17 Sep 2014 07:40
GRUPO CLARIN S.A.
Grupo Clarín Responds Shareholder Information Request
On 15 September 2014, Grupo Clarín S.A. (the "Company") informed the Argentine Securities Commission and the Buenos Aires Stock Exchange that it had exchanged notes with a shareholder in connection with the agenda of the Extraordinary Shareholders' Meeting to be held on 22 September 2014.
Attached as Exhibit A is a free translation of the shareholder's request, with the Company's response point by point. Attached as Exhibit B is a free translation of the three letters received from 34 South Media LLC in connection with the acquisition of the shares and signals that make up Unit No. 4 of the Plan to Conform the Company to the Audiovisual Communication Services Law, referred to under Point 5(a) of Exhibit A.
Enquiries:
In Buenos Aires:
Alfredo Marín/Agustín Medina Manson
Grupo Clarín
Tel: +5411 4309 7215
Email: investors@grupoclarin.com
In London:
Alex Money
Jasford IR
Tel: +44 20 3289 5300
Email: alexm@jasford.com
In New York:
Melanie Carpenter
I-advize Corporate Communications
Tel: +1 212 406 3692
Email: clarin@i-advize.com
EXHIBIT A
FREE TRANSLATION
Buenos Aires, 15 September 2014
To the Shareholder of
Grupo Clarín S.A.
National Social Security Administration (ANSES)
By Hand
Attn: Lic. Cristian Girard
Dear Sir,
I, Alfredo Marin, in my capacity as Person in Charge of Relations with the Market of Grupo Clarín S.A. (hereinafter, interchangeably, the "Corporation", "Grupo Clarín" or the "Company") hereby address You in response to your request for information, issued by means of a letter that was received at the headquarters of the Company on 3 September 2014.
Pursuant to Law No. 19,550 of Business Companies, we hereby respond to your request as follows:
1) Executed copy of the Minutes of the Board of Directors that calls the Extraordinary Shareholders' Meeting.
Said minutes, with due identification of the signors, was made available to the general public through the Autopista de Información Financiera ("AIF") [online electronic disclosure system used by public companies] on 15.8.2014 under ID No. 4-4242020-D.
2) Copy of the latest version of the restated Bylaws.
The Company's bylaws were made available to the general public on the AIF on 30.10.2007 under ID No. 4-85482-D. After that date, except for the amendment approved by the shareholders in connection with the spinoff of the Company at the Extraordinary Shareholders' Meeting of 30 June 2014, there were no amendments to the bylaws. Therefore, the copy attached in response to Your requests dated 18 April 2013, 18 February 2014 and 5 April 2014, corresponds to the latest version of the bylaws. In addition, we note that the amendment approved in connection with the spinoff of the Company has not yet been cast onto a public deed because the conditions precedent to which the spinoff, and the resulting amendment to the bylaws, are subject have not yet been fulfilled.
3) Current Composition of the Board of Directors (directors and alternate directors) with the dates on which they were appointed, and inform on the term of their office.
According to the information that was made available to the general public on the AIF (ID No. 4-225212-D and 4-224398 on 7.05.2014 and 30.04.2014, respectively), the current composition of the Board of Directors of the Company is the following:
Chairman: Jorge Carlos Rendo; Vice-Chairman: Alejandro Alberto Urricelqui; Directors: Pablo César Casey, Saturnino Lorenzo Herrero Mitjans, Héctor Mario Aranda, Ignacio Rolando Driollet, Lorenzo Calcagno, Alberto César Menzani, Luis María Blaquier and Jorge I. Oría(*) Alternate Directors: Martín Gonzalo Etchevers, Hernán Pablo Verdaguer, Juan Ignacio Giglio, Francisco Iván Acevedo, Sebastián Bardengo, Horacio Eduardo Quiros, Carlos Rebay, Luis Germán Fernández, Sebastián Salaber and Francisco Saravia.
We hereby state for the record that on 7 May 2014, the Board of Directors of the Company approved the granting or a license to Director Dr. Jorge I Oría, for personal reasons subsequent to the date of the Annual Ordinary Shareholders' Meeting, as from 7 May 2014 up to and including 30 November 2014. In his place, Mr. Sebastián Salaber assumed the position of Director. This information was made available to the general public on the AIF (ID 4-225211-D).
All of the abovementioned directors and alternate directors were appointed at the Annual General Ordinary Shareholders' Meeting and Special Meeting by Classes of Shares held on 29 April 2014 and their terms of office last one fiscal year.
4) Detail of the shareholder composition as of the date hereof, indicating if there have been any transfers.
As reflected in the Annual Financial Statements of the Company, its equity capital is of Ps. 287,418,584 represented by 75,980,304 common, nominative, non-endorsable Class "A" shares, with a par value of Ps. 1 and entitled to 5 votes per share; 186,281,411 common, book-entry Class "B" shares, with a par value of Ps. 1 and entitled to one vote per share; and 25,156,869 common, nominative, non-endorsable Class "C" shares, with a par value of Ps. 1 and entitled to one vote per share.
The Company keeps a record of the Class A and Class C Shares. According to that registry, GC Dominio S.A. holds 75,980,304 common, nominative, non-endorsable Class "A" shares, with a par value of Ps. 1 and entitled to 5 votes per share, representing 26.4% of the equity capital and 64.2% of the votes of the Company and GS Unidos, LLC holds 25,156,869 common, nominative, non-endorsable Class "C" shares, with a par value of Ps. 1 and entitled to one vote per share, representing 8.75% of the equity capital and 4.3% of the votes of the Company.
The Company has not registered to date any transfers of Class A and/or Class C shares.
The registry of Class B shares is kept by Caja de Valores S.A.
5) With respect to the following points of the agenda, we request:
a. (Point 2) Information and Confirmation of the actions of the Board of Directors of the Company with respect to the acceptance of the firm and irrevocable offer to purchase the shares and signals that make up Unit No. 4 of the Plan to Conform the Company [to the Audiovisual Communication Services Law] that was received from 34 South Media LLC. Pronouncement with respect to the decision under point 5 of the Agenda of the General Extraordinary Shareholders' Meeting held on 30 June 2014 and reconvened on 11 July 2014 after its adjournment."
Copy of the firm and irrevocable offer received from 34 South Media LLC, discussed at the Meeting of the Board of Directors of 27 June 2014, for the purchase of the shares and signals that make up Unit No. 4 of the Plan to Conform the Company [to the Audiovisual Communication Services Law], that will be submitted to the consideration of the shareholders;
Copy of the note received by the company from 34 South Media LLC where that company expresses its concern with respect to the implementation of the alternative offer-which provides for the creation of a trust-, discussed at the Meeting of the Board of Directors of 15 August 2014; as well as any other supporting documents that may be relevant to this point.
With respect to the firm and irrevocable offer received on 26 June 2014 from 34 South Media LLC, even though its terms and conditions were considered by the Board of Directors of the Company, reproduced in the minutes of the meeting of the Board of Directors of 27 June 2014 that is available to the public on the AIF (ID 4-234074-D) and at the Extraordinary Shareholders' Meeting held on 30 June 2014 that is also available to the general public on the AIF (ID 4-235275-D), we attach a copy of the offer that was received.
Finally, we also attach copies of the letters of 11 July 2014 and 15 August 2014, the terms of which were considered at the Extraordinary Shareholders' Meeting of 30 June 2014, after the meeting was reconvened on 11 July 2014, and at the Meeting of the Board of Directors of 15 August 2014, respectively.
We note for the record that in this response, together with the request, shall be made available to the general public on AIF and on the Buenos Aires Stock Exchange.
We are at your disposal to make any clarifications that you may deem necessary.
Sincerely,
EXHIBIT B
FREE TRANSLATION
Buenos Aires, 26 June 2014
GRUPO CLARÍN S.A.
GC MINOR S.A.
PIEDRAS 1743
BUENOS AIRES, ARGENTINA
By Hand
Re: Firm and Irrevocable Offer to Purchase the Shares and Signals that make up Unit No. 4 of the Plan to Conform Grupo Clarín S.A. to the Audiovisual Communication Services Law approved pursuant to Resolution 193/AFSCA/2014.
Dear Sirs,
In my capacity as attorney-in-fact (manager) of 34 SOUTH MEDIA LLC, I hereby contact You in connection with the implementation of the plan to conform [to the Audiovisual Communication Services Law] filed by Grupo Clarín, Cablevisión S.A., Arte Radiotelevisivo Argentino S.A. and Radio Mitre S.A. with the regulatory authorities of the Republic of Argentina, that was declared formally admissible by AFSCA pursuant to Resolution 193/AFSCA/2014 dated 18 February 2014 (the "Plan").
Within that framework, we hereby express to You our interest in acquiring the businesses of television signal and sports [broadcasting] rights grouped under the so-called Unit No. 4 of said Plan, subject to the terms that we shall lay out in this offer.
34 SOUTH MEDIA, LLC, domiciled in 430 Park Ave. 5th floor, New York (10002), USA, will be the investment vehicle through which Mr. Alexander Silverman will carry out the transaction proposed herein, in his capacity as owner of 100% of the capital stock and votes (membership interests) of that company (hereinafter, 34 SOUTH MEDIA, LLC and Alexander Silverman, collectively, the "Offerors").
Mr. Silverman is a citizen of the United States of America and has an extensive experience as an investor in media and entertainment companies. The company is organised and registered in the state of Delaware, USA, and is duly registered in the Republic of Argentina pursuant to applicable laws and the Law of Business Companies. Its legal representative is Mr. Francisco Aguiar. The members in charge of the management of the company are Alexander Silverman and Miguel El Haiek, interchangeably, and in addition, the company will receive the advice of Mr. Raúl Jacinto Naya.
1. The Transaction:
As a consequence of the above, and for the reasons explained above, we hereby communicate formally our firm and irrevocable offer to Grupo Clarín S.A. and GC Minor S.A. (the "Assignors") for the acquisition of all, and not less than all, the shares issued by Inversora de Eventos S.A. ("IESA") representing 100% of the capital stock and votes of that company, together with all the political and economic rights inherent to such shares, subject to the terms and conditions that are detailed under Exhibit "A", attached hereto; in the understanding and assuming that as of Closing (as defined below) IESA will be the owner of the relevant assets set forth in Exhibit II to Exhibit "A", attached (the "Offer"), which include, among others, the Signals (as defined below) and 24.999613% of the capital stock and votes of Canal Rural Satelital S.A. Terms capitalised in this Offer have the meaning assigned to them under Exhibit "A".
The aggregate prize offered for Unit No. 4 is of USD 31,500,000 (United States Dollars thirty one million five hundred thousand), which at the average exchange rate, as of the date of this Offer, between the official exchange rate and the implicit exchange rate resulting from the purchase of sovereign bonds abroad and their subsequent sale in the Argentine market, equal to Ps. 293,895,000 (two hundred ninety three million eight hundred ninety five thousand pesos), which shall be payable in United States Dollars at the foreign account that the Assignors shall duly indicate.
According to the valuations that we have made, we allocate the aggregate amount of the price offered under this Offer as follows:
(i) USD 21,800,000 (United States dollars twenty one million eight hundred thousand), equal to Ps. 203,394,000 (two hundred three million three hundred ninety four thousand pesos) for the shares representing 100% of the capital stock and votes of IESA,
(ii) USD 9,200,000 (United States dollars nine million two hundred thousand), equal to Ps. 85,836,000 (eighty five million eight hundred thirty six thousand pesos) for the Signals, a condition that shall be reflected in the Signal Purchase Option set forth in Exhibit II to Exhibit "A", attached, and
(iii) USD 500,000 (United States dollars five hundred thousand), equal to Ps. 4,665,000 (four million six hundred sixty five pesos) for the shares representing 24.999613% of the capital stock and votes of Canal Rural Satelital S.A., a condition that shall be reflected in the Signal Purchase Option set forth in Exhibit II to Exhibit "A", attached
All of which shall be payable under the conditions set forth in Exhibit "A" hereto.
This Offer is made with the knowledge that, prior to its eventual acceptance by the Assignors, the Shareholders of Grupo Clarín S.A. must consider and approve the terms and conditions of this Offer as part of the Plan at a Shareholders' Meeting.
2. Conditions Precedent to which the transaction is subject:
The final closing of the transaction included in this Offer-in the event that it is accepted-, including the payment of the Purchase Price and the transfer of the shares of IESA to the Offerors, is subject (as conditions precedent) to the fulfilment, no later than 31 December 2014, of all of the following conditions (each condition individually and all of them collectively, the "Conditions Precedent"):
(i) that-if necessary-AFSCA and the other oversight agencies that may correspond, approve the transfer of the shares and other assets that are the object of this Offer, including the approval of the admissibility conditions of the Offerors;
(ii) that at Closing there be no laws and/or administrative or judicial orders restraining, prohibiting, amending, altering, conditioning or rendering illegal the transfer of the shares and other assets that are the object of this Offer and the closing of the transaction in the terms set forth herein; and
(iii) that as of the Closing date the right of IESA to acquire from Arte Radiotelevisivo Argentino S.A. ("ARTEAR") the television signals El Trece Satelital, Quiero Música en mi Idioma, ("Quiero"), Magazine and Volver (the "Signals"), and the shares representing 24.999613% of the capital stock and votes of Canal Rural S.A. property of ARTEAR, in the terms set forth under the purchase options attached in copy as part of Annex II to Exhibit A to this Offer at the price conditions set forth under points (ii) and (iii) of point 1, above, remain in effect (this condition precedent shall be interpreted in the exclusive benefit and in favour of the Offerors, who shall be the only ones who may waive it as they may deem convenient).
3. Duration of the Offer. Pre-acceptance:
This Offer shall remain effective until 30 June 2014. If on or before that date the Assignors shall communicate to us that the Offer has been declared admissible by the Board of Directors of Grupo Clarín S.A. and pre-accepted-under the terms of Exhibit A, attached hereto-for the purpose of its subsequent consideration at the meeting of the shareholders of Grupo Clarín S.A. that will consider and decide on the manner, form and conditions of implementation of the Plan (the "Pre-Acceptance"), this Offer shall be automatically extended for an additional term that shall expire on 31 December 2014.
During the period between the Pre-Acceptance of this Offer and the Closing, IESA shall continue to conduct all of its operations in the way such operations have been conducted as of this date, in the ordinary course of business and consistent with past practices; with the exception of such acts that are currently pending execution that its subsidiaries may have to perform in furtherance of the implementation of the merger of Carburando S.A.P.I.C.A.F.I., Mundo Show TV S.A. y TC Marketing S.A., into Mundo Show S.A. (as surviving company), pursuant to Sections 82 to 87 of the Law of Business Companies, Sections 165 and subsequent sections of General Resolution No. 7/05 of the Superintendency of Corporations (Inspección General de Justicia), Sections 77 and 78 of Law No. 20,628, and Sections 105 to 109 of its implementing decree.
4. Right of First Refusal if Offerors match any third party offers received by Assignors.
In the event of Pre-Acceptance, during the period between Pre-Acceptance and the date of the shareholders' meeting of Grupo Clarín at which the shareholders will consider the Offer's eventual final acceptance, the Offerors shall have the right to match the best offer that Grupo Clarín and GC Minor S.A. may receive for Unit No. 4 of the Plan, and to acquire such Unit with preference over any third party.
To that effect, Assignors shall notify us of any offer that they may receive during that period with respect to Unit No. 4, so that the Offerors may state whether or not they shall exercise the abovementioned right of first refusal within 5 (five) business days of such notice.
5. Acceptance of the Offer.
Also, in the event that at the shareholders of Grupo Clarín S.A., at the abovementioned shareholders' meeting, and the Board of Directors of GC Minor S.A., decide to accept the Offer definitively, and were to communicate such acceptance in writing to us (the "Acceptance"), this Offer shall be binding on both the Assignors and the Offerors, and its execution shall only be subject to the occurrence of the Conditions Precedent. At Closing, both Parties shall execute all the final instruments that may be necessary to consummate the Purchase of the Shares of IESA. Said final documents shall reflect the terms and conditions set forth in this Offer, as well as such other terms and conditions that are standard and usual for this type of transactions-which shall be satisfactory to the parties-without that affecting in any way the validity and binding nature of this Offer, once accepted.
In the event that the Assignors shall not accept the Offer in due time and form, the Offer shall be automatically cancelled, extinguished and rendered without effect, and neither party shall remain bound by any obligation whatsoever.
The notices related to this Offer shall be sent in the form specified in Exhibit "A".
This Offer shall be interpreted and executed according to the laws of the Republic of Argentina, and the parties hereby submit to the exclusive jurisdiction of the national ordinary commercial courts of the Autonomous City of Buenos Aires, and hereby waive any other forum or jurisdiction that may correspond, including the federal courts.
Finally, we state that we shall maintain absolute confidentiality with respect to the information that you may furnish to us in connection with this Offer, pursuant to the confidentiality agreements executed between us on 10 April 2014.
Sincerely,
34 South Media LLC
/s/ Miguel El Haiek
Attorney-in-fact
EXHIBIT "A"
I. PURCHASE OF THE SHARES OF IESA.
Assignors: Grupo Clarín S.A. and GC Minor S.A.
Assignees: 34 South Media, LLC.
Purchase of the Shares of IESA: The Assignors shall assign, sell and transfer definitively to the Assignees the Shares of IESA, on the Closing date.
Shares of IESA: 5,105 common, nominative, non-endorsable Class "A" shares, each with a par value of Ps. 1 per share and entitled to one vote per share, owned by Grupo Clarín; 403 common, nominative, non-endorsable Class "A" shares, each with a par value of Ps. 1 and entitled to one vote per share, owned by GC Minor S.A.; and 7,349 common, nominative, non-endorsable Class "B" shares, each with a par value of Ps. 1 and entitled to 5 votes per share, owned by Grupo Clarín S.A. -which add up to an aggregate 12,857 shares-representing collectively 100% of the capital stock and votes of Inversora de Eventos S.A., together with the political and economic rights inherent to such shares.
Closing: The tenth business day counted as from the fulfilment (or waiver thereof by whom it may correspond) of the last of all Conditions Precedent.
Purchase Price of the Shares of IESA: USD 21,800,000 (United States Dollars twenty one million eight hundred thousand) (the "Purchase Price").
The Purchase Price shall be paid by the Assignees as follows: (i) USD 6,540,000 (United States Dollars six million five hundred forty thousand) on the Closing date, in United States dollars, in freely available funds in the bank account of a bank in the City of New York, United States of America, that the Assignors shall indicate to the Assignees at least five (5) business days prior to the Closing Date, and (ii) the balance of USD 15,260,000 (United States Dollars fifteen million two hundred sixty thousand) shall be paid in 3 equal and consecutive annual instalments of USD 5,086,666.66 (United States Dollars five million eighty six thousand six hundred sixty six and 66/100) each (plus interest on outstanding principal), with the first instalment maturing on the first anniversary of the Closing date. [The three instalments] shall be guaranteed with 3 promissory notes issued by the Assignees, to be delivered at the Closing to the Assignors, each for USD 5,086,666.66 (United States Dollars five million eighty six thousand six hundred sixty six and 66/100).
Once full payment of the Purchase Price has been credited, the Purchase Price shall be deemed fully cancelled, unless the TSC Purchase Price Adjustment and/or the TRISA Purchase Price Adjustment shall occur, in which chase the Purchase Price shall only be deemed fully cancelled once the TSC Purchase Price Adjustment and/or the TRISA Purchase Price Adjustment, as applicable, have been paid.
Interest: A nominal annual interest rate of 5% (five per cent) shall apply on the outstanding principal of the Purchase Price.
Guarantee: First degree pledge over 100% of the Shares of IESA, and over 100% of the capital stock (membership interests) of 34 South Media, LLC, until payment of full of the Purchase Price to Assignors.
Covenants: The following covenants shall apply until payment on full of the Purchase Price:
Dividends received by Assignees, after payment of taxes, shall be applied necessarily to: (i) the payment of interest accrued on the balance of the Purchase Price, and (ii) prepayment of the outstanding principal amount of the Purchase Price.
The Assignees, IESA and the direct or indirect subsidiaries of IESA shall not make any assets sales for a market value in excess of USD 1,000,000 per annum.
Any proceeds from the sale of assets of the Assignees, IESA and IESA's direct or indirect subsidiaries constitute a Liquidity Event-except when such sale shall occur in the ordinary course of business-and shall be applied to: (i) the payment of interest accrued on the balance of the Purchase Price, and (ii) prepayment of the outstanding principal amount of the Purchase Price.
The Assignees, IESA and the direct or indirect subsidiaries of IESA shall not make any payments for any cause to their shareholders, except for IESA or its subsidiaries exclusively when such payment is a compensation for management and/or administrative tasks that were effectively performed, and to the extent that such payments do not exceed an aggregate amount of USD 500,000 per annum (to all shareholders that are paid and with respect to all companies that make such payments).
The Assignees, IESA and the direct or indirect subsidiaries of IESA shall not incur financial debt, except that IESA and its subsidiaries may do so for an aggregate and total amount that shall not exceed 20% of each company's Net Worth.
The Assignees, IESA and the direct or indirect subsidiaries of IESA shall not create any pledges or mortgages except to guarantee commercial transactions in the ordinary course of their business, and that do not exceed in aggregate USD 1,000,000 (United States Dollars one million).
The Assignees, IESA and the direct or indirect subsidiaries of IESA shall not sell any of their respective shares or rights.
The Assignees, IESA and the direct or indirect subsidiaries of IESA shall not shall not issue any shares, except for equity capital increases that are entirely paid in by Assignees and that all the shares issued shall become subject to a pledge and subject to a purchase option and a right of first refusal.
The Assignees, IESA and the direct or indirect subsidiaries of IESA shall not merge or spin off any companies, as surviving company, merged company, spun off company or continuing company.
Any transactions between IESA and companies that control, are controlled by, or are under common control with IESA, shall be at arm's length terms and prices.
TSC Purchase Price Adjustment: Given that on 15 June 2010 Televisión Satelital Codificada S.A. ("TSC") brought a claim against the Argentine Football Association ("AFA") for the fulfilment of a contract and damages that is currently pending (the "Claim against AFA"), the TSC Purchase Price Adjustment means a sum equal to 33.33% (thirty three point thirty three per cent) of the collections and/or benefits received by TSC deriving directly from the Claim against AFA (net of income tax), with prior deduction of the pro rata expenses, costs, fees and professional fees incurred in connection with such claim, regardless of whether the lawsuit ends with a final judgment in favour of TSC or a settlement between AFA and TSC. The TSC Price Adjustment will be paid by the Assignees to the Assignors no later than 30 (thirty) days after the collections and/or benefits derived from the Claim against AFA are collected by TSC.
The court proceedings relating to the Claim against AFA and/or any transactional settlement relating thereto shall continue under the law firm that has been in charge of the legal representation of TSC. Any changes to such legal representation shall require the express written consent of both Parties.
TRISA Purchase Price Adjustment: Given that Tele Red Imagen S.A. was the owner of the exclusive broadcasting rights for all matches corresponding to the National B tournament organised by AFA pursuant to an agreement that was duly executed by TRISA, Torneos y Competencias S.A. and AFA, which was terminated untimely by AFA, and that on that account TRISA is evaluating the filing of a claim against AFA for the fulfilment of that contract and/or damages, the TRISA Purchase Price Adjustment means a sum equal to 33.33% (thirty three point thirty three per cent) of the collections and/or benefits received by TRISA deriving directly from the Claim against AFA (net of income tax), with prior deduction of the pro rata expenses, costs, fees and professional fees incurred in connection with such claim, regardless of whether the lawsuit ends with a final judgment in favour of TRISA or a settlement between AFA and TRISA. The TRISA Price Adjustment will be paid by the assignees to the assignors no later than 30 (thirty) days after the collections and/or benefits derived from the Claim against AFA are collected by TRISA
The court proceedings relating to the claim that TRISA may file against AFA and/or any transactional settlement relating thereto shall continue under the law firm that has been in charge of the legal representation of TSC in the Claim against AFA. Any changes to such legal representation shall require the express written consent of both Parties.
Liabilities: The Purchase of the Shares of IESA shall occur under the economic, financial, fiscal and legal conditions in which the Shares of IESA will be as of the Closing date, provided however that as of that date IESA shall have cancelled all of the indebtedness with shareholders and shall have no commercial debt in excess of that reflected in the Financial Statements as of 3/31/2014. The Purchase of the IESA shares shall be for the assignees free and clear of any liability for the existence of any certain or contingent liabilities arising from causes of claims dating from before the Closing date that has not been duly registered in the audited Financial Statements as of 3/31/2014.
Cash: As of the Closing date, the cash balance of IESA, understood as its holdings of cash, bank deposits and current and non-current financial investments, shall be of at least Ps. 100,000 (pesos one hundred thousand).
Working Capital: As of the Closing date the working capital of IESA, understood as current assets minus non-current liabilities, without taking into account cash or financial indebtedness, shall be at least equal to the amount stated in the audited financial statements as of 3/31/2014.
Representations and Warranties: Assignors will only grant indemnity to the Assignees for the veracity and compliance of their own Representations and Warranties. The contract shall include representations and warranties that are usual for this type of transactions.
Obligations at Closing: The parties undertake to make, within applicable terms, all the notices and/or filings before IESA and such authorities or governmental agencies that may apply as a consequence of or in connection with the Purchase of the Shares of IESA.
II. RELEVANT ASSETS AND OBLIGATIONS OF IESA. Among its relevant assets, rights and obligations, as of Closing, IESA shall have the following:
(i) Option to Purchase the signals of ARTEAR: an irrevocable purchase option granted in its favour by ARTEAR, to acquire the television signals El Trece Satelital, Quiero, Magazine and Volver as detailed in the copy included under Annex II, attached hereto.
(ii) Option to Sell the signals of ARTEAR: an irrevocable sale option granted in favour of ARTEAR, whereby ARTEAR may force IESA to acquire the television signals El Trece Satelital, Quiero, Magazine and Volver as detailed in the copy included under Annex II, attached hereto.
(iii) Option to purchase Canal Rural: an irrevocable purchase option, granted in its favour y ARTEAR over all the shares owned by ARTEAR, representing 24.999613% of the capital stock and votes of the company Canal Rural Satelital S.A., together with the political and economic rights inherent to such shares, whereby until 31 December 2014, IESA shall have the right to elect to acquire from ARTEAR all of the abovementioned shares subject to the conditions detailed in the copy included under Annex II, attached hereto.
(iv) Option to sell Canal Rural: an irrevocable sale option, granted in favour of ARTEAR over all the shares owned by ARTEAR, representing 24.999613% of the capital stock and votes of the company Canal Rural Satelital S.A., together with the political and economic rights inherent to such shares, whereby until 31 December 2014, ARTEAR shall have the right to elect to sell to IESA all of the abovementioned shares subject to the conditions detailed in the copy included under Annex II, attached hereto.
(v) Share Participations: IESA owns, directly, share participations in the following companies, in the percentages indicated (collectively, the "Subsidiaries"): 50% of the capital stock and votes of Tele Red Imagen S.A.; 50% of the capital stock and votes of Televisión Satelital Codificada S.A.; 95.55% of the capital stock and votes of Auto Sports S.A. ("AS"); and 96.19% of the capital stock and votes of AS Minor S.A. ("ASM"). In turn, AS and ASM own share participations in the following companies, in the percentages indicated: AS owns 95% of the capital stock and votes of Carburando S.A.P.I.C.A.F.I., and ASM owns the remaining 5%; also Carburando S.A.P.I.C.A.F.I. owns 96% of the capital stock and votes of CARBURANDO CLUB S.A.; as well as 20% of the capital stock and votes of TC MARKETING S.A. AS is the owner of 95% of the capital stock and votes of MUNDO SHOW S.A. and ASM owns the remaining 5%; additionally MUNDO SHOW S.A. owns 80% of the capital stock and votes of TC MARKETING S.A. ; and AS owns 95% of the capital stock and votes of MUNDO SHOW TV S.A. and ASM owns the remaining 5%.
III. PURCHASE OPTION.
Assignors: 34 South Media, LLC
Beneficiary: Grupo Clarín S.A. or the person or persons to whom Grupo Clarín S.A. shall assign-if applicable-the Purchase Option. In the case of assignment, the Assignors accept that whoever becomes assignee may exercise the Purchase Option as if it were its original Beneficiary, and that the possible limitations that may affect the original Beneficiary shall not apply to the assignee.
Shares of IESA: the common, nominative, non-endorsable Class "A" Shares, each with a par value of Ps. 1 and with the right to one vote per share, and Class "B" shares, with the right to five votes per share, representing 100% of the capital stock and votes of Inversora de Eventos S.A., together with all the political and economic rights inherent to such shares.
Purchase Option: Assignors sall grant the Beneficiary the exclusive, firm and irrevocable righto elect to purchase up to all of the Shares of IESA representing 100% of the capital stock and votes of IESA, in one or more successive transactions, together with all of the political and economic rights inherent to such shares.
Term: The Purchase Option may be exercised by the Beneficiary, in one or more successive exercises, during the term of 3 (three) years counted as from Closing. This term may be extended at the request of the Beneficiary for up to 3 (three) additional years.
Price: The Beneficiary shall offer a price for all of the Shares of IESA (hereinafter, the "Offered Price" or "OP"). If the Assignors shall not accept the Offered Price, the Beneficiary may ask for the appraisal of the Shares of IESA by Banco Santander, Banco Itaú or by another appraiser selected with the agreement of both parties, at the Beneficiary's sole request and proposal. The appraiser shall fulfil its task within thirty (30) calendar days of its appointment, and shall notify the result of the appraisal to all Parties by certifiable means. The method of valuation shall be determined by the appointed appraiser. Once notified to the Parties by certifiable means, the price that results from the appraisal according to the agreed procedure (hereinafter, the "Appraised Price" or "AP"), the Parties shall proceed as follows: a) if the Offered Price is lower than the Appraised Price, the Beneficiary shall have the option to acquire the Shares of IESA at the Appraised Price, or to forfeit its right to acquire the Shares of IESA. b) if the Offered Price is greater than the Appraised Price, the final price that the Beneficiary shall pay the Assignors shall be the following: PV + [(PO - PV) / 2]. The costs and expenses accrued from the appraisal agreed under this clause, shall be borne exclusively by the Beneficiary. Once the final sale price has been accepted or determined as provided in this clause, the purchase transaction for the Shares of IESA shall be deemed firmly agreed, and the Parties shall implement the transaction on the date and at the place indicated by the Beneficiary.
Limitations: During the Term of the Purchase Option, Assignors shall not sell or transfer-or approve or permit the sale or transfer-of shares, or material assets of IESA (except for those performed in the ordinary course of business) and/or of its subsidiaries.
IV. RIGHT OF FIRST REFUSAL.
Assignor: 34 South Media, LLC
Assignee: Grupo Clarín S.A. or the person or persons to whom Grupo Clarín S.A. shall assign-if applicable-the Purchase Option. In the case of assignment, the Assignors accept that whoever becomes assignee may exercise the Purchase Option as if it were its original Beneficiary, and that the possible limitations that may affect the original Beneficiary shall not apply to the assignee.
Shares of IESA: the common, nominative, non-endorsable Class "A" Shares, each with a par value of Ps. 1 and with the right to one vote per share, and Class "B" shares, with the right to five votes per share, representing 100% of the capital stock and votes of Inversora de Eventos S.A., together with all the political and economic rights inherent to such shares, including all shares that IESA may issue in the future, so that the Right of First Refusal will always cover 100% of the Shares of IESA.
Right of First Refusal. Without prejudice to the Purchase Option over 100% of the Shares of IESA upon expiration of the Term of the Purchase Option, the Assignee will have a Right of First Refusal for the acquisition of 100% of the Shares of IESA, exercisable by the Assignee by matching any offer that the Assignors may have received for such shares and accepted subject to the exercise of the Assignee's Right of First Refusal. For such purpose, the Assignors shall notify formally to the Assignee of any offer that they shall receive and accept as indicated above. Assignee shall state within 30 business days of such notice whether or not it will exercise its Right of First Refusal.
V. NOTICES:
If to 34 South Media LLC
Juan Bautista Alberdi 1162, Olivos, Province of Buenos Aires, Argentina
Attn.: Mr. Francisco Aguiar
If to Grupo Clarín S.A. and to GC Minor S.A.
Piedras No. 1743 (C1140ABK) - Autonomous City of Buenos Aires.
Attn.: Mr. Alejandro Urricelqui
EXHIBIT B (Continued)
Buenos Aires 11 July 2014
GRUPO CLARÍN S.A.
GC MINOR S.A.
PIEDRAS 1743
BUENOS AIRES, ARGENTINA
By Hand
Re: Extension of the firm and Irrevocable Offer to Purchase the Shares and Signals that make up Unit No. 4 of the Plan to Conform Grupo Clarín S.A. to the Audiovisual Communication Services Law made on 26 June 2014.
Dear Sirs,
I address you in my capacity as attorney-in-fact (manager) of 34 SOUTH MEDIA, LLC, in connection with the firm and irrevocable offer to purchase the shares and signals that make up Unit No. 4 of the Plan to Conform Grupo Clarín S.A. to the Audiovisual Communication Services Law approved pursuant to AFSCA Resolution 193/2014, that my principal made on 26 June 2014 (the "Original Offer").
We have learned of the decision of the shareholders of Grupo Clarín S.A. at the shareholders' meeting that began last 30 June (the "Shareholders Meeting") with respect to the postponement of the discussion of our Original Offer as a result of the filing made by Grupo Clarín S.A. and Arte Radiotelevisivo Argentino S.A. ("Artear") on 1 July 2014 before the Audiovisual Communication Services Federal Enforcement Authority ("AFSCA"), of which You furnished a copy (hereinafter, the "Administrative Filing").
Taking into account the notice under File No. 3002-AFSCA/13 that AFSCA sent You yesterday in connection with the Administrative Filing that you sent us in copy, and considering that such notice shall be considered at the Shareholders' Meeting today, we hereby send you an extension of the Original Offer so that it may be considered by the shareholders. This extension sets forth an alternative for the transaction, stating for the record that this new alternative we propose does not render without effect the transaction proposed under the Original Proposal that merited Pre-Acceptance by the Board of Directors of Grupo Clarín S.A., which remains fully effective in its original terms. This extension should be deemed as supplementary of the Original Proposal.
The terms included herein in capital letters shall have the meaning assigned to them in the Original Offer, unless expressly defined herein.
This extension of the Original Offer, which we shall call "Alternative Offer", has the purpose of providing the shareholders at the shareholders' meeting with an additional possibility that they may consider, in order to facilitate the execution of the proposed business, subject to the terms and conditions detailed below:
1. Alternative Offer:
In the event that the shareholders consider not approving or postponing or subjecting the sale of the assets included under Unit No. 4 of the Plan to Conform Grupo Clarín S.A. to the Audiovisual Communication Services Law, to the final and definitive result of the judicial claims that may be brought in order to obtain a judicial declaration that may safeguard the rights set forth in the Administrative Filing (the "Court Filing") we hereby make this-binding and irrevocable-Alternative Offer that consists in the following:
- the fiduciary property of the assets that make up Unit No. 4 of the Plan to Conform Grupo Clarín S.A. to the Audiovisual Communication Services Law shall be transferred to a trust, where Grupo Clarín S.A. and GC Minor S.A. shall be the Settlors, pursuant to the contribution of all of the shares issued by Inversora de Eventos S.A. ("IESA") (the "Shares of IESA") representing 100% of the capital stock and votes of that company, together with all the political and economic rights inherent to such shares, after IESA has exercised the purchase options it has over the Signals and over the shares representing 24.999613% of the capital stock and votes of Canal Rural Satelital S.A.;
- management of the Trust shall be given to an independent Trustee, that will be appointed by mutual agreement of the Assignors and the Offeror. The Trustee shall act on the basis of rules or a management and administration manual to be defined by mutual agreement of the Assignors and the Offeror at the creation of the Trust. The main purpose of the Trust shall be the preservation of the value of the assets under management and those that the parties shall define by mutual agreement at the creation of the Trust;
- the beneficiaries shall be the Assignors and the Offeror, to whom the Trustee will transfer-to one or the others, as applicable-the property of the assets under trust depending on the final and definitive result of the Court Filing, i.e. the Trustee will transfer all of the Shares of IESA: (i) in favour of the Offeror if the courts shall decide that Grupo Clarín S.A. is under the obligation to divest of the assets that make up Unit No. 4, within 10 (ten) business days of the fulfilment of the Conditions Precedent or the determination of the Price (as defined below), whatever occurs last (the "Closing"), or (ii) in favour of the Assignors if the courts shall decide that Grupo Clarín S.A. is not under an obligation to divest of the assets that make up Unit No. 4, within 10 (ten) days of the final resolution on the Court Filing;
- prior to Closing-if applicable-the parties shall determine the price (the "Price") that the Offeror shall pay the Assignors for the Shares of IESA according to the following procedure: the Offeror shall offer the Assignors an aggregate price in United States dollars, in cash, for the Shares of IESA (hereinafter, the "Offered Price" or "OP"). If the Assignors shall not accept the Offered Price, the Offeror may ask for the appraisal of the Shares of IESA by Banco Santander, Banco Itaú, at the Assignors' sole discretion, or by another appraiser that may be agreed to by both Parties, at the Assignors' request. The appraiser shall fulfil its task within thirty (30) calendar days of its appointment, and shall notify the result of the appraisal to all Parties by certifiable means. The method of valuation shall be determined by the appointed appraiser. Once notified to the Parties by certifiable means, the price that results from the appraisal according to the agreed procedure (hereinafter, the "Appraised Price" or "AP"), the Parties shall proceed as follows: a) If the Offered Price is lower than the Appraised Price, the Offerors shall acquire the Shares of IESA at PO + [(PO - PV) /2]. b) if the Offered Price is greater than the Appraised Price, the Price that the Offerors shall pay the Assignors for the Shares of IESA shall be the following: PV + [(PO - PV) / 2]. The costs and expenses accrued from the appraisal agreed under this clause, shall be borne equally by Assignors and Offerors. Once the final sale price has been accepted or determined as provided in this clause, the Parties shall implement the transaction on the Closing date, which shall occir on the day and at the place indicated by the Assignors.
The Price shall be paid by the Offerors in the foreign account that the Assignors will indicate in due course, as follows: 30% on the Closing date, and the balance in three (3) equal, annual, consecutive instalments, counted as from Closing.
2. Conditions Precedent:
The fulfilment of the obligations undertaken by the parties at Closing (if applicable), including the payment of the Price by the Offerors to the Assignors and the transfer of the Shares of IESA by the Trustee to the Offerors, shall be subject (as conditions precedent) ot the fulfilment of all of the following conditions (individually and collectively, the "Conditions Precedent"):
(i) that-if necessary-AFSCA and the other oversight agencies that may correspond, approve the transfer of the Shares of IESA and other assets that are the object of this Offer; and
(ii) that there be no laws and/or administrative or judicial orders restraining, prohibiting, amending, altering, conditioning or rendering illegal the transfer of the Shares of IESA and other assets that are the object of this Offer.
3. Duration of the Alternative Offer:
This Alternative Offer shall remain effective until 10 (ten) business days after the final conclusion of the Shareholders' Meeting that was adjourned until 11 July 2014.
It will be deemed accepted in the same way as provided for the acceptance of the Original Offer. If accepted, it will be binding on both the Assignors and the Offerors, and its execution will only be subject to the effective occurrence of the Conditions Precedent.
In the event that the Assignors shall not accept the Alternative Offer in due time and form, the Alternative Offer shall be deemed automatically cancelled, extinguished and rendered without effect, and neither Party shall remain subject to any obligation whatsoever.
4. Other stipulations:
The stipulations included under the Original Offer relating to Acceptance, Guarantee, Covenants, TSC Purchase Price Readjustment, TRISA Purchase Price Readjustment, Liabilities, Cash, Working Capital, Purchase Option and Right of First Refusal shall also apply to this Alternative Offer.
We ask that you please communicate this Alternative Offer to the shareholders of Grupo Clarín S.A., for its consideration and discussion at the Shareholders' Meeting.
34 South Media LLC
/s/ Miguel El Haiek
Attorney-in-fact
EXHIBIT B (Continued)
Buenos Aires, 15 August 2014
GRUPO CLARÍN S.A.
GC MINOR S.A.
PIEDRAS 1743
BUENOS AIRES, ARGENTINA
By Hand
Re: Firm and Irrevocable Offer to Purchase the Shares and Signals that make up Unit No. 4 of the Plan to Conform Grupo Clarín S.A. to the Audiovisual Communication Services Law made on 26 June 2014.
Dear Sirs,
We hereby address You in our capacity as attorneys-in-fact (managers) of 34 SOUTH MEDIA, LLC, in connection with the firm and irrevocable offer to purchase the shares and signals that make up Unit No. 4 of the Plan to Conform Grupo Clarín S.A. to the Audiovisual Communication Services Law, made on 26 June 2014 (the "Original Offer"). Also subscribing this letter are (i) Mr. Alexander Silverman, in his capacity as owner of 100% of the capital stock and votes (membership interests) of 34 SOUTH MEDIA, LLC; and (ii) Mr. Miguel El Haiek, on his own behalf.
The terms included in this letter in capital letters shall have the meaning assigned to them in the Original Offer and/or the Alternative Offer dated as of 10 July 2014 (as applicable), unless they are expressly defined herein.
First of all, we would like to thank you for having informed us of the issuance of Resolution 902/AFSCA/2014, dated as of 12 August 2014, in File No. 3002-AFSCA/2013 ("Resolution 902"). Having reviewed the terms of Resolution 902, we feel the need to express our concern with respect to the implementation of the Alternative Offer in the ters that it was originally formulated and approved by the shareholders of Grupo Clarín S.A. at the shareholders' meeting (that began on 30 June and ended on 11 July, both in 2014).
Given that we maintain our irrevocable intention to acquire Unit No. 4 of the Plan to Conform Grupo Clarín S.A. to the Audiovisual Communication Services Law under the terms and conditions set forth in our Original Offer, and given the circumstances indicated above, we kindly request that you reconsider your acceptance, to which ends and effects we ratify the Original Offer in each and every one of its terms and conditions (except as amended herein), effective until 31 December 2014 and with the effects derived from its Pre-Acceptance, as approved by the Board of Directors of Grupo Clarín S.A. at its meeting of 27 June 2014.
We hereby state for the record that this letter does not render our Alternative Offer without effect. Such offer remains fully effective and is, as indicated therein, supplementary to the Original Offer, which we ratify in the event that you may reconsider its acceptance.
Should you deem it convenient to accept the Original Offer, we will understand that you have done so if you communicate its acceptance in writing (the "Acceptance of the Original Offer").
Upon receipt of the Acceptance of the Original Offer, the execution of the Original Offer will only be subject to the corresponding corporate steps that the Assignors must fulfil to implement and perfect the transaction, and to the effective occurrence of the Conditions Precedent set forth under Point 2 (i) and (ii) of the Original Offer, given that the condition precedent set forth under Point 2(iii) must be deemed fulfilled because the transfer by ARTEAR in favour of Inversora de Eventos S.A. od the television signals El Trece Satelital, Quiero Música en mi Idioma ("Quiero"), Magazine and Volver, as well as the transfer of the shares representing 24.999613% of the capital stock and votes of Canal Rural Satelital S.A., have already occurred.
Finally, we state for the record that in the event of Acceptance of the Original Offer, Mr. Miguel El Haiek will acquire the minority participation in Inversora de Eventos S.A. that may be necessary for regulatory purposes in order to comply with the requirement of a plurality of shareholders set forth under Law No. 19,550.
Hoping that you will consider the above if you deem it convenient, we take this opportunity so send our greetings.
34 SOUTH MEDIA, LLC 34 SOUTH MEDIA, LLC MIGUEL EL HAIEK
/s/ Alexander Silverman /s/ Miguel El Haiek /s/ Miguel El Haiek
Sole Member and Manager Manager On his own behalf