EXHIBIT 10
EXHIBIT 10
STOCK PURCHASE AGREEMENT
The parties to this stock purchase agreement, dated as of June 1, 2000
(this "Agreement") are InfoAmerica, Inc., a corporation organized under the laws
of the state of Delaware (the "Purchaser"), on the one hand, and Xxxx Xxxxx
International Cable Ventures Ltd., a corporation organized under the laws of the
Turks and Caicos Islands ("DCICV"), and Xxxxxx Xxxxxxxxxx, Sr. ("Xxxxxxxxxx")
(collectively the "Sellers") and Cable California S.A. de C.V., a corporation
organized under the laws of the Republic of Mexico (the "Company"), on the other
hand.
RECITALS
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1. The Sellers are the owners of issued and outstanding shares of the capital
stock of the Company (the "Shares").
2. The Sellers desire to sell and transfer to the Purchaser, and the Purchaser
desires to purchase and acquire one hundred percent (100%) of the non-voting
limited shares (the "Limited Shares") of the Company and one hundred percent
(100%) of the voting shares (the "Voting Shares") of the Company owned by the
Sellers, upon and subject to the terms and conditions set forth below.
3. In consideration of the premises, the representations and warranties, the
mutual covenants contained herein and other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Purchaser, the Sellers and
the Company agree as follows:
Transfer of the Shares.
1.1. Transfer of the Shares. Upon the terms and subject to the
conditions hereinafter set forth, concurrently with the execution and delivery
of this Agreement, the transfer of the Shares shall be as follows:
(a) The Sellers shall transfer, assign and deliver one hundred
percent (100%) of the Limited Shares of the Company to the
Purchaser free and clear of all liens, security interests,
pledges, options, equitable interests, claims and encumbrances
of any nature whatsoever.
(b) The Sellers shall transfer, assign and deliver one hundred
percent (100%) of the Voting Shares of the Company to the
Purchaser free and clear of all liens, security interests,
pledges, options, equitable interests, claims and encumbrances
of any nature whatsoever. The manner in which the Voting
Shares shall be held by the Purchaser is as follows:
(i) Forty-nine percent (49%) of the Voting Shares shall be held in a manner
designated by the Purchaser.
(ii) Fifty-one percent (51%) of the Voting Shares shall be placed in a Mexican
trust established by a Mexican financial institution, which is reasonably
acceptable to both the Purchaser and Xxxxxxxxxx, to be held for the benefit of
the Purchaser. The terms of the trust agreement and related documentation shall
be acceptable to the Purchaser and Xxxxxxxxxx.
1.2. Consideration. In consideration for the transfer, assignment and
delivery to the Purchaser of the Shares being transferred hereunder and the
representations and warranties and covenants and agreements of the Sellers set
forth herein, and upon the terms and subject to the conditions contained herein,
at the Closing (as such term is defined in Section 1.5) the Purchaser shall
transfer, assign and deliver 2,225,000 shares of the common stock of the
Purchaser (the "Consideration Shares") to each of DCICV and Xxxxxxxxxx.
1.3. Adjustment to Consideration. If on the Closing Date (as such term
is defined in Section 1.5), the price of the Consideration Shares results in
aggregate consideration greater than $10,000,000 U.S. Dollars, then the total
amount of the Consideration Shares issued shall be equitably adjusted so that
the total value of the Consideration Shares shall not exceed $10,000,000 U.S.
Dollars.
1.4. Closing of Stock Transfer Books. On and after the date of this
Agreement there shall be no transfers on the stock transfer books of the Company
of shares of capital stock of the Company that were issued and outstanding
immediately prior to the date hereof.
1.5. Closing. The closing of the transfer of the Shares and other
transactions contemplated hereby (the "Closing") shall take place at the offices
of the Purchasers counsel at 10:00 am on June __, 2000, or such other date, time
or place as may be agreed to in writing by the parties hereto (the "Closing
Date").
2. Representations and Warranties of the Company and Xxxxxxxxxx. The Company and
Xxxxxxxxxx jointly, make the following representations and warranties to the
Purchaser and acknowledge that the Purchaser is relying upon such
representations and warranties in connection with the acquisition of the Shares,
each of which is true and correct on the date hereof and shall survive the
Closing of the transactions provided for herein.
2.1. Legal Capacity; No Restrictions. Except as set forth on Schedule
2.1, the Company and Xxxxxxxxxx each have full legal capacity, power and
authority to execute and deliver this Agreement and all other agreements,
certificates and documents executed or delivered, or to be executed or delivered
by the Company and Xxxxxxxxxx in connection herewith, and to perform the
obligations hereunder. All acts required to be taken by the Company and
Xxxxxxxxxx to enter into this Agreement and to carry out the transactions
contemplated hereby have been properly taken; and this Agreement constitutes a
legal, valid and binding obligation of the Company and Xxxxxxxxxx enforceable in
accordance with its terms subject to (a) bankruptcy, insolvency or other similar
laws now or hereafter in effect relating to creditors' rights generally and (b)
equitable principles of law. The execution, delivery and performance of this
Agreement by the Company and Xxxxxxxxxx in accordance with its terms
will not, with or without the giving of notice or the passage of time, or both,
conflict with, result in a default, right to accelerate or loss of rights under,
or result in the creation of any encumbrance pursuant to, or require the consent
of any third party or governmental authority under the laws of the United States
of America and any of its states, or under the laws of the Republic of Mexico
and any of its states pursuant to any material franchise, mortgage, indenture or
deed of trust or any material lease, license or other agreement or any statute,
law, ordinance, rule of regulation, or any order, writ, injunction, judgment,
plan or decree of any court, arbitrator, department, commission, board, bureau,
agency, authority, instrumentality or other body, whether federal, state or
municipal in the United States of America, or foreign including, but not limited
to, the Republic of Mexico and its states to which the Sellers are a party or by
which the Sellers (or any of their assets, properties, operations or businesses)
may be bound, subject to or affected.
2.2. Ownership. Each Seller owns all of the issued and outstanding
Shares of the Company listed opposite the name of such Seller on Exhibit A to
this Agreement, and the Shares transferred to the Purchaser under this Agreement
constitute all of the issued and outstanding shares of the Company. The Sellers
are the sole registered holders and beneficial owners of the Shares as set forth
on Exhibit A, free and clear of any and all mortgages, liens, security
interests, restrictions, pledges, options, calls, assessments, adverse claims or
rights with respect to the Shares. Such Seller has all legal right, title and
authority to transfer the Shares to the Purchaser as contemplated hereby. The
assignment, transfer and delivery of the Shares owned by such Seller to the
Purchaser in accordance with Section 1 hereof will vest in the Purchaser full
right, title and interest in and to all of Shares of the Company owned by such
Seller.
2.3. The Sellers' Interest in Similar Businesses. Except as set forth
on Schedule 2.3 of this Agreement, such Seller has no financial interest in any
person, firm or entity (other than the Company) which is directly or indirectly,
engaged in any business engaged in by the Company, or which is a party to any
material agreement to which the Company is also a party.
2.4. Litigation. There is no claim, legal action, arbitration,
governmental investigation or other legal or administrative proceeding, nor any
order, writ, injunction, judgment, plan or decree ("Litigation") in progress,
pending or in effect, against the Sellers or to the best knowledge of the
Sellers, is threatened, against or relating to the Company, its properties,
assets, business or capital stock or the transactions contemplated by this
Agreement, and the Sellers do not know of any basis of the same in the United
States of America, and any of its states, or in the Republic of Mexico, and any
of its states. There is no continuing order, injunction or decree of any court,
arbitrator or Government Entities to which the Sellers, and to the best
knowledge of the Sellers, the Company, is a party or by which the Sellers, or
the Company or its assets, properties, business or capital stock are bound.
2.5. Investment Intent.
(a) The Sellers understand that each certificate representing
the Consideration Shares shall be imprinted with a legend in substantially the
following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OF
AMERICA OR ANY FOREIGN JURISDICTION AND HAVE BEEN SOLD IN RELIANCE UPON
EXEMPTIONS THEREFROM. THESE SECURITIES MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION COVERING THESE SECURITIES UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR DELIVERY TO INFOAMERICA, INC ("INFOAMERICA") OF AN OPINION OF
COUNSEL (SUCH COUNSEL TO BE SATISFACTORY TO INFOAMERICA) SATISFACTORY TO THE
COMPANY (WHICH IS IN FORM, SUBSTANCE AND SCOPE SATISFACTORY TO INFOAMERICA) THAT
REGISTRATION IS NOT REQUIRED THEREUNDER. THE TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE
STOCKHOLDERS AGREEMENT DATED AS OF JUNE , 2000 AND AS AMENDED AND MODIFIED FROM
TIME TO TIME BETWEEN INFOAMERICA, THE UNDERSIGNED, AND CERTAIN OTHER
STOCKHOLDERS, AND INFOAMERICA RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH
SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH
TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY INFOAMERICA TO THE
HOLDER HEREOF UPON WRITTEN REQUEST WITHOUT CHARGE.
(b) The Sellers are acquiring the Consideration Shares for
their own account, for investment purposes and not with a view to, or for sale
in connection with, any distribution of such Consideration Shares or any part
thereof.
(c) The Sellers (i) are "accredited investors" as that term is
defined in Rule 401(a) promulgated under the Securities Act of 1933, as amended,
(ii) are able to sustain an entire loss of the investment represented by the
Consideration Shares, (iii) have such knowledge and experience in financial,
business and investment matters as to be capable of evaluating the merits and
risks of this investment, (iv) has the ability to bear the economic risks of
this investment, (v) have had access to and has received such information
regarding the Purchaser as is specified in subparagraph (b)(2) of Rule 402
promulgated under the Securities Act of 1933, as amended, and (vi) without in
any way limiting the Purchaser's right or ability to rely on the representations
and warranties made by the Sellers in or pursuant to this Agreement, has been
afforded prior to the Closing the opportunity to ask questions of, and to
receive answers from, the Purchaser and to obtain any additional information, to
the extent the Purchaser has such information or could have acquired it without
unreasonable expense, all as necessary for the Sellers to make an informed
investment decision with respect to the purchase of the Consideration Shares.
(d) The Sellers understand and acknowledge that (a) the Shares
to be sold and issued hereunder are unregistered and may be required to be held
indefinitely unless subsequently registered under the Securities Act of 1933, as
amended, or an exemption from such registration is available; (B) the Purchaser
is under no obligation to file a registration statement with the Securities and
Exchange Commission with respect to the Shares, and (c) Rule 144 promulgated
under the Securities Act of 1933, as amended ("Rule 144"), which provides for
certain limited sales of unregistered securities, is not presently available
with respect to the Shares.
2.6. No Violation. Except as set forth on Schedule 2.6 of this
Agreement, neither the execution nor the delivery by Xxxxxxxxxx or the Company
of this Agreement or any Seller Documents, to which Xxxxxxxxxx or the Company is
a party, the performance by Xxxxxxxxxx or the Company of their obligations
hereunder or thereunder nor the consummation by Xxxxxxxxxx or the Company of the
transactions contemplated hereby will, (a) violate any provision of the
Company's certificate of incorporation or other organizational documents, (b)
violate any provision of any material Contract (as such term is defined in
Section 3.9) to which the Company or Xxxxxxxxxx is a party or by which any of
the properties or assets of the Company or Xxxxxxxxxx may be bound or otherwise
subject, (c) violate any statute, law, ordinance, rule or regulation of any
jurisdiction to which the Company or Xxxxxxxxxx is bound, or any order, writ,
injunction, judgment, plan or decree (collectively, "Orders") of any court,
arbitrator, department, commission, board, bureau, agency, authority,
instrumentality or other body, whether federal, state or municipal in the United
States of America, or the Turks and Caicos Islands and the Republic of Mexico,
and its states, or (d) will require any authorization, consent, approval,
exemption or other action by or notice to any government entity unless such
violation would not have a Material Adverse Effect on the Company.
2.7. Finders' and Brokers' Fees. Neither the Company nor Xxxxxxxxxx
has retained any broker, finder or agent or agreed to pay any brokerage fee,
finder's fee or commission with respect to the transactions contemplated by this
Agreement.
3. Representations and Warranties of DCICV. The shareholders of DCICV jointly,
make the following representations and warranties to the Purchaser and
acknowledge that the Purchaser is relying upon such representations and
warranties in connection with the acquisition of the Shares, each of which is
true and correct on the date hereof and shall survive the Closing of the
transactions provided for herein.
3.1. Legal Capacity; No Restrictions. Except as set forth on Schedule
3.1 of this Agreement, DCICV has full legal capacity, power and authority to
execute and deliver this Agreement and all other agreements, certificates and
documents executed or delivered, or to be executed or delivered, by DCICV in
connection herewith and to perform the obligations hereunder. All acts required
to be taken by DCICV to enter into this Agreement and to carry out the
transactions contemplated hereby have been properly taken; and this Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable in
accordance with its terms subject to (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) equitable principles of law. The
execution, delivery and performance of this Agreement by DCICV in accordance
with its terms will not, with or without the giving of notice or the passage of
time, or both, conflict with, result in a default, right to accelerate or loss
of rights under, or result in the creation of any encumbrance pursuant to, or
require the consent of any third party or governmental authority, whether
domestic under the laws of the United States of America and any of its states,
or foreign, under the laws of the Turks and Caicos Islands, pursuant to (a) any
provision of the formation documents, as now in effect, or by-laws, as now in
effect, of DCICV, or (b) any material franchise, mortgage, indenture or deed of
trust or any material lease, license or other agreement or any law, ordinance,
regulation, order, judgment or decree to which DCICV is a party or by which
either of them (or any of their assets, properties, operations or businesses)
may be bound, subject to or affected.
(a) DCICV is a corporation duly organized, validly existing
and in good standing under the laws of the Turks and Caicos Islands, and is duly
qualified as a foreign corporation in all jurisdictions, whether in the United
States of America or in the Turks and Caicos Islands, in which the failure to be
so qualified would have a Material Adverse Effect.
(b) DCICV has all necessary corporate power, legal right,
capacity and authority to execute and deliver this Agreement and each
transaction document to which it is a party, perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. This Agreement has been authorized by DCICV's Board of Directors and
will be authorized by the stockholders of DCICV upon execution of a
stockholders' consent and, except for execution of the stockholders' consent, no
further action by DCICV's Board of Directors or stockholders is necessary.
3.2. No Violation. Except as set forth on Schedule 3.2 of this
Agreement, neither the execution nor delivery by DCICV of this Agreement or any
transaction document to which it is a party, the performance by DCICV of its
obligations hereunder or thereunder nor the consummation by DCICV of the
transactions contemplated hereby will, (a) violate any provision of DCICV's
formation documents, by-laws or other organizational documents, (b) violate any
provision of any material Contract (as such term is defined herein) to which
DCICV is a party or by which any of the properties or assets of DCICV may be
bound or otherwise subject, (c) violate any Laws or Orders of any Government
Entities, or (d) will require any authorization, consent, approval, exemption or
other action by or notice to any Government Entity unless such violation would
not have a Material Adverse Effect on the Company.
3.3. Litigation. There is no Litigation in progress, pending or in
effect, or to the best knowledge of the shareholders of DCICV threatened,
against or relating to DCICV, or the transactions contemplated by this
Agreement.
4. Representations and Warranties of the Purchaser. The Purchaser represents and
warrants to the Sellers and the Company as follows:
4.1. Organization and Standing. The Purchaser is a corporation duly
organized and validly existing and in good standing under the law of the State
of Delaware.
4.2. Capitalization. The authorized capital stock of the Purchaser
consists of 40,000,000 shares of common stock. There are 19,392,892 shares of
common stock issued and outstanding. All such shares of capital stock of the
Purchaser are validly issued, fully paid and non-assessable. Except as set forth
in Schedule 4.2 of this Agreement, there are no (i) securities convertible into
or exchangeable for any of the Purchaser's capital stock or other securities,
(ii) options, warrants or other rights to purchase or subscribe to capital stock
or other securities of the Purchaser or securities which are convertible into or
exchangeable for capital stock or other securities of the Purchaser, or (iii)
Contracts or arrangements of any kind relating to the issuance, sale or transfer
of any capital stock or other equity securities of the Purchaser, any such
convertible or exchangeable securities or any such options, warrants or other
rights.
4.3. Legal Capacity; No Restrictions. The Purchaser has full corporate
power and authority to execute and deliver this Agreement and all other
agreements, certificates and documents executed or delivered, or to be executed
or delivered, by the Company in connection herewith (the "Purchaser Documents")
and to perform the obligations hereunder, and to perform each of the obligations
hereunder. All action required to authorize the Purchaser to enter into this
Agreement and to carry out the transactions contemplated hereby has been
properly taken; and this Agreement constitutes the legal, valid and binding
obligation of each member of the Purchaser, enforceable in accordance with its
terms. The execution, delivery and performance of this Agreement and the
Purchaser Documents by the Purchaser in accordance with its terms will not, with
or without the giving of notice or the passage of time, or both, conflict with,
result in a default, right to accelerate or loss of rights under, or result in
the creation of any encumbrance pursuant to, or require the consent of any third
party or governmental authority pursuant to (a) any provision of the Purchaser's
certificate of incorporation or by-laws, as currently amended and in effect, (b)
any material franchise, mortgage, indenture or deed of trust or any material
lease, license or other agreement or any law, regulation, order, judgment or
decree to which either member of the Purchaser is a party or by which it (or any
of its assets, properties, operations or business) may be bound, subject to or
affected.
4.4. Compliance with Laws and Other Instruments. The Purchaser has
complied with all existing material federal, state and local laws, rules,
regulations, ordinances, orders, judgments and decrees now or hereafter
applicable to its business, properties or operations as presently conducted, and
neither the ownership nor use of the Purchaser's properties nor the conduct of
the respective businesses conflicts with the rights of any other person, firm or
corporation or violates, or with or without the giving of notice or the passage
of time, or both, will violate, conflict with or result in a default, right to
accelerate or loss of rights under, any term or provision of their respective
(i) certificate of incorporation, or by-laws, as currently amended and in
effect, or (ii) any mortgage, indenture, deed of trust or material encumbrance,
lease, license or agreement or any law, ordinance, rule, regulation, order,
judgment or decree to which either member of the Purchaser is a party or by
which they or any of their respective properties, assets or operations may be
bound or affected or which might materially adversely affect any such
properties, assets or operations. Without limiting the generality of the
foregoing, to the best
knowledge and belief of the Purchaser, neither of the Purchaser nor any of their
respective officers, directors, employees or agents has, directly or indirectly,
made, promised to make, or authorized the making of, any offer, payment or gift
of money or anything of value to any governmental official, political party or
employee, agent or fiduciary of a customer, to obtain a contract for or to
influence a decision in favor of Purchaser where such offer, payment or gift was
or would be, if made, in violation of any applicable law, nor has it maintained
cash or anything of value, in an account or otherwise, not properly or
accurately accounted for on the respective books and records of Purchaser for
this purpose.
4.5. Finders' and Brokers' Fees. The Purchaser has not, nor has anyone
on behalf of the Purchaser, retained any broker, finder or agent or agreed to
pay any brokerage fee, finder's fee or commission with respect to the
transactions contemplated by this Agreement.
4.6. Authorization; Validity of Agreement. The Purchaser has all
necessary power, legal right, capacity and authority to execute and deliver this
Agreement and each Purchaser Document, perform its obligations hereunder and
thereunder and consummate the transactions contemplated hereby and thereby. This
Agreement and each Purchaser Document to which the Purchaser has been duly
authorized by all necessary corporate action on the part of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser is, and when
executed and delivered will be, a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) equitable
principles of law.
4.7. No Violations; Governmental Filings.
(a) The execution, delivery and performance of this Agreement,
and the Purchaser Documents, does not, and the consummation by the Purchaser of
the transactions contemplated hereby and thereby will not, (i) violate any
provision of the certificate of incorporation, and by-laws, (ii) violate any
provision of any Contract to which the Purchaser is a party or by which any of
its properties or assets may be bound or otherwise subject or (iii) violate any
Order of any Government Entity or any Law, applicable to the Purchaser or any of
its properties or assets.
(b) No filing, notice or registration with any Governmental
Entity is required by the Purchaser in connection with the execution, delivery
and performance of this Agreement, or any Purchaser Document, or the by the
Purchaser of the transactions contemplated hereby and thereby.
4.8. Financial Statements. Attached hereto as Exhibit B, are copies of
the Form 10-K for the fiscal year ended December 31, 1999 of the Purchaser, and
the Form 10-Q for the quarter ended March 31, 2000 of the Purchaser as filed
with the Securities and Exchange Commission (the "SEC"). The attached financial
statements are in compliance with the requirements of the SEC with respect to
such reports.
4.9. Litigation. There is no claim, legal action, arbitration,
governmental investigation or other legal or administrative proceeding, nor any
order, writ, injunction,
judgment, plan or decree ("Litigation") in progress, pending or in effect,
against the Purchaser is threatened, against or relating to the Purchaser, its
properties, assets, business or capital stock or the transactions contemplated
by this Agreement, and the Purchasers do not know of any basis of the same.
There is no continuing order, injunction or decree of any court, arbitrator or
Government Entities to which the Purchaser, is a party or by which the Purchaser
or its assets, properties, business or capital stock are bound.
4.10. Absence of Certain Changes. Except as and to the extent set
forth in Schedule 4.10 of this Agreement, since the date of the Interim
Financial Statements there has not been (a) any material adverse change in the
financial condition, assets, liabilities, business or operations of the
Purchaser other than changes caused by general economic or industry conditions
or trends expert or (b) any loss, damage or destruction, whether covered by
insurance or not, affecting the Purchaser's business or properties.
4.11. Validity of the Shares to be Issued to the Sellers. The
Consideration Shares to be issued to the Sellers of the Company in connection
with the transactions contemplated in this Agreement will, when issued and
transferred for in accordance with the terms and conditions of this Agreement,
be duly and validly issued, non-assessable shares, free and clear of any and all
encumbrances thereon, and will be issued, subject to the accuracy and validity
of the representations and warranties of the Sellers set forth in Section 2.5,
in compliance with all applicable federal and state securities laws.
5. Covenants and Agreements.
5.1. Conduct of the Business by the Company. The Company covenants,
and each Seller covenants, to cause the Company, to conduct its business in the
ordinary course, consistent with past practice. Without limiting the generality
of the foregoing, unless otherwise expressly provided in this Agreement, the
Company covenants that it will not and the Sellers covenant to use commercially
reasonable efforts so that the Company will not:
(a) issue or sell any stock or any other security;
(b) declare or pay any dividend or other distribution (whether
in cash, stock or property or any combination thereof) to any
of its stockholders;
(c) make any loans, advances or capital contributions to, or
investments in, any other person or entity (other than loans
or advances to employees in accordance with past practices);
(d) sell, lease or otherwise dispose of any of its properties
or assets, except for sales in the ordinary course of business
and consistent with past practice;
(e) make any capital expenditure or commitment for additions
to property, plant, equipment or other capital assets in
excess of $25,000;
(f) take any action which materially adversely affects the
rights and franchises of the Company, the business
organization of the Company or
the Company's present relationships with suppliers and
customers and others having business relationships with the
Company;
(g) enter into any Contract, except Contracts which are in the
ordinary course of business and consistent with past practice,
are not material to the Company (individually or in the
aggregate) and would not have been required to be disclosed in
the Disclosure Schedule had they been in existence on the date
of this Agreement;
(h) amend its Constitute of Documents or By-laws, as
applicable, or make any changes in authorized or issued
capital stock;
(i) directly or indirectly (through a representative or
otherwise) solicit or furnish any information to any
prospective buyer, commence, or conduct presently ongoing,
negotiations with any other party or enter into any agreement
with any other party concerning the sale of the Company, the
Company's assets or business or any part thereof or any equity
securities of the Company (an "Acquisition Proposal"); or
(j) enter into any agreement to do, or take, or agree in
writing or otherwise to take or consent to, any of the
foregoing actions.
5.2. Access to Information. The Company's officers, directors,
employees, agents, accountants and counsel to, upon reasonable notice, shall (a)
afford the officers, employees and authorized agents, accountants, counsel and
representatives of the Purchaser complete access, during normal business hours,
to (i) the offices, properties, plants, other facilities, books, Contracts,
documents and records of the Company and any records concerning the Company
maintained and accumulated by its representatives, and (ii) those officers,
directors, employees, agents, accountants and counsel of the Company who have
any knowledge relating to the Company or the Company's business; (b) furnish to
the officers, employees and authorized agents, accountants, counsel and
representatives of the Purchaser such additional financial and operating data
and other information regarding the Company or the Company's business
(including, without limitation, any Contracts, licenses and patents in effect as
of the date hereof and any Contracts, or licenses being negotiated or entered
into between the date hereof and the Closing Date), properties and goodwill of
the Company as the Purchaser may from time to time request; (c) with and only
with the prior written consent of the Sellers, allow the Purchaser access to any
properties for the purposes of conducting environmental, safety and health audit
activities (including sampling); and (d) with the prior consent of the Sellers
in each instance, allow access to vendors, customers, manufacturers of its
machinery and equipment, and others having business dealings with the Company.
5.3. Other Actions. Each of the parties hereto shall use all
reasonable efforts to (i) take, or cause to be taken, all actions, (ii) do, or
cause to be done, all things, and (iii) execute and deliver all such documents,
instruments and other papers, as in each case may be necessary, proper or
advisable under applicable laws, or reasonably required to in order to carry out
the terms and provisions of this Agreement and to consummate and make effective
the transactions contemplated hereby.
6. Conditions to the Closing.
6.1. Conditions Precedent to the Company's and Sellers Obligations to
Close. The obligations of the Company and the Sellers to consummate the
transactions contemplated hereby shall be subject to the satisfaction or waiver
by the Company and the Sellers, at or prior to the Closing, of the following
conditions:
(a) the representations and warranties of the Purchaser
contained in this Agreement shall be true and correct in all material respects
as of the date made and as of the Closing Date as if made on and as of the
Closing Date;
(b) the Purchaser shall have performed in all material
respects its obligations under this Agreement required to be performed by it at
or prior to the Closing pursuant to the terms hereof;
(c) no Litigation shall have been commenced or threatened, and
no investigation by any Government Entity shall have been commenced, against
Purchaser or any of its Affiliates, officers or directors, with respect to the
transactions contemplated hereby;
(d) the Purchaser shall delivered to the Company and the
Sellers a certificate executed by the secretary of the Purchaser certifying as
true and accurate (i) the certificate of incorporation of the Purchaser (ii) the
by-laws of the Purchaser, (iii) the signatures of the officers of the Purchaser
executing this Agreement or the Purchaser Documents, and (iv) the board of
director resolutions of the each of the Purchaser authorizing the transactions
contemplated herein;
(e) the Purchaser has placed fifty-one percent (51%) of the
Voting Shares in a Mexican trust established by a Mexican financial institution,
which is reasonably acceptable to both the Purchaser and Xxxxxxxxxx, to be held
for the benefit of the Purchaser; and
(f) the Purchaser has received a fairness opinion from an
investment bank, with respect to the fairness of the transactions contemplated
in this Agreement to the stockholders of the Purchaser.
6.2 Conditions Precedent to the Purchaser's Obligations to Close. The
obligations of the Purchaser to consummate the transactions contemplated hereby
shall be subject to the satisfaction or written waiver by the Purchaser, at or
prior to the Closing, of the following conditions:
(a) the representations and warranties of the Company and the
Sellers contained in this Agreement shall be true and correct in all material
respects as of the date made and as of the Closing Date as if made on and as of
the Closing Date;
(b) the Company and the Sellers shall have performed in all
material respects their obligations under this Agreement required to be
performed by them at or prior to the Closing pursuant to the terms hereof;
(c) no Litigation shall have been commenced or threatened, and
no investigation by any Government Entity shall have been commenced, against the
Company, or any of the Sellers or any of their Affiliates, or any officers or
directors the Company, with respect to the transactions contemplated hereby;
(d) the Company shall have delivered to the Purchaser a
certificate executed by the secretary of the Company certifying as true and
accurate (i) the [constitutive of documents] and by-laws of the Company, (ii)
the stockholder and board of director consents authorizing the actions of the
Company's directors and officers for certain periods prior to the Closing in a
form reasonably satisfactory to Purchaser, (iii) the signatures of the officers
of the Company executing this Agreement or the Seller Documents or Company
Documents;
(e) the Concession, a form of which is attached hereto as
Exhibit C, is true, correct, complete, remains in full force and effect, and has
not been amended as of the Closing Date and no notice of cancellation has been
received by the Company or to the best of the Sellers knowledge has been
received by the Company;
(f) the Sellers shall have executed the Stockholders
Agreement, a form of which is attached hereto as Exhibit 6.2(f);
(g) the Company shall have appointed an agent for service of
process in the State of New York.
7. Closing Deliveries and Actions.
7.1. By the Purchaser. At the Closing, the Purchaser shall deliver to
the Shareholders:
(a) stock certificates representing 2,250,000 shares of stock
of the Purchaser to each of DCICV and Xxxxxxxxxx;
(b) the opinion of Xxxxxx Xxxxxx LLP, counsel to the
Purchaser, substantially in the form attached as Exhibit 7.1(b); and
(c) the fairness opinion of an investment bank.
7.2. By the Sellers and the Company. At the Closing, there shall also
be delivered to the Purchaser:
(a) the stock certificates representing the Limited Shares
and Voting Shares of the Company owned by each of the Sellers, duly endorsed in
blank or accompanied by stock transfer powers and the minute books, stock
certificate books and stock transfer ledgers of the Company;
(b) a certificate with respect to the Company from Republic
of Mexico and all jurisdictions in which the Company is qualified to do business
attesting as to its good standing therein as of dates recent to the Closing
Date;
(c) the resignations, dated the Closing Date, of each
Director and Officer;
(d) the opinion of Xxxxx Xxxxx Xxxxx, counsel to the Company,
in the form attached hereto as Exhibit 7.2(d);
(e) the opinion of Xxxxx Xxxxx Xxxxx, counsel to Xxxxxxxxxx,
in the form attached hereto as Exhibit 7.2(e); and
(f) the opinion of [name of Mexican law firm], counsel to
DCICV, in the form attached hereto as Exhibit 7.2(f); and
(g) an executed Stockholders Agreement.
8. Termination. This agreement may be terminated prior to the Closing (a) by
mutual written consent of the Purchaser and the Sellers or (b) by the Purchaser,
on the one hand, or the Stockholders, on the other hand, if the Closing shall
not have occurred on or before December 31, 2000, provided the terminating party
has not, through breach of a representation, warranty or consent, prevented the
Closing from occurring on or before such date. Prompt written notice of any such
termination shall be given to the other parties specifying the reason for such
termination and upon any such termination this Agreement shall forthwith
terminate without, however, any waiver of the rights of the parties for breaches
of this Agreement.
9. Indemnification.
9.1. Indemnification by the Sellers. Each Seller hereby severally
agrees to indemnify, defend and hold harmless each member of the Purchaser, the
Surviving Corporation and each of their respective directors, officers,
employees and controlled or controlling persons ("Affiliates") for all losses,
liabilities, claims, damages, judgments, awards, costs and expenses (including,
without limitation, interest, penalties, court costs and attorneys fees and
expenses) (collectively, "Damages") incurred by, asserted against, resulting to
or imposed on the Purchaser, directly or indirectly, as a result of or arising
out of (i) the inaccuracy or breach of any representation or warranty of any
Seller or the Company contained or made in this Agreement made by any Seller or
the Company as of the date of this Agreement or the Closing Date; or (ii) the
breach by any Seller or the Company of any covenant, agreement or obligation of
any Seller or the Company contained in this Agreement made by any Seller or the
Company as of the date of this Agreement or the Closing Date;
9.2. Indemnification by the Company. The Company shall indemnify,
defend and hold harmless the Purchaser for all Damages incurred by, asserted
against, resulting to or imposed on the Purchaser, directly or indirectly, as a
result of or arising out of (i) the breach of any representation or warranty of
any Seller or the Company contained in this Agreement which
occurs after the Closing Date; (ii) the breach by any Seller or the Company of
any covenant, agreement or obligation of any Seller or the Company contained in
this Agreement which occurs after the Closing Date; or (iii) any assertion by
any past or current stockholder of the Company of any suit or action relating to
any of the transactions contemplated by this Agreement or any of the Purchaser
Documents. The indemnification obligations of the Company under this Section 9.2
shall only exist until, and shall be automatically terminated and extinguished
upon the Effective Time.
9.3. Indemnification by the Purchaser. The Purchaser shall indemnify
the Sellers and the Company for any Damages incurred by, asserted against,
resulting to or imposed on the Purchaser, directly or indirectly, as a result of
(i) the breach of any representation or warranty made by the Purchaser in this
Agreement and (ii) the breach by any member of the Purchaser of any covenant,
agreement or obligation of the Purchaser contained in this Agreement.
9.4. Time Limitations. The Company shall have no liability for
indemnification with respect to any representation or warranty (other than the
representations and warranties in Sections 3.9 and 3.10 unless, on or before 12
months after the Closing, the Purchaser notifies the Company of a claim of
indemnity specifying the basis thereof in reasonable detail. A claim for
indemnification under Section 9.1 arising out of the inaccuracy or a breach of
any representation or warranty set forth in Section 3.10 (a "Tax Related Claim")
may be made by any member of the Purchaser at any time until the expiration of
the applicable statute of limitations (and any extension thereof, which
extension shall require the consent of the Stockholders which shall not be
unreasonably withheld).
9.5. Limitations on Amount; Order of Claims.
The Sellers shall not have any liability for indemnification under
Section 9.1 arising out of the inaccuracy or a breach of any representation or
warranty of the Company or the Sellers, (other than representations and
warranties in Section 3.15) unless and until the total of all Damages incurred
by the Purchaser exceeds $500,000 U.S. Dollars (the "Basket"), and then the
Sellers in the aggregate shall only be responsible for the Damages in excess of
that amount. If the Basket has been exceeded, the Purchaser shall be entitled to
indemnification for such breach to the extent the Basket would then be exceeded.
Notwithstanding the foregoing, the Basket shall apply to Damages incurred by the
Purchaser arising out of breaches of Sections 3.1, 3.2 and 3.3 of this
Agreement, or any claim for Damages arising out of the subject matter of Section
9.5(d) of this Agreement.
9.6. Procedure for Indemnification - Third Party Claims other than
Taxes.
(a) Except in the case of any action, suit or proceeding, or
written threat thereof relating to a Tax Claim (as defined herein), promptly
after receipt by an indemnified party of written notice of the commencement
against it by any third party (including but not limited to any Governmental
Entity) of any action, suit or proceeding, or written threat thereof, such
indemnified party will, if a claim is to be made against an indemnifying party
under this Article 9, give notice to the indemnifying party thereof. The
indemnified party shall furnish to the indemnifying party in reasonable detail
the information possessed by the indemnified party with respect to such
indemnification claim.
(b) The indemnifying party shall have 30 days after the notice
from the indemnified party to notify the indemnified party in writing of its
election to defend the third party claim or demand on behalf of the indemnified
party. If the indemnifying party elects to defend such third party claim or
demand, the indemnified party shall make available to the indemnifying party all
materials reasonably required for that purpose and shall otherwise assist and
cooperate with the indemnifying party in the defense of such third party claim
or demand, and so long as the indemnifying party is defending such third party
claim in good faith, the indemnified party shall not pay, settle or compromise
such third party claim or demand. If the indemnifying party elects to defend
such third party claim or demand, the indemnifying party shall have the right to
control the defense of such third party claim or demand, at the indemnifying
party's own expense. If the indemnifying party does not elect to defend such
third party claim or demand or does not defend such third party claim or demand
in good faith, the indemnified party shall have the right, in addition to any
other right or remedy it may have hereunder, at the indemnifying party's
expense, to defend such third party claim or demand.
(c) If a notice of deficiency, proposed adjustment,
adjustment, assessment, audit, examination or other administrative or court
proceeding, suit, dispute or other claim (a "Tax Claim") shall be delivered,
sent, commenced or initiated to or against the Purchaser by any Tax authority
with respect to Taxes for which the Purchaser is entitled to indemnification
from the Sellers, the Purchaser shall promptly notify the Sellers in writing of
the Tax Claim.
9.7. Procedure for Indemnification - Tax Claims.
(a) If the Tax Claim relates to any period of time prior to
the Closing Date, the Stockholders may, within 30 days after written notice from
the Merger Subsidiary, assume and control the defense of such Tax Claim at their
own cost and expense and with their own counsel, and the Merger Subsidiary
agrees to cooperate with the Stockholders in pursuing such contest. If the
Stockholders elect to assume the defense of any such Tax Claim, notwithstanding
anything to the contrary contained herein: (i) the Stockholders shall keep the
Merger Subsidiary informed of all material developments and events relating to
any such Tax Claim; and (ii) at its own cost and expense, the Merger Subsidiary
shall have the right to participate in (but not to control) the defense of any
such Tax Claim.
(b) In connection with the contest of any Tax Claim that the
Stockholders have the right to control but do not timely elect to control
pursuant to Section 9.7 hereof or any Tax Claim which relates to any period of
time after the Closing Date, such contest shall be controlled by the Merger
Subsidiary, and the Stockholders agree to cooperate with the Merger Subsidiary
in pursuing such contest.
9.8. Mitigation of Damages.
(a) No party shall have any liability to another party under
this Article 9 for Damages to the extent that such Damages relate to a liability
or matter with respect to
which the indemnified party has made recovery from an insurance company or from
the person causing the damages, to the extent of such recovery.
(b) The obligation of an indemnifying party shall be adjusted
so as to give effect to any net reduction in federal, state or local income tax
liability determined on a consolidated basis to which the party being
indemnified hereunder will be actually entitled in connection with the
satisfaction by the indemnifying party of any indemnification claim brought by
the party being indemnified.
(c) The remedies provided in this Article 9 shall be exclusive
as to any claim by a party under this Agreement or any other document executed
hereunder or arising out of the transactions provided for herein and therein.
9.9 Recovery of Legal Fees and Expenses. In the event that a party
hereto shall assert a claim for indemnification against any other party hereto
and it shall be determined that the asserting party is not entitled for
indemnification with respect to such claim, the asserting party shall promptly
pay to the non-asserting party all of the non-asserting party's expenses
(including but not limited to legal fees and expenses) incurred by the
non-asserting party in investigating, negotiating, litigating, arbitrating
and/or otherwise addressing such claim.
Miscellaneous.
-------------
10.1. Disclosure Schedules. Information set forth in the disclosure
schedules to this Agreement (collectively referred to herein as the "Disclosure
Schedule") specifically refers to the article and section of this Agreement to
which such information is responsive and such information shall not be deemed to
have been disclosed with respect to any other article or section of this
Agreement or for any other purpose. The Disclosure Schedule shall not vary,
change or alter the language of the representations and warranties contained in
this Agreement and, to the extent the language in the Disclosure Schedule does
not conform in every respect to the language of such representations and
warranties, such language shall be disregarded and be of no force or effect.
10.2. Amendments. This agreement may be amended, supplemented or
modified, any provision hereof may be waived, only by a written instrument
making specific reference to this Agreement signed by the party against whom the
same is sought to be enforced.
10.3. Waiver. No course of dealing of any party hereto, no omission,
failure or delay on the part of any party hereto in asserting or exercising any
right hereunder, and no partial or single exercise of any right hereunder by any
party hereto shall constitute or operate as a waiver of any such right or any
other right hereunder. No waiver of any provision hereof shall be effective
unless in writing and signed by or on behalf of the party to be charged
therewith. No waiver of any provision hereof shall be deemed or construed as a
continuing waiver, as a waiver in respect of any other or subsequent breach or
default of such provision, or as a waiver of any other provision hereof unless
expressly so stated in writing and signed by or on behalf of the party to be
charged therewith.
10.4. Governing Law; Jurisdiction; Arbitration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN THAT STATE, WITHOUT REGARD TO ANY OF ITS PRINCIPLES OF CONFLICTS OF LAWS OR
OTHER LAWS WHICH WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED WITHOUT REGARD
TO ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS AGREEMENT TO BE DRAFTED. EACH
OF THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES
UNCONDITIONALLY AND IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND THE FEDERAL
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK WITH RESPECT TO ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN NEW YORK COUNTY OR SUCH
DISTRICT, AND AGREES THAT SERVICE OF ANY SUMMONS, COMPLAINT, NOTICE OR OTHER
PROCESS RELATING TO SUCH SUIT,
ACTION OR OTHER PROCEEDING MAY BE EFFECTED IN THE MANNER PROVIDED IN SECTION
10.5.
(b) Notwithstanding the provisions in Section
10.4(a), in the event that the parties agree to seek to resolve any disputes
between the parties arising out of or relating to this Agreement by expedited
dispute resolution procedures, the parties agree to submit such disputes, if
any, to binding arbitration to be conducted in New York, New York, by the
American Arbitration Association ("AAA"), pursuant to the rules and procedures
of the AAA.
(c) If any such dispute exists, a party will notify
the other party of the dispute, and if the dispute is not resolved within ten
(10) days after such notice is furnished, the notifying party may institute
arbitration proceedings pursuant to this Section 10.4(c).
(d) Any arbitration conducted pursuant to this
Section 10 shall be before a panel of three (3) arbitrators chosen from lists of
qualified arbitrators submitted by the AAA.
(e) The determination of a majority of the
arbitrators in the arbitration shall be conclusive and binding on the parties
hereto and shall not be subject to appeal or judicial review. The award of the
arbitrators may be enforced in any court of competent jurisdiction and each of
the parties hereby unconditionally and irrevocably consents to the jurisdiction
of the Federal District Court for the Southern District of New York and the
Courts of the State of New York located in New York County solely with respect
to (and for no reason or other purpose) any action instituted to enforce any
such award.
(f) Each of the parties unconditionally and
irrevocably waives any right to a trial by jury in respect of any such action.
(g) The arbitrators shall be entitled to award and
apportion the costs and expenses of the parties in connection with any
arbitration (including, without limitation, attorneys' fees and expenses) as the
arbitrators, in their discretion, may determine. The costs and expenses of the
arbitrators and expenses of the arbitrators and the AAA shall be shared equally
by the Sellers, on the one hand, and the Purchaser, on the other hand.
10.5. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given upon (a) transmitter's confirmation of a
receipt of a facsimile transmission or (b) confirmed delivery by a standard
courier service or delivery by hand at the following addresses (or at such other
address for a party as shall be specified by like notice):
if to the Purchaser, to:
InfoAmerica, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Fax Number: 000-000-0000
with a copy to:
Xxxxxx Xxxxxx, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxx Xxxxxxxx, Esq.
Fax Number: 000-000-0000
if to the Sellers, to:
Xxxxxx Xxxxxxxxxx, Sr.
Blvd. Agua Caliente 4558, Piso 18
22420 Tijuana, B.C., Mexico
Fax Number: 00-00-00-00
Xxxx Xxxxx International Cable Ventures, Ltd.
c/o Xxxxxx Xxxxxx, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxx Xxxxxxxx, Esq.
Fax Number: 000-000-0000
if to the Company, to:
Cable California S.A. de C.V.
------------------------
------------------------
------------------------
Fax Number: _____________
with a copy to:
Xxxxx Xxxxx Xxxxx
------------------------
------------------------
Fax Number: _____________
10.6. Entire Agreement. This agreement (together with the Schedules and
Exhibits hereto) and the agreements and documents delivered pursuant to this
Agreement, constitute the entire agreement of the parties with respect to the
subject matter hereof, and collectively supersede all other prior or
contemporaneous negotiations, commitments, agreements and understandings
(whether written or oral), between the parties with respect to the subject
matter hereof.
10.7. Further Assurances. Each party hereto covenants and agrees
promptly to execute, deliver, file or record such agreements, instruments,
certificates and other documents and to perform such other and further acts as
the other party hereto may reasonably request or as may otherwise be necessary
or proper to consummate and perfect the transactions contemplated hereby.
10.8. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, or unenforceable, then (a) such provision, covenant or
restriction shall be construed by limiting and reducing it so as to be
enforceable to the fullest extent permitted under applicable law and shall
thereupon be enforced as so limited and reduced and (b) the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
10.9. Assignment. This agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interest or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. This
agreement is not intended to confer upon any other person except the parties
hereto any rights or remedies hereunder.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have executed this
Agreement and Plan of Merger as of the day and year first written above.
INFOAMERICA, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Executive Officer
CABLE CALIFORNIA S.A. de C.V.
By: /S/ Xxxxxx Xxxxxxxxxx, Sr.
---------------------------------------
Name:Xxxxxx Xxxxxxxxxx, Sr.
Title: President
Sellers:
/s/ Xxxxxxx Xxxxx
----------------------------------------
Xxxx Xxxxx International Cable Ventures, Ltd.
/s/ Xxxxxx Xxxxxxxxxx, Sr.
---------------------------------------
Xxxxxx Xxxxxxxxxx, Sr.
