Exhibit 2
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COMBINATION AGREEMENT
among
NEW SITE INC.,
NEWHAVEN OVERSEAS CORP.,
HICKS, MUSE, XXXX & XXXXX LATIN AMERICA FUND, X.X.
XXXXX, MUSE, XXXX & XXXXX LATIN AMERICA PRIVATE FUND, L.P.
HMLA 1-SBS COINVESTORS, L.P.
IBERO-AMERICAN MEDIA PARTNERS II LTD.
and
EL SITIO, INC.
Dated as of October 30, 2000
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Table of Contents
Page
1. Organizational Documents of Holdco and Formation of El Sitio
Merger Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1. Organizational Documents of Holdco . . . . . . . . . . . . . 2
1.2. Directors and Officers of Holdco . . . . . . . . . . . . . . 2
1.3. Organization of El Sitio Merger Subsidiary . . . . . . . . . 2
1.4. Directors and Officers of El Sitio Merger
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5. Actions of IAMP . . . . . . . . . . . . . . . . . . . . . . 3
2. The El Sitio Merger and Related Matters . . . . . . . . . . . . . . 3
2.1. The Contributions and the El Sitio Merger . . . . . . . . . 3
2.2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3. Effective Time . . . . . . . . . . . . . . . . . . . . . . . 4
2.4. Effects of the El Sitio Merger . . . . . . . . . . . . . . . 5
2.5. Memorandum and Articles of Association . . . . . . . . . . . 5
2.6. Directors and Officers . . . . . . . . . . . . . . . . . . . 5
2.7. Effect on El Sitio Share Capital . . . . . . . . . . . . . . 5
2.8. Treatment of Options; Common Share Plans . . . . . . . . . . 6
2.9. Certain Adjustments . . . . . . . . . . . . . . . . . . . . 7
3. Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . 7
3.1. Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . 7
3.2. Exchange Procedures . . . . . . . . . . . . . . . . . . . . 7
3.3. Distributions with Respect to Unexchanged
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4. No Further Ownership Rights in El Sitio Common Shares . . . 8
3.5. No Fractional Holdco Common Shares . . . . . . . . . . . . . 8
3.6. Termination of Exchange Fund . . . . . . . . . . . . . . . . 9
3.7. No Liability . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8. Investment of the Exchange Fund . . . . . . . . . . . . . . 9
3.9. Lost Certificates . . . . . . . . . . . . . . . . . . . . . 9
3.10. Withholding Rights . . . . . . . . . . . . . . . . . . . . . 9
3.11. Further Assurances . . . . . . . . . . . . . . . . . . . . . 10
3.12. Share Transfer Books . . . . . . . . . . . . . . . . . . . . 10
3.13. IAMP Matters . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14. Lock-Up Agreements . . . . . . . . . . . . . . . . . . . . . 11
4. Representations and Warranties . . . . . . . . . . . . . . . . . . 11
4.1. Representations and Warranties of Newhaven, Xxxxx and IAMP . 11
4.2. Representations and Warranties of Newhaven . . . . . . . . . 25
4.3. Representations and Warranties of El Sitio . . . . . . . . . 38
4.4. Expiration of Representations and Warranties . . . . . . . . 50
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5. Transactions Prior to Closing . . . . . . . . . . . . . . . . . . . 51
5.1. Access to Information Concerning Properties
and Records; Confidentiality . . . . . . . . . . . . . . . 51
5.2. Conduct of the Business of Media Companies Pending the
Closing Date . . . . . . . . . . . . . . . . . . . . . . . 52
5.3. Conduct of Business of El Sitio Pending the Closing Date . . 55
5.4. Intercompany Transactions . . . . . . . . . . . . . . . . . . 58
5.5. Further Actions . . . . . . . . . . . . . . . . . . . . . . . 58
5.6. Notification . . . . . . . . . . . . . . . . . . . . . . . . 60
5.7. Assignment of Rights to Newhaven . . . . . . . . . . . . . . 60
5.8. Transition Period . . . . . . . . . . . . . . . . . . . . . 60
5.9. No Inconsistent Action . . . . . . . . . . . . . . . . . . . 60
5.10. Convertible Preferred Shares; Debt Financing . . . . . . . . 60
5.11. Redemption or Retirement of Holdco Common Shares
Received by Subsidiaries of Holdco . . . . . . . . . . . . 61
5.12. IAMP Employee Share and Equity Rights . . . . . . . . . . . . 62
5.13. Agreement with Cablevision . . . . . . . . . . . . . . . . . 62
6. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . 62
6.1. Preparation of Proxy Statement; Shareholders Meeting . . . . 62
6.2. Acquisition Proposals . . . . . . . . . . . . . . . . . . . . 64
6.3. Holdco Board of Directors; PTVI Board of Directors . . . . . 67
6.4. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . 67
6.5. Directors' and Officers' Indemnification and Insurance . . . 68
6.6. Public Announcements . . . . . . . . . . . . . . . . . . . . 69
6.7. Listing of Holdco Common Shares . . . . . . . . . . . . . . . 69
6.8. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . 69
6.9. Iberoamerican Media Holdings Chile S.A. Options . . . . . . 70
7. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . 70
7.1. Conditions Precedent to Obligations of El Sitio,
each Media Company, Newhaven and Xxxxx . . . . . . . . . . 70
7.2. Conditions Precedent to Obligations of El Sitio . . . . . . . 71
7.3. Conditions Precedent to the Obligations of Newhaven, Xxxxx
and the Media Companies . . . . . . . . . . . . . . . . . . 72
8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . 73
9. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.1. Survival of Representations and Warranties . . . . . . . . . 73
10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.2. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 80
10.3. Binding Effect; No Third-Party Beneficiaries . . . . . . . . 80
10.4. Assignability . . . . . . . . . . . . . . . . . . . . . . . . 80
10.5. Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . 80
10.6. Schedules and Exhibits . . . . . . . . . . . . . . . . . . . 80
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10.7. Section Headings; Table of Contents . . . . . . . . . . . . . 81
10.8. Severability . . . . . . . . . . . . . . . . . . . . . . . . 81
10.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 81
10.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . 81
10.11. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 81
10.12. Submission to Jurisdiction . . . . . . . . . . . . . . . . . 81
10.13. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 82
Exhibits
Exhibit A - Holdco Agreement
Exhibit B - Term Sheet for Registration Rights Agreement
Exhibit C - Voting Agreement
Exhibit D - Term Sheet for Employment Agreement of Xxxxxxx
Vivo-Chaneton
Exhibit E-1 - Holdco Memorandum of Association
Exhibit E-2 - Holdco Articles of Association
Exhibit F - Holdco Letter Agreement for Chilean Employees
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COMBINATION AGREEMENT
COMBINATION AGREEMENT, dated as of October 30, 2000 (this
"Agreement"), among New Site Inc., a British Virgin Islands international
business company ("Holdco"), Newhaven Overseas Corp., a British Virgin
Islands international business company ("Newhaven"), Hicks, Muse, Xxxx &
Xxxxx Latin America Fund, L.P., a Delaware limited partnership ("HMTF
I"), Hicks, Muse, Xxxx & Xxxxx Latin America Private Fund, L.P., a
Delaware limited partnership ("HMTF II"), HMLA 1-SBS Coinvestors, L.P., a
Delaware limited partnership ("HMTF III" and, together with HMTF I and
HMTF II, "Xxxxx"), Ibero-American Media Partners II Ltd., a Cayman
Islands company ("IAMP", and, together with Newhaven, the "Media
Companies") and El Sitio, Inc., a British Virgin Islands international
business company ("El Sitio").
W I T N E S S E T H :
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WHEREAS, Newhaven and Xxxxx together own 100% of the issued and
outstanding share capital of IAMP;
WHEREAS, Newhaven and Xxxxx, through the Media Companies, as well
as through their respective subsidiaries, are engaged in the business of
developing, producing, marketing and distributing television, radio and
other media programming and own television and radio networks and certain
pay-television channels in Latin America and Europe with certain
additional operations in the United States and other parts of the world
(the "Media Business");
WHEREAS, IAMP owns the percentage of the share capital of each IAMP
Subsidiary as set forth in Section 4.1(a)(iv) of the IAMP Disclosure
Schedule, and Newhaven owns (directly or indirectly) the percentage of
the share capital of each Newhaven Subsidiary as set forth on Section
4.2(a)(iv) of the Newhaven Disclosure Schedule;
WHEREAS, El Sitio is an Internet media company that provides
country-specific and global interactive content, connectivity and
e-commerce for Spanish- and Portuguese-speaking audiences in Latin America
and the United States;
WHEREAS, the respective Boards of Directors of Newhaven, Xxxxx,
IAMP, Holdco and El Sitio have approved and deemed it advisable and in
the best interests of their respective shareholders to consummate the
Transactions pursuant to the terms and subject to the conditions set
forth herein;
WHEREAS, Newhaven, Xxxxx, IAMP, Holdco and El Sitio intend, by
approving resolutions authorizing this Agreement, to adopt this Agreement
as a plan of reorganization within the meaning of Sections 354, 361 and
368(a) of the U.S. Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder (the "Code") and that the
transactions contemplated by this Agreement be undertaken pursuant to
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such plans and that such transactions be treated as a tax-free exchange
pursuant to Section 368 and/or Section 351 of the Code;
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to each party's willingness
to enter into this Agreement, Newhaven and Xxxxx and certain shareholders
of El Sitio have entered into a voting agreement (the "Voting Agreement")
dated as of the date hereof;
WHEREAS, as a condition to the closing of the Transactions,
Hampstead Management Company Ltd., Xxxxx, certain shareholders of El
Sitio and Holdco will enter into an agreement (the "Holdco Agreement"),
attached as Exhibit A hereto, and Newhaven, Xxxxx and Holdco will enter
into a registration rights agreement (the "Registration Rights
Agreement") providing for, among other things, the registration of Holdco
Common Shares to be held, as the case may be, by Newhaven and Xxxxx or
their affiliates under the Securities Act including the terms set forth
in Exhibit B hereto; and
WHEREAS, the parties hereto desire to make certain representations,
warranties and agreements in connection with the Transactions, and also
to prescribe various conditions to the Transactions.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants of the parties hereto, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed as follows:
1. Organizational Documents of Holdco and
Formation of El Sitio Merger Subsidiary
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1.1. Organizational Documents of Holdco. El Sitio, Xxxxx and
Newhaven shall take, and shall cause Holdco to take, all requisite action
to cause the memorandum of association of Holdco to be in the form set
forth as Exhibit E-1 and the articles of association of Holdco to be in
the form set forth as Exhibit E-2 (collectively, the "Holdco Memorandum
and Articles of Association") at the Effective Time.
1.2. Directors and Officers of Holdco. Prior to the Effective Time,
the directors and officers of Holdco shall consist of individuals
designated by Newhaven. El Sitio, Xxxxx, and Newhaven shall take all
requisite action to cause the directors and officers of Holdco as of the
Effective Time to be as provided in Section 6.3. Each such director and
officer shall remain in office until his or her successors are elected in
accordance with the Holdco Memorandum and Articles of Association.
1.3. Organization of El Sitio Merger Subsidiary. As promptly as
practicable following the execution of this Agreement, Holdco shall cause
to be formed as an international business company under the laws of the
British Virgin Islands ("El Sitio Merger Subsidiary") for the sole
purpose of effectuating the El Sitio Merger contemplated herein; the
memorandum of association and articles of association of El Sitio Merger
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Subsidiary shall be in such forms as shall be determined by Holdco as
soon as practicable following the execution of this Agreement; and the
authorized share capital of El Sitio Merger Subsidiary shall initially
consist of 100 common shares, par value U.S.$0.01 per share, all of which
shares shall be issued to Holdco at a price of U.S.$1.00 per share.
1.4. Directors and Officers of El Sitio Merger Subsidiary. As
promptly as practicable following the execution of this Agreement, El
Sitio, Newhaven, Xxxxx and IAMP shall take all requisite action to
designate the directors and officers of El Sitio Merger Subsidiary and to
take such steps as may be necessary or appropriate to complete the
organization of El Sitio Merger Subsidiary.
1.5. Actions of IAMP. As promptly as practicable following the
execution of this Agreement, IAMP, as the holder of all the outstanding
Class A common shares of Holdco, par value U.S.$0.01 per share ("Holdco
Common Shares"), shall adopt this Agreement, and shall cause Holdco, as
the sole shareholder of El Sitio Merger Subsidiary, to adopt this
Agreement. Prior to the Effective Time, IAMP shall cause Holdco, and
Holdco shall cause El Sitio Merger Subsidiary, to perform its obligations
under this Agreement. As promptly as practicable after the date hereof,
the parties hereto shall cause this Agreement to be amended to add El
Sitio Merger Subsidiary as a party hereto and El Sitio Merger Subsidiary
shall become a constituent corporation in the El Sitio Merger.
Prior to the Imagen Contribution, IAMP shall contribute all of the
stock it owns of Iberoamerican Media Holdings, Chile, S.A. and Red de
Television Chilevision S.A. (the "Chile Businesses") to a newly formed
wholly owned subsidiary of IAMP ("Chile Sub"), which shall be a British
Virgin Islands international business company and a disregarded entity
for U.S. tax purposes, in exchange for stock of Chile Sub.
2. The El Sitio Merger and Related Matters
------------------------------------------------
2.1. The Contributions and the El Sitio Merger. Upon the terms and
subject to the conditions set forth in this Agreement, and in accordance
with the provisions of Part VII of the International Business Companies
Ordinance, 1984 of the British Virgin Islands (the "BVI Companies
Ordinance"):
(a) First, as promptly as practical following the date
hereof, IAMP shall cause CTG Inversora, S.A. to be dissolved under
the laws of Argentina.
(b) Second, IAMP shall contribute all of the common stock
of Imagen Satelital S.A. to Holdco in exchange for 23,768,410
Holdco Common Shares (the "Imagen Contribution").
(c) Third, IAMP shall contribute all of the common stock
owned by IAMP of each of Chile Sub, Canal Joven S.A., Morehaven
Investments, Inc., IAMP (El Sitio) Investments Ltd. and Kedar
Enterprises Ltd. (with their respective subsidiaries and Imagen
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Satelital, S.A., the "IAMP Subsidiaries") to Holdco in exchange for
39,760,058 Holdco Common Shares (together the "IAMP Contribution").
Immediately following the Effective Time, Holdco shall issue to
IAMP two Class C Common Shares of Holdco, par value U.S.$1.00 per
share (the "C Shares"), and one Class H Common Share of Holdco, par
value U.S.$1.00 per share (the "H Share"), as additional
consideration for the IAMP Contribution.
(d) Fourth, Newhaven shall cause Hampstead Management
Company Ltd. to contribute all of the capital stock of Meadowlane
Enterprises, Ltd., Rainbow Heights International Ltd. ("Rainbow"),
Collingham Holdings Co. Ltd. and Iberoamerican Media Management,
Inc. (together with their respective subsidiaries, the "Hampstead
Subsidiaries") to Holdco (the "Hampstead Contribution") and
Newhaven shall contribute 100% of the capital stock of its
wholly-owned subsidiary Victoria Springs Investments Ltd.
("Victoria Springs" and together with its subsidiary and the
Hampstead Subsidiaries, the "Newhaven Subsidiaries") in exchange
for 8,762,547 Holdco Common Shares (the "Newhaven Contribution"
and, together with the Imagen Contribution, the IAMP Contribution
and the Hampstead Contribution, the "Contributions").
(e) Fifth, El Sitio Merger Subsidiary shall be merged
with and into El Sitio (the "El Sitio Merger"). El Sitio shall be
the surviving corporation in the El Sitio Merger and shall continue
its corporate existence under the laws of the British Virgin
Islands. As a result of the El Sitio Merger, El Sitio shall become
a wholly owned subsidiary of Holdco. The Contributions and the El
Sitio Merger together are referred to herein as the "Transactions".
(f) Sixth, immediately following the Effective Time, each
of the Founders (as defined in the Holdco Agreement) shall
contribute U.S.$0.01 to Holdco in exchange for 1 share of Class F
Common Shares of Holdco, par value U.S.$0.01 per share.
2.2. Closing. Upon the terms and subject to the conditions set forth
in Article 7 and the termination rights set forth in Article 8, the
closing of the Transactions (the "Closing") will take place on the first
Business Day after the satisfaction or waiver (subject to applicable law)
of the conditions (excluding conditions that, by their nature, cannot be
satisfied until the Closing Date) set forth in Article 7, unless this
Agreement has been terminated pursuant to its terms or unless another
time or date is agreed to in writing by the parties hereto (the actual
time and date of the Closing referred to herein as the "Closing Date").
The Closing shall be held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, unless another place is
agreed to in writing by the parties hereto.
2.3. Effective Time. As soon as practicable following the
satisfaction or waiver (subject to applicable law) of the conditions set
forth in Article 7 and subject to the ordering of the transactions set
forth in this Section 2.3, at the Closing the parties shall file the
Certificate of Merger relating to the El Sitio Merger (the "El Sitio
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Certificate of Merger") with the Registrar of Companies of the British
Virgin Islands in such form as is required by and executed and
acknowledged in accordance with the relevant provisions of the BVI
Companies Ordinance, and shall make all other filings or recordings
required under the BVI Companies Ordinance. The Imagen Contribution shall
become effective immediately prior to the effective time of the IAMP
Contribution. The IAMP Contribution shall become effective immediately
prior to the effective time of the Hampstead Contribution. The Hampstead
Contribution shall become effective immediately prior to the effective
time of the Newhaven Contribution. The Newhaven Contribution shall become
effective immediately prior to the effective time of the El Sitio Merger.
The El Sitio Merger shall become effective at (a) the date and time the
El Sitio Certificate of Merger is duly filed with the Registrar of
Companies of the British Virgin Islands or (b) such subsequent time as El
Sitio, IAMP, Newhaven and Xxxxx shall agree and as shall be specified in
the El Sitio Certificate of Merger (such effective date and time for the
El Sitio Merger being the "Effective Time").
2.4. Effects of the El Sitio Merger. At and after the Effective
Time, the El Sitio Merger will have the effects set forth in the BVI
Companies Ordinance.
2.5. Memorandum and Articles of Association. The memorandum of
association and the articles of association of El Sitio, as in effect
immediately prior to the Effective Time, shall be the memorandum of
association and articles of association of the surviving corporation in
the El Sitio Merger.
2.6. Directors and Officers. The directors and officers of El Sitio
Merger Subsidiary immediately prior to the Effective Time shall be the
directors and officers of the surviving corporation in the El Sitio
Merger.
2.7. Effect on El Sitio Share Capital. As of the Effective Time, by
virtue of the El Sitio Merger and without any action on the part of the
holder of any common shares of El Sitio, par value U.S.$0.01 per share,
(the "El Sitio Common Shares"), or any Holdco Common Shares:
(a) Shares of El Sitio Merger Subsidiary. Each issued and
outstanding common share of El Sitio Merger Subsidiary, par value
U.S.$0.01 per share, shall be converted into the right to receive
one fully paid and non-assessable common share of the surviving
corporation in the El Sitio Merger, par value U.S.$0.01 per share.
(b) Conversion of El Sitio Common Shares. Subject to
Section 3.5, each issued and outstanding El Sitio Common Share
shall be converted into the right to receive one fully paid and
non-assessable Holdco Common Share (the "El Sitio Exchange Ratio").
The Holdco Common Shares into which the El Sitio Common Shares are
converted pursuant to the foregoing are collectively referred to
herein as the "El Sitio Merger Consideration".
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As a result of the El Sitio Merger and without any action on the
part of the holders thereof, at the Effective Time, all El Sitio Common
Shares shall cease to be outstanding and shall be canceled and retired
and shall cease to exist, and each holder of a certificate that
immediately prior to the Effective Time represented any such El Sitio
Common Shares (an "El Sitio Certificate") shall thereafter cease to have
any rights with respect to such El Sitio Common Shares, except the right
(subject to Section 3.5) to receive the El Sitio Merger Consideration to
be issued in consideration therefor.
2.8. Treatment of Options; Common Share Plans. As soon as reasonably
practicable following the date of this Agreement, the board of directors
of each of Holdco and El Sitio (or, if appropriate, any committee
administering the El Sitio Common Share Plans) shall adopt such
resolutions or take such other actions as may be required to effect the
following:
(a) adjust the terms of all outstanding employee share
options to purchase El Sitio Common Shares ("El Sitio Common Share
Options") granted under any plan, program or arrangement of El
Sitio and the El Sitio Subsidiaries and affiliates that provides
for share options or share purchase, including without limitation,
the 1999 Share Option Plan (collectively, the "El Sitio Common
Share Plans"), to provide that, at the Effective Time, each El
Sitio Common Share Option outstanding immediately prior to the
Effective Time (except to the extent that El Sitio and the holder
of a El Sitio Common Share Option otherwise agree prior to the
Effective Time) shall be converted into an option to acquire, on
the same terms and conditions as were applicable under such El
Sitio Common Share Option, that number of Holdco Common Shares
equal to the product of (x) the number of El Sitio Common Shares
issuable upon exercise of such El Sitio Common Share Option and (y)
the El Sitio Exchange Ratio (such product rounded up to the nearest
whole share), at a price per share equal to the quotient of (i) the
per share exercise price for the El Sitio Common Shares otherwise
purchasable pursuant to such El Sitio Common Share Option divided
by (ii) the El Sitio Exchange Ratio (such quotient rounded down to
the nearest whole cent); provided, however, that, in the case of
any option that is a qualified stock option, the parties shall use
reasonable efforts to cause the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of
exercise of such option to be determined in order to comply with
Section 424(a) of the Code; and
(b) Holdco shall, as of the Effective Time, reserve for
issuance a number of Holdco Common Shares equal to the number of
shares that may become issuable pursuant to the options referenced
in subsection (a) above. Upon the Effective Time or as soon as
practicable thereafter, Holdco shall file with the U.S. Securities
and Exchange Commission ("SEC") a registration statement on Form
S-8 covering all shares of Holdco Common Shares to be so issued and
shall cause such registration statement to remain effective so long
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as Holdco has a registration statement on Form S-8 outstanding for
other Holdco share options.
2.9. Certain Adjustments. If, between the date of this Agreement and
the Effective Time, the share capital of Holdco or El Sitio shall have
been increased, decreased, changed into or exchanged for a different
number of shares or different class, in each case, by reason of any
reclassification, recapitalization, share split, split-up, combination or
exchange of shares or a share dividend or dividend payable in any other
securities shall be declared with a record date within such period, or
any similar event shall have occurred, the applicable Transaction
consideration pursuant to Section 2.1 shall be appropriately adjusted to
provide to the holders of El Sitio Common Shares, IAMP and Newhaven the
same economic effect as contemplated by this Agreement prior to such
event.
3. Exchange of Certificates
------------------------------
3.1. Exchange Fund. Prior to the Effective Time, Holdco shall
appoint a commercial bank or trust company reasonably acceptable to El
Sitio to act as exchange agent hereunder for the purpose of exchanging
Certificates for the El Sitio Merger Consideration (the "Exchange
Agent"). At or prior to the Effective Time, Holdco shall deposit with the
Exchange Agent, in trust for the benefit of holders of shares of El Sitio
Common Shares, certificates representing the Holdco Common Shares
issuable pursuant to Sections 2.7, 2.8 and 2.9 in exchange for
outstanding El Sitio Common Shares. Holdco agrees to make available to
the Exchange Agent, from time to time as needed, cash sufficient to pay
cash in lieu of fractional shares pursuant to Section 3.5. Any cash and
certificates representing Holdco Common Shares deposited with the
Exchange Agent shall hereinafter be referred to as the "Exchange Fund".
3.2. Exchange Procedures. Promptly after the Effective Time, Holdco
shall cause the Exchange Agent to mail to each holder of a Certificate
(a) a letter of transmittal that shall be in customary form and have such
other provisions as Holdco may reasonably specify and that shall specify
that delivery shall be effected, and risk of loss and title to such El
Sitio Certificates shall pass, only upon proper delivery of such El Sitio
Certificates to the Exchange Agent and (b) instructions for effecting the
surrender of such El Sitio Certificates in exchange for the El Sitio
Merger Consideration, together with any dividends and other distributions
with respect thereto and any cash in lieu of fractional shares. Upon
surrender of a El Sitio Certificate to the Exchange Agent together with
such letter of transmittal, duly executed and completed in accordance
with the instructions thereto and such other documents as may reasonably
be required by the Exchange Agent, the holder of such Certificate shall
be entitled to receive in exchange therefor (a) one or more Holdco Common
Shares (which shall be in uncertificated book-entry form unless a
physical certificate is requested or is otherwise required by applicable
law or regulation) representing, in the aggregate, the whole number of
shares that such holder has the right to receive pursuant to Sections
2.7, 2.8 and 2.9 (after taking into account all Holdco Common Shares then
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held by such holder) and (b) a check in the amount equal to the cash that
such holder has the right to receive pursuant to the provisions of this
Article 3, including cash in lieu of any fractional Holdco Common Shares
pursuant to Section 3.5. No interest will be paid or will accrue on any
cash payable pursuant to Section 3.3 or 3.5. In the event of a transfer
of ownership that is not registered in the transfer records of El Sitio,
one or more Holdco Common Shares evidencing, in the aggregate, the proper
number of Holdco Common Shares, and a check in the proper amount of cash
in lieu of any fractional Holdco Common Shares pursuant to Section 3.5,
may be issued with respect to such El Sitio Common Shares to such a
transferee if the El Sitio Certificate representing such El Sitio Common
Shares is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and evidence that any
applicable share transfer taxes have been paid.
3.3. Distributions with Respect to Unexchanged Shares. No dividends
or other distributions with a record date after the Effective Time shall
be paid to the holder of any unsurrendered El Sitio Certificate with
respect to the Holdco Common Shares that such holder would be entitled to
receive upon surrender of such El Sitio Certificate and no cash payment
in lieu of fractional Holdco Common Shares shall be paid to any such
holder pursuant to Section 3.5 until such holder shall surrender such El
Sitio Certificate in accordance with Section 3.2. Subject to the effect
of applicable laws, following surrender of any such El Sitio Certificate,
there shall be paid to the record holder thereof without interest, (a)
promptly after the time of such surrender, the amount of any cash payable
in lieu of fractional Holdco Common Shares to which such holder is
entitled pursuant to Section 3.5 and the amount of dividends or other
distributions with a record date after the Effective Time theretofore
paid with respect to such whole Holdco Common Shares, and (b) at the
appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time and a payment date subsequent
to such surrender payable with respect to such whole Holdco Common
Shares.
3.4. No Further Ownership Rights in El Sitio Common Shares. All
Holdco Common Shares issued and cash paid upon conversion of El Sitio
Common Shares in accordance with the terms of Article 2 and this Article
3 (including any cash paid pursuant to Section 3.3 or 3.5) shall be
deemed to have been issued or paid in full satisfaction of all rights
pertaining to the El Sitio Common Shares.
3.5. No Fractional Holdco Common Shares. (a) No certificates or
scrip or Holdco Common Shares representing fractional Holdco Common
Shares or book-entry credit of the same shall be issued upon the
surrender for exchange of El Sitio Certificates, and such fractional
share interests will not entitle the owner thereof to vote or to have any
rights of a shareholder of Holdco or a holder of Holdco Common Shares.
(b) Notwithstanding any other provision of this Agreement, each
holder of El Sitio Common Shares exchanged pursuant to the El Sitio
Merger who would otherwise have been entitled to receive a fraction of a
Holdco Common Share (determined after taking into account all El Sitio
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Certificates delivered by such holder) shall receive, in lieu thereof,
cash (without interest) in an amount equal to the product of (i) such
fractional part of a Holdco Common Share multiplied by (ii) the average
of closing bid and ask price during regular trading hours for a Holdco
Common Share as reported on The Nasdaq Stock Market ("Nasdaq") on the
first trading day following the date on which the Effective Time occurs.
As promptly as practicable after the determination of the amount of cash,
if any, to be paid to holders of fractional interests, the Exchange Agent
shall so notify Holdco, and Holdco shall deposit such amount with the
Exchange Agent and shall cause the Exchange Agent to forward payments to
such holders of fractional interests subject to and in accordance with
the terms hereof.
3.6. Termination of Exchange Fund. Any portion of the Exchange Fund
that remains undistributed to the holders of El Sitio Certificates six
months after the Effective Time shall, at Holdco's request, be delivered
to Holdco or otherwise on the instruction of Holdco, and any holders of
such El Sitio Certificates that have not complied with this Article 3
shall, after such delivery, look only to Holdco for the El Sitio Merger
Consideration and any cash in lieu of fractional Holdco Common Shares
with respect to the El Sitio Common Shares formerly represented thereby
to which such holders are entitled pursuant to Sections 2.7, 2.8, 2.9 and
3.5.
3.7. No Liability. None of the parties hereto or the Exchange Agent
shall be liable to any Person in respect of any El Sitio Merger
Consideration from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
3.8. Investment of the Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by Holdco on a
daily basis; provided, however, that no such investment or loss thereon
shall affect the amounts payable to shareholders of El Sitio pursuant to
Article 2 and the other provisions of this Article 3. Any interest and
other income resulting from such investments shall promptly be paid to
Holdco.
3.9. Lost Certificates. If any El Sitio Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit to such effect
by the Person claiming such El Sitio Certificate to be lost, stolen or
destroyed and, if required by Holdco, the posting by such Person of a
bond in such reasonable amount as Holdco may direct as indemnity against
any claim that may be made against it with respect to such El Sitio
Certificate, the Exchange Agent will deliver in exchange for such lost,
stolen or destroyed El Sitio Certificate the El Sitio Merger
Consideration with respect to the El Sitio Common Shares formerly
represented thereby, any cash in lieu of fractional Holdco Common Shares,
and unpaid dividends and distributions on Holdco Common Shares
deliverable in respect thereof, pursuant to this Agreement.
3.10. Withholding Rights. Holdco shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement such amounts as it is required to deduct and withhold with
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respect to the making of such payment under the Code or any provision of
U.S. federal or state or non-U.S. Tax law. To the extent that amounts are
so withheld by Holdco, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the party in respect of
which such deduction and withholding was made by Holdco.
3.11. Further Assurances. At and after the Effective Time, the
directors and officers of Holdco will be authorized to execute and
deliver, in the name and on behalf of any of the IAMP Subsidiaries, any
of the Newhaven Subsidiaries, El Sitio or El Sitio Merger Subsidiary, any
deeds, bills of sale, assignments or assurances and to take and do, in
the name and on behalf of any of the IAMP Subsidiaries, any of the
Newhaven Subsidiaries, El Sitio or El Sitio Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in
Holdco any and all right, title and interest in, to and under any of the
rights, properties or assets acquired or to be acquired by Holdco as a
result of, or in connection with, the Transactions.
3.12. Share Transfer Books. The share transfer books of El Sitio
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of El Sitio Common Shares that were
outstanding immediately prior to the El Sitio Merger thereafter on the
records of El Sitio. On or after the Effective Time, any El Sitio
Certificates presented to the Exchange Agent or Holdco for any reason
shall be converted into the right to receive the El Sitio Merger
Consideration (including any cash in lieu of fractional Holdco Common
Shares to which the holders thereof are entitled pursuant to Section 3.5
and any dividends or other distributions to which the holders thereof are
entitled pursuant to Section 3.3).
3.13. IAMP Matters. Effective upon the Effective Time, except with
respect to the agreements entered into in connection with the
consummation of the Transactions and referred to herein (including,
without limitation, the Indemnification and Contribution Agreement of
even date herewith), all prior agreements, arrangements, understandings,
undertakings and indemnities by, between or among any of Newhaven and its
affiliates, on the one hand, and Xxxxx and its affiliates, on the other
hand, or pursuant to which any such Persons have any liabilities or
obligations with respect to the formation or contribution of any assets
to or governance of IAMP shall terminate with no further obligations or
liabilities between or of any of the parties thereto or otherwise of or
in respect of any third-party beneficiaries or other Persons, all of
which obligations and liabilities shall be fully and forever released and
terminated (including, without limitation, that neither Holdco nor any of
its affiliates shall have any rights to enforce or collect any such
liabilities or obligations as successor or otherwise). Effective
immediately following the Effective Time, Newhaven and Xxxxx shall
dissolve IAMP and distribute its assets pursuant to the terms of such
agreements and pursuant to the plan of reorganization, provided that (i)
all such distributions shall be divided equally between Newhaven and
Xxxxx, and (ii) IAMP shall distribute the C Shares to Newhaven or a
wholly-owned subsidiary of Newhaven and shall distribute the H Share to
Xxxxx or a wholly-owned subsidiary of Xxxxx.
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3.14. Lock-Up Agreements. Holdco shall enter into individual lock-up
agreements with each of Newhaven, Xxxxx and each of the Founders, each
agreement to be in customary form, to be effective upon the Effective
Time and to restrict the applicable shareholder from transferring its
Holdco Common Shares for six months following the Effective Time.
Notwithstanding the foregoing, the entrance into such agreements shall
not be a condition to the obligations of any party hereto under Article
7.
4. Representations and Warranties
-----------------------------
4.1. Representations and Warranties of Newhaven, Xxxxx and IAMP.
Except as set forth in the disclosure schedule delivered by IAMP to El
Sitio prior to the date of this Agreement (the "IAMP Disclosure
Schedule"), Newhaven, with respect to itself, Xxxxx, with respect to HMTF
I, HMTF II and HMTF III, and IAMP, with respect to itself, severally but
not jointly, represent and warrant to El Sitio as follows; provided that
no representation or warranty is made with respect to Holdco other than
pursuant to Section 4.1(w) below:
(a) Due Organization; Good Standing and Power; Subsidiaries.
(i) Each of Xxxxxxxx, XXXX X, XXXX XX, XXXX III, IAMP and their
respective subsidiaries is a corporation or other Person duly organized,
validly existing and, in the case of each U.S. corporation or other
Person, is in good standing under the laws of the jurisdiction of its
incorporation or organization, has the requisite power and authority to
conduct its business as now conducted by it, except where the failure to
be so organized, existing and in good standing or have such power and
authority, individually or in the aggregate, would not have a Material
Adverse Effect on IAMP and the IAMP Subsidiaries taken as a whole.
(ii) Each of IAMP and the IAMP Subsidiaries is duly
qualified and in good standing to do business in each other jurisdiction
in which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify or to be in good standing,
individually or in the aggregate, would not have a Material Adverse
Effect on IAMP and the IAMP Subsidiaries taken as a whole.
(iii) The copies of the certificate of incorporation
and by-laws or other constitutive documents of IAMP and each IAMP
Subsidiary, which were previously furnished or made available to El
Sitio, are true, complete and correct copies in all material respects of
such documents as in effect on the date of this Agreement.
(iv) Section 4.1(a)(iv) of the IAMP Disclosure
Schedule sets forth all of the IAMP Subsidiaries and for each IAMP
Subsidiary, its name, jurisdiction of incorporation or organization and
the record ownership as of the date of this Agreement of all the share
capital of such subsidiary that is issued and outstanding. All the
outstanding share capital of each IAMP Subsidiary has been validly issued
and is fully paid and non-assessable, and, except as set forth in Section
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4.1(a)(iv) of the IAMP Disclosure Schedule, is owned, directly or
indirectly by IAMP, free and clear of all material pledges, claims,
liens, charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"), and free of any other material
restriction (including any restriction on the right to vote, sell or
otherwise dispose of such share capital or other ownership interests),
except for restrictions on transfer imposed by applicable securities laws
and under the Holdco Agreement. Except as disclosed in Section 4.1(a)(iv)
of the IAMP Disclosure Schedule, neither IAMP nor any of the IAMP
Subsidiaries owns, directly or indirectly, any equity interest in, or any
interest convertible into or exchangeable or exercisable for any equity
interest in, any corporation or other Person that is material to IAMP and
the IAMP Subsidiaries taken as a whole.
(v) Other than the IAMP Subsidiaries or as set forth
in Section 4.1(a)(v) of the IAMP Disclosure Schedule, neither IAMP nor
the IAMP Subsidiaries (A) has any direct or indirect subsidiaries that
engage, directly or indirectly, in the Media Business, or (B) owns in
excess of 5% of the outstanding share capital of any Person that engages,
directly or indirectly, in the Media Business.
(vi) Except as disclosed in Section 4.1(a)(vi) of the
IAMP Disclosure Schedule, none of IAMP or any of the IAMP Subsidiaries is
a party to any joint venture or partnership agreement relating to the
Media Business, and neither IAMP nor any of the IAMP Subsidiaries is a
party to any other joint venture or partnership agreement.
(b) Capitalization. (i) All of the issued and outstanding
share capital of IAMP has been duly authorized and validly issued and is
fully paid and non-assessable, and, except as set forth on Section
4.1(b)(i) of the IAMP Disclosure Schedule and except for directors'
qualifying shares and other nominal share interests issued to third
parties to comply with requirements of law, are owned by Newhaven or
Xxxxx (or their respective subsidiaries), free and clear of all Liens and
free of any other material restriction on the right to vote, sell or
otherwise dispose of such share capital.
(ii) No bonds, debentures, notes or other
Indebtedness having the right to vote on any matters on which
shareholders may vote ("Voting Debt") of IAMP or any of the IAMP
Subsidiaries are issued or outstanding.
(iii) Except as set forth in Section 4.1(b)(iii) of
the IAMP Disclosure Schedule, there are no options, warrants, calls,
rights, commitments or agreements of any character to which IAMP or any
of the IAMP Subsidiaries is a party or by which IAMP or any of the IAMP
Subsidiaries is bound obligating IAMP or any of the IAMP Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional capital shares or any Voting Debt of IAMP or of any of the
IAMP Subsidiaries or obligating IAMP or any of the IAMP Subsidiaries to
grant, extend or enter into any such option, warrant, call, right,
commitment or agreement. Except as set forth in Section 4.1(b)(iii) of
the IAMP Disclosure Schedule, there are no outstanding contractual
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obligations of IAMP or any of the IAMP Subsidiaries (A) to repurchase,
redeem or otherwise acquire any shares of IAMP or any of the IAMP
Subsidiaries or (B) to register any capital stock of IAMP under the U.S.
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act").
(iv) Since June 30, 2000, except as set forth in
Section 4.1(b)(iv) of the IAMP Disclosure Schedule, IAMP has not (A)
issued or permitted to be issued any shares, or securities exercisable or
exchangeable for or convertible into shares, of any of the IAMP
Subsidiaries, other than any such shares issued after the date hereof in
the ordinary course of business consistent with past practice, (B)
repurchased, redeemed or otherwise acquired, directly or indirectly
through one or more of its subsidiaries, any shares of IAMP or any of the
IAMP Subsidiaries or (C) declared, set aside, made or paid dividends or
other distributions on the outstanding shares of any of the IAMP
Subsidiaries.
(v) Newhaven and Xxxxx have made all capital
contributions due and payable to IAMP and the IAMP Subsidiaries through
September 30, 2000.
(c) Indebtedness. As of the date hereof, the only outstanding
Indebtedness of IAMP and the IAMP Subsidiaries is the Indebtedness set
forth in Section 4.1(c) of the IAMP Disclosure Schedule or as set forth
in the IAMP Financial Information or the IAMP Interim Financial
Information. Section 4.1(c) of the IAMP Disclosure Schedule specifically
identifies each Indebtedness of IAMP or the IAMP Subsidiaries that is in
a principal amount of at least U.S.$5 million. There exists (i) no
default or event of default (with or without notice or lapse of time or
both) by IAMP or any of the IAMP Subsidiaries under the provisions of the
agreements identified in Section 4.1(c) of the IAMP Disclosure Schedule
and (ii) no default or event of default (with or without notice or lapse
of time or both) by IAMP or any of the IAMP Subsidiaries under the
provisions of any other instrument evidencing such other Indebtedness or
of any agreement relating thereto, that, in either case, permits
acceleration of all or any part of such Indebtedness, except, in the case
of clause (i) or (ii), where such acceleration would not result in a
default under the agreements identified on Section 4.1(c) of the IAMP
Disclosure Schedule and would not otherwise, individually or in the
aggregate, have a Material Adverse Effect on IAMP and the IAMP
Subsidiaries taken as a whole.
(d) Authorization and Validity of Agreements. Each of Newhaven,
HMTF I, HMTF II, HMTF III and IAMP has all necessary corporate or other
power and authority to enter into this Agreement, the Holdco Agreement,
the Registration Rights Agreement and the Voting Agreement, to enter into
the other agreements contemplated hereby and to consummate the
transactions and perform its obligations contemplated hereby and thereby.
The execution, delivery and performance by Xxxxxxxx, XXXX X, XXXX XX,
XXXX III, and IAMP of this Agreement, the Voting Agreement, the Holdco
Agreement and the Registration Rights Agreement and the other agreements
contemplated hereby and thereby and the consummation by Xxxxxxxx, XXXX X,
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XXXX XX, XXXX III and IAMP of the transactions contemplated hereby and
thereby have been duly authorized by the board of directors of each of
Xxxxxxxx, XXXX X, XXXX XX, XXXX III and IAMP. No other corporate or
shareholder action is necessary for the authorization, execution,
delivery and performance by Xxxxxxxx, XXXX X, XXXX XX, XXXX III and IAMP
of this Agreement, the Holdco Agreement, the Registration Rights
Agreement and the Voting Agreement and the other agreements contemplated
hereby and the consummation by Xxxxxxxx, XXXX X, XXXX XX, XXXX III and
IAMP of the transactions contemplated hereby or thereby, other than the
corporate approvals set forth in Section 4.1(d) of the IAMP Disclosure
Schedule, which corporate approvals shall have been obtained by, and be
in full force and effect on, the Closing Date. This Agreement has been
duly executed and delivered by each of Xxxxxxxx, XXXX X, XXXX XX, XXXX
III and IAMP and constitutes a valid and legally binding obligation of
each of Xxxxxxxx XXXX X, XXXX XX, XXXX III and IAMP enforceable against
each of them in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting the enforcement of creditors'
rights generally, by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law) or
by an implied covenant of good faith and fair dealing.
(e) No Conflicts. Except (i) as, individually or in the
aggregate, would not have a Material Adverse Effect on IAMP and the IAMP
Subsidiaries taken as a whole, subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations
and filings referred to in Section 4.1(f) and (ii) as set forth in
Section 4.1(e) of the IAMP Disclosure Schedule, the execution and
delivery of this Agreement by Xxxxxxxx, XXXX X, XXXX XX, XXXX III, and
IAMP does not, and the consummation by IAMP of the IAMP Contribution and
the other transactions contemplated hereby and the performance by
Xxxxxxxx, XXXX X, XXXX XX, XXXX III, and IAMP of their respective
obligations hereunder will not, conflict with, or result in any violation
of, or constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of, or result by its terms in the
termination, amendment, cancellation or acceleration of any obligation of
IAMP or the IAMP Subsidiaries or the loss of a material benefit to which
IAMP or the IAMP Subsidiaries are entitled under, or the creation of a
Lien on, or the loss of, any assets, including Intellectual Property of
IAMP or the IAMP Subsidiaries (any such conflict, violation, default,
right of termination, amendment, cancellation or acceleration, loss or
creation, a "Violation") pursuant to: (A) any provision of the memorandum
of association and articles of association, certificate of incorporation
or bylaws or similar constitutive document of any such Person or any IAMP
Subsidiary, or (B) any loan or credit agreement, note, mortgage, bond,
indenture, lease, Benefit Plan or other agreement, obligation,
instrument, permit, Concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation binding upon
Newhaven, Xxxxx, IAMP or any IAMP Subsidiary or their respective
properties or assets.
(f) No Governmental Approvals or Notices Required; No Conflict
with Instruments to which IAMP or the IAMP Subsidiaries are a Party.
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Except for Government Consents under applicable antitrust laws and
filings contemplated by Article 1 and Section 2.1 hereof, no Government
Consent or notice to, or declaration, filing or registration with any
Government Entity, or consent, approval or waiver of any other Person (a
"Non-Governmental Approval"), is required to be made or obtained by
Newhaven, Xxxxx, IAMP or any IAMP Subsidiary in connection with the
execution, delivery and performance of this Agreement and the other
agreements contemplated hereby by Newhaven, Xxxxx and IAMP and the
consummation by each of them of the transactions contemplated hereby and
thereby, other than such violations the occurrence of which, and such
consents, approvals, filings or notices the failure of which to obtain or
make, would not, individually or in the aggregate, have a Material
Adverse Effect on IAMP and the IAMP Subsidiaries taken as a whole.
(g) Title to Properties. Newhaven, Xxxxx, IAMP or one or more of
the IAMP Subsidiaries have or has (i) good title to the IAMP Common
Shares and (ii) good and marketable title to all material real property
owned, and a valid leasehold interest in all material property leased by
such Person in the case of each of clauses (i) and (ii), free and clear
of all Liens, except (A) as set forth on Section 4.1(g) of the IAMP Disclosure
Schedule; (B) as set forth in the IAMP Financial Information or IAMP
Interim Financial Information; (C) Liens for taxes, assessments and
other governmental charges not yet due and payable or, if due, being
contested in good faith by appropriate proceedings during which
collection or enforcement against the property is stayed; (D) mechanics',
workmen's, repairmen's, warehousemen's, carriers' or other like liens
arising or incurred in the ordinary course of business if the underlying
obligations are not past due, original purchase price conditional sales
contracts and equipment leases with third parties entered into in the
ordinary course of business; (E) with respect to real property, (1)
easements, licenses, covenants, rights-of-way and other similar
restrictions, including, without limitation, any other agreements,
conditions or restrictions which would be shown by a current title report
or other similar report or listing, (2) any conditions that may be shown
by a current survey, title report or physical inspection and (3) zoning,
building and other similar restrictions, so long as none of (1), (2) or
(3) render the title of such real property unmarketable or prevent the
use of such real property substantially as currently used; and (F) Liens
that, individually or in the aggregate, would not have a Material Adverse
Effect on IAMP and the IAMP Subsidiaries taken as a whole (such Liens
described in clauses (A) through (F) above being referred to herein as
"Permitted Liens"). The real property of IAMP and each IAMP Subsidiary
is adequate for the conduct of the business of IAMP and each IAMP
Subsidiary as currently conducted, except for such inadequacy that,
individually or in the aggregate, would not have a Material Adverse
Effect on IAMP and the IAMP Subsidiaries taken as a whole.
(h) Conduct of Business. Except as disclosed in Section 4.1(h)
of the IAMP Disclosure Schedule or otherwise disclosed in this Agreement,
or as set forth in the IAMP Financial Information or the IAMP Interim
Financial Information, since December 31, 1999, IAMP and the IAMP
Subsidiaries have conducted their business in the ordinary course
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consistent with past practice, and, other than in the ordinary course,
there has not occurred or arisen, with respect to its business: (i) a
Material Adverse Effect on IAMP and the IAMP Subsidiaries taken as a
whole; (ii) any notice of non-renewal, cancellation or termination from
any existing customers with respect to any IAMP Material Contract, which
would have a Material Adverse Effect on IAMP and the IAMP Subsidiaries
taken as a whole; (iii) any sale, assignment, pledge, hypothecation or
other transfer of any assets, businesses or operations, other than such
sales, assignments, pledges, hypothecations or other transfers which
would not, individually or in the aggregate have a Material Adverse
Effect on IAMP and the IAMP Subsidiaries taken as a whole; (iv) any
termination or material amendment of, or any notice of termination of,
any IAMP Material Contract, which amendment or termination would have a
Material Adverse Effect on IAMP and the IAMP Subsidiaries taken as a
whole; (v) any damage, destruction or other casualty loss (not covered by
insurance) which would have a Material Adverse Effect on IAMP and the
IAMP Subsidiaries taken as a whole; (vi) except in each case for
immaterial amounts, any (A) increase in the fringe benefits or
compensation of any present or former director, officer or employee of
IAMP or the IAMP Subsidiaries, (B) grant of any severance or termination
pay to any present or former director, officer or employee of IAMP or the
IAMP Subsidiaries, (C) loan or advance of money or other property by IAMP
or the IAMP Subsidiaries to any of their present or former directors,
officers or employees, or (D) establishment, adoption, entrance into,
modification, amendment or termination of any IAMP Benefit Plan; (vii)
the cancellation of any debts to or waiver of any claims or rights of
material value to IAMP (viii) capital expenditures or additions to
property, plant or equipment or the acquisition of any other property or
assets (other than raw materials, supplies and inventory) by IAMP, other
than immaterial amounts; (ix) any lease by IAMP of any of its properties
or assets, other than immaterial amounts; (x) the entering into of any
IAMP Material Contract not listed on the IAMP Disclosure Schedule or (xi)
the entering into of an agreement to do any of the foregoing.
(i) Financial Information; Absence of Certain
Changes. (i) IAMP has delivered to El Sitio the audited consolidated
balance sheets of IAMP and the IAMP Subsidiaries at December 31, 1998 and
1999 (in the case of the balance sheet at December 31, 1999, the "IAMP
1999 Balance Sheet"), and the related audited statements of operations
and comprehensive income, stockholders' equity and cash flows for the
fiscal year ended December 31, 1999, including notes thereto, and the
report thereon of independent certified public accountants, which are set
forth in Section 4.1(i) of the IAMP Disclosure Schedule (the "IAMP
Financial Information"). The IAMP Financial Information fairly presents
in all material respects the financial position and results of operations
of IAMP and the IAMP Subsidiaries as at the respective dates thereof and
for the periods then ended, all in accordance with generally accepted
accounting principles in the United States ("U.S. GAAP") consistently
applied by IAMP at the dates and during the period involved. Except (A)
as and to the extent set forth on the IAMP 1999 Balance Sheet, including
the notes thereto, or in the IAMP Interim Financial Information or (B) as
disclosed in Section 4.1(i) of the IAMP Disclosure Schedule, neither IAMP
nor any of the IAMP Subsidiaries has any liabilities or obligations of
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any nature (whether accrued, absolute, contingent or otherwise) that
would be required to be reflected on a balance sheet or in the notes
thereto prepared in accordance with U.S. GAAP other than liabilities or
obligations incurred since December 31, 1999 that would not, individually
or in the aggregate, have a Material Adverse Effect on IAMP and the IAMP
Subsidiaries taken as a whole.
(ii) IAMP has delivered to El Sitio the unaudited
consolidated balance sheet of IAMP and the IAMP Subsidiaries as at June
30, 2000, and the related unaudited statements of operations for the
period then ended, set forth in Section 4.1(i)(ii) of the IAMP Disclosure
Schedule (the "IAMP Interim Financial Information"). The IAMP Interim
Financial Information was prepared in accordance with U.S. GAAP on a
basis consistent with prior practice for the preparation of interim
financial statements for IAMP and the IAMP Subsidiaries, and fairly
presents in all material respects the financial position and results of
operations of IAMP and the IAMP Subsidiaries at June 30, 2000 and for the
period then ended, subject to customary year-end adjustments.
(j) Legal Proceedings. Except as described in Section
4.1(j) of the IAMP Disclosure Schedule, there is no suit, action, legal
proceeding or governmental investigation or inquiry ("Legal Proceedings")
relating to IAMP or the IAMP Subsidiaries to which IAMP or any of the
IAMP Subsidiaries is a party, or to which any of their assets is subject,
pending, or, to the knowledge of Newhaven, Xxxxx or IAMP, threatened
against IAMP or any of the IAMP Subsidiaries or relating to the
transactions contemplated by this Agreement that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect on IAMP and the IAMP Subsidiaries taken as a whole.
(k) Labor Matters. Except as described in Section 4.1(k)
of the IAMP Disclosure Schedule, since December 31, 1999, (i) IAMP and
the IAMP Subsidiaries are, to the knowledge of Newhaven, Xxxxx and IAMP,
in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and neither IAMP nor any of the IAMP
Subsidiaries has been engaged in any unfair labor practice, (ii) there is
no unfair labor practice complaint against IAMP or the IAMP Subsidiaries
pending before any labor relations board or other Governmental Entity
having oversight authority with respect to labor relations, (iii) there
is no labor strike, dispute, slowdown or stoppage actually pending or, to
the knowledge of Newhaven, Xxxxx and IAMP, threatened against or
affecting IAMP or the IAMP Subsidiaries, (iv) neither IAMP nor any of the
IAMP Subsidiaries has experienced any strike, work stoppage or other
labor difficulty, and (v) neither IAMP nor any of the IAMP Subsidiaries
is a party to, or subject to, a collective bargaining agreement, and no
collective bargaining agreement relating to IAMP Employees is currently
being negotiated, which, in the case of any of the foregoing, would,
individually or in the aggregate, have a Material Adverse Effect on IAMP
and the IAMP Subsidiaries taken as a whole.
(l) Contracts. (i) Section 4.1(l)(i) of the IAMP
Disclosure Schedule lists all contracts, agreements or commitments of
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IAMP and the IAMP Subsidiaries that are material to IAMP and the IAMP
Subsidiaries taken as a whole ("IAMP Material Contracts"). Except as
specified in Section 4.1(l)(i) of the IAMP Disclosure Schedule, all IAMP
Material Contracts are in full force and effect and are valid and
enforceable in accordance with their respective terms, except where the
failure to be in full force and effect and valid and enforceable would
not, individually or in the aggregate, have a Material Adverse Effect on
IAMP and the IAMP Subsidiaries taken as a whole. Except as specified in
Section 4.1(l)(i) of the IAMP Disclosure Schedule, IAMP and the IAMP
Subsidiaries are not in breach or default in the performance of, and to
IAMP's knowledge, no other Person is in breach or default of, any
obligation thereunder and no event has occurred or has failed to occur
whereby any of the other parties thereto have been or will be released
therefrom or will be entitled to refuse to perform thereunder, except for
such breaches, defaults and events that, individually or in the
aggregate, would not have a Material Adverse Effect on IAMP and the IAMP
Subsidiaries taken as a whole.
(ii) Except as set forth in Section 4.1(l)(ii) of the
IAMP Disclosure Schedule, there is no IAMP Material Contract between IAMP
and the IAMP Subsidiaries, on the one hand, and any affiliate of
Newhaven, Xxxxx or IAMP (in each case excluding IAMP and the IAMP
Subsidiaries), on the other hand, and no affiliate of Newhaven, Xxxxx or
IAMP (in each case excluding IAMP and the IAMP Subsidiaries) has any
material interest in any material property, real or personal, tangible or
intangible, including, without limitation, any Intellectual Property,
used in the business of IAMP and the IAMP Subsidiaries.
(m) Intellectual Property. (i) Section 4.1(m)(i) of the IAMP
Disclosure Schedule sets forth, with respect to material Intellectual
Property owned, held or used by IAMP and/or the IAMP subsidiaries ("IAMP
Intellectual Property"), all patents, registrations and applications
relating thereto, all material unregistered Intellectual Property, and
all material licenses, consents, royalty and other agreements concerning
IAMP Intellectual Property to which IAMP and/or any of the IAMP
Subsidiaries is a party ("IAMP Intellectual Property Licenses").
(ii) Except as disclosed in Section 4.1(m)(ii) of the
IAMP Disclosure or would not have a Material Adverse Effect, (A) IAMP
and/or the IAMP Subsidiaries own or have the right to use all the IAMP
Intellectual Property necessary to conduct the respective businesses of
IAMP and the IAMP Subsidiaries as currently are conducted, free of all
Liens; (B) all of the IAMP Intellectual Property is valid, enforceable,
not abandoned and unexpired; (C) to the knowledge of IAMP and the IAMP
Subsidiaries, the IAMP Intellectual Property does not infringe or
otherwise impair the Intellectual Property of any other Person and is not
being infringed or impaired by any other Person, nor has IAMP or the IAMP
Subsidiaries received any written notice of the same; (D) IAMP and/or the
IAMP Subsidiaries take all reasonable steps to protect and maintain the
IAMP Intellectual Property, including executing all appropriate
confidentiality agreements, filing all appropriate patents and
registrations, and filings any other documents necessary under the laws
of any relevant jurisdictions to preserve their rights in such IAMP
-18-
Intellectual Property; (E) no party to a IAMP Intellectual Property
License is, or is alleged to be, in breach or default thereunder; (F) the
transactions contemplated by this Agreement shall not impair the rights
of IAMP or the IAMP Subsidiaries under any IAMP Intellectual Property
License, or cause any payments to be due thereunder; and (G) without
limiting the generality of the foregoing, IAMP and/or the IAMP
Subsidiaries owns and possesses all right, title and interest in and to
all IAMP Intellectual Property created or developed by, or under the
direction or supervision of, its employees.
(iii) "Intellectual Property" shall mean all
intellectual property, including without limitation all (A) (1) patents,
inventions, discoveries, processes, designs, techniques, developments,
technology, and related improvements and know-how; (2) copyrights and
works of authorship in any media, including films, websites, website
content, computer programs, hardware, software, applications, files,
databases, documentation and related items; (3) trademarks, service
marks, trade names, brand names, corporate names, domain names, logos,
trade dress, and all common-law rights relating thereto; and (4) trade
secrets and other confidential or proprietary documents, files, analyses,
lists, ways of doing business and/or information; and (B) registrations,
applications and recordings related thereto.
(n) Governmental Consents. Section 4.1(n) of the IAMP
Disclosure Schedule sets forth a true and complete list of each radio and
television concession and license owned or leased and operated by IAMP or
the IAMP Subsidiaries (the "Concessions") and the dates of expiration of
each Concession. Except as described in Section 4.1(n) of the IAMP
Disclosure Schedule, IAMP and the IAMP Subsidiaries have all Governmental
Consents required for the conduct of their respective businesses as
presently conducted, and such Governmental Consents are in full force and
effect, and Newhaven, Xxxxx, IAMP and the IAMP Subsidiaries have not
received any notice of any violation thereof or claim thereunder, nor
does any of Newhaven, Xxxxx, IAMP or any IAMP Subsidiary have knowledge
of any threatened suspension or cancellation of any such Governmental
Consent, except where the failure to have, or to keep in full force and
effect such Governmental Consents would not, individually or in the
aggregate, have a Material Adverse Effect on IAMP and the IAMP
Subsidiaries taken as a whole.
(o) Conduct of Business in Compliance with Regulatory and
Contractual Requirements. Except as described in Section 4.1(o) of the
IAMP Disclosure Schedule or as set forth in the IAMP Interim Financial
Information, since December 31, 1999, IAMP and the IAMP Subsidiaries have
conducted their respective businesses so as to comply in all material
respects with all applicable U.S. and non-U.S. laws, ordinances,
regulations or orders or other requirements of any Governmental Entity,
and have received no written notice of any failure to comply with such
laws, ordinances, regulations, orders, rights or requirements, except
where the failure to comply with such laws, ordinances, regulations,
orders, rights or requirements would not, individually or in the
aggregate, have a Material Adverse Effect on IAMP and the IAMP
Subsidiaries taken as a whole.
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(p) Employee Benefit Plans. (i) "Benefit Plans" means all
"employee benefit plans" (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
including, without limitation, "multiemployer plans" (within the meaning
of Sections 3(37) and 4001(a)(3) of ERISA)), and all material pension,
retirement, savings, share purchase, share option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation, vacation, insurance (including
self-insurance), health or medical, disability, worker's compensation,
supplemental unemployment, retiree welfare, and all other employee
benefit plans, agreements, programs, policies or other arrangements,
whether or not subject to ERISA (including any funding mechanism),
whether formal or informal, oral or written. "IAMP Benefits Plans" means
all Benefit Plans that (A) are entered into, sponsored or maintained by
IAMP or any of the IAMP Subsidiaries, and (B) under which any present or
former director, officer or employee of IAMP or any of the IAMP
Subsidiaries (collectively, the "IAMP Employees") has any present or
future right to benefits. "IAMP U.S. Benefit Plans" means all IAMP
Benefit Plans under which any IAMP Employee who is or was primarily
employed in the United States (collectively, the "IAMP U.S. Employees")
has any present or future right to benefits. "IAMP International Benefit
Plans" means all IAMP Benefit Plans other than the IAMP U.S. Benefit
Plans.
(ii) Section 4.1(p)(ii) of the IAMP Disclosure
Schedule sets forth a list of each IAMP Benefit Plan.
(iii) With respect to each IAMP Benefit Plan, IAMP
has provided or made available to El Sitio a current, accurate and
complete copy thereof, including any amendments thereto, and, to the
extent applicable: (A) any related trust agreement or other funding
instrument, (B) the most recent determination letter, if applicable, (C)
any summary description and other material written communications to IAMP
Employees concerning benefits provided thereunder, (D) for the one most
recent year, if applicable, the Form 5500 and attached schedules, audited
financial statements and actuarial reports.
(iv) Except as described on Section 4.1(p)(iv) of
the IAMP Disclosure Schedule:
(A) each IAMP Benefit Plan has been
established and administered in accordance with its terms, in
compliance with the applicable provisions of ERISA, the Code and
other applicable laws, rules, statutes, orders and regulations, and
has been maintained in good standing with applicable regulatory
authorities;
(B) each IAMP U.S. Benefit Plan that is
intended to be qualified (within the meaning of Section 401(a) of
the Code) is so qualified and has received a favorable
determination letter as to its qualification, and nothing has
occurred, whether by action or failure to act, that could
reasonably be expected to cause the loss of such qualification;
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(C) no event has occurred and no condition
exists that would subject IAMP or any of the IAMP
Subsidiaries, either directly or by reason of their affiliation
with any member of their "Controlled Group" (defined as any
organization that is a member of an controlled group of
organizations (within the meaning of Section 414(b), (c), (m) or
(o) of the Code)), to any tax, fine, lien, penalty or other
liability imposed by ERISA, the Code or any other applicable
laws, rules, statutes, orders and regulations;
(D) no "prohibited transaction" (as defined
in Section 406 of ERISA and Section 4975 of the Code) has
occurred with respect to any IAMP U.S. Benefit Plan;
(E) no IAMP Benefit Plan provides retiree
welfare benefits, and neither IAMP nor any of the IAMP Subsidiaries
have any obligation to provide retiree welfare benefits other than
coverage mandated under applicable law or regulation for which
neither IAMP nor any of the IAMP Subsidiaries is required to book
an accrual on its financial statements;
(F) no IAMP U.S. Benefit Plan is subject to
Title IV of ERISA or Section 412 of the Code, or is a
"multiemployer plan" (within the meaning of Section 4001(a)(3) of
ERISA);
(G) no actions, suits, claims, administrative
investigations, audits or other administrative proceedings (other
than routine claims for benefits in the ordinary course) are
pending or threatened with respect to any IAMP Benefit Plan, and no
facts or circumstances exist that could give rise to any such
actions, suits, claims, investigations, audits or proceedings;
(H) no IAMP Benefit Plans exist that,
individually or collectively, could be reasonably expected to give
rise to the payment of any amount that would not be deductible
pursuant to the terms of Section 280G of the Code, and no IAMP
Benefit Plan exists that, as a result of the transaction
contemplated by this Agreement, could result in the payment to any
IAMP Employee of any money or other property or could result in the
acceleration or provision of any other rights or benefits to any
IAMP Employee; and
(I) with respect to any IAMP International
Benefit Plan, according to the actuarial assumptions and valuations
most recently used for the purpose of funding each IAMP
International Benefit Plan (which actuarial assumptions and
valuations were provided in accordance with the actuarial and
accounting principles, bases, policies, methods and practices in
the relevant jurisdiction for such plan), as of June 30, 2000, the
total amount or value of the funds available under such IAMP
International Benefit Plan to pay benefits accrued thereunder or
segregated in respect of such accrued benefits, together with any
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reserve or accrual with respect thereto, exceeded the present value
of all benefits (actual or contingent) accrued as of such date of
all participants and past participants therein in respect of which
IAMP or any of the IAMP Subsidiaries has or would have after the
Closing Date any obligation.
(v) There are no Benefit Plans that are entered
into, sponsored or maintained by Newhaven or Xxxxx under which any
present or former IAMP Employee has any present or future right to
benefits.
(q) Tax Matters. Except as disclosed in Section
4.1(q) of the IAMP Disclosure Schedule and except as would not result in
a Material Adverse Effect on IAMP and the IAMP Subsidiaries taken as a
whole:
(i) IAMP and the IAMP Subsidiaries have filed all Tax Returns
that they were required to file. All such filed Tax Returns were
correct and complete in all material respects. All Taxes required
to have been paid by IAMP and the IAMP Subsidiaries (whether or not
shown on any Tax Return) have been paid or adequately reserved
against in accordance with U.S. GAAP. None of IAMP or the IAMP
Subsidiaries currently is the beneficiary of any extension of time
within which to file any Tax Return. No written claim has ever been
made (and, to the knowledge of IAMP or the IAMP Subsidiaries, no
claim has been threatened in writing) by any authority in a
jurisdiction where IAMP and any of the IAMP Subsidiaries does not
file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Liens on any of the assets of any of
IAMP and the IAMP Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Tax other than Liens for
(A) current Taxes not yet due or (B) Taxes that are being disputed
in good faith by appropriate proceedings and for which adequate
reserves have been provided.
(ii) IAMP and the IAMP Subsidiaries have withheld and paid
all Taxes required to have been withheld and paid in connection
with amounts paid or owing to any IAMP Employee, independent
contractor, creditor, shareholder or other third party.
(iii) No audit or other proceeding by any Governmental Entity
is pending or, to the knowledge of IAMP, threatened in writing with
respect to any Taxes due from or with respect to IAMP or any of the
IAMP Subsidiaries. There is no dispute or claim concerning any Tax
liability of IAMP or the IAMP Subsidiaries claimed or raised by any
taxing authority (and, to the knowledge of IAMP or the IAMP
Subsidiaries, no such dispute or claim has been threatened in
writing). IAMP has made available to El Sitio correct and complete
copies of all income Tax Returns and examination reports with
respect to, and statements of deficiencies assessed against or
agreed to by, IAMP and the IAMP Subsidiaries since December 31,
1999.
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(iv) None of IAMP or the IAMP Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.
(v) None of IAMP or the IAMP Subsidiaries has filed a consent
under Section 341(f) of the Code concerning collapsible
corporations. None of IAMP or the IAMP Subsidiaries has made any
payments, is obligated to make any payments, or is a party to any
agreement that under certain circumstances could obligate it to
make any payments that will not be deductible under Section 280G of
the Code. None of IAMP or the IAMP Subsidiaries has been a United
States real property holding corporation (within the meaning of
Section 897(c)(2) of the Code) during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code. IAMP and the
IAMP Subsidiaries have disclosed on their U.S. income Tax Returns
all positions taken therein that could reasonably be expected to
give rise to a substantial understatement of U.S. federal income
Tax (within the meaning of Section 6662 of the Code). None IAMP or
the IAMP Subsidiaries is a party to any Tax allocation or sharing
agreement, other than such an agreement exclusively between or
among IAMP and the IAMP Subsidiaries. None of IAMP or the IAMP
Subsidiaries (A) has been a member of an affiliated group filing a
consolidated income Tax Return or (B) have any liability for the
Taxes of any Person (other than IAMP and the IAMP Subsidiaries)
under U.S. Treasury Regulations Section 1.1502-6 (or any similar
provision of U.S. or non-U.S. federal, state or local law), as a
transferee or successor, by contract, or otherwise.
(vi) "Tax" means any domestic or foreign federal, national,
state, provincial, local, territorial, foreign or other
jurisdictional income, gross receipts, property, sales, use,
withholding, license, excise, franchise, employment, payroll,
alternative or add-on minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like
assessment or charge imposed by any Governmental Authority,
together with any interest or penalty imposed thereon. The term
"Tax Return" means a report, return or other information (including
any attached schedules or any amendments to such report, return or
other information) required to be supplied to or filed with a
taxing authority with respect to any Tax, including any information
return, claim for refund, amended return or declaration of
estimated Tax.
(r) Insurance. Except as would not have a Material Adverse
Effect on IAMP and the IAMP Subsidiaries taken as a whole, all insurance
policies covering IAMP and the IAMP Subsidiaries and their respective
material assets are in full force and effect, all premiums with respect
thereto (or with respect to new insurance policies that, in the ordinary
course of business, have replaced such insurance policies), covering all
periods up to and including the Closing Date, have been paid, to the
extent due, prior to the Closing Date, or accrued on IAMP's financial
statements and books and records and no notice of cancellation or
termination has been received with respect to any such insurance policy
-23-
(other than any insurance policy that expires, is cancelled or is
terminated in accordance with its terms and has been continued, extended
or reinstated on substantially similar terms or is replaced with another
insurance policy with substantially similar terms). Except as would not
have a Material Adverse Effect on IAMP and the IAMP Subsidiaries taken as
a whole, such policies are sufficient for compliance with all
requirements of law, and are, to the knowledge of IAMP and the IAMP
Subsidiaries, valid, outstanding and enforceable. Except as would not
have a Material Adverse Effect on IAMP and the IAMP Subsidiaries taken as
a whole, neither IAMP nor any IAMP Subsidiary has received notice that
the coverage of any insurance has been limited by any insurance carrier,
which insurance carrier has carried any such insurance during the last
three years.
(s) Certain Fees. Except for fees and expenses payable to Xxxxx
Xxxxxx & Partners and to Bear, Xxxxxxx & Co. Inc., neither Newhaven,
Xxxxx, IAMP nor any of the IAMP Subsidiaries nor any IAMP Employee, on
behalf of IAMP, Newhaven, Xxxxx or the IAMP Subsidiaries, has employed
any broker or finder or incurred any other liability for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated hereby for which Holdco would be liable.
(t) Holdco Common Shares Held for Investment. Newhaven and
Xxxxx are aware that the Holdco Common Shares to be received by Newhaven
and Xxxxx as consideration in the Contributions have not been registered
under the Securities Act or under any state securities laws in the United
States or under the laws of any other jurisdiction. Newhaven and Xxxxx
are acquiring such Holdco Common Shares solely for investment, with no
present intention to distribute any such shares to any Person.
(u) Information Supplied. (i) None of the information supplied
or to be supplied by IAMP, Newhaven or Xxxxx for inclusion or
incorporation by reference in (A) the Form F-4 at the time it is filed
with the SEC, at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act or (B) the Proxy
Statement/Prospectus, on the date it is first mailed to El Sitio
shareholders or at the time of the El Sitio Shareholders Meeting, will
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, in light of the circumstances under which they were
made, not misleading.
(ii) Notwithstanding the foregoing provisions of this
Section 4.1(u), no representation or warranty is made by Newhaven, Xxxxx
or IAMP with respect to statements made or incorporated by reference in
the Form F-4 or the Proxy Statement/Prospectus based on information
supplied by El Sitio for inclusion or incorporation by reference therein,
and no representation or warranty is made by Xxxxx or IAMP with respect
to statements made or incorporated by reference in the Form F-4 or the
Proxy Statement/Prospectus based on information supplied by Newhaven with
respect to the Newhaven Subsidiaries, for inclusion or incorporation by
reference therein.
-24-
(v) Board Approvals.
(i) Newhaven Board Approval. The board of directors of
Newhaven, by resolutions duly adopted by unanimous vote of those voting
at a meeting duly called and held and not subsequently rescinded or
modified in any way has duly approved this Agreement, the Voting
Agreement, the Holdco Agreement, the Registration Rights Agreement and
the Transactions (the "Newhaven Board Approval").
(ii) Xxxxx Board Approval. The general partners of each of
HMTF I, HMTF II and HMTF III, by resolutions duly adopted by unanimous
vote of those voting at a meeting duly called and held and not
subsequently rescinded or modified in any way, has duly approved this
Agreement, the Voting Agreement, the Holdco Agreement, the Registration
Rights Agreement and the Transactions (the "Xxxxx Board Approval").
(iii) IAMP Board Approval. The board of directors of IAMP,
by resolutions duly adopted by unanimous vote of those voting at a
meeting duly called and held and not subsequently rescinded or modified
in any way, has duly approved this Agreement, and the Transactions. IAMP
has received all necessary corporate approvals of this Agreement, the
Voting Agreement, the Holdco Agreement, the Registration Rights Agreement
and the Transactions under the laws of the Cayman Islands (the "IAMP
Board Approval").
(w) Holdco. Holdco has been formed for the purpose of
consummating the transactions contemplated hereby and has not engaged in
any other business except that prior to the Closing, Holdco shall have
entered into the letter agreements described in Section 6.9 hereof. All
of the outstanding capital stock of Holdco, consisting of 1 Holdco Common
Share, is owned beneficially and of record by IAMP, and any other
issuances of Holdco Common Shares prior to the Effective Time shall be
solely as contemplated by this Agreement and the transactions
contemplated hereby.
(x) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 4.1, none of
Newhaven, Xxxxx or IAMP nor any other Person has made or makes any other
express or implied representation or warranty on behalf of Newhaven,
Xxxxx, IAMP or the IAMP Subsidiaries.
4.2. Representations and Warranties of Newhaven. Except as
set forth in the disclosure schedule delivered by Newhaven to Xxxxx
and El Sitio prior to the date of execution of this Agreement (the
"Newhaven Disclosure Schedule"), Newhaven represents and warrants
to El Sitio and Xxxxx as follows:
(a) Due Organization; Good Standing and Power. (i) Each of
Newhaven and each of the Newhaven Subsidiaries is a corporation or other
Person duly organized, validly existing and, in the case of each U.S.
corporation or other Person, is in good standing under the laws of the
jurisdiction of its incorporation or organization, has the requisite
power and authority to conduct its business as now conducted by it,
-25-
except where the failure to be so organized, existing and in good
standing or have such power and authority, individually or in the
aggregate, would not have a Material Adverse Effect on Newhaven and the
Newhaven Subsidiaries taken as a whole.
(ii) Each of Newhaven and the Newhaven Subsidiaries is
duly qualified and in good standing to do business in each other
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary other than
in such jurisdictions where the failure so to qualify or to be in good
standing, individually or in the aggregate, would not have a Material
Adverse Effect on Newhaven and the Newhaven Subsidiaries taken as a
whole.
(iii) The copies of the certificate of incorporation and
bylaws or other constitutive documents of Newhaven and each Newhaven
Subsidiary, which were previously furnished or made available to El
Sitio, are true, complete and correct copies in all material respects of
such documents as in effect on the date of this Agreement.
(iv) Section 4.2(a)(iv) of the Newhaven Disclosure
Schedule sets forth all Newhaven Subsidiaries, and for each such Newhaven
Subsidiary, its name, jurisdiction of incorporation or organization and
the record ownership as of the date of this Agreement of all the share
capital of such Newhaven Subsidiary that is issued and outstanding. All
the outstanding share capital of each such Newhaven Subsidiary has been
validly issued and is fully paid and non-assessable, and, except as set
forth in Section 4.2(a)(iv) of the Newhaven Disclosure Schedule, is
owned, directly or indirectly, by Newhaven, free and clear of all Liens
and free of any other material restriction (including any restriction on
the right to vote, sell or otherwise dispose of such share capital or
other ownership interests), except for restrictions on transfer imposed
by applicable securities laws and under the Holdco Agreement. Except as
disclosed in Section 4.2(a)(iv) of the Newhaven Disclosure Schedule,
neither Newhaven nor any of the Newhaven Subsidiaries owns, directly or
indirectly, any equity interest in, or any interest convertible into or
exchangeable or exercisable for any equity interest in, any corporation
or other Person that is material to Newhaven and the Newhaven
Subsidiaries taken as a whole.
(v) Other than the Newhaven Subsidiaries or as set forth
in Section 4.2(a)(v) of the Newhaven Disclosure Schedule, neither
Newhaven nor any of the Newhaven Subsidiaries (A) has any direct or
indirect subsidiaries that engages, directly or indirectly, in the Media
Business, or (B) owns in excess of 5% of the outstanding share capital of
any Person that engages, directly or indirectly, in the Media Business.
(vi) Except as disclosed in Section 4.2(a)(vi) of the
Newhaven Disclosure Schedule, neither of Newhaven nor any of the Newhaven
Subsidiaries is a party to any joint venture or partnership agreement
relating to the Media Business, and neither Newhaven nor any of the
Newhaven Subsidiaries is a party to any other joint venture or
partnership agreement.
-26-
(b) Capitalization. (i) All of the issued and outstanding
share capital of Newhaven has been duly authorized and validly issued
and is fully paid and non-assessable.
(ii) No Voting Debt of Newhaven or any of the Newhaven
Subsidiaries is issued or outstanding.
(iii) Except as set forth in Section 4.2(b)(iii) of the
Newhaven Disclosure Schedule, there are no options, warrants, calls,
rights, commitments or agreements of any character to which Newhaven or
any Newhaven Subsidiary is a party or by which Newhaven or any Newhaven
Subsidiary is bound obligating Newhaven or any Newhaven Subsidiary to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional capital shares or any Voting Debt of Newhaven or of any
Subsidiary or obligating Newhaven or any Newhaven Subsidiary to grant,
extend or enter into any such option, warrant, call, right, commitment or
agreement. Except as set forth in Section 4.2(b)(iii) of the Newhaven
Disclosure Schedule, there are no outstanding contractual obligations of
Newhaven or any Newhaven Subsidiary (A) to repurchase, redeem or
otherwise acquire any shares of Newhaven or any Newhaven Subsidiary or
(B) to register Newhaven Common Shares or other securities under the
Securities Act.
(iv) Since June 30, 2000, except as set forth in Section
4.2(b)(iv) of the Newhaven Disclosure Schedule, Newhaven has not (A)
issued or permitted to be issued any shares, or securities exercisable or
exchangeable for or convertible into shares, of any Newhaven Subsidiary,
other than any such shares issued after the date hereof in the ordinary
course of business consistent with past practice, (B) repurchased,
redeemed or otherwise acquired, directly or indirectly through one or
more Newhaven Subsidiaries, any shares of Newhaven or any Newhaven
Subsidiary, or (C) declared, set aside, made or paid dividends or other
distributions on the outstanding shares of any Newhaven Subsidiary.
(v) Newhaven has made all capital contributions due and
payable to the Newhaven Subsidiaries through September 30, 2000.
(c) Indebtedness. As of the date hereof, the only outstanding
Indebtedness of Newhaven and the Newhaven Subsidiaries is the
Indebtedness set forth in Section 4.2(c) of the Newhaven Disclosure
Schedule or as set forth in the Newhaven Financial Information or the
Newhaven Interim Financial Information. Section 4.2(c) of the Newhaven
Disclosure Schedule specifically identifies each Indebtedness of Newhaven
or the Newhaven Subsidiaries that is in a principal amount of at least
U.S.$5 million. There exists (i) no default or event of default (with or
without notice or lapse of time or both) by Newhaven or any of the
Newhaven Subsidiaries under the provisions of the agreements identified
in Section 4.2(c) of the Newhaven Disclosure Schedule, and (ii) no
default or event of default (with or without notice or lapse of time or
both) by Newhaven or any of the Newhaven Subsidiaries under the
provisions of any other instrument evidencing such other Indebtedness or
of any agreement relating thereto, that, in either case, permits
acceleration of all or any part of such Indebtedness, except, in the case
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of clause (i) or (ii) above, where such acceleration would not result in
a default under the agreements identified on Section 4.2(c) of the
Newhaven Disclosure Schedule and would not otherwise, individually or in
the aggregate, have a Material Adverse Effect on Newhaven and the
Newhaven Subsidiaries taken as a whole.
(d) Authorization and Validity of Agreements. Newhaven has all
necessary corporate or other power and authority to enter into this
Agreement, the Holdco Agreement, the Registration Rights Agreement and
the Voting Agreement, to enter into the other agreements contemplated
hereby, and to consummate the transactions and perform its obligations
contemplated hereby and thereby. The execution, delivery and performance
by Newhaven of this Agreement, the Voting Agreement, the Holdco Agreement
and the Registration Rights Agreement and the other agreements
contemplated hereby and thereby and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by
the board of directors of Newhaven. No other corporate or shareholder
action is necessary for the authorization, execution, delivery and
performance by Newhaven of this Agreement, the Holdco Agreement, the
Registration Rights Agreement and the Voting Agreement and the other
agreements contemplated hereby and the consummation by Newhaven of the
transactions contemplated hereby or thereby, other than the corporate
approvals set forth in Section 4.2(d) of the Newhaven Disclosure
Schedule, which corporate approvals shall have been obtained by, and be
in full force and effect on, the Closing Date. This Agreement has been
duly executed and delivered by Newhaven, and constitutes a valid and
legally binding obligation of Newhaven enforceable against Newhaven in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally,
by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by
an implied covenant of good faith and fair dealing.
(e) No Conflicts. Except (i) as, individually or in the
aggregate, would not have a Material Adverse Effect on Newhaven and the
Newhaven Subsidiaries taken as a whole, subject to obtaining or making
the consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in Section 4.2(f) and (ii) as set
forth in Section 4.2(e) of the Newhaven Disclosure Schedule, and except
with respect to employee share options, the execution and delivery of
this Agreement by Newhaven does not, and the consummation by Newhaven of
the Transactions and the performance by Newhaven of its respective
obligations hereunder will not, conflict with, or result in any Violation
of, or constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of, or result by its terms in a
Violation pursuant to: (A) any provision of the memorandum of association
and articles of association, certificate of incorporation or bylaws or
similar constitutive document of Newhaven or any Newhaven Subsidiary, or
(B) any loan or credit agreement, note, mortgage, bond, indenture, lease,
Newhaven Benefit Plan or other agreement, obligation, instrument, permit,
Concession, franchise, license, judgment, order, decree, statute, law,
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ordinance, rule or regulation binding upon Newhaven, or any Newhaven
Subsidiary or their respective properties or assets.
(f) No Governmental Approvals or Notices Required; No Conflict
with Instruments to which Newhaven or any of the Newhaven Subsidiaries
are a Party. Except for Governmental Consents under applicable antitrust
laws and filings contemplated by Article 1 and Section 2.1 hereof, no
Governmental Consent or notice to, or declaration, filing or registration
with any Governmental Entity, or consent, approval or waiver of a
Non-Governmental Approval, is required to be made or obtained by Newhaven
or any Newhaven Subsidiary in connection with the execution, delivery and
performance of this Agreement and the other agreements contemplated
hereby by Newhaven and the consummation of the transactions contemplated
hereby and thereby, other than such violations the occurrence of which,
and such consents, approvals, filings or notices the failure of which to
obtain or make, would not, individually or in the aggregate, have a
Material Adverse Effect on Newhaven and the Newhaven Subsidiaries taken
as a whole.
(g) Title to Properties. Newhaven or one or more of the
Newhaven Subsidiaries has good and marketable title to all material real
property owned, and a valid leasehold interest in all material property
leased by such Person in the case of each of clauses (x) and (y), free
and clear of all Liens, except (i) as set forth on Section 4.2(g) of the
Newhaven Disclosure Schedule; (ii) as set forth in the notes to the
Newhaven Financial Information; and (iii) Permitted Liens. The real
property of Newhaven and each Newhaven Subsidiary is adequate for the
conduct of the business of such Persons as currently conducted, except
for such inadequacy that, individually or in the aggregate, would not
have a Material Adverse Effect on Newhaven and the Newhaven Subsidiaries
taken as a whole.
(h) Conduct of Business. Except as disclosed in Section 4.2(h)
of the Newhaven Disclosure Schedule or otherwise disclosed in this
Agreement, or the Newhaven's Disclosure Schedule or as set forth in the
Newhaven Financial Information or the Newhaven Interim Financial
Information since December 31, 1999, Newhaven has conducted its business
in the ordinary course consistent with past practice, and other than in
the ordinary course, there has not occurred or arisen, with respect to
its business: (i) a Material Adverse Effect on Newhaven and the Newhaven
Subsidiaries taken as a whole; (ii) any notice of non-renewal,
cancellation or termination from any existing customers with respect to
any Newhaven Material Contracts, that would have a Material Adverse
Effect on Newhaven and the Newhaven Subsidiaries taken as a whole; (iii)
any sale, assignment, pledge, hypothecation or other transfer of any
assets, businesses or operations, other than such sales, assignments,
pledges, hypothecations or other transfers which would not, individually
or in the aggregate have a Material Adverse Effect on Newhaven and the
Newhaven Subsidiaries taken as a whole; (iv) any termination or material
amendment of, or any notice of termination of, any Newhaven Material
Contract, which amendment or termination would have a Material Adverse
Effect on Newhaven and the Newhaven Subsidiaries taken as a whole; (v)
any damage, destruction or other casualty loss (not covered by insurance)
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that would have a Material Adverse Effect on Newhaven and the Newhaven
Subsidiaries taken as a whole; (vi) except in each case for immaterial
amounts, any (A) increase in the fringe benefits or compensation of any
present or former Newhaven Employee, (B) grant of any severance or
termination pay to any present or former Newhaven Employee (C) loan or
advance of money or other property by Newhaven or the Newhaven
Subsidiaries to any present or former Newhaven Employee, or (D)
establishment, adoption, entrance into, modification, amendment or
termination of any Newhaven Benefit Plan; (vii) any incurrence or
assumption of any indebtedness for borrowed money or the guaranty by
Newhaven of another person; (viii) the cancellation of any debts to or
waiver of any claims or rights of material value to Newhaven; (ix)
capital expenditures or additions to property, plant or equipment or the
acquisition of any other property or assets (other than raw materials,
supplies and inventory) by Newhaven, other than immaterial amounts; (x)
any lease by Newhaven of any of its properties or assets, other than
immaterial amounts; (xi) the entering into of any Newhaven Material
Contract not listed on the Newhaven Disclosure Schedule; or (xii) the
entering into of an agreement to do any of the foregoing.
(i) Financial Information; Absence of Certain Changes. (i)
Newhaven has delivered to El Sitio the audited balance sheet of Playboy
TV International LLC ("PTVI") at December 31, 1999 (the "PTVI 1999
Balance Sheet"), and the related consolidated audited statements of
operations and comprehensive loss, of owner's equity and of cash flows
for the period from August 31, 1999 (date of commencement) through
December 31, 1999, including notes thereto, and the report thereon of
independent certified public accountants, which are set forth in Section
4.2(i) of the Newhaven Disclosure Schedule (the "PTVI Financial
Information"). The PTVI Financial Information fairly presents in all
material respects the financial position and results of operations of
PTVI as at the respective dates thereof and for the periods then ended,
all in accordance with U.S. GAAP consistently applied by PTVI at the
dates and during the periods involved. Except (A) as and to the extent
set forth on the PTVI 1999 Balance Sheet, including the notes thereto,
the PTVI Interim Financial Information, the Rainbow Financial Information
or the AEI Financial Information or (B) as disclosed in Section 4.2(i) of
the Newhaven Disclosure Schedule, neither Newhaven nor any of the
Newhaven Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on a balance sheet or in the notes thereto
prepared in accordance with U.S. GAAP other than liabilities or
obligations incurred since December 31, 1999 that would not, individually
or in the aggregate, have a Material Adverse Effect on Newhaven and the
Newhaven Subsidiaries taken as a whole.
(ii) Newhaven has delivered to El Sitio the unaudited
balance sheet of PTVI as at June 30, 2000, and the related unaudited
statements of operations and comprehensive loss for the period then
ended, attached as Section 4.2(i)(ii) of the Newhaven Disclosure Schedule
(the "PTVI Interim Financial Information"). The PTVI Interim Financial
Information was prepared in accordance with U.S. GAAP on a basis
consistent with prior practice for the preparation of interim financial
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statements for PTVI, and fairly presents in all material respects the
financial position and results of operations of PTVI at as of and for the
period then ended subject to customary year-end adjustments.
(iii) Newhaven has delivered to El Sitio the unaudited
balance sheet of Rainbow at June 30, 2000, and the related unaudited
statement of operations for the period then ended, attached as Section
4.2(i)(iii) of the Newhaven Disclosure Schedule (the "Rainbow Financial
Information"). The Rainbow Financial Information was prepared in
accordance with U.S. GAAP on a basis consistent with prior practice for
the preparation of interim financial statements for Rainbow and fairly
presents in all material respects the financial position and results of
operations of Rainbow as of and for the period then ended subject to
customary year-end adjustments.
(iv) Newhaven has delivered to El Sitio (A) the unaudited
balance sheet of AEI Collingham Holdings Co, Ltd. ("AEI") at December 31,
1999, and the related unaudited statement of operations for the fiscal
year then ended, and (B) the unaudited balance sheet of AEI at June 30,
2000, and the related unaudited statement of operations for the period
then ended attached as Section 4.1(i)(iv) of the Newhaven Disclosure
Schedule (collectively, the "AEI Financial Information," and together
with the PTVI Financial Information, the PTVI Interim Financial
Information and the Rainbow Financial Information, the "Newhaven
Financial Information"). The AEI Financial Information was prepared in
accordance with U.S. GAAP on a basis consistent with prior practice for
the preparation of annual or interim financial statements, as applicable,
for AEI and fairly presents in all material respects the financial
position and results of operations of AEI as of and for the periods then
ended subject to customary year-end adjustments.
(j) Legal Proceedings. Except as described in Section 4.2(j) of
the Newhaven Disclosure Schedule, there is no Legal Proceeding relating
to Newhaven or the Newhaven Subsidiaries to which Newhaven or any of the
Newhaven Subsidiaries is a party, or to which any of their assets is
subject, pending or, to the knowledge of Newhaven, Xxxxx or Newhaven,
threatened against Newhaven or any of the Newhaven Subsidiaries or
relating to the Transactions that, individually or in the aggregate,
would reasonably be expected to result in a Material Adverse Effect on
Newhaven and the Newhaven Subsidiaries taken as a whole.
(k) Labor Matters. Except as described in Section 4.2(k) of the Newhaven
Disclosure Schedule, since December 31, 1999, (i) Newhaven and the
Newhaven Subsidiaries are, to the knowledge of Newhaven, in compliance in
all material respects with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and
hours, and neither Newhaven nor any of the Newhaven Subsidiaries has been
engaged in any unfair labor practice, (ii) there is no unfair labor
practice complaint against Newhaven or the Newhaven Subsidiaries pending
before any labor relations board or other Governmental Entity having
oversight authority with respect to labor relations, (iii) there is no
labor strike, dispute, slowdown or stoppage actually pending or, to the
knowledge of Newhaven, threatened against or affecting Newhaven or the
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Newhaven Subsidiaries, (iv) neither Newhaven nor any of the Newhaven
Subsidiaries has experienced any strike, work stoppage or other labor
difficulty, and (v) neither Newhaven nor any of the Newhaven Subsidiaries
is a party to, or subject to, a collective bargaining agreement, and no
collective bargaining agreement relating to any Newhaven Employees
currently is being negotiated, which, in the case of any of the foregoing
would, individually or in the aggregate, have a Material Adverse Effect
on Newhaven and the Newhaven Subsidiaries taken as a whole.
(l) Contracts. (i) Section 4.2(l)(i) of the Newhaven Disclosure
Schedule lists all contracts, agreements or commitments of Newhaven and
the Newhaven Subsidiaries that are material to Newhaven and the Newhaven
subsidiaries taken as a whole ("Newhaven Material Contracts"). Except as
specified in Section 4.2(l)(i) of the Newhaven Disclosure Schedule, all
Newhaven Material Contracts are in full force and effect and are, to the
knowledge of Newhaven, valid and enforceable in accordance with their
respective terms, except where the failure to be in full force and effect
and valid and enforceable would not, individually or in the aggregate,
have a Material Adverse Effect on Newhaven and the Newhaven Subsidiaries
taken as a whole. Except as specified in Section 4.2(l)(i) of the
Newhaven Disclosure Schedule, Newhaven and the Newhaven Subsidiaries are
not in breach or default in the performance of, and to Newhaven's
knowledge, no other Person is in breach or default of, any obligation
thereunder and no event has occurred or has failed to occur whereby any
of the other parties thereto have been or will be released therefrom or
will be entitled to refuse to perform thereunder, except for such
breaches, defaults and events that, individually or in the aggregate,
would not have a Material Adverse Effect on Newhaven and the Newhaven
Subsidiaries taken as a whole.
(ii) Except as set forth in Section 4.2(l)(ii) of the
Newhaven Disclosure Schedule, there is no Newhaven Material Contract
between Newhaven and the Newhaven Subsidiaries, on the one hand, and any
affiliate of Newhaven, on the other hand, (except, in each case, IAMP and
the IAMP Subsidiaries) and no affiliate of Newhaven has any material
interest in any material property, real or personal, tangible or
intangible, including, without limitation, any Intellectual Property,
used in the business of Newhaven and the Newhaven Subsidiaries.
(m) Intellectual Property. (i) Section 4.2(m)(i) of the
Newhaven Disclosure Schedule sets forth, with respect to material
Intellectual Property owned, held or used by Newhaven and/or the Newhaven
Subsidiaries ("Newhaven Intellectual Property"), all patents,
registrations and applications relating thereto, all material
unregistered Intellectual Property, and all material licenses, consents,
royalty and other agreements concerning Newhaven Intellectual Property to
which Newhaven and/or the Newhaven Subsidiaries is a party ("Newhaven
Intellectual Property Licenses").
(ii) Except as disclosed in Section 4.2(m)(ii) of the Newhaven
Disclosure or would not have a Material Adverse Effect, (A) Newhaven
and/or the Newhaven Subsidiaries own or have the right to use all the
Newhaven Intellectual Property necessary to conduct the respective
-32-
businesses of Newhaven and the Newhaven Subsidiaries as currently are
conducted, free of all Liens; (B) all of the Newhaven Intellectual
Property is valid, enforceable, not abandoned and unexpired; (C) to the
knowledge of Newhaven and the Newhaven Subsidiaries, the Newhaven
Intellectual Property does not infringe or otherwise impair the
Intellectual Property of any other Person and is not being infringed or
impaired by any other Person, nor has Newhaven or the Newhaven
Subsidiaries received any written notice of the same; (D) Newhaven and/or
the Newhaven Subsidiaries take all reasonable steps to protect and
maintain the Newhaven Intellectual Property, including executing all
appropriate confidentiality agreements, filing all appropriate patents
and registrations, and filings any other documents necessary under the
laws of any relevant jurisdictions to preserve their rights in such
Newhaven Intellectual Property; (E) no party to a Newhaven Intellectual
Property License is, or is alleged to be, in breach or default
thereunder; (F) the transactions contemplated by this Agreement shall not
impair the rights of Newhaven or the Newhaven Subsidiaries under any
Newhaven Intellectual Property License, or cause any payments to be due
thereunder; and (G) without limiting the generality of the foregoing,
Newhaven and/or the Newhaven Subsidiaries owns and possesses all right,
title and interest in and to all Newhaven Intellectual Property created
or developed by, or under the direction or supervision of, its employees.
(n) Government Consents. Except as described in Section 4.2(n)
of the Newhaven Disclosure Schedule, Newhaven or the Newhaven
Subsidiaries have all Governmental Consents required for the conduct of
their respective businesses as presently conducted, and such Governmental
Consents are in full force and effect, and Newhaven and the Newhaven
Subsidiaries have not received any notice of any violation thereof nor
does any of Newhaven or any of the Newhaven Subsidiaries have knowledge
of any threatened suspension or cancellation of any such Governmental
Consent, except where the failure to have, or to keep in full force and
effect such Governmental Consents would not, individually or in the
aggregate, have a Material Adverse Effect on Newhaven and the Newhaven
Subsidiaries taken as a whole.
(o) Conduct of Business in Compliance with Regulatory and
Contractual Requirements. Except as described in Section 4.2(o) of the
Newhaven Disclosure Schedule or as reflected in the Newhaven Financial
Information, since December 31, 1999, Newhaven and the Newhaven
Subsidiaries have conducted their respective businesses so as to comply
in all material respects with all applicable U.S. and non-U.S. laws,
ordinances, regulations or orders or other requirements of any
Governmental Entity and have received no written notice of any failure to
comply with such laws, ordinances, regulations, orders, rights or
requirements, except where the failure to comply with such laws,
ordinances, regulations, orders, rights or requirements would not,
individually or in the aggregate, have a Material Adverse Effect on
Newhaven and the Newhaven Subsidiaries taken as a whole.
(p) Employee Benefit Plans. (i) "Newhaven Benefit Plans" means
all Benefit Plans that (A) are entered into, sponsored or maintained by
any of the Newhaven Subsidiaries, and (B) under which any present or
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former director, officer or employee of any of the Newhaven Subsidiaries
(collectively, the "Newhaven Employees") has any present or future right
to benefits. "Newhaven U.S. Benefit Plans" means all Newhaven Benefit
Plans under which any Newhaven Employee who is or was primarily employed
in the United States (collectively, the "Newhaven U.S. Employees") has
any present or future right to benefits. "Newhaven International Benefit
Plans" shall mean all Newhaven Benefit Plans other than the Newhaven U.S.
Benefit Plans.
(ii) Section 4.2(p)(ii) of the Newhaven Disclosure Schedule
sets forth a list of each Newhaven Benefit Plan.
(iii) With respect to each Newhaven Benefit Plan, Newhaven
has provided or made available to El Sitio a current, accurate and
complete copy thereof, including any amendments thereto, and, to the
extent applicable: (A) any related trust agreement or other funding
instrument, (B) the most recent determination letter, if applicable, (B)
any summary description and other written communications to Newhaven
Employees concerning benefits provided thereunder, (C) for the one most
recent year, if applicable, the Form 5500 and attached schedules, audited
financial statements and actuarial reports.
(iv) Except as described on Section 4.2(p)(iv) of the
Newhaven Disclosure Schedule:
(A) each Newhaven Benefit Plan has been
established and administered in accordance with its terms, in
compliance with the applicable provisions of ERISA, the Code and
other applicable laws, rules, statutes, orders and regulations, and
has been maintained in good standing with applicable regulatory
authorities;
(B) each Newhaven U.S. Benefit Plan that is
intended to be qualified (within the meaning of Section 401(a) of
the Code) is so qualified and has received a favorable
determination letter as to its qualification, and nothing has
occurred, whether by action or failure to act, that could
reasonably be expected to cause the loss of such qualification;
(C) no event has occurred and no condition
exists that would subject Newhaven or any of the Newhaven
Subsidiaries, either directly or by reason of their affiliation
with any member of their "Controlled Group" (defined as any
organization that is a member of an controlled group of
organizations (within the meaning of Section 414(b), (c), (m) or
(o) of the Code), to any Tax, fine, Lien, penalty or other
liability imposed by ERISA, the Code or any other applicable laws,
rules, statutes, orders and regulations;
(D) no "prohibited transaction" (as defined in
Section 406 of ERISA and Section 4975 of the Code) has occurred
with respect to any Newhaven U.S. Benefit Plan;
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(E) no Newhaven Benefit Plan provides retiree
welfare benefits and neither Newhaven nor any of the Newhaven
Subsidiaries have any obligation to provide retiree welfare
benefits other than coverage mandated under applicable law or
regulation for which neither Newhaven nor any Newhaven Subsidiary
is required to book an accrual on its financial statements;
(F) no Newhaven U.S. Benefit Plan is subject
to Title IV of ERISA or Section 412 of the Code, or is a
multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA;
(G) no actions, suits, claims, administrative
investigations, audits or other administrative proceedings (other
than routine claims for benefits in the ordinary course) are
pending or threatened with respect to any Newhaven Benefit Plan,
and no facts or circumstances exist that could give rise to any
such actions, suits, claims, investigations, audits or proceedings;
(H) no Newhaven Benefit Plans exist that,
individually or collectively, could be reasonably expected to give
rise to the payment of any amount that would not be deductible
pursuant to the terms of Section 280G of the Code, and no Newhaven
Benefit Plan exists that, as a result of the transaction
contemplated by this Agreement, could result in the payment to any
Newhaven Employee of any money or other property or could result in
the acceleration or provision of any other rights or benefits to
any Newhaven Employee; and
(I) with respect to any Newhaven International
Benefit Plan, according to the actuarial assumptions and valuations
most recently used for the purpose of funding each Newhaven
International Benefit Plan (which actuarial assumptions and
valuations were provided in accordance with the actuarial and
accounting principles, bases, policies, methods and practices in
the relevant jurisdiction for such plan), as of June 30, 2000, the
total amount or value of the funds available under such Newhaven
International Benefit Plan to pay benefits accrued thereunder or
segregated in respect of such accrued benefits, together with any
reserve or accrual with respect thereto, exceeded the present value
of all benefits (actual or contingent) accrued as of such date of
all participants and past participants therein in respect of which
Newhaven or any of the Newhaven Subsidiaries has or would have
after the Closing Date any obligation.
(v) There are no Benefit Plans that are entered into,
sponsored or maintained by Newhaven under which any present or former
Newhaven Employee has any present or future right to benefits.
(q) Tax Matters. Except as disclosed on Section 4.2(q) of the
Newhaven Disclosure Schedule and except as would not result in a Material
Adverse Effect on Newhaven and the Newhaven Subsidiaries taken as a
whole:
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(i) Newhaven and the Newhaven Subsidiaries have
filed all Tax Returns that they were required to file. All such
filed Tax Returns were correct and complete in all material
respects. All Taxes required to have been paid by Newhaven and the
Newhaven Subsidiaries (whether or not shown on any Tax Return) have
been paid or adequately reserved against in accordance with U.S.
GAAP. None of Newhaven or the Newhaven Subsidiaries currently is
the beneficiary of any extension of time within which to file any
Tax Return. No written claim has ever been made (and, to the
knowledge of Newhaven or the Newhaven Subsidiaries, no claim has
been threatened in writing) by any authority in a jurisdiction
where Newhaven and any of the Newhaven Subsidiaries does not file
Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Liens on any of the assets of any of
Newhaven and the Newhaven Subsidiaries that arose in connection
with any failure (or alleged failure) to pay any Tax other than
Liens for (i) current Taxes not yet due or (ii) Taxes that are
being disputed in good faith by appropriate proceedings and for
which adequate reserves have been provided.
(ii) Newhaven and the Newhaven Subsidiaries have
withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any Newhaven Employee,
independent contractor, creditor, shareholder or other third party.
(iii) No audit or other proceeding by any
Governmental Entity is pending or, to the knowledge of Newhaven,
threatened in writing with respect to any Taxes due from or with
respect to Newhaven or any of the Newhaven Subsidiaries. There is
no dispute or claim concerning any Tax liability of Newhaven or the
Newhaven Subsidiaries claimed or raised by any taxing authority
(and, to the knowledge of Newhaven or the Newhaven Subsidiaries no
such dispute or claim has been threatened in writing). Newhaven,
has made available to El Sitio correct and complete copies of all
income Tax Returns and examination reports with respect to, and
statements of deficiencies assessed against or agreed to by,
Newhaven and the Newhaven Subsidiaries since December 31, 1999.
(iv) None of Newhaven or the Newhaven Subsidiaries
has waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or
deficiency.
(v) None of Newhaven or the Newhaven Subsidiaries
has filed a consent under Section 341(f) of the Code concerning
collapsible corporations. None of Newhaven or the Newhaven
Subsidiaries has made any payments, is obligated to make any
payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not
be deductible under Section 280G of the Code. None of Newhaven or
the Newhaven Subsidiaries has been a United States real property
holding corporation (within the meaning of Section 897(c)(2) of the
Code) during the applicable period specified in Section
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897(c)(1)(A)(ii) of the Code. Newhaven and the Newhaven
Subsidiaries have disclosed on their U.S. income Tax Returns all
positions taken therein that could reasonably be expected to give
rise to a substantial understatement of U.S. federal income Tax
(within the meaning of Section 6662 of the Code). None of Newhaven
or the Newhaven Subsidiaries is a party to any Tax allocation or
sharing agreement, other than such Tax allocation or sharing
agreement exclusively between or among Newhaven and the Newhaven
Subsidiaries. None of Newhaven or the Newhaven Subsidiaries (A) has
been a member of an affiliated group filing a consolidated income
Tax Return or (B) has any liability for the Taxes of any person
(other than Newhaven and the Newhaven Subsidiaries) under U.S.
Treasury Regulations Section 1.1502-6 (or any similar provision of
U.S. or non-U.S. federal, state or local law), as a transferee or
successor, by contract, or otherwise.
(r) Insurance. Except as would not have a Material Adverse
Effect on Newhaven and the Newhaven Subsidiaries taken as a whole, all
insurance policies covering Newhaven and the Newhaven Subsidiaries and
their respective material assets are in full force and effect, all
premiums with respect thereto (or with respect to new policies that, in
the ordinary course of business, have replaced such policies) covering
all periods up to and including the Closing Date have been paid, to the
extent due, prior to the Closing Date, or accrued on Newhaven's financial
statements and books and records and no notice of cancellation or
termination has been received with respect to any such policy (other than
any policy that expires, is cancelled or is terminated in accordance with
its terms and has been continued, extended or reinstated on substantially
similar terms or is replaced with another policy with substantially
similar terms). Except as would not have a Material Adverse Effect on
Newhaven and the Newhaven Subsidiaries taken as a whole, such policies
are sufficient for compliance with all requirements of law and are, to
the knowledge of Newhaven and the Newhaven Subsidiaries, valid,
outstanding and enforceable. Except as would not have a Material Adverse
Effect on Newhaven and the Newhaven Subsidiaries taken as a whole,
neither Newhaven nor any Newhaven Subsidiary has received notice that the
coverage of any insurance has been limited by any insurance carrier,
which insurance carrier has carried any such insurance during the last
three years.
(s) Certain Fees. Neither Newhaven, nor any of the
Newhaven Subsidiaries nor any Newhaven Employee, on behalf of Newhaven or
the Newhaven Subsidiaries, has employed any broker or finder or incurred
any other liability for any brokerage fees, commissions or finders' fees
in connection with the Transactions for which Newhaven or Holdco would be
liable.
(t) Holdco Common Shares Held for Investment. Newhaven is
aware that the Holdco Common Shares to be received by Newhaven in the
Contributions will not have been registered under the Securities Act or
under any state securities laws in the United States or under the laws of
any other jurisdiction. Newhaven is acquiring such Holdco Common Shares
-37-
solely for investment, with no present intention to distribute any such
shares to any Person.
(u) Information Supplied. (i) None of the information
supplied or to be supplied by Newhaven for inclusion or incorporation by
reference in (A) the Form F-4 at the time it is filed with the SEC, at
any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, or (B) the Proxy
Statement/Prospectus, on the date it is first mailed to El Sitio
shareholders or at the time of the El Sitio Shareholders Meeting, will
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, in light of the circumstances under which they were
made, not misleading.
(ii) Notwithstanding the foregoing provisions of this Section
4.2(u), no representation or warranty is made by Newhaven with respect to
statements made or incorporated by reference in the Form F-4 or the
Proxy Statement/Prospectus based on information supplied by El Sitio or
Xxxxx for inclusion or incorporation by reference therein.
(v) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 4.2, neither
Newhaven nor any other Person has made or makes any other express or
implied representation or warranty with respect to Newhaven or the
Newhaven Subsidiaries.
4.3. Representations and Warranties of El Sitio. Except (i) as
set forth in the disclosure schedule delivered by El Sitio to IAMP, Xxxxx
and Newhaven prior to the date of execution of this Agreement (the "El
Sitio Disclosure Schedule" and, together with the IAMP Disclosure
Schedule and the Newhaven Disclosure Schedule, the "Disclosure
Schedules") or (ii) as set forth in the El Sitio SEC Reports that have
been filed prior to the date hereof, El Sitio represents and warrants to
each of IAMP, Xxxxx and Newhaven as follows:
(a) Due Organization; Good Standing and Power;
Subsidiaries. (i) Each of El Sitio and the El Sitio Subsidiaries (as
defined below) is a corporation or other Person duly organized, validly
existing and, in the case of each U.S. corporation or other Person, is in
good standing under the laws of the jurisdiction of its incorporation or
organization, has the requisite power and authority to conduct its
business as now conducted by it, except where the failure to be so
organized, existing and in good standing or have such power and
authority, individually or in the aggregate, would not have a Material
Adverse Effect on El Sitio and the El Sitio Subsidiaries taken as a
whole.
(ii) Each of El Sitio and the El Sitio Subsidiaries
is duly qualified and in good standing to do business in each other
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary other than
in such jurisdictions where the failure so to qualify or to be in good
-38-
standing, individually or in the aggregate, would not have a Material
Adverse Effect on El Sitio and the El Sitio Subsidiaries taken as a
whole.
(iii) The copies of the memorandum of association and
articles of association or other constitutive documents of El Sitio and
each of the El Sitio Subsidiaries which were previously furnished or made
available to IAMP and Newhaven, are true, complete and correct copies in
all material respects of such documents as in effect on the date of this
Agreement.
(iv) Section 4.3(a)(iv) of the El Sitio Disclosure
Schedule sets forth all the subsidiaries of El Sitio (the "El Sitio
Subsidiaries"), and, for each El Sitio Subsidiary, its name, jurisdiction
of incorporation or organization and the record ownership as of the date
of this Agreement of all the share capital of such subsidiary that is
issued and outstanding. All the outstanding share capital of each such
subsidiary has been validly issued and is fully paid and non-assessable,
and, except as set forth in Section 4.3(a)(iv) of the El Sitio Disclosure
Schedule, is owned, directly or indirectly by El Sitio, free and clear of
all Liens, and free of any other material restriction (including any
restriction on the right to vote, sell or otherwise dispose of such share
capital or other ownership interests), except for restrictions on
transfer imposed by applicable securities laws and under the Holdco
Agreement. Except as disclosed in Section 4.3(a)(iv) of the El Sitio
Disclosure Schedule, neither El Sitio nor any of the El Sitio
Subsidiaries owns, directly or indirectly, any equity interest in, or any
interest convertible into or exchangeable or exercisable for any equity
interest in, any corporation or other Person that is material to El Sitio
and the El Sitio Subsidiaries taken as a whole.
(v) Except as disclosed in the El Sitio Disclosure
Schedule, neither El Sitio nor any of the El Sitio Subsidiaries is a
party to any joint venture or partnership agreement.
(b) Capitalization. (i) All of the issued and outstanding
share capital of El Sitio has been duly authorized and validly issued and
is fully paid and non-assessable, except as set forth in Section
4.3(b)(i) of the El Sitio Disclosure Schedule.
(ii) No Voting Debt of El Sitio or any of the El
Sitio Subsidiaries issued or outstanding.
(iii) Except as set forth in Section 4.3(b)(iii) of
the El Sitio Disclosure Schedule, there are no options, warrants, calls,
rights, commitments or agreements of any character to which El Sitio or
any El Sitio Subsidiary is a party or by which El Sitio or any El Sitio
Subsidiary is bound obligating El Sitio or any El Sitio Subsidiary to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional capital shares or any Voting Debt of El Sitio or of any El
Sitio Subsidiary or obligating El Sitio or any El Sitio Subsidiary to
grant, extend or enter into any such option, warrant, call, right,
commitment or agreement. Except as set forth in Section 4.3(b)(iii) of
-39-
the El Sitio Disclosure Schedule, there are no outstanding contractual
obligations of El Sitio or any El Sitio Subsidiary (A) to repurchase,
redeem or otherwise acquire any shares of El Sitio or any El Sitio
Subsidiary or (B) to register El Sitio Common Shares or other securities
under the Securities Act.
(iv) Since June 30, 2000, except as set forth in
Section 4.3(b)(iv) of the El Sitio Disclosure Schedule, El Sitio has not
(A) issued or permitted to be issued any shares, or securities
exercisable or exchangeable for or convertible into shares, of any El
Sitio subsidiary, other than any such shares issued after the date hereof
in the ordinary course of business consistent with past practice, (B)
repurchased, redeemed or otherwise acquired, directly or indirectly
through one or more El Sitio subsidiaries, any shares of El Sitio or any
El Sitio Subsidiary or (C) declared, set aside, made or paid dividends or
other distributions on the outstanding shares of any El Sitio Subsidiary.
(c) Indebtedness. As of the date hereof, the only outstanding
Indebtedness of El Sitio and the El Sitio Subsidiaries is the
Indebtedness set forth in Section 4.3(c) of the El Sitio Disclosure
Schedule or as set forth in the El Sitio Financial Information or the El
Sitio Interim Financial Information. Section 4.3(c) of the El Sitio
Disclosure Schedule specifically identifies each Indebtedness of El Sitio
or the El Sitio Subsidiaries that is in a principal amount of at least
U.S.$5 million. There exists (i) no default or event of default (with or
without notice or lapse of time or both) by El Sitio or any of the El
Sitio Subsidiaries under the provisions of the agreements identified in
Section 4.3(c) of the El Sitio Disclosure Schedule and (ii) no default or
event of default (with or without notice or lapse of time or both) by El
Sitio or any of El Sitio Subsidiaries under the provisions of any other
instrument evidencing such other Indebtedness or of any agreement
relating thereto, that, in either case, permits acceleration all or any
part of such Indebtedness, except, in the case of clause (i) or (ii),
where such acceleration would not result in a default under the
agreements identified on Section 4.3(c) of the El Sitio Disclosure
Schedule and would not otherwise, individually or in the aggregate, have
a Material Adverse Effect on El Sitio and El Sitio Subsidiaries taken as
a whole.
(d) Authorization and Validity of Agreement. El Sitio has all
necessary corporate power and authority to execute and deliver this
Agreement, the Holdco Agreement and the Voting Agreement, to perform its
obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance
by El Sitio of this Agreement, the Holdco Agreement and the Voting
Agreement and the other agreements contemplated hereby and the
consummation by El Sitio of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate
action. No other corporate or shareholder action is necessary for the
authorization, execution, delivery and performance by El Sitio of this
Agreement, the Holdco Agreement and the Voting Agreement and the other
agreements contemplated hereby and the consummation by El Sitio of the
transactions contemplated hereby or thereby other than the approvals set
-40-
forth in Section 4.3(d) of the El Sitio Disclosure Schedule, which
corporate approvals shall have been obtained by, and be in full force and
effect on, the Closing Date. This Agreement has been duly executed and
delivered by El Sitio, and constitutes a valid and legally binding
obligation of El Sitio enforceable against El Sitio in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law) or by an implied covenant of good faith and fair
dealing.
(e) No Conflicts. Except (i) as, individually or in the
aggregate, would not have a Material Adverse Effect on El Sitio and El
Sitio Subsidiaries taken as a whole, subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations
and filings referred to in Section 4.3(f) and (ii) as set forth in
Section 4.3(e) of the El Sitio Disclosure Schedule, and except with
respect to employee share options, the execution and delivery of this
Agreement by El Sitio does not, and the consummation by El Sitio of the
Transactions and the performance by El Sitio of its obligations hereunder
will not, conflict with, or result in any violation of, or constitute a
default (with or without notice or lapse of time, or both) under, or give
rise to a right of, or result by its terms in the termination, amendment,
cancellation or acceleration of any obligation of El Sitio or El Sitio
Subsidiaries or a violation pursuant to: (A) any provision of the
memorandum and articles of association, certificate of incorporation or
bylaws or similar constitutive document of any such Person or any El
Sitio Subsidiary, or (B) any loan or credit agreement, note, mortgage,
bond, indenture, lease, Benefit Plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation binding upon El Sitio
or any El Sitio Subsidiary or their respective properties or assets.
(f) No Governmental Approvals or Notices Required; No Conflict
with Instruments to which El Sitio is Party. Except for Governmental
Consents under applicable antitrust laws and filings contemplated by
Article 1 and Section 2.1 hereof, no Governmental Consent or notice to,
or declaration, filing or registration with any Governmental Entity, or
consent, approval or waiver of any Non-Governmental Approval, is required
to be made or obtained by El Sitio or any El Sitio Subsidiary in
connection with the execution, delivery and performance of this Agreement
and the other agreements contemplated hereby by El Sitio and the
consummation by it of the transactions contemplated hereby and thereby,
except for (x) the applicable requirements of the Exchange Act, and the
rules and regulations promulgated thereunder and (y) such violations the
occurrence of which, and such consents, approvals, filings or notices the
failure of which to obtain or make, would not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse
Effect on El Sitio and the El Sitio Subsidiaries taken as a whole.
(g) Title to Properties. El Sitio or one of the El Sitio
Subsidiaries has good and marketable title to all material real property
-41-
owned, and a valid leasehold interest in all material property leased by
such Person, free and clear of all Liens, except (i) as set forth in
Section 4.3(g) of the El Sitio Disclosure Schedule; (ii) as set forth in
the El Sitio Financial Information or El Sitio Interim Financial
Information; and (iii) Permitted Liens. The real property of El Sitio and
each El Sitio Subsidiary is adequate for the conduct of the business of
such Persons as currently conducted, except for such inadequacy that,
individually or in the aggregate, would not have a Material Adverse
Effect on El Sitio and the El Sitio Subsidiaries taken as a whole.
(h) Conduct of Business. Except as disclosed in Section 4.3(h)
of the El Sitio Disclosure Schedule or otherwise disclosed in this
Agreement or as set forth in the El Sitio Financial Information or the El
Sitio Interim Financial Information, since December 31, 1999, El Sitio
has conducted its business in the ordinary course consistent with past
practice, and, other than in the ordinary course, there has not occurred
or arisen, with respect to its business: (i) a Material Adverse Effect on
El Sitio and the El Sitio Subsidiaries taken as a whole; (ii) any notice
of non-renewal, cancellation or termination from any existing customers
with respect to any El Sitio Material Contract, which would have a
Material Adverse Effect on El Sitio and the El Sitio Subsidiaries taken
as a whole; (iii) any sale, assignment, pledge, hypothecation or other
transfer of any assets, businesses or operations, other than such sales,
assignments, pledges, hypothecations or other transfers which would not,
individually or in the aggregate have a Material Adverse Effect on El
Sitio and the El Sitio Subsidiaries taken as a whole; (iv) any
termination or material amendment of, or any notice of termination of,
any El Sitio Material Contract, which amendment or termination would have
a Material Adverse Effect on El Sitio and the El Sitio Subsidiaries taken
as a whole; (v) any damage, destruction or other casualty loss (not
covered by insurance) which would have a Material Adverse Effect on El
Sitio and the El Sitio Subsidiaries taken as a whole; (vi) except in each
case for immaterial amounts, any (A) increase in the fringe benefits or
compensation of any present or former El Sitio Employee, (B) grant of any
severance or termination pay to any present or former El Sitio Employee,
(C) loan or advance of money or other property by El Sitio or the El
Sitio Subsidiaries to any of their present or former directors, officers
or employees, or (D) establishment, adoption, entrance into,
modification, amendment or termination of any El Sitio Benefit Plan;
(vii) any incurrence or assumption of any indebtedness for borrowed money
or the guaranty by El Sitio of another person; (viii) the cancellation of
any debts to or waiver of any claims or rights of material value to El
Sitio; (ix) capital expenditures or additions to property, plant or
equipment or the acquisition of any other property or assets (other than
raw materials, supplies and inventory) by El Sitio, other than immaterial
amounts; (x) any lease by El Sitio of any of its properties or assets
other than immaterial amounts; (xi) the entering into of any El Sitio
Material Contract not listed on the El Sitio Disclosure Schedule or (xii)
the entering into of an agreement to do any of the foregoing.
(i) Financial Information. (i) El Sitio has made available
to IAMP, Xxxxx and Newhaven the audited consolidated balance sheets of El
Sitio and the El Sitio Subsidiaries at December 31, 1998 and 1999 (in
-42-
the case of the balance sheet at December 31, 1999, the "El Sitio 1999
Balance Sheet"), and the related audited statements of income and
retained earnings and cash flows for each of the fiscal years then ended,
including note thereto, and the report thereon of independent certified
public accountants, which are set forth in Section 4.3(i)(i) of the El
Sitio Disclosure Schedule (the "El Sitio Financial Information"). The El
Sitio Financial information fairly presents in all material respects the
financial position and results of operations of El Sitio and the El Sitio
Subsidiaries as at the respective dates thereof and for the periods then
ended, all in accordance with U.S. GAAP consistently applied by El Sitio
at the dates and during the periods involved. Except (A) as and to the
extent set forth on the El Sitio 1999 Balance Sheet, including the notes
thereto, or as specifically identified in the notes to the El Sitio
Interim Financial Information or (B) as disclosed in Section 4.3(i)(i) of
the El Sitio Disclosure Schedule, neither El Sitio nor any of the El
Sitio Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on a balance sheet or in the notes thereto
prepared in accordance with U.S. GAAP other than liabilities or
obligations incurred since December 31, 1999 that would not, individually
or in the aggregate, have a Material Adverse Effect on El Sitio and the
El Sitio Subsidiaries taken as a whole.
(ii) El Sitio has made available to IAMP, Xxxxx and
Newhaven the unaudited consolidated balance sheet of El Sitio and the El
Sitio Subsidiaries as at June 30, 2000, and the related unaudited
statements of income and retained earnings and cash flows for the period
then ended and the corresponding period of 1999, including notes thereto,
set forth Section 4.3(i)(ii) of the El Sitio Disclosure Schedule (the "El
Sitio Interim Financial Information"). The El Sitio Interim Financial
Information was prepared in accordance with U.S. GAAP on a basis
consistent with prior practice for the preparation of interim financial
statements for El Sitio and the El Sitio Subsidiaries, and fairly
presents in all material respects the financial position and results of
operations of El Sitio and the El Sitio Subsidiaries at June 30, 2000 and
for the period then ended subject to customary year-end adjustments.
(j) Legal Proceedings. Except as described in Section
4.3(j) of the El Sitio Disclosure Schedule, there is no Legal Proceeding
relating to El Sitio or the El Sitio Subsidiaries to which El Sitio or
any of the El Sitio Subsidiaries is a party, or to which any of their
assets is subject, pending or, to the knowledge of El Sitio, threatened
against El Sitio or any of the El Sitio Subsidiaries or relating to the
Transactions that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect on El Sitio and the El
Sitio Subsidiaries taken as a whole.
(k) Labor Matters. Except as described in Section 4.3(k)
of the El Sitio Disclosure Schedule, since December 31, 1999, (i) El
Sitio and the El Sitio Subsidiaries are, to the knowledge of El Sitio, in
compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment
and wages and hours, and neither El Sitio nor any of the El Sitio
-43-
Subsidiaries has been engaged in any unfair labor practice, (ii) there is
no unfair labor practice complaint against El Sitio pending before any
labor relations board or any other Governmental Entity having oversight
authority with respect to labor relations, (iii) there is no labor
strike, dispute, slowdown or stoppage actually pending or, to the
knowledge of El Sitio, threatened against or affecting El Sitio or the El
Sitio subsidiaries, (iv) neither El Sitio nor any of the El Sitio
Subsidiaries has experienced any strike, work stoppage or other labor
difficulty and (v) neither El Sitio nor any of the El Sitio Subsidiaries
is a party to, or subject to, a collective bargaining agreement, and no
collective bargaining agreement relating to El Sitio Employees is
currently being negotiated, which in the case of any of the foregoing
would, individually or in the aggregate, have or reasonably be expected
to have a Material Adverse Effect on El Sitio and the El Sitio
Subsidiaries taken as a whole.
(l) Contracts. (i) Section 4.3(l)(i) of the El Sitio
Disclosure Schedule lists all contracts, agreements or commitments of El
Sitio and the El Sitio Subsidiaries that are material to El Sitio and the
El Sitio Subsidiaries taken as a whole ("El Sitio Material Contracts").
Except as specified in Section 4.3(l)(i) of the El Sitio Disclosure
Schedule, all El Sitio Material Contracts are in full force and effect
and are, to the knowledge of El Sitio, valid and enforceable in
accordance with their respective terms, except where the failure to be in
full force and effect and valid and enforceable would not, individually
or in the aggregate, have a Material Adverse Effect on El Sitio and the
El Sitio Subsidiaries taken as a whole. Except as specified in Section
4.3(l)(i) of the El Sitio Disclosure Schedule, El Sitio and the El Sitio
Subsidiaries are not in breach or default in the performance of, and to
El Sitio's knowledge, no other Person is in breach or default of, any
obligation thereunder and no event has occurred or has failed to occur
whereby any of the other parties thereto have been or will be released
therefrom or will be entitled to refuse to perform thereunder, except for
such breaches, defaults and events that, individually or in the
aggregate, would not have a Material Adverse Effect on El Sitio and the
El Sitio Subsidiaries taken as a whole.
(ii) Except as set forth in Section 4.3(l)(ii) of the
El Sitio Disclosure Schedule, there is no Material Contract between El
Sitio and the El Sitio Subsidiaries, on the one hand, and any affiliate
of El Sitio on the other hand and no affiliate of El Sitio has any
material interest in any material property, real or personal, tangible or
intangible, including, without limitation, any Intellectual Property,
used in the business of El Sitio and the El Sitio Subsidiaries.
(m) Intellectual Property. (i) Section 4.3(m)(i) of the El
Sitio Disclosure Schedule sets forth, with respect to material
Intellectual Property owned, held or used by El Sitio and/or the El Sitio
Subsidiaries ("El Sitio Intellectual Property"), all patents,
registrations and applications relating thereto, all material
unregistered Intellectual Property, and all material licenses, consents,
royalty and other agreements concerning El Sitio Intellectual Property to
-44-
which El Sitio and/or the El Sitio Subsidiaries is a party ("El Sitio
Intellectual Property Licenses").
(ii) Except as disclosed in Section 4.3(m)(ii) of the
El Sitio Disclosure, (A) El Sitio and/or the El Sitio Subsidiaries own or
have the right to use all the El Sitio Intellectual Property necessary or
desirable to conduct the respective businesses of El Sitio and the El
Sitio Subsidiaries as currently are conducted, free of all Liens; (B) all
of the El Sitio Intellectual Property is valid, enforceable, not
abandoned and unexpired; (C) to the knowledge of El Sitio and the El
Sitio Subsidiaries, the El Sitio Intellectual Property does not infringe
or otherwise impair the Intellectual Property of any other Person and is
not being infringed or impaired by any other Person, nor has El Sitio or
the El Sitio Subsidiaries received any written notice of the same; (D) El
Sitio and/or the El Sitio Subsidiaries take all reasonable steps to
protect and maintain the El Sitio Intellectual Property, including
executing all appropriate confidentiality agreements, filing all
appropriate patents and registrations, and filing any other documents
necessary under the laws of any relevant jurisdictions to preserve their
rights in such El Sitio Intellectual Property; (E) no party to a El Sitio
Intellectual Property License is, or is alleged to be, in breach or
default thereunder; (F) the Transactions shall not impair the rights of
El Sitio or the El Sitio Subsidiaries under any El Sitio Intellectual
Property License, or cause any payments to be due thereunder; and (G)
without limiting the generality of the foregoing, El Sitio and/or the El
Sitio Subsidiaries owns and possesses all right, title and interest in
and to all El Sitio Intellectual Property created or developed by, or
under the direction or supervision of, its employees.
(n) Governmental Consents. Except as described in Section
4.3(n) of the El Sitio Disclosure Schedule, El Sitio or the El Sitio
Subsidiaries have all Governmental Consents required for the conduct of
their respective businesses as presently conducted, and such Governmental
Consents are in full force and effect, and neither El Sitio nor any of
the El Sitio Subsidiaries has received notice of any violation thereof
nor does El Sitio nor any of the El Sitio Subsidiaries have knowledge of
any threatened suspension or cancellation of any such Governmental
Consent, except where the failure to have, or to keep in full force and
effect such Governmental Consents would not, individually or in the
aggregate, have a Material Adverse Effect on El Sitio and the El Sitio
Subsidiaries taken as a whole.
(o) Conduct of Business in Compliance with Regulatory and
Contractual and Contractual Requirements. Except as described in Section
4.3(o) of the El Sitio Disclosure Schedule or as set forth in the El
Sitio Interim Financial Information, since December 31, 1999, El Sitio
and the El Sitio Subsidiaries have conducted their respective businesses
so as to comply in all material respects with all applicable U.S. and
non-U.S. laws, ordinances, regulations or orders or other requirements of
any Governmental Entity, rights of concession, licenses, know-how or
other proprietary rights of others, and have received no written notice
of any failure to comply with such laws, ordinances, regulations, orders,
rights or requirements, except where the failure to comply with such
-45-
laws, ordinances, regulations, orders, rights or requirements would not,
individually or in the aggregate, have a Material Adverse Effect on El
Sitio and the El Sitio Subsidiaries taken as a whole.
(p) Employee Benefit Plans. (i) "El Sitio Benefit Plans"
means all Benefit Plans that (A) are entered into, sponsored or
maintained by El Sitio or any of the El Sitio Subsidiaries, and (B) under
which any present or former director, officer or employee of El Sitio or
any of the El Sitio Subsidiaries (collectively, the "El Sitio Employees")
has any present or future right to benefits. "El Sitio U.S. Benefit
Plans" means all El Sitio Benefit Plans under which any El Sitio Employee
who is or was primarily employed in the United States (collectively, the
"El Sitio U.S. Employees") has any present or future right to benefits.
"El Sitio International Benefit Plans" means all El Sitio Benefit Plans
other than the El Sitio U.S. Benefit Plans.
(ii) Section 4.3(p)(ii) of the El Sitio Disclosure
Schedule sets forth a list of each El Sitio Benefit Plan.
(iii) With respect to each El Sitio Benefit Plan, El
Sitio has provided or made available to IAMP and Newhaven a current,
accurate and complete copy thereof, including any amendments thereto,
and, to the extent applicable: (A) any related trust agreement or other
funding instrument, (B) the most recent determination letter, if
applicable, (C) any summary description and other material written
communications to El Sitio Employees concerning benefits provided
thereunder, (D) for the one most recent year, if applicable, the Form
5500 and attached schedules, audited financial statements and actuarial
reports.
(iv) Except as described on Section 4.3(p)(iv) of the
El Sitio Disclosure Schedule:
(A) each El Sitio Benefit Plan has been
established and administered in accordance with its terms, in
compliance with the applicable provisions of ERISA, the Code and
other applicable laws, rules, statutes, orders and regulations, and
has been maintained in good standing with applicable regulatory
authorities;
(B) each El Sitio U.S. Benefit Plan that is
intended to be qualified (within the meaning of Section 401(a) of
the Code) is so qualified and has received a favorable
determination letter as to its qualification, and nothing has
occurred, whether by action or failure to act, that could
reasonably be expected to cause the loss of such qualification;
(C) no event has occurred and no condition
exists that would subject El Sitio or any of the El Sitio
Subsidiaries, either directly or by reason of their affiliation
with any member of their "Controlled Group" (defined as any
organization that is a member of an controlled group of
organizations (within the meaning of Section 414(b), (c), (m) or
-46-
(o) of the Code), to any Tax, Fine, Lien, penalty or other
liability imposed by ERISA, the Code or any other applicable laws,
rules, statutes, orders and regulations;
(D) no "prohibited transaction" (as defined in
Section 406 of ERISA and Section 4975 of the Code) has occurred
with respect to any El Sitio U.S. Benefit Plan;
(E) no El Sitio Benefit Plan provides retiree
welfare benefits and neither El Sitio nor any of the El Sitio
Subsidiaries have any obligation to provide retiree welfare
benefits other than coverage mandated under applicable law or
regulation for which neither El Sitio nor any of the El Sitio
Subsidiaries is required to book an accrual on its financial
statements;
(F) no El Sitio U.S. Benefit Plan is subject
to Title IV of ERISA or Section 412 of the Code, or is a
multiemployer plan (within the meaning of Section 4001(a)(3) of
ERISA);
(G) no actions, suits, claims, administrative
investigations, audits or other administrative proceedings (other
than routine claims for benefits in the ordinary course) are
pending or threatened with respect to any El Sitio Benefit Plan,
and no facts or circumstances exist that could give rise to any
such actions, suits, claims, investigations, audits or proceedings;
(H) no El Sitio Benefit Plans exist that,
individually or collectively, could be reasonably expected to give
rise to the payment of any amount that would not be deductible
pursuant to the terms of Section 280G of the Code, and no El Sitio
Benefit Plan exists that, as a result of the transaction
contemplated by this Agreement, could result in the payment to any
El Sitio Employee of any money or other property or could result in
the acceleration or provision of any other rights or benefits to
any El Sitio Employee; and
(I) with respect to any El Sitio International
Benefit Plan, according to the actuarial assumptions and valuations
most recently used for the purpose of funding each El Sitio
International Benefit Plan (which actuarial assumptions and
valuations were provided in accordance with the actuarial and
accounting principles, bases, policies, methods and practices in
the relevant jurisdiction for such plan), as of June 30, 2000, the
total amount or value of the funds available under such El Sitio
International Benefit Plan to pay benefits accrued thereunder or
segregated in respect of such accrued benefits, together with any
reserve or accrual with respect thereto, exceeded the present value
of all benefits (actual or contingent) accrued as of such date of
all participants and past participants therein in respect of which
El Sitio or any of the El Sitio Subsidiaries has or would have
after the Closing Date any obligation.
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(q) Tax Matters. Except as disclosed in Section 4.3(q) of
the El Sitio Disclosure Schedule and except as would not result in a
Material Adverse Effect on El Sitio and the El Sitio Subsidiaries taken
as a whole:
(i) El Sitio and the El Sitio Subsidiaries have
filed all Tax Returns that they were required to file. All such
filed Tax Returns were correct and complete in all material
respects. All Taxes required to have been paid by El Sitio and the
El Sitio Subsidiaries (whether or not shown on any Tax Return) have
been paid or adequately reserved against in accordance with U.S.
GAAP. None of El Sitio or the El Sitio subsidiaries currently is
the beneficiary of any extension of time within which to file any
Tax Return. No written claim has ever been made (and, to the
knowledge of El Sitio or the El Sitio Subsidiaries, no claim has
been threatened in writing) by any authority in a jurisdiction
where El Sitio and any of the El Sitio Subsidiaries does not file
Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Liens on any of the assets of any of El
Sitio and the El Sitio Subsidiaries that arose in connection with
any failure (or alleged failure) to pay any Tax other than Liens
for (i) current Taxes not yet due or (ii) Taxes that are being
disputed in good faith by appropriate proceedings and for which
adequate reserves have been provided.
(ii) El Sitio and the El Sitio Subsidiaries
have withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any El Sitio
Employee, independent contractor, creditor, shareholder or other
third party.
(iii) No audit or other proceeding by any
Governmental Entity is pending or, to the knowledge of El Sitio,
threatened in writing with respect to any Taxes due from or with
respect to El Sitio or any of the El Sitio Subsidiaries. There is
no dispute or claim concerning any Tax liability of El Sitio or the
El Sitio Subsidiaries claimed or raised by any taxing authority
(and, to the knowledge of El Sitio or the El Sitio Subsidiaries, no
such dispute or claim has been threatened in writing). El Sitio has
made available to El Sitio, Xxxxx and Newhaven correct and complete
copies of all income Tax Returns and examination reports with
respect to, and statements of deficiencies assessed against or
agreed to by, El Sitio and the El Sitio Subsidiaries since December
31, 1999.
(iv) None of El Sitio or the El Sitio
Subsidiaries has waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(v) None of El Sitio or the El Sitio
Subsidiaries has filed a consent under Section 341(f) of the Code
concerning collapsible corporations. None of El Sitio or the El
-48-
Sitio Subsidiaries has made any payments, is obligated to make any
payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not
be deductible under Section 280G of the Code. None of El Sitio or
the El Sitio Subsidiaries has been a United States real property
holding corporation (within the meaning of Section 897(c)(2) of the
Code) during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. El Sitio and the El Sitio
Subsidiaries have disclosed on their U.S. income Tax Returns all
positions taken therein that could reasonably be expected to give
rise to a substantial understatement of U.S. federal income Tax
(within the meaning of Section 6662 of the Code). None of El Sitio
or the El Sitio Subsidiaries is a party to any Tax allocation or
sharing agreement, other than such Tax allocation or sharing
agreement exclusively between or among El Sitio and the El Sitio
Subsidiaries. None of El Sitio or the El Sitio Subsidiaries (A) has
been a member of an affiliated group filing a consolidated income
Tax Return or (B) has any liability for the Taxes of any Person
(other than El Sitio and the Subsidiaries) under U.S. Treasury
Regulations Section 1.1502-6 (or any similar provision of U.S. or
non-U.S. federal, state or local law), as a transferee or
successor, by contract, or otherwise.
(r) Insurance. Except as would not have a Material Adverse
Effect on El Sitio and the El Sitio Subsidiaries taken as a whole, all
insurance policies covering El Sitio and the El Sitio Subsidiaries and
their respective material assets are in full force and effect, all
premiums with respect thereto (or with respect to new policies that, in
the ordinary course of business, have replaced such policies) covering
all periods up to and including the Closing Date have been paid, to the
extent due, prior to the Closing Date, or accrued on El Sitio's financial
statements and books and records and no notice of cancellation or
termination has been received with respect to any such policy (other than
any policy that expires, is cancelled or is terminated in accordance with
its terms and has been continued, extended or reinstated on substantially
similar terms or is replaced with another policy with substantially
similar terms). Except as would not have a Material Adverse Effect on El
Sitio and the El Sitio Subsidiaries taken as a whole, such policies are
sufficient for compliance with all requirements of law and are, to the
knowledge of El Sitio and the El Sitio Subsidiaries, valid, outstanding
and enforceable. Except as would not have a Material Adverse Effect on El
Sitio and the El Sitio Subsidiaries taken as a whole, neither El Sitio
nor any El Sitio Subsidiary has received notice that the coverage of any
insurance has been limited by any insurance carrier, which insurance
carrier has carried any such insurance during the last three years.
(s) Certain Fees. Except for fees and expenses payable to
Credit Suisse First Boston Corporation, which shall be paid by El Sitio,
neither El Sitio nor any El Sitio Employee, on behalf of El Sitio, has
employed any broker or finder or incurred any other liability for any
brokerage fees, commissions or finders' fees in connection with the
Transactions for which IAMP, Newhaven or Holdco would be liable.
-49-
(t) Information Supplied. (i) None of the information supplied or to
be supplied by El Sitio for inclusion or incorporation by reference in (A) the
Form F-4, at the time it is filed with the SEC, at any time it is amended or
supplemented or at the time it becomes effective under the Securities
Act, or (B) the Proxy Statement/Prospectus, on the date it is first
mailed to El Sitio shareholders or at the time of the El Sitio
Shareholders meeting, will 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, in light of the circumstances
under which they were made.
(ii) Notwithstanding the foregoing provisions of this
Section 4.3, no representation or warranty is made by El Sitio with
respect to statements made or incorporated by reference in the Form F-4
or the Proxy Statement/Prospectus based on information supplied by
Newhaven, Xxxxx or IAMP for inclusion or incorporation by reference
therein.
(u) El Sitio Board Approval. The Board of Directors of El
Sitio, by resolutions duly adopted by unanimous vote of those voting at a
meeting duly called and held and not subsequently rescinded or modified
in any way (the "El Sitio Board Approval"), has duly (A) determined that
this Agreement and the Transactions are fair to and in the best interests
of El Sitio and its shareholders and declared the Transactions to be
advisable, (B) approved this Agreement, the Voting Agreement and the
Transactions, and (C) recommended that the shareholders of El Sitio
approve the issuance of El Sitio Common Shares pursuant to this Agreement
and directed that such matter be submitted for consideration by El
Sitio's shareholders at a special shareholders' meeting. El Sitio Board
Approval constitutes approval of this Agreement and the Transactions for
purposes of Part VII of the BVI Companies Ordinance. To the knowledge of
El Sitio, no foreign or U.S. takeover statute is applicable to this
Agreement or the Transactions.
(v) Shareholder Vote Required. The affirmative vote of the
holders of a majority of the El Sitio Common Shares present in person or
represented by proxy at El Sitio's special shareholders' meeting
(provided that the shares so present or represented constitute a majority
of the outstanding El Sitio Common Shares), is the only vote of the
holders of any class or series of El Sitio's share capital necessary to
approve this Agreement, the Transactions and the transactions
contemplated thereby.
(w) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 4.3, neither El
Sitio nor any other Person has made or makes any other express or implied
representation or warranty on behalf of El Sitio.
4.4. Expiration of Representations and Warranties. The respective
representations and warranties of El Sitio, Newhaven, Xxxxx and IAMP
contained herein or in any certificate or other document delivered prior
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to or on the Closing Date shall expire and be terminated and extinguished
on the day that is 12 months following the Closing Date (except with
respect to the representations made in Sections 4.1(q), 4.2(q), and
4.3(q), which representations shall expire and be terminated and
extinguished on the day that is 24 months following the Closing Date,
subject to Section 9.1(a)(iv)); and thereafter El Sitio, Newhaven, Xxxxx
and IAMP shall have no liability whatsoever with respect to any such
representation or warranty. None of the controlling persons,
shareholders, members, legal representatives, officers, directors or
affiliates of either El Sitio, Newhaven, Xxxxx or IAMP nor any
controlling person, legal representative, heir, successor or assign of
any such officer, director or affiliate shall have any liability for any
breach of any representation, warranty, covenant or agreement of any of
El Sitio, Newhaven, Xxxxx or IAMP under this Agreement.
5. Transactions Prior to Closing
-----------------------------
5.1. Access to Information Concerning Properties and Records;
Confidentiality. (a) Newhaven, Xxxxx and IAMP agree that, during the
period commencing on the date hereof and ending on the Closing Date,
unless otherwise prohibited by law, (i) they will give or cause to be
given to El Sitio and its counsel, financial advisors, auditors and other
authorized representatives (collectively, the "Representatives") such
access, during normal business hours and upon reasonable advance notice,
to the properties, books and records of IAMP, the IAMP Subsidiaries and
the Newhaven Subsidiaries, as El Sitio may from time to time reasonably
request, and (ii) they will furnish or cause to be furnished to El Sitio
such financial and operating data and other information with respect to
the business, operations and properties of such entities, as El Sitio may
from time to time reasonably request. El Sitio and its Representatives
shall be entitled, in consultation with IAMP or Newhaven, to such access
to the representatives, officers and employees of IAMP, the IAMP
Subsidiaries, and the Newhaven Subsidiaries to the extent they are
involved in the business of the Media Companies and the Subsidiaries as
El Sitio may reasonably request. Such access and request shall not
materially disrupt the business of such entities.
(a) El Sitio agrees that, during the period commencing on the
date hereof and ending on the Closing Date, (i) it will give or cause to
be given to each of IAMP and Newhaven and their respective
Representatives such access, during normal business hours and upon
reasonable advance notice, to the properties, books and records of El
Sitio, as IAMP or Newhaven may from time to time reasonably request and
(ii) it will furnish or cause to be furnished to IAMP or Newhaven such
financial and operating data and other information with respect to El
Sitio, as such Person may from time to time reasonably request. Each of
IAMP and Newhaven and each of their Representatives shall be entitled, in
consultation with El Sitio, to such access to the representatives,
officers and employees of El Sitio as IAMP or Newhaven may reasonably
request. Such access and request shall not materially disrupt the
business of El Sitio.
-51-
(b) Except as required by law, each party hereto will hold, and
will cause its respective directors, officers, partners, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold in confidence, any nonpublic information obtained from
any other party hereto in confidence to the extent required by, and in
accordance with, the provisions of the letter dated August 31, 2000,
among El Sitio, Newhaven and Xxxxx (the "Confidentiality Agreement"), as
if Newhaven and Xxxxx were also parties.
5.2. Conduct of the Business of Media Companies Pending the Closing
Date. Each of Newhaven, Xxxxx and IAMP agrees that, except as permitted
or required by this Agreement, as required by contractual obligations in
the agreements listed in Sections 4.1(l) of the IAMP Disclosure Schedule
and Section 4.2(l) of the Newhaven Disclosure Schedule, as disclosed on
Section 5.2 of each party's Disclosure Schedule, or as otherwise
consented to or approved in writing by El Sitio (such consent not to be
unreasonably withheld or delayed), during the period commencing on the
date hereof and ending at the Closing Date:
(a) Subject to Section 5.9, IAMP and Newhaven will, and will
cause the IAMP Subsidiaries and Newhaven Subsidiaries, respectively, to,
operate their respective businesses only in the usual, regular and
ordinary manner, on a basis consistent with past practice (other than
transactions not in the ordinary course with a value not in excess of
U.S.$2.5 million individually and U.S.$10 million in the aggregate),
including, without limitation, the making of necessary capital
expenditures; provided, that each of IAMP and Newhaven and its
respective Subsidiaries may refrain from making any expenditures planned
by each of IAMP and Newhaven with respect to management information
systems or, with respect to any other planned or necessary capital
expenditures, to the extent agreed upon by El Sitio;
(b) None of IAMP, Newhaven or any of the IAMP Subsidiaries or
the Newhaven Subsidiaries will materially amend its memorandum and
articles of association, certificate of incorporation or bylaws or other
constitutive documents, and none of IAMP, Newhaven or any of the IAMP
Subsidiaries or the Newhaven Subsidiaries shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property;
(c) None of IAMP, Newhaven or any of the IAMP Subsidiaries or
the Newhaven Subsidiaries will issue or agree to issue any additional
shares of share capital of any class or series, or any securities
convertible into or exchangeable for shares of share capital or issue any
options, warrants or other rights to acquire any shares of share capital,
other than issuances pursuant to outstanding agreements as of the date
hereof or as in effect as of the date hereof, in each case as set forth
on Section 5.2(c) of the IAMP Disclosure Schedule and on Section 5.2(c)
of the Newhaven Disclosure Schedule, or issuances with a value not in
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excess of U.S.$2.5 million individually and U.S.$10 million in the
aggregate;
(d) None of IAMP, Newhaven or any Subsidiary will (i) split,
combine or reclassify any shares of its outstanding share capital, (ii)
declare, set aside or pay any dividend or other distribution payable in
cash, share or property other than as required by the governing documents
of such Person or to another wholly-owned subsidiary of IAMP or Newhaven,
(iii) directly or indirectly redeem or otherwise acquire any shares of
its share capital or shares of the share capital of any of its
subsidiaries, (iv) except with respect to transactions with a value of
less than U.S.$2.5 million individually and U.S.$10 million in the
aggregate, merge or consolidate with another entity, (v) except with
respect to transactions with a value of less than U.S.$2.5 million
individually and U.S.$10 million in the aggregate, acquire or purchase an
equity interest in or a substantial portion of the assets of another
corporation, partnership or other business organization or otherwise
acquire any assets outside the ordinary and usual course of business and
consistent with past practice or otherwise enter into any material
contract, commitment or transaction outside the ordinary and usual course
of business consistent with past practice, or (vi) except with respect to
transactions with a value of less than U.S.$2.5 million individually and
U.S.$10 million in the aggregate, make any loans, advances or capital
contributions to, or investments in, any other person, other than to its
subsidiaries and except as required by the governing documents of IAMP,
Newhaven or any of their respective subsidiaries;
(e) Each of IAMP and Newhaven will use, and will cause the IAMP
Subsidiaries and the Newhaven Subsidiaries, respectively, to use, its
reasonable best efforts to preserve intact the business organization of
each such subsidiary, to keep available the services of their present
officers and key employees and others having business relations with each
of them or such respective subsidiaries, and to preserve the goodwill of
those having business relationships with such subsidiaries;
(f) Each of IAMP and Newhaven will not, and will cause the IAMP
Subsidiaries and the Newhaven Subsidiaries, respectively, not to:
(i) except with respect to transactions with a value
of less than U.S.$2.5 million individually and U.S.$10 million in
the aggregate, dispose of or encumber any of their properties or
assets other than (A) in the ordinary course of business, (B) any
property or asset which has been determined by either IAMP or
Newhaven, as the case may be, to be obsolete, worn out or no longer
useful in the operation of their respective businesses and (C)
transfers by either IAMP or Newhaven, as the case may be, to any of
the IAMP Subsidiaries or Newhaven Subsidiaries, as the case may be;
(ii) cancel any material debts or waive any material
claims other than in the ordinary course of business;
(iii) except as (A) required by applicable law, (B)
pursuant to previously existing contractual commitments or (C) in
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the ordinary course of business consistent with past practice (1)
increase the compensation or fringe benefits of any present or
former director, officer or employee, (2) grant any severance or
termination pay to any present or former director, officer or
employee, (3) loan or advance any money or other property to any of
their present or former directors, officers or employees, (4)
establish, adopt, enter into, modify or amend in any material
respect or terminate any IAMP Benefit Plan or Newhaven Benefit
Plan, as applicable, or any employee benefit plan, policy or
arrangement that would have been a IAMP Benefit Plan or a Newhaven
Benefit Plan, as applicable, had it been in effect as of the date
hereof or (5) accelerate the vesting or payment of any compensation
or benefits;
(iv) make any capital expenditure or commitment
other than (A) in the ordinary course of business, (B) pursuant to
existing commitments, (C) maintenance capital expenditures or
capital expenditures reasonably required to xxxxx conditions
endangering individuals or property or (D) pursuant to budgets
previously disclosed to El Sitio;
(v) except with respect to endorsement of negotiable
instruments in the ordinary course, incur, assume or guarantee any
Indebtedness other than (A) Indebtedness incurred in the ordinary
course of business, (B) refundings of existing Indebtedness, (C)
Indebtedness of a IAMP Subsidiary to IAMP or a Newhaven Subsidiary
to Newhaven, as the case may be, (D) other Indebtedness that is not
material to the business, properties, results of operations,
financial condition or prospects of either IAMP or Newhaven, as the
case may be, and the IAMP Subsidiaries and Newhaven Subsidiaries,
respectively, or (E) as required by the governing documents of IAMP
or Newhaven or any of the IAMP Subsidiaries or Newhaven
Subsidiaries, as the case maybe;
(vi) enter into or modify, or engage in any
negotiations with respect to, any collective bargaining or union
agreement or commitment, except as required by applicable law;
(vii) enter into or modify any agreement or
commitment or engage in any activity or transaction other than
agreements, commitments and transactions in the ordinary course of
business and consistent with past practice; or
(viii) (A) make any material Tax election or settle
or compromise any material Tax liability or (B) enter into any Tax
sharing or Tax allocation agreements.
(g) Each of IAMP and Newhaven will, and will cause the IAMP
Subsidiaries and Newhaven Subsidiaries, respectively, to, use reasonable
best efforts to maintain in full force and effect all licenses, subsidies
or Tax holidays from Governmental Entities applicable to either IAMP or
Newhaven, as the case may be, and the IAMP Subsidiaries and Newhaven
Subsidiaries, respectively, and comply, in all material respects, with
-54-
all laws, statutes, ordinances, rules, regulations, orders, writs,
injunctions, decrees, awards or other requirements of any court or other
Governmental Entities applicable to them or the conduct of their
businesses;
(h) each of IAMP and Newhaven will, and will cause the IAMP
Subsidiaries and Newhaven Subsidiaries, respectively, to, perform all of
their respective material obligations under all IAMP Material Contracts
and Newhaven Material Contracts; and
(i) neither of IAMP nor Newhaven nor any of the IAMP
Subsidiaries and Newhaven Subsidiaries, respectively, will agree, whether
in writing or otherwise, to do any of the foregoing actions described in
paragraphs (b), (c), (d) or (f) of this Section 5.2.
5.3. Conduct of Business of El Sitio Pending the Closing Date. El
Sitio agrees that, except as permitted or, required by this Agreement, as
required by contractual obligations contained in the agreements listed in
Section 4.3(l) of the El Sitio Disclosure Schedule, as disclosed on
Section 5.2 of the El Sitio Disclosure Schedule or as otherwise consented
to or approved in writing by Xxxxx and Newhaven (such consent not to be
unreasonably withheld or delayed), during the period commencing on the
date hereof and ending at the Closing Date:
(a) El Sitio will, and will cause the El Sitio
Subsidiaries to, operate their respective businesses only in the
usual, regular and ordinary manner, on a basis consistent with past
practice (other than transactions not in the ordinary course with a
value not in excess of U.S.$2.5 million individually and U.S.$10
million in the aggregate), including, without limitation, the
making of necessary capital expenditures; provided that El Sitio
may refrain from making expenditures planned by El Sitio with
respect to management information systems or any other planned or
necessary capital expenditures to the extent agreed upon by
Newhaven and Xxxxx;
(b) None of El Sitio or any of the El Sitio Subsidiaries
will materially amend its memorandum and articles of association,
certificate of incorporation or bylaws or other constitutive
documents, and neither El Sitio nor any material subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property;
(c) None of El Sitio or any of the El Sitio Subsidiaries
will issue or agree to issue any additional shares of share capital
of any class or series, or any securities convertible into or
exchangeable for shares of share capital or issue any options,
warrants or other rights to acquire any shares of share capital,
other than issuances pursuant to outstanding agreements as of the
-55-
date hereof or as in effect as of the date hereof, in each case, as
set forth on Section 5.3(c) of the El Sitio Disclosure Schedule;
(d) None of El Sitio or any of the El Sitio Subsidiaries
will (i) split, combine or reclassify any shares of its outstanding
share capital, (ii) declare, set aside or pay any dividend or other
distribution payable in cash, share or property other than as
required by the governing documents of El Sitio or to a
wholly-owned subsidiary of El Sitio, (iii) directly or indirectly
redeem or otherwise acquire any shares of its share capital, (iv)
except with respect to transactions with a value of less than
U.S.$2.5 million individually and U.S.$10 million in the aggregate,
merge or consolidate with another entity; (v) except with respect
to transactions with a value of less than U.S.$2.5 million
individually and U.S.$10 million in the aggregate, acquire or
purchase an equity interest in or a substantial portion of the
assets of another corporation, partnership or other business
organization or otherwise acquire any assets outside the ordinary
and usual course of business and consistent with past practice, or
otherwise enter into any material contract, commitment or
transaction outside the ordinary and usual course of business
consistent with past practice, or (vi) except with respect to
transactions with a value of less than U.S.$2.5 million
individually and U.S.$10 million in the aggregate, make any loans,
advances or capital contributions to, or investments in, any other
Person, other than to the El Sitio Subsidiaries and except as
required by the governing documents of El Sitio or the El Sitio
Subsidiaries;
(e) El Sitio will use, and will cause the El Sitio
Subsidiaries to use, its reasonable efforts to preserve intact the
present business organization, including the business organization
of each subsidiary, to keep available the services of their present
officers and key employees and others having business relations
with El Sitio and the El Sitio Subsidiaries, and to preserve the
goodwill of those having business relationships with El Sitio and
with the El Sitio Subsidiaries;
(f) El Sitio will not, and will cause the El Sitio
Subsidiaries not to:
(i) except with respect to transactions with a value
of less than U.S.$2.5 million individually and U.S.$10 million in
the aggregate, dispose of or encumber any of its properties or
assets, other than (A) in the ordinary course of business or (B)
any property or asset that has been determined by El Sitio to be
obsolete, worn out or no longer useful in the operation of their
respective businesses, (C) transfers by El Sitio to any of the El
Sitio Subsidiaries;
(ii) cancel any material debts or waive any material
claims or rights pertaining to or affecting its business, except in
the ordinary course of business;
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(iii) except as (A) is required by applicable law,
(B) pursuant to previously existing contractual commitments or (C)
in the ordinary course of business consistent with past practice
(1) increase the compensation of any present or former director,
officer or employee, (2) grant any severance or termination pay to
any present or former director, officer or employee, (3) loan or
advance any money or other property to any of its present or former
directors, officers or employees, (4) establish, adopt, enter into,
modify or amend in any material respect or terminate any El Sitio
Benefit Plan, or any employee benefit plan, policy or arrangement
that would have been a El Sitio Benefit Plan had it been in effect
as of the date hereof or (5) accelerate the vesting period or
payment of any compensation or benefits;
(iv) make any capital expenditure or commitment,
other than (A) in the ordinary course of business, (B) pursuant to
existing commitments, (C) maintenance capital expenditures or
capital expenditures reasonably required to xxxxx conditions
endangering individuals or property or (D) pursuant to budgets
previously disclosed to IAMP and Newhaven; or
(v) except with respect to endorsement of negotiable
instruments in the ordinary course of its business, incur, assume
or guarantee any Indebtedness other than (A) Indebtedness incurred
in the ordinary course of business, (B) refundings of existing
Indebtedness, (C) Indebtedness of a subsidiary, (D) other
Indebtedness that is not material to the business, properties,
results of operations, financial condition or prospects of El Sitio
and the El Sitio Subsidiaries, or (E) as required by the governing
documents of El Sitio or any of the El Sitio Subsidiaries;
(vi) enter into or modify, or engage in any
negotiations with respect to, any collective bargaining or union
agreement or commitment, except as required by applicable law;
(vii) enter into or modify any agreement or
commitment or engage in any activity or transaction other than
agreements, commitments and transactions in the ordinary course of
business and consistent with past practice; or
(viii) (A) make any material Tax election or settle
or compromise any material Tax liability or (B) enter into any Tax
sharing or Tax allocation agreements.
(g) El Sitio will, and will cause the El Sitio Subsidiaries to,
use reasonable best efforts to maintain in full force and effect all
licenses, subsidies or Tax holidays from Governmental Entities applicable
to El Sitio and the El Sitio Subsidiaries and comply, in all material
respects, with all laws, statutes, ordinances, rules, regulations,
orders, writs, injunctions, decrees, awards or other requirements of any
court or other Governmental Entities applicable to it or the conduct of
its business;
-57-
(h) El Sitio will, and will cause the El Sitio Subsidiaries to,
perform all of its obligations under all El Sitio Material Contracts;
(i) Prior to the Effective Time, El Sitio will release and
deliver all the El Sitio Common Shares that El Sitio has previously
agreed to release and deliver to Xxxxxxxx Enterprises Ltd., IAMP (El
Sitio) Investments Inc., Red de Television Chilevision, S.A. and
Iberoamerican Radio Holdings Chile, S.A., without any restrictions
thereon; and
(j) Neither El Sitio nor any of the El Sitio Subsidiaries will
agree, whether in writing or otherwise, to do any of the foregoing
actions described in paragraphs (b), (c), (d) or (f) of this Section 5.3.
5.4. Intercompany Transactions. Prior to or on the Closing, all
intercompany receivables or payables and loans then existing between any
of IAMP or Newhaven, any IAMP Subsidiary or Newhaven Subsidiary or any
other subsidiary or affiliate of any of IAMP or Newhaven that is not an
IAMP Subsidiary or a Newhaven Subsidiary (the "Non-Media Affiliates") on
the one hand, and the IAMP Subsidiaries or the Newhaven Subsidiaries, on
the other hand, shall be settled by way of capital contribution (with
respect to intercompany payables or loans due to any of IAMP or Newhaven,
any IAMP Subsidiary or Newhaven Subsidiary or any Non-Media Affiliate),
except for services rendered and goods provided on an arm's-length basis
consistent with past practices, which amounts shall be settled in the
ordinary course. Such settlement shall be accomplished without any
violation of any law or regulation or any incurrence of any material Tax,
penalties, interest or other charges.
5.5. Further Actions. (a) Subject to the terms and conditions
hereof, Newhaven, Xxxxx, IAMP and El Sitio agree to use their reasonable
best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable to consummate
and make effective the Transactions, including using all reasonable best
efforts: (i) to obtain prior to the Closing Date all Governmental
Consents and Non-Governmental Consents as are necessary for the
consummation of the Transactions, including, without limitation, such
consents and approvals as may be required under any antitrust laws of any
applicable jurisdiction as set forth below; and (ii) to furnish to each
other such information and assistance as reasonably may be requested in
connection with the foregoing. Newhaven, Xxxxx, IAMP and El Sitio shall
cooperate fully with each other to the extent reasonably required to
obtain such consents. Notwithstanding the foregoing, no party shall
agree, without the prior consent of the other parties and shall not be
obligated to agree, to any action, including agreeing to divestitures,
standstill arrangements, hold separate agreements or other limitations on
business activities, that would (A) have a Material Adverse Effect on
IAMP and the IAMP Subsidiaries taken as a whole, Newhaven and the
Newhaven Subsidiaries taken as a whole, El Sitio and the El Sitio
Subsidiaries taken as a whole or Holdco and its subsidiaries taken as a
whole or (B) be materially adverse to Newhaven, Xxxxx or El Sitio.
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(b) Newhaven, Xxxxx, IAMP and El Sitio shall timely and promptly
make all filings which may be required by each of them in connection with
the consummation of the Transactions under any antitrust laws of any
applicable jurisdiction. Each party shall furnish to each other such
necessary information and assistance as such party may reasonably request
in connection with the preparation of any necessary filings or
submissions by it to any U.S. or non-U.S. Governmental Entity, including,
without limitation, any filings necessary under the provisions of the
Securities Act and the Exchange Act. Each party hereto shall provide the
other party the opportunity to make copies of all correspondence, filings
or communications (or memoranda setting forth the substance thereof)
between such party or its representatives, on the one hand, and
Governmental Entity (including antitrust regulatory authorities) or any
similar foreign Governmental Entity or members of their respective
staffs, on the other hand, with respect to this Agreement or the
Transactions. Each party hereto shall promptly inform the other parties
hereto of any communication received from a Governmental Entity, give an
opportunity to the other parties to participate in any conversation or
meeting with any Governmental Entity and grant the other parties hereto
an opportunity to review in advance any filing or communication made with
a Governmental Entity relating to this Agreement or the Transactions.
(c) Each of Newhaven, Xxxxx and IAMP shall use its reasonable
best efforts to cause the Transactions to qualify, and will not (both
before and after the Effective Time) take any actions, which would
reasonably be expected to prevent the Transactions from qualifying as a
reorganization under the provisions of Sections 367 and 368(a) of the
Code and/or as a tax free exchange under the provisions of Section 351 of
the Code. Each of El Sitio, IAMP and Newhaven shall make, and shall cause
their affiliates to make, such representations, warranties and covenants
as shall be requested reasonably in the circumstances by Xxxxxxx Xxxxxxx
& Xxxxxxxx, U.S. counsel to El Sitio, and by Wachtell, Lipton, Xxxxx &
Xxxx, U.S. counsel to Newhaven, and by Xxxxxxxx Chance, Xxxxxx & Xxxxx
LLP, U.S. counsel to Xxxxx, in order for such firms to render their
opinions referred to in Sections 7.2 (e) and 7.3(f), respectively. Holdco
and its subsidiaries (including CTG Inversora, S.A., the IAMP
Subsidiaries, the Newhaven Subsidiaries and El Sitio) will take no action
which will cause the Imagen Contribution, the IAMP Contribution and
subsequent IAMP liquidation (together the "IAMP Reorganization") to be
considered an indirect stock transfer under Treas. Regs. Section
1.367(a)-3(d). In particular Holdco and its subsidiaries will not
contribute or otherwise transfer any of the IAMP Subsidiaries or any
other assets acquired from IAMP to an entity controlled by Holdco or its
subsidiaries that is treated as a corporation for U.S. federal income tax
purposes within two years of the Closing or otherwise in connection with
the Transactions. In the event that Holdco and/or its subsidiaries
contributes or otherwise transfers any of the IAMP Subsidiaries, or any
other assets acquired from IAMP to an entity controlled by Holdco or its
subsidiaries that is treated as a corporation for U.S. federal income tax
purposes and thereby causes the IAMP Reorganization to be considered an
indirect stock transfer under Treas. Regs. Section 1.367(a)-3(d), Holdco
shall indemnify and hold harmless the shareholders of IAMP for the U.S.
federal, state and local taxes (and interest and penalties related
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thereto) incurred by the IAMP shareholders in connection with the IAMP
Reorganization being so treated. The obligations and covenant included in
this Section 5.5 shall survive the Closing Date until the expiration of
the statute of limitations with respect to the applicable taxes.
5.6. Notification. Each party hereto shall notify each other party
and keep it advised as to (i) any litigation or administrative proceeding
pending and known to any such party or, to its knowledge, threatened
against it, or any subsidiary that challenges the Transactions and (ii)
any notice or other communication from any person or entity alleging that
the consent of such person or entity is or may be required in connection
with the Transactions.
5.7. Assignment of Rights to Newhaven. Notwithstanding anything in
this Agreement to the contrary, the parties agree that following the
Effective Time, all trademarks, copyrights, domain names, trade names,
brand names, corporate names, and logos containing the word "Xxxxxxxx",
the phrase "Xxxxxxxx Television Group" or any derivative or abbreviation
thereof, and all legal rights relating thereto (the "Xxxxxxxx
Intellectual Property"), shall be the exclusive property of Newhaven.
Following the Effective Time, neither Holdco nor any of its subsidiaries
shall use any Xxxxxxxx Intellectual Property without the express written
consent of Newhaven. The parties shall take all actions necessary to
assign any such rights to Newhaven.
5.8. Transition Period. Prior to the Effective Time, each of the
parties hereto will cooperate, to the fullest extent permitted by law, to
plan for the integration of the Media Companies and El Sitio as part of
Holdco. Such cooperation shall include, to the fullest extent permitted
by law, coordinating operational matters, developing uniform personnel
and benefits policies, identifying and planning for future growth
opportunities, management integration, and similar matters. Such
integration efforts will be coordinated among senior executives of IAMP,
Newhaven and El Sitio.
5.9. No Inconsistent Action. None of the parties hereto shall take
any action inconsistent with their obligations under this Agreement that
would reasonably be expected to materially hinder or delay the
consummation of the Transactions.
5.10. Convertible Preferred Shares; Debt Financing.
(a) Prior to or on the Closing Date and pursuant to the plan of
reorganization contemplated by this Agreement, Newhaven and Xxxxx will
purchase from Holdco at least U.S.$15,000,000 stated amount of preferred
shares, which will have the following terms and conditions:
(i) The preferred shares will not have dividend
rights;
(ii) The preferred shares will have voting rights
equivalent to those of the Holdco Common Shares based on conversion
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at the El Sitio Common Shares price per share at the close of
regular day time trading on the day prior to the Effective Time;
(iii) Convertible on a mandatory basis on the
earlier to occur of: (A) an underwritten public offering by Holdco
of Holdco Common Shares, in which case, the preferred shares held
by Newhaven and Xxxxx will be converted at the per share offering
price of such number of Holdco Common Shares upon completion of
such offering and (B) 24 months from Closing, in which case such
preferred shares will be converted into such number of Holdco
Common Shares (rounded to the nearest whole share) at a price per
share equal to the value of such preferred shares divided by the
"fair market value" of each Holdco Common Share;
(iv) Beginning 12 months from the Closing and ending
24 months from the Closing Date, Newhaven and Xxxxx will have the
right to convert the preferred shares held by them into such number
of Holdco Common Shares as is equal to the aggregate stated amount
of the preferred shares held by each of them divided by the "fair
market value" per Holdco Common Share on the date of such
conversion; and
(v) If a "change in control" (as defined in Section
9.1(d)) occurs with respect to Holdco prior to the date 24 months
from the Closing, Newhaven and Xxxxx will have the option to
exchange the preferred shares held by each of them for either (A)
the consideration received in the transaction that resulted in such
change of control, as if the preferred shares had been converted
into Holdco Common Shares as of such date or (B) an amount of cash
equal to the stated amount of the preferred shares.
For purposes of this Section 5.10, "fair market value", means, with
respect to each Holdco Common Share, the average of the daily high and
low bid and ask prices per Holdco Common Share on the Nasdaq for the 10
trading days immediately preceding the applicable conversion date for the
preferred shares.
(b) Following the date hereof and prior to the Effective Time,
Newhaven and Xxxxx shall, in addition to the capital contributions
referred to in Section 5.10(a) use reasonable best efforts to procure
from third parties no less than U.S.$10,000,000 in debt financing for
IAMP, and/or the IAMP Subsidiaries (it being understood that such efforts
will include offers of credit support until the Effective Time to any
such third-party debt provider by Newhaven and Xxxxx).
5.11. Redemption or Retirement of Holdco Common Shares Received
by Subsidiaries of Holdco. In connection with the transactions
contemplated by Article 2, any Holdco Common Shares held by any
subsidiary of Holdco as of the Effective Time will, immediately following
the Effective Time, be redeemed or acquired by Holdco, pursuant to the
Holdco Memorandum and Articles of Association for a nominal amount.
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5.12. IAMP Employee Share and Equity Rights. Prior to the
Effective Time, IAMP or an affiliate thereof will cause to be satisfied
in full any share option, share grant or other equity rights granted to
or held by employees of IAMP, the IAMP Subsidiaries or the Newhaven
Subsidiaries, which satisfaction of any such share options, share grants
or other equity rights will result in a reduction (on a net treasury
basis in the case of options) in the number of Holdco Common Shares
otherwise issuable to such entities pursuant to Article 2.
5.13. Agreement with Cablevision. Newhaven and Xxxxx will use
their reasonable best efforts to cause Imagen to execute a definitive
agreement with Cablevision, S.A. ("Cablevision") prior to the Closing for
the carriage and transmission by Cablevision to its subscribers of
programming produced and/or distributed by Imagen, which agreement will
be on terms and conditions reasonably acceptable to the parties hereto.
6. Additional Agreements
---------------------
6.1. Preparation of Proxy Statement; Shareholders Meeting.
(a) As promptly as reasonably practicable following the
date hereof, the parties hereto shall cooperate in preparing and shall
cause to be filed with the SEC a mutually acceptable proxy
statement/prospectus relating to the matters to be submitted to the El
Sitio shareholders at the El Sitio Shareholders Meeting (such proxy
statement/prospectus, and any amendments or supplements thereto, the
"Proxy Statement/Prospectus"), and Holdco shall prepare and file with the
SEC a registration statement on Form F-4 (or another appropriate Form if
Form F-4 is not available) with respect to the issuance of Holdco Common
Shares in connection with the Transactions (such Form F-4, and any
amendments or supplements thereto, the "Form F-4"). The Proxy
Statement/Prospectus will be included as a prospectus in and will
constitute a part of the Form F-4 as Holdco's prospectus. Each of the
parties hereto shall use its reasonable best efforts to have the Proxy
Statement/Prospectus cleared by the SEC and the Form F-4 declared
effective by the SEC, and to keep the Form F-4 effective as long as is
necessary to consummate the Transactions. Each of the parties hereto
shall, as promptly as practicable after receipt thereof, provide the
other parties hereto copies of any written comments and advise the other
parties hereto of any oral comments, with respect to the Proxy
Statement/Prospectus or Form F-4 received from the SEC. The parties
hereto shall cooperate and provide the others with a reasonable
opportunity to review and comment on any amendment or supplement to the
Proxy Statement/Prospectus and the Form F-4 prior to filing such with the
SEC, and will provide each other with a copy of all such filings made
with the SEC. Notwithstanding any other provision in this Agreement to
the contrary, no amendment or supplement (including by incorporation by
reference) to the Proxy Statement/Prospectus or the Form F-4 shall be
made without the approval of each party hereto, which approval shall not
be unreasonably withheld or delayed; provided, however, that, with
respect to documents filed by a party hereto that are incorporated by
reference in the Proxy Statement/Prospectus of Form F-4, this right of
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approval by a party hereto shall apply only with respect to information
relating to the Transactions hereby, such party hereto or its
subsidiaries or their business, financial condition, results of
operations or prospects. Holdco shall also take any action (other than as
would have a Material Adverse Effect on Holdco) required to be taken
under any applicable state securities laws in connection with the
Transactions and each party hereto shall furnish all information
concerning it and the holders of its share capital as may be reasonably
requested in connection with any such action. Each party hereto will
advise the other parties hereto, promptly after it receives notice
thereof, of the time when the Form F-4 has become effective, the issuance
of any stop or similar order, the suspension of the qualification of the
Holdco Common Shares issuable in connection with the Transactions for
offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Proxy Statement/Prospectus or the Form F-4. If at any
time prior to the Effective Time any information should be discovered by
any party hereto or any event shall occur or any condition shall exist
that should be set forth in an amendment or supplement to any of the
Proxy Statement/Prospectus or Form F-4 so that any of such documents
would not include any misstatement of a material fact or omit to state
any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, the party
that discovers such information shall promptly notify the other parties
hereto and, to the extent required by law, rules or regulations, an
appropriate amendment or supplement describing such information shall be
promptly filed by El Sitio or Holdco, as appropriate, with the SEC and
disseminated to the shareholders of El Sitio.
(b) El Sitio shall duly take all lawful action to call,
give notice of, convene and hold a special shareholders meeting as
promptly as practicable following the date upon which the Form F-4
becomes effective (the "El Sitio Shareholders Meeting") for the purpose
of obtaining shareholder approval with respect to the Transactions (the
"El Sitio Shareholder Approval") and shall take all lawful action to
solicit the adoption of this Agreement by the El Sitio Shareholders; and
the Board of Directors of El Sitio shall recommend adoption of this
Agreement by the shareholders of El Sitio to the effect as set forth in
Section 4.3(u) (the "El Sitio Recommendation"), and shall not (i)
withdraw, modify or qualify (or propose to withdraw, modify or qualify)
in any manner adverse to IAMP or Newhaven such recommendation or (ii)
take any action or make any statement in connection with the El Sitio
Shareholders Meeting inconsistent with such recommendation (collectively,
a "Change in the El Sitio Recommendation"); provided, however, any
statement under clause (ii) will not be deemed a Change in the El Sitio
Recommendation provided (A) such statement is taken or made after
consultation with U.S., British Virgin Islands and, if advisable, other
counsel of El Sitio, to the effect that such statement is required for
the El Sitio directors to comply with their fiduciary duties under
applicable law, (B) if a publicly disclosed Acquisition Proposal has been
made and not rescinded, such statement shall not relate to such public
proposal other than any factual statement required by any regulatory
authority (including the SEC) and shall in any event include a rejection
of such public proposal and (C) such statement also includes a
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reaffirmation of the El Sitio Board Approval of the El Sitio Merger and
the other Transactions and recommendation to the El Sitio shareholders to
adopt this Agreement; provided, further, that the board of directors of
El Sitio may make a Change in the El Sitio Recommendation pursuant to
Section 6.2 hereof. Notwithstanding any Change in the El Sitio
Recommendation, this Agreement shall be submitted to the shareholders of
El Sitio at the El Sitio Shareholders Meeting for the purpose of adopting
this Agreement and receiving any required El Sitio Shareholder Approval
for the Transactions and nothing contained herein shall be deemed to
relieve El Sitio of such obligation.
6.2. Acquisition Proposals. (a) Each Media Company and each of
Xxxxx, Newhaven and El Sitio agrees that neither it nor any of the El
Sitio Subsidiaries or affiliates nor any of the directors and officers of
it or the El Sitio Subsidiaries or affiliates shall, and that it shall
use its reasonable best efforts to cause the El Sitio Subsidiaries and
its affiliates, employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of the El
Sitio Subsidiaries) not to, directly or indirectly, (i) initiate,
solicit, encourage or knowingly facilitate any inquiries or the making of
any proposal or offer with respect to, or a transaction to effect, a
merger, reorganization, share exchange, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving it, El Sitio or any of the El Sitio Subsidiaries,
IAMP or any of the IAMP Subsidiaries or Newhaven or any of the Newhaven
Subsidiaries (or a material portion of the stock or assets thereof),
(other than any such transaction permitted by Section 5.2 in the case of
a Media Company or its subsidiaries, and Section 5.3 in the case of El
Sitio) or any purchase or sale of the consolidated assets (including,
without limitation, shares of its subsidiaries) of it and its
subsidiaries, taken as a whole, or any purchase or sale of, or tender or
exchange offer for, its voting securities that, if consummated, would
result in any person (or the shareholders of such Person) beneficially
owning all or substantially all of its securities (or of the surviving
parent entity in such transaction) or any of its subsidiaries (any such
proposal, offer or transaction (other than a proposal or offer made by
the other party to this Agreement or an affiliate thereof) being
hereinafter referred to as an "Acquisition Proposal"), (ii) have any
discussions with or provide any confidential information or data to any
Person relating to an Acquisition Proposal, or engage in any negotiations
concerning an Acquisition Proposal, or knowingly facilitate any effort or
attempt to make or implement an Acquisition Proposal, (iii) approve or
recommend, or propose publicly to approve or recommend, any Acquisition
Proposal or (iv) approve or recommend, or propose to approve or
recommend, or execute or enter into, any letter of intent, agreement in
principle, merger agreement, asset purchase or share exchange agreement,
option agreement or other similar agreement related to any Acquisition
Proposal or propose or agree to do any of the foregoing.
(b) Notwithstanding anything in this Agreement to the
contrary, El Sitio and its board of directors shall be permitted to (A)
effect a Change in the El Sitio Recommendation or (B) engage in any
discussions or negotiations with, or provide any confidential information
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or data to, any person in response to an unsolicited bona fide written
Acquisition Proposal by any such person first made after the date of this
Agreement, if and only to the extent that, in any such case referred to
in clause (A) or (B) above:
(i) the party making the Acquisition Proposal is an
entity with which El Sitio has not engaged, directly or indirectly,
in substantial discussions with respect to an Acquisition Proposal
at any time during the six months immediately prior to the date
hereof;
(ii) the El Sitio Shareholders Meeting shall not have
occurred;
(iii) El Sitio has complied in all respects with this
Section 6.2;
(iv) El Sitio's board of directors, on the advice of
outside counsel, determines in good faith that failure to take such
action would result in a breach of its fiduciary duties under
applicable law;
(v) in the case only of clause (A) above, (I) El Sitio
has received an unsolicited bona fide written Acquisition Proposal
from a third party and El Sitio's board of directors concludes in
good faith that such Acquisition Proposal constitutes a Superior
Proposal (after giving effect to all of the concessions that may be
offered by the other party hereto pursuant to clause (III) below),
(II) it has notified the other parties hereto, at least five
business days in advance, of its intention to effect a Change in
the El Sitio Recommendation, specifying the material terms and
conditions of such Superior Proposal and furnishing to the other
party to this Agreement a copy of any relevant proposed transaction
agreements with the party making such Superior Proposal and any
other material documents received by it or its Representatives, and
(III) prior to effecting such a Change in the El Sitio
Recommendation, it has, and has caused its financial and legal
advisors to, negotiate with the other parties hereto in good faith
to make such adjustments in the terms and conditions of this
Agreement such that such Acquisition Proposal would no longer
constitute a Superior Proposal;
(vi) in the case only of clause (B) above, the board of
directors of El Sitio concludes in good faith that there is a
reasonable likelihood that such Acquisition Proposal constitutes or
is reasonably likely to result in a Superior Proposal (taking into
account the terms of the Acquisition Proposal, the identity of the
Person making such Acquisition Proposal, the ability of such Person
to effect a Superior Proposal, and all other relevant factors), and
prior to providing any information or data to any person in
connection with an Acquisition Proposal by any such person, the
board of directors of El Sitio receives from such Person an
executed confidentiality agreement having provisions that are no
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more favorable to such Person than those contained in the
Confidentiality Agreement for Newhaven, Xxxxx and IAMP; and
(vii) El Sitio notifies the other parties hereto, as promptly
as practicable (and in any event with 24 hours of providing any
confidential information or data to any Person or entering into
discussions or negotiations with any Person), of such inquiries,
proposals or offers received by, any such information requested
from, or any such discussions or negotiations sought to be
initiated or continued with, it or any of its representatives
indicating, in connection with such notice, the identity of such
Person and the material terms and conditions of any inquiries,
proposals or offers (including a copy thereof if in writing and any
related available documentation or correspondence and copies of any
written or electronic materials provided to such Person). El Sitio
agrees that it will promptly keep the other parties hereto informed
of the status and terms of any such proposals or offers and the
status and terms of any such discussions or negotiations.
(c) Each of Newhaven and Xxxxx, each Media Company and El
Sitio agrees that (i) it will, and will cause its directors, officers and
representatives to, immediately cease and cause to be terminated any
activities, discussions or negotiations existing as of the date of this
Agreement with any Persons conducted heretofore with respect to any
Acquisition Proposal, (ii) it will immediately cease and cause its
subsidiaries, its affiliates, and its and their officers, directors,
agents, representatives and advisors, to cease any and all existing
activities, discussions or negotiations with any third parties conducted
heretofore with respect to any Acquisition Proposal, and (iii) it will
not release any third party from, or waive any provisions of, any
confidentiality or standstill agreement to which it or any of its
subsidiaries is a party with respect to any Acquisition Proposal. Each of
El Sitio, the Media Companies, Newhaven and Xxxxx agrees that it will use
reasonable best efforts to promptly inform its respective directors,
officers, key employees, agents and representatives of the obligations
undertaken in this Section 6.2.
(d) Nothing in this Section 6.2 shall (i) permit any party
to terminate this Agreement or (ii) affect any other obligation of the
parties hereto under this Agreement. El Sitio shall not submit to the
vote of its shareholders any Acquisition Proposal other than the El Sitio
Merger.
(e) "Superior Proposal" means a bona fide written
Acquisition Proposal involving the acquisition of all or substantially
all the El Sitio Common Shares that the board of directors of El Sitio
concludes in good faith, after consultation with its financial and legal
advisors, taking into account all legal, financial, regulatory and other
terms of the proposal and the identity of the Person making the proposal
(including any break-up fees, expense reimbursement provisions and
conditions to consummation), (i) is more favorable to the shareholders of
El Sitio, from a financial point of view, than the Transactions, (ii) is
fully financed or reasonably capable of being fully financed and
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otherwise reasonably capable of being completed on the terms proposed;
and (iii) is reasonably likely to be consummated in accordance with its
terms.
(f) Any disclosure made pursuant to clause (A) of Section
6.2(b) shall be deemed to be a Change in the El Sitio Recommendation
unless the board of directors of El Sitio expressly reaffirms the El
Sitio Recommendation.
6.3. Holdco Board of Directors; PTVI Board of Directors. (a) At
or prior to the Effective Time, Newhaven, Xxxxx and El Sitio will take
all action necessary to cause the board of directors of Holdco
immediately following the Effective Time to include three independent
directors designated by mutual agreement of Newhaven, Xxxxx and the
Founders, three designees of Newhaven, two designees of Xxxxx, and one
designee of the Founders (in each case, until the earlier of their
resignation or removal or until their respective successors are duly
elected and qualified, as the case may be) and be otherwise constituted
as provided in the Holdco Memorandum and Articles of Association. It is
intended that Xxxxxxx Vivo-Chaneton will be the initial chairman and
chief executive officer of Holdco, until the earlier of his resignation
or removal or until his successor is duly elected and qualified, as the
case may be.
(b) From and after the Effective Time, Holdco shall
consult in good faith with Newhaven in connection with the selection of
designees to serve on the PTVI board of directors. For one year following
the Effective Time, Holdco shall cause the current designees of Victoria
Springs serving on the board of directors of PTVI to continue to serve in
such capacity or nominate such other designees as may be acceptable to
Playboy Entertainment Group, Inc.
6.4. Fees and Expenses. (a) If the Transactions are
consummated, Holdco shall bear and pay the Expenses (including
reimbursing any amounts previously paid) incurred by or on behalf of
Newhaven and Xxxxx in connection with this Agreement and the Transactions
as well as any and all real property transfer, sales, use, transfer,
value added, share transfer and stamp Taxes, any transfer, recording,
registration and other fees, and any similar Taxes ("Transfer Taxes")
imposed on the Media Companies, Newhaven or Xxxxx and any Transfer Taxes
imposed on the IAMP Subsidiaries or the Newhaven Subsidiaries resulting
from the Transactions.
El Sitio shall bear and pay the Expenses (including amounts
previously paid) incurred by or on behalf of it as well as any and all
Transfer Taxes incurred by it or its subsidiaries in connection with the
Transactions. In no event shall Holdco or any affiliate thereof reimburse
El Sitio for the payment of such Expenses or Transfer Taxes.
"Expenses" means all out-of-pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates)
incurred by a party hereto or on its behalf in connection with or related
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to the authorization, preparation, negotiation, execution and performance
of this Agreement and the Transactions, including the preparation,
printing, filing and mailing of the Proxy Statement and Prospectus and
the solicitation of shareholder approvals and all other matters related
to the Transactions.
(b) If the Transactions are not consummated, each of Newhaven,
Xxxxx and El Sitio will bear and pay for its own Expenses incurred in
connection with the Transactions; provided, however, that all expenses
relating to the preparation, printing, filing and mailing of the Proxy
Statement/Prospectus and solicitation of shareholder approval shall be
shared pro rata by Newhaven, Xxxxx and El Sitio, based on the number of
Holdco shares each of them (or their respective shareholders) would have
received in connection with consummation of the Transactions.
6.5. Directors' and Officers' Indemnification and Insurance.
Holdco shall, and in the case of the El Sitio Merger, Holdco shall cause
the surviving corporation of the El Sitio Merger to, (i) indemnify and
hold harmless, and provide advancement of expenses to, all past and
present directors, officers and employees of each party to the
Transactions and their respective subsidiaries (in all of their
capacities) (a) to the same extent such persons are indemnified or have
the right to advancement of expenses as of the date of this Agreement by
such party pursuant to such party's certificate of incorporation, bylaws
(or equivalent constitutive documents) and indemnification agreements, if
any, in existence on the date hereof with any directors, officers and
employees of such party and its subsidiaries and (b) without limitation
to clause (a), to the fullest extent permitted by law, in each case for
acts or omissions occurring at or prior to the Effective Time (including
for acts or omissions occurring in connection with the approval of this
Agreement and the consummation of the Transactions), (ii) include and
cause to be maintained in effect in the surviving corporation's (or any
successor's) memorandum and articles of association, certificate of
incorporation and bylaws or equivalent constitutive documents after the
Effective Time, provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees and
advancement of expenses which are, in the aggregate, no less advantageous
to the intended beneficiaries than the corresponding provisions contained
in the current certificate of incorporation and bylaws of such party and
(iii) cause to be maintained for a period of six years after the
Effective Time the current policies of directors' and officers' liability
insurance and fiduciary liability insurance maintained by such party
(provided, that the surviving corporation (or any successor) may
substitute therefor one or more policies of at least the same coverage
and amounts containing terms and conditions which are, in the aggregate,
no less advantageous to the insured) with respect to claims arising from
facts or events that occurred on or before the Effective Time; provided,
however, that in no event shall the surviving corporation be required to
expend in any one year an amount in excess of 150% of the annual premiums
currently paid by such party for such insurance; and, provided, further,
that if the annual premiums of such insurance coverage exceed such
amount, the surviving corporation shall be obligated to obtain a policy
with the greatest coverage available for a cost not exceeding such
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amount. The provisions of clause (iii) of the immediately preceding
sentence shall be deemed to have been satisfied if prepaid policies have
been obtained prior to the Closing for purposes of this Section 6.5,
which policies provide such directors and officers with coverage for an
aggregate period of six years with respect to claims arising from facts
or events that occurred on or before the Effective Time, including,
without limitation, in respect of the Transactions and for a premium not
in excess of the aggregate of the premiums set forth in the preceding
sentence. If such prepaid policies have been obtained prior to the
Closing, Holdco shall and shall cause the applicable surviving
corporation to maintain such policies in full force and effect, and
continue to honor the obligations thereunder. The obligations under this
Section 6.5 shall not be terminated or modified in such a manner as to
adversely affect any Person to whom this Section 6.5 applies without the
consent of such affected Person (it being expressly agreed that the
Persons to whom this Section 6.5 applies shall be third-party
beneficiaries of this Section 6.5).
6.6. Public Announcements. The parties hereto shall use their
reasonable best efforts to (a) promptly following the date hereof,
develop a joint communications plan; (b) to ensure that all press
releases and other public statements with respect to the Transactions
shall be consistent with such joint communications plan; and (c) unless
otherwise required by applicable law or by obligations pursuant to any
listing agreement with or rules of any securities exchange, to consult
with each other before issuing any press release or, to the extent
practical, otherwise making any public statement with respect to this
Agreement or the Transactions. In addition to the foregoing, except to
the extent disclosed in or consistent with the Proxy Statement/Prospectus
in accordance with the provisions of Section 6.1, no party hereto shall
issue any press release or otherwise make any public statement or
disclosure concerning any other party hereto or any other party's
business, financial condition or results of operations without the
consent of such other party hereto, which consent shall not be
unreasonably withheld or delayed.
6.7. Listing of Holdco Common Shares. Holdco shall use its
reasonable best efforts to cause the Holdco Common Shares to be issued in
connection with the Transactions and the Holdco Common Shares to be
reserved for issuance upon exercise of the Holdco Options (issued under
the 2000 Holdco Option Plan) and El Sitio Common Share Options, to be
approved for listing on Nasdaq, subject to official notice of issuance,
prior to the Closing Date.
6.8. Employee Benefits. From and after the Effective Time,
Holdco will honor, or will cause its subsidiaries to honor, all
obligations under the IAMP Benefit Plans, the Newhaven Benefit Plans and
the El Sitio Benefit Plans (collectively, the "Plans"). From and after
the Effective Time, Holdco shall have the right to amend, modify, alter
or terminate any such Plan to the extent the terms of such Plan permit
such action and shall have no obligation to extend or continue any such
Plan which by its terms expires or terminates.
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6.9. Iberoamerican Media Holdings Chile S.A. Options. As soon
as practicable after the date hereof, Holdco shall offer to enter into a
letter agreement in the form attached hereto as Exhibit F with each of
the Persons listed in Exhibit F providing for payment of an aggregate
amount to all such Persons up to U.S.$3,245,000 in payments to such
Persons by Holdco in connection with options or other equity rights
previously granted by Iberoamerican Media Holdings Chile S.A.
7. Conditions Precedent
--------------------
7.1. Conditions Precedent to Obligations of El Sitio, each
Media Company, Newhaven and Xxxxx. The respective obligations of El
Sitio, each Media Company, Newhaven, and Xxxxx to consummate the
Transactions shall be subject to the satisfaction at or prior to the
Closing Date of the following conditions:
(a) No Injunction, Etc. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any
Governmental Entity of competent jurisdiction that is in effect
that restrains or prohibits the consummation of the Transactions.
(b) Governmental Authorizations. All consents, approvals,
authorizations and orders of U.S. and foreign Governmental Entities
(including courts) as are necessary in connection with the
Transactions, or that, if not obtained, would be reasonably likely
to subject El Sitio, each Media Company, Newhaven, Xxxxx or any of
their respective subsidiaries, or any director, officer or agent of
any such Person to criminal or material civil liability or could
render such transfer void or voidable (the "Required Consents")
shall have been obtained or any applicable waiting period shall
have expired or been terminated, except for Required Consents the
failure to obtain which, individually or in the aggregate, would
not have a Material Adverse Effect on Holdco and are not otherwise
likely to subject any such director, officer, employee or agent to
criminal or material civil liability.
(c) El Sitio Shareholder Approval. The El Sitio Shareholder
Approval shall have been obtained.
(d) Holdco Memorandum and Articles. The Holdco Memorandum and
Articles shall have been duly adopted and shall be in effect.
(e) Consents. All third-party consents with respect to the
Transactions shall have been obtained, except those consents the
failure of which to obtain that, individually or in the aggregate,
would not have a Material Adverse Effect on Holdco and its
subsidiaries taken as whole (after giving effect to the
Transactions).
(f) Employment Agreements. Holdco shall have offered to enter
into an employment agreement with Xxxxxxx Vivo-Chaneton in
accordance with the terms set forth on Exhibit D hereto.
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7.2. Conditions Precedent to Obligations of El Sitio. The
obligations of El Sitio under this Agreement are subject to the
satisfaction (or waiver by El Sitio), at or prior to the Closing Date, of
each of the following conditions:
(a) Accuracy of Representations and Warranties. (i) All
representations and warranties of Newhaven, Xxxxx and each Media
Company contained herein or in any certificate delivered to El
Sitio pursuant hereto, shall be true and correct in all respects on
and as of the Closing Date, with the same force and effect as
though such representations and warranties had been made on and as
of the Closing Date, except (A) to the extent that any such
representation or warranty is made as of a specified date, in which
case such representation or warranty shall have been true and
correct in all respects as of such date, and (B) after giving
effect to clause (A), for all such inaccuracies or misstatements
that, individually or in the aggregate, would not have a Material
Adverse Effect on IAMP and the IAMP Subsidiaries taken as a whole
or Newhaven and the Newhaven Subsidiaries taken as a whole.
(ii) No Material Adverse Change. Except as contemplated by or
set forth in this Agreement or in the Exhibits or the Disclosure
Schedule of any Media Company subsequent to the date of this
Agreement, there has not occurred or arisen, any Material Adverse
Effect on IAMP and the IAMP Subsidiaries taken as a whole or
Newhaven and the Newhaven subsidiaries taken as a whole.
(b) Performance of Agreements. Newhaven, Xxxxx and each Media
Company shall, in all material respects, have performed all
obligations and agreements, and complied in all material respects
with all material covenants and conditions, contained in this
Agreement to be performed or complied with by it prior to or at the
Closing Date.
(c) Officer's Certificate. El Sitio shall have received a
certificate, dated the Closing Date, of the president or other
senior executive officer of each of Newhaven, Xxxxx, IAMP to the
effect that, to the knowledge of such officer after due inquiry,
the applicable conditions specified in Sections 7.2(a) and (b) have
been fulfilled.
(d) Holdco Agreement. The Holdco Agreement shall have been
executed by each party thereto.
(e) Tax Opinion. El Sitio shall have received a written
opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, U.S. counsel to El Sitio, in
form and substance reasonably satisfactory to it, on the basis of
customary representations, warranties, covenants and assumptions
set forth in such opinions, and delivered as of the date of the
Effective Time, to the effect that the El Sitio Merger will
constitute a reorganization within the meaning of Section 368(a) of
the Code and/or that the Transactions, taken together, will
constitute an exchange under Section 351 of the Code.
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7.3. Conditions Precedent to the Obligations of Newhaven, Xxxxx
and the Media Companies. The obligations of Newhaven, Xxxxx and the Media
Companies under this Agreement are subject to the satisfaction (or waiver
by Newhaven, Xxxxx or the Media Companies, as the case may be), at or
prior to the Closing Date, of each of the following conditions:
(a) Accuracy of Representations and Warranties. (i) All
representations and warranties of El Sitio contained herein or in
any certificate or document delivered to Newhaven, Xxxxx or the
Media Companies pursuant to this Agreement shall be true and
correct in all respects on and as of the Closing Date, with the
same force and effect as though such representations and warranties
had been made on and as of the Closing Date, except (A) to the
extent that any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall
have been true and correct in all respects as of such date and (B)
after giving effect to clause (A) for all such inaccuracies or
misstatements that, individually or in the aggregate, would not
have a Material Adverse Effect on El Sitio and the El Sitio
Subsidiaries taken an a whole.
(ii) No Material Adverse Change. Except as otherwise
contemplated by or disclosed in this Agreement or the Exhibits
hereto or the El Sitio Disclosure Schedule, subsequent to the date
of this Agreement, there has not occurred any Material Adverse
Effect on El Sitio and the El Sitio Subsidiaries taken as a whole.
(b) Performance of Agreements. El Sitio shall in all material
respects have performed all obligations and agreements, and
complied in all material respects with all covenants and
conditions, contained in this Agreement to be performed or complied
with by it prior to or at the Closing Date.
(c) Officer's Certificate. Newhaven, Xxxxx and the Media
Companies shall have received a certificate, dated the Closing
Date, of the president or a vice president of El Sitio to the
effect that, to the knowledge of such officer after due inquiry,
the conditions specified in Sections 7.3(a) and (b) have been
fulfilled.
(d) Holdco Agreement. The Holdco Agreement shall have been
executed by each party thereto.
(e) Registration Rights Agreement. The Registration Rights
Agreement in a form in accordance with the terms set forth as
Exhibit B hereto shall have been executed by Holdco.
(f) Tax Opinion. Newhaven shall have received a written
opinion of Wachtell, Lipton, Xxxxx & Xxxx, U.S. counsel to Newhaven
and Xxxxx shall have received a written opinion of Xxxxxxxx Chance
Xxxxxx & Xxxxx LLP, U.S. counsel to Xxxxx, in each case, in form
and substance reasonably satisfactory to the recipients, on the
basis of customary representations, warranties, covenants and
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assumptions set forth in such opinions, and delivered as of the
date of the Effective Time, to the effect that the IAMP
Reorganization will constitute a reorganization within the meaning
of Section 368(a) of the Code and, in the case of the opinion of
Wachtell, Lipton, Xxxxx & Xxxx, to the further effect that the
Transactions, taken together, will constitute an exchange under
Section 351 of the Code.
8. Termination
-----------
8.1. General. This Agreement may be terminated and the Transactions
may be abandoned: (a) by mutual consent of El Sitio, IAMP, Newhaven and
Xxxxx; or (b) by El Sitio, IAMP, Newhaven or Xxxxx by notice to the other
parties hereto in the event that the Closing Date shall not have occurred
on or before July 30, 2001; provided, however, that, if the Closing Date
shall not have occurred on or before such date due to the act or omission
of El Sitio, IAMP, Newhaven or Xxxxx in breach of this Agreement, then
that party may not terminate the Agreement.
8.2. Effect of Termination. In the event of any termination of the
Agreement as provided in Section 8.1 above, this Agreement shall
forthwith become wholly void and of no further force and effect and there
shall be no liability on the part of El Sitio, IAMP, Newhaven or Xxxxx,
except that (i) the obligations of El Sitio, IAMP, Newhaven and Xxxxx
under Sections 5.1(b), 6.4 and 6.6 of this Agreement shall remain in full
force and effect and (ii) termination shall not preclude any party from
suing another party for breach of this Agreement.
9. Indemnification.
-------------------
9.1. Survival of Representations and Warranties.
(a) Each of the representations and warranties set forth
in Section 4.4 and in any certificate delivered pursuant to Sections
7.2(c) or 7.3(c) shall survive for the time period set forth in Section
4.4, after which time they will have no further force or effect. The
agreements set forth in this Agreement shall terminate at the Effective
Time, except that the agreements set forth in Article 1, Section 5.1(c),
Section 5.5, Section 6.5, this Article 9, and Article 10 shall survive
the Effective Time and the Closing.
(i) Newhaven and Xxxxx, jointly and severally, with
respect to matters relating to IAMP, and Newhaven, with respect to
matters relating to Newhaven, shall indemnify and hold Holdco harmless
against and in respect of (i) any actual loss, liability, damage, cost,
expense or amount paid in settlement (including reasonable attorneys'
fees and other reasonable costs of defense) (collectively, "Damages")
incurred or sustained by Holdco as a result of any breach by Newhaven,
Xxxxx or IAMP of their respective covenants contained herein that survive
the Closing; and (ii) any actual Damages incurred or sustained by Holdco
as a result of any breach by Newhaven, Xxxxx or IAMP of their respective
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representations and warranties contained in Section 4.1 or 4.2 hereof
that survive pursuant to Section 4.4 and made on the date hereof;
provided that Newhaven and Xxxxx shall be required to indemnify Holdco
pursuant to this clause (ii) for such breaches only to the extent that
the aggregate actual Damages resulting from such breaches to Holdco
exceeds U.S.$5,000,000 (the "Threshold"); and provided, further, that
Newhaven and Xxxxx' aggregate liability pursuant to this Section 9.1(a)
will not exceed U.S.$50,000,000, (the "Cap") and any claim for
indemnification under this clause (ii) must be made in writing with
specificity to Newhaven and Xxxxx by Holdco within 12 months of the
Closing Date (except in the case of breach of a representation in
Sections 4.1(q) and 4.2(q), which claim may be made within 24 months of
the Closing Date.
(ii) With respect to the agreements set forth on
Section 9.1(a)(ii) of the IAMP Disclosure Schedule or Section 9.1(a)(ii)
of the Newhaven Disclosure Schedule, each IAMP Subsidiary or each
Newhaven Subsidiary, as the case may be, identified in such Section will
agree to: (A) if permitted pursuant to applicable law and the terms of
the applicable agreement, assign to Holdco any and all rights to
indemnification granted to such Subsidiary by any third party transferor
or seller (other than Newhaven, Xxxxx or any affiliate of either of such
parties), as the case may be, with respect to the assets or other
property conveyed to such Subsidiary, and (B) if assignment is not
permitted by the terms of the applicable agreement, agree to pursue any
claim for indemnification granted under such agreement and assign, convey
or otherwise transfer to Holdco any and all cash proceeds, property or
other valuable consideration received from any such third party
indemnitor. Notwithstanding the foregoing, subject to paragraph (iii)
below, in no event shall any assignment pursuant to this paragraph limit
any right of Newhaven, Xxxxx or the IAMP Subsidiaries to pursue a claim
for indemnification against such third-party indemnitor in the event that
Holdco makes a claim for indemnification against Newhaven, Xxxxx or IAMP
related to the assets or other property conveyed by such third party, in
which event Holdco shall immediately assign the right to seek
indemnification against the third-party indemnitor back to the
Indemnifying Party against which Holdco has made a claim for
indemnification. In the event Holdco recovers any cash proceeds, property
or other valuable consideration from a third-party indemnitor pursuant to
a claim for indemnification, such amount shall be deducted from the
Damages Holdco may be entitled to recover from an Indemnifying Party.
(iii) In the event that Holdco may have the benefit
of a claim under paragraph (ii) above, as well as a claim under paragraph
(i) above, Holdco shall first use its reasonable best efforts to pursue
such claim under paragraph (ii) and only thereafter seek indemnification
pursuant to paragraph (i).
(iv) Newhaven shall, from and after the Effective
Time until January 1, 2005 (or, if earlier, the applicable statute of
limitations), indemnify and hold harmless Holdco, on the same terms and
conditions as otherwise set forth in this Section 9 (including with
respect to the Threshold and the cap, which shall apply in the aggregate
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as to indemnification pursuant to this paragraph (iv) and otherwise under
this Agreement, as well as the manner of making and handling claims) with
respect to the tax-free status of the tax-free reorganization under
Argentine law involving Imagen and the subsequent combination of Imagen
and Imasac S.A. into a common business enterprise in June 1997.
Notwithstanding any other provision in this Agreement, in the event that
Holdco or another Indemnified Party receives notice of any claim or
dispute with respect to any matter related to the indemnity set forth in
this paragraph (iv) or which would give rise to any claim for
indemnification pursuant hereto, it shall promptly provide such notice to
Newhaven, and Newhaven shall have sole authority to manage such claim or
dispute and to settle or otherwise resolve it, including through
litigation. Holdco shall provide Newhaven such powers of attorney and
other documents as Newhaven may reasonably request in connection with
such claim. As a condition to its right set forth in this paragraph (iv),
Holdco shall not take, and shall cause its directors, officers, agents
and subsidiaries not to take, any action which could reasonably be
expected to result in, or increase the amount of, any claim or dispute
under this paragraph (iv), including in positions or statements in any
future tax returns, tax audit inquiries and other administrative or
judicial tax proceedings or financial statements and related notes
thereto, except as required by law.
The provisions of this paragraph (iv) shall not
affect the release of Holdco Common Shares in the IAMP Escrow Account,
which shall be released at such time as otherwise provided herein, except
that, if a claim is made with respect to this paragraph (iv) by Holdco or
another Indemnified Party hereunder prior to the time such shares would
otherwise be released, such shares may be retained by the Escrow Agent,
to the extent applicable, with respect to any pending claim under this
paragraph (iv). Following release of the IAMP Escrow Account, Holdco may
seek indemnification under this paragraph (iv) by claim against Newhaven
(subject to the same limitations as set forth herein). For the avoidance
of doubt, to the extent Holdco Common Shares held in the IAMP Escrow
Account have been used to satisfy obligations of Newhaven, Xxxxx or any
of their affiliates hereunder, or cash amounts have been paid in lieu of
the release of such shares in respect of indemnification obligations (and
such shares have, accordingly, been released to Newhaven or Xxxxx) the
amount of available indemnification hereunder shall be correspondingly
reduced by the value of such shares, based on the transaction value set
forth below, represented by such cash amount.
(b) Holdco shall indemnify and hold IAMP, Xxxxx and Newhaven
harmless against and in respect of any actual Damages incurred or
sustained by Xxxxx, IAMP or Newhaven as a result of any breach by El
Sitio of its representations and warranties contained in Section 4.3 that
survive pursuant to Section 4.4 and made on the date hereof; provided
that Holdco shall be required to indemnify IAMP, Xxxxx and Newhaven
pursuant to this Section 9.1(b) for such breaches only to the extent that
the aggregate actual Damages resulting from such breaches to IAMP, Xxxxx
or Newhaven exceed the Threshold; provided, however, that Holdco's
aggregate liability pursuant to this Section 9.1(b) will not exceed the
Cap and any claim for indemnification under this Section 9.1(b) must be
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made in writing with specificity to Holdco by IAMP, Xxxxx or Newhaven, as
applicable, within 12 months of the Closing Date (except in the case of
breach of a representation in Section 4.3(q), which claim may be made
within 24 months of the Closing Date).
(c) Any claim for Damages pursuant to this Section 9.1 for
which a notice of a breach has been given during the time such
representation, warranty or agreement survives shall survive the time it
would otherwise terminate pursuant to this Section 9.1.
(d) With respect to third-party claims, all claims for
indemnification by Holdco, Newhaven, Xxxxx or IAMP (the "Indemnified
Party") hereunder shall be asserted and resolved as set forth in this
Section 9.1(d). In the event that any written claim or demand for which
Newhaven, Xxxxx or Holdco (an "Indemnifying Party"), would be liable to
the Indemnified Party hereunder is asserted against or sought to be
collected from the Indemnified Party by a third party, the Indemnified
Party shall promptly notify the Indemnifying Party of such claim or
demand and the amount or the estimated amount thereof to the extent then
feasible (which estimate shall not be conclusive of the final amount of
such claim or demand) (the "Claim Notice"). Failure to give prompt notice
shall not affect the indemnification obligations hereunder in the absence
of actual prejudice. The Indemnifying Party shall have 20 days from the
personal delivery or mailing of the Claim Notice (the "Notice Period") to
notify the Indemnified Party (i) whether or not the Indemnifying Party
disputes the liability of the Indemnifying Party to the Indemnified Party
hereunder with respect to such claim or demand and (ii) whether or not it
desires to defend the Indemnified Party against such claim or demand. All
costs and expenses incurred by the Indemnifying Party in defending such
claim or demand shall be a liability of, and shall be paid by, the
Indemnifying Party; provided, however, that the amount of such costs and
expenses that shall be a liability of the Indemnifying Party hereunder
shall be subject to the limitations set forth in Section 9.1(a) and (b)
hereof. Except as hereinafter provided, in the event that the
Indemnifying Party notifies the Indemnified Party within the Notice
Period that it desires to defend the Indemnified Party against such claim
or demand, the Indemnifying Party shall have the right to defend the
Indemnified Party with counsel reasonably satisfactory to the Indemnified
Party by appropriate proceedings and shall have the sole power to direct
and control such defense and the Indemnifying Party shall not be liable
to such Indemnified Party under this Section 9.1 for any fees of other
counsel or any other expenses, in each case subsequently incurred by such
Indemnified Party in connection with the defense thereof, other than
reasonable costs of investigation and costs and expenses of legal
counsel, if the Indemnified Party and the Indemnifying Party are both
parties to the action and the indemnified party has been advised by
counsel that there may be one or more defenses available to it and not
available to the Indemnifying Party. If any Indemnified Party desires to
participate in any such defense, other than with respect to defenses
described in the last clause of the preceding sentence, it may do so at
its sole cost and expense. The Indemnified Party shall not settle a claim
or demand without the consent of the Indemnifying Party unless prior
thereto or in connection therewith the Indemnified Party unconditionally
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releases the Indemnifying Party for any liability arising out of such
claim or demand. The Indemnifying Party shall not, without the prior
written consent of the Indemnified Party, settle, compromise or offer to
settle or compromise any such claim or demand on a basis which would
result in the imposition of a consent order, injunction or decree which
would restrict the future activity or conduct of the Indemnified Party or
any subsidiary or affiliate thereof or if such settlement or compromise
does not include an unconditional release of the Indemnified Party for
any liability arising out of such claim or demand. If the Indemnifying
Party elects not to defend the Indemnified Party against such claim or
demand, whether by not giving the Indemnified Party timely notice as
provided above or otherwise, then the amount of any such claim or demand
or, if the same be contested by the Indemnified Party, that portion
thereof as to which such defense is unsuccessful (and the reasonable
costs and expenses pertaining to such defense), shall be the liability of
the Indemnifying Party hereunder, subject to the limitations set forth in
Section 9.1(a) and (b). Holdco, Newhaven and Xxxxx shall each render to
each other such assistance as may reasonably be requested in order to
insure the proper and adequate defense of any such claim or proceeding.
Notwithstanding any other provision in this Agreement, the
obligations of, Holdco, Newhaven and Xxxxx under this Section 9 shall
terminate with respect to a party that otherwise is entitled to indemnity
hereunder immediately upon consummation of a "change in control" with
respect to such party, Holdco or, in the case of an indemnity for the
benefit of Holdco, with respect to an asset or business as to which
indemnification is sought hereunder. A "change in control" with respect
to a party or any of Holdco's businesses shall be deemed to occur upon
the occurrence of any of the following: (i) a person or group (other than
Holdco and its wholly owned subsidiaries with respect to Holdco) obtains
control, whether through ownership, contract or otherwise, of at least
50.01% of the voting power or equity interest of such party or such
business, or (ii) a person or group (other than Holdco and its wholly
owned subsidiaries or an affiliate of the indemnified party) obtains the
ability to elect a majority of the board of directors or other managing
body of such party or such business whether through contract, share
ownership, proxy, voting agreement or otherwise; provided, in the event
that Xxxxx or Newhaven or one of their affiliates effects any such
transaction with respect to Holdco, the Holdco Board shall have approved
or consented to such transaction.
(e) (i) At Closing, Newhaven and Xxxxx shall place 3,525,824
and 2,763,484 Holdco Common Shares, respectively, in an escrow account
(the "IAMP Escrow Account") with an escrow agent (the "Escrow Agent")
mutually agreeable to Newhaven, Xxxxx, El Sitio and Holdco. Any
indemnification payments that may be made from Newhaven or Xxxxx to
Holdco hereunder may be paid, at Newhaven's or Xxxxx' option, in U.S.
dollars in the amount of the Damages or in Holdco Common Shares out of
the IAMP Escrow Account with a value equal to the Damages (with each
Holdco Common Share being deemed, solely for purposes of this Section
9.1(e), to have a value of U.S.$7.95). In the event that Newhaven or
Xxxxx makes an indemnification payment to Holdco in cash, a number of
Holdco Common Shares shall immediately be released to the Indemnifying
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Party from the IAMP Escrow Account equal in value to the amount of such
cash indemnification payment (such Holdco Common Shares being deemed to
have a value, solely for purposes of this Section 9.1(e), of U.S.$7.95
per share). The IAMP Escrow Account shall be terminated on the date two
years after Closing and all Holdco Common Shares remaining therein on
such date shall be returned to Newhaven or Xxxxx; provided that in the
event there is a pending claim for indemnification against Newhaven or
Xxxxx at such date, then Holdco Common Shares shall remain in the IAMP
Escrow Account pending the final resolution of such claim.
(ii) Holdco shall place 6,289,308 shares of Holdco
Common Shares in an escrow account (the "Holdco Escrow Account") with the
Escrow Agent against which all claims for indemnification against Holdco
may be met. Any indemnification payments that may be made from Holdco to
Newhaven or Xxxxx hereunder may be paid, at Holdco's option, in U.S.
dollars in the amount of the Damages or in Holdco Common Shares out of
the Holdco Escrow Account with a value equal to the Damages (with each
Holdco Common Share being deemed, solely for purposes of this Section
9.1(e), to have a value of U.S.$7.95; provided, however, that Holdco
shall not be entitled to make such payment in U.S. dollars to the extent
that doing so would cause the IAMP Reorganization to fail to constitute a
reorganization within the meaning of Section 368(a) of the Code). The
Holdco Escrow Account shall be terminated on the date two years after
Closing and all Holdco Common Shares remaining therein on such date shall
be returned to Holdco; provided that in the event there is a pending
claim for indemnification against Holdco at such date, then Holdco Common
Shares shall remain in the Holdco Escrow Account pending the final
resolution of such claim.
(iii) The sole recourse of any party hereto in the
event of any claim pursuant to this Section 9 shall be to the applicable
Escrow Account, regardless of the value of any Holdco Common Shares then
held in such Escrow Account, or the size or basis of the claim made by
any indemnified party. The parties acknowledge that, as a consequence of
this provision, in the event that a party's Escrow Account is exhausted,
an indemnified party shall have no remedy against such other party with
respect to any such claim, notwithstanding an indemnification obligation
set forth in Section 9(a) or 9(b) hereof.
(iv) The IAMP Escrow Account and the Holdco Escrow
Account shall substantially satisfy the provisions of IRS Revenue
Procedure 84-42.
(f) The parties agree that any indemnification payments
made pursuant to this Agreement shall be treated for tax purposes as an
adjustment to the Merger Consideration, unless otherwise required by
applicable law.
10. Miscellaneous
-----------------
10.1. Notices. Any and all notices to any party to this
Agreement will be delivered to the following addresses:
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(a) If to Newhaven, IAMP or Holdco:
Newhaven Overseas Corp.
c/o Finser Corporation
000 Xxxxxxxx Xxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Fax No.: (000) 000-0000
with a copy (solely for information purposes) to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
Fax No.: (000) 000-0000
(c) If to HMTF I, HMTF II, HMTF III, IAMP or Holdco:
c/o Hicks, Muse, Xxxx & Xxxxx, Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Fax No.: (000) 000-0000
with a copy (solely for information purposes) to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: L. Xxxxx X'Xxxx, Xx., Esq.
Fax No.: (000) 000-0000
and
(d) If to El Sitio:
El Sitio, Inc.
Xxxxxxx Xxxxxxxxx Xxxxxx 0000
X0000XXX Xxxxxx Xxxxx, Xxxxxxxxx
Attention: Xxxxxxx Xxxxxxx
Fax No.: (5411) 4339-3876
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
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or to such other address as the parties hereto shall have specified by
notice in writing to the other parties hereto. All such notices,
requests, demands and communications shall be deemed to have been
received on the date of personal delivery or telecopy or on the third
Business Day after the mailing thereof.
10.2. Entire Agreement. This Agreement (including the Exhibits
hereto and the Disclosure Schedules), together with the Confidentiality
Agreement, the Registration Rights Agreement, the Holdco Agreement and
the Voting Agreement, constitutes the entire agreement between the
parties hereto, and supersedes all prior agreements and understandings,
oral and written, between the parties hereto with respect to the subject
matter hereof.
10.3. Binding Effect; No Third-Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and
their respective successors and assigns. Nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the
parties hereto or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.
10.4. Assignability. This Agreement shall not be assignable by
Newhaven, Xxxxx or IAMP without the prior written consent of El Sitio or
by El Sitio without the prior written consent of each of Newhaven, Xxxxx
and IAMP, provided, however, that each of Newhaven, Xxxxx and IAMP shall
be permitted to assign its rights hereunder to any one or more Person or
Persons to which all or substantially all of its respective businesses
are assigned or otherwise transferred, so long as such Person assumes the
obligations of such party hereunder and such assignment does not deprive
any other party hereunder of the benefits of this Agreement.
10.5. Amendment; Waiver. This Agreement may be amended, supplemented
or otherwise modified only by a written instrument executed by the
parties hereto. No waiver by any of the parties hereto of any of the
provisions hereof shall be effective unless explicitly set forth in
writing and executed by the party hereto so waiving. Except as provided
in the preceding sentence, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any
party hereto, shall be deemed to constitute a waiver by the party hereto
taking such action of compliance with the representations, warranties,
covenants, or agreements contained herein, and in any documents delivered
or to be delivered pursuant to this Agreement and in connection with the
Closing hereunder. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach.
10.6. Schedules and Exhibits. Any fact or item that is clearly
disclosed on any Exhibit to this Agreement or in any Disclosure Schedule
or in the Financial Information or Interim Financial Information of any
party hereto in such a way as to make its relevance to a representation
or representations made elsewhere in this Agreement or to the information
called for by an Exhibit or Exhibits to this Agreement or any Disclosure
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Schedule readily apparent shall be deemed to be an exception to such
representation or representations or to be disclosed on such Exhibit or
Exhibits on any Disclosure Schedule, as the case may be, notwithstanding
the omission of a reference or cross-reference thereto. Any fact or item
disclosed on any Exhibit or any Disclosure Schedule shall not by reason
only of such inclusion be deemed to be material and shall not be employed
as a point of reference in determining any standard of materiality under
this Agreement.
10.7. Section Headings; Table of Contents. The Section headings
contained in this Agreement and the Table of Contents to this Agreement
are for reference purposes only, and shall not affect the meaning or
interpretation of this Agreement.
10.8. Severability. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be
affected and shall remain in full force and effect.
10.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
10.10. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW,
THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION.
10.11. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
10.12. Submission to Jurisdiction. Each of Newhaven, Xxxxx, each
Media Company and El Sitio irrevocably agrees that any Legal Proceeding
with respect to this Agreement or for recognition and enforcement of any
judgment in respect hereof brought by another party hereto or its
successors or assigns may be brought and determined in the U.S. federal
district court for the Southern District of New York, and each of
Newhaven, Xxxxx, the Media Companies and El Sitio hereby irrevocably
submits with regard to any such Legal Proceeding for itself and in
respect to its property, generally and unconditionally, to the exclusive
jurisdiction of the aforesaid courts. Each of Newhaven, Xxxxx, each Media
Company and El Sitio hereby irrevocably waives, and agrees not to assert,
by way of motion, as a defense, counterclaim or otherwise, in any Legal
Proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any
reason other than the failure to lawfully serve process, (b) that it or
its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service
of notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise), (c) to the fullest
extent permitted by applicable law, that (i) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (ii)
the venue of such suit, action or proceeding is improper and (iii) this
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Agreement, or the subject matter hereof, may not be enforced in or by
such courts and (d) any right to a trial by jury.
10.13. Certain Definitions
(a) Defined Terms. For purposes of this Agreement, the
following terms shall have the specified meanings:
(i) "affiliate" of a Person means a Person that, directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;
(ii) "Business Day" means any day other than a Saturday,
Sunday, or other day on which banks located in New York City, the
British Virgin Islands or Buenos Aires, Argentina are authorized or
obligated to close;
(iii) "Government Consent" means any license, certificate,
permit, consent, approval, authorization, qualification or order
issued by, or entered by or with any Governmental Entity;
(iv) "Governmental Entity" means any U.S. or non-U.S.
national, state, municipal or local government, any regulatory
agency, body or court, or any quasi-governmental or private body
exercising any regulatory, taxing, importing or quasi-governmental
entity or any supranational government or regulatory agency, body
or court;
(v) "Indebtedness" means, with respect to any Person, (a) all
indebtedness or such Person, whether or not contingent, for
borrowed money (including reimbursement obligations in respect of
letters of credit, guarantees or similar instruments), (b) all
obligations of such Person for the deferred subscription price of
property or services, (c) all other indebtedness of such Person
evidenced by notes, bonds, debentures, letters of credit or other
similar instruments, (d) all obligations under leases required to
be classified and accounted for as capital leases in accordance
with generally accepted accounting principles and (e) all
indebtedness of other persons referred to in clauses (a) through
(d) above guaranteed directly or indirectly in any manner by such
person, except, in the case of clauses (a) through (e),
indebtedness of either Media Company or any of the Subsidiaries to
such Media Company or any of its wholly-owned subsidiaries;
(vi) "material" has the meaning assigned to such term under
the Securities Act and the Exchange Act (including, without
limitation, under SEC Staff Accounting Bulletin No. 99);
(vii) "Material Adverse Effect" means (A) a material adverse
effect upon the business, operations, properties, assets,
liabilities, financial condition or results of operations of the
applicable Person(s), (B) the prevention of or material delay in
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the ability of the parties hereto to perform their respective
obligations under this Agreement and to consummate the Transactions
or (C) any material adverse change in the near-term or long-term
projected business, assets, liabilities, financial condition or
results of operations (taking into account, among other factors,
EBITDA and free cash flow, as such terms are customarily used) of
the applications Person(s), except, in the case of clauses (A), (B)
or (C), any such effect resulting from or arising in connection
with: (1) changes in general economic or business conditions or in
financial markets in the countries in which the parties do
business, (2) changes in circumstances or conditions affecting
companies in the media or entertainment industry generally, (3)
this Agreement, the Transactions or the announcement hereof or (4)
the failure of a party to give consent to an action requested
pursuant to an applicable Section of Article 5. for purposes of
clause (C) of this definition, the term "material adverse change"
shall take into account, among other factors, the intended capital
structure of Holdco giving effect to the Transactions;
(viii) "Permits" means all licenses, permits, order,
consents, approvals, registrations, authorizations, qualifications
and fillings with and under all U.S. federal, state or local or
other non-U.S. laws and Governmental Entities and the National
Association of Securities Dealers, Inc.;
(ix) "Person" means an individual, corporation, partnership,
association, trust, incorporated organization, other entity or
group (as defined in Section 13(d)(3) of the Exchange Act); and
(x) "subsidiary" of El Sitio, Newhaven, Xxxxx, any Media
Company or any other Person means any corporation, partnership,
joint venture or other legal entity of which El Sitio, Newhaven,
Xxxxx, any Media Company or such other Person, as the case may be
(either alone or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the share capital or
other equity interests the holder of which generally is entitled to
vote for the election of the board of directors or other governing
body of such corporation or other legal entity.
(b) Other Terms. For purposes if this Agreement, references to
"share capital", "capital stock", "share" and similar expressions shall,
in the case of any Person that is not a corporation, mean the
corresponding equity or ownership interests in such Person.
(c) Glossary of Terms. Capitalized terms used herein are
defined in the following Sections of this Agreement:
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Defined Term Section
------------ --------
Acquisition Proposal . . . . . . . . . . . . . . . 6.2(a)
AEI . . . . . . . . . . . . . . . . . . . . . 4.2(i)(iv)
AEI Financial Information . . . . . . . . . . 4.2(i)(iv)
Affiliate . . . . . . . . . . . . . . . . . . 10.13(a)(i)
Affiliate Agreement . . . . . . . . . . . . . . . . . 6.8
Agreement . . . . . . . . . . . . . . . . . . . Preamble
Articles of Association . . . . . . . . . . . . . . . 1.2
Benefit Plans . . . . . . . . . . . . . . . . . 4.1(p)(i)
Business Day . . . . . . . . . . . . . . . . 10.13(a)(ii)
BVI Companies Ordinance . . . . . . . . . . . . . . 2.1
C Share . . . . . . . . . . . . . . . . . . . . . 2.1(b)
Cap . . . . . . . . . . . . . . . . . . . . . . . . . 9.1
capital stock . . . . . . . . . . . . . . . . . 10.13(b)
Certificate of Merger . . . . . . . . . . . . . . . . 2.3
Change in the El Sitio Recommendation . . . . . . 6.1(b)
Claim Notice . . . . . . . . . . . . . . . . . . . . 9(a)
Closing . . . . . . . . . . . . . . . . . . . . . . 2.2
Closing Date . . . . . . . . . . . . . . . . . . . . . 2.2
Code . . . . . . . . . . . . . . . . . . . . . . Preamble
Concessions . . . . . . . . . . . . . . . . . . . 4.1(n)
Confidentiality Agreement . . . . . . . . . . . . 5.1(c)
Contributions . . . . . . . . . . . . . . . . . . 2.1(d)
Damages . . . . . . . . . . . . . . . . . . . . . 9(b)(i)
Disclosure Schedules . . . . . . . . . . . . . . . . . 4.3
Effective Time . . . . . . . . . . . . . . . . . . . . 2.3
El Sitio . . . . . . . . . . . . . . . . . . . . Preamble
El Sitio 1999 Balance Sheet . . . . . . . . . . 4.3(i)(i)
El Sitio Benefit Plans . . . . . . . . . . . . . 4.3(p)(i)
El Sitio Board Approval . . . . . . . . . . . . . 4.3(u)
El Sitio Certificate . . . . . . . . . . . . . . . . . 2.7
El Sitio Certificate of Merger . . . . . . . . . . . . 2.3
El Sitio Common Share Options . . . . . . . . . . 2.8(a)
El Sitio Common Share Plans . . . . . . . . . . . 2.8(a)
El Sitio Common Shares . . . . . . . . . . . . . . . . 2.7
El Sitio Disclosure Schedule . . . . . . . . . . . . . 4.3
El Sitio Employees . . . . . . . . . . . . . . . 4.3(p)(i)
El Sitio Exchange Ratio . . . . . . . . . . . . . 2.7(b)
El Sitio Financial Information . . . . . . . . . 4.3(i)(i)
El Sitio Interim Financial Information . . . . 4.3(i)(ii)
El Sitio Intellectual Property . . . . . . . . . . 4.3(m)
El Sitio International Benefit Plans . . . . . . 4.3(p)(i)
El Sitio Material Contracts . . . . . . . . . . . 4.3(l)
El Sitio Merger . . . . . . . . . . . . . . . . . 2.1(f)
El Sitio Merger Consideration . . . . . . . . . . 2.7(b)
El Sitio Merger Subsidiary . . . . . . . . . . . . . . 1.3
El Sitio Recommendation . . . . . . . . . . . . . 6.1(b)
El Sitio Shareholders Meeting. . . . . . . . . . 6.1(b)
El Sitio Subsidiaries . . . . . . . . . . . . 4.3(a)(iv)
El Sitio U.S. Benefit Plans . . . . . . . . . . 4.3(p)(i)
El Sitio U.S. Employees . . . . . . . . . . . . 4.3(p)(i)
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ERISA . . . . . . . . . . . . . . . . . . . . . 4.1(p)(i)
Escrow Agent . . . . . . . . . . . . . . . . . . . 9(4)(i)
Exchange Act . . . . . . . . . . . . . . . . . . 4.3(f)(I)
Exchange Agent . . . . . . . . . . . . . . . . . . . . 3.1
Exchange Fund . . . . . . . . . . . . . . . . . . . . 3.1
Expenses . . . . . . . . . . . . . . . . . . . . . 6.4(a)
Form F-4 . . . . . . . . . . . . . . . . . . . . . 6.1(a)
Government Consent . . . . . . . . . . . . . 10.13(a)(iii)
Government Entity . . . . . . . . . . . . . 10.13(a)(iv)
H Share . . . . . . . . . . . . . . . . . . . . . 2.1(b)
Hampstead Contribution . . . . . . . . . . . . . . 2.1(c)
Hampstead Subsidiaries . . . . . . . . . . . . . . 2.1(c)
Xxxxx . . . . . . . . . . . . . . . . . . . . . Preamble
Xxxxx Board Approval . . . . . . . . . . . . . 4.1(v)(ii)
HMTF I . . . . . . . . . . . . . . . . . . . . . Preamble
HMTF II . . . . . . . . . . . . . . . . . . . . Preamble
HMTF III . . . . . . . . . . . . . . . . . . . . Preamble
Holdco . . . . . . . . . . . . . . . . . . . . . Preamble
Holdco Agreement . . . . . . . . . . . . . . . . Preamble
Holdco Common Shares . . . . . . . . . . . . . . . . 1.5
Holdco Escrow Account . . . . . . . . . . . . . 9(4)(ii)
Holdco Memorandum and Articles of Association . . . . 1.1
IAMP . . . . . . . . . . . . . . . . . . . . . . Preamble
IAMP Benefit Plans . . . . . . . . . . . . . . . 4.1(p)(i)
IAMP Board Approval . . . . . . . . . . . . . .1(v)(iii)
IAMP Contribution . . . . . . . . . . . . . . . . 2.1(b)
IAMP Disclosure Schedule . . . . . . . . . . . . . . . 4.1
IAMP Employees . . . . . . . . . . . . . . . . . 4.1(p)(i)
IAMP Escrow Account . . . . . . . . . . . . . . . 9(4)(i)
IAMP Financial Information . . . . . . . . . . . 4.1(i)(i)
IAMP Intellectual Property Licenses . . . . . . . 4.1(m)
IAMP Interim Financial Information . . . . . . 4.1(i)(ii)
IAMP International Benefit Plans . . . . . . . 4.1(p)(i)
IAMP Material Contracts . . . . . . . . . . . . . 4.1(l)
IAMP 1999 Balance Sheet . . . . . . . . . . . . 4.1(i)(i)
IAMP Subsidiaries . . . . . . . . . . . . . . . . 2.1(b)
IAMP U.S. Benefit Plans . . . . . . . . . . . . 4.1(p)(i)
IAMP U.S. Employees . . . . . . . . . . . . . . 4.1(p)(i)
Indebtedness . . . . . . . . . . . . . . . . . 10.13(a)(v)
Indemnified Party . . . . . . . . . . . . . . . . . 9(e)
Indemnifying Party . . . . . . . . . . . . . . . . . 9(e)
Intellectual Property . . . . . . . . . . . . 4.1(m)(ii)
Imagen Contribution . . . . . . . . . . . . . . . 2.1(a)
Legal Proceedings . . . . . . . . . . . . . . . . 4.1(j)
Liens . . . . . . . . . . . . . . . . . . . . 4.1(a)(iv)
Material . . . . . . . . . . . . . . . . . . 10.13(a)(v)
Material Adverse Effect . . . . . . . . . . 10.13(a)(vi)
Media Business . . . . . . . . . . . . . . . . . Preamble
Media Companies . . . . . . . . . . . . . . . . Preamble
Nasdaq . . . . . . . . . . . . . . . . . . . . . . 3.5(b)
Newhaven . . . . . . . . . . . . . . . . . . . . Preamble
Newhaven 1999 Balance Sheet . . . . . . . . . . 4.2(i)(i)
Newhaven Benefit Plans . . . . . . . . . . . . . 4.2(p)(i)
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Newhaven Board Approval . . . . . . . . . . . . 4.1(v)(i)
Newhaven Contribution . . . . . . . . . . . . . . 2.1(e)
Newhaven Disclosure Schedule . . . . . . . . . . . . . 4.2
Newhaven Employees . . . . . . . . . . . . . . . 4.2(p)(i)
Newhaven Financial Information . . . . . . . . 4.2(i)(iv)
Newhaven Intellectual Property . . . . . . . . . . 4.2(n)
Newhaven Intellectual Property Licenses . . . . . 4.2(n)
Newhaven Interim Financial Information . . . . 4.2(i)(ii)
Newhaven International Benefit Plans . . . . . . 4.2(p)(i)
Newhaven Material Contracts . . . . . . . . . . 4.2(l)(i)
Newhaven Subsidiaries . . . . . . . . . . . . . . 2.1(e)
Newhaven U.S. Benefit Plans . . . . . . . . . . 4.2(p)(i)
Newhaven U.S. Employees . . . . . . . . . . . . 4.2(p)(i)
Non-Governmental Approval . . . . . . . . . . . . 4.1(f)
Non-Media Affiliates . . . . . . . . . . . . . . . . . 5.4
Notice Period . . . . . . . . . . . . . . . . . . . 9(e)
Permits . . . . . . . . . . . . . . . . . 10.13(a)(vii)
Permitted Liens . . . . . . . . . . . . . . . . . 4.1(g)
Person . . . . . . . . . . . . . . . . . . 10.13(a)(viii)
Proxy Statement/Prospectus . . . . . . . . . . . . 6.1(a)
PTVI . . . . . . . . . . . . . . . . . . . . . . 4.2(h)(i)
Rainbow . . . . . . . . . . . . . . . . . . . . . 2.1(d)
Rainbow Financial Information . . . . . . . . 4.2(i)(iii)
Registration Rights Agreement . . . . . . . . . Preamble
Required Consents . . . . . . . . . . . . . . . . 7.1(b)
Representatives . . . . . . . . . . . . . . . . . 5.1(a)
Securities Act . . . . . . . . . . . . . . . . 4.1(b)(iii)
SEC . . . . . . . . . . . . . . . . . . . . . . . 2.8(b)
Securities Act . . . . . . . . . . . . . . . . . . 4.1(b)
Share . . . . . . . . . . . . . . . . . . . . . 10.13(b)
share capital . . . . . . . . . . . . . . . . . 10.13(b)
Subsidiaries . . . . . . . . . . . . . . . . . . Preamble
Subsidiary . . . . . . . . . . . . . . . . . 10.13(a)(ix)
Superior Proposal . . . . . . . . . . . . . . . . . 6.2(e)
Tax . . . . . . . . . . . . . . . . . . . . . . 4.1(g)(vi)
Tax Return . . . . . . . . . . . . . . . . . . 4.1(g)(vi)
Threshold . . . . . . . . . . . . . . . . . . . . . 9(b)(i)
Transactions . . . . . . . . . . . . . . . . . . . 2.1(f)
Transfer Taxes . . . . . . . . . . . . . . . . . . 6.4(a)
U.S. GAAP . . . . . . . . . . . . . . . . . . . . 4.1(i)(i)
Violation . . . . . . . . . . . . . . . . . . . . . 4.1(e)
Victoria Springs . . . . . . . . . . . . . . . . . 2.1(e)
Voting Agreement . . . . . . . . . . . . . . . . Preamble
Voting Debt . . . . . . . . . . . . . . . . . . 4.1(b)(ii)
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
NEW SITE INC.
By: /s/ Xxxxx Xxxxxxx
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-----------------------
Name: Xxxxx Xxxxxxx
Title: Director
NEWHAVEN OVERSEAS CORP.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxx
Title: Attorney In Fact
HICKS, MUSE, XXXX & XXXXX LATIN AMERICA
FUND, L.P.
By: /s/ Xxxx X. Xxxxxx
-----------------------
Name: Xxxx X. Xxxxxx
Title: Principal
HICKS, MUSE, XXXX & XXXXX LATIN AMERICA PRIVATE
FUND, L.P.
By: /s/ Xxxx X. Xxxxxx
-----------------------
Name: Xxxx X. Xxxxxx
Title: Principal
HMLA 1-SBS COINVESTORS, L.P.
By: /s/ Xxxx X. Xxxxxx
-----------------------
Name: Xxxx X. Xxxxxx
Title: Principal
IBERO-AMERICAN MEDIA PARTNERS II LTD.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------
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Name: Xxxxxx X. Xxxxxx
Title: Attorney In Fact
By: /s/ Xxxx X. Xxxxxx
-----------------------
Name: Xxxx X. Xxxxxx
Title: Attorney In Fact
EL SITIO, INC.
By: /s/ Xxxxxxx Vivo
------------------------
Name: Xxxxxxx Vivo
Title: Chairman of the Board
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Exhibit A
AGREEMENT
by and among
HAMPSTEAD MANAGEMENT COMPANY LTD.,
HICKS, MUSE, XXXX & XXXXX LATIN AMERICA FUND, X.X.
XXXXX, MUSE, XXXX & XXXXX LATIN AMERICA PRIVATE FUND, L.P.
HMLA 1-SBS COINVESTORS, L.P.
CERTAIN NEW SITE INC. STOCKHOLDERS
and
NEW SITE INC.
Dated as of [______]
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AGREEMENT dated as of [________] (this "Agreement") by and among
Hampstead Management Company Ltd., a corporation organized under the laws
of the British Virgin Islands ("Hampstead"), Hicks, Muse, Xxxx & Xxxxx
Latin America Fund, L.P., a Delaware limited partnership ("HM"), Hicks,
Muse, Xxxx & Xxxxx Latin America Private Fund, L.P., a Delaware limited
partnership ("HMPF"), HMLA 1-SBS Coinvestors, L.P., a Delaware limited
partnership ("HMC", and together with HM and HMPF, "Xxxxx Muse"), certain
shareholders of New Site Inc. listed on Schedule A hereto (for purposes
of Section 2.1, 2.2., 3.1, 4.3 and Article V) (the "Founders"), Xxxxxx
Xxxxxxx Xxxxxxxx (for purposes of Sections 3.1 and 4.3 and Article V) and
New Site Inc. (the "Company").
WHEREAS, certain of the parties hereto and certain other parties
have entered into a Combination Agreement, dated as of October 30, 2000
(the "Combination Agreement") relating to a transaction involving the
Company, Newhaven Overseas Corp. and Xxxxx Muse and certain related
matters;
WHEREAS, the Holders (as defined herein), the Founders and the
Company desire to set forth certain terms and conditions governing their
relationship; and
WHEREAS, it is a condition to the obligations of the Holders and the
Company to consummate the transactions contemplated by the Combination
Agreement that this Agreement be executed and delivered by the parties
hereto.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 As used in this Agreement, the following terms shall
have the respective meanings set forth below:
"Affiliate" shall have the meaning ascribed thereto in Rule 12b-2
promulgated under the U.S. Securities Exchange Act of 1934, as amended,
and as in effect on the date hereof.
"Articles of Association" shall mean the Amended and Restated
Articles of Association of the Company, as in effect as of the Closing.
"Beneficial Owner" shall mean, with respect to any security, a
Person who Beneficially Owns such security, and "Beneficial Ownership"
shall have a correlative meaning.
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"Beneficially Own" shall mean, with respect to any security, having
or sharing the power to direct or control the voting or disposition of
such security.
"CEC" shall mean Xxxxxx Xxxxxxx Xxxxxxxx and the members of his
immediate family and their lineal descendants, and trusts or similar
entities established for the benefit of such Persons, who or which have
become party hereto.
"Xxxxxxxx Family" shall mean Xxxxxxx Xxxxxxxx or Xxxxxxx Xxxxxxxx and
the members of their immediate families and their lineal descendants, and
trusts or other entities established primarily for the benefit of any of
such Persons and charities, and any entities controlled directly or
indirectly by such Persons, who or which have become party hereto, other
than CEC, unless he agrees in writing to be bound hereby to the same
extent as any other Hampstead Holder.
"Company Common Shares" shall mean the common shares, par value
U.S.$0.01 per share, of the Company.
"Corporate Affiliate" shall mean, with respect to any Person, any
other Person (other than a natural person) that is under common control
with, or controlled by, the first Person, for so long as such first
Person remains in such relationship. Any Corporate Affiliate of any
member or members of the Xxxxxxxx Family shall be deemed to be a
Corporate Affiliate of each member of the Xxxxxxxx Family.
"15% Event" shall mean, with respect to any Holder, any time at which the
aggregate Ownership Percentage of such Holder and its Corporate
Affiliates is less than 15% and any time thereafter (regardless of
whether such Ownership Percentage subsequently is returned to or above
such level and regardless of the cause of such event).
"5% Event" shall mean, with respect to any Holder, any time at which
the aggregate Ownership Percentage of such Holder and its Corporate
Affiliates is less than 5% and any time thereafter (regardless of whether
such Ownership Percentage subsequently is returned to or above such level
and regardless of the cause of such event).
"Hampstead Holder" shall mean, as of any date, Hampstead and any
Corporate Affiliate of Hampstead that owns Company Common Shares on that
date and any member of the Xxxxxxxx Family or Corporate Affiliate of any
member of the Xxxxxxxx Family who owns such shares and has agreed to be
bound by the terms hereof.
"Xxxxx Holder" shall mean, as of any date, any of the entities
referred to herein collectively as Xxxxx Muse and any Corporate Affiliate
of any of such entities that owns Company Common Shares on that date and
has agreed to be bound by the terms hereof.
"Holders" shall mean, as applicable, the Hampstead Holders and/or the
Xxxxx Holders.
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"Marketable Securities" shall mean any securities that are traded on
a major internationally recognized exchange, the average daily volume
over the prior 20 trading days of which securities is at least equal to
the average daily volume of the Company Common Shares over the same
period.
"Memorandum of Association" shall mean the Amended and Restated
Memorandum of Association of the Company, as in effect as of the Closing.
"Ownership Percentage" shall mean, with respect to any Person, the
percentage of Company Common Shares then outstanding of which such Person
is the Beneficial Owner, reflecting, for purposes of calculating such
percentage, (a) any indirect interests in Company Common Shares
(including through a direct or indirect holding company), and (b) any
securities held by such Person then exercisable for or convertible into a
direct or indirect beneficial interest in Company Common Shares, provided
that no two Persons shall be deemed to be the Beneficial Owner of the
same share or shares of Company Common Shares (or any other security
relevant in such calculation).
"Person" shall mean any individual, partnership, firm, corporation,
association, joint venture, trust or other entity, or any government or
political subdivision or agency, department or instrumentality thereof.
"Subsidiaries" shall mean all the corporations or similar entities of
which the Company owns, directly or indirectly, the capital stock
representing 50% or more of the voting power or equity interest.
"Transfer" shall mean any sale, assignment, or other outright
transfer of Beneficial Ownership of any securities (including through a
direct or indirect holding company) and any pledge or hypothecation
(other than a pledge or hypothecation to or financing arrangement through
a financial or investment banking institution for bona fide indebtedness
pursuant to which the pledgee agrees to be subject to the terms of this
Agreement to the same extent as the transferee), hypothecation or similar
deposit, including, without limitation, a transaction the result of which
is that entities not previously controlling such Person have acquired
voting control of such Person, and "Transferred" and "Transferee" shall
have correlative meanings.
In addition, capitalized terms used herein and not defined shall
have the meanings assigned to them in the Combination Agreement, and the
following terms are defined elsewhere in the Agreement:
Term Section
"Agreement" Preamble
"Board" 2.1
"Bring-Along Notice" 4.2
"Bring-Along Right" 4.2
"Bring-Along Shareholders" 4.2
"Bring-Along Transaction" 4.2
"Combination Agreement" Preamble
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"Company" Preamble
"Company Sale" 4.2
"Election Notice" 4.1
"Eligible Bring-Along Transaction" 4.1
"Exercising Holder" 4.1
"Extraordinary Transaction" 4.1
"15% Company Transferee" 4.4
"5% Shareholder Transferee" 4.4
"5% Company Transferee" 4.4
"Founders" Preamble
"Hampstead" Preamble
"Xxxxx Muse" Preamble
"HM" Preamble
"HMC" Preamble
"HMPF" Preamble
"Offer Notice" 4.1
"Offered Holder" 4.1
"Offering Holder" 4.1
"Sale Process" 4.2
"Third Party Acquiror" 4.1
ARTICLE 2
Memorandum and Articles of Association; Advisory Fees
Section 2.1 Memorandum and Articles of Association. Other than
pursuant to the Combination Agreement, the Company shall not propose, and
the board of directors of the Company (the "Board") shall not approve or
recommend, any amendment of the Memorandum of Association or Articles of
Association of the Company which materially adversely affects the rights
of a Holder or the Founders under this Agreement, without the prior
written consent of the affected Persons.
Section 2.2 Advisory Fees. Through the third anniversary of the
Effective Time (as defined in the Combination Agreement) assuming such
Holder has not experienced a 5% Event, the Xxxxx Holders and the
Hampstead Holders shall each be entitled to receive an annual advisory
fee in the amount of U.S.$150,000 (in the case of the Xxxxx Holders) and
U.S.$150,000 (in the case of the Hampstead Holders), payable on a
quarterly basis. Through the earlier of the third anniversary of the
Closing and the equivalent of a 5% Event with respect to the Founders
collectively, the Founders, collectively, shall be entitled to receive an
annual advisory fee in the amount of U.S.$50,000 payable on a quarterly
basis. Such advisory fees shall not reduce the directors fees and
reimbursements that may otherwise be payable to a director designated by
such Persons pursuant to the Company's policies. The parties agree that
the Company shall reimburse directors for all reasonable expenses
incurred by them in connection with their service as such. As soon as
practicable following the Effective Time, the Company shall use its
reasonable best efforts to cause the articles of association of El Sitio,
Inc. to be amended to provide for the deletion of article 75 thereof and
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the termination of the obligation of El Sitio, Inc. to pay monitoring
fees pursuant thereto.
ARTICLE 3
Competitive Activities; Information
Section 3.1 Competitive Activities. Neither any provision of this
Agreement, nor the ownership of Company Common Shares, shall (a) restrict
the Founders, CEC, the Hampstead Holders, any member of the Xxxxxxxx
Family or Xxxxx Holders or any of their respective Affiliates or other
entities in which either owns a substantial interest from engaging in or
owning an interest in or serving as an officer, director, employee,
advisor or consultant of any business which competes with the Company or
any of its Subsidiaries, now or in the future or (b) restrict the Company
or any of its Subsidiaries from engaging in or owning an interest in any
business which competes with any of the Founders, CEC, the Hampstead
Holders, the Xxxxxxxx Family or Xxxxx Holders or any of their respective
Affiliates or other entities in which either owns a substantial interest.
To the fullest extent permitted by applicable law, each party hereto
hereby knowingly waives any and all claims such party may have against
any of the Founders, CEC, the Hampstead Holders, the Xxxxxxxx Family or
Xxxxx Holders or any of their respective Affiliates relating to any
breach of fiduciary duty or other conflict of interest, including under
the doctrine of corporate opportunity, of any of the Founders, CEC, the
Hampstead Holders, the Xxxxxxxx Family or Xxxxx Holders arising directly
or indirectly from such competitive activities. Notwithstanding the
foregoing, all directors shall treat as confidential and shall not use,
other than in connection with their service as a director of the Company,
or a designee of a Holder, any material nonpublic information obtained
from the Company in the course of their service as a director.
Section 3.2 Accounting, Financial Information. Subject to
applicable law, prior to a 15% Event with respect to the applicable
Holders, the Company will provide Hampstead and Xxxxx Muse such periodic
accounting and financial information as Hampstead or Xxxxx Muse may
reasonably require for its internal purposes.
Section 3.3 Corporate Records. Each of the Holders, prior to a 15%
Event with respect to such Holder, shall be entitled to full access to
the corporate records of the Company during regular business hours and
upon reasonable advance notice.
ARTICLE 4
Right of First Offer; Bring-Along; Tag-Along; Transferees Bound
Section 4.1 Right of First Offer.
(a) Except as otherwise provided herein, in the event that, at any
time following the Closing and prior to December 31, 2007, any Holder, 5%
Shareholder Transferee (as defined herein), 15% Company Transferee (as
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defined herein) or other party to this Agreement (other than the Company,
the Founders or CEC) (an "Offering Holder") proposes to Transfer (other
than (1) any Transfer to a Corporate Affiliate, which Corporate Affiliate
agrees to be bound by the terms hereof, (2) any Transfer to a Person
comprising such Holder or (3) pursuant to an agreement approved by the
Board with respect to a transaction involving all or substantially all of
the assets or capital stock of the Company (an "Extraordinary
Transaction")) any shares of Company Common Shares owned by such Offering
Holder, such Offering Holder shall first make an offer to Transfer such
shares of Company Common Shares to both Holders (or the other Holder, if
the Offering Holder is a Holder) as to which a 5% Event has not occurred
(each an "Offered Holder") in accordance with the following provisions:
(i) The Offering Holder shall deliver a written notice ("Offer Notice")
to the Offered Holders stating (1) its bona fide intention to offer such
shares, (2) the number of shares to be offered and (3) the price, which
shall be in US dollars, and terms upon which it proposes to offer such
shares.
(ii) Within 14 calendar days after giving of the Offer Notice, each of
the Offered Holders shall notify the Offering Holder in writing (the
"Election Notice", specifying whether such Offered Holder elects to
purchase, at the price and on the terms specified in the Offer Notice,
all (but not less than all) of the shares offered by the Offering Holder
(each Offered Holder affirmatively so electing an "Exercising Holder").
Notwithstanding the foregoing, in the case of a proposed Transfer by the
Hampstead Holders or the Xxxxx Holders of all of the shares of Company
Common Shares owned by such Offering Holder (which amount is at least 50%
of the number of shares of Company Common Shares owned by the Offering
Holder at Closing) (an "Eligible Bring-Along Transaction"), the Offered
Holders shall be permitted to deliver such Election Notice within 28
calendar days after the giving of the Offer Notice.
(iii) If only one of the Offered Holders elects to purchase all of the
shares specified in the Offer Notice, the Offering Holder shall promptly
Transfer such shares to such Offered Holder at the price and on the terms
specified in the Offer Notice. If both of the Offered Holders elect to
purchase all of the shares offered pursuant to the Offer Notice, then
each Exercising Holder shall purchase its pro rata portion, based on the
relative Ownership Percentage of each Exercising Holder. In the case of
an Eligible Bring-Along Transaction, if the Offered Holder elects to
purchase less than all of the shares specified in the Offer Notice, the
Company may elect to purchase all (but not less than all) such remaining
shares on the terms specified in the Offer Notice within 14 calendar days
after expiration of the Offer Notice or, if earlier, the date on which
the Offered Holder delivers the Election Notice. If the Company elects to
purchase such remaining shares, the Offering Holder shall promptly
Transfer such shares to the Company, and the Offered Holder, if
applicable, at the price and on the terms specified in the Offer Notice.
The closing of a purchase of shares by an Exercising Holder, Exercising
Holders or the Company pursuant to this subsection shall be no later than
10 business days following the last applicable expiration period pursuant
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to paragraphs (ii) and (iii), subject to receipt of any required
regulatory approvals.
(b) Notwithstanding the foregoing, if the Offered Holders (and the
Company, in the case of an Eligible Bring-Along Transaction) do not
collectively elect to purchase all of the shares specified in the Offer
Notice, the Offering Holder shall have no obligation to sell any of such
shares to the Offered Holders or the Company, and may, subject to
Sections 4.1(c) and 4.4(a) and except in the case of an Eligible
Bring-Along Transaction, during the 60 calendar day period following the
expiration of the period provided in Section 4.1(a)(ii), enter into an
agreement to Transfer all of the shares specified in the Offer Notice to
any other party (a "Third Party Acquiror"), at a price (in cash or
publicly traded securities with a fair market value at least equal to the
cash price referred to in Section 4.1(a)(i)) and upon terms no more
favorable to the Third Party Acquiror than those specified in the Offer
Notice. If the Offering Holder does not enter into an agreement for the
sale of the shares within such period, or if transactions under such
agreement are not consummated within 90 calendar days of the execution
thereof, the right provided hereunder shall be deemed to be revived and
such shares shall not be offered or Transferred unless first re-offered
to the Offered Holders in accordance with this Section.
(c) Notwithstanding any provision of this Agreement to the contrary,
prior to December 31, 2007, other than in a Bring-Along Transaction
pursuant to Section 4.2, no Holder may Transfer, in the aggregate, in
any one or series of transactions, more than 20% of the shares of
Company Common Shares held by such Holder as of the Closing to any
Persons who are not, or who do not become, as a consequence of such
Transfer, parties to this Agreement.
Section 4.2 Bring-Along Right.
(a) In the event any of the Hampstead Holders or the Xxxxx Holders
proposes an Eligible Bring-Along Transaction, and such Offering Holder is
entitled to Transfer all of its shares of Company Common Shares in a
transaction with a Third-Party Acquiror pursuant to Section 4.1(b), then
such Offering Holder shall also have the right (a "Bring-Along Right"),
upon notice no less than 10 business days to the other Holder, the
Company and any other party that has become bound by this Section 4.2 (as
and to the extent set forth in Section 4.4) (the "Bring-Along Notice"),
to require all of such parties (other than the Company and not including
the Founders or CEC) (the "Bring-Along Shareholders") to participate in
such a transaction and thus cause each Bring-Along Shareholder to dispose
of 100% of its shares of Company Common Shares in such transaction on the
terms set forth in this Section 4.2 (the "Bring-Along Transaction"), the
consideration for which shall be cash and/or Marketable Securities.
Notwithstanding the foregoing, no Holder may exercise the Bring-Along
Right prior to June 30, 2005, and notice of a Holder's exercise of the
Bring-Along Right may not be given after December 31, 2007.
(b) In the event that the Offering Holder exercises the Bring-Along
Right in accordance with the terms of Section 4.2(a) above, subject to
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Sections 4.2(c)and 4.2(d) below, each of the Bring-Along Shareholders
shall promptly Transfer all of its Company Common Shares to the
Third-Party Acquiror on the same terms and conditions that apply to the
Offering Holder in connection with the Bring-Along Transaction. Each of
the Bring-Along Shareholders and each 5% Company Transferee further
agrees to timely take such other actions as the Offering Holder may
reasonably request in connection with the approval and consummation of
such Bring-Along Transaction, including, without limitation, causing its
designees on the Board to approve such transaction, voting all of its
Company Common Shares in favor of such transaction, waiving any
dissenters' rights, and executing such agreements, powers of attorney,
voting proxies, consents or other documents and instruments as may be
necessary or desirable to consummate such Bring-Along Transaction.
(c) In the event that a Bring-Along Transaction is proposed, the
Third-Party Acquiror shall, as a condition to the consummation of the
Bring-Along Transaction, agree that, if a majority of the Board (or a
special committee thereof) so approves, the Third-Party Acquiror will
consummate an Extraordinary Transaction in which each shareholder of the
Company would be entitled to receive, in exchange for its Company Common
Shares, the same consideration per share as the Holders pursuant to the
Bring-Along Transaction. The Third-Party Acquiror shall submit an offer
to the Company with respect to such Extraordinary Transaction no later
than such time as the Offering Holder delivers the Bring-Along Notice to
the Company.
(d) In the event that the Board (or a special committee thereof) does
not approve the Extraordinary Transaction proposed by the Third-Party
Acquiror pursuant to Section 4.2(c) above within 10 calendar days after
the Offering Holder delivers the Bring-Along Notice to the Company, the
Offering Holder may, within 10 calendar days after the Board's rejection
of the offer (or failure to act within such 10 calendar day period), upon
notice to the Company, initiate a process for the possible sale of the
Company (the "Sale Process") as set forth in paragraphs (i) and (ii)
below.
(i) In the event that the Offering Holder notifies the Company of
its election to initiate the Sale Process, the Company shall use its
reasonable best efforts to solicit offers from interested parties for an
alternative Extraordinary Transaction ("Company Sale"). The Offering
Holder shall be entitled to participate with the Company in such process,
and the Offering Holder and the Company shall fully cooperate with each
other in an effort to obtain the highest price for each share of Company
Common Shares. The Company shall accept and the Board shall approve the
Company Sale offered in such Sale Process that offers the Company's
shareholders the most favorable terms, provided that (A) the price
offered for the shares of Company Common Shares in such Company Sale is
equal to or greater than the price offered by the Third Party Acquiror
and (B) an internationally recognized investment bank selected by the
Board delivers an opinion to the effect that the consideration offered to
the Company's shareholders in such Company Sale is fair from a financial
point of view. In the event the Board approves the Company Sale, each of
the Holders and each 5% Company Transferee shall vote its shares in favor
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of such transaction and otherwise use its reasonable best efforts to
cause such transaction to be consummated. In the event that the Board
does not obtain an offer that satisfies both clauses (A) and (B) of this
paragraph (i) and the Board does not approve a Company Sale within 6
months following delivery of notice to the Company of the exercise of the
Bring-Along Right, the Offering Holder may require each of the
Bring-Along Shareholders to promptly Transfer all of its Company Common
Shares to the third-party offeror (or, within 60 days of the termination
of the Sale Process, to any other party whose offer price is at least
equal to the price offered in the initial proposed Bring-Along
Transaction) in such Bring-Along Transaction on the same terms and
conditions that apply to the Offering Holder in connection with such
Bring-Along Transaction. Subject to Section 4.3, the Offering Holder
may alternatively elect to sell only its shares of Company Common Shares
as described in the preceding sentence.
(ii) In the event a Holder exercises the Bring-Along Right and
neither a Bring-Along Transaction nor a Company Sale is consummated
(other than for reasons not within such Holder's reasonable control, such
as failure of the Third-Party Acquiror to obtain financing or regulatory
obstacles to the transaction), such Holder shall not exercise the
Bring-Along Right until the earlier of 12 months after such Holder's last
exercise of the Bring-Along Right and December 31, 2007.
(iii) The Company shall provide all reasonable cooperation as may
be requested by the Offering Holder in connection with the negotiation
and consummation of a Bring-Along Transaction or Company Sale, including,
without limitation, providing financial, business and other information
to the Third-Party Acquiror, using its reasonable best efforts to obtain
a fairness opinion if required pursuant to Section 4.2(d)(i) and other
customary matters for such a transaction; provided, however, that prior
to providing any material confidential information to such Third-Party
Acquiror, the Company may request that the Third-Party Acquiror enter
into a reasonable and customary confidentiality agreement relating to the
receipt and use of such information.
Section 4.3 Tag-Along Right; Founders' and CEC's Other
Agreements.
(a) In the event that, at any time prior to December 31, 2007, any
of the Xxxxx Holders, Hampstead Holders, CEC and/or the Founders
(collectively, the "Tag-Along Holders") propose to sell in one
transaction or a series of related transactions (subject to the terms of
this Article 4) an aggregate number of Company Common Shares equal to or
greater than 45% of the outstanding Company Common Shares, which
transaction is not a Company Sale or other Board-approved transaction
relating to the entire Company or its capital stock (a "Tag-Along Sale"),
each of the other Tag-Along Holders, so long as the applicable group has
not experienced a 5% Event, may elect within 10 calendar days of receipt
of written notice thereof, to participate on a pro rata basis (based on
the percentage sold relative to the Tag-Along Holders' entire holding),
in such Tag-Along Sale, in which case the notifying Tag-Along Holder
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shall cause such other Tag-Along Holders shares to be included in the
Tag-Along Sale, on the same terms and conditions.
(b) Each of the Founders and CEC hereby agrees that, in connection
with any Company Sale or other Bring-Along Transaction that requires a
vote of the shareholders of the Company, such party will (i) vote its
shares in favor of approval of such transaction, (ii) to the full extent
permitted by applicable law, cause any designee it may have on the Board
to vote, in favor of such transaction, (iii) Transfer its shares to the
acquiror in such Company Sale or Bring-Along Transaction and (iv)
otherwise cooperate with the Xxxxx Holders and the Hampstead Holders in
causing such Company Sale or Bring-Along Transaction to be consummated.
(c) Schedule A hereto lists the identity of each of the Founders and
the number of Company Common Shares beneficially owned by such Founders
as of the date hereof. The Founders designate Xxxxxxx Vivo-Chaneton to be
their representative for purposes of providing any notices specified in
this Section 4.3, which designee may be changed by written notice signed
by Founders holding a majority of the Company Common Shares owned by the
Founders to the Company and the Holders. In the event that any Founder
that is not a natural person experiences a change in control (such that
any Person other than a Person with such equity or voting power as of the
date hereof beneficially owns or controls 45% of the equity, voting power
or the ability to elect a majority of the board of directors of such
entity), such Founder's rights and obligations under this Section 4.3
shall terminate. A Transferee of the Founders shall not be entitled to
any of the benefits of this Section 4.3 (except in the case of a Transfer
to another Founder).
Section 4.4 Transferees Bound; Confirmatory Document Required Prior
to Transfer.
(a) In the event that either the Hampstead Holders, or the Xxxxx
Holders propose to Transfer Company Common Shares such that the
Transferee would be a 5% Shareholder Transferee, or if the Company
proposes to Transfer Company Common Shares such that the Transferee would
be a 15% Company Transferee, the proposed Transferee(s) of Company Common
Shares shall first be required to execute a confirmatory document in
which it agrees in writing to be bound by the terms of Sections 4.1, 4.2,
4.4 and 5.3. The restrictions set forth in Sections 4.1, 4.2, 4.4 and 5.3
shall also apply to any subsequent Transfers of such Company Common
Shares. Any 5% Shareholder Transferee or 15% Company Transferee shall
have the obligations of an Offering Holder under Section 4.1 but not the
rights of an Offered Holder. Such 5% Shareholder Transferee or 15%
Company Transferee shall not have any rights of an Offering Holder
(including the Bring-Along Right) pursuant to Section 4.2, but shall have
the obligations of an Offered Holder pursuant to Section 4.2. In the
event that the Company proposes to Transfer Company Common Shares such
that the Transferee would be a 5% Company Transferee, the proposed
Transferee(s) of Company Common Shares shall first be required to execute
a confirmatory document in which it agrees in writing to be bound by the
terms of Sections 4.2(b) and 4.2(d)(i). The restrictions set forth in
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Sections 4.2(b) and 4.2(d)(i) shall also apply to any subsequent
Transferees of such shares of Company Common Shares. Notwithstanding this
Section 4.4 and any other provision hereof to the contrary, a 5% Company
Transferee shall only have the obligation to vote its shares in favor of
a Bring-Along Transaction pursuant to Section 4.2(b) or a Company Sale
and otherwise use its reasonable best efforts to cause such Company Sale
to be consummated pursuant to Section 4.2(d)(i).
(b) A "5% Shareholder Transferee" shall be a Person which acquires
at least 5% of the outstanding voting stock of the Company from a Holder
or from a Transferee of such Holder. A "15% Company Transferee" shall be
a Person which acquires at least 15% of the outstanding voting stock of
the Company from the Company. A "5% Company Transferee" shall be a Person
which acquires at least 5% but less than 15% of the outstanding voting
stock of the Company from the Company.
(c) The provisions of this Article shall not apply to a Transfer
between Holders or among Persons comprising one Holder, or a Transfer to
a Corporate Affiliate that in connection with such Transfer becomes a
member of the applicable Holder.
ARTICLE 5
Miscellaneous
Section 5.1 Transfers; Affiliates.
(a) A Holder may Transfer shares to another member or members of the
applicable group of Holders so long as each such Transferee agrees
unconditionally to be bound by the terms hereof to the full extent of the
obligations of the transferor hereunder. Any such agreement shall be in
writing, in a form reasonably satisfactory to the Company and the Board,
entered into prior to effecting the Transfer and provided to the other
Holder as to which a 15% Event has not occurred. For the avoidance of
doubt, this Section 5.1(a) shall not apply to any Transfer by a Founder.
(b) A Transfer in violation of this Section 5.1, or any other
provision of this Agreement, shall be null and void, and the Company
shall not give effect to such Transfer on the stock transfer books of the
Company nor recognize for any purpose the transferee as the holder of the
shares purported to be Transferred.
Section 5.2 Further Assurances. Each party shall execute and
deliver such additional instruments and other documents and shall take
such further actions as may be necessary or appropriate to effectuate,
carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby, including making application as soon as
practicable hereafter for all consents and approvals required in
connection with the transactions contemplated hereby and diligently
pursuing the receipt of such consents and approvals in good faith
thereafter.
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Section 5.3 Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby
may be brought in any U.S. federal court located in the Southern District
of the State of New York or any New York state court in the Borough of
Manhattan, and each of the parties hereby irrevocably consents to the
exclusive jurisdiction of such courts (except in the case of enforcement
of orders, in which case the jurisdiction of such courts shall be
non-exclusive) (and of the appropriate appellate courts therefrom) in any
such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 5.7 shall be deemed effective
service of process on such party.
Section 5.4 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 5.5 Public Announcements and Confidentiality. No party
hereto will make any public announcement concerning transactions
contemplated by this Agreement prior to reaching agreement with the other
parties hereto, unless required to do so by applicable law or regulation.
The parties hereto agree, except as may be required by applicable law or
regulation, not to further disclose any terms of the agreements
contemplated hereby or any of the transactions or other matters
contemplated thereby or related thereto.
Section 5.6 Expenses. Except as otherwise specifically provided in
this Agreement or the Combination Agreement, each party shall bear its
own expenses, including the fees and expenses of any attorneys,
accountants, investment bankers, brokers, finders or other intermediaries
or other Persons engaged by it, incurred in connection with this
Agreement and the transactions contemplated hereby.
Section 5.7 Notices. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement
shall be in writing and shall be deemed to have been duly given to any
party when delivered personally (by courier service or otherwise), or
when delivered by telecopy and confirmed by return telecopy, in each case
to the applicable addresses set forth below, or such other address as any
such party shall have designated by notice to the other parties:
(a) If to Hampstead or to any member of the Xxxxxxxx Family:
Hampstead Management Company Ltd.
c/o Finser Corporation
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000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to the Company or any of the Founders:
El Sitio, Inc.
Xxxxxxx Xxxxxxxxx Xxxxxx 0000
Xxxxxx Xxxxx, Xxxxxxxxx
Attention: General Counsel
Facsimile: 011-5411-4339-3700
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
(c) If to any of HM, HMPF or HMC:
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: L. Xxxxx X'Xxxx, Xx., Esq.
Facsimile: (000) 000-0000
(d) If to CEC:
c/x Xxxxxxxx Television Group
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000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Section 5.8 Termination. This Agreement may be terminated at any
time by the mutual consent of the Holders who have not experienced a 5%
Event. Unless earlier terminated, this Agreement will terminate in full
on December 31, 2007 (subject to extension in the event a Sale Process is
then in progress). Except to the extent earlier terminated as to
particular Sections or Holders, this Agreement shall terminate in full at
such time as both Holders have experienced a 5% Event.
Section 5.9 Amendment. This Agreement may be amended, modified,
superseded or cancelled only by an agreement in writing signed by the
Holders, provided that any such change shall not increase the obligations
of a non-Holder hereunder without such party's written consent. The
rights of the Founders and CEC under Section 4.3 or any other Section
hereof under which such party has rights may not be amended in any manner
adverse, as the case may be, to (x) the Founders without the prior
written consent of Founders then holding at least 50.0% of the Company
Common Shares then owned by all of the Founders or (y) CEC, without the
prior written consent of CEC.
Section 5.10 Waiver; Effect of Waiver. No provision of this
Agreement may be waived except by a written instrument signed by the
party waiving compliance. No waiver by any party hereto of any of the
requirements hereof or of any of such party's rights hereunder shall
release the other parties from full performance of their remaining
obligations stated herein. No failure to exercise or delay in exercising
on the part of any party hereto any right, power or privilege of such
party shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
by such party.
Section 5.11 Successors and Assigns. Except as set forth herein,
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Except as set forth herein, no party hereto shall be entitled to assign
its rights or delegate its obligations under this Agreement (other than
to Affiliates) without the express prior written consent of the other
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parties hereto. Any purported assignment or delegation made in violation
of this Section shall be null and void and of no effect. Notwithstanding
anything in this Agreement to the contrary, any party hereto (other than
the Founders) may assign its rights hereunder to any one or more Person
or Persons to whom all or substantially all of its respective businesses
are assigned or otherwise Transferred, so long as such Person or Persons
assumes the obligations of such party hereunder and such assignment does
not deprive any other party hereunder of the benefits of this Agreement.
Section 5.12 Specific Performance. The parties hereto each
acknowledge that, in view of the uniqueness of the parties hereto, the
parties hereto would not have an adequate remedy at law for money damages
in the event that this Agreement were not performed in accordance with
its terms, and therefore agree that the parties hereto shall be entitled
to specific enforcement of the terms hereof in addition to any other
remedy to which the parties hereto may be entitled at law or in equity.
Section 5.13 Entire Agreement. Except as otherwise provided herein,
this Agreement embodies the entire agreement and understanding between
the parties, or among any of them, relating to the subject matter hereof
and supersedes (i) all prior agreements and understandings relating to
such subject matter, whether written or oral and (ii) any contemporaneous
oral understandings related to the subject matter hereof.
Section 5.14 Interpretation; Absence of Presumption.
(a) For the purposes hereof, (i) words in the singular shall be held
to include the plural and vice versa and words of one gender shall be
held to include the other gender as the context requires; (ii) the terms
"hereof," "herein," and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a
whole (including all of the Exhibits hereto) and not to any particular
provision of this Agreement, and Article, Section, subsection, paragraph
and Exhibit references are to the Articles, Sections, subsections and
paragraphs of and Exhibits to this Agreement unless otherwise specified;
(iii) the word "including" and words of similar import when used in this
Agreement shall mean "including, without limitation," unless the context
otherwise requires or unless otherwise specified; (iv) provisions shall
apply, when appropriate, to successive events and transactions; and (v)
all references to any period of days shall be deemed to be to the
relevant number of calendar days.
(b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the
party drafting or causing any instrument to be drafted.
Section 5.15 Headings. The name assigned this Agreement and the
Section, Article and other headings contained in this Agreement are
inserted for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement.
Section 5.16 Severability. If any term of this Agreement or the
application thereof to any party or circumstance shall be held invalid or
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unenforceable to any extent, the remainder of this Agreement and the
application of such term to the other parties or circumstances shall not
be affected thereby and shall be enforced to the greatest extent
permitted by applicable law.
Section 5.17 Remedies Cumulative. Except as otherwise specifically
provided herein, all rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy
by such party.
Section 5.18 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law.
Section 5.19 Counterparts. This Agreement may be executed in any
number of counterparts, all of which shall be considered one and the same
agreement, and shall become effective when counterparts have been signed
by each party hereto and delivered to each other party. Copies of
executed counterparts transmitted by telecopy, telefax or other
electronic transmission service shall be considered original executed
counterparts for purposes of this Section, provided that receipt of
copies of such counterparts is confirmed.
IN WITNESS WHEREOF, each of the undersigned, intending to be
legally bound, has caused this Agreement to be duly executed and
delivered on the date first set forth above.
NEW SITE INC.
By:__________________________________
Name:
Title:
HAMPSTEAD MANAGEMENT COMPANY LTD.
By:_________________________________
Name:
Title:
HICKS, MUSE, XXXX & XXXXX LATIN
AMERICA FUND, L.P.
By:__________________________________
Name:
Title:
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HICKS, MUSE, XXXX & XXXXX LATIN
AMERICA
PRIVATE FUND, L.P.
By:__________________________________
Name:
Title:
HMLA 1-SBS COINVESTORS, L.P.
By:__________________________________
Name:
Title:
XXXXXX XXXXXXX XXXXXXXX
By:________________________________
Xxxxxx Xxxxxxx Xxxxxxxx
XXXXXXXXX LIMITED
By:__________________________________
Name:
Title:
XXXXXXX VIVO-CHANETON
By:__________________________________
Name:
Title:
IMPSAT FIBER NETWORKS, INC.
By:__________________________________
Name:
Title:
XXX.XXX INC.
By:__________________________________
Name:
Title:
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TOWER PLUS INTERNATIONAL
By:__________________________________
Name:
Title:
RC LIMITED
By:__________________________________
Name:
Title:
XXXXXXX XXXXXXX-XXXXXX
By:__________________________________
Name:
Title:
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SCHEDULE A
Founders
Name and Controlling
Shareholder (if any) Number of Common Shares
--------------------------- -----------------------
IMPSAT Fiber Networks, Inc. 6,141,230
Xxxxxxxxx Limited 4,607,010
RC Limited 792,360
Xxxxxxx Xxxxxxx-Xxxxxx 960,000 (Beneficial ownership)
Xxxxxxx Vivo-Chaneton 460,000 (Beneficial ownership)
XXX.xxx Inc. 4,894,176
Tower Plus International 2,309,674
[FN]
For avoidance of doubt, includes El Sitio Common Shares that are (i)
underlying share options exercisable as of the date hereof are within 60
days hereunder and (ii) underlying share options that will thereafter
become exercisable.
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EXHIBIT C
VOTING AGREEMENT, dated as of October 30, 2000 (this
"Agreement"), among IBERO-AMERICAN MEDIA PARTNERS II LTD., a Cayman
Islands company ("IAMP"), EL SITIO, INC., a British Virgin Islands
international business company ("El Sitio"), and the SHAREHOLDER NAMED ON
THE SIGNATURE PAGE HEREOF (the "Shareholder").
RECITALS
WHEREAS, pursuant to a Combination Agreement, dated as of the
date hereof (the "Combination Agreement"), among Holdco, Newhaven
Overseas Corp. ("Newhaven"), Hicks, Muse, Xxxx & Xxxxx, Inc. ("Xxxxx")
and El Sitio, the parties thereto have agreed that, among other things
and subject to certain terms and conditions, El Sitio will merge with and
into a subsidiary of Holdco (the "Merger");
WHEREAS, as of the date hereof, the Shareholder is the record
and beneficial owner of the number of El Sitio Common Shares (as defined
in the Combination Agreement) specified on the signature page hereof
(such El Sitio Common Shares, the "Existing Shares" and, together with
any shares of El Sitio Common Shares or other voting capital shares of El
Sitio acquired after the date hereof, whether upon the exercise of
warrants, options, conversion of convertible securities or otherwise, the
"Shares"); and
WHEREAS, as a condition to entering into the Combination
Agreement, the parties thereto have requested that the Shareholder agree,
and the Shareholder has agreed, to enter into this Agreement;
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained in this Agreement, the parties
hereto agree as follows:
ARTICLE I
VOTING
1.1 Agreement to Vote. The Shareholder hereby agrees during
the term of this Agreement that it shall, and shall cause the holder of
record on any applicable record date to, at any meeting (whether annual
or special and whether or not an adjourned or postponed meeting) of
shareholders of El Sitio, however called, or in connection with any
written consent of the holders of El Sitio Common Shares, (i) if a
meeting is held, appear at such meeting or otherwise cause the Shares to
be counted as present thereat for purposes of establishing a quorum, and
(ii) vote or consent (or cause to be voted or consented), in person or by
proxy, all Shares, and any other voting securities of El Sitio (whether
acquired heretofore or hereafter) that are beneficially owned or held of
record by the Shareholder or as to which the Shareholder has, directly or
indirectly, the right to vote or direct the voting, in favor of the
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approval and adoption of the Combination Agreement, the Merger and the
other transactions contemplated thereby.
1.2 Proxy. IAMP hereby agrees to grant to Mr. Roberto
Vivo-Chaneton and each other Shareholder agrees to grant to IAMP a proxy
to vote the Shares as indicated in Section 1.1 above if the Shareholder
fails for any reason to vote the Shares in accordance with Section 1.1.
The Shareholder agrees that such a proxy would be irrevocable and would
be coupled with an interest and agrees that it will take such further
action or execute such other instruments as may be necessary or desirable
to effectuate the intent of such a proxy and hereby revokes any proxy
previously granted by it with respect to the Shares.
1.3 No Inconsistent Agreements. The Shareholder hereby
covenants and agrees that, except as contemplated by this Agreement and
the Combination Agreement, the Shareholder (a) has not entered, and shall
not enter at any time while this Agreement remains in effect, into any
voting agreement or voting trust with respect to the Shares and (b) has
not granted, and shall not grant at any time while this Agreement remains
in effect, a proxy or power of attorney with respect to the Shares, in
either case, which is inconsistent with the Shareholder's obligations
pursuant to this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDER
The Shareholder hereby represents and warrants to the other
parties hereto as follows:
2.1 Authorization; Validity of Agreement; Necessary Action.
The Shareholder has full power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance
by the Shareholder of this Agreement and the consummation by it of the
transactions contemplated hereby have been duly and validly authorized by
the Shareholder and no other actions or proceedings on the part of the
Shareholder are necessary to authorize the execution and delivery by it
of this Agreement and the consummation by it of the transactions
contemplated hereby. This Agreement has been duly executed and delivered
by the Shareholder, and, assuming this Agreement constitutes a valid and
binding obligation of the other parties hereto, constitutes a valid and
binding obligation of the Shareholder, enforceable against it in
accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency or other similar laws, now
or hereafter in effect, affecting creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
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2.2 Shares. The Existing Shares are, and from the date hereof
through and on the Closing Date will be, owned beneficially and of record
by the Shareholder (subject to any dispositions of Shares permitted by
Section 4.1(a) hereof). As of the date hereof, the Existing Shares
constitute all of the El Sitio Common Shares owned of record or
beneficially by the Shareholder. The Shareholder has and will have sole
voting power, sole power of disposition, sole power to issue instructions
with respect to the matters set forth in Article I hereof, and sole power
to agree to all of the matters set forth in this Agreement, in each case
with respect to all of the Existing Shares, with no limitations,
qualifications or restrictions on such rights, subject to applicable
federal securities laws and the terms of this Agreement.
2.3 No Liens. The Existing Shares are held by the
Shareholder, or by a nominee or custodian for the exclusive benefit of
the Shareholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or
any other encumbrances whatsoever.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OTHER PARTIES
Each party hereto represents and warrants to all other
parties hereto as follows:
3.1 Power: Binding Agreement. Such party has full power and
authority to execute and deliver this Agreement and to perform all of its
obligations under this Agreement. This Agreement has been duly and
validly executed and delivered by such party and constitutes a valid and
binding agreement of such party, enforceable against it in accordance
with its terms, except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency or other similar laws, now or hereafter
in effect, affecting creditors' rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
ARTICLE IV
OTHER COVENANTS
4.1 Further Agreements of the Shareholder.
-----------------------------------------------
(a) The Shareholder hereby agrees, while this Agreement is in
effect, and except as contemplated hereby and by the Combination
Agreement, not to sell, transfer, pledge, encumber, assign or otherwise
dispose of (collectively, a "Transfer") or enforce or permit the
execution of the provisions of any redemption, share purchase or sale,
recapitalization or other similar agreement or enter into any contract,
option or other arrangement or understanding with respect to the offer
for sale, sale, transfer, pledge, encumbrance, assignment or other
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disposition of, any of its Existing Shares, any Shares acquired after the
date hereof, any securities exercisable for or convertible into El Sitio
Common Shares, any other capital shares of El Sitio or any interest in
any of the foregoing with any Person.
(b) In the event of a share dividend or distribution, or any
change in El Sitio Common Shares by reason of any share dividend or
distribution, or any change in El Sitio Common Shares by reason of any
share dividend, split-up, recapitalization, combination, exchange of
shares or the like, the term "Shares" shall be deemed to refer to and
include the Shares as well as all such share dividends and distributions
and any securities into which or for which any or all of the Shares may
be changed or exchanged or which are received in such transaction.
4.2 Acquisition Proposals. Without limitation on any of its
other obligations under this Agreement, the Shareholder hereby covenants
and agrees that neither it nor any of its Subsidiaries nor any of the
officers and directors of it or its Subsidiaries shall, and that it shall
use its reasonable best efforts to cause its and its Subsidiaries'
employees, agents and representatives (including any investment banker,
attorney or accountant retained by it or any of its Subsidiaries) not to,
directly or indirectly, (i) initiate, solicit, encourage or knowingly
facilitate any inquiries or the making of any Acquisition Proposal (as
defined in the Combination Agreement), (ii) have any discussion with or
provide any confidential information or data to any person relating to an
Acquisition Proposal, or engage in any negotiations concerning an
Acquisition Proposal, or knowingly facilitate any effort or attempt to
make or implement an Acquisition Proposal, (iii) approve, vote in favor
of, consent to or recommend, or propose publicly to approve or recommend,
any Acquisition Proposal or (iv) approve, vote in favor of, consent to or
recommend, or propose to approve or recommend, or execute or enter into,
any letter of intent, agreement in principle, merger agreement,
acquisition agreement, option agreement or other similar agreement or
propose publicly or agree to do any of the foregoing. The Shareholder
agrees that it will promptly keep the other parties hereto informed of
the status and terms of any such proposals. The Shareholder further
agrees that it will, and will cause its officers, directors and
representatives to, immediately cease and cause to be terminated any
activities, discussions or negotiations existing as of the date of this
Agreement with any parties conducted heretofore with respect to any
Acquisition Proposal and that it will use reasonable best efforts to
promptly inform its directors, officers, key employees, agents and
representatives of the obligations undertaken in this Section 4.2.
ARTICLE V
MISCELLANEOUS
5.1 Termination. This Agreement shall terminate and no party
shall have any rights or duties hereunder upon the earlier of (a) the
Effective Time or (b) termination of the Combination Agreement pursuant
to Section 8.1 thereof. Nothing in this Section 5.1 shall relieve or
otherwise limit any party of liability for breach of this Agreement. Upon
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any termination of this Agreement, this Agreement shall thereupon become
void and of no further force and effect, and there shall be no liability
in respect of this Agreement or of any transactions contemplated hereby
on the part of any party hereto or any of its directors, officers,
partners, members, shareholders, employees, agents, advisors,
representatives or affiliates; provided, however, that nothing herein
shall relieve any party from any liability for such party's breach of
this Agreement; and provided further that nothing in this Section 5.1
shall limit, restrict, impair, amend or otherwise modify the rights,
remedies, obligations or liabilities of any person under any other
contract or agreement, including, without limitation, the Combination
Agreement.
5.2 Further Assurances. From time to time, at any of the
other parties' request and without further consideration, each party
hereto shall execute and deliver such additional documents and take all
such further action as may be necessary or appropriate to consummate the
transactions contemplated by this Agreement.
5.3 Acknowledgment. Each Shareholder and El Sitio understands
and acknowledges that Newhaven, Xxxxx and IAMP are entering into the
Combination Agreement in reliance upon such Shareholder's execution and
delivery of this Agreement. Each Shareholder, Newhaven, Xxxxx and IAMP
understands and acknowledges that El Sitio is entering into the
Combination Agreement in reliance upon such Shareholder's execution and
delivery of this Agreement.
5.4 Noninterference. The Shareholder hereby agrees and
covenants that it shall not, directly or indirectly, take any action that
would make any representation or warranty contained herein untrue or
incorrect or have the effect of preventing or disabling the Shareholder
from performing its obligations under this Agreement.
5.6 Notices. Any and all notices to any party to this
Agreement will be delivered to the following addresses:
(a) If to IAMP:
Newhaven Overseas Corp.
c/o Finser Corporation
000 Xxxxxxxx Xxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Fax No.: (000) 000-0000
with a copy (solely for information purposes) to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
Fax No.: (000) 000-0000
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with a copy (solely for information purposes) to:
Hicks, Muse, Xxxx & Xxxxx, Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Xx.
Fax No.: (000) 000-0000
with a copy (solely for information purposes) to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X'Xxxx, Esq.
Fax No.: (000) 000-0000
(c) If to El Sitio:
El Sitio, Inc.
Xxxxxxx Xxxxxxxxx Xxxxxx 0000
X0000XXX Xxxxxx Xxxxx, Xxxxxxxxx
Attention: Chief Executive Officer
Fax No.: (000) 0000-0000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
or to such other address as any party shall have specified by notice in
writing to the other parties. All such notices, requests, demands and
communications shall be deemed to have been received on the date of
personal delivery or telecopy or on the third business day after the
mailing thereof.
5.7 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by any party and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
5.8 Governing Law. This Agreement shall be governed, and
construed in accordance with, the laws of the State of New York.
5.9 Submission to Jurisdiction; Waivers. Each of the parties
hereto irrevocably agrees that any legal action or proceeding with
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respect to this Agreement or for recognition and enforcement of any
judgment in respect hereof brought by any other party hereto or its
successors or assigns may be brought and determined in the U.S. federal
district court for the Southern District of New York, and each of the
parties hereto hereby irrevocably submit with regard to any such action
or proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts.
Each of the parties hereto hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any
action or proceeding with respect to this Agreement, (a) any claim that
it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to lawfully serve process,
(b) that it or its property is exempt or immune from jurisdiction of any
such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in
aid of execution of judgment, execution of judgment or otherwise), (c) to
the fullest extent permitted by applicable law, that (i) the suit, action
or proceeding in any such court is brought in an inconvenient forum, (ii)
the venue of such suit, action or proceeding is improper and (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by
such courts and (d) any right to a trial by jury.
5.10 Amendment. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
5.11 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms. It is
accordingly agreed that the parties shall be entitled to specific
performance of the terms hereof, this being in addition to any other
remedy to which they are entitled at law or in equity, including without
limitation injunctive relief.
5.12 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
5.13 Defined Terms. Capitalized terms used but not defined
herein shall be used as defined in the Combination Agreement.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers or other authorized
persons thereunto duly authorized as of the date first written above.
IBERO-AMERICAN MEDIA PARTNERS II LTD.
By: ------------------------------
Name:
Title:
By: ------------------------------
Name:
Title:
EL SITIO, INC.
By: ------------------------------
Name:
Title:
SHAREHOLDER*
By: ----------------- --------------
Name: Name:
Title: Title:
* Name of Shareholder:_________________________
Number of El Sitio Common Shares:
(i) Beneficially Owned___________
(ii) Record Ownership___________
Address of Shareholder:
------------------------------------
------------------------------------
Fax No.:_________________
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