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EXHIBIT 10.3
OPTION AGREEMENT
THIS AGREEMENT is made effective as of the 1st of January, 1999, by and between
ASHTON COMMUNICATIONS CORPORATION ("ACC"), INTERCARRIER TRANSPORT, INC. ("ICT"),
AcNET, S.A. DE C.V. ("AcNet"), Xxxxxx Xxxxxx ("Xxxxxx") (collectively, the
"Ashton Group" or "Sellers")
and
INCOMEX, INC. ("Incomex") and XXXXXXX COMMUNICATIONS CORPORATION ("MCC")
(collectively, the "MCC Group" or "Purchasers").
In consideration of the following mutual agreements and other consideration
described below, the parties hereto agree:
1. BY MCC: Option to Purchase Stock of AcNet
a. MCC shall have the continuing non-assignable (other than to a
wholly owned subsidiary of MCC) option to purchase from ICT,
and upon exercise of such option, ICT shall sell to MCC, such
number and shares of AcNet held by ICT as thereafter equals
49% of the "Stock" (as defined below) of AcNet pursuant to the
terms and conditions of this Agreement.
b. MCC shall have the continuing, assignable option to purchase
from Xxxxxx, and upon exercise of such option, Xxxxxx shall
sell to MCC, such number and shares of AcNet held by Xxxxxx as
thereafter equals 1% of the "Stock" (as defined below) of
AcNet pursuant to the terms and conditions of this Agreement.
c. For purposes of this Agreement, the term "Stock" includes all
the issued and outstanding capital shares or equity interests
of AcNet.
d. MCC acknowledges that the shareholders of ICT prefer that the
proposed transaction be structured as a sale of 100% of ICT
rather than the sale by ICT of AcNet Stock. MCC agrees to
cooperate with ICT in defining an appropriate structure,
provided, however, in no event will MCC consider or be
required to consider any alternative that in its sole opinion
alters the basic economic structure and characteristics of the
proposed transaction.
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2. BY MCC: Option to Purchase Preferred Stock of AcNet
a. MCC shall have the continuing non-assignable (other than to a
wholly owned subsidiary of MCC) option to purchase from AcNet,
and upon exercise of such option, AcNet shall sell to MCC, up
to U.S. $2,000,000 of "Preferred Shares" (as defined below) of
AcNet pursuant to the terms and conditions of this Agreement.
b. Preferred Shares shall mean a newly created class of equity
securities of AcNet with the following attributes.
i. The Preferred Shares shall be validly authorized and
issued by AcNet under Mexican law.
ii. The Preferred Shares shall bear all rights typically
associated with Preferred Shares issued by U.S.
corporations, including but not limited to a
liquidation preference over the other classes of
Stock of AcNet, provided, however, that the Preferred
Shares shall have no voting rights and shall not be
convertible into common stock of AcNet.
iii. The Preferred Shares, as a class, shall accrue
dividends on a cumulative basis equal to 20% of the
earnings before interest and taxes ("EBIT") of AcNet.
Accrued dividends shall be paid upon declaration by
the Board of Directors of AcNet.
iv. The Preferred Shares may be redeemed by AcNet at any
time at a price equal to 120% of the face amount,
plus accrued dividends.
3. CONSIDERATION FOR OPTION: As consideration for this option to purchase
the Stock and the Preferred Stock of AcNet, MCC and Incomex have
extended loans to AcNet in the amount of U.S. $850,000 evidenced by one
or more promissory notes. The AcNet and ICT acknowledges receipt of such
funds and further acknowledges that such loan constitutes adequate and
sufficient consideration for this option.
4. ACQUISITION PRICE:
a. Stock of AcNet:
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i. The aggregate exercise consideration to
purchase the Stock from ICT pursuant to Section 1.a
shall be
(1) 450,000 shares of the Common Stock of MCC.
(2) Guarantee by MCC of amounts owed by AcNet to
Cisco Systems, Inc. and Duetsche Capital,
provided, however, that the aggregate amount
of such guarantee(s) will not exceed U.S.
$1,000,000. Such guarantee must be
consummated on or before March 30, 1999.
ii. The aggregate exercise consideration to
purchase the Stock from Xxxxxx pursuant to Section
1.b shall be one dollar (U.S. $1.00), provided,
however, that MCC shall have no right to exercise the
option pursuant to 1.b unless it has exercised the
option to purchase Stock from ICT pursuant to Section
1.a.
b. Preferred Stock of AcNet: The exercise consideration to
purchase the Preferred Stock of AcNet pursuant to Section 2
shall be, at the option of MCC, any combination of
i. U.S. funds in amounts equal to the face
value of the Preferred Shares so purchased; and, or
ii. Conversion of any loans, plus accrued
interest made by MCC or Incomex to AcNet.
5. CLOSING. The closing of the purchase of Stock and Preferred Stock
pursuant to this Agreement shall take place at a time and a place
agreed to by Sellers and the Purchasers. If the parties cannot agree,
the closing shall be five business days after MCC's notice of exercise
and at MCC's executive offices.
6. OPTION PERIOD. This option may be exercised in whole or in part by
notice from MCC to the Sellers given at any time prior to 11:59 p.m.
Pacific Time, July 31, 1999.
7. ACC, AcNet and ICT agree that, during the Option Period, ACC, AcNet
and/or ICT shall not, unless it receives the prior written consent of
MCC: (1) merge or consolidate ACC, AcNet or ICT with any individual,
partnership, corporation, limited liability company, governmental
entity or
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any department, agency or political division thereof; (ii) sell, lease
or otherwise dispose of any of AcNet assets; (iii) liquidate, dissolve
or effect a recapitalization or reorganization of ACC, ICT or AcNet in
any form of transaction; (iv) create, incur, assume, guarantee, be or
remain liable for, contingently or otherwise, or suffer to exist any
funded indebtedness, other than the indebtedness presently existing or
indebtedness funded by MCC; or (v) conduct discussions or negotiations
with respect to a transaction of the type described in clauses (i)
through (iv) with any party.
8. Injunctive Relief. The parties hereto agree that any party may apply
for and obtain from any state or federal court injunctive relief
prohibiting the violation of the terms of this agreement. Such remedy
shall be cumulative and not exclusive.
9. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by and against ACC, ICT, AcNet, Xxxxxx,
Incomex, MCC and their respective successors, transferees and other
assigns. Each of the parties hereby warrants that its officers,
executing this Agreement on each party's behalf is duly authorized to
enter into this Agreement as the binding act of the same.
10. Interim Disbursements. MCC reserves the right to make interim
"Pre-Option Exercise Disbursements" either to ACC or directly to AcNet,
and any and all such disbursements shall be considered Loans until and
if MCC exercises its right to purchase Preferred Stock under this
Option Agreement. Each Loan made hereunder shall be evidenced by a
Promissory Note emitted by the borrower, with a due date not to exceed
December 31, 1999.
11. Performance of Necessary Acts. ACC, ICT and AcNet shall perform any
further acts and execute and deliver or cause to be delivered by AcNet
any additional documents, which may be reasonably necessary to carry
out the provision of this Agreement. ICT represents and warrants that
it has, and covenants, that at all times during the Option period it
will have sufficient authorized shares of AcNet reserved for issuance
upon exercise of MCC's option under this Agreement.
12. Governing Law. This Agreement has been executed by MCC and shall be
governed and constructed in accordance with the internal Laws of the
State of Texas, United States of America.
13. Amendment, Waiver and Consent. This Agreement may be amended, or any
provision of this Agreement may be waived only if such amendment or
waiver is set forth in writing executed by the parties. No course of
dealing
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between the parties will be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of
any party under or by reason of this Agreement.
In witness to the foregoing, the parties hereto have executed this agreement on
the date first above written.
Ashton Communications Corporation Xxxxxxx Communications Corporation
/s/ Xxx Xxxxxx /s/ Xxx Xxxxxxx
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Xxx Xxxxxx, President Xxx Xxxxxxx, Chairman
Intercarrier Transport, Inc. Incomex, Inc.
/s/ Xxx Xxxxxx /s/ Xxxx Xxxxx
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Xxx Xxxxxx, President Xxxx Xxxxx, Chief Executive Officer
AcNet S.A. de C.V.
/s/ Xxx Xxxxxx
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Xxx Xxxxxx, Director General
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
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