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
FIDELITY CAPITAL MARKETS
a division of National Financial Services Corporation
As Representatives of the several
Underwriters named in Schedule 1
c/o Credit Suisse First Boston Corporation
00 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, Xxxxxx
Brothers Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxxx Xxxxx
Barney Inc., Wit Capital Corporation and Fidelity Capital Markets, a division of
National Financial Services Corporation, are acting as Representatives (the
"Representatives"), 8,200,000 common shares, par value U.S.$0.01 per share (the
"Common Shares") (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 (the "Option
Shares"). The Firm Shares and the Option Shares, if purchased, are hereinafter
collectively called the "Shares". 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:
2
(a) A registration statement on Form F-1
(Registration No. 333-__), 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 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 paragraph (1) or (4) of 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
3
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 Entretenimento
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 17) of the
Company (collectively, the "Significant Subsidiaries").
(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 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) and - 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.
4
(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 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) Each of the Company and the Significant
Subsidiaries 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 by the Company).
(g) This Agreement has been duly authorized, executed
and delivered by each of the Company and the Significant
Subsidiaries and constitutes a legal, valid and binding
obligation of each of the Company and the Significant
Subsidiaries, respectively, enforceable against the Company
and the Significant Subsidiaries, respectively, 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 each of the Company and the Significant
Subsidiaries, respectively, 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 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 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
5
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
Significant Subsidiaries 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 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 were not, and are not,
required to be integrated with the offering of the Shares as
contemplated under this Agreement and, accordingly, to be
registered under the Securities Act.
(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
6
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 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.
7
(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.
(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
8
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 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.
(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.
9
(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
National Association of Securities Dealers, Inc. ("NASD")
Automated Quotation National Market System (the "Nasdaq
National Market System").
(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 NASD ("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 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, agent, employee or other person
associated with or 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
10
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 17 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 and
under the laws of the jurisdiction of incorporation or
organization of each Significant Subsidiary, the submission by
the Company and each Significant Subsidiary 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 the
Significant Subsidiaries, respectively and would be
enforceable in any judicial or administrative proceeding in
the British Virgin Islands, in the case of the Company, or in
the relevant jurisdiction of incorporation or organization, in
the case of each Significant Subsidiary (in each case subject
to any applicable exceptions to the recognition or enforcement
of foreign judgments in the British Virgin Islands or in such
other jurisdiction of incorporation or organization).
11
(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 accordance with
the terms 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. The
Company intends to conduct its business activities in an
effort to reduce the risk of its classification as a PFIC.
(nn) Any reprogramming required to permit the proper
functioning, in and following the year 2000, of the Company's
and its subsidiaries' (i) computer systems and (ii) equipment
containing embedded microchips (including systems and
equipment supplied by others or with which the Company's
systems interface) and the testing of all such systems and
equipment, as so reprogrammed, will be completed by November
30, 1999. The cost to the Company of such reprogramming 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 reprogramming 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) None of the Company and any of its subsidiaries,
or any of their respective affiliates, does business with the
government of Cuba or with any person or affiliate located in
Cuba.
12
(pp) 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. The
respective purchase obligations of the Underwriters with respect to the Firm
Shares shall be rounded among the Underwriters to avoid fractional shares, as
the Representatives may determine.
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 the Representatives so that no
Underwriter shall be obligated to purchase Option Shares other than in 100-share
amounts.
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 on the First Delivery Date or the Second Delivery Date
(as defined in Section 4), as the case may be, except upon payment for all the
Shares to be purchased on such Delivery Date 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.
It is understood that up to 820,000 Firm Shares ("Directed
Sale Shares") may initially be reserved by the several Underwriters for offer
and sale upon the terms and conditions set forth in the Prospectus and in
accordance with the rules and regulations of the NASD to certain persons
designated by the Company ("Directed Sale Share Purchasers") who have heretofore
delivered to the Representatives offers to purchase Directed Sale Shares in form
satisfactory to the Representatives, and that any allocation of Directed Sale
Shares among the Directed Sale Share Purchasers shall be made in accordance with
timely directions received by the Representatives from
13
the Company; PROVIDED, HOWEVER, that under no circumstances shall the
Representatives or any Underwriter be liable to, or have any liability
whatsoever for, the Company or to any Directed Sale Share Purchaser for any
action taken or omitted in good faith in connection with such offering to the
Directed Sale Share Purchasers. It is further understood that any such Directed
Sale Shares which are not purchased by the Directed Sale Share Purchasers will
be offered by the Underwriters to the public upon the terms and conditions set
forth in the Prospectus.
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 the
third full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
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 at a bank located in New York City designated by the Company in
writing at least one business day prior to the First Delivery Date. 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 the Representatives 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 may be exercised in whole or in part
from time to time by written notice being given to the Company by the
Representatives. 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 the "Second Delivery Date" and the First Delivery Date and the
Second 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 Second Delivery Date. On the
Second 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
14
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 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 Second 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)
15
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 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;
(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;
(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 five 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
16
securities exchange or system or (ii) the Commission pursuant
to the Exchange Act or any rule or regulation of the
Commission thereunder;
(h) Promptly from time to time to take such action as
the Representatives may request to qualify 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
options granted or Common Shares issued pursuant to the
Company's share option plan), 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 Xxxxxx Brothers Inc. on behalf of
the Underwriters; and (ii) to cause each director, officer and
shareholders 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) Prior to the Effective Date, to apply for the
inclusion of the Common Shares on the Nasdaq National Market
System and to use its best efforts to effect such quotation,
subject only to official notice of issuance, prior to the
First Delivery Date;
(k) To use its best efforts to cause the Shares to be
accepted for settlement through the facilities of The
Depository Trust Company ("DTC");
(l) To complete the 2-for-1 share split 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);
17
(m) 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;
(n) 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";
(o) 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;
(p) 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;
(q) 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;
(r) 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; and
(s) To cause Deloitte & Touche to deliver one or more
"initial comfort letters", with respect to the financial
statements and financial data, and pro forma consolidated
financial statements, of the Company and the IMPSAT Entities,
dated the date of the Prospectus, in form and substance
reasonably satisfactory to the Representatives, at or prior to
the time copies of the Prospectus are furnished to the
Representatives.
18
6. EXPENSES. The Company and the Significant Subsidiaries
agree, jointly and severally, 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 preparing, 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 securing any required
review by the NASD of the terms of sale of the Shares;
(f) Any applicable listing or other fees, including,
without limitation, the fees for listing of the Common Shares
on the Nasdaq National Market System;
(g) The fees and expenses of qualifying the Shares
under the securities laws of the several jurisdictions as
provided in Section 5(h) and of preparing, printing and
distributing a "blue sky" memorandum (including related fees
and expenses of U.S. counsel to the Underwriters);
(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 the
Shares by the Underwriters to the Directed Sale Share
Purchasers;
(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;
[(k) the aggregate amount of U.S.$______ to the
Representatives in partial reimbursement of their
out-of-pocket expenses (including the fees and expenses of
19
U.S. counsel to the Underwriters) relating to the transactions
contemplated by this Agreement;] and
(l) All other costs and expenses incident to the
performance of the obligations of the Company and the
Significant Subsidiaries under this Agreement.
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 Xxxxxxx Xxxxxxx &
Xxxxxxxx, U.S. counsel for the Underwriters, is material or
omits to state any fact which, in the opinion of such counsel,
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 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
20
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,
might have a Material Adverse Effect on the Company
and its subsidiaries; 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 and by each of the Significant
Subsidiaries under the laws of its jurisdiction of
incorporation or organization, this Agreement has
been duly executed and delivered by each of the
Company and the Significant Subsidiaries,
respectively, in accordance with the laws of the
State of New York and constitutes a valid and legally
binding agreement of each of the Company and the
Significant Subsidiaries, respectively, enforceable
in the State of New York 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;
21
(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) Assuming the validity of such actions
under the laws of the British Virgin Islands and
under the laws of the jurisdiction of incorporation
or organization of each of the Significant
Subsidiaries, under the laws of the State of New York
relating to submission of jurisdiction, each of the
Company and the Significant Subsidiaries has validly
and irrevocably submitted to the non-exclusive
personal jurisdiction of any U.S. federal or New York
state court located in the Borough of Manhattan, The
City of New York, in any action arising out of or
relating to this Agreement and 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
each of the Company and the Significant Subsidiaries
in any such action; and each of the Company and the
Significant Subsidiaries 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 and the Significant Subsidiaries 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 known to such counsel
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 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
22
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 required for the execution, delivery and
performance of this Agreement by the Company and the
Significant Subsidiaries 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
System 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 were not, and are not, required to be
integrated with the offering of the Shares as
contemplated under this Agreement and, accordingly,
to be registered under the Securities Act.
(xii) To such counsel's knowledge and except
as set forth in the Prospectus, there are no
contracts, agreements or understandings 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.
(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 accurate summaries thereof in
all material respects and the tax opinion filed as
Exhibit 8.1 to the Registration Statement is
confirmed;
(xiv) The statements contained in the
Prospectus under the captions "Risk Factors - We are
dependent on our intellectual property" and "Business
- Intellectual Property and Proprietary Rights",
insofar as they purport to constitute summaries of
intellectual property-related laws and other matters,
constitute accurate summaries thereof in all material
respects; and
23
(xv) 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 an
opinion or statement 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 opinion or 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 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).
(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 has been duly incorporated
and is validly existing as a corporation for an
unlimited duration under the laws of the British
Virgin Islands and has full power and authority
necessary to own or hold its properties and assets
and conduct the businesses in which it is engaged;
(ii) The Company has an authorized and issued
capitalization as set forth in the Prospectus; and
all of the issued and outstanding Common Shares of
the Company have been duly and validly authorized and
issued, are fully
24
paid and non-assessable and conform to the
description thereof contained in the Prospectus;
(iii) 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;
(iv) The Company has full power and authority
to enter into this Agreement; this Agreement has been
duly authorized, executed and delivered by the
Company; 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 the Company enforceable
in the British Virgin Islands 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
British Virgin Islands law;
(v) 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,
British Virgin Islands law or any agreement or other
instrument known to such counsel and to which the
Company is a party or to which any of its properties
or assets is subject;
(vi) To such counsel's knowledge there are no
legal, judicial, arbitral, rule-making,
administrative, governmental or other proceedings
pending in the British Virgin Islands to which the
Company is a party or any of its properties or assets
is subject which, (A) individually or in the
aggregate, if determined adversely to the Company or
any of its subsidiaries, could reasonably be expected
to have a Material Adverse Effect or (B) questions
the validity or enforceability of this Agreement or
any action taken or to be taken in connection
therewith; and, to such counsel's knowledge, no such
proceedings in the British Virgin Islands are
threatened or contemplated by any British Virgin
Islands governmental agency or body or threatened by
any person or entity in the British Virgin Islands;
(vii) 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 with all of the
provisions of this Agreement
25
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 the British Virgin
Islands 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 Company's Memorandum and
Articles of Association or any British Virgin Islands
statute or any order, rule or regulation of any
British Virgin Islands governmental agency or body
having jurisdiction over the Company;
(viii) 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);
(ix) To such counsel's knowledge, the Company
is not in violation of its Memorandum and Articles of
Association; neither the Company nor its subsidiaries
are (A) 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 material agreement or instrument known to such
counsel which is governed by the law of the British
Virgin Islands and to which they are a party or by
which they are bound or to which any of their
properties or assets is subject or (B) in violation
in any material respect of any British Virgin Islands
statute or any regulation, rule or order of any
British Virgin Island governmental agency or body or
court to which the Company or any of its subsidiaries
or their respective properties or assets may be
subject;
(x) The filing of the Registration
Statements with the Commission and the listing of the
Common Shares on the Nasdaq National Market System
have been duly authorized by the Company;
(xi) The Underwriters would be permitted to
commence proceedings in British Virgin Islands courts
of competent jurisdiction based on this Agreement,
and such courts would accept jurisdiction over any
such action or proceeding and would recognize the
choice of the law of the State of New York as the
governing law of this Agreement;
26
(xii) The courts of the British Virgin Islands
will 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 such judgment is final and was
not obtained in a manner and is not of a kind the
enforcement of which is contrary to the public policy
of the British Virgin Islands];
(xiii) Assuming valid submission by the Company
under the laws of the State of New York to the
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 valid service
of process under the laws of the State of New York
effected in the manner set forth in this Agreement,
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 will be
legal, valid and binding on the Company insofar as
British Virgin Islands law is concerned;
(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 valid and legally
binding and will be recognized by British Virgin
Islands courts; and the Company is not entitled to
any immunity in respect of its obligations under this
Agreement and could not interpose any immunity as a
defense to any suit or action brought or maintained
in respect of its obligations under such agreements;
(xv) 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;
(xvi) The statements in the Prospectus under
the captions (A) "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
27
Business Companies Act and (B) "Taxation - British
Virgin Islands Tax Considerations", insofar as they
constitute a summary of matters of British Virgin
Islands tax law, constitute accurate summaries
thereof in all material respects;
(xvii) Under current British Virgin Islands
laws and regulations, there are no restrictions on
the ability of the Company to pay dividends declared
and payable in respect of the Common Shares by the
Company to the holder thereof in U.S. dollars or in
any other currency; and
(xviii) 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 British Virgin
Islands or any taxing authority thereof or therein in
connection with (A) the issuance and sale of the
Shares by the Company; (B) the delivery of the Shares
to or for the respective accounts of the Underwriters
in the manner contemplated herein; or (C) the sale
and delivery outside of the British Virgin Islands by
the Underwriters of the Shares to the initial
purchasers thereof.
The opinion of such counsel shall also have furnished
to the Representatives a written statement, addressed to the
Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Representatives, to the effect
that (x) such counsel has acted as counsel to the Company on a
regular basis has acted as counsel to the Company in
connection with previous financing transactions and has acted
as counsel to the Company in connection with the preparation
of the Registration Statements, and (y) based on the
foregoing, no facts have come to the attention of such counsel
which lead them to believe that, solely as regards to matters
purporting to summarize the laws of, or documents governed by
the laws of, the British Virgin Islands, 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 opinion or 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
paragraph (xvi) above).
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).
28
(f) Xxxxx, Xxxxxx e Advogados, special Brazilian
counsel to the Company and its Brazilian subsidiary, O Site
Entretenimento Ltda. ("O Site"), 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) O Site has been duly incorporated and is
validly existing as a limited liability company
(SOCIEDADE 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) Each of the Company and O Site possesses
adequate certificates, authorities, approvals,
licenses or permits issued by appropriate
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 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) O Site has full power and authority to
enter into this Agreement; this Agreement has been
duly authorized, executed and delivered by O Site;
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 O Site enforceable in
Brazil 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 Brazilian 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 O Site 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 Brazil 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
29
will such actions result in any violation of the
ESTATUTOS of O Site or any Brazilian statute or any
order, rule or regulation of any Brazilian
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
Brazilian governmental agency or body or court is
required for the execution, delivery and performance
of this Agreement by O Site; [CONFIRM]
(vii) The statements in the Prospectus under
the caption "Business-Government Regulation-Brazil",
insofar as they describe the relevant laws and
regulations in Brazil, constitute accurate summaries
thereof in all material respects;
(viii) To such counsel's knowledge, there are
no legal or governmental proceedings pending in
Brazil to which the Company or O Site is a party or
of which any property or assets of the Company 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
(ix) [The Internet Services Agreement, dated
October 6, 1999, between IMPSAT Comunicacoes Ltda
("IMPSAT Brazil") and O Site, which relates to the
provision to the Company of telecommunications
infrastructure for Internet access by IMPSAT Brazil,
constitutes a valid and legally binding obligation of
O Site and IMPSAT Brazil, respectively, and is
enforceable against O Site 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:
(i) El Sitio Argentina has been duly
organized and is validly existing as a corporation
(SOCIEDAD ANONIMA) under the laws of Argentina and
30
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-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
31
required for the execution, delivery and performance
of this Agreement by El Sitio Argentina; [CONFIRM]
(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
constitute summaries of intellectual property-related
laws and other matters, constitute accurate summaries
thereof in all material respects;
(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;
(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 Salom & 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 has been duly organized
and is validly existing as a 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
businesses 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;
32
(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 are owned directly or indirectly
by the Company, free and clear of all liens,
encumbrances, equities or claims;
(iv) El Sitio Mexico has full power and
authority to enter into this Agreement; this
Agreement has been duly authorized, executed and
delivered by El Sitio Mexico; 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 Mexico enforceable in Mexico 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 Mexican 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 Mexico
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 Mexico 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 Mexico or any Mexican statute
or any order, rule or regulation of any Mexican
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 Mexican
governmental agency or body or court is required for
the execution, delivery and performance of this
Agreement by El Sitio Mexico; [CONFIRM]
(vii) The statements in the Prospectus under
the caption "Business - Government Regulation -
Mexico", insofar as they describe the relevant laws
and regulations in Mexico, constitute accurate
summaries thereof in all material respects;
33
(viii) 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 Xxxxxxx, 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) El Sitio Uruguay has full power and
authority to enter into this Agreement; this
Agreement has been duly authorized, executed and
delivered by El Sitio Uruguay; 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 Uruguay enforceable in Uruguay
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 Uruguayan law;
34
(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 Uruguay
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 Uruguay 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 Uruguay or any Uruguayan
statute or any order, rule or regulation of any
Uruguayan 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
Uruguayan governmental agency or body or court is
required for the execution, delivery and performance
of this Agreement by El Sitio Uruguay; [CONFIRM]
(vii) 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 thereof in all material respects;
(viii) 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 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 USA"), 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
35
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 USA 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;
(iii) El Sitio U.S.A. has full power and
authority to enter into this Agreement; this
Agreement has been duly authorized, executed and
delivered by El Sitio U.S.A.; 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 U.S.A. enforceable in the State
of Florida 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 Florida law;
(iv) 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 U.S.A.
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 Florida 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
Articles of Incorporation and by-laws of El Sitio
U.S.A. or any Florida statute or any order, rule or
regulation of any Florida governmental agency or body
or court having jurisdiction over the Company or any
of its subsidiaries;
(v) No consent, approval, authorization or
order of, or filing or registration with, any Florida
governmental agency or body or court is required for
the execution, delivery and performance of this
Agreement by El Sitio U.S.A. and the consummation of
the transactions contemplated hereby; [CONFIRM]
(vi) Each of the Company and El Sitio USA
possesses adequate, certificates, authorities,
approvals, licenses or permits issued by appropriate
36
governmental agencies or bodies in the State of
Florida to conduct its business as presently
conducted and as proposed to be conducted; and
(vii) 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 USA is a party or of which any property
or assets of the Company or El Sitio USA is the
subject which, if determined adversely to the Company
or El Sitio USA, might have a Material Adverse Effect
on the Company and El Sitio USA; 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 "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 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 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) 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
37
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 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 System 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
38
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.
(o) The Company 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 System, 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 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 such 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 [four] 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 satisfactory to
Xxxxxxx Xxxxxxx & Xxxxxxxx, U.S. counsel for the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
39
(a) The Company and the Significant Subsidiaries,
jointly and severally, 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, but not limited to, 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 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 and the Significant
Subsidiaries 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
the Company and the Significant Subsidiaries 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). The foregoing indemnity agreement is in addition to any
liability which the Company may
40
otherwise have to any Underwriter or to any director, officer,
employee or controlling person of that Underwriter.
(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), 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
41
counsel 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
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 or any Significant Subsidiary
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 and the
Significant Subsidiaries. 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 and the
Significant Subsidiaries 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 and the
Significant Subsidiaries 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
42
relative benefits received by the Company and the Significant
Subsidiaries 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 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. For purposes of
the preceding two sentences, the net proceeds deemed to be
received by the Company shall be deemed to be also for the
benefit of the Significant Subsidiaries and information
supplied by the Company shall also be deemed to have been
supplied by the Significant Subsidiaries. The Company, the
Significant Subsidiaries 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
public offering of the Shares set forth in the box on the
cover page of, and the selling concession and reallowance
figures 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.
43
9. DEFAULTING UNDERWRITERS. If, on either 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. 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 the Second
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 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. 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) 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 (including the
termination of this Agreement pursuant to Section 10), the Company and the
Significant Subsidiaries shall, jointly and severally, shall reimburse the
Underwriters for the fees
44
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 and the Significant
Subsidiaries shall, jointly and severally, pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 9 by reason
of the default of one or more Underwriters, the Company and the Significant
Subsidiaries shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
12. ADDITIONAL AMOUNTS. If the compensation (including the
Underwriters' discounts and commissions) or any other amounts to be received by
the Underwriters under this Agreement, solely as a result of entering into this
Agreement, are subject to any present or future taxes, assessments, deductions,
withholdings or changes of any nature enacted by any non-U.S. jurisdiction or
any political subdivision thereof or taxing authority therein ("Non-U.S.
Taxes"), then the Company and the Significant Subsidiaries, jointly and
severally, shall pay to the Underwriters an additional amount so that the
Underwriters shall retain, after taking into consideration all such Non-U.S.
Taxes, an amount equal to this Agreement as if such amounts had not been subject
to Taxes. If any Non-U.S. Taxes are collected by deduction or withholding, the
Company shall provide to the Underwriters copies of documents evidencing the
transmittal to the proper authorities of the amount of Non-U.S. Taxes deducted
or withheld.
13. JUDGMENT CURRENCY. The Company and the Significant
Subsidiaries, jointly and severally, 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.
14. 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, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: [Syndicate Department] (Fax:
212-___-____);
(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);
45
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
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 Xxxxxx Brothers Inc. on
behalf of the Representatives or on behalf of the Underwriters.
15. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Company, the Significant
Subsidiaries 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 and the Significant Subsidiaries 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 5, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
16. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Significant Subsidiaries 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.
17. CERTAIN DEFINITIONS. For purposes of this Agreement, (a)
"business day" means any day on which the Nasdaq National Market System 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.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
19. CONSENT TO JURISDICTION. Each of the Company and the
Significant Subsidiaries 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
46
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.
Each of the Company and the Significant Subsidiaries, to the fullest extent
permitted by applicable law, irrevocably waives the defense of sovereign
immunity and the defense of an inconvenient forum to the maintenance of such
suit, action or proceeding.
Each of the Company and the Significant Subsidiaries 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. Each of the Company and the Significant Subsidiaries that it has
notified the Process Agent of such designation and appointment and that the
Process Agent has accepted the same in writing. Each of the Company and the
Significant Subsidiaries hereby irrevocably authorizes and directs the Process
Agent to accept such service. Each of the Company and the Significant
Subsidiaries further agrees that service of process upon the Process Agent and
written notice of such service to the Company or such Significant Subsidiary,
mailed by first class mail or delivered to the Process Agent shall be deemed in
every respect effective service of process upon the Company or such Significant
Subsidiary 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. Each of the Company and the
Significant Subsidiaries 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 19 shall survive the
termination of this Agreement.
20. 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.
21. 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.
47
If the foregoing correctly sets forth the agreement among the
Company, the Significant Subsidiaries and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
EL SITIO, INC.
By:_______________________________________
Name:
Title:
EL SITIO ARGENTINA, S.A.
By:_______________________________________
Name:
Title:
O SITE ENTRETENIMENTO LTDA.
By:_______________________________________
Name:
Title:
EL SITIO ENTRETENIMIENTOS, S.A. DE C.V.
By:_______________________________________
Name:
Title:
EL SITIO U.S.A., INC.
By:_______________________________________
Name:
Title:
EL SITIO (URUGUAY) SOCIEDAD ANONIMA
By:_______________________________________
Name:
Title:
48
Accepted:
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX BROTHERS INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXX XXXXX BARNEY INC.
WIT CAPITAL CORPORATION
FIDELITY CAPITAL MARKETS,
a division of National Financial Services Corporation
By: Credit Suisse First Boston Corporation
By __________________________
AUTHORIZED REPRESENTATIVE
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
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.....................................................
Fidelity Capital Markets, a division of National Financial Services
Corporation...............................................................
---------------
Total 8,200,000
===============
SCHEDULE 2
Directors, Executive Officers and Shareholders
To Deliver Lock-Up Letters
DIRECTORS
Xxxxxxx Vivo-Chaneton
Xxxxxxx Xxxxxxx-Xxxxxx
Xxxxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxx
EXECUTIVE OFFICERS
Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx xx Xxxxxxxx
Xxxxxxx Xxxxx
SHAREHOLDERS
IAMP (El Sitio) Investments, Ltd.
Xxxxxxxxx Limited
Tower Plus International
XXX.xxx Inc.
IMPSAT Corporation
Bear, Xxxxxxx & Co., Inc.
Intel Atlantic, Inc.
Utilivest II, L.P.
Utilivest III, L.P.
EXHIBIT A
FORM OF LOCK-UP LETTER
November ___, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX BROTHERS INC.
XXXXXXX XXXXX XXXXXX INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
WIT CAPITAL CORPORATION
FIDELITY CAPITAL MARKETS
a division of National Financial Services Corporation
As Representatives of the several
Underwriters named in
Schedule 1 to the Underwriting Agreement
Ladies and Gentlemen:
In consideration of the participation of the several
Underwriters, for which Credit Suisse First Boston Corporation, Xxxxxx Brothers
Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxxx Xxxxx Barney
Inc., Wit Capital Corporation and Fidelity Capital Markets, a division of
National Financial Services Corporation (the "Representatives") will to act as
Representatives, 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-______) and for other good and valuable consideration (the
receipt of which is hereby acknowledged) the undersigned hereby agrees that the
undersigned will not, for a period of 180 days commencing on the date of the
final Prospectus included as part of the Registration Statement, 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 of 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 Xxxxxx Brothers Inc. on behalf of the Underwriters.
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.
A-2
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:
