SETTLEMENT AGREEMENT
Exhibit
10.35
SETTLEMENT
AGREEMENT DATED MARCH 6, 2006, IS ENTERED INTO BY AND
BETWEEN:
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(I)
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ON
ONE PART, BY:
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a.
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MEGA
CABLE, S.A. DE C.V. (HEREINAFTER REFERRED TO AS “MC”), REPRESENTED BY MR.
FRANCISCO XXXXXX X. XXXXX
XXXXXXX;
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b.
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MCM
HOLDING, S.A. DE C.V., (HEREINAFTER REFERRED TO AS “MCM”) REPRESENTED BY
MR. FRANCISCO XXXXXX X. XXXXX CASTELO;
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c.
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THE
PRIVATE SHAREHOLDERS (AS DEFINED HEREUNDER) ALL REPRESENTED BY XX.
XXXXXXX
XXXX XXXXXX,
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d. TELEHOLDING,
S.A. DE C.V. (HEREINAFTER REFERRED TO AS “PURCHASER”), REPRESENTED BY MR.
FRANCISCO XXXXXX X. XXXXX CASTELO (MC, MCM, THE PRIVATE SHAREHOLDERS AND
PURCHASER ARE COLLECTIVELY REFERRED TO AS THE “MC GROUP”),
AND
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(II)
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ON
THE OTHER, BY:
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a.
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RCN
INTERNATIONAL HOLDINGS, INC. (HEREINAFTER REFERRED TO AS “RCN INT.”)
AND
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b.
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RCN
CORPORATION, INC. (HEREINAFTER REFERRED TO AS “RCN
CORP”).
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(RCN
INT. AND RCN CORP. ARE JOINTLY REFERRED TO AS THE “RCN
GROUP”)
(THE
MC GROUP AND THE RCN GROUP ARE HEREINAFTER COLLECTIVELY REFERRED TO AS THE
“PARTIES” AND INDIVIDUALLY AS A “PARTY”).
WHEREAS,
each
of
MC
and
MCM is
a
company duly organized and validly existing under the laws of the United Mexican
States;
WHEREAS,
the
PRIVATE SHAREHOLDERS (listed
in Exhibit
A,
attached hereto), are individuals of Mexican Nationality with the legal capacity
to enter into this Settlement Agreement;
WHEREAS,
the
representative of each of the MC Group is duly empowered and authorized to
execute this Settlement Agreement, and as of today such powers and authority
has/have not been revoked, limited or modified in any manner
whatsoever;
WHEREAS,
RCN INT.
is a
company duly incorporated and validly existing in accordance with the laws
of
the State of Delaware, United States of America and their representative(s)
is(are) duly empowered and authorized to execute this Settlement Agreement,
and
as of today such powers and authority has/have not been revoked, limited or
modified in any manner whatsoever;
WHEREAS,
RCN CORP is
a
company duly incorporated and validly existing in accordance with the laws
of
the State of Delaware, United States of America and their representative(s)
is(are) duly empowered and authorized to execute this Settlement Agreement
and
as of today such powers and authority has/have not been revoked, limited or
modified in any manner whatsoever;
WHEREAS,
MC and
RCN
INT.
entered
into a Subscription Agreement executed as of January 19, 1995;
WHEREAS,
MC, the
PRIVATE
SHAREHOLDERS
and
RCN
INT. entered
into a Shareholders Agreement executed as of January 24, 1995;
WHEREAS,
MC, the
PRIVATE
SHAREHOLDERS and
CTEC
Corporation, entered
into a Support and Guarantee Agreement, executed as of January 19, 1995, that
was subsequently assumed by RCN Corp. (the Subscription Agreement, the
Shareholders Agreement and the Support and Guarantee Agreement are hereinafter
referred to collectively as the “MC-RCN Corporate Agreements”, each of which is
enclosed hereto as EXHIBIT
“B”);
WHEREAS,
MCM, assumed
MC’s
obligations under the MC-RCN Corporate Agreements, as a result of a spin-off
from MC
dated
November 1st,
2001.
WHEREAS,
on
this
date, the PRIVATE
SHAREHOLDERS, through
PURCHASER, entered
into a Stock Purchase Agreement with RCN
INT.,
pursuant to which the latter sells to PURCHASER all of its shares, rights and
interest in MC
and
in
MCM,
that
is
enclosed hereto as EXHIBIT
“C”
(hereinafter referred to as the “Stock Purchase Agreement”).
WHEREAS,
on
November 14, 2005, RCN
CORP
filed a
motion in
the
United States Bankruptcy Court for the Southern District of New York, (“the
Bankruptcy Court”) that is enclosed hereto as Exhibit
“D”,
relating to the Support and Guarantee Agreement (the “Bankruptcy Motion”);
and
WHEREAS,
as of
November 14, 2005, the MC
GROUP,
filed
an arbitration petition against RCN
INT.
before
the International Court of Arbitration, of the International Chamber of Commerce
in Paris, France, reference 14098/CCO, that is enclosed hereto as Exhibit
“E”
(the
“Arbitration Petition”) (generally, the “Arbitration Proceeding”)
NOW,
THEREFORE,
in
consideration of the foregoing and of the mutual promises and covenants
contained herein, the Parties hereto agree as follows:
CLAUSES
1.-
Settlement.
Except
with respect to any claims or disputes arising under the Stock Purchase
Agreement or this Agreement, as of the Closing Date and upon Closing (as such
terms are defined in the Stock Purchase Agreement), each of the members of
the
MC
Group and
of
the RCN
Group,
hereby
expressly, irrevocably and unconditionally agree to finally settle, resolve,
dismiss and discontinue all past, present and future claims and disputes among
any of them that ever existed, exist now or may exist in the future with respect
to all periods from the beginning of time until the Closing Date, including
the
withdrawal of the Bankruptcy Court Motion with prejudice and termination of
the
Arbitration Proceeding with prejudice. Each Party shall bear its own costs
with
respect to these proceedings, to the termination of the Agreements pursuant
to
Section 2 below and to this Settlement.
2.-
Termination
of the Agreements.
As
of the
Closing Date and upon Closing, each of the members of the MC
Group and
of
the RCN
Group, hereby
expressly, irrevocably and unconditionally agree to terminate and leave without
any further legal effect, each of the MC-RCN Corporate Agreements, including
any
other agreement, contract or understanding related to the foregoing other than
the Stock Purchase Agreement and this Settlement Agreement.
3.-
Assurances.
On
the
Closing Date and upon Closing:
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(i)
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The
MC
Group
shall file with the International Court of Arbitration of the
International Chamber of Commerce an irrevocable withdrawal and dismissal
of the Arbitration Petition and RCN
INT.
shall file with the International Court of Arbitration of the
International Chamber of Commerce a letter consenting to the MC
Group’s
irrevocable withdrawal and dismissal of the Arbitration Petition
and each
of the MC
Group
and the RCN
Group
shall take any other actions necessary to terminate the corresponding
Arbitration Proceeding; copies of such withdrawal and such consent
letter,
as approved by both Parties, are enclosed hereby as Exhibits
“F-1“
and “F-2”;
and
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(ii)
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RCN
CORP shall
file with the Bankruptcy Court an irrevocable withdrawal of the Bankruptcy
Motion; a copy of this withdrawal, as approved by both Parties, is
enclosed hereby as Exhibit
“G“;
and
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(iii)
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Each
of the MC
Group and
of the RCN
Group shall
withdraw any other claim or action filed with any other authority,
panel,
arbitration institution, mediator or otherwise, related to each other
for
whatever reason.
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Each
of
MC
Group
and
RCN
Group
agree to
indemnify and hold harmless each other if there is any judgment, ruling, order
or decree issued by any judicial or arbitral tribunal or by any other entity
that may arise from any claim not withdrawn pursuant to the terms of this
Settlement Agreement. Such indemnity shall include all costs, including legal
fees, incurred by the other party in the event that the corresponding proceeding
is not dismissed by the International Court of Arbitration of the International
Chamber of Commerce or the Bankruptcy Court. Each Party agrees that it shall
not
seek or support an award of sanctions against the other Party arising from
the
commencement of either the Arbitration Proceedings or the Bankruptcy Court
proceedings and each Party agrees that upon request by the other Party, it
shall
cooperate (at the requesting Party’s sole expense) in opposing the imposition of
any such sanctions against the requesting Party. For the avoidance of doubt,
however, the indemnity contained in this Paragraph 3 shall not include indemnity
for sanctions, or for costs associated with sanction proceedings, if sanctions
are sought or imposed against a Party through any process other than a process
initiated by a Party or an assignee, affiliate or shareholder of a
Party.
4.-
Mutual
Release.
Except
with respect to any claims, causes of action, liabilities, or other obligations
arising under the Stock Purchase Agreement or this Agreement or any other
agreements entered into by the Parties in connection therewith, as of the
Closing Date and upon Closing, each of the MC
Group and
of
the RCN
Group, including
their respective affiliates, subsidiaries, parent companies, shareholders,
officers, directors, representatives and agents, hereby expressly, irrevocably
and unconditionally releases the other from any and all claims causes of action,
liabilities, or other obligations (whether absolute or contingent) existing
in
the past, now or in the future with respect to the periods from the beginning
of
time until the Closing Date under the Stock Purchase Agreement, which relate
to
or involve the RCN Group’s ownership of the Shares, the MC-RCN Agreements and
all matters relating thereto.
5.-
Applicable Law.
This
Agreement shall be governed by the laws of the United Mexican
States.
6.-
Arbitration
All
disputes arising under or in connection with this Settlement Agreement shall
be
finally settled under the Rules
of
Arbitration of the International Court of Arbitration of the International
Chamber of Commerce (“ICC”) by
a
panel of three arbitrators, two appointed by each of the MC
Group and
the
RCN
Group
and the
third (to be the Chairman) appointed in accordance with the said Rules. The
arbitration proceedings are to take place in the City of Houston, State of
Texas, United States of America including the issue of the arbitration award.
The arbitration proceedings shall be conducted in English. The Parties expressly
waive any other jurisdiction which may correspond to them by reason of their
current or future domiciles, or for any other reason whatsoever.
7.-
Modifications.
This
Settlement Agreement, and any of its terms, conditions and provisions may be
modified, amended, altered, supplemented, added to, canceled or terminated
only
by mutual agreement in writing signed by the duly authorized representatives
of
the Parties.
8.-Counterparts.
This
Settlement Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one in the same instrument.
9.-Further
Assurances.
The
Parties shall, contemporaneously herewith or hereafter, execute such additional
documents and take any other action as may be reasonably necessary to evidence
or give effect to the terms and purpose of this Settlement Agreement. Failure
of
Purchaser to obtain any of the necessary authorizations or approvals referenced
in Section 3 of the Stock Purchase Agreement shall have no effect on the
obligations or effectiveness of this Agreement.
10.-
Entire
Agreement.
This
Settlement Agreement, the Stock Purchase Agreement and any other agreements
entered into by the Parties in connection therewith constitute the entire
agreement between the Parties and supersede and replace any and all other
negotiations, conversations, understandings and/or agreements, written, oral,
implied or otherwise.
11.
Notifications.
Any
notice or communication to be given by the Parties hereunder, shall be sent
to
each other by hand, via courier or facsimile, return receipt requested, and
shall be valid as of the date of such receipt, if delivered to the following
addresses:
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If
to MC GROUP
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Ave.
Xxxxxx Xxxxxx 000 Xxxxx
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Xxxxxx
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Xxxxxx
Xxxxxxx, Xxxxxx
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00000
México.
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Attention:
Xxxxxx X. Xxxxx Xxxxxxx.
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If
to RCN GROUP
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000
Xxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX. 00000, U.S.A:
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Attention:
Xx. Xxxxx X. Xxxxxx
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12.
Conditionality.
The
provisions of this Agreement shall be conditioned upon and shall not be
effective until, the Closing Date and upon Closing being fully consummated
pursuant to the Stock Purchase Agreement.
IN
WITNESS WHEREOF,
the
parties have duly executed this Settlement Agreement on the date first above
written.
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MEGA
CABLE, S.A. DE C.V.,:
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MCM
HOLDING, S.A. DE C.V.:
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By:
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/s/
Xxxxxx Xxxxx
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By:
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/s/
Xxxxxx Xxxxx
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Name:
Xxxxxx Xxxxx
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Name:
Xxxxxx Xxxxx
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Title:
Chairman
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Title:
Chairman
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THE
PRIVATE SHAREHOLDERS
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By:
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/s/
Xxxxxxx
Xxxx Xxxxxx
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Name:
Xxxxxxx Xxxx Xxxxxx
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Title:
Attorney in Fact
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RCN
INTERNATIONAL HOLDINGS, INC.
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RCN
CORPORATION, INC.
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By:
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/s/
Xxxxx X. Xxxxxx
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By:
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Xxxxx
X. Xxxxxx
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Name:
Xxxxx X. Xxxxxx
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Name:
Xxxxx X. Xxxxxx
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Title:
Chief Executive Officer
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Title:
Chief Executive Officer
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