AGREEMENT
by and among
LAS AMERICAS BROADBAND, INC. ("Las Americas Broadband")
and
CABLE CALIFORNIA S.A. de C. V. (the "Company") and
XXXXXX XXXXXXXXXX, SR. ("Glutamate")
and
LABN MEXICO S. A. de C. V. ("Mexco" or the "Purchaser")
09 Dated as of 2002
1. AGREEMENT, dated as Of September 26, 2002 (this "Agreement"), is entered
into by and among Las Americas Broadband Inc., a corporation organized under the
laws of the State of Colorado, United States of America ("Las Americas
Broadband"), Cable California S.A. de C.V., a sociedad anonima de capital
variable organized under the laws of the United Mexican States (the "Companv"),
Xxxxxx Xxxxxxxxxx, Sr.., an individual who resides in the United Mexican States
("Xxxxxxxxxx"), and LABN Mexico, S.A. de C.V., a sociedad anonima de capital
variable organized under the laws of the United Mexican States ("Mexco" or the
"Purchaser"),. For the purposes of this Agreement, "Las Americas Broadband"
shall, to the extent applicable, include any successor by merger (except,
specifically, with regard to Section 5).
RECITALS
WHEREAS, Xxxxxxxxxx solely owns of record and beneficially all of the issued and
outstanding Series A Shares which represent fifty-one percent (51 %) of the
outstanding capital stock of the Company (the "Series A Shares"). To the best of
his knowledge, the other forty-nine percent (49%) of the outstanding capital
stock of the Company is represented by all of the issued and outstanding Series
B Shares which are held by xxxx Xxxxx international cable ventures Ltd., a Turks
and Caicos corporation;
WHEREAS, Xxxxxxxxxx desires to sell all of his Series A Shares to Mexco, and
Mexco wishes to purchase such Series A Shares from Xxxxxxxxxx in exchange for
the consideration set forth herein and upon the terms and subject to the
conditions set forth herein; and
WHEREAS, Las Americas Broadband wishes to facilitate the transfer of the Series
A Shares and agrees to assist Mexco in providing the consideration set forth
herein.
NOW THEREFORE, in consideration of the premises, representations, warranties and
mutual covenants contained herein and other valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
AGREEMENT
1. J Sale and Transfer of the Shares.
the _ conditions set forth herein, Xxxxxxxxxx shall transfer the Series A
Shares to the Purchaser as follows:
(a) Upon signing of this Agreement, Xxxxxxxxxx shall deliver the stock
certificates representing the Series A Shares, duly endorsed in property in
blank, free and clear of all mortgages, liens, security interests, restrictions,
pledges, options, calls, equitable interests, voting agreements, rights of first
refusal, assessments, adverse claims or rights or other similar rights or other
encumbrances of any nature whatsoever to Banco Santander Mexicano, Direcci6n
Fiduciaria, acting as depositor (hereinafter the "Depositor") in the conditional
deposit agreement (the "Deposit Agreement") to be entered into on this same date
in substantially the form of Annex "1.1 (a)" hereto, and;
(b)Once the Conditions Precedent (as hereinafter defined), have been satisfied,
or waived as applicable, on or before June 30, 2003, the Depositor shall
transfer the Series A Shares to Mexco free and clear of all mortgages, liens,
security interests, restrictions, pledge, options, calls, equitable interests,
voting agreements, rights of first refusal, assessments adverse claims or rights
or other similar rights or other encumbrances of any nature whatsoever. So that
the Depositor may carry out the transfer of the Series A Shares to Mexco once
the Conditions Precedent are satisfied, or waived as applicable., prior to
delivering the Series A Shares to Mexco the Depositor shall reasonably verify in
good faith, that the Conditions Precedent have been complied with, within one
business day as from the date Mexco provides the documentation required to
evidence the occurrence of the Conditions Precedent, but in any event
concurrently with the payment to Xxxxxxxxxx referred to in Section 1.2 (a)
herein.
(c) Although the Series A Shares shall be delivered to the Depositor by
Xxxxxxxxxx upon the execution hereof, the Deposit Agreement shall clearly
provide that Xxxxxxxxxx shall at all times retain control over the voting rights
of the Series A Shares until the date that the Closing (as hereinafter defined)
takes place. If the Closing has not taken place by June 30, 2003, or if this
Agreement is terminated in accordance with its terms, then, at such time the
Series A Shares shall be returned back to Xxxxxxxxxx. The Depositor fees for
establishing, maintaining and canceling the Deposit Agreement shall be solely
borne by Mexco.
1.2. Consideration for the Transfer of the Shares to Mexco. In consideration for
the transfer, assignment and delivery by Xxxxxxxxxx of the Series A Shares to
Mexco and the representations and warranties, covenants and agreements set forth
herein, and upon the terms and subject to the conditions contained herein, Mexco
shall pay or deliver, as the case may be, or shall otherwise cause to be paid or
delivered to Xxxxxxxxxx or its designee the aggregate amount of$5'000,000.00
(Five Million United States Dollars), which shall be payable as follows:
Consideration Shares;
(i)The amount of$l,OOO,OOO.OO (One Million United States Dollars), by means of a
cashiers check on the date of Closing;
(ii)The amount of$3,000,000.00 (Three Million United States Dollars), by wire
transfer, on the second (2nd) year anniversary of the date of this Agreement,
and
(iii)The amount of$l,OOO,OOO.OO (One Million United States Dollars), by wire
transfer, on the third (3rd) year anniversary of the date of this Agreement.
1.3.Assignment of debt to Las Americas Broadband. Immediately after the
execution and delivery of this Agreement Mexco shall assign to Las Americas
Broadband (or its successor by way of merger), the payment obligation, subject
to the Conditions Precedent referred to in Section 8 hereof, against Mexco in
favor of Xxxxxxxxxx in the amount of$5,000,000 (Five Million United States
Dollars, hereinafter the "Debt" pursuant to an assignment agreement in the
form attached hereto as "Annex 1.3" (the "Assignment Agreement"). Xxxxxxxxxx
grants his consent for such assignment and hereby agrees to sign the Assignment
Agreement and any other document required to effectuate the assignment of debt
as may be reasonably requested by Las Americas Broadband.
1.4Additional Consideration for the Transfer of the Shares.
a)As additional consideration for the transfer, assignment and delivery by
Xxxxxxxxxx of the Series A Shares to Mexco, Las America'2. Broadband '2.hall
deliver to Xxxxxxxxxx on the date of the Closing or immediately prior to the
Closing of the Merger (as hereinafter defined) whichever occurs earlier,
2,225,000 (two million two hundred twenty-five thousand) shares of the common
stock, par value $0.025, of Las Americas Broadband (the "Consideration Shares"),
which shares when issued shall be considered "Restricted Securities" pursuant to
Rule 144 of the Securities Act of 1933, as amended (the "Act"). Xxxxxxxxxx
further agrees to execute any and all related documents as may be reasonably
required by Las Americas Broadband to accomplish the foregoing.
Xxxxxxxxxx acknowledges and agrees that in the event that the Closing of the
Merger takes place prior to the Closing, Las Americas Broadband shall deposit in
escrow with an appropriate institution, the Considerations Shares, instructing
the escrow agent to: (i) immediately subsequent to the Closing of the Merger (as
hereinafter defined), exchange the Consideration Shares for such number of
shares issued by USA Broadband, Inc. (the "USA Consideration Shares"), as a
consequence of the merger, in the terms of that certain Agreement and Plan of
Merger dated April 25, 2002 by and between Las Americas Broadband and USA
Broadband, Inc.; (ii) at the time of Closing, deliver to Xxxxxxxxxx the USA
2. Creation of Series N Shares.
2.1.Creation of Series N Shares. Xxxxxxxxxx shall vote his shares in favor of
the required amendments to the By-laws of the Company in order for them to,
subject to the Conditions Precedent (as hereinafter defined), provide for the
issuance of an amount equivalent to ninety percent (90%) of the total aggregate
capital stock of the Company (the "Series N Shares"). Said Series N Shares shall
have limited voting rights for those matters expressly set forth in the By-laws
of the Company and any agreement among the Company's shareholders.
Notwithstanding the foregoing, it is expressly agreed that no such Series N
Shares will be issued until such time as the amount mentioned in clause 1.2 i,
has been paid to Xxxxxxxxxx.
3. Closing.
3.1.The Closing. The closing of the sale and transfer of the Series A Shares and
other transactions contemplated hereby (the "Closing") shall take place at the
offices of Las Americas Broadband's counsel, Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx
LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at
10:00 A.M., New York City time on or before June 30, 2003, or at such other
date, time or place as may be mutually agreed upon in writing by the parties
hereto (the "Closing Date").
3.2.Closing of Stock Transfer Books On and after the date of this Agreement,
and unless the Closing does not occur on or before June 30, 2003, there shall be
no transfers on the stock transfer books of the Company of the Series A Shares
of the Company that were issued and outstanding immediately prior to the date
hereof.
Representations and Warranties of Xxxxxxxxxx. Xxxxxxxxxx makes the following
representations and warranties to Mexco and Las Americas Broadband and
acknowledges that such parties are relying upon such representations and
warranties in connection with the transfer of the Series A Shares, each of which
representation and warranty is true and correct on the date hereof and as of the
Closing, and shall survive the Closing of the transactions provided for herein.
0.0.Xxxxx Capacity: No Restrictions
(a) Xxxxxxxxxx has the full legal capacity, power and authority to execute,
deliver and perform this Agreement, the Deposit Agreement and any and all other
agreements, certificates and documents executed or delivered, or to be
reasonably executed or delivered by Xxxxxxxxxx in connection herewith
(collectively, the "Ancillary Documents"), and to consummate the transactions
contemplated hereby or therewith. This Agreement constitutes a legal, valid and
binding obligation of Xxxxxxxxxx enforceable in accordance with the terms
established herein, subject to (i) bankruptcy, insolvency or other similar laws
now or hereafter in effect relating to creditors' rights generally, and (ii)
equitable principles of law; and
(b) Xxxxxxxxxx is a Mexican citizen in full exercise of his legal rights within
the United Mexican States, and has the legal capacity to enter into this
agreement and be bound by its terms.
0.0.Xx Violation; Consents and Approvals.
(a) The execution, delivery and performance of the obligations by Xxxxxxxxxx
under this Agreement or any Ancillary Document, do not and will not, (i) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default, or give rise to any right of termination, amendment,
cancellation or acceleration, under any of the terms, conditions or provisions
of any contract, lease, note, license, or other material instrument, agreement
or binding commitment, whether or not in written form (a "Material Contract") to
which Xxxxxxxxxx is a party or by which any of his properties or assets may be
bound or otherwise subject, or (ii) violate any statute, law, ordinance, rule or
regulation of any jurisdiction to which 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
("Governmental Entities") in the United Mexican States and its states.
(b) Other than the satisfaction of the Conditions Precedent referred to in this
Agreement, no authorization, consent, approval, exemption or other action by, or
notice to, any Governmental Entity is necessary or required to be obtained by
Xxxxxxxxxx in order to consummate the transactions contemplated hereunder.
4.3. Ownership. Xxxxxxxxxx is the sole registered holder and beneficial owner of
the Series A Shares, which such shares are validly issued, fully paid for, non
assessable, free and clear of any and all mortgages, liens, security interests,
restrictions, pledges, options, calls, equitable interests, voting agreements,
rights of first refusal, assessments, adverse claims or rights, or other similar
rights or other encumbrances of any nature whatsoever with respect to the Series
A Shares. The Series A Shares deposited with the Depositor under the Deposit
Agreement, for further transfer to Mexco if the Conditions Precedent are met
constitute all of the issued and outstanding Series A Shares of the Company.
Xxxxxxxxxx has full legal capacity, title and authority to deposit the Series A
Shares to the Depositor under the Deposit Agreement, for further transfer to
Mexco as contemplated hereby. The delivery of the Series A Shares to the
Depositor under the Deposit Agreement, for further transfer to Mexco in
accordance with Section I hereof, and the corresponding registration in the
Company's stock registry book, will vest in Mexco, once the Series A Shares are
transferred from Xxxxxxxxxx to Mexco, full right, title and interest in and to
all of the Series A Shares of the Company.
4.4. 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 Xxxxxxxxxx or to the knowledge of Xxxxxxxxxx, threatened against,
or relating to, the Series A Shares, or the transactions contemplated by this
Agreement, and Xxxxxxxxxx does not know of any basis of the same in the United
Mexican States, and any of its states. There is no continuing order, injunction
or decree of any court, arbitrator or Governmental Entity to which Xxxxxxxxxx,
and the Series A Shares are bound.
4.5. Investment Intent. Xxxxxxxxxx understands that each certificate
representing the Consideration Shares shall be imprinted with a legend in
substantially the following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH OFFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION OR IS
OTHERWISE IN COMPLIANCE WITH THE ACT AND SUCH LAWS AND LAS AMERICAS BROADBAND,
INC. ("LAS AMERICAS BROADBAND") RECEIVES A LEGAL OPINION FROM COUNSEL TO THE
TRANSFEROR REASONABLY SATISFACTORY TO LAS AMERICAS BROADBAND TO SUCH EFFECT.
4.6. Investment for Xxxxxxxxxx'x Own Account. Xxxxxxxxxx is acquiring the
Consideration Shares for his 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, except in compliance with applicable securities
laws.
4.7. Accredited Investors. Xxxxxxxxxx: (i) is "accredited investor" as that
term is defined in Rule 501(a) promulgated under the Act, @ is able to sustain
an entire loss of the investment represented by the Consideration Shares, (iii)
has such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of this investment and making an
informed investment decision with respect thereto, (iv) has the ability to bear
the economic risks of this investment, (v) has had the opportunity to ask
questions and receive answers concerning the terms and conditions of the
offering of securities acquired hereunder, as well as the opportunity to obtain
additional information necessary to verify the accuracy of information furnished
in connection with such offering that Las American Broadband possesses or can
acquire without unreasonable effort or expense. "Accredited investor" is defined
as any natural person: (a) whose individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeds $1,000,000.00; or (b)
who had an individual income in excess of $200,000.00 in each of the two most
recent years or joint income with that person's spouse in excess of $300,000 in
each of those years and has a reasonable expectation of reaching the same income
level in the current year;
4.8. No Obligation to Register the Consideration Shares. Xxxxxxxxxx understands
and acknowledges that (a) the Consideration Shares to be issued hereunder have
not been registered under the Act or any state securities laws and may not be
transferred unless subsequently registered under the Act, or pursuant to an
exemption from such registration; (b) Las Americas Broadband is under no
obligation to file a registration statement with the U.S. Securities and
Exchange Commission with respect to the Consideration Shares; and (c) any and
all sales of the Consideration Shares shall be subject to the provisions of Rule
144 as promulgated under the Act.
4.9. Finders' and Brokers' Fees. Xxxxxxxxxx has not retained any broker, finder
or agent, or agreed to pay any investment banking fees, brokerage commissions,
finder's fees or similar compensation in connection with the transactions
contemplated by this Agreement.
5. Representations and Warranties of Las Americas Broadband. Las Americas
Broadband makes the following representations and warranties to Xxxxxxxxxx and
acknowledges that he is relying upon such representations and warranties in
connection with the transfer of the Series A Shares and the issuance of the
Consideration Shares, each of which representation and warranty is true and
correct on the date hereof and as of the Closing and shall survive the Closing
of the transactions provided for herein.
5.1.Organization; Good Standing. Las Americas Broadband is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado and is duly qualified as a foreign corporation in such other
jurisdictions in which the failure to be so qualified would have a material
adverse effect on the business and assets (a "Material Adverse Effect") on Las
Americas Broadband. Las Americas Broadband has all requisite corporate power and
authority and possesses all franchises, licenses, permits, authorizations and
approvals from Governmental Entities to own and lease its assets and properties
and to conduct its business as it is now being conducted.
0.0.Xxxxx Capacity; No Restrictions. Las Americas Broadband has the full legal
capacity, power and authority to execute, deliver and perform this Agreement and
the Ancillary Documents, and to consummate the transactions contemplated hereby
and thereby. All acts required to be taken by Las Americas Broadband to enter
into this Agreement and to carry out the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Las
Americas Broadband, and this Agreement constitutes a legal, valid and binding
obligation of Las Americas Broadband enforceable in accordance with its terms
subject to (i) bankruptcy, insolvency or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) equitable principles of
law.
5.3. No Violation; Consents and Approvals.
(a) The execution, delivery and performance of the obligations by Las Americas
Broadband under this Agreement or any Ancillary Document, do not and will not,
(i) violate any provision of the its certificate of incorporation, by-laws or
other organizational documents, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default, or
give rise to any right of termination, amendment, cancellation or acceleration,
under any of the terms, conditions or provisions of any Material Contract to
which it is a party or by which any of its properties or assets may be bound or
otherwise subject, or (iii) violate any Orders of any Governmental Entities in
the United States of America and its states.
(b) No authorization, consent, approval, exemption or other action by, or notice
to, any Governmental Entity is necessary or required to be obtained by Las
Americas Broadband in order to consummate the transactions contemplated
hereunder..
5.4 Capitalization. As of the date hereof, there are 38,979,988 shares of
common stock of Las Americas Broadband issued and outstanding. All such shares
of common stock of Las Americas Broadband are validly issued, fully paid and
non- assessable. Except as set forth in Schedule 5.4 of this Agreement, there
are no (i) securities convertible into or exchangeable for any of Las Americas
Broadband's capital stock or other securities, (ii) options, warrants or other
rights to purchase or subscribe to capital stock or other securities of Las
Americas Broadband or securities which are convertible into or exchangeable for
capital stock or other securities of Las Americas Broadband, or (iii) Material
Contracts or arrangements of any kind relating to the issuance, sale or transfer
of any capital stock or other equity securities of Las Americas Broadband, any
such convertible or exchangeable securities or any such options, warrants or
other rights.
5.5.Validitv of the Consideration Shares to be Issued to Xxxxxxxxxx. The
Consideration Shares to be issued to Xxxxxxxxxx in connection with the
transactions contemplated in this Agreement, when issued and transferred in
accordance with the terms and conditions of this Agreement, will be duly and
validly issued, non-assessable, 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 Xxxxxxxxxx set forth in Sections 4.6 and 4.7,
in compliance with all applicable federal and state securities laws.
5.6. Litigation. There is no Litigation in progress, pending or in effect,
against Las Americas Broadband or to the knowledge of Las Americas Broadband
threatened against, or relating to, Las Americas Broadband, its properties,
assets, business or capital stock or the transactions contemplated by this
Agreement, and Las Americas Broadband does not know of any basis of the same
that would result in a Material Adverse Effect change to Las Americas Broadband.
There is no continuing order, injunction or decree of any court, arbitrator or
Governmental Entities to which Las Americas Broadband is a party or by which Las
Americas Broadband or its assets, properties, business or capital stock are
bound.
6. Representations and Warranties ofMexco. Mexco makes the following
representations and warranties to Xxxxxxxxxx and acknowledges that he is relying
upon such representations and warranties in connection with the transfer of the
Series A Shares ,each of which representation and warranty is true and correct
on the date hereof and as of the Closing and shall survive the Closing of the
transactions provided for herein.
6.1. Organization; Good Standing. Mexco is a sociedad anonima de capital
variable duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is organized in the United Mexican States and is
duly qualified in such other jurisdictions in the United Mexican States in which
the failure to be so qualified would have a Material Adverse Effect on Mexco.
Mexco has all requisite power and authority and possesses all franchises,
licenses, permits, authorizations and approvals from Governmental Entities (as
hereinafter defined) to own and lease its assets and properties and to conduct
its business as it is now being conducted.
6.2. Legal Capacity; No Restrictions. Mexco has the legal capacity, power and
authority to execute, deliver and perform this Agreement and the Ancillary
Documents, and to consummate the transactions contemplated hereby. All corporate
acts required to be taken by Mexco to enter into this Agreement and to carry out
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part ofMexco. This Agreement constitutes the legal,
valid and binding obligation ofMexco enforceable in accordance with its terms
subject to (i) bankruptcy, insolvency or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) equitable principles of
law.
6.3. No Violation; Consents and Approvals.
(a) The execution, delivery and performance of the obligations by Mexco under
this Agreement or any Ancillary Document, does not and will not, (i) violate any
provision of the Mexco's formation documents, by- laws or other organizational
documents, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default, or give rise to any
right of termination, amendment, cancellation or acceleration, under any of the
terms, conditions or provisions of any Material Contract to which Mexco is a
party or by which any of its properties or assets may be bound or otherwise
subject, or (iii) violate any Orders of any Governmental Entities in the United
Mexican States and its states, or the United States of America and its states.
(b) No authorization, consent, approval, exemption or other action by or notice
to any Governmental Entity is necessary or required to be obtained by Mexco
different from those defined as Conditions Precedent, in order to consummate the
transactions contemplated hereunder.
7. Covenants and Agreements.
7.1. Conduct of the Business by the Company Pending the Closing. Unless
otherwise expressly provided in this Agreement, or the By-laws of the Company,
Xxxxxxxxxx covenants to use his best efforts to ensure 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 shareholders;
(c) 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;
(d) enter into any Material Contract, except Material 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 to Mexco had they been in existence on the date of this
Agreement;
(e) unless otherwise provided for herein, amend its formation documents, By-
laws or other organization documents, as applicable, or make any changes in its
authorized or issued capital stock; or
(f) enter into any agreement to do, or take, or agree in writing or otherwise
to take or consent to, any of the foregoing actions.
7.2. Non compete. Except for the Consideration Shares to be issued to
Xxxxxxxxxx upon the consummation of the transactions contemplated herein,
Xxxxxxxxxx shall not either directly or through any corporate entity, or any
related third party, such as any of his parents or children, directly or
indirectly, alone or in association with any other individual, firm, corporation
or other business organization, (i) acquire or own in any manner, any interest
in any other individual or entity that is engaged in any facet of the business
of the Company, (ii) engage in any facet of the business of the Company or
compete in any way with the business of the Company, (iii) be employed in any
capacity by, serve as an employee of, consultant or advisor to, or otherwise
participate in the management or operation of, any individual or entity that (x)
engages in any facet of the business of the Company, or (y) competes with the
business of the Company in any way; provided, however, that notwithstanding the
foregoing, Xxxxxxxxxx and his parents and children individually, may own
collectively up to two percent (2%) of the voting securities of any publicly-
traded company, which engages in any facet of the business of the Company or
competes in any way with the business of the Company.
7.3. 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 in order to carry out the terms and
provisions of this Agreement and to consummate and effectuate the transactions
contemplated hereby.
8. Conditions to the Clo1iing.
8.1. Conditions Precedent to Close. The obligations of Xxxxxxxxxx and Mexco to
consummate the transactions contemplated hereby shall be subject to the
satisfaction or waiver by Mexco and Xxxxxxxxxx, at or prior to the Closing, of
the following conditions (hereinafter the "Conditions Precedent"):
(a) The authorization from the Ministry of Communications and Transportation
("SCT") of the sale and purchase of the Series A Shares according to the terms
and conditions herein provided;
(b) The authorization from the SCT of the amendment to the By-laws of the
Company, in the form attached hereto as Exhibit "8.1.(b )", which shall provide,
among other matters, for the issuance of the Series N Shares;
(c) The favorable opinion of the Federal Telecommunications Commission
("Cofetel") for the sale and purchase of the Series A Shares by Mexco and for
the amendment to the By-laws of the Company in the terms and conditions
established herein;
(d) The authorization by the Foreign Investments Bureau of the Ministry of
Economy, for the amendment to the By-laws of the Company in the terms and
conditions provided herein, and for the issuance of the Series N Shares;
(e) The favorable termination by the SCT of the Administrative Revocation
Procedure initiated against the Company's Concession to operate in Tijuana; and
(f) The merger contemplated by that certain Agreement and Plan of Merger dated
April 25, 2002, by and between Las Americas Broadband and USA Broadband, Inc., a
Delaware corporation shall have occurred (the "Closing of the Merger"). All
costs, fees and expenses, including reasonable legal fees, incurred by
Xxxxxxxxxx to obtain the previously mentioned authorizations and opinions, which
shall have been previously agreed upon on writing by Las Americas Broadband,
shall be reimbursed to Xxxxxxxxxx on demand.
8.2. Conditions Precedent to Xxxxxxxxxx'x Obligations to Close. The obligations
of Xxxxxxxxxx to consummate the transactions contemplated hereby shall be
subject to the satisfaction or written waiver by Xxxxxxxxxx, at or prior to the
Closing, of the following conditions, in addition to the Conditions Precedent:
(a) The representations and warranties of Mexco and Las Americas Broadband
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) Mexco and Las Americas Broadband shall have performed in all material
respects the 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 been threatened against Mexco and
Las Americas Broadband, and no investigation by any Governmental Entity shall
have been commenced, against Mexco and Las Americas Broadband or any of their
respective affiliates, officers or directors, with respect to the transactions
contemplated hereby;
(d) Mexco shall have delivered to Xxxxxxxxxx a certificate executed by the
secretary ofMexco certifying as true and accurate: (i) the organizational
documents ofMexco and the by-laws ofMexco; (ii) the signatures of the officers
of Mexco executing this Agreement or Ancillary Documents; (iii) resolutions of
the board of directors of Mexco authorizing the transactions contemplated herein
and in the Ancillary Documents, and (iv) the representations and warranties of
Mexco, 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; and
(e) Las Americas Broadband shall have delivered to Xxxxxxxxxx a certificate
executed by the secretary of Las Americas Broadband certifying as true and
accurate: (i) the signatures of the officers of Las Americas Broadband executing
this Agreement or Ancillary Documents; (ii) resolutions of the board of
directors of Las Americas Broadband authorizing the transactions contemplated
herein and in the Ancillary Documents, and (iii) the representations and
warranties of Las Americas Broadband, 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.
8.3. Conditions Precedent to Mexco's Obligations to Close. The obligations
ofMexco to consummate the transactions contemplated hereby shall be subject to
the satisfaction or written waiver by Mexco, at or prior to the Closing, of the
following conditions, in addition to the Conditions Precedent:
(a) the representations and warranties of Xxxxxxxxxx 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) Xxxxxxxxxx shall have performed in all material respects their obligations
under this Agreement required to be performed by him at or prior to the Closing
pursuant to the terms hereof;
(c) no Litigation shall have been commenced or been threatened against the
Xxxxxxxxxx, and no investigation by any Governmental Entity shall have been
commenced, against Xxxxxxxxxx, with respect to the transactions contemplated
hereby; and
(d) Xxxxxxxxxx shall have delivered to Mexco a certificate executed by the
secretary of the Company certifying as true and accurate: (i) the formation
documents, by- laws and other organizational documents of the Company; (ii) the
signatures of the officers of the Company executing this Agreement or the
Ancillary Documents; (iii) resolutions of the board of directors of the Company
authorizing the actions of the Company the transactions contemplated herein and
in the Ancillary Documents; and (iv) the representations and warranties of
Xxxxxxxxxx, 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.
9. Closing Deliveries and Actions.
9.1. By Xxxxxxxxxx to Mexco and Las Americas Broadband. At the Closing
Xxxxxxxxxx shall deliver or cause the Depositor to deliver:
(a) stock certificates representing the Series A Shares of the Company owned by
Xxxxxxxxxx, duly endorsed in favor ofMexco and the stockholders minutes book,
board of directors minutes book, and capital variations book;
(b) the written authorization from the SCT, the Foreign Investments Bureau and
the Cofetel' s written approval to the transactions contemplated hereby;
(c) the written termination to the Administrative Revocation Procedure initiated
by the SCT against the Concession of the Company to operate in Tijuana;
(d) the resignations, dated the Closing Date, of each director, and officer of
the Company;
(e) A shareholders meeting of the Company whereby the powers of attorney of
those attorneys-in-fact determined by Mexco be revoked as well as the
appointment of those other attorneys-in-fact and officers determined by Mexco;
and
(f) a certificate executed by Xxxxxxxxxx, as sole administrator of the Company,
certifying as true and accurate (i) the formation documents, by-laws and other
organizational documents of the Company; and (ii) the signatures of the officers
of the Company executing this Agreement or the Ancillary Documents.
10. Termination. This Agreement may be terminated prior to the Closing (a) by
the mutual written consent ofMexco and Xxxxxxxxxx, or (b) by Mexco, on the one
hand, or Xxxxxxxxxx, on the other hand, if the Closing shall not have occurred
on or before June 30,2003. Prompt written notice of any such termination shall
be given to the other parties specifying the reason for such termination and
upon the receipt of such notice, this Agreement shall immediately terminate
without, however, any waiver of the rights of the parties for breaches of this
Agreement.
11. Indemnification.
11.1. Indemnification by the Company. The Company agrees to indemnify, defend
and hold harmless Mexco and Las Americas Broadband, and each of its affiliates,
past and present directors, officers, employees, agents, advisors and
consultants, from any and 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, Mexco and Las Americas
Broadband, directly or indirectly, as a result of, or arising out of (i) the
inaccuracy or breach of any individual representation or warranty made by the
Company in this Agreement as of the date of this Agreement or the Closing Date,
(ii) the breach by the Company of any covenant, agreement or obligation of the
Company contained in this Agreement or the Ancillary Documents made by the
Company, or (iii) any assertion by any past or current shareholder of the
Company of any suit or action relating to any of the transactions contemplated
by this Agreement or the Ancillary Documents.
11.2. Indemnification by Xxxxxxxxxx. Xxxxxxxxxx, agrees to indemnify, defend
and hold harmless Mexco and Las Americas Broadband, and each of their respective
affiliates, past and present directors, officers, employees, agents, advisors
and consultants, from any and all Damages incurred by, asserted against,
resulting to, or imposed on, Mexco, directly or indirectly, as a result of, or
arising out of (i) the inaccuracy or breach of any individual representation or
warranty made by Xxxxxxxxxx in this Agreement as of the date of this Agreement
or the Closing Date, or (ii) the breach by Xxxxxxxxxx of the covenants referred
to in Sections 7.2 and 7.3 of this Agreement.
11.3. Indemnification by the Company, Mexco and Las Americas Broadband. Mexco,
Las Americas Broadband and the Company, agree to jointly or severally indemnify,
defend and hold harmless Xxxxxxxxxx and Xxxxxx Xxxxxxxxxx Aubanel for any
Damages incurred by, asserted against, resulting to, or imposed on, Xxxxxxxxxx
and Xxxxxx Xxxxxxxxxx Aubane1, directly or indirectly, as a result of (i) the
inaccuracy or breach of any representation or warranty made by Mexco, Las
Americas Broadband and the Company in this Agreement as of the date of this
Agreement or the Closing Date, (ii) the breach by Mexco, Las Americas Broadband
and the Company of any covenant, agreement or obligation ofMexco, Las Americas
Broadband and the Company contained in this Agreement, (iii) any acts or
omissions of the Company or Las Americas Broadband during the tenure of
Xxxxxxxxxx and Xxxxxx Xxxxxxxxxx Aubanel as officers thereof, and (iv) past or
present, alleged or actual, violations of any securities or corporate laws or
regulations asserted against Las Americas Broadband in writing, other than (A)
violations directly attributable to Xxxxxxxxxx or Xxxxxx Xxxxxxxxxx Aubanel, or
(B) for Damages incurred by Xxxxxxxxxx or Xxxxxx Xxxxxxxxxx Aubanel as
shareholders of Las Americas Broadband or USA Broadband, Inc.
11.4. Termination of Indemnification. The obligation to indemnify and hold
harmless any party, pursuant to this Section 11 shall survive the Closing and
shall last as long as the applicable statute of limitations provides.
Notwithstanding the generality of the foregoing the obligation to indemnify
shall, in no event exceed 5 years from the Closing Date.
11.5. Procedure for Indemnification - Third Party Claims.
(a) In order for a party to be entitled to any indemnification provided for
under this Section 11 (the "Indemnitee"), in respect of, arising out of or
involving a claim made by any person against the Indemnitee (a "Third Party
Claim") (including, but not limited to, a claim asserted by a Governmental
Entity), such Indemnitee must notify the indemnifying party (the "Indemnitor")
in writing of the Third Party Claim, promptly following receipt by such
Indemnitee of notice of the Third Party Claim being asserted; provided that,
failure to give such notification shall not affect the indemnification provided
hereunder, except to the extent the Indemnitor shall have been actually and
materially prejudiced as a result of such failure. The Indemnitee shall furnish
to the Indemnitor in reasonable detail, the information possessed by the
Indemnitee with respect to such Third Party Claim.
(b) The Indemnitor shall have thirty (30) days after the notice from the
Indemnitee to notify the Indemnitee in writing of its election to defend the
Third Party Claim or demand, on behalf of the Indemnitee. If the Indemnitor
elects to defend such Third Party Claim or demand, the Indemnitee shall make
available to the Indemnitor all materials reasonably required for that purpose
and the Indemnitee shall otherwise assist and cooperate the Indemnitor in the
defense of such Third Party Claim or demand, and so long as the Indemnitor is
defending such Third Party Claim in good faith, the Indemnitee shall not pay,
settle or compromise such Third Party Claim or demand. If the Indemnitor elects
to defend such Third Party Claim or demand, the Indemnitor shall have the right
to control the defense of such Third Party Claim or demand, at the Indemnitor's
own expense. If the Indemnitor 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
Indemnitee shall have the right, in addition to any other right or remedy it may
have hereunder, at the Indemnitor's sole cost and expense, to defend such Third
Party Claim or demand.
11.6. Mitigation of Damages.
(a) No party shall have any liability to another party under this Section 11 for
Damages to the extent that such Damages relate to a liability or matter with
respect to which the Indemnitee shall have recovered such Damages fYom an
insurance company or from the person causing the Damages, to the extent of such
recovery.
(b) The obligation of the Indemnitor 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 Indemnitee hereunder will be actually entitled
in connection with the satisfaction by the Indemnitor of any indemnification
claim brought by the Indemnitee.
(c) The remedies provided in this Section 11 shall be exclusive as to any claim
by a party under this Agreement or the Ancillary Documents, or any other
document executed hereunder or arising out of the transactions provided for
herein and therein.
11.7 Survival of Representations and Warranties. The representations and
warranties of the parties contained in this Agreement or in any of the Ancillary
Documents shall survive the Closing and shall last as long as the statute of
limitation provides. Notwithstanding the generality of the foregoing, the
survival of the representations and warranties shall not exceed 3 years from the
Closing Date.
11.8 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 to be indemnified
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, attorney's fees and expenses) incurred by the non-asserting party in
investigating, negotiating, defending, litigating, arbitrating and/or otherwise
addressing such claim.
12. Miscellaneous.
12.1. Amendments. Neither this Agreement, nor any of the terms hereof may be
amended, supplemented, modified or waived, except by an instrument in writing
signed by each of the parties hereto.
12.2. 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.
12.3. Expenses. Except as expressly provided herein, whether or not the
transactions contemplated by this Agreement are consummated, all costs and
expenses, including, but not limited to, attorneys' and advisory fees, incurred
in connection with this Agreement and the transactions contemplated thereby
shall be paid by the party incurring such expenses. The foregoing shall not
effect the legal right, if any, that any party hereto may have to recover
expenses from the other party that breaches its obligations hereunder.
12.4. Governing Law; Jurisdiction; Arbitration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF MEXICO, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT
COUNTRY, 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.
(b) Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach, termination or validity hereof shall be finally settled
by expedited dispute resolution procedures, the parties agree to submit such
disputes, if any, to binding arbitration to be conducted in San Diego,
California, by the American Arbitration Association ("AAA"), pursuant to the
rules and procedures of the AAA.
(c) If any such dispute exists, the party claiming such dispute exists shall
notify the party against which such dispute is being asserted 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 12.4(c).
(d) Any arbitration conducted pursuant to this Section 12 shall be managed by
the AAA and 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.
(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 so determine. The costs and expenses incurred in the process of
any such arbitration shall be borne equally by Xxxxxxxxxx, on the one hand, and
Mexco, on the other hand.
13. Notices. All notices, demands, consents, requests, instructions and other
communications to be given or delivered or permitted under or by reason of the
provisions of this Agreement, or in connection with the transactions
contemplated hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (a) if personally delivered, on
the business day of such delivery (as evidenced by the receipt of the personal
delivery service); (b) if mailed by certified or registered mail return receipt
requested, four (4) business days after the aforesaid mailing; (c) if delivered
by overnight courier (with all charges having been prepaid), on the second
business day of such delivery (as evidenced by the receipt of the overnight
courier service of recognized standing); or (d) if delivered by facsimile
transmission, on the business day of such delivery if sent by 6:00 p.m. in the
time zone of the recipient, or if sent after that time, on the next succeeding
business day (as evidenced by the printed confirmation of delivery generated by
the sending party's telecopier machine). If any notice, demand, consent,
request, instruction or other communication cannot be delivered because of a
changed address of which no notice was given (in accordance with this Section
13), or the refusal to accept same, the notice shall be deemed received on the
business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers as
applicable:
if to Las Americas Broadband, to: Las Americas Broadband, Inc. 00000 Xxxxxx
Xxxxxxxxx Xxxxxxxxx, XX 00000 Attn: Xxxxxxx X. Xxxxx Tel. Number: 000-000-0000
Fax Number: 000-000-0000
with a copy to: J enkens & Xxxxxxxxx Xxxxxx Xxxxxx, LLP The Chrysler Building
000 Xxxxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attn: Xxxxxx Xxxx Xxxxxxxx, Esq.
Tel. Number:000-000-0000 Fax Number: 000-000-0000
if to the Company, to: Cable California S.A. de X.X. Xxxx. Xxxx Xxxxxxxx, 0000,
Piso 18 22420 Tijuana, B.C., Mexico Attn: Xx. Xxxxxxx Xxxxx Tel.
Number:000-00-00-00-0000 Fax Number: 000-00-00-00-0000
with a copy to: Xxxxxxx Xxxx Xxxxxxxx X. Xxxx Xxxxxxxx, Xxxxxxxx Lutteroth y
Xxxxxxxxx, S.C. Monte Pelvoux 111 - 1 er. Piso Col. Xxxxx xx Xxxxxxxxxxx 00000
Xxxxxx, X.X., Xxxxxx Tel. Number: 000-00-00-0000-0000 Fax Number:
000-00-00-0000-0000
if to Xxxxxxxxxx, to: Xxxxxx Xxxxxxxxxx, Sr. Blvd. Agua Caliente 4558, Pi so 18
22420 Tijuana, B.C., Mexico Fax Number: 000-00-00-00-0000
with a copy to: Xxxx Xxxxxxxx Xxxxxx XX & X Xxxxxxxxx, X.X. Xxxx. Xxxx Xxxxxxxx
0000-000 22420 Tijuana, RC., Mexico Tel. Number: 000-00-00-00-0000 Fax Number:
000-00-00-00-0000
if to LABN Mexico, S.A. de C.V., to: 00000 Xxxxxx Xxxxxxxxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx Tel. Number: 000-000-0000 Fax Number: 000-000-0000
with a copy to:
Xxxxxxx Xxxx Xxxxxxxx X. Xxxx Xxxxxxxx, Xxxxxxxx Lutteroth y Xxxxxxxxx, S.c.
Monte Pelvoux 111 - 1 er. Piso Col. Xxxxx xx Xxxxxxxxxxx 00000 Xxxxxx, X.X.,
Xxxxxx Tel. Number: 000-00-00-0000-0000 Fax Number: 000-00-00-0000-0000
or to such other address as any party may specify by notice given to the other
party in accordance with this Section 13.
..
14. Entire Agreement. This Agreement and the Ancillary Documents and any other
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.
15. 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 effectuate the transactions contemplated hereby.
16. Sever ability. 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.
17. Headings. The headings contained in this Agreement are included for
convenience and reference purposes only and shall be given no effect in the
construction or interpretation of this Agreement.
18. 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.
19. Counterparts. This Agreement may be executed in any number of counterparts
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement may be signed by original
signatures or by facsimile signatures, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have executed this Agreement a the
day and year first written above.
LABN /s/
CABLE CALIFORNIA S.A. de c.v.
BY_ Title:
/s/
Carlo
