates; "Preliminary Prospectus"
means each prospectus included in any such registration statement, or
amendments thereof, before it became effective under the Securities Act
and any prospectus filed with the Commission by the Company with the
consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Primary Registration Statement" means the first
registration statement referred to in this Section 1(a), as amended at
its Effective Time; "Rule 462(b) Registration Statement" means the
second registration statement, if any, referred to in this Section 1(a),
as filed with the Commission; and "Registration Statements" means both
the Primary Registration Statement and any Rule 462(b) Registration
Statement, including in each case all information contained in the final
prospectus filed with the Commission
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pursuant to Rule 424(b) of the Rules and Regulations in accordance with
Section 5(a) hereof and deemed to be a part of the Registration
Statements as of the Effective Time of the Primary Registration
Statement pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus, as first
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
(b) The Primary Registration Statement conforms, and the Rule
462(b) Registration Statement, if any, the Prospectus and any further
amendments or supplements to the Registration Statements or the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform, in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable Effective Date (as to the
Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED that
no representation or warranty is made as to information contained in or
omitted from the Registration Statements or the Prospectus in reliance
upon and in conformity with written information furnished to the Company
through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The Company has been duly incorporated and is validly
existing as a company in good standing under the laws of the British
Virgin Islands. Each of the subsidiaries of the Company has been duly
organized and is validly existing as a corporation, company or other
corporate entity, as the case may be, in good standing, if applicable,
under the laws of its respective jurisdiction of organization. Each of
the Company and its subsidiaries is duly qualified to do business and is
in good standing in each jurisdiction in which its respective ownership
or lease of property or assets or the conduct of its respective
businesses requires such qualification, and has all power and authority
necessary to own or hold its respective properties or assets and to
conduct the businesses in which it is engaged. El Sitio Argentina S.A.,
O Site Entretenimentos Ltda., El Sitio Entretenimientos, S.A. de C.V.,
El Sitio U.S.A., Inc. and El Sitio (Uruguay) Sociedad Anonima, each of
which is a subsidiary of the Company, are the sole "significant
subsidiaries" (as defined in Section 16 hereof) of the Company.
(d) The Company has an authorized capitalization as set forth in
the Prospectus; all of the issued and outstanding Common Shares have
been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; there are no authorized classes of capital stock of the
Company other than the Common Shares and ______ Class A convertible
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preferred shares, par value U.S.$0.01 per share ( "Class A Convertible
Preferred Shares"), which will automatically convert into Common Shares
on the First Delivery Date (as defined in Section 4 hereof) and
1,111,111 Class B convertible preferred shares, par value U.S.$0.01 per
share (the "Class B Convertible Preferred Shares"); and all of the
issued and outstanding shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable and (other than a de minimis number of shares
required in certain jurisdictions to satisfy diversity of ownerships
requirements) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(e) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable; the holders
of the Shares will have no liability under the laws of the British
Virgin Islands for any debt or other obligation of the Company towards
third parties in their capacity as holders thereof; the Shares will
conform to the description thereof contained in the Prospectus; except
as described in the Prospectus, there are no outstanding securities
convertible into or exchangeable for, or warrants, rights or options to
purchase from the Company and its subsidiaries, or obligations of the
Company and its subsidiaries to issue, any class of capital stock of the
company or any of its subsidiaries; and except as described in the
Prospectus, there are no restrictions on transfer or voting of any
capital stock of the Company pursuant to the Company's Amended and
Restated Memorandum of Association and Amended and Restated Articles of
Association (the "Memorandum and Articles of Association") or any
agreement to which the Company is a party or by which it may be bound or
to which any of its property or assets may be subject.
(f) The Company has full power and authority to execute, deliver
and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby (including, without limitation, the
issuance, sale and delivery of the Shares).
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles and except, further, as enforceability of indemnification
provisions may be limited by considerations of public policy.
(h) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby
will not (A) conflict with or result in a breach or violation of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or
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instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any
of the properties or assets of the Company or any of its subsidiaries is
subject, (B) result in any violation of the Company's Memorandum and
Articles of Association or of the charter, ESTATUTOS, by-laws or any
other constitutive document of any of the Company's subsidiaries or (C)
result in any violation of any statute or any regulation, rule or order
of any governmental agency or body or court having jurisdiction over the
Company or any of its subsidiaries or any of their properties or assets.
(i) No consent, approval, authorization or order of, or filing
or registration with, any governmental agency or body or court is
required for the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby, except for the registration of the Shares under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the U.S. Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and applicable U.S. state
securities or "blue sky" laws in connection with the purchase and
distribution of the Shares by the Underwriters and except for the filing
with the British Virgin Islands Registrar of Companies of any amendment
to the Company's Memorandum and Articles of Association pursuant to
Section 7(r) hereof.
(j) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
other person which grant such person the right to require the Company to
file a registration statement under the Securities Act with respect to
any securities of the Company owned or to be owned by such person or to
require the Company to include such securities as part of the securities
registered pursuant to the Registration Statements or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(k) Except for offers and sales of the Company's Class A
Convertible Preferred Shares and Class B Convertible Preferred Shares,
and Common Shares in respect of outstanding options, rights or warrants,
in each case as described in the Prospectus, the Company has not offered
or sold any Common Shares or securities convertible or exchangeable into
Common Shares during the six-month period preceding the date of the
Prospectus (including, without limitation, any offers or sales pursuant
to (i) Section 4(2) of , or Regulation D under, the Securities Act or
(ii) Rule 144A under, or Regulation S of, the Securities Act). The offer
and sale by the Company of its Class A Convertible Preferred Shares and
Class B Convertible Preferred Shares as described in the Prospectus and
in Item 15 of the Primary Registration Statement should not have been,
and should not be, required to be integrated with the offering of the
Shares as contemplated under this Agreement and, accordingly, to be
registered under the Securities Act.
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(l) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus; and, since such date, there has not been any change in
the capital stock, any increase in current liabilities or any decrease
in shareholders' equity of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, properties,
results of operations, financial condition or prospects of the Company
and its subsidiaries taken as a whole ( "Material Adverse Effect"),
otherwise than as set forth in the Prospectus.
(m) The consolidated financial statements of the Company and its
subsidiaries and the statement of historical net assets to be sold by
IMPSAT Corporation at September 30, 1999 and the statements of net
revenues and direct costs and expenses for the retail dial-up access
businesses of each of IMPSAT S.A. (Argentina), MANDIC INTERNET LTDA.
(formerly XXXXXX.XXX LTDA.) (Brazil) and IMPSAT S.A. (Colombia)
(collectively, the "IMPSAT Entities") filed as part of the Registration
Statements or included in the Prospectus present fairly, in all material
respects, the financial condition and results of operations of the
entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with U.S. generally
accepted accounting principles applied on a consistent basis throughout
the periods indicated. The summary financial data and selected financial
data included in the Registration Statements and the Prospectus have
been fairly and accurately extracted from the financial statements and
pro forma consolidated financial information of the Company filed as
part of the Registration Statements or included in the Prospectus. The
pro forma consolidated financial information included in the Prospectus
(i) is presented fairly in all material respects, (ii) has been prepared
in accordance with the Rules and Regulations with respect to pro forma
financial statements and (iii) has been properly compiled on the bases
described therein, and the assumptions used in the preparation of the
pro forma consolidated financial information included in the Prospectus
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein.
(n) No forward-looking statement (with the meaning to Section
27A of the Securities Act and Section 21E of the Exchange Act) contained
in the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(o) Deloitte & Touche LLP and its affiliates in Argentina,
Brazil and Colombia (collectively, "Deloitte & Touche"), which have
certified the financial statements of the Company and of the IMPSAT
Entities, whose reports appear in the
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Prospectus and which have delivered the initial comfort letter referred
to in Section 5(q) hereof, are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(p) Each of the Company and its subsidiaries owns, leases or
licenses all properties and assets necessary to conduct its business as
presently conducted and as proposed to be conducted.
(q) Neither the Company nor any of its subsidiaries owns any
real property; the Company and each of its subsidiaries have good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company and its
subsidiaries; and all real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries.
(r) Except as set forth in the Prospectus, each of the Company
and its subsidiaries possesses adequate certificates, authorities,
approvals, licenses or permits issued by appropriate governmental
agencies or bodies necessary to conduct its business as presently
conducted and as proposed to be conducted, and has not received any
notice of proceedings relating to the revocation or modification of any
such certificate, authority, approval, license or permit.
(s) The Company and each of its subsidiaries carry, or are
covered by, insurance from insurers of recognized financial
responsibility in such amounts and covering such risks as is adequate
for the conduct of their respective businesses and the value of their
respective properties and as is prudent and customary for companies
engaged in similar businesses in similar industries; all policies of
insurance insuring the Company or any of its subsidiaries or their
respective businesses, assets, directors, officers and employees are in
full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all
material respects; and there are no claims by the Company or any of its
subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation
of rights clause; neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for; and neither the
Company nor any such subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that could not
reasonably be expected to have a Material Adverse Effect.
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(t) Except as set forth in the Prospectus, the Company and each
of its subsidiaries own or possess adequate rights to use all material
uniform resource locators (URLs), patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service
xxxx registrations, copyrights and licenses necessary for them to
conduct their respective businesses as now conducted and as proposed to
be conducted and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of any other
person or entity.
(u) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse
Effect; and to the Company's knowledge, no such proceedings are
threatened or contemplated by any governmental agency or body or
threatened by any other person or entity.
(v) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to either of the
Registration Statements by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statements.
(w) No relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries on the one hand, and the
directors, officers, shareholders, customers or suppliers of the Company
or such subsidiary, as the case may be, on the other hand, which is
required to be described in the Prospectus which is not so described.
(x) No labor disturbance by the employees of the Company or its
subsidiaries exists or, to the knowledge of the Company, is imminent,
which could reasonably be expected to have a Material Adverse Effect.
Each of the Company and its subsidiaries is in compliance in all
material respects with all applicable laws in their respective
jurisdictions relating to employees (including, without limitation, laws
relating to pension contributions and obligations).
(y) Each of the Company and its subsidiaries has filed with all
appropriate taxing authorities all material income, franchise or other
tax returns required to be filed through the date hereof and has paid
all taxes due thereon; each such tax return, report or other
information, was, when filed, accurate and complete in all material
respects; and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the Company
have any knowledge of any tax deficiency which, if determined adversely
to the Company or any of its subsidiaries, could reasonably be expected
to have) a Material Adverse Effect.
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(z) All dividends and other distributions properly declared and
payable on the Shares may under the current laws and regulations of the
British Virgin Islands be paid in U.S. dollars that may be freely
transferred from or out of the British Virgin Islands without the
necessity of obtaining any consents, approvals, authorizations, orders
or clearances from or registering with any governmental agency or body
or court of the British Virgin Islands.
(aa) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or
on behalf of the Underwriters to the government of the British Virgin
Islands or any political subdivision or taxing authority thereof or
therein in connection with (i) the issuance and sale of the Shares by
the Company to the Underwriters in accordance with this Agreement, (ii)
the delivery of the Shares to or for the respective accounts of the
Underwriters in the manner contemplated in this Agreement or (iii) the
resale and delivery by the Underwriters of the Shares to the initial
purchasers therefrom as contemplated in the Prospectus.
(bb) The Common Shares have been approved for listing, subject
only to official notice of issuance, on The Nasdaq Stock Market's
National Market (the "Nasdaq National Market").
(cc) None of the Company, any subsidiary of the Company or any
director or officer of the Company or of any subsidiary of the Company
is (i) a director, officer, or partner of any brokerage firm, broker or
dealer that is a member of the National Association of Securities
Dealers, Inc. ( "NASD"; and each such member, an "NASD member") or (ii)
directly or indirectly, a "person associated with" a NASD member or an
"affiliate" of a NASD member, as such terms are used in the NASD by-laws
or rules.
(dd) Since the date as of which information is given in the
Prospectus, and except as set forth in the Prospectus, the Company has
not (i) issued or granted any securities, (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations
which were incurred in the ordinary course of business, (iii) entered
into any transaction not in the ordinary course of business or (iv)
declared or paid any dividend on the Common Shares.
(ee) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary
to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted
only in accordance with management's authorization and (D) the reported
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accountability for its assets is compared with existing assets at
reasonable intervals.
(ff) Neither the Company nor any of its subsidiaries, nor any
director, officer, employee, authorized agent or other person acting on
behalf of the Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended;
or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(gg) Neither the Company nor any of its subsidiaries (i) is in
violation of, in the case of the Company, its Memorandum and Articles of
Association, and in the case of each such subsidiary, of its charter,
ESTATUTOS, by-laws or any other constitutive document, as the case may
be, (ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its properties or assets is subject or (iii) is in violation in
any material respect of any statute or any rule, regulation or order of
any governmental agency or body or court to which it or its properties
or assets may be subject.
(hh) For the purpose described in Section 18 hereof, under the
laws of the State of New York relating to submission to jurisdiction,
the Company has validly and irrevocably submitted to the jurisdiction of
any New York state or U.S. federal court located in the Borough of
Manhattan, New York City, has validly and irrevocably waived any
objection to the venue of a proceeding in any such court, and has
validly and irrevocably appointed CT Corporation System as its
authorized agent for service of process.
(ii) As of the date hereof, neither the Company nor any of its
subsidiaries is, or intends to conduct its business activities in such a
manner that it would become, and, after giving effect to the
transactions contemplated hereunder, neither the Company nor any of its
subsidiaries will be required to be registered as, an "investment
company" pursuant to the U.S. Investment Company Act of 1940, as amended
(the "Investment Company Act" ), and the rules and regulations of the
Commission thereunder.
(jj) Under the laws of the British Virgin Islands, the
submission by the Company to the jurisdiction of any New York state or
U.S. federal court sitting in the Borough of Manhattan, New York City,
and the choice of the law of the State of New York to govern this
Agreement, will be binding upon the Company and would be enforceable in
any judicial or administrative proceeding in the British Virgin Islands
(subject to any applicable exceptions to the recognition or enforcement
11
of foreign judgments in the British Virgin Islands).
(kk) Neither the Company nor any of its subsidiaries has (i)
violated any material environmental statute, rule, regulation, order,
judgment, decree or permit in any jurisdiction in which the Company or
such subsidiary conducts any business or owns or holds any properties or
assets or (ii) received notice of any actual or potential liability for
the investigation or remediation of any disposal or release of hazardous
or toxic substance or wastes, pollutants or contaminants, except where
such violation or liability could not reasonably be expected to have a
Material Adverse Effect.
(ll) The acquisitions of the retail dial-up access customers and
related assets of the IMPSAT Entities in Argentina and Brazil have been
completed in all material respects, as set forth in the Prospectus.
Other than the pending acquisition of the retail dial-up access
customers and related assets of IMPSAT S.A. (Colombia), there are no
material acquisitions of businesses or assets by the Company or any of
its subsidiaries pending or currently being negotiated.
(mm) Based on its projected income and assets (including
goodwill), which it believes to be reasonable, the nature of the
Company's business and assets and taking into account the receipt of
proceeds from the offering and sale of the Shares, the Company believes
that it will not be classified as a passive foreign investment company (
"PFIC") within the meaning of Section 1297(a) of the U.S. Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"),
including the regulations and rulings and interpretations thereunder,
for its current taxable year.
(nn) The Company has tested its computers, servers and other
equipment. The Company has sought written confirmation from each of its
third-party suppliers and service providers as to their respective
readiness. The Company expects to complete upgrades and testing by the
end of 1999. The Company also expects to receive confirmation as to year
2000 compliance from all key vendors and suppliers in December 1999. The
cost to the Company of such upgrades and testing and of the reasonably
foreseeable consequences of year 2000 to the Company (including, without
limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in a Material Adverse Effect. Except for such
of the upgrades referred to in the preceding sentence as may be
necessary, the computer and management information systems of the
Company and its subsidiaries are and, with ordinary course upgrading and
maintenance, will continue to be, sufficient to permit the Company to
conduct its business without a Material Adverse Effect.
(oo) The Primary Registration Statement and each Preliminary
Prospectus conforms, and the Rule 462(b) Registration Statement, if any,
the Prospectus and any further amendments or supplements to the
Registration Statements or the Prospectus will conform, with any
applicable laws or regulations of foreign jurisdictions in
12
which such documents are distributed in connection with the Directed
Share Program; and no consent, approval, authorization or order of, or
filing or registration with, any governmental agency or body or court is
required or advisable under any applicable laws or regulations of
foreign jurisdictions in which the Directed Shares are offered outside
the United States.
(pp) The Company has not offered, or caused the Underwriters to
offer, any Shares to any person pursuant to the Directed Share Program
with the intent to influence unlawfully (i) a customer or supplier of
the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its
products.
(qq) Neither the Company nor any of its officers, directors or
affiliates has taken, directly or indirectly, any action designed to
stabilize or manipulate the trading price of the Common Shares, or that
might reasonably be expected to cause or result in stabilization or
manipulation of the trading price of the Common Shares.
2. PURCHASE OF THE SHARES BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 8,200,000 Firm Shares
to the several Underwriters, and each of the Underwriters, severally and not
jointly, agrees to purchase the number of Firm Shares set opposite that
Underwriter's name in Schedule 1 hereto.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,230,000 Option Shares. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Shares and is
exercisable as provided in Section 4 hereof. The Option Shares shall be
purchased severally for the account of the Underwriters in proportion to the
number of Firm Shares set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Shares shall be adjusted by CSFBC to eliminate fractions.
The purchase price to be paid by the Underwriters for the Firm Shares
and any Option Shares shall be U.S.$__.00 per share.
The Company shall not be obligated to deliver any of the Shares to be
delivered except upon payment for all the Shares to be purchased on such
Delivery Date (as defined below) as provided herein.
3. OFFERING OF SHARES BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus; PROVIDED, HOWEVER, that no Shares registered pursuant
to the Rule 462(b) Registration Statement, if any, shall be offered prior to the
Effective Time thereof.
13
4. DELIVERY OF AND PAYMENT FOR THE SHARES. Delivery of and payment for
the Firm Shares shall be made at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx, U.S.
counsel to the Underwriters, located at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Xxxxxx Xxxxxx, at 10:00 A.M., New York City time, on December __, 1999 or
at such other date or place as shall be determined by agreement between CSFBC
and the Company. This date and time are sometimes referred to as the "First
Delivery Date". On the First Delivery Date, the Company shall deliver or cause
to be delivered certificates representing the Firm Shares to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds to
a bank account that has been designated by the Company in writing at least one
business day prior to the First Delivery Date and is reasonably acceptable to
CSFBC. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm Shares shall be registered
in such names and in such denominations as CSFBC shall request in writing not
less than two full business days prior to the First Delivery Date. For the
purpose of expediting the checking and packaging of the certificates for the
Firm Shares, the Company shall make the certificates representing the Firm
Shares available for inspection by the Representatives in New York, New York,
not later than 2:00 P.M., New York City time, on the business day prior to the
First Delivery Date.
At any time on or before the 30th day after the date of this Agreement,
the option granted in Section 2 hereof may be exercised in whole or in part from
time to time by written notice being given to the Company by CSFBC. Such notice
shall set forth the aggregate number of Option Shares as to which the option is
being exercised, the names in which the Option Shares are to be registered, the
denominations in which the Option Shares are to be issued and the date and time,
as determined by the Representatives, when the Option Shares are to be
delivered; PROVIDED, HOWEVER, that this date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. The date and
time the Option Shares are delivered are sometimes referred to as an "Optional
Delivery Date" and the First Delivery Date and the Optional Delivery Date are
sometimes each referred to as a "Delivery Date".
Delivery of and payment for the Option Shares shall be made at the place
specified in the first paragraph of this Section 4 (or at such other place as
shall be determined by agreement between the Representatives and the Company) at
10:00 A.M., New York City time, on the Optional Delivery Date. On the Optional
Delivery Date, the Company shall deliver or cause to be delivered the
certificates representing the Option Shares to the Representatives for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire transfer in immediately available funds to the
bank account designated by the Company pursuant to the first paragraph of this
Section 4. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Option Shares shall be registered
in such names and in such denominations as the Representatives shall request in
the aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Shares, the Company
14
shall make the certificates representing the Option Shares available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Optional Delivery
Date.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees:
(a) To prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and to file such
Rule 462(b) Registration Statement with the Commission on the date
hereof; to prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second business day following the execution and delivery
of this Agreement; to make no further amendment or any supplement to the
Registration Statements or to the Prospectus except as permitted herein;
to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to either Registration Statement
has been filed or becomes effective or any supplement to the Prospectus
or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Shares for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statements or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
U.S. counsel to the Underwriters a copy of each draft of the
Registration Statements as submitted for confidential review by the
Commission and a signed copy of each of the Registration Statements as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and other exhibits submitted
or filed therewith;
(c) To deliver promptly to the Representatives in New York City
such number of the following documents as the Representatives shall
request: (i) conformed copies of the Registration Statements as
originally filed with the Commission and each amendment thereto (in each
case excluding exhibits other than this Agreement and the computation of
per share earnings), (ii) each Preliminary Prospectus, the Prospectus
(not later than 10:00 A.M., New York City time, of the day following the
execution and delivery of this Agreement) and any amended or
supplemented Prospectus (not later than 10:00 A.M., New York City time,
on the day following the date of such amendment or supplement) and, if
the delivery of a
15
prospectus is required at any time after the Effective Time of the
Primary Registration Statement in connection with the offering or sale
of the Shares (or any other securities relating thereto) and if at such
time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus in order to
comply with the Securities Act, to notify the Representatives and, upon
their request, to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives
may from time to time request of an amended or supplemented Prospectus
which will correct such statement or omission or effect such compliance.
Notwithstanding the foregoing provisions of this Section 5(c), neither
the Representatives' consent to, nor any Underwriters' delivery of, any
such amended or supplemented Prospectus shall constitute a waiver of,
any of the conditions set forth in Section 7 hereof;
(d) To file promptly with the Commission any amendment to the
Registration Statements or the Prospectus or any amendment or supplement
to the Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission (i) any amendment to
either of the Registration Statements or amendment any or supplement to
the Prospectus or (ii) any Prospectus pursuant to Rule 424 of the Rules
and Regulations, to furnish a copy thereof to the Representatives and
counsel for the Underwriters and obtain the consent of the
Representatives to the filing (which consent shall not be unreasonably
withheld);
(f) As soon as practicable after the Effective Date of the
Primary Registration Statement, to make generally available to the
Company's security holders and to deliver to the Representatives an
earning statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule
158);
(g) For a period of three years following the Effective Date of
the Primary Registration Statement, to furnish to the Representatives
copies of all materials furnished by the Company to its shareholders and
all public reports and all reports and financial statements furnished by
the Company to (i) the principal U.S. national securities exchange or
automatic quotation system upon which the Common Shares may be listed or
quoted pursuant to requirements of or agreements with such securities
exchange or system or (ii) the Commission pursuant to the Exchange Act
or any rule or regulation of the Commission thereunder;
16
(h) Promptly from time to time to cooperate with the
Representatives in connection with the qualification or registration of
the Shares for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with such
laws so as to permit sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the
Shares; PROVIDED, HOWEVER, that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction in any action
other than one arising out of the offering or sale of the Shares;
(i) (i) For a period of 180 days from the date of the
Prospectus, not to, directly or indirectly, (a) offer for sale, sell or
contract to sell, pledge or otherwise dispose of, or announce an
offering of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition or purchase by
any person at any time in the future of) any Common Shares or other
equity securities of the Company or any securities convertible into or
exchangeable for any Common Shares or other equity securities, or sell
or grant options, rights or warrants with respect to any Common Shares
or equity securities of the Company or any securities convertible into
or exchangeable for any Common Shares or other equity securities (other
than (i) shares issued pursuant to share option or other employee
benefit plans and (ii) pursuant to currently outstanding options,
warrants or rights, in each case as in effect on the date hereof), or
(b) enter into any swap or other derivatives transaction that transfers
to another, in whole or in part, any of the economic benefits or risks
of ownership of any Common Shares or other equity Securities, whether
any such transaction described in clause (a) or (b) above is to be
settled by delivery of Common Shares or other equity securities in cash
or otherwise, in each case without the prior written consent of CSFBC on
behalf of the Underwriters except that, prior to the expiration of such
180-day period, the Company may file one or more registration statements
with the Commission on Form S-8 relating to the Company's existing share
option plan as described in the Registration Statement; and (ii) to
cause each director, executive officer, employee and shareholder of the
Company listed on Schedule 2 to furnish to the Representatives, prior to
the First Delivery Date, a "lock-up" letter (each, a "Lock-up Letter"),
substantially in the form of Exhibit A hereto;
(j) To use its best efforts to cause the Shares to be accepted
for settlement through the facilities of The Depository Trust Company (
"DTC");
17
(k) To complete the 2-for-1 share split (as defined in Section
7(r) hereof) in respect of the Common Shares as contemplated in the
Prospectus (including, without limitation, to provide that the holders
of the Company's Class B Convertible Preferred Shares shall be entitled
to convert such shares solely into post-share split Common Shares);
(l) To duly appoint The Bank of New York (or such other leading
U.S. financial institution as may be reasonably satisfactory to the
Representatives) as registrar and transfer agent for the Company's
Common Shares;
(m) To apply the net proceeds from the sale of the Shares being
sold by the Company as set forth in the Prospectus under the caption
"Use of Proceeds";
(n) Between the date hereof and the First Delivery Date (both
dates inclusive), to notify and consult with the Representatives, and to
cause its subsidiaries and all other parties acting on its or their
behalf to notify and consult with the Representatives, prior to issuing
any press release or other announcement which could be material in the
context of the distribution of the Shares;
(o) To conduct its business activities in a manner to avoid the
requirement to be registered as an "investment company" pursuant to the
Investment Company Act and the rules and regulations of the Commission
thereunder, and that none of the Company's subsidiaries shall become an
"investment company" within the meaning of such term under the
Investment Company Act and the rules and regulations of the Commission
thereunder;
(p) From and after the First Delivery Date, to use its best
efforts to maintain the Shares as "marketable securities" within the
meaning of Section 1296(e) of the Internal Revenue Code and the
regulations, rulings and interpretations thereunder; to monitor its PFIC
status and take all reasonable steps to notify U.S. shareholders as
promptly as practicable in the event that the Company believes it will
become a PFIC in any taxable year; and if the Company becomes a PFIC, to
provide U.S. shareholders, upon request, with the annual information
statement and any other information necessary for U.S. shareholders to
make a "qualified electing fund" election under Section 1295 of the
Internal Revenue Code and the regulations thereunder;
(q) To indemnify and hold harmless the Underwriters against any
British Virgin Islands documentary, stamp or similar issuance tax,
including any interest and penalties, on the issuance, sale and delivery
by the Company of the Shares and on the execution and delivery of this
Agreement;
(r) In connection with the Directed Share Program, to ensure
that the Directed Shares shall be restricted to the extent required by
the NASD or pursuant to the rules of the NASD from sale, transfer,
assignment, pledge or hypothecation for a period of three months
following the Effective Dates and also to direct the transfer agent to
place stop transfer restrictions upon the Directed Shares for such
period of time (it being understood that the Designated Underwriter
shall notify the Company as to which Directed Share Participants shall
be required to be so restricted); and
18
(s) To comply with all applicable laws and regulations in each
foreign jurisdiction in which the Directed Shares are offered or sold
pursuant to the Directed Share Program.
6. EXPENSES. The Company agrees to pay the following fees, costs and
expenses on a timely basis:
(a) The costs incident to the authorization, issuance, sale and
delivery of the Shares (and any VAT or other taxes payable in that
connection);
(b) The costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statements and any
amendments and exhibits thereto;
(c) The costs of printing and distributing the Registration
Statements as originally submitted to the Commission for confidential
review and as formally filed with the Commission and each amendment
thereto and any post-effective amendments thereof (including, in each
case, exhibits), any Preliminary Prospectus, the Prospectus and any
amendment or supplement to the Prospectus, all as provided in this
Agreement;
(d) The costs of producing and distributing this Agreement, and
any other related documents in connection with the offer, sale and
delivery of the Shares;
(e) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the
required review by the NASD of the terms of sale of the Shares, provided
that such fees and expenses of U.S. counsel to the Underwriters shall
not exceed U.S.$15,000;
(f) Any applicable listing or other fees, including, without
limitation, the fees for listing of the Common Shares on the Nasdaq
National Market;
(g) The fees and expenses of qualifying the Shares under the
securities laws of the several jurisdictions as provided in Section 5(h)
hereof and of preparing, printing and distributing a "blue sky"
memorandum, including related fees and expenses of U.S. counsel to the
Underwriters, provided that such fees and expenses of U.S. counsel to
the Underwriters shall not exceed U.S.$5,000;
(h) The fees and expenses of U.S., British Virgin Islands and
other counsel to the Company and of Deloitte & Touche, in each case
relating to the transactions contemplated by this Agreement;
(i) All costs and expenses of the Underwriters, including the
related fees and disbursements of U.S. counsel to the Underwriters,
incident to the offer and sale of
19
the Shares by the Underwriters to the Directed Sale Share Purchasers
(and any stamp duties or other taxes payable by the Designated
Underwriter in connection with the Directed Share Program);
(j) All costs and expenses incurred by or on behalf of the
Company in connection with the "road show" for the offering of the
Shares; and
(k) All other costs and expenses incident to the performance of
the obligations of the Company under this Agreement.
The Underwriters shall pay their own costs and expenses incident to the
performance of their obligations hereunder, including the costs and expenses of
U.S. counsel to the Underwriters, any transfer taxes in respect of the Shares
that they may sell, and the expenses of any advertising relating to the offering
of the Shares made by the Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness
of either of the Registration Statements or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated
or threatened by the Commission; and any request of the Commission for
inclusion of additional information in either of the Registration
Statements or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that either of the
Registration Statements or the Prospectus or any amendment or supplement
thereto contains any untrue statement of a fact which, in the opinion of
a majority in interest of the Underwriters (including, without
limitation, the Representatives), is material or omits to state any fact
which is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Common
Shares (including the Shares), the Registration Statements and the
Prospectus, and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be satisfactory in all
respects to U.S. counsel for the Underwriters, and the Company shall
have furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters and to
furnish to the
20
Representatives their written opinion, addressed to the Underwriters and
dated such Delivery Date, covering such matters as the Representatives
may reasonably request.
(d) Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, U.S. counsel to the
Company, shall have furnished to the Representatives their written
opinion, addressed to the Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The Primary Registration Statement was declared
effective under the Securities Act as of the date and time
specified in such opinion; the Rule 462(b) Registration
Statement, if any, was filed with the Commission on the date
specified therein; the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein; and no stop order suspending the effectiveness of
either of the Registration Statements has been issued and, to
the knowledge of such counsel, no proceeding for that purpose is
pending or threatened by the Commission;
(ii) The Registration Statements, as of their respective
Effective Dates, and the Prospectus, as of its date, and any
further amendments or supplements thereto, as of their
respective dates, made by the Company prior to such Delivery
Date (other than the financial statements and other financial
data contained therein, as to which such counsel need express no
opinion) complied as to form in all material respects with the
requirements of the Securities Act and the Rules and
Regulations;
(iii) To such counsel's knowledge, there are no
contracts or other documents which are required to be described
in the Prospectus or filed as exhibits to the Registration
Statements under the Securities Act or under the Rules and
Regulations which have not been described or filed as exhibits
to the Registration Statements;
(iv) To such counsel's knowledge and except as set forth
in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or asset of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
would reasonably be expected to have a Material Adverse Effect;
and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by any governmental agency or body or
threatened by any other person or entity;
(v) Assuming due authorization, execution and delivery
by the Company under the laws of the British Virgin Islands,
this Agreement has been duly executed and delivered by the
Company in accordance with the laws of the State of New York and
constitutes a valid and legally binding
21
agreement of the Company enforceable in accordance with its
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency moratorium and similar laws affecting
enforcement of creditors' rights generally and by general
principles of equity (regardless of whether in a proceeding in
equity or at law) and except, further, as indemnification
provisions may be limited by considerations of public policy;
(vi) To such counsel's knowledge, and except as set
forth in the Prospectus, there are no preemptive or other rights
to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any Shares pursuant to any agreement,
contract or other instrument to which the Company is a party;
(vii) The Company is not and, after giving effect to the
offering and the sale of the Shares, will not be an "investment
company" or an entity "controlled" by an "investment company"
(as such terms are defined in the Investment Company Act);
(viii) In any action or proceeding arising out of or
relating to any of this Agreement in a New York or United States
federal court sitting in the Borough of Manhattan, the City of
New York, such court, in a properly pleaded and argued case,
should recognize and give effect to the submission by the
Company to the jurisdiction of such court contained in this
Agreement to the extent the court otherwise has subject matter
jurisdiction over the dispute in question; the Company has
validly and irrevocably appointed CT Corporation System (or such
other successor agent as the parties hereto shall mutually
agree), as its authorized agent for the purposes described in
Section 17 of this Agreement; and service of process effected in
the manner set forth in Section 17 of this Agreement will be
effective to confer valid personal jurisdiction over the Company
in any such action; and the Company has legally, validly,
effectively and irrevocably waived (A) the defense of an
inconvenient forum to the maintenance of any such suit or
proceeding and (B) any immunity to jurisdiction to which it may
otherwise be entitled in any such suit or proceeding;
(ix) To such counsel's knowledge, the issue and sale of
the Shares being delivered on such Delivery Date by the Company
and the compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result in a breach
or violation of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument filed by the Company as an exhibit to the
Registration Statements to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties
22
or assets of the Company or any of its subsidiaries is subject,
nor will such actions result in any violation of any U.S.
federal or New York state statute or any order, rule or
regulation known to such counsel of any U.S. federal or New York
state governmental agency or body or court having jurisdiction
over the Company or any of its subsidiaries or any of their
properties or assets;
(x) No consent, approval, authorization or order of, or
filing or registration with, any U.S. federal or New York state
governmental agency or body or court is required for the
execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated
hereby, except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act in connection with the listing of the Common Shares
on the Nasdaq National Market or under U.S. state securities or
"blue sky" laws in connection with the purchase and distribution
of the Shares by the Underwriters;
(xi) The offer and sale by the Company of its Class A
Convertible Preferred Shares and its Class B Convertible
Preferred Shares as described in the Prospectus and in Item 15
of the Primary Registration Statement should not have been, and
should not be, required to be integrated with the offering of
the Shares as contemplated under this Agreement and,
accordingly, to be registered under the Securities Act (taking
into account Rule 152 under the Securities Act and relevant
no-action letters issued by the Commission);
(xii) To such counsel's knowledge and except as set
forth in the Prospectus, there are no contracts or agreements
between the Company and any person granting such person the
right to require the Company to file a registration statement
under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statements or in any securities
being registered pursuant to any other registration statement
filed by the Company under the Securities Act, except for
registration rights of holders of the Class A Convertible
Preferred Shares and Class B Convertible Preferred Shares under
certain registration rights agreements, as amended, with the
Company filed as exhibits to the Registration Statements, which
registration rights have been waived in connection with this
offering;
(xiii) The statements contained in the Prospectus under
the caption "Taxation--U.S. Federal Income Tax Considerations",
insofar as they purport to summarize U.S. federal tax statutes,
rules and regulations, constitute
23
accurate summaries thereof in all material respects[ and the tax
opinion filed as Exhibit 8.1 to the Registration Statement is
confirmed]; and
(xiv) The statements contained in the Prospectus under
the caption "Shares Eligible for Future Sale", insofar as they
purport to constitute summaries of the terms of U.S. federal
securities laws or rules and regulations thereunder or contracts
or other documents, constitute accurate and complete summaries
of the terms of such statutes, rules and regulations and
contracts and other documents in all material respects.
The opinion of such counsel shall also include a statement
substantially to the effect that (x) such counsel has acted as U.S.
counsel to the Company in connection with previous financing
transactions and has acted as U.S. counsel to the Company in connection
with the preparation of the Registration Statements and the Prospectus,
and (y) based on the foregoing, no facts have come to the attention of
such counsel which lead them to believe that the Registration
Statements, as of their respective Effective Dates, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus contains any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The foregoing statement may be qualified by a
statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statements or the Prospectus
(except as stated in paragraphs xiii and xiv above).
In rendering the foregoing opinion, such counsel may (i) state
that their opinion is limited to matters governed by the U.S. federal
laws and New York state laws and (ii) rely, as to matters involving the
laws of the British Virgin Islands, upon the opinion of Xxxxxxx Xxxx &
Xxxxxxx rendered pursuant to Section 7(e) hereof.
(e) Xxxxxxx Xxxx & Xxxxxxx, British Virgin Islands counsel to
the Company, shall have furnished to the Representatives their written
opinion, addressed to the Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The Company is duly incorporated and validly
existing under the laws of the British Virgin Islands and in
good standing;
(ii) The Company has the necessary corporate power and
authority to own, lease and operate its properties and assets
and conduct the businesses in which it is engaged;
24
(iii) The execution and delivery of this Agreement, the
issue and sale of Shares being delivered on such Delivery Date
by the Company and the performance by the Company of its
obligations under this Agreement and the consummation of the
transactions contemplated hereby will not result in any
violation of the Company's Memorandum and Articles of
Association or any British Virgin Islands statute or any
applicable law, regulation, order or decree in the British
Virgin Islands;
(iv) The Company has an authorized and issued share
capital as set forth under the caption "Description of Share
Capital" in the Prospectus; all of the issued and outstanding
Common Shares of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus;
and the Shares being delivered by the Company to the
Underwriters upon such Delivery Date have been duly and validly
authorized and, when issued against payment and delivery in
accordance with this Agreement, will be duly and validly issued,
fully paid and non-assessable and will conform to the
description of thereof contained in the Prospectus;
(v) The Company has taken all corporate action required
to authorize its execution, delivery and performance of this
Agreement; this Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally
binding obligation of the Company enforceable in the British
Virgin Islands in accordance with its terms;
(vi) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the capital stock of the
Company pursuant to the Company's Memorandum and Articles of
Association or British Virgin Islands law;
(vii) No consent, approval, authorization or order of,
or filing or registration with, any British Virgin Islands
governmental agency or body or court is required for the
execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated
hereby, except for the filing with the British Virgin Islands
Registrar of Companies of an amendment to the Company's
Memorandum and Articles of Association pursuant to Section 7(r)
hereof (which filing has been made and is effective);
(viii) To such counsel's knowledge there are no
judgments against the Company nor any legal or governmental
proceedings pending in the British Virgin Islands to which the
Company is subject;
25
(ix) The filing of the Registration Statements with the
Commission and the listing of the Common Shares on the Nasdaq
National Market have been duly authorized by the Company;
(x) To ensure the legality, validity, enforceability or
admissibility in evidence of this Agreement in the British
Virgin Islands, it is not necessary that any document be filed,
recorded or enrolled with any government or other authority in
the British Virgin Islands, or any British Virgin Islands stamp
or similar tax be paid in respect of the Agreement; and all
formalities required in the British Virgin Islands for the
validity and enforceability of this Agreement have been
accomplished, and no notarization is required, for the validity
and enforceability thereof;
(xi) The Underwriters have standing to commence an
action or proceedings in British Virgin Islands courts of
competent jurisdiction based on this Agreement; and it is not
necessary or advisable in order for the Underwriters to enforce
their rights under this Agreement, including the exercise of
remedies thereunder, that it be licensed, qualified or otherwise
entitled to carry on business in the British Virgin Islands;
(xii) There is no income or other tax imposed by
withholding or otherwise on any payment to be made to or by the
Company pursuant to this Agreement or the issue or transfer of
the Shares by the Company, the delivery of the Share to the
Underwriters in the manner contemplated in this Agreement or the
sale and transfer of the Shares by the Underwriters;
(xiii) The Underwriting Agreement will not be subject to
ad valorem stamp duty in the British Virgin Islands and no
registration, documentary, recording, transfer or other similar
tax, fee or charge is payable in the British Virgin Islands in
connection with the execution, delivery, filing, registration or
performance of the Underwriting Agreement;
(xiv) Under the laws of the British Virgin Islands, the
choice of the laws of the State of New York to govern this
Agreement is a valid choice of law and would be recognized and
given effect to in any action brought before a court of
competent jurisdiction in the British Virgin Islands, except for
those laws (i) which such court considers to be procedural in
nature, (ii) which are revenue or penal laws or (iii) the
application of which would be inconsistent with public policy,
as such term is interpreted under the laws of the British Virgin
Islands (and such counsel has no reason to believe that the
application of which would be inconsistent with public policy);
(xv) The Company is not entitled to any immunity in
respect of its obligations under this Agreement and could not
interpose any immunity,
26
whether characterized as sovereign immunity or otherwise, as a
defense to any suit or action brought or maintained in respect
of its obligations under this Agreement;
(xvi) The courts of the British Virgin Islands would
recognize and enforce a judgment of a U.S. federal or New York
state court in respect of any legal suit or proceedings arising
out of or relating to this Agreement without retrial on the
merits based on the principle that a judgment of a competent
foreign court imposes upon the judgment debtor an obligation to
pay the sum for which judgment has been given; PROVIDED THAT (a)
such courts had proper jurisdiction over the parties subject to
such judgment, (b) such courts did not contravene the rules of
natural justice of the British Virgin Islands, (c) such judgment
was not obtained by fraud, (d) the enforcement of the judgment
would not be contrary to the public policy of the British Virgin
Islands, (e) no new admissible evidence relevant to the action
is submitted prior to the rendering of the judgment by the
courts of the British Virgin islands, and (f) the due compliance
with the correct procedures under the laws of the British Virgin
islands (and such counsel has no reason to believe that
enforcement of such a judgment would contravene such rules of
natural justice or be contrary of such public policy);
(xvii) The submission by the Company to the
non-exclusive jurisdiction of the U.S. federal or New York state
courts sitting in the Borough of Manhattan, New York City as set
forth in this Agreement and the appointment of CT Corporation
System (or such other successor agent as the parties hereto
shall mutually agree) as its authorized agent for the purpose
described in Section 19 of this Agreement are valid and binding
on the Company insofar as British Virgin Islands law is
concerned;
(xviii) Under current British Virgin Islands laws and
regulations, hold, sell and remit foreign currency and
securities without restrictions, including the declaration and
payment of any dividends in U.S. dollars or in any other
currency; and
(xix) The statements in the Prospectus under the
captions (A) "Risk Factors -- Our shareholders may face
difficulties in protecting their interests because we are a
British Virgin Islands company" and "-- You may experience
difficulty in enforcing civil liabilities against our company",
insofar as they describe certain matters of British Virgin
Islands law, (B) "Description of Share Capital", insofar as they
describe certain provisions of the Company's Memorandum and
Articles of Association relating to the capital stock of the
Company and the British Virgin Islands International Business
Companies Act and (C) "Taxation -- British Virgin Islands Tax
Considerations", insofar as they constitute a summary of matters
of British
27
Virgin Islands tax law, constitute accurate summaries thereof in
all material respects.
In rendering the foregoing opinion, such counsel may (i) state
that their opinion is limited to matters governed by the laws of the
British Virgin Islands and (ii) rely, as to matters involving the laws
of the United States and the State of New York, upon the opinion of Xxxx
Xxxxxxxx Xxxxxxxx & Xxxxxx LLP rendered pursuant to Section 7(d) hereof.
(f) Xxxxx, Xxxxxx e Advogados Associados, special Brazilian
counsel to the Company and its Brazilian subsidiaries, O Site
Entretenimento Ltda. ( "O Site") and Mandic Internet Ltda ( "Mandic
Internet"), shall have furnished to the Representatives their written
opinion, addressed to the Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives to the effect
that:
(i) Each of O Site and Mandic Internet has been duly
incorporated and is validly existing as a limited liability
company (SOCIEDADE COMERCIAL POR QUOTAS DE RESPONSABILIDADE
LIMITADA) under the laws of Brazil and has all power and
authority necessary to own or hold its properties and assets and
conduct the businesses in which it is engaged;
(ii) The Company does not conduct business in its own
name in Brazil; each of O Site and Mandic Internet possesses
certificates, authorities, approvals, licenses or permits issued
by governmental agencies or bodies in Brazil necessary to
conduct its business as presently conducted and as proposed to
be conducted;
(iii) All of the issued shares of capital stock of O
Site have been duly and validly authorized and issued, are
partially (in accordance with its articles of formation) paid
and non-assessable, and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
(iv) All of the issued shares of capital stock of Mandic
Internet have been duly and validly authorized and issued, are
partially paid (in accordance with its articles of formation)
and non-assessable, and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
(v) The statements in the Prospectus under the caption
"Business--Government Regulation--Brazil", insofar as they
describe the relevant laws and regulations in Brazil applicable
to the business developed by O Site and Mandic Internet, and
"Business--Technology--Connectivity"
28
insofar as they purport to constitute summaries of the Internet
Services Agreement, constitute accurate summaries thereof in all
material respects;
(vi) To such counsel's knowledge, there are no material
legal or governmental proceedings pending in Brazil to which the
Company, O Site or Mandic Internet is a party or of which any
property or assets of the Company, O Site or Mandic Internet or
is the subject; and to such counsel's knowledge, no such
proceedings are threatened or contemplated by any Brazilian
governmental agency or body or threatened by any other person or
entity in Brazil; and
(vii) The Internet Services Agreement, dated October 6,
1999, between IMPSAT Communicacoes Ltda ( "IMPSAT Brazil") and
Mandic Internet Ltda. ( "Mandic Internet") relates to the
provision by IMPSAT Brazil to Mandic Internet of
telecommunications infrastructure to enable Mandic Internet and
O Site to provide retail Internet dial-up access services,
constitutes a valid and legally binding obligation of Mandic
Internet and IMPSAT Brazil, respectively, and is enforceable
against Mandic Internet or IMPSAT Brazil, as the case may be, in
accordance with the terms thereof;
In rendering such Brazilian legal opinion, such counsel may
state that their opinion is limited to matters governed by the laws of
the Federative Republic of Brazil.
(g) Estudio Marval, X'Xxxxxxx & Mairal, special Argentine
counsel to the Company and its Argentine subsidiary, El Sitio Argentina
S.A., formerly Cibrian Xxxxxx Creativos S.A. ( "El Sitio Argentina"),
shall have furnished to the Representatives their written opinion,
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Representatives to the effect that [TO BE
REVISED UPON DISCUSSION WITH ARGENTINE COUNSEL]:
(i) El Sitio Argentina has been duly organized and is
validly existing as a corporation (sociedad anonima) under the
laws of Argentina and has all power and authority necessary to
own or hold its properties and assets and conduct the businesses
in which it is engaged;
(ii) Each of the Company and El Sitio Argentina
possesses adequate certificates, authorities, approvals,
licenses or permits issued by appropriate governmental agencies
or bodies in Argentina necessary to conduct its business as
presently conducted and as proposed to be conducted;
(iii) All of the issued shares of capital stock of El
Sitio Argentina have been duly and validly authorized and
issued, are fully paid and non-
29
assessable, and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(iv) El Sitio Argentina has full power and authority to
enter into this Agreement; this Agreement has been duly
authorized, executed and delivered by El Sitio Argentina; and
assuming due authorization, execution and delivery thereof by
the other parties hereto and assuming that this Agreement
constitutes a valid and legally binding agreement under the laws
of the State of New York, this Agreement constitutes a valid and
legally binding agreement of El Sitio Argentina enforceable in
Argentina in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equitable principles; and the
indemnification and contribution provisions of this Agreement do
not contravene Argentine law;
(v) The execution and delivery of this Agreement, the
issue and sale of Shares being delivered on such Delivery Date
by the Company and the compliance by the Company and El Sitio
Argentina with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby will not
contravene, or result in a breach or violation of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel
which is governed by the law of Argentina and to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of
the properties or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any
violation of the ESTATUTOS of El Sitio Argentina or any
Argentine statute or any order, rule or regulation of any
Argentine governmental agency or body or court having
jurisdiction over the Company or any of its subsidiaries;
(vi) No consent, approval, authorization or order of, or
filing or registration with, any Argentine governmental agency
or body or court is required for the execution, delivery and
performance of this Agreement by El Sitio Argentina;
(vii) The statements in the Prospectus under the
captions (A) "Business--Government Regulation--Argentina",
insofar as they describe the relevant laws and regulations in
Argentina and (B) "Business--Dial-Up Access" and
"Business--Technology--Dial-Up Access", insofar as they purport
to constitute summaries of intellectual property-related laws
and other matters, constitute accurate summaries thereof in all
material respects;
30
(viii) To such counsel's knowledge, there are no legal
or governmental proceedings pending in Argentina to which the
Company or El Sitio Argentina is a party or of which any
property or assets of the Company or El Sitio Argentina is the
subject; and to such counsel's knowledge, no such proceedings
are threatened or contemplated by any Argentine governmental
agency or body or threatened by any other person or entity in
Argentina; and
(ix) The Internet Services Agreement, dated October __,
1999, between IMPSAT S.A. ( "IMPSAT Argentina") and El Sitio
Argentina, which relates to the provision to the Company of
telecommunications infrastructure for Internet access by IMPSAT
Argentina, constitutes a valid and legally binding obligation of
El Sitio Argentina and IMPSAT Argentina, respectively, and is
enforceable against El Sitio Argentina or IMPSAT Argentina, as
the case may be, in accordance with the terms thereof.
In rendering such opinion, such counsel may state that their
opinion is limited to matters governed by the laws of the Argentine
Republic.
(h) Xxxxxx-Xxxxxxx Xxxxx & Asociados, S.C., special Mexican
counsel to the Company and its Mexican subsidiary, El Sitio
Entretenimientos S.A. de C.V. ( "El Sitio Mexico"), shall have furnished
to the Representatives their written opinion, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that:
(i) El Sitio Mexico was duly incorporated and is validly
existing as a mercantile corporation (SOCIEDAD ANOnima de
Capital Variable) under the laws of Mexico and has all power and
authority necessary to own or hold its properties and assets and
conduct the business in which it is engaged;
(ii) Each of the Company and El Sitio Mexico possesses
adequate certificates, authorities, approvals, licenses or
permits issued by appropriate governmental agencies or bodies in
Mexico necessary to conduct its business as presently conducted
and as proposed to be conducted;
(iii) All of the issued shares of capital stock of El
Sitio Mexico have been duly and validly authorized and issued,
are fully paid and non-assessable, and (other than a de minimis
number of shares required to satisfy diversity of ownership
requirements in Mexico) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
(iv) The statements in the Prospectus under the caption
"Business -- Government Regulation -- Mexico", insofar as they
describe the relevant
31
laws and regulations in Mexico, constitute accurate summaries
thereof in all material respects; and
(v) To such counsel's knowledge, there are no legal or
governmental proceedings pending in Mexico to which the Company
or El Sitio Mexico is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject; and to
such counsel's knowledge, no such proceedings are threatened or
contemplated by any Mexican governmental agency or body or court
or threatened by any other person or entity in Mexico.
In rendering such opinion, such counsel may state that their
opinion is limited to matters governed by the laws of the United Mexican
States.
(i) Xxxxx y Regules, special Uruguayan counsel to the Company
and its Uruguayan subsidiary, El Sitio (Uruguay) Sociedad Anonima ( "El
Sitio Uruguay"), shall have furnished to the Representatives their
written opinion, addressed to the Underwriters and dated such Delivery
Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) El Sitio Uruguay has been duly organized and is
validly existing as a corporation (SOCIEDAD ANOnima) under the
laws of Uruguay and has all power and authority necessary to own
or hold its properties and assets and conduct the businesses in
which it is engaged;
(ii) Each of the Company and El Sitio Uruguay possesses
adequate certificates, authorities, approvals, licenses or
permits issued by appropriate governmental agencies or bodies in
Uruguay necessary to conduct its business as presently conducted
and as proposed to be conducted;
(iii) All of the issued shares of capital stock of El
Sitio Uruguay have been duly and validly authorized and issued,
are fully paid and non-assessable, and are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(iv) The statements in the Prospectus under the caption
"Business -- Government Regulation -- Uruguay", insofar as they
describe the relevant laws and regulations in Uruguay,
constitute accurate summaries of the material aspects of such
information; and
(v) To such counsel's knowledge, there are no legal or
governmental proceedings pending in Uruguay to which the Company
or El Sitio Uruguay is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject;
and to such counsel's knowledge, no
32
such proceedings are threatened or contemplated by any Uruguayan
governmental agency or body or court or threatened by any other
person or entity in Uruguay.
In rendering such opinion, such counsel may state that their
opinion is limited to matters governed by the laws of the Republic of
Uruguay.
(j) De Xx Xxxx, Xxxxxxxxxx & Xxxxxxxx, special U.S. counsel to
the Company's U.S. subsidiary, El Sitio U.S.A., Inc. ( "El Sitio
U.S.A."), shall have furnished to the Representatives their written
opinion, addressed to the Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives to the effect
that:
(i) El Sitio U.S.A. has been duly organized, is validly
existing and in good standing as a corporation under the laws of
the State of Florida and has all corporate power and authority
necessary to own or hold its properties and assets and conduct
the businesses in which it is engaged;
(ii) All of the issued shares of capital stock of El
Sitio U.S.A. have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
(iii) El Sitio U.S.A. possesses adequate certificates,
authorities, approvals, licenses or permits issued by
appropriate governmental agencies or bodies in the State of
Florida to conduct its business as presently conducted and as
proposed to be conducted; the Company does not conduct business
in its own name within the State of Florida; and accordingly,
there is no requirement for certification, authorization,
approval, licensure or permits for the Company within the State
of Florida; and
(iv) To such counsel's knowledge, there are no U.S.
federal or Florida state legal or governmental proceedings
pending to which the Company or El Sitio U.S.A. is a party or of
which any property or assets of the Company or El Sitio U.S.A.
is the subject which, if determined adversely to the Company or
El Sitio U.S.A., might have a Material Adverse Effect on the
Company and El Sitio U.S.A.; and, to such counsel's knowledge,
no such proceedings are threatened or contemplated by any U.S.
federal or Florida state governmental agency or body or
threatened by any other person or entity in the United States.
(k) With respect to the "comfort letter" of Deloitte & Touche
delivered to the Representatives concurrently with the execution of this
Agreement (the "initial comfort letter"), the Company shall have
furnished to the Representatives a letter (the
33
"bring-down letter") of such accountants, addressed to the Underwriters
and dated such Delivery Date (i) confirming that they are independent
public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down comfort
letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than three days prior
to the date of the bring-down comfort letter), the conclusions and
findings of such firm with respect to the financial information and
other matters covered by the initial comfort letter and (iii) confirming
in all material respects the conclusions and findings set forth in the
initial letter.
(l) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its chairman of the board,
president and chief executive officer, and chief financial officer, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The representations, warranties and agreements of
the Company in Section 1 hereof are true and correct as of such
Delivery Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Section 7(a)
hereof have been fulfilled;
(ii) (A) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Prospectus or (B) since such
date there has not been any change in the capital stock, any
increase in current liabilities and any decrease in
shareholders' equity of the Company or any of its subsidiaries
or any change, or any development involving a prospective
change, in or affecting the business, properties, results of
operations, financial condition or prospects of the Company and
its subsidiaries taken as a whole, except as set forth in the
Prospectus;
(iii) They have carefully examined the Registration
Statements and the Prospectus and, in their opinion (A) the
Registration Statements, as of their respective Effective Dates,
and the Prospectus, as of each of the Effective Dates, did not
include any untrue statement of a material fact and did not omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B)
since the Effective Date of the Primary Registration Statement,
no event has occurred
34
which would be required by the Securities Act to be set forth in a
supplement or amendment to either of the Registration Statements or the
Prospectus; and
(iv) No stop order suspending the effectiveness of
either of the Registration Statements or any part thereof has
been issued and no proceeding for that purpose has been
initiated or threatened by the Commission.
(m) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus and (ii) since such date there shall not have been any change
in the capital stock, any increase in current liabilities and any
decrease in shareholders' equity of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, properties, results of operations,
financial condition or prospects of the Company and its subsidiaries,
except as set forth in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(n) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange, the Nasdaq National Market or in the over-the-counter
market, or trading in any securities of the Company on any exchange or
in the over-the-counter market shall have been suspended or minimum
prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by the British Virgin Islands or U.S. federal
or New York state authorities, (iii) the United States or any of the
British Virgin Islands, Brazil, Argentina or Mexico shall have become
engaged in hostilities, there shall have been an escalation in
hostilities involving any of such countries or there shall have been a
declaration of a national emergency or war by any of such countries; or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest
of the several Underwriters, impracticable or inadvisable to proceed
with the public offering or delivery of the Shares being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
35
(o) The Company, each director, executive officer, employee and
shareholder shall have furnished to the Representatives an original
counterpart of each executed Lock-up Letter, in each case in form and
substance satisfactory to the Representative.
(p) The Common Shares shall have been approved for inclusion on
the Nasdaq National Market, subject only to official notice of issuance
and evidence of satisfactory distribution.
(q) The Common Shares shall have been accepted for settlement
through the facilities of DTC.
(r) The Common Shares shall have been divided into two Common
Shares of U.S.$0.50 each and the par value reduced from U.S.$0.50 to
U.S.$0.01 (the "2-for-1 share split") in respect of the Common Shares
shall have been completed as contemplated in the Prospectus, and the
Company shall have duly filed with the British Virgin Islands Registrar
of Companies amendments to its Memorandum and Articles of Association to
appropriately reflect the 2-for-1 share split and other matters relating
to the Common Shares in form and substance reasonably satisfactory to
the Representatives.
(s) The private placement of the Class B Convertible Preferred
Shares by the Company to three strategic institutional investors shall
have been consummated as set forth in the Prospectus and on terms
reasonably satisfactory to the Representatives.
All opinions, letters, evidence and certificates referred to above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to Xxxxxxx Xxxxxxx & Xxxxxxxx, U.S. counsel for the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each
Underwriter, its directors, officers and employees and each person, if
any, who controls any Underwriter within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, without
limitation, any loss, claim, damage, liability or action relating to
purchases and sales of Shares), to which that Underwriter, director,
officer, employee or controlling person may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus, or in any amendment or supplement thereto,
or (B) in any blue sky
36
application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Shares
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue
Sky Application"), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, either of the Registration Statements or the
Prospectus, or in any amendment or supplement thereto, or in any Blue
Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act
or failure to act, or any alleged act or failure to act, by any
Underwriter in connection with, or relating in any manner to, the Shares
or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out
of or based upon matters covered by clause (i) or (ii) above (PROVIDED
that the Company shall not be liable in the case of any matter covered
by this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such act or
failure to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or wilful misconduct), and shall reimburse
each Underwriter and each such director, officer, employee and
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; PROVIDED, HOWEVER, that (A) the
Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement, or
in any Blue Sky Application in reliance upon and in conformity with the
written information furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein
and described in Section 8(e) hereof and (B) with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission
from any Preliminary Prospectus, the indemnity agreement contained in
this Section 8(a) shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or
liabilities purchased the Shares concerned, to the extent that the
Prospectus was required to be delivered by such Underwriter under the
Securities Act in connection with such purchase and any such loss,
claim, damage or liability of such Underwriter results from the fact
that there was not sent or given to such person, prior to or at the
written confirmation of the sale of such Shares to such person, a copy
of the Prospectus if the Company had previously furnished sufficient
copies thereof to such Underwriter. The foregoing indemnity agreement is
in addition to any liability which the Company may otherwise have to any
Underwriter or to any director, officer, employee or controlling person
of that Underwriter.
37
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its directors (including any person who,
with his or her consent, is named in either of the Registration
Statements as about to become a director of the Company), officers and
employees and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss, claim, damage
or liability, joint or several, or any action in respect thereof, to
which the Company or any such director, officer, employee or controlling
person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of,
or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained (A) in any Preliminary Prospectus, either
of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with the
written information furnished to the Company through the Representatives
by or on behalf of that Underwriter specifically for inclusion therein
and described in Section 8(e) hereof, and shall reimburse the Company
and any such director, officer, employee or controlling person for any
legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Company or any such director,
officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 8 except to the extent it has been materially prejudiced by
such failure and, PROVIDED FURTHER, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
38
party under this Section 8 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; PROVIDED, HOWEVER, that
the Representatives shall have the right to employ counsel to represent
jointly the Representatives and those other Underwriters and their
respective directors, officers, employees and controlling persons who
may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Company under
this Section 8 if, in the reasonable judgment of the Representatives, it
is advisable for the Representatives and those Underwriters, directors,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the Company. No indemnifying party
shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise
or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable
for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss of
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company on the one hand and the
Underwriters on the other with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering
of the Shares purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters
39
with respect to the Shares purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the shares
of the Shares under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Section 8(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 8(d) shall be deemed to include, for purposes of this Section
8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it
and distributed to the public was offered to the public exceeds the
amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 8(d) are several
in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm, and the Company
acknowledges, that the statements with respect to the selling concession
and reallowance figures in the third paragraph, the sixth paragraph, the
tenth paragraph, on behalf of Wit Capital Corporation the twelfth
paragraph [and on behalf of Fidelity Capital Markets, a division of
National Financial Services Corporation, the thirteenth paragraph], all
under the caption "Underwriting" in, the Prospectus are correct and
constitute the only information furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the
Registration Statements and the Prospectus.
(f) The Company shall indemnify and hold harmless the Designated
Underwriter, its directors, officers and employees and each person, if
any, who controls the Designated Underwriter within the meaning of the
Securities Act (the "Designated Entities"), from and against any loss,
claim, damage or liability or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action
relating to purchases and sales of Directed Shares, to which that
40
Designated Underwriter, director, officer, employee or controlling
person may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants
in connection with the Directed Share Program; (ii) the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(iii) the failure of any Directed Share Participant to pay for and
accept delivery of Directed Shares that the Directed Share Participant
agreed to purchase; or (iv) the Directed Share Program (PROVIDED that
the Company shall not be liable in the case of any matter covered by
clauses and (iii) and (iv) hereof to the extent that it is determined in
a final judgment by a court of competent jurisdiction that such loss,
claim, damage, liability or action resulted directly from any act or
failure to act undertaken or omitted to be taken by the Designated
Underwriter through its gross negligence or wilful misconduct), and
shall reimburse the Designated Underwriter and each such director,
officer, employee and controlling person promptly upon demand for any
legal or other expenses reasonably incurred by the Designated
Underwriter, director, officer, employee or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have to any Underwriter
or to any director, officer, employee or controlling person of that
Underwriter.
9. DEFAULTING UNDERWRITERS. If, on any Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated severally to purchase
the Shares which the defaulting Underwriter agreed but failed to purchase on
such Delivery Date in the respective proportions which the number of Firm Shares
set opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of Firm Shares set opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto; PROVIDED,
HOWEVER, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Shares on such Delivery Date if the total number of
Shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 9.09% of the total number of the Shares to be
purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the number of Shares which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 2
hereof. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Shares to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to an Optional Delivery Date,
the obligation of the Underwriters to purchase, and of the Company to sell, the
Option Shares) shall terminate without liability on the part
41
of any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11 hereof. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 9, purchases Firm Shares which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Shares of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the First Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Shares if, prior to that time, any
of the events described in Sections 7(m) or 7(n) hereof shall have occurred or
if the Underwriters shall decline to purchase the Shares for any reason
permitted under this Agreement.
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company shall
fail to tender the Shares for delivery to the Underwriters for any reason
permitted under this Agreement, or (b) the Underwriters shall decline to
purchase the Shares for any reason permitted under this Agreement (other than
the termination of this Agreement pursuant to Section 10 hereof due to any event
described in Section 7(n) (i), (ii) and (iii)), the Company shall reimburse the
Underwriters for the fees and expenses of their U.S. counsel and for such other
out-of-pocket expenses as shall have been incurred by them in connection with
this Agreement and the proposed purchase of the Shares, and upon demand the
Company shall pay the full amount thereof to the Representatives. If this
Agreement is terminated pursuant to Section 9 hereof by reason of the default of
one or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
12. JUDGMENT CURRENCY. The Company shall indemnify each Underwriter
against any loss incurred by it as a result of any judgment or order being given
or made and expressed and paid in a currency (the "Judgment Currency") other
than U.S. dollars and as a result of any variation as between (i) the rate of
exchange at which the U.S. dollar amount is converted into the Judgment Currency
for the purpose of such judgment or order and (ii) the spot rate of exchange in
New York, New York at which such Underwriter on the date of payment of such
judgment or order is able to purchase U.S. dollars with the amount of the
Judgment Currency actually received by such Underwriter. The foregoing indemnity
shall constitute a separate and independent obligation of the Company and shall
continue in full force and effect notwithstanding any such judgment or order as
aforesaid. The term "spot rate of exchange" shall include any premiums and costs
of exchange payable in connection with the purchase of, or conversion into, U.S.
dollars.
42
13. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Credit Suisse First Boston
Corporation, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Investment Banking -- Transactions Advisory Group (Fax: 000-000-0000);
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Primary Registration Statement, Attention: Xxxxxxx Xxxxxxx, Chief
Financial Officer (Fax: 011-54-11-4343-6700 ext. 104);
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made by CSFBC on behalf of the
Representatives or on behalf of the Underwriters.
14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the Company and the Underwriters and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the directors, officers
and employees of each Underwriter and the person or persons, if any, who control
each Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of the directors, officers and
employees of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 14, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
15. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company on the one hand and the Underwriters on
the other contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Shares or any termination or cancellation of this Agreement and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
43
16. CERTAIN DEFINITIONS. For purposes of this Agreement, (a) "business
day" means any day on which the Nasdaq National Market is open for trading, (b)
"subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations
and (c) "significant subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
18. CONSENT TO JURISDICTION. The Company agrees that any legal
suit, action or proceeding brought against it by any party to this Agreement or
by each person, if any, who controls any such party arising out of or based upon
this Agreement may be instituted in any New York state or U.S. federal court
sitting in the Borough of Manhattan, New York City, and waives any objection
which it may now or hereafter have to the laying of venue of any such
proceeding, and irrevocably submits to the non-exclusive jurisdiction of such
courts in any suit, action or proceeding. The Company, to the fullest extent
permitted by applicable law, irrevocably waives any defense of immunity and the
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding.
The Company hereby designates and appoints CT Corporation
System (or such other successor agent as the parties hereto shall mutually
agree) (the "Process Agent"), as its authorized agent, upon whom process may be
served in any such suit, action or proceeding. The Company that it has notified
the Process Agent of such designation and appointment and that the Process Agent
has accepted the same in writing. The Company hereby irrevocably authorizes and
directs the Process Agent to accept such service. The Company further agrees
that service of process upon the Process Agent and written notice of such
service to the Company, mailed by first class mail or delivered to the Process
Agent shall be deemed in every respect effective service of process upon the
Company in any such suit or proceeding.
Nothing herein shall affect the right of any person to serve
process in any other manner permitted by law. The Company agrees that a final
judgment in any such suit, action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgement or in any other lawful
manner.
The provisions of this Section 18 shall survive the
termination of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
44
If the foregoing correctly sets forth the agreement among the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
EL SITIO, INC.
By:
----------------------------------------
Name:
Title:
Accepted:
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX BROTHERS INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX BARNEY INC.
WIT CAPITAL CORPORATION
By: Credit Suisse First Boston Corporation
By
-------------------------------
AUTHORIZED REPRESENTATIVE
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
45
SCHEDULE 1
Number of
UNDERWRITERS FIRM SHARES
Credit Suisse First Boston Corporation
Xxxxxx Brothers Inc. ...............................................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated......................................
Xxxxxxx Xxxxx Barney Inc. ..........................................
Wit Capital Corporation.............................................____________
Total 8,200,000
SCHEDULE 2
Directors, Executive Officers, Employees and Shareholders
To Deliver Lock-Up Letters
DIRECTORS
Xxxxxxx Vivo-Chaneton
Xxxxxxx Xxxxxxx-Xxxxxx
Xxxxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx
EXECUTIVE OFFICERS
Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx xx Xxxxxxxx
Xxxxxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxx
EMPLOYEES
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx Said
Xxxxxxx Xxxx Xxxxx
SHAREHOLDERS
IAMP (El Sitio) Investments, Ltd.
Xxxxxxxxx Limited
GCC Investments, LLC
Tower Plus International
XXX.xxx Inc.
IMPSAT Corporation
TV Azteca S.A. de C.V.
Bear, Xxxxxxx & Co., Inc
Banco Nominees Ltd. (c/o Bear, Xxxxxxx & Co. Inc.)
Intel Atlantic, Inc.
Utilitivest II, L.P.
Utilitivest III, L.P.
Compania de Inversiones de Montevideo S.A.
EXHIBIT A
FORM OF LOCK-UP LETTER
December ___, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX BROTHERS INC.
And the other several Underwriters named in
Schedule 1 to the Underwriting Agreement
Ladies and Gentlemen:
In consideration of the participation of the several Underwriters,
including Credit Suisse First Boston Corporation and Xxxxxx Brothers Inc., in
the underwriting of the proposed initial public offering (the "Offering") of
common shares ("Common Shares") of El Sitio, Inc., a British Virgin Islands
company (the "Company"), as contemplated by a Registration Statement on Form F-1
filed with the Securities and Exchange Commission (Registration No. 333-91263)
and for other good and valuable consideration (the receipt of which is hereby
acknowledged) the undersigned hereby agrees that from the date hereof the
undersigned will not, until 180 days after the date of the final Prospectus
included as part of the Registration Statement (the "Public Offering Date"),
directly or indirectly, (a) offer for sale, sell or contract to sell, pledge or
otherwise dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition or purchase by any person
at any time in the future of) any Common Shares or other equity securities of
the Company or any securities convertible into or exchangeable for any Common
Shares or other equity securities, or sell or grant options, rights or warrants
with respect to any Common Shares or other equity securities of the Company or
any securities convertible into or exchangeable for any Common Shares or other
equity securities, or (b) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership whether any such transaction described in clause (a) or (b)
above is to be settled by delivery of any Common Shares or other equity
securities, in cash or otherwise, in each case without the prior written consent
of Credit Suisse First Boston Corporation on behalf of the Underwriters.
Notwithstanding the preceding sentence, the undersigned may transfer any
such Common Shares or other equity securities to (i) immediate family members,
(ii) trusts the beneficiaries of which are the undersigned and immediate family
members, (iii) donees of charitable gifts and (iv) pledges under security
arrangements relating to loans or other financings in favor of the undersigned
or immediate family members; PROVIDED, HOWEVER, that in the case of each of the
clauses (i) through (iv), the transferee agrees in writing with you to be bound
by the terms hereof.
A-2
The undersigned also agrees that (i) any Common Shares received upon
exercise of options granted to the undersigned will also be subject to the terms
hereof and (ii) any Common Shares acquired by the undersigned in the open market
will not be subject to the terms hereof; provided the transferee agrees to be
bound in writing by the terms hereof.
The undersigned further agrees that, in furtherance of the foregoing,
the Company and its transfer agent and registrar are hereby authorized to
decline to make any transfer of Common Shares if such transfer would constitute
a violation or breach of the terms hereof.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this agreement, and that, upon request,
the undersigned will execute any additional documents necessary or desirable in
connection with the enforcement hereof. All authority herein conferred or agreed
to be conferred shall survive the death or incapacity of the undersigned and any
obligations of the undersigned shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned.
The agreements set forth in this letter shall be binding on the
undersigned and his, her or its successors, heirs, personal representatives and
assigns. The agreements set forth in this letter shall lapse and become null and
void in the event that the Public Offering Date shall not have occurred on or
before March 31, 2000.
This letter constitutes an agreement that shall be governed by, and
construed in accordance with, the laws of the State of New York.
Very truly yours,
By:__________________________
Name:
