Exhibit 10.22
================================================================================
EL SITIO, INC.
SHARE PURCHASE AGREEMENT
November 9, 1999
================================================================================
SHARE PURCHASE AGREEMENT, dated as of this 9th day of
November, 1999 (this "AGREEMENT"), among EL SITIO, INC., an international
business company organized and existing under the laws of the British Virgin
Islands (the "COMPANY"), and each of the persons or entities set forth on
EXHIBIT A (each, a "PURCHASER").
W I T N E S S E T H:
WHEREAS, the Company desires to issue to the Purchasers, and
the Purchasers desire to purchase from the Company, the Preferred Shares (as
such term is defined below) as set forth below; and
WHEREAS, certain terms used in this Agreement are defined in
Section 9.1 hereof;
NOW, THEREFORE, in consideration of the promises and mutual
covenants and agreements hereinafter contained, the parties hereto hereby agree
as follows:
1. SALE AND PURCHASE OF SECURITIES.
1.1 SALE AND PURCHASE OF PREFERRED SHARES. Subject to the
terms and conditions of this Agreement, on the Closing Date (as defined in
Section 3.1 hereof), the Company shall issue, sell and deliver to each of the
Purchasers, and each of the Purchasers shall purchase from the Company for the
Purchase Price (as defined in Section 2.1 hereof) that number of Class B
Convertible Preferred Shares of the Company (the "PREFERRED SHARES"), set forth
opposite such Purchaser's name on EXHIBIT A.
2. PURCHASE PRICE.
2.1 AMOUNT OF PURCHASE PRICE. The purchase price of the
Preferred Shares to be purchased pursuant to Section 1.1 by each Purchaser shall
be as set forth opposite such Purchaser's name on EXHIBIT A (the "PURCHASE
PRICE"). The Purchase Price shall be payable as provided in Section 2.2 hereof.
2.2 PAYMENT OF THE PURCHASE PRICE. At the Closing (as
defined in Section 3.1 hereof), each Purchaser shall pay its Purchase Price in
United States dollars by wire transfer of immediately available funds or by such
other method as may be reasonably acceptable to the Company and such Purchaser,
to such account of the Company as shall have been designated in advance to the
Purchasers by the Company.
3. CLOSING.
3.1 CLOSING DATE. The closing of the sale and purchase of
the Preferred Shares (the "Closing") shall take place on November 11, 1999, or
at such other time, date or place as the parties hereto may mutually agree;
provided that all conditions to the Closing set forth in this Agreement have
been satisfied or waived by such date. The date on which the Closing is held is
referred to in this Agreement as the "Closing Date." At the Closing, the parties
shall execute and deliver the documents referred to in Section 8 hereof.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Purchasers that:
4.1 ORGANIZATION AND GOOD STANDING; CAPITALIZATION.
(a) The Company is duly organized and validly existing under
the laws of the British Virgin Islands and has the corporate power and authority
to own, lease and operate its properties and assets and to carry on its business
as now conducted and as it is proposed to be conducted, except where the lack
thereof would not have a Material Adverse Effect (as defined in Section 9.1).
The Company is duly qualified or authorized to do business as a foreign
corporation under the laws of each jurisdiction in which the conduct of its
business or the ownership of its properties or assets requires such
qualification or authorization except where the lack thereof would not have a
Material Adverse Effect.
(b) The authorized and issued share capital of the Company
immediately prior to and immediately after the Closing and the legal and
beneficial ownership thereof is as set forth on SCHEDULE 4.1(B). All the
outstanding shares of the Company have been duly authorized, and are validly
issued, fully paid and non-assessable. Except as disclosed on SCHEDULE 4.1(B),
(i) there is no option, warrant, call, right, commitment or other agreement of
any character to which the Company is a party, (ii) there are no securities of
the Company outstanding which upon conversion or exchange would require, and
(iii) there are no share appreciation rights, or other similar rights based on
securities of the Company which, in the case of clause (i), (ii) or (iii), would
require the issuance, sale or transfer of any additional share capital or other
equity securities of the Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase share
capital or other equity securities of the Company. Except as disclosed on
SCHEDULE 4.1(B) and other than this Agreement, the Company is not a party to,
nor is it aware of, any voting trust or other voting agreement with respect to
any of the securities of the Company or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of the share capital
of the Company.
4.2 AUTHORIZATION OF AGREEMENT; ENFORCEABILITY. The Company
has all requisite corporate power and authority to execute and deliver this
Agreement and each other agreement, document, instrument and certificate to be
executed by the Company in connection with the consummation of the transactions
contemplated by this Agreement (the "TRANSACTION DOCUMENTS"), and to perform
fully its obligations hereunder and thereunder. The execution, delivery and
performance by the Company of this Agreement and the Transaction Documents have
been duly authorized by all necessary corporate action on the part of the
Company and its members. This Agreement and each of the Transaction Documents
have been duly and validly executed and delivered by the Company and, assuming
the due authorization, execution and delivery thereof by the Purchasers, this
Agreement and each of the Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
2
4.3 SUBSIDIARIES, JOINT VENTURES, PARTNERSHIPS, ETC.
(a) SCHEDULE 4.3(A) hereof sets forth a true, complete
and correct list of each company or other entity in which the Company holds an
interest of greater than fifty percent (50%) (each such corporation or other
entity is referred to herein as a "SUBSIDIARY" and, collectively, the
"SUBSIDIARIES") as well as each entity in which the Company holds a minority
interest. Each Subsidiary is duly organized and validly existing in good
standing (if applicable) under the laws of the jurisdiction of its incorporation
with corporate power and corporate authority under such laws to own, lease and
operate its properties and conduct its business as currently conducted except,
in each case, where the lack thereof would not have a Material Adverse Effect;
and each Subsidiary is duly qualified to transact business as a foreign
corporation and is in good standing (if applicable) in each other jurisdiction
in which it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the extent that
the failure to so qualify or be in good standing would not result in a Material
Adverse Change. All of the issued and outstanding share capital of each
Subsidiary which are owned by the Company has been duly authorized and validly
issued, and is fully paid and non-assessable. The Company, directly or
indirectly, owns the percentage of capital indicated in SCHEDULE 4.3(A) next to
each such Subsidiary, free and clear of any Liens, except as set forth in
SCHEDULE 4.3(A).
(b) The Company is not a party to any joint venture,
partnership or similar arrangement in which the Company or any of its
Subsidiaries participates. 4.4 CONSENTS OF THIRD PARTIES. None of the execution
and delivery by the Company of this Agreement and the Transaction Documents, the
consummation of the transactions contemplated hereby or thereby, or compliance
by the Company with any of the provisions hereof or thereof will (a) conflict
with, or result in the breach of, any provision of the Memorandum of Association
or Articles of Association of the Company, (b) conflict with, violate, result in
the breach or termination of, or constitute a default or give rise to any right
of termination or acceleration or right to increase the obligations or otherwise
modify the terms thereof under any Permit or Order to which the Company is a
party or any Contract to which the Company or any of its Subsidiaries is bound
or by which the Company or any of its properties or assets is bound, (c)
constitute a violation of any Law applicable to the Company or (d) result in the
creation of any Lien upon the properties or assets of the Company. Except as set
forth on SCHEDULE 4.4 and other than those which have been obtained or made, no
consent, waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is required on
the part of the Company in connection with the execution and delivery of this
Agreement or the Transaction Documents, or the compliance by the Company with
any of the provisions hereof or thereof.
4.5 AUTHORIZATION OF PREFERRED SHARES.
(a) On the Closing Date, the issuance, sale, and delivery of
the Preferred Shares to be purchased pursuant to Section 1.1 will have been duly
authorized by all requisite action of the Company, and, when issued, sold,
delivered and paid for in accordance with this Agreement, the Preferred Shares
will be validly issued and outstanding, fully paid and non-
3
assessable, with no personal liability attaching to the ownership thereof, and
not subject to preemptive or any other similar rights of the members of the
Company or others.
(b) On the Closing Date, the issuance and delivery of the
Common Shares to be delivered upon conversion of the Preferred Shares in
accordance with the terms of the Preferred Shares will have been duly authorized
by all requisite action of the Company and, when issued and delivered in
accordance with the terms of the Preferred Shares, the Common Shares will be
validly issued and outstanding, fully paid and non-assessable, with no personal
liability attaching to the ownership thereof, and not subject to preemptive or
any other similar rights of the members of the Company or others.
4.6 FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 4.6
are (a) copies of the audited balance sheet of the Company and its Subsidiaries,
on a consolidated basis as of December 31, 1998, the income statement of the
Company and its Subsidiaries, on a consolidated basis for the fiscal year ended
December 31, 1998, and the cash flow statement of the Company and its
Subsidiaries, on a consolidated basis for the fiscal year ended December 31,
1998 (the "AUDITED FINANCIAL STATEMENTS") and (b) copies of the unaudited
balance sheet of the Company and its Subsidiaries, on a consolidated basis as of
June 30, 1999, the statement of income and retained earnings of the Company and
its Subsidiaries, on a consolidated basis for the six-month period ended June
30, 1999, and the cash flow statement of the Company and its Subsidiaries, on a
consolidated basis for the six-month period ended June 30, 1999 (the "UNAUDITED
FINANCIAL STATEMENTS", and together with the Audited Financial Statements, the
"FINANCIAL STATEMENTS"). Each of the Financial Statements was prepared in good
faith, is complete and correct in all material respects, has been prepared in
accordance with GAAP and in conformity with the practices consistently applied
by the Company and its Subsidiaries and presents fairly the financial position,
results of operations and cash flows of the Company and its Subsidiaries as of
the dates and for the periods indicated, subject, in the case of the Unaudited
Financial Statements, to the absence of footnotes and normal year-end
adjustments.
4.7 NO UNDISCLOSED LIABILITIES. Except as set forth on
SCHEDULE 4.7, neither the Company nor any of its Subsidiaries has any
liabilities (whether accrued, absolute, contingent or otherwise, and whether due
or to become due or asserted or unasserted), except (a) obligations under
Contracts described in SCHEDULE 4.15 or under Contracts that are not required to
be disclosed thereon as a result of dollar thresholds therein, (b) liabilities
provided for in the Financial Statements (other than liabilities which, in
accordance with GAAP, need not be disclosed), (c) liabilities (other than
accounts payable) incurred since the Audited Financial Statements, in the
ordinary course of business consistent with past practice, the sum of which is,
in the aggregate, no greater than $50,000, and (d) accounts payable in excess of
those shown on the Financial Statements, incurred in the ordinary course of
business consistent with past practice, the sum of which is, in the aggregate,
not greater than $50,000.
4.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth on
SCHEDULE 4.8 and since the date of the Audited Financial Statements:
(a) there has not been any Material Adverse Change nor has
any event occurred which could result in any Material Adverse Change;
4
(b) there has not been any declaration, setting a record
date, setting aside or authorizing the payment of, any dividend or other
distribution in respect of any share capital of the Company or any of its
Subsidiaries or any repurchase, redemption or other acquisition by the Company
or any of its Subsidiaries, of any of the outstanding share capital or other
securities of, or other ownership interest in, the Company or any of its
Subsidiaries;
(c) there has not been any transfer, issue, sale or other
disposition by the Company of any share capital or other securities of the
Company or any of its Subsidiaries or any grant of options, warrants, calls or
other rights to purchase or otherwise acquire shares of such capital stock or
such other securities;
(d) neither the Company nor any of its Subsidiaries has (i)
awarded or paid any bonuses to Employees or Representatives of the Company, (ii)
entered into any employment, deferred compensation, severance or similar
agreements (nor amended any such agreement), (iii) agreed to increase the
compensation payable or to become payable by the Company or any of its
Subsidiaries to any of the Company's Employees or Representatives, or (iv)
agreed to increase the coverage or benefits available under any severance pay,
deferred compensation, bonus or other incentive compensation, pension or other
employee benefit plan, payment or arrangement made to, for or with such
Employees or Representatives, other than in the ordinary course of business
consistent with past practice which increases in the aggregate do not exceed
$50,000 in annual cost to the Company or any of its Subsidiaries and consistent
with the operating expense budget of the Company or any of its Subsidiaries, and
other than as may have been required by law or insurers;
(e) neither the Company nor any of its Subsidiaries has made
any loans, advances (other than advances to officers and employees of the
Company or its Subsidiaries which advances are made in the ordinary course of
business and do not exceed per individual the reasonable anticipated expenses
for legitimate business purposes), or capital contributions to, or investments
in, any Person or paid any fees or expenses to any Affiliate of the Company
other than a Subsidiary;
(f) neither the Company nor any of its Subsidiaries has
transferred or granted any rights under any Contracts, leases, licenses,
agreements or intangible property (as set forth in Section 4.12 hereof) used by
the Company in its business which could result in a Material Adverse Change;
(g) there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property or assets of
the Company or any of its Subsidiaries having a replacement cost of more than
$10,000 for any single loss or $50,000 for all such losses;
(h) neither the Company nor any of its Subsidiaries has
mortgaged, pledged or subjected to any Lien any of its assets, or acquired any
assets for a purchase price in excess of $50,000 in the aggregate or sold,
assigned, transferred, conveyed, leased or otherwise disposed of any assets of
the Company or any of its Subsidiaries for a sale price in excess of $50,000 in
the aggregate except for assets acquired or sold, assigned, transferred,
conveyed, leased or otherwise disposed of in the ordinary course of business;
5
(i) neither the Company nor any of its Subsidiaries has
canceled or compromised any debt or claim or amended, canceled, terminated,
relinquished, waived or released any Contract or right except in the ordinary
course of business consistent with past practice and which, individually or in
the aggregate, would not be material to the Company or any of its Subsidiaries;
(j) neither the Company nor any of its Subsidiaries has made
any binding commitment to make any capital expenditures or capital additions or
betterments in excess of $25,000 individually or $75,000 in the aggregate;
(k) neither the Company nor any of its Subsidiaries has
incurred any debts, obligations or liabilities, whether due or to become due,
except current liabilities incurred in the ordinary course of business, none of
which current liabilities (individually or in the aggregate) could result in a
Material Adverse Change;
(l) neither the Company nor any of its Subsidiaries has
entered into any transaction other than in the ordinary course of business
except for (in the case of the Company) this Agreement;
(m) neither the Company nor any of its Subsidiaries has
encountered any labor difficulties or labor union organizing activities;
(n) neither the Company nor any of its Subsidiaries has made
any change in the accounting principles, methods or practices followed by it or
depreciation or amortization policies or rates theretofore adopted;
(o) neither the Company nor any of its Subsidiaries has
disclosed to any Person any material trade secrets except for disclosures made
to Persons subject to valid and enforceable confidentiality agreements;
(p) except in the ordinary course of business, neither the
Company nor any of its Subsidiaries has suffered or experienced any change in
the relationship or course of dealings between the Company and/or any of its
Subsidiaries and any of their suppliers or customers which supply goods or
services to the Company or any of its Subsidiaries or purchase goods or services
from the Company and or any of its Subsidiaries, which has had or is likely to
have a Material Adverse Effect; and
(q) neither the Company nor any of its Subsidiaries has made
any payment to, or received any payment from, or made or received any investment
in, or entered into any transaction or series of related transactions (including
without limitation, the purchase, sale, exchange or lease of assets, property or
services, or the making of a loan or guarantee) with any Affiliate in each case,
in excess of $50,000 or its equivalent (other than any transactions between or
among the Company and any of its Subsidiaries) (each, an "AFFILIATE
Transaction").
4.9 TAXES. The Company and each of its Subsidiaries has
filed all Tax returns (including statements of estimated Taxes owed) and reports
required to be filed within the applicable periods (subject to extensions) for
such filings and has paid all Taxes required to be
6
paid, and has established adequate reserves (net of estimated Tax payments
already made) for the payment of all Taxes payable in respect of the period
subsequent to the last periods covered by such returns. Such Tax returns and
reports are true and correct in all material respects. No deficiencies for any
Tax are currently assessed against the Company or any Subsidiary, and, no Tax
returns of the Company or any Subsidiary have ever been audited, and, to the
knowledge of the Company, there is no such audit pending or contemplated.
Neither the Company nor any of its Subsidiaries has received any notice of any
audit of any of the Tax returns by any British Virgin Islands or foreign taxing
authority (including, without limitation, the Argentine DIRECCION GENERAL
IMPOSITIVA ("DGI") and DIRECCION GENERAL XX XXXXXX). There is no Tax Lien,
whether imposed by any federal, state or local taxing authority, outstanding
against the assets, properties or business of the Company or any of its
Subsidiaries other than Liens for Taxes which are not yet due. Neither the
Company nor any of its Subsidiaries has executed any waiver of the statute of
limitations on the assessment or collection of any Tax or governmental charge.
The Company and its Subsidiaries have properly charged, collected and paid all
applicable stamp, sales, use and other similar Taxes on or before the Closing
Date.
4.10 REAL PROPERTY. (a) Neither the Company nor any of its
Subsidiaries owns any real property.
(b) SCHEDULE 4.10(B) sets forth a complete list of all real
property and interests in real property leased by the Company or any of its
Subsidiaries (each, a "REAL PROPERTY LEASE", and collectively, the "REAL
PROPERTY LEASES") as lessee or lessor. The Company or the applicable Subsidiary
has good, legal and marketable title to the leasehold estates in all Real
Property Leases in each case free and clear of all Liens. Neither the Company
nor any Subsidiary has any reason to believe that such title would not be
insurable subject to customary exceptions.
(c) Each of the Real Property Leases is valid and
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and there is no default under any Real Property
Lease by the Company or the applicable Subsidiary or, to the knowledge of the
Company, by any other party thereto, and no event has occurred that with the
lapse of time or the giving of notice or both would constitute a default
thereunder. The Company has delivered or otherwise made available to the
Purchasers true, correct and complete copies of the Real Property Leases,
together with all amendments, modifications, supplements or side letters
affecting the obligations of any party thereunder.
(d) No previous or current party to any Real Property Lease
has given notice of or made a claim with respect to any breach or default
thereunder. With respect to those Real Property Leases that were assigned or
subleased to the Company or a Subsidiary by a third party, all necessary
consents to such assignments or subleases have been obtained.
4.11 TANGIBLE PERSONAL PROPERTY; ASSETS. Each of the Company
and its Subsidiaries has good, legal and marketable title to or valid leasehold
interests in, all of its personal property and assets. The personal property
owned by the Company or its Subsidiaries are held in each case free and clear of
all Liens, other than Permitted Liens. With respect to the
7
personal property and assets that the Company or any Subsidiary leases, the
lessee thereunder is in compliance with such leases except for such
noncompliance as would not have a Material Adverse Effect and the lessee holds a
valid leasehold interest free and clear of any Liens, other than Permitted
Liens. All material items of personal property and assets owned or leased by the
Company and its Subsidiaries are in good operating condition, normal wear and
tear excepted.
4.12 INTANGIBLE PROPERTY. Each of the Company and its
Subsidiaries owns or possesses adequate licenses or other rights to use all
patents, patent applications, trademarks, trademark applications, service marks,
service xxxx applications, trade names, copyrights, manufacturing processes,
software, formulae, trade secrets and know how (collectively, "INTELLECTUAL
PROPERTY") necessary to the conduct of its business as conducted; if any such
Intellectual Property necessary to the conduct of the business as proposed to be
conducted is not owned or licensed to the Company or to any of its Subsidiaries,
such Intellectual Property is readily available to the Company on commercially
reasonable terms, and no claim is pending or, to the knowledge of the Company,
threatened to the effect that the operations of the Company or any Subsidiary
infringe upon or conflict with the asserted rights of any other Person under any
Intellectual Property, and the Company does not know of any basis for any such
claim (whether or not pending or threatened). No claim is pending or, to the
knowledge of the Company, threatened to the effect that any such Intellectual
Property owned or licensed by the Company or any Subsidiary, or which the
Company or a Subsidiary otherwise has the right to use, is invalid or
unenforceable by the Company or the applicable Subsidiary, and the Company does
not know of any basis for any such claim (whether or not pending or threatened).
Neither the Company nor any Subsidiary has granted or assigned to any other
Person any right to provide the services or proposed services of the Company and
its Subsidiaries.
4.13 TECHNOLOGY. Except as set forth in SCHEDULE 4.13, the
products, processes, proprietary technology and other proprietary know-how owned
or used by the Company and its Subsidiaries were completely developed by the
Company's full-time employees only; the concepts, inventions and original works
of authorship owned or used by the Company or its Subsidiaries were developed or
conceived by employees within the scope of their employment by the Company (or
the applicable Subsidiary) and are connected with the Company's and its
Subsidiaries' underlying products, processes and proprietary technology. Except
as set forth in SCHEDULE 4.13, no independent contractors or consultants were
used or employed by the Company or a Subsidiary in the development of the
products, processes, proprietary technology and other proprietary know-how owned
or used by the Company and its Subsidiaries.
4.14 REAL PROPERTY HOLDING CORPORATION. The Company is not a
"United States real property holding corporation" within the meaning of Section
847(c)(2) of the Code.
4.15 MATERIAL CONTRACTS.
(a) Except as set forth on SCHEDULE 4.15, neither the
Company, any Subsidiary nor any of their respective properties or assets is a
party to or bound by any (i) Contract not made in the ordinary course of
business, or involving a commitment or payment by the Company or any Subsidiary
in excess of $50,000 or, in the Company's belief, otherwise material to the
business of the Company or any Subsidiary, (ii) Contract among members or
granting a right of first refusal or for a partnership or a joint venture or for
the acquisition, sale or lease of any assets
8
or share capital of the Company or any other Person or involving a sharing of
profits, (iii) mortgage, pledge, conditional sales contract, security agreement,
factoring agreement or other similar Contract with respect to any real or
tangible personal property of the Company or any Subsidiary, (iv) loan
agreement, credit agreement, promissory note, guarantee, subordination
agreement, letter of credit or any other similar type of Contract, (v) Contract
with any Governmental Body outside the ordinary course of business, (vi)
Contract with respect to the discharge, storage or removal of hazardous
materials or (vii) binding commitment or agreement to enter into any of the
foregoing. The Company has delivered or otherwise made available to the
Purchasers true, correct and complete copies of the Contracts listed on SCHEDULE
4.15, together with all amendments, modifications, supplements or side letters
affecting the obligations of any party thereunder.
(b) (i) Each of the Contracts listed on SCHEDULE 4.15 is
valid and enforceable against the Company or its Subsidiaries in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity), and there
is no default under any Contract listed on SCHEDULE 4.15 by the Company or any
of its Subsidiaries or, to the knowledge of the Company, by any other party
thereto, which is likely to have a Material Adverse Effect, and no event has
occurred that with the lapse of time or the giving of notice or both would
constitute a default by the Company thereunder which is likely to have a
Material Adverse Effect. (ii) No previous or current party to any Contract has
given written notice to the Company or any Subsidiary of or made a claim with
respect to any breach or default thereunder and the Company has no knowledge of
any notice of or claim with respect to any such breach or default.
(c) With respect to the Contracts listed on SCHEDULE 4.15
that were assigned to the Company or any Subsidiary by a third party, all
necessary consents to such assignment have been obtained.
4.16 EMPLOYEE BENEFITS. Except as set forth on SCHEDULE 4.16,
neither the Company nor any Subsidiary has in effect any employment agreements,
consulting agreements, deferred compensation, pension or retirement agreements
or arrangements, bonus, incentive or profit-sharing plans or arrangements, or
labor or collective bargaining agreements, written or oral. The Company and its
Subsidiaries are in compliance in all material respects with all applicable Laws
relating to labor, employment, fair employment practices, terms and conditions
of employment, and wages and hours.
4.17 EMPLOYEES.
(a) To the knowledge of the Company, no key executive
Employee and no group of Employees or independent contractors of the Company or
any Subsidiary has any plans to terminate his, her or its employment or
relationship as an Employee or independent contractor with the Company or such
Subsidiary.
9
(b) SCHEDULE 4.17 sets forth a true and complete list of the
name and amount of annual compensation of (i) each Employee of the Company or
any Subsidiary whose current annual compensation is $50,000 or more, together
with such person's job title and amounts and forms of compensation and fringe
and severance benefits and (ii) each consultant, contractor or subcontractor
equivalent of the Company and its Subsidiaries whose annual compensation by the
Company or its Subsidiary is $50,000 or more.
(c) To the best of the Company's knowledge after reasonable
inquiry, no key executive Employee or any other Employee of the Company or any
Subsidiary is a party to or is otherwise bound by any agreement or arrangement
(including, without limitation, confidentiality agreements, non-competition
agreements, licenses, covenants, or commitments of any nature), or subject to
any judgment, decree, or Order of any court or Governmental Body, (i) that would
conflict with such Employee's obligation diligently to promote and further the
interest of the Company or such Subsidiary or (ii) that would conflict in any
material respect with the Company's (or the applicable Subsidiary's) business as
now conducted or as proposed to be conducted. 4.18 LITIGATION. There are no
Legal Proceedings pending or, to the knowledge of the Company, threatened that
question the validity of this Agreement or any of the Transaction Documents or
any action taken or to be taken by the Company in connection with the
consummation of the transactions contemplated hereby or thereby. Except as set
forth on SCHEDULE 4.18, there are no Legal Proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company, any of
its Subsidiaries or any of their respective properties or assets, and there is
no reasonable basis for any such Legal Proceeding. There is no outstanding or,
to the knowledge of the Company, threatened Order of any Governmental Body
against, in respect of or naming the Company or any of its Subsidiaries or in
respect of any of their respective properties or assets or against the Company
or its Subsidiaries.
4.19 COMPLIANCE WITH LAWS; PERMITS.
(a) The Company and each Subsidiary is and at all times has
been in compliance in all material respects with all material Laws and material
Orders promulgated by any Governmental Body applicable to the Company or such
Subsidiary, or to the conduct of the business or operations of the Company or
such Subsidiary, or the use of any of their respective properties (including any
leased properties) and assets. Neither the Company nor any Subsidiary has
received any notices of violation or alleged violation of any such Law or Order
by any Governmental Body.
(b) The Company and each Subsidiary has all Permits
necessary for the conduct of its business where the failure to have such Permits
could have a Material Adverse Effect. The Company and each Subsidiary has
complied in all material respects with all conditions of such Permits applicable
to it; no default or violation, or event that with the lapse of time or giving
of notice or both would become a default or violation which could have a
Material Adverse Effect, has occurred in the due observance of any such Permit;
all such Permits are in full force and effect without further consent or
approval of any Person; and neither the Company nor any Subsidiary has received
any notice from any source to the effect that there is lacking any
10
such material Permit required in connection with the current operations of the
Company or such Subsidiary.
4.20 ENVIRONMENTAL AND SAFETY LAWS. Neither the Company nor
any Subsidiary is in violation of any applicable Laws relating to the
environment or occupational health and safety where the failure to so comply
could have a Material Adverse Effect and no material expenditures are or will be
required in order to comply with any such existing Laws.
4.21 INVESTMENT COMPANY ACT. The Company is not, nor is it
directly or indirectly controlled by or acting on behalf of, any Person that is
an investment company within the meaning of the Investment Company Act of 1940,
as amended.
4.22 AFFILIATE TRANSACTIONS. SCHEDULE 4.22 sets forth each
Affiliate Transaction of the Company and its Subsidiaries, including the
parties, material terms (including amounts due from the Company (or a
Subsidiary) or owed to the Company (or a Subsidiary)), restrictions and
obligations of the Company and its Subsidiaries in connection with each such
Affiliate Transaction. Each such Affiliate Transaction is on an arm's-length
basis and on terms no less favorable to the Company or a Subsidiary than could
be obtained from non-related parties. The Company has delivered or otherwise
made available to the Purchasers true, correct and complete copies of all
written Contracts relating to such Affiliate Transactions, together with all
amendments, modifications, supplements or side letters affecting the obligations
of any party thereunder.
4.23 DISCLOSURE; SURVIVAL. There is no fact which has not
been disclosed to the Purchasers of which the Company has knowledge and which
has had or could reasonably be anticipated to result in a Material Adverse
Change. All representations and warranties set forth in this Agreement or in any
writing or certificate delivered in connection with this Agreement shall survive
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby for a period of sixty (60) days after delivery
of audited financial statements for 1999 (the "SURVIVAL PERIOD") and shall not
be affected by any examination made for or on behalf of the Purchasers, the
knowledge of the Purchasers, or the acceptance by the Purchasers of any
certificate or opinion.
4.24 INSURANCE. There is in full force and effect one or more
policies of insurance issued by insurers of recognized responsibility, insuring
the Company, its Subsidiaries and their respective properties, business and
projects against such losses and risks, and in such amounts, as are customary in
the case of corporations of established reputation engaged in the same or
similar business and similarly situated. Neither the Company nor any Subsidiary
has been refused any insurance coverage sought or applied for, and the Company
has no reason to believe that the Company and its Subsidiaries will be unable to
renew its existing insurance coverage as and when the same shall expire upon
terms at least as favorable as those presently in effect, other than possible
increases in premiums that do not result from any act or omission of the Company
or the applicable Subsidiary. SCHEDULE 4.24 sets forth a list of each insurance
policy (specifying the insurer, the amount of coverage, the type of insurance,
the policy number, the expiration date, the annual premium (current and for each
of the last three (3) years) and any pending claims thereunder) maintained by
the Company and its Subsidiaries relating to its properties, assets, business or
personnel, and each inspection report or recommendation, if any,
11
during the last three (3) years as to the conditions of the properties and
assets owned, leased, occupied or operated by it or the conduct of its business.
Except as disclosed on SCHEDULE 4.24, neither the Company nor any Subsidiary is
in default in any material respect with respect to any provision contained in
any insurance policy maintained by the Company or any of its Subsidiaries, and
neither the Company nor any Subsidiary has failed to give any notice or present
any presently existing claims under any insurance policy in due and timely
fashion.
4.25 CUSTOMERS AND SUPPLIERS. SCHEDULE 4.25 sets forth a list
of the ten (10) largest customers and the ten (10) largest suppliers of the
Company and its Subsidiaries and the dollar amount of purchases or sales which
each such customer or supplier represents. There exists no actual or, to the
knowledge of the Company, threatened termination or cancellation of the business
conducted by the Company or any Subsidiary with any customer, supplier or group
of customers or group of suppliers set forth on SCHEDULE 4.25.
4.26 YEAR 2000. Each item of hardware, software, information
technology, embedded, or processor based system and/or any combination thereof,
used, developed, manufactured, distributed, licensed, transferred or delivered,
by the Company or any of its Subsidiaries (collectively, the "SYSTEM"), shall be
able to correctly function, operate, process data or perform date related
calculations, including, but not limited to, calculating, comparing and
sequencing, from, into and between the years 1999 and 2000, accurately process,
provide and/or receive date data, including leap year calculations, into and
between the years 1999, 2000 and beyond, shall otherwise function as per the
specifications thereof before, during and following January 1, 2000. Neither
performance nor functionality of the System shall be affected by dates prior to,
during and after January 1, 2000. A System containing or calling on a calendar
function including, without limitation, any function indexed to the CPU clock,
and any function providing specific dates or days, or calculating spans of dates
or days shall record, store, process, provide and, where appropriate, insert,
true and accurate dates and calculations for dates and spans, before, during and
following January 1, 2000. The System shall have no lesser functionality or
operability with respect to records containing dates, before, during or after
January 1, 2000 than heretofore with respect to dates prior to January 1, 2000.
The System shall be fully interoperable and interface with any and all other
systems, software and/or hardware used by the Company, its Subsidiaries and
their respective customers before, during or after January 1, 2000, and/or
otherwise exchange data, including date related data therewith.
4.27 FINANCIAL ADVISORS. Except as set forth in SCHEDULE
4.27, no agent, broker, investment banker, finder, financial advisor or other
Person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee from the Company, directly or indirectly, in
connection with the transactions contemplated by this Agreement or any
Transaction Document and no Person is entitled to any fee or commission or like
payment from the Company in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of the Company.
4.28 CONDITION OF PROPERTIES. All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by the
Company and its Subsidiaries are in good operating condition and repair, are
reasonably fit and usable for the purposes for which they are being used, are
adequate and sufficient for the Company and its Subsidiaries' respective
businesses and conform in all material respects with all applicable Laws.
12
4.29 ILLEGAL OR UNAUTHORIZED PAYMENTS; POLITICAL
CONTRIBUTIONS. The operations and practices of the Company and its Subsidiaries
have been conducted at all times during the past five (5) years in compliance
with the provisions of the United States Foreign Corrupt Practices Act of 1977,
as amended.
4.30 PENDING CHANGES. To the actual knowledge of the Company,
there is no pending or threatened change in any Law which materially affects or
could materially affect the Company or the business, assets, liabilities,
prospects, properties, results of operations or condition (financial or
otherwise) of the Company or its Subsidiaries.
4.31 SECURITIES LAWS. The Company has complied with all
applicable U.S. federal and state securities laws in connection with the offer,
issuance and sale of the Preferred Shares. Prior to the Closing, neither the
Company nor anyone acting on its behalf has sold, offered to sell or solicited
offers to buy the Preferred Shares or similar securities to, or solicit offers
with respect thereto from, or entered into any preliminary conversations or
negotiations relating thereto with, any Person, so as to bring the issuance and
sale of the Preferred Shares under the registration provisions of the Securities
Act, and applicable state securities laws. Neither the Company nor any Person
acting on its behalf has offered the Preferred Shares to any Person by means of
general or public solicitation or general or public advertising, such as by
newspaper or magazine advertisements, by broadcast media, or at any seminar or
meeting whose attendees were solicited by such means.
4.32 BACKLOG. SCHEDULE 4.32 sets forth a list of Revenue and
Customer "Backlog" by customer as of July 31, 1999. Such list has been
accurately compiled, is true, correct and complete insofar as it purports to
reflect revenues actually generated, and represents the best good faith forecast
of the Company insofar as it purports to forecast revenues for periods after the
date hereof.
4.33 ACCOUNTS RECEIVABLE. The accounts receivable of the
Company and its Subsidiaries were created in the ordinary course of business
and, to the Company's knowledge, are fully collectible, without offset or other
deduction, subject to appropriate reserves in accordance with GAAP applied on a
consistent basis. SCHEDULE 4.33 sets forth a good faith estimate of the accounts
receivable of the Company and its Subsidiaries as of July 31, 1999.
4.34 REGISTRATION RIGHTS. Except for the rights granted under
the Transaction Documents, no Person has demand or other rights to cause the
Company to file any registration statement under the Securities Act relating to
any securities of the Company or any right to participate in any such
registration statement.
4.35 BOOKS AND RECORDS. The books of account, ledgers, order
books, records and documents of the Company and its Subsidiaries accurately and
completely reflect all material information relating to the business of the
Company or the applicable Subsidiary, the location and collection of its assets,
and the nature of all transactions giving rise to the obligations or accounts
receivable of the Company or the applicable Subsidiary.
4.36 PFIC. The Company is not a "passive foreign investment
company" within the meaning of Section 1297 of the Code.
13
4.37 SIGNATURE PAGES. Notwithstanding anything in this
Article 4 to the contrary, the representations and warranties made as of the
date hereof (but not as of the Closing Date) in Sections 4.2 and 4.4 are subject
to the receipt by the Company of signature pages to the relevant consents and
authorizations referred to therein.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company that:
5.1 CAPACITY; AUTHORIZATION. Such Purchaser has all legal
capacity to enter into this Agreement and to carry out its obligations
hereunder. Assuming due execution and delivery by the Company of this Agreement,
this Agreement will constitute a legal, valid and binding obligation of such
Purchaser, enforceable against such Purchaser in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
5.2 INVESTMENT PURPOSES. (a) Such Purchaser is acquiring the
Preferred Shares it has agreed to purchase for investment purposes only, for its
own account, and not as nominee or agent for any other Person, and not with a
view to, or for resale in connection with, any distribution thereof within the
meaning of the Securities Act, (b) it understands and acknowledges that the
Preferred Shares have not been registered under the Securities Act or any other
securities laws, (c) it is not an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Company, (d) it has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment, (e) it is an "accredited investor" within the meaning
of Rule 501 of Regulation D under the Securities Act, (f) the Company has made
available to it the opportunity to ask questions and to receive answers, and to
obtain information necessary to evaluate the merits and risks of this
investment, (g) such Purchaser understands, acknowledges and agrees that the
Preferred Shares have not been registered under (and that the Company has no
present intention to register the Preferred Shares under) the Securities Act or
applicable state securities laws, and may not be sold or otherwise transferred
by the Purchasers to a United States person unless the Preferred Shares have
been registered under the Securities Act and applicable U.S. state securities
laws or are sold or transferred in a transaction exempt therefrom, and (h) no
broker has acted on behalf of such Purchaser in connection with this Agreement,
and there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection therewith based on any agreement, arrangement
or understanding with such Purchaser or any action taken by such Purchaser.
5.3 PAYMENT OF PURCHASE PRICE. Such Purchaser has available
resources in order to pay to the Company the purchase price for the Preferred
Shares in accordance with the terms and conditions of this Agreement.
14
6. FURTHER AGREEMENTS OF THE PARTIES.
6.1 RESERVED SHARES. For so long as the Preferred Shares are
convertible, the Company shall reserve that number of Common Shares issuable
upon conversion of the Preferred Shares, which shares shall not be subject to
any preemptive or other similar rights.
6.2 USE OF PROCEEDS. The Company shall use the proceeds from
the sale of the Preferred Shares under this Agreement for the following
purposes: advertising, brand positioning and development, production of
proprietary and third-party content, product and technology development,
expansion of local sales operations, general corporate purposes and such other
purposes as are discussed in the Private Placement Memorandum.
6.3 ACCESS TO INFORMATION. The Purchasers and their
Representatives shall be entitled, upon reasonable notice, and at their own
expense, to make such investigation of the properties, business and operations
of the Company and such examination of the books, records and financial
condition of the Company as they reasonably request and to make extracts and
copies of such books and records. Any such investigation and examination shall
be conducted during regular business hours and under reasonable circumstances
without material interference with the Company's normal business operations, and
the Company and its Representatives shall cooperate fully therein. No
investigation by the Purchasers or their Representatives prior to or after the
date of this Agreement shall diminish or obviate any of the representations,
warranties, covenants or agreements of the Company contained in this Agreement
or the Transaction Documents. In order that the Purchasers may have full
opportunity to make such physical, business, accounting and legal review,
examination of the affairs of the Company and investigation as may be reasonably
requested, the Company shall cause its Representatives to cooperate fully with
the Representatives of the Purchasers in connection with such review and
examination.
6.4 CONFIDENTIALITY. Except as may be required by applicable
Law or as otherwise agreed among the parties hereto, neither the Company, the
Purchasers nor any of their respective Affiliates shall at any time divulge,
disclose, disseminate, announce or release any information to any Person
concerning this Agreement, the Transaction Documents, the transactions
contemplated hereby or thereby, any trade secrets or other confidential
information of the Company or the Purchasers, without first obtaining the prior
written consent of the other parties hereto; PROVIDED, HOWEVER, that the parties
shall be entitled to disclose information with respect to the Purchasers'
investment in the Company on any reports the Purchasers furnish to their
investors or as otherwise required by Law. The provisions of this Section 6.4
shall not apply to Intel Atlantic, Inc., whose obligations with respect to the
treatment of such information, including Corporate Information (as defined in
Section 9.9), are set forth in EXHIBIT F hereto.
6.5 OTHER ACTIONS. The Company and the Purchasers agree to
execute and deliver such other documents and take such other actions as the
other parties may reasonably request for the purpose of carrying out the intent
of this Agreement and the Transaction Documents.
15
6.6 YEAR 2000 COVENANT. The Company undertakes to promptly
inform the Purchasers of any material deficiency or expected cost in complying
with the "Year 2000" problem.
6.7. INDEMNITY.
(a) The Company agrees to indemnify, defend and hold
harmless the Purchasers (and their partners (and each officer and director
thereof), directors, officers, members, stockholders, Employees, Affiliates,
agents and permitted assigns) from and against any and all losses, claims,
liabilities, damages, deficiencies, costs or expenses (including interest,
penalties, and reasonable attorneys' fees, disbursements and related charges)
(collectively, "LOSSES") based upon, arising out of or otherwise in respect of
any inaccuracy in or breach of any representations, warranties, covenants or
agreements of the Company contained in this Agreement or the Transaction
Documents; provided, however, that the Purchasers shall have no right to
indemnification hereunder unless and until its Losses, when aggregated with any
and all other Losses which the Purchasers may have against the Company, exceed
$250,000. The provisions of this Section 6.7(a) shall survive the termination of
this Agreement for a period equal to the Survival Period.
(b) Each Purchaser agrees, severally and not jointly, to
indemnify, defend and hold harmless the Company (and its directors, officers,
members, Employees, Affiliates, agents and permitted assigns) from and against
any and all Losses based upon, arising out of or otherwise in respect of any
inaccuracy in or breach by it of any representations, warranties, covenants or
agreements of such Purchaser (and no other) contained in this Agreement.
6.8 OTHER AFFIRMATIVE COVENANTS OF THE COMPANY. Without
limiting any other covenants and provisions hereof, the Company covenants and
agrees that until the consummation of a Qualifying IPO, it will perform and
observe the following covenants and provisions, and will cause each Subsidiary,
if and when such Subsidiary exists, to perform and observe such of the following
covenants and provisions as are applicable to such Subsidiary:
(a) The Company shall pay and discharge, and cause each
Subsidiary to pay and discharge, all Taxes, assessments and governmental charges
or levies imposed upon it or upon its income, profits or business, or upon any
properties belonging to it, prior to the date on which penalties attach thereto,
and all lawful claims which, if unpaid, might become a Lien or charge upon any
properties of the Company or any Subsidiary, PROVIDED that neither the Company
nor any Subsidiary shall be required to pay any such Tax, assessment, charge,
levy or claim which is being contested in good faith and by appropriate
proceedings if the Company or any Subsidiary shall have set aside on its books
sufficient reserves, if any, with respect thereto. The Company shall pay and
cause each Subsidiary to pay, when due, or in conformity with customary trade
terms, all lease obligations, all trade debt, and all other indebtedness
incident to the operations of the Company or its Subsidiaries, except such as
are being contested in good faith and by proper proceedings if the Company or
Subsidiary concerned shall have set aside on its books sufficient reserves, if
any, with respect thereto.
(b) The Company shall maintain insurance with a reputable
insurance company or association in such amount and covering such risks as is
customary coverage
16
covering its properties and businesses customarily carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Company or any Subsidiary operates for the type and scope of its
properties and businesses and the Company shall maintain, and cause each
Subsidiary to maintain, such insurance. The Company will not cause or permit any
assignment of the proceeds of the life insurance policies specified in the first
sentence of this paragraph and will not borrow against such policies. The
Company will add the Purchasers as a notice party to such policies and will
request that the issuer(s) of such policies provide such designee with at least
ten (10) days' notice before either such policy is terminated (for failure to
pay premiums or otherwise) or assigned, or before any change is made in the
designation of a beneficiary thereof.
(c) The Company shall preserve and maintain (except where
noncompliance will not result in a Material Adverse Effect) and, unless the
Company deems it not to be in its best interests, cause each Subsidiary to
preserve and maintain, its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified, and cause each Subsidiary to qualify and remain qualified, as a
foreign corporation in each jurisdiction in which such qualification is
necessary or desirable in view of its business and operations or the ownership
or lease of its properties. The Company shall use commercially reasonable best
efforts to secure, preserve and maintain (except where noncompliance will not
result in a Material Adverse Effect) and cause each Subsidiary to use
commercially reasonable best efforts to secure, preserve and maintain (except
where noncompliance will not result in a Material Adverse Effect), all licenses
and other rights to use patents, processes, licenses, Permits, trademarks, trade
names, inventions, intellectual property rights or copyrights owned or possessed
by it and deemed by the Company to be material to the conduct of its business or
the business of any Subsidiary.
(d) The Company shall comply (except where noncompliance
will not result in a Material Adverse Effect), and cause each Subsidiary to
comply, with the requirements of all applicable Laws and Orders of any
Governmental Body, where noncompliance would have a Material Adverse Effect.
(e) The Company shall keep, and cause each Subsidiary to
keep, adequate records and books of account in which complete entries will be
made in accordance with GAAP consistently applied, reflecting all financial
transactions of the Company and any Subsidiary, and in which, for each fiscal
year, all proper reserves for depreciation, depletion, returns of merchandise,
obsolescence, amortization, Taxes, bad debts and other purposes in connection
with its business shall be made.
(f) The Company shall use commercially reasonable best
efforts to maintain and preserve, and cause each Subsidiary to use commercially
reasonable best efforts to maintain and preserve, all of its properties and
assets, necessary for the proper conduct of its business, in good repair,
working order and condition, ordinary wear and tear excepted, including, without
limitation, the maintenance and preservation of any material patents, licenses,
Permits or agreements being used by the Company in its business as now operated
and as now proposed to be operated.
17
(g) The Company shall promptly, fully and in detail, inform
the Board of Directors of any substantive discussions, offers or contracts
relating to possible financings of any nature for the Company, whether initiated
by the Company or any other Person, except for (i) arrangements with trade
creditors, and (ii) utilization by the Company or any Subsidiary of commercial
lending arrangements with financial institutions.
(h) The Company shall at all times maintain provisions in
its Memorandum of Association and Articles of Association indemnifying all
directors against liability to the maximum extent permitted under the laws of
the British Virgin Islands.
6.9 ISSUANCE OF ADDITIONAL PREFERRED SHARES. Without the
consent of the Purchasers, the Company shall not issue any Preferred Shares
(other than the issuance and sale of Preferred Shares pursuant to this
Agreement) to any Person that is not named in the definition of "Strategic Sale"
contained in the Memorandum of Association.
6.10 WAIVER. Each Purchaser hereby irrevocably waives its
right to include any of its Preferred Shares in the Company's proposed
registration statement on Form F-1, which the Company expects to be declared on
or about November 30, 1999.
7. OTHER OBLIGATIONS OF THE PARTIES.
7.1 CERTAIN NOTIFICATIONS. At all times prior to the
Closing, each party hereto shall as promptly as reasonably practicable notify
the others in writing of the occurrence of any event of which it obtains
knowledge which will result, or in the opinion of such party has a reasonable
prospect of resulting, in the failure to satisfy the conditions specified in
Section 8 hereof.
7.2 PUBLIC ANNOUNCEMENTS. The parties hereto agree to
consult promptly with each other prior to issuing any press releases or
otherwise making public statements with respect to the transactions contemplated
hereby, and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law.
7.3 FURNISHING INFORMATION. Each of the parties hereto will,
as soon as practicable after reasonable request therefor, furnish all the
information concerning it required for inclusion in any statement or application
made by any of them to any governmental or regulatory body in connection with
the transactions contemplated by this Agreement.
8. CONDITIONS TO CLOSING.
8.1 CONDITIONS OF OBLIGATIONS OF THE PURCHASERS. The
obligation of the Purchasers to purchase and pay for the Preferred Shares which
it has agreed to purchase on the Closing Date is subject to the fulfillment in
all material respects prior to or on the Closing Date of the following
conditions, any of which may be waived in whole or in part by the Purchasers:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company under this Agreement shall be deemed to have been made
again on the Closing Date
18
(other than those representations and warranties made expressly as of a date
prior to the Closing Date) and shall then be true and correct.
(b) COMPLIANCE WITH AGREEMENT. The Company shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by the Company on or before the
Closing Date.
(c) APPROVALS. The Company shall have obtained any and all
consents, waivers, approvals or authorizations, with or by any Governmental Body
or any other Person required for the valid execution of this Agreement and the
transactions contemplated hereby.
(d) NO INJUNCTION. No Governmental Body or any other Person
shall have issued an Order which shall then be in effect restraining or
prohibiting the completion of the transactions contemplated hereby, nor shall
any such Order be threatened or pending.
(e) NO MATERIAL ADVERSE CHANGE. Since December 31, 1998,
there shall not have been a Material Adverse Change.
(f) CERTIFICATE OF OFFICER. The Company shall have delivered
to the Purchasers a certificate dated the Closing Date, executed by its Chief
Executive Officer, certifying the satisfaction of the conditions specified in
paragraphs (a), (b), (c), (d), (e) and (h) of this Section 8.1.
(g) OPINIONS OF THE COMPANY'S COUNSEL. The Purchasers shall
have received from Paul, Hastings, Xxxxxxxx & Xxxxxx, LLP, U.S. counsel for the
Company, and from Xxxxxxx, Xxxx & Pearmen, British Virgin Islands counsel for
the Company, favorable opinions dated the Closing Date, in form and substance
satisfactory to the Purchasers and their counsel.
(h) MEMORANDUM AND ARTICLES. The Amended and Restated
Memorandum of Association and the Amended and Restated Articles of Association
providing for the terms, preferences, designations and other rights of the
Preferred Shares set forth in Exhibit C hereto shall have been duly adopted and
executed and filed with the appropriate authorities in the British Virgin
Islands. The Amended and Restated Memorandum of Association and the Amended and
Restated Articles of Association shall be in full force and effect as of the
Closing under the laws of the British Virgin Islands and shall not have been
further amended or modified. The Company shall not have adopted or filed any
other document designating terms, relative rights or preferences of the
Preferred Shares. A certified copy of the Amended and Restated Memorandum of
Association and the Amended and Restated Articles of Association shall have been
delivered to counsel for the Purchasers.
(I) AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT AND
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT. The Purchasers shall have received
from each of the parties thereto (other than the Purchasers) executed versions
of the Amended and Restated Shareholders Agreement and the Amended and Restated
Registration Rights Agreement on the Closing Date, in the form attached hereto
as Exhibits D and E.
(J) SUPPORTING DOCUMENTS. The Purchasers shall have received
the following:
19
(i) Copies of resolutions of the Board and the members of
the Company, certified by the Secretary of the Company, authorizing and
approving the amendments to the Amended and Restated Memorandum of Association
and the Amended and Restated Articles of Association set forth in Exhibit C and,
as to the Board, the execution, delivery and performance of this Agreement and
the Transaction Documents and the issuance of the Preferred Shares, the forms of
share certificates, and all other documents and instruments to be delivered
pursuant hereto and thereto;
(ii) A copy of the consent executed by holders of a majority
of the shares of the Class A Preferred Stock issued and outstanding as of the
date hereof consenting to the issuance of the Preferred Shares pursuant to this
Agreement; and
(iii) A certificate of incumbency executed by the Secretary of
the Company certifying the names, titles and signatures of the officers
authorized to execute the documents referred to in subparagraph (I) above and
further certifying that the Amended and Restated Memorandum of Association and
the Amended and Restated Articles of Association of the Company, as amended in
accordance with Exhibit C and delivered to the Purchasers at the time of the
execution of this Agreement have been validly adopted and have not been further
amended or modified.
(k) UPDATING OF INFORMATION. The Company shall have promptly
delivered to the Purchasers any information concerning events subsequent to the
date of this Agreement which is necessary to supplement the information
contained in or made a part of the representations and warranties contained
herein, including the schedules provided in connection with this Agreement, or
delivered by the Company pursuant to any of the covenants contained herein, in
order that the information contained herein or so delivered be complete and
accurate in all material respects as of the Closing Date. Notwithstanding the
preceding sentence, for purposes of determining the parties' rights and
obligations under this Agreement, the schedules delivered by the Company shall
be deemed to include only that information contained therein on the date of this
Agreement.
8.2 CONDITIONS OF COMPANY'S OBLIGATIONS. The Company's
obligation to issue and sell the Preferred Shares to the Purchases on the
Closing Date is subject to the fulfillment prior to or on the Closing Date of
the flowing conditions, any of which may be waived in whole or in part by the
Company:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchasers under this Agreement shall be deemed to have been
made again on the Closing Date and shall then be true and correct in all
material respects.
(b) COMPLIANCE WITH AGREEMENT. Each of the Purchasers shall
have performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by such Purchaser on or before the
Closing.
(c) APPROVALS. Each of the Purchasers shall have obtained
any and all consents, waivers, approvals, Permits or authorizations, with or by
any Governmental Body
20
or any other Person required for the valid execution of this Agreement and the
transactions contemplated hereby.
(d) PAYMENT OF PURCHASE PRICE. Each Purchaser shall have
delivered its Purchase Price specified in Section 2.1 hereof.
(e) NO INJUNCTION. No Governmental Body or any other Person
shall have issued an Order which shall then be in effect restraining or
prohibiting the completion of the transactions contemplated hereby, nor shall
any such Order be threatened or pending.
9. MISCELLANEOUS.
9.1 CERTAIN DEFINITIONS.
"AFFILIATE" of any Person means any Person that directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, "CONTROL" (including with its correlative
meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person (whether through ownership
of securities or partnership or other ownership interests, by contract or
otherwise).
"CODE" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"COMMON SHARES" means the ordinary shares, par value $0.01 per
share, of the Company.
"CONTRACT" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sales contract, mortgage, license,
franchise, insurance policy, commitment or other arrangement or agreement,
whether written or oral.
"DOLLARS" or "$" means the currency of the United States or
its foreign currency equivalent at the time the determination is made.
"EMPLOYEE" means any current employee, office consultant,
independent contractor, agent, officer or director of the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Securities and Exchange Commission thereunder, all as the same shall be in
effect at the time.
"GAAP" means generally accepted accounting principles, as in
effect in the United States.
"GOVERNMENTAL BODY" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether federal,
state, local or foreign, or any agency, instrumentality or authority thereof, or
any court or arbitrator (public or private).
21
"LAW" means any federal, state, local or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
requirement or guideline.
"LEGAL PROCEEDING" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private), claims or governmental
proceedings.
"LIEN" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind, including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof and the filing of or agreement to give any financing statement under the
Uniform Commercial Code (or similar laws) of any jurisdiction and including any
lien or charge arising by statute or other law.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
the business, assets, liabilities, prospects, properties, results of operations
or condition (financial or otherwise) of the Company and its Subsidiaries, taken
as a whole.
"MATERIAL ADVERSE EFFECT" means any event, circumstance,
condition, fact, effect, or other matter which has had or could reasonably be
expected to have a material adverse effect (i) on the business, assets,
liabilities, prospects, properties, results of operations or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole or
(ii) on the ability of the Company and such subsidiaries to perform on a timely
basis any material obligation under this Agreement or to consummate the
transactions contemplated hereby.
"ORDER" means any order, injunction, judgment, decree, ruling,
writ, assessment or arbitration award.
"PERMITS" means any approvals, authorizations, consents,
licenses, permits or certificates by or of any Governmental Body.
"PERMITTED LIENS" shall mean (a) Liens for ad valorem real or
personal property taxes or assessments not at the time due and (b) Liens in
respect of pledges or deposits under workers' compensation laws or similar
legislation, carriers', warehousemen's, mechanics', laborers', and materialmen's
and similar liens, if the obligations secured by such Liens are not then
delinquent.
"PERSON" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.
"QUALIFYING IPO" means an underwritten initial public offering
of Common Shares of the Company pursuant to an effective registration statement
under the Securities Act, as then in effect (or any comparable statement under
any similar federal statute then in force or effect) in which the net proceeds
to the Company are equal to or greater than $35.0 million.
"REGISTER" means to register under the Securities Act and
applicable state securities laws for the purpose of effecting a public sale of
securities.
22
"REPRESENTATIVES" of a Person means its officers, Employees,
agents, legal advisors and accountants.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the Securities
and Exchange Commission thereunder, all as the same shall be in effect at the
time.
"TAXES" means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, share capital, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value-added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
9.2 EXPENSES.
(a) At the Closing, the Company shall reimburse the
Purchasers for the reasonable out-of-pocket fees and expenses incurred by the
Purchasers in connection with the transactions contemplated hereby. The Company
agrees that such fees and expenses incurred through the Closing Date may be
deducted by the Purchasers from the Purchase Price payable at the Closing.
(b) The Company shall pay its own other out-of-pocket
expenses and all stamp and other Taxes which may be payable in respect of the
execution and delivery of this Agreement, the Transaction Documents, or the
issuance, delivery or acquisition of the Preferred Shares.
(c) The Company further agrees to reimburse the Purchasers
on demand for the Purchasers' reasonable out-of-pocket fees and expenses
incurred in connection with any amendment to or waiver or enforcement of this
Agreement.
9.3 SPECIFIC PERFORMANCE. Each of the parties hereto
acknowledges and agrees that the breach of this Agreement would cause
irreparable damage to the other parties hereto and that the other parties hereto
will not have an adequate remedy at law. Therefore, the obligations of each of
the parties hereto under this Agreement shall be enforceable by a decree of
specific performance issued by any court of competent jurisdiction, and
appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.
9.4 FURTHER ASSURANCES. The Company and the Purchasers agree
to execute and deliver such other documents or agreements as may be necessary or
desirable for the implementation of this Agreement and the consummation of the
transactions contemplated hereby.
23
9.5 SUBMISSION TO JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of any federal or state court located within the
Borough of Manhattan, State of New York over any dispute arising out of or
relating to this Agreement or any of the transactions contemplated hereby and
each party hereby irrevocably agrees that all claims in respect of such dispute
or any suit, action or proceeding related thereto may be heard and determined in
such courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of venue of any such dispute brought in such court or any defense
of inconvenient forum for the maintenance of such dispute. Each of the parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby consents to process
being served by any party to this Agreement in any suit, action or proceeding by
the mailing of a copy thereof in accordance with the provisions of Section 8.10
hereof.
9.6 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement
(including the schedules and exhibits hereto) represents the entire
understanding and agreement among the parties hereto with respect to the subject
matter hereof and can be amended, supplemented or changed, and any provision
hereof can be waived, only by written instrument making specific reference to
this Agreement signed by the parties hereto. No action taken pursuant to this
Agreement, including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, covenant or agreement
contained herein. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. No
failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
9.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflict of laws thereunder which would specify the
application of the law of another jurisdiction.
9.8 HEADINGS; INTERPRETIVE MATTERS. The section headings of
this Agreement are for reference purposes only and are to be given no effect in
the construction or interpretation of this Agreement. No provision of this
Agreement will be interpreted in favor of, or against, any of the parties hereto
by reason of the extent to which any such party or its counsel participated in
the drafting thereof or by reason of the extent to which any such provision is
inconsistent with any prior draft hereof or thereof.
9.9 CONFIDENTIALITY. Each party hereto (other than Intel
Atlantic, Inc.) covenants and agrees to treat any non-public information
provided to it by the Company concerning the business and finances of the
Company ("Corporate Information") as confidential and agrees further that it
will not use, exploit, reproduce, disclose or provide Corporate
24
Information to any third-party (other than any agents of the parties who are
bound by substantially similar obligations of confidentiality) on its own behalf
or otherwise, except with the consent of the Company or as required by law,
legal process or any federal or state regulatory body having jurisdiction over
such party. The provisions of this Section 9.9 shall not apply to any
information which:
(a) was within the public domain prior to the time of
disclosure of Corporate Information to the receiving party or which comes into
the public domain other than as a result of a breach by the party of this
Section 9.9;
(b) was in the possession of the receiving party or any of
its officers, directors, employees, agents, principals, or Affiliates) before
the receiving party received the Corporate Information;
(c) was rightfully acquired by the receiving party from a
third party without, to the knowledge of the receiving party, any restriction or
any obligation of confidentiality; or
(d) was independently developed by the receiving party
without any use or reference to the Corporate Information.
The provisions of this Section 9.9 shall survive the
termination of this Agreement, either in whole or as to any party, for a period
of two (2) years.
9.10 NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally, telecopied or mailed by certified mail, return receipt requested, to
the parties at the address or telecopier number indicated in the signature pages
hereof.
All notices are effective upon receipt or upon refusal if
properly delivered.
9.11 SEVERABILITY. If any provision of this Agreement is
invalid or unenforceable, the balance of this Agreement shall remain in effect.
9.12 BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall create or be
deemed to create any third-party beneficiary rights in any Person not a party to
this Agreement except as provided below. No assignment of this Agreement or of
any rights or obligations hereunder may be made by the Company or the Purchasers
(by operation of law or otherwise) without the prior written consent of the
other parties hereto and any attempted assignment without the required consents
shall be void; PROVIDED, HOWEVER, that any of the Purchasers may assign this
Agreement and any or all of its rights and obligations hereunder, in whole or in
part, to any of its Affiliates, but any such assignment shall not relieve such
Purchaser of its obligations hereunder. In addition, and whether or not any
express assignment has been made, the provisions of this Agreement which are for
the benefit of the Purchasers as purchasers or holders of Preferred Shares (or
any securities pursuant to which such Preferred Shares may be converted or
exercised into) are also for the benefit of and enforceable by, any subsequent
holder of such Preferred Shares who
25
acquires the lesser of (i) $5,000,000 in original purchase price value of the
Preferred Shares other than pursuant to open-market purchases or (ii) fifty
percent (50%) of the number of Preferred Shares purchased by the Purchasers
pursuant hereto. Upon any permitted assignment, the references in this Agreement
to the Purchasers shall also apply to any such assignee unless the context
otherwise requires.
9.13 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
[The rest of this page has been intentionally left blank]
26
IN WITNESS WHEREOF, the parties hereto have executed or have
caused this Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first written above.
EL SITIO, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Title: Chief Financial Officer
Notice address:
Xxxxxxx Xxxxxxxx 000, 0xx Xxxxx
0000 Xxxxxx Xxxxx, Xxxxxxxxx
Attention: Xxxxxxx Xxxxxxx-Xxxxxx
Telephone: (00 00) 0000-0000
Telecopier: (00 00) 0000-0000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
[Signature Page to Share Purchase Agreement - El Sitio, Inc.]
UTILITIVEST II, L.P.
By: Utilitivest II, L.L.C., its General Partner
By: /s/ Hurdle X. Xxx III
-------------------------------------
Name: Hurdle X. Xxx III
Title: Vice President and Director of
Utilitivest II, L.L.C.
Notice address:
Globalvest Management Company
6000 Estate Charlotte Amalie
Xxxxx 0
Xx. Xxxxxx, XX 00000
Telephone - 000-000-0000
xxxx@xxxxxxxxxx.xxx
UTILITIVEST III, L.P.
By Utilitivest III, L.L.C., its General Partner
By: /s/ Hurdle X. Xxx III
-------------------------------------
Name: Hurdle X. Xxx III
Title: Vice President and Director of
Utilitivest III, L.L.C.
Notice address:
Globalvest Management Company
6000 Estate Charlotte Amalie
Xxxxx 0
Xx. Xxxxxx, XX 00000
Telephone - 000-000-0000
xxxx@xxxxxxxxxx.xxx
[Signature Page to Share Purchase Agreement - El Sitio, Inc.]
INTEL ATLANTIC, INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President and Treasurer
Notice address:
Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: M&A Portfolio Manager-M/S RN6-46
Fax Number: (000) 000-0000
With copies to:
Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: General Counsel
Fax Number: (000) 000-0000
[Signature Page to Share Purchase Agreement - El Sitio, Inc.]
EXHIBIT A
Number of Class B Percentage of Class B
NAME PREFERRED SHARES PREFERRED SHARES PURCHASE PRICE
Utilitivest II, L.P. 333,333 30% $3,000,000
Utilitivest III, L.P. 222,222 20% $2,000,000
Intel Atlantic, Inc. 555,556 50% $5,000,000
EXHIBIT F
November 9, 1999
Intel Atlantic, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
In consideration of the purchase by Intel Atlantic, Inc. ("Intel") of
555,555.55 shares of Class B Preferred Stock of El Sitio, Inc. ("Company"),
pursuant to a Share Purchase Agreement dated November 9, 1999 (the "Purchase
Agreement"), Company and Intel agree to the terms and obligations of this letter
agreement ("Agreement").
1. CONFIDENTIALITY
(a) DISCLOSURE OF TERMS. The terms and conditions of this Agreement,
the Purchase Agreement, the Amended and Restated Shareholders Agreement, dated
November 9, 1999 and the Amended and Restated Registration Rights Agreement,
dated November 9, 1999 (collectively, the "Financing Terms"), including their
existence, shall be considered confidential information and shall not be
disclosed by the Company to any third party except in accordance with the
provisions set forth below.
(b) PRESS RELEASES, ETC. Within sixty (60) days after the closing of
the transactions contemplated by the Purchase Agreement, the Company may issue a
press release disclosing that the Investors, including Intel, have invested in
the Company; provided that the release does not disclose any of the Financing
Terms and the final form of the press release is approved in advance in writing
by Intel. Intel's name and the fact that Intel is an investor in the Company can
be included in a reusable press release boilerplate statement, so long as Intel
has given the Company its initial approval of such boilerplate statement and the
boilerplate statement is reproduced in exactly the form in which it was
approved. No other announcements regarding Intel in a press release, conference,
advertisement, announcement, professional or trade publication, mass marketing
materials or otherwise to the general public may be made without Intel's prior
written consent.
(c) PERMITTED DISCLOSURES. Notwithstanding the foregoing, (i) the
Company may disclose any of the Financing Terms to its current or bona fide
prospective investors, employees, investment bankers, lenders, accountants and
attorneys, in each case only where such persons or entities are under
appropriate nondisclosure obligations; (ii) the Company may disclose (other than
in a press release or other public announcement described in subsection (b))
solely the fact that Intel is an investor in the Company to any third parties
without the requirement for the consent of any other party or nondisclosure
obligations; and (iii) Intel may disclose its investment in the Company and the
Financing Terms to third parties or to the public at its sole discretion and, if
it does so, the Company shall have the right to disclose to third parties any
such information disclosed in a press release or other public announcement by
Intel.
[Signature Page to Share Purchase Agreement]
(d) LEGALLY COMPELLED DISCLOSURE. In the event that any party is
requested or becomes legally compelled (including without limitation, pursuant
to securities laws and regulations) to disclose the existence of the agreements
referenced in paragraph (a) above or any of the Financing Terms hereof in
contravention of the provisions of this letter, the Company shall provide Intel
with prompt written notice of that fact so that the appropriate party may seek
(with the cooperation and reasonable efforts of the other) a protective order,
confidential treatment or other appropriate remedy. In such event, the Company
shall furnish only that portion of the information which is legally required and
shall exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded such information to the extent reasonably requested
by Intel.
(e) OTHER INFORMATION. The provisions of this Letter Agreement shall be
in addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by any of the parties hereto with respect to
the transactions contemplated hereby. Additional disclosures and exchange of
confidential information between the Company and Intel Corporation or Intel
Atlantic, Inc. shall be governed by the terms of the Corporate Non-Disclosure
Agreement No. 7626010, dated October 18, 1999, executed by the Company and Intel
Corporation, and any Confidential Information Transmittal Records (CITR)
provided in connection therewith.
(f) All notices required under this section shall be made pursuant to
Section 8.10 of the Purchase Agreement.
2. MISCELLANEOUS.
2.1 DEFINITIONS. All capitalized terms used but not otherwise defined
in this Agreement have the meaning defined for such terms in the Purchase
Agreement.
2.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
2.3 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
2.4 AMENDMENTS AND WAIVERS. This Agreement may not be amended or
modified without the written consent of Intel and the Company, nor shall any
waiver be effective against any party unless in a writing executed on behalf of
such party.
2.5 SEVERABILITY. If any provision of this Agreement shall be declared
void or unenforceable by any judicial or administrative authority, the validity
of any other provision and of the entire Agreement shall not be affected
thereby.
The parties hereto have executed this Agreement on the day and year first
written above.
EL SITIO, INC. INTEL ATLANTIC, INC.
By: By:
------------------------ ------------------------
Name: Name:
------------------------ ------------------------
Title: Title:
------------------------ ------------------------
