Exhibit
10.1


Execution Copy


 


 


STOCK
PURCHASE AGREEMENT


 


by and
among


 


NASCENT
WINE COMPANY, INC.,


a
Nevada corporation,


 


THE
PERSONS SET FORTH ON SCHEDULE A HERETO,


 


and


 


COMERCIAL
TARGA, S.A. de C.V.,


a
Mexican corporation


 


 


 


 


Dated
as of October 29, 2007


 


 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  PURCHASE AND
  SALE

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Purchase and Sale

  	
  6

  
	
  2.2

  	
   

  	
  Purchase Price

  	
  6

  
	
  2.3

  	
   

  	
  Establishment of Escrow Account

  	
  7

  
	
  2.4

  	
   

  	
  Closing

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF THE COMPANY AND SELLERS

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Organization and Qualification

  	
  7

  
	
  3.2

  	
   

  	
  Corporate Power

  	
  7

  
	
  3.3

  	
   

  	
  Authorization; Binding Obligations

  	
  8

  
	
  3.4

  	
   

  	
  Conflict; Existing Defaults

  	
  8

  
	
  3.5

  	
   

  	
  Consents and Approvals

  	
  8

  
	
  3.6

  	
   

  	
  Capitalization

  	
  8

  
	
  3.7

  	
   

  	
  Subsidiaries

  	
  9

  
	
  3.8

  	
   

  	
  Financial Statements; Undisclosed Liabilities

  	
  9

  
	
  3.9

  	
   

  	
  Contracts

  	
  10

  
	
  3.10

  	
   

  	
  Accounts Receivable

  	
  11

  
	
  3.11

  	
   

  	
  Employees; Labor Relations

  	
  11

  
	
  3.12

  	
   

  	
  Welfare Plans

  	
  12

  
	
  3.13

  	
   

  	
  Taxes

  	
  13

  
	
  3.14

  	
   

  	
  Litigation

  	
  13

  
	
  3.15

  	
   

  	
  Transactions with Related Parties

  	
  13

  
	
  3.16

  	
   

  	
  Licenses and Permits

  	
  14

  
	
  3.17

  	
   

  	
  Personal Property

  	
  14

  
	
  3.18

  	
   

  	
  Real Property

  	
  14

  
	
  3.19

  	
   

  	
  Environmental Matters

  	
  15

  
	
  3.20

  	
   

  	
  Intellectual Property

  	
  16

  
	
  3.21

  	
   

  	
  Powers of Attorney

  	
  16

  
	
  3.22

  	
   

  	
  Insurance

  	
  16

  
	
  3.23

  	
   

  	
  Business Relationships

  	
  16

  
	
  3.24

  	
   

  	
  Inventories

  	
  17

  
	
  3.25

  	
   

  	
  Depository and Other Accounts

  	
  17

  
	
  3.26

  	
   

  	
  Books and Records

  	
  17

  
	
  3.27

  	
   

  	
  Brokers

  	
  17

  
	
  3.28

  	
   

  	
  Compliance with Laws

  	
  17

  
	
  3.29

  	
   

  	
  Interim Changes

  	
  17

  
	
  3.30

  	
   

  	
  No Omissions or Misstatements

  	
  18

  



 


i

















 


	
  ARTICLE IV

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF SELLERS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Ownership of Capital Stock

  	
   

  	
  19

  
	
  4.2

  	
   

  	
  Legal Capacity

  	
   

  	
  19

  
	
  4.3

  	
   

  	
  Authorization; Binding Obligation

  	
   

  	
  19

  
	
  4.4

  	
   

  	
  Conflict

  	
   

  	
  19

  
	
  4.5

  	
   

  	
  Consents and Approvals

  	
   

  	
  19

  
	
  4.6

  	
   

  	
  Litigation

  	
   

  	
  19

  
	
  4.7

  	
   

  	
  Brokers

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF BUYER

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Organization

  	
   

  	
  20

  
	
  5.2

  	
   

  	
  Corporate Power

  	
   

  	
  20

  
	
  5.3

  	
   

  	
  Authorization; Binding Obligations

  	
   

  	
  20

  
	
  5.4

  	
   

  	
  Conflict; Existing Defaults

  	
   

  	
  20

  
	
  5.5

  	
   

  	
  Consents and Approvals

  	
   

  	
  21

  
	
  5.6

  	
   

  	
  Brokers

  	
   

  	
  21

  
	
  5.7

  	
   

  	
  Compliance with Laws

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  COVENANTS OF THE
  PARTIES

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Conduct of Company Business

  	
   

  	
  21

  
	
  6.2

  	
   

  	
  Access to Information

  	
   

  	
  22

  
	
  6.3

  	
   

  	
  Efforts to Consummate Transaction

  	
   

  	
  23

  
	
  6.4

  	
   

  	
  No Solicitation

  	
   

  	
  23

  
	
  6.5

  	
   

  	
  Tax Matters

  	
   

  	
  23

  
	
  6.6

  	
   

  	
  Noncompete

  	
   

  	
  26

  
	
  6.7

  	
   

  	
  Certain Taxes

  	
   

  	
  26

  
	
  6.8

  	
   

  	
  Notification of Certain Matters

  	
   

  	
  27

  
	
  6.9

  	
   

  	
  Supplementation and Amendment of Schedules

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  CLOSING
  CONDITIONS

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Obligation of Buyer to Close

  	
   

  	
  27

  
	
  7.2

  	
   

  	
  Obligation of Sellers to Close

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Indemnification

  	
   

  	
  29

  
	
  8.2

  	
   

  	
  Limitations of Indemnity

  	
   

  	
  30

  
	
  8.3

  	
   

  	
  Indemnification Procedures - Third Party Claims

  	
   

  	
  30

  
	
  8.4

  	
   

  	
  Indemnification Procedures - Other Claims,
  Indemnification Generally

  	
   

  	
  32

  
	
  8.5

  	
   

  	
  Exclusive Remedy

  	
   

  	
  32

  



 


ii

















 


	
  ARTICLE IX

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Termination

  	
   

  	
  32

  
	
  9.2

  	
   

  	
  Expenses

  	
   

  	
  33

  
	
  9.3

  	
   

  	
  Entire Agreement; Amendments and Waivers

  	
   

  	
  33

  
	
  9.4

  	
   

  	
  Notices

  	
   

  	
  34

  
	
  9.5

  	
   

  	
  Waivers and Amendments

  	
   

  	
  35

  
	
  9.6

  	
   

  	
  Governing Law

  	
   

  	
  35

  
	
  9.7

  	
   

  	
  Consent to Jurisdiction and Venue

  	
   

  	
  35

  
	
  9.8

  	
   

  	
  Waiver of Trial by Jury

  	
   

  	
  36

  
	
  9.9

  	
   

  	
  Counterparts

  	
   

  	
  36

  
	
  9.10

  	
   

  	
  Invalidity

  	
   

  	
  37

  
	
  9.11

  	
   

  	
  Negotiated Agreement

  	
   

  	
  37

  
	
  9.12

  	
   

  	
  Assignment

  	
   

  	
  37

  
	
  9.13

  	
   

  	
  Further Assurances

  	
   

  	
  37

  



 


iii

















 


	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Escrow Agreement

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule A

  	
  Sellers; Stock

  
	
  Schedule 1.1

  	
  Permitted Liens

  
	
  Schedule 3.8(a)

  	
  Company Historical
  Financials

  
	
  Schedule 3.8(c)

  	
  Undisclosed Liabilities

  
	
  Schedule 3.9(a)

  	
  Material Contracts

  
	
  Schedule 3.11(b)

  	
  Employment Agreements

  
	
  Schedule 3.12

  	
  Welfare Plans

  
	
  Schedule 3.13

  	
  Taxes

  
	
  Schedule 3.14

  	
  Litigation

  
	
  Schedule 3.16(a)

  	
  Licenses and Permits

  
	
  Schedule 3.18

  	
  Real Property

  
	
  Schedule 3.20

  	
  Intellectual Property

  
	
  Schedule 3.22

  	
  List of Insurance Policies

  
	
  Schedule 3.23

  	
  Business Relationships

  
	
  Schedule 3.25

  	
  Depository and Other
  Accounts

  
	
  Schedule 3.28

  	
  Compliance with Laws

  
	
  Schedule 3.29

  	
  Company Interim Changes

  
					



 

















 


STOCK
PURCHASE AGREEMENT


 


STOCK
PURCHASE AGREEMENT dated as of October 29, 2007 by and among NASCENT WINE
COMPANY, INC., a Nevada corporation (“Buyer”), each of the Persons set
forth on Schedule A hereto (“Sellers”), and COMERCIAL TARGA, S.A.
de C.V., a Mexican corporation (the “Company”).


RECITALS


 


WHEREAS,
Sellers own and are the record holders of 100% of the issued and outstanding
capital stock of the Company as set forth on Schedule A (collectively,
the “Stock”); and


                WHEREAS,
each Seller desires to sell to Buyer all of the Stock owned by such Seller
(except Rafael Morales Cuevas shall retain one share of the Stock following the
Closing (as defined below)), and Buyer desires to purchase the Stock from
Sellers, subject to the terms and conditions set forth in this Agreement.


 


                NOW,
THEREFORE, in consideration of the premises and mutual covenants contained in
this Agreement and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:


 


Article
I

Definitions


1.1           Definitions.  For purposes of this Agreement, the following
terms shall have the respective meanings set forth below:


“Affiliate” of any specified Person means (i) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person and (ii) any five percent stockholder
of such Person.  For purposes of this
definition, “control” when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by Contract or
otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.


“Agreement” means this Agreement and includes all of the schedules
and exhibits annexed hereto.


“Bankruptcy Laws” means the United States Bankruptcy Code (Title
11, United States Code) and any state or federal Laws pertaining to insolvency,
as the same may be amended from time to time.


“Business Day” means any weekday, except for any weekday on
which banks are to close in California.


“Buyer” has the meaning set forth in the introduction to this
Agreement.


 


1

















 


“Buyer Indemnified Parties” has the meaning set forth in Section
8.1(a).


“Closing” has the meaning set forth in Section 2.3.


“Closing Date” has the meaning set forth in Section 2.3.


“Company” has the meaning set forth in the introduction to this
Agreement.


“Company Current Financials” has the meaning set forth in Section
3.8(b)(ii).


“Company Historical Financials” has the meaning set forth in
Section 3.8(b).


“Competing Transaction” means any business combination or
recapitalization involving the Company or any acquisition or purchase of all or
a portion of the assets of, or any equity interest in, the Company or any other
similar transaction with respect to the Company involving any Person or entity
other than Buyer or its Affiliates (other than any sale by the company of
inventory in the ordinary course of business).


“Confidential Information” means the confidential affairs and
proprietary information of the Company, including all information, observations
and data disclosed to, or developed or obtained by, Sellers while owning the
Company if related to the Company’s business.


“Contract” means any contract, lease, license, purchase order,
sales order, obligation or other agreement or binding commitment, whether or
not in written form.


“Court Order” means any judgment, decree, injunction, order or
ruling of any Governmental Authority or authority that is binding on any Person
or its property under applicable Law.


“Environmental Laws” means any Law relating to Hazardous
Substances, the protection of human health and safety, the environment or
natural resources, including without limitation any Governmental Rule relating
to the generation, use, processing, treatment, storage, release, transport or
disposal of Hazardous Substances.


“Escrow Agent” means Corporate Stock Transfer or any successor
thereto.


“Escrow Agreement” means the Escrow Agreement between the Escrow
Agent, Sellers and Buyer in substantially the form set forth in Exhibit A
hereto.


“Escrow Funds” has the meaning set forth in Section 2.2(b).


“Governmental Authority” means any (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature, or any political subdivision thereof, (b) federal,
state, local, municipal, foreign or other government, or (c) governmental
or quasi-governmental authority of any nature (including any governmental
division, department, agency, commission, instrumentality, official,
organization, body or other entity and any court, arbitrator or other
tribunal).


 


2

















 


“Hazardous Material” means any substance, material, liquid or
waste that is regulated, classified, or otherwise characterized under or
pursuant to any Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,”
“radioactive,” or words of similar meaning or effect, including, without
limitation, petroleum and its by-products, asbestos, polychlorinated biphenyls,
radon, mold, and urea formaldehyde insulation.


“Indemnification Acknowledgment” has the meaning set forth in
Section 8.3(a)(ii).


“Indemnitee” has the meaning set forth in Section 8.3(a).


“Indemnitor” has the meaning set forth in Section 8.3(a).


“Intellectual Property” has the meaning set forth in Section
3.20.


“Knowledge” and “Knowledge of the Company” means, the
actual knowledge or awareness of each Seller and any other officer or director
of the Company and the knowledge or awareness that each such Person would have
obtained after reasonable due diligence or inquiry in light of the
circumstances.


“Laws” means any federal, state, local or foreign statute, code,
law, ordinance, regulation, Court Order, judgment, writ, injunction, award or
decree or rule of any Governmental Authority, including without limitation
those covering environmental, energy, safety, health, transportation, bribery,
record keeping, zoning, antidiscrimination, antitrust, wage and hour, and price
and wage control matters, as well as any applicable principle of common law.


“Licenses and Permits” means all foreign, local, state and
federal licenses, permits, registrations, certificates, Contracts, consents,
accreditations and approvals necessary for the operation of the Business.


“Lien” means any lien (statutory or other), pledge, mortgage,
deed of trust, assignment, deposit arrangement, priority, security interest,
restriction on voting or disposition or other charge or encumbrance or other
preemptive or preferential arrangement of any kind or nature whatsoever
(including the interest of a lessor under a capitalized lease having
substantially the same economic effect), any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing or
existence of any financing statement or other similar form of notice under the
Laws of any jurisdiction, any security agreement authorizing any Person to file
such a financing statement, whether arising by contract, operation of law, or
otherwise, or any restriction on the right to vote.


“Losses” means any and all damages, costs, liabilities, losses,
judgments, settlements, awards, penalties, fines, expenses or other costs,
including reasonable attorneys’ fees, expert fees and costs of investigation,
enforcement and collection suffered or incurred by an Indemnified Party.


“Material Adverse Effect” means, (i) with respect to the Company
or Sellers, a material adverse effect on either (A) the assets, operations,
personnel, condition (financial or otherwise) or prospects of the Company, or
(B) any of Sellers’ ability to consummate the transactions contemplated hereby,
and (ii) with respect to Buyer, a material adverse effect on either (A) the


 


3

















 


assets, operations, personnel, condition (financial or otherwise) or
prospects of Buyer, or (B) Buyer’s ability to consummate the transactions
contemplated hereby.


“Mexican GAAP” means generally accepted accounting principles in
effect in Mexico, consistently applied, as in effect on the date of this
Agreement.


“Noncompete Period” has the meaning set forth in Section 6.6(a).


“Notice of Claim” has the meaning set forth in Section
8.3(a)(i).


“Party” and “Parties” means, individually and
collectively, the Company, Sellers and Buyer.


“Permitted Liens” means (i) Liens and other exceptions to title
that are disclosed on Schedule 1.1; and (ii) liens for Taxes, fees,
levies, duties or other governmental charges of any kind which are not yet
delinquent or are being contested in good faith by appropriate proceedings
which suspend the collection thereof.


“Person” means any individual, partnership, limited liability
company, limited liability partnership, corporation, association, joint stock
company, trust, joint venture, unincorporated organization or governmental
entity (or any department, agency or political subdivision thereof).


“Pre-Closing Tax Period” has the meaning set forth in Section
6.5(b).


“Purchase Price” has the meaning set forth in Section 2.2.


“Real Property” has the meaning set forth in Section 3.18


“Release” means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching into the indoor or
outdoor environment, and includes any migration of any Hazardous Material from
or onto the properties owned or leased by the Company.


“Related Party” means (w) the Company, (x) any
Affiliate of the Company, (y) any manager, officer or equity holder of the
Company or of any Affiliate of the Company and (z) any Affiliate or family
member of any Person described in clause (y) above.


“Remedial Action” means all actions to (i) clean up, remove,
treat or in any other way address any Hazardous Material, (ii) prevent the
Release of any Hazardous Material so it does not endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment, (iii)
perform pre-remedial studies and investigations or post-remedial monitoring and
care or (iv) to otherwise correct a condition of noncompliance with
Environmental Laws.


“Sellers” has the meaning set forth in the introduction to this
Agreement.


“Solvent” means, with respect to any Person, that at the time of
determination:  (i) the present fair
saleable value of the assets (i.e., the price a buyer is willing to pay for
such asset in an arms-length transaction) of such Person will exceed the amount
that will be required to pay 


 


4

















 


the probable liability on the existing debts (whether matured or
unmatured, liquidated or unliquidated, absolute, fixed or contingent) of such
Person as they become absolute and matured; (ii) the sum of the debts (whether
matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent) of such Person will not exceed all of the property of such Person
at a fair valuation; (iii) the assets of such Person do not constitute
unreasonably small capital for such Person to carry on its businesses as now
conducted or proposed to be conducted; and (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay such debts and liabilities as they mature.  For purposes of the preceding sentence, the
amount of contingent obligations outstanding at any time shall be computed as
the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that are reasonably expected to become an
actual or matured liability.


“Stock” has the meaning set forth in the Recitals to this
Agreement.


“Straddle Period” has the meaning set forth in Section 6.5(c).


“Subsidiary” and “Subsidiaries” means, with respect to
any Person, any other Person of which more than 50% of the total voting power
of capital stock entitled to vote (without regard to the occurrence of any
contingency) in the election of directors (or other Persons performing similar
functions) are at the time directly or indirectly owned by such specified
Person.


“Tax” or “Taxes” means any federal, state, local or
foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, capital gain,
intangible, environmental (including taxes under Section 59A of the Code or
otherwise), custom duties, capital stock, profits, franchise, employee’s income
withholding, foreign withholding, social security (or its equivalent),
unemployment, disability, real property, personal property, sales, use,
transfer, value added, registration, alternative or add-on minimum, estimated
or other tax of any kind, including any interest, penalties or additions to tax
in respect of the foregoing, whether disputed or not, and any obligation to
indemnify, assume or succeed to the liability of any other Person in respect of
the foregoing; and the term “Tax Liability” shall mean any liability
(whether known or unknown, whether absolute or contingent, whether liquidated
or unliquidated, and whether due or to become due) with respect to Taxes.


“Tax Determination” has the meaning set forth in Section 6.5(f).


“Tax Return” means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.


“Third Party Claim” means a claim or demand made by any Person,
other than Buyer, Sellers or the Company, against an Indemnified Party.


“Trademark Assignment Agreement” means the Trademark Assignment
Agreement between Julia Olavarri de Arana and Buyer dated as of the date
hereof.


“Transaction Documents” means this Agreement, the Escrow
Agreement, the Trademark Assignment Agreement and any document or instrument
which shall be executed and delivered at the Closing by the Company, Sellers or
Buyer, as the case may be.


 


5
















“Welfare Plan” means
any other plan or program maintained for past or present employees of the
Company, including without any limitation health insurance plan, life insurance
plan, option plan, bonus plan, savings plan or severance plan, profit sharing,
bonus, stock option, stock purchase, stock bonus, restricted stock, stock
appreciation right, phantom stock or other equity-based compensation
arrangement, vacation pay, holiday pay, tuition reimbursement, scholarship,
severance, dependent care assistance, excess benefit, bonus, incentive
compensation, salary continuation, supplemental retirement, deferred
compensation, employee loan or loan guarantee program, split dollar, cafeteria
plan, and other compensation arrangements and other material agreement, arrangement,
plan, policy, practice or program related to employment, compensation or
employee benefits whether written or unwritten, funded or unfunded, formal or
informal, that are maintained or contributed to by the Company.


 


“Working Capital Amount”
has the meaning set forth in Section 6.9.


 


“U.S. GAAP” means generally accepted accounting principles in
effect in the United States of America, consistently applied, as in effect on
the date of this Agreement.


Article
II

Purchase and Sale


2.1           Purchase and Sale.  On the Closing Date, subject to the terms and
conditions hereof, Sellers agree to sell, transfer, assign, convey and deliver
to Buyer, and Buyer agrees to purchase from Sellers, all of the Stock (except
Rafael Morales Cuevas shall retain one share of the Stock following the
Closing), free and clear of all Liens.


2.2           Purchase Price.  Subject to the terms and conditions hereof,
as consideration for the Stock and the agreements contained herein, the
purchase price for the Stock shall be an aggregate of FOUR HUNDRED THOUSAND
U.S. DOLLARS (U.S.$400,000) (the “Purchase Price”).  On the Closing Date, Buyer shall pay the
Purchase Price as follows:


(a)           ONE HUNDRED FIFTY THOUSAND U.S.
DOLLARS (U.S.$150,000) shall be paid in cash by wire transfer in immediately
available funds to such account or accounts designated by Sellers to Buyer in
writing; and


(b)           TWO HUNDRED FIFTY THOUSAND U.S.
DOLLARS (U.S.$250,000) (the “Escrow Funds”) shall be deposited with the
Escrow Agent, to be held and disbursed pursuant to the terms of the Escrow
Agreement and in accordance with the terms of this Agreement.  The Escrow Funds shall be security for the
indemnification obligations of Sellers pursuant to Section 8.1(a).


2.3           Establishment of Escrow Account. 
At the Closing, Buyer and Sellers
shall deliver the Escrow Agreement to the Escrow Agent, and Buyer shall deposit
the Escrow Funds to be held by the Escrow Agent in an escrow account, all in
accordance with the terms of the Escrow Agreement and this Agreement.  The Escrow Agent shall pay to Buyer or
Sellers such amounts as are required by the terms of the Escrow Agreement in
accordance with the Escrow Agreement and this Agreement.  Such amounts may be delivered to Buyer or
Sellers, as the case may be, in accordance with the terms of the Escrow
Agreement which shall, among other things, require 


 


6

















 


disbursement to Sellers of the Escrow Funds on the six month anniversary
of the Closing Date of an amount equal to the difference between (i) U.S.$250,000,
and (ii) the aggregate of any amounts actually paid in satisfaction of any
indemnification obligation of Sellers under Section 8.1(a) and the amount of
any pending or outstanding claim for indemnification under such Section.  Each Seller consents to and approves of the
use of the Escrow Funds to secure the indemnification rights of Buyer in the
manner set forth in the Escrow Agreement and this Agreement.


2.4           Closing.  Subject to the terms and conditions hereof,
the closing of the transactions contemplated by this Agreement (the “Closing”)
shall be held at 10:00 a.m. local time on the later of (i) October 29, 2007, or
(ii) the satisfaction or waiver of all conditions to closing contained herein,
at the offices of Brownstein Hyatt Farber Schreck, P.C., 410 17th
Street, Suite 2200, Denver, Colorado 80202, or at such other time and/or place
as the Parties otherwise agree (the “Closing Date”).


Article
III

Representations and Warranties of the Company and Sellers


As
a material inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated herein, the Company and Sellers hereby, jointly
and severally, make the following representations and warranties to Buyer,
subject to qualification by the disclosure schedules.  The information disclosed in any particular
disclosure schedule shall be deemed to relate to and to qualify only the
particular representation or warranty set forth in the corresponding numbered
section in this Agreement and shall not be deemed to relate to or to qualify
any other representation or warranty.


3.1           Organization and Qualification.  The Company is a corporation duly organized,
validly existing and in good standing under the Laws of the Mexico.  The Company is duly qualified or licensed to
do business in each jurisdiction in which the character of the properties or
assets owned, leased or operated by it or the nature of the activities
conducted makes such qualification or licensing necessary.


3.2           Corporate Power.  The Company has all requisite corporate power
and authority necessary to own and/or lease and operate its properties and
assets and to carry on its business as now conducted.  The Company has all requisite corporate power
and authority to execute, deliver, carry out and perform its obligations under
this Agreement and each other Transaction Document to which it is a party and
to consummate the transactions contemplated hereby and thereby.


3.3           Authorization; Binding Obligations.  The execution, delivery and performance of
this Agreement and each other Transaction Document to which the Company is a
party and the consummation of the other transactions contemplated hereby and
thereby, have been duly authorized by all requisite action on the part of the
Company.  This Agreement has been duly
executed and delivered by the Company and, at the Closing, each of the other
Transaction Documents to which the Company is a party will be duly executed and
delivered by the Company.  This Agreement
is, and at the Closing each of the other Transaction Documents to which the
Company is a party will be, a legal, valid and binding obligation of the
Company, 


 


7

















 


enforceable against the Company in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance or similar Laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability, and except as rights of indemnity or contribution
may be limited by securities Laws or the public policy underlying such Laws.


3.4           Conflict; Existing Defaults.


(a)           Neither the execution, delivery and
performance by the Company of this Agreement or the other Transaction Documents
to which the Company is a party nor the consummation of the transactions
contemplated hereby or thereby, will conflict with, violate, or cause a default
under, result in the imposition of any Lien under or give rise to a right of
termination, acceleration, suspension, revocation, cancellation or amendment
under, (i) the organizational documents of the Company, (ii) any Contract to
which the Company is a party, or by which its assets are bound, or (iii) any
applicable Laws.


(b)           The Company is not (i) in default,
breach or violation of its organizational documents, as in effect as of the
date hereof, as applicable, or (ii) in default, breach or violation of any
Contract required to be disclosed on Schedule 3.9(a) to which it is a
party or by which it or its assets is or may be bound, except, in the case of
clause (ii), for such default, breach or violation as, individually or in the
aggregate, is not likely to have a Material Adverse Effect.


3.5           Consents and Approvals.  No consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority or any
other Person is required to be obtained or made by the Company in connection
with the execution, delivery and performance of this Agreement or any other
Transaction Document to which the Company is a party and the consummation of
the transactions contemplated hereby and thereby.


3.6           Capitalization.  The Company’s authorized capital stock
consists of 8,000 shares of Series A stock and 2,938,684  shares of Series B stock.  The issued and outstanding shares of common
stock are owned as set forth on Schedule A.  All of the outstanding shares of capital
stock of the Company are validly issued, fully paid and nonassessable and were
not issued in violation of any preemptive rights or Contract binding upon the
Company or any applicable Laws.  Except
as set forth on Schedule A, there are no outstanding (i) shares of
capital stock or other voting securities of the Company, (ii) securities
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, (iii) options, warrants or other rights to acquire
from the Company or obligations of the Company to issue any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company, or (iv) equity equivalent interests
in the ownership or earnings of the Company or stock appreciation, phantom
stock, right of first refusal, commitment or other similar rights.  There are no voting trusts, proxies or other
agreements or understandings with respect to the voting, registration or
transfer of ownership of the Company’s capital stock.  The Company is not subject to any obligations
(contingent or otherwise) to repurchase, redeem or otherwise acquire or retire
any shares of its capital stock.  All
dividends or distributions on securities of the Company that have been declared
or authorized prior to the date of this Agreement have been paid in full or
accrued for in the Historical Financials.


 


8

















 


3.7           Subsidiaries.  The Company has no Subsidiaries.  The Company does not own, directly or
indirectly, any capital stock, partnership interest, joint venture interest or
other equity interest of any other Person.


3.8           Financial Statements; Undisclosed
Liabilities.


(a)           The books of account and other
financial records of the Company, all of which have been made available to
Buyer, are correct and complete in all material respects, represent actual bona
fide transactions and have been maintained in accordance with sound business
and accounting practices.  Each
transaction is properly and accurately recorded in the books and records of the
Company.  The Company maintains an
adequate system of internal accounting controls and does not engage in or
maintain any off-the-books accounts or transactions.


(b)           Attached hereto as Schedule 3.8 are
the following (the financial statements referred to in clauses (i) and (ii)
below being collectively referred to as the “Company Historical Financials”):


(i)            the Company’s audited  balance sheets and statements of income, retained earnings
and cash flows as of and for its fiscal years ended December 31, 2004, 2005 and
2006; and


(ii)           the Company’s unaudited interim
balance sheet and statements of income, retained earnings and cash flows as of
and for the six months ended June 30, 2007 (the “Company Current Financials”).


The
Company Historical Financials (including, in each case, the related schedules
and notes, if any) fairly present the financial condition, results of
operations and changes in financial position of the Company as of and for the
respective dates  and periods covered
thereby and were prepared in accordance with Mexican GAAP applied on a
consistent basis throughout the periods covered thereby subject, in the case of
the Company Current Financials, to year-end audit adjustments (which will not
be material) and the lack of footnotes and other presentation items.


(c)           Except as set forth on Schedule
3.8(c), the Company does not have any liabilities (whether known or unknown,
whether direct or indirect, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due, including any liability for Taxes), except for (i) liabilities set forth
in the Company Current Financials, and (ii) liabilities that have arisen after
the Company Current Financials in the ordinary course of business.


(d)           On the date hereof and immediately
prior to the Closing Date, the Company is Solvent.


3.9           Contracts.


(a)           Schedule 3.9(a) sets forth a
true, correct and complete list of all Contracts to which the Company is a
party or to which any of its assets or properties is bound:


 


9

















 


(i)            under which the Company is
indemnified for or against any liability, or under which the Company is or
could be obligated to indemnify any Person;


(ii)           under which the Company leases
personal property from or to third parties under capitalized leases per annum
or under operating leases;


(iii)          for the purchase or sale of products
or other personal property or for the furnishing or receipt of services (A)
that calls for performance over a period of more than one year or (B) in which
the Company has agreed to purchase a minimum quantity of goods or services or
has agreed to purchase goods or services exclusively from any Person;


(iv)          (A) granting representation,
marketing, manufacturing, purchase or distribution rights or (B) relating
to Company Intellectual Property (including license, development or similar
agreements);


(v)           under which the Company has created,
incurred, assumed or guaranteed (or may create, incur, assume or guarantee)
indebtedness for borrowed money;


(vi)          establishing or maintaining any
partnership, joint venture or strategic alliance;


(vii)         under which there is or may be imposed
a security interest or other Lien on any of its assets, whether tangible or
intangible (other than security interests or Liens granted in favor of Buyer);


(viii)        concerning any confidentiality or
non-solicitation obligations;


(ix)           under which the Company is restricted
from carrying on its business or any part thereof, or from competing in any
line of business or with any Person;


(x)            with officers, directors, employees
or consultants of the Company, in each case involving payments by the Company
in excess of U.S.$5,000 per annum;


(xi)           involving any Affiliates of the
Company;


(xii)          under which the consequences of a
default or termination would reasonably be expected to have, a Material Adverse
Effect;


(xiii)         under which the Company will (A)
receive aggregate payments from customers, (B) make aggregate payments to
vendors or other suppliers or (C) make or receive aggregate payments to or from
any other Persons, in each case in excess of U.S.$25,000  per
annum (with specific reference to those agreements in excess of U.S.$500,000
per annum);


(xiv)        which are subject to termination or
modification by any third party as a result of the transactions contemplated by
this Agreement;


(xv)         not entered into in the ordinary course
of business and not otherwise disclosed on Schedule 3.9(a) in response
to any of the foregoing clauses; or


 


10

















 


(xvi)        are otherwise material to the Company’s
business.


The Company has delivered to Buyer true, correct and complete copies of
each such Contract.  To the extent that
written Contracts do not exist, the Company has delivered to Buyer accurate
summaries of the material terms and conditions of such oral Contracts.  Such Contracts constitute all material
Contracts necessary for the Company to conduct its business as currently
conducted.


(b)           (i) each Contract existing as of the
date hereof is a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms (except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or conveyance or similar Laws relating to or limiting
creditors’ rights generally or by equitable principles relating to
enforceability), and (ii) to the Knowledge of the Company, each Contract
existing as of the date hereof is a legal, valid and binding obligation of the
other parties thereto, enforceable against the other parties in accordance with
its terms (except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance or similar Laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability) and is in full force and effect.  The Company is and, to the Knowledge of the
Company each other party to each Contract existing as of the date hereof are,
in compliance with the terms thereof, and no default or event of default by the
Company or any other party thereto exists thereunder.


3.10         Accounts Receivable.  All accounts receivable of the Company (a)
are legal, valid and binding obligations of the Persons shown in the accounting
records of the Company as the obligor with respect thereto, (b) arose out of
bona fide sales actually made or services actually performed on or prior to
such date in the ordinary course of business, (c) are not subject to discount,
rebate, off-set, return privilege (other than return privileges granted in the
ordinary course of business consistent with past practice) or claim, and (d)
have been billed and are valid and collectible in the ordinary course of
business.


3.11         Employees; Labor Relations.


(a)           The Company has previously provided
to Buyer a correct and complete list of (i) all managers and executive
officers of the Company, (ii) all other employees of or consultants to the
Company, (iii) the current job title or relationship to the Company of
each such Person and (iv) the amount of compensation (including bonuses
and commissions or other benefits) paid to each such Person during the fiscal
year ended December 31, 2006 and which each of them is expected to receive in
the current fiscal year.


(b)           Except as otherwise disclosed on Schedule 3.11(b),
the Company is not a party to any written employment agreements, independent
contractor or consulting agreements and sales representative (or similar)
agreements, golden parachute agreements, change of control agreements and
employee-related non-competition and non-solicitation or similar agreement,
written or oral, with any Person.


(c)           (i) Except as otherwise
disclosed on Schedule 3.11(c), no employees of the Company are
represented by any labor union or similar organization, (ii) the Company
is not


 


11

















 


party to any collective bargaining or similar
agreement covering any of its employees and (iii) no labor union or
similar organization or group of employees has made a demand for recognition,
filed a petition seeking a representation proceeding, given the Company notice
of any intention to hold an election of a collective bargaining representative
or engaged in any organizing activities at any time during the past three
years.


(d)           (i) No strike, work stoppage,
contract dispute or other labor disturbance involving any employees of the
Company currently exists or, to the Company’s knowledge, is threatened and
(ii) no investigation, action or proceeding by or before any governmental
entity which relates to allegedly unfair or discriminatory employment or labor
practices by the Company or the violation by the Company of any applicable Law
relating to employment or labor practices is pending or, to the Company’s
knowledge, threatened.


3.12         Welfare Plans.  Schedule 3.12 sets forth a
correct and complete list of all Welfare Plans. 
Except as otherwise disclosed on Schedule 3.12:


(a)           each Welfare Plan and any related trust has been
established, maintained, administered and funded in all material respects in
compliance with all applicable Laws;


 


(b)           no transaction or omission has occurred with respect to
any Welfare Plan or related trust that could subject the Company to any Tax or
penalty under applicable Laws;


 


(c)           none of the Welfare Plans or any related trusts have any
unfunded liabilities;


 


(d)           none of the Welfare Plans provides medical, health, life
insurance or other welfare-type benefits to former employees of the Company or
any Affiliate;


 


(e)           there are no actions, suits, investigations or other
proceedings pending or, to the Company’s knowledge, threatened against any Plan
or any related trust or any fiduciary thereof;


 


(f)            there are no outstanding Governmental Orders that name
any Plan or any related trust or any fiduciary thereof or are directed to any
Plan or related trust, any fiduciary thereof or any assets thereof;


 


(h)           there are no benefits or perquisites available to any
employees of the Company that are not generally available to all employees of
the Company.


 


The Company has delivered to
Buyer true, correct and complete copies of all Welfare Plan documentation.


 


3.13         Taxes.  Except as set forth on Schedule 3.13:


(a)           all Tax Returns with respect to Taxes
which are required to be filed by or on behalf of the Company with any
Governmental Authority have been properly prepared and filed and correctly
state the Company’s Tax liability;


 


12

















 


(b)           the Company has paid, or has made
adequate reserves on its books for the payment of, all Taxes shown to be due on
such Tax Returns or claimed to be due by any Governmental Authority or which
the Company otherwise is liable for or is required to withhold on behalf of any
other Person;


(c)           the reserves and provisions for Taxes
on the books of the Company are adequate for all open years and for its current
fiscal period;


(d)           the Company has no knowledge of any proposed
assessment of any additional Taxes by any governmental entity or of any basis
for any such assessment (whether or not reserved against);


(e)           the Company is not currently being
audited by any governmental entity, and no such audit is pending or, to the
Company’s knowledge, threatened;


(f)            the Company has not given any waiver
or extension of any period of limitation governing the time of assessment or
collection of any Tax; and


(g)           the Company is not party to any Tax
sharing or similar agreement with any other Person.


3.14         Litigation.  Except as otherwise disclosed on Schedule
3.14, there is no pending or, to the Company’s knowledge, threatened
investigation, action or proceeding against, relating to or affecting the
Company or its assets or any officer, director or employee thereof in his or
her capacity as such, by or before any Governmental Authority or
arbitrator.  Schedule 3.14 sets
forth a correct and complete list of each investigation, action and proceeding
(a) described in the preceding sentence or (b) in which the Company is the
plaintiff or initiating party, together with the parties thereto, the alleged
basis therefore, the relief sought therein and the current status.


3.15         Transactions with Related Parties.  (a) none of the customers, suppliers,
distributors or sales representatives of the Company are Related Parties;
(b) none of the Company’s assets are owned or used by or leased to any
Related Parties; (c) no Related Party is a party to any Business
Agreement; and (d) no Related Party provides any legal, accounting or
other services to the Company.


3.16         Licenses and Permits.


(a)           Schedule 3.16(a) lists all
Licenses and Permits.  No other
governmental authorizations are necessary or required for the Company to
lawfully conduct its Business as currently conducted or for the Company to own,
lease or use its assets.


(b)           Each of the Licenses and Permits is
valid and in full force and effect.  The
Company has not received any notice that remains outstanding from any
Governmental Authority regarding any actual or proposed revocation, withdrawal,
suspension, cancellation or termination (other than by expiration) of any
material Licenses and Permits.  The
transactions contemplated by this Agreement will not adversely affect the
Company’s right to utilize the Licenses and Permits.  The Company has delivered to Buyer true,
correct and complete copies of each License and Permit.


 


13

















 


3.17         Personal Property.  The Company has good and marketable title to
all personal property purported to be owned by it and good leasehold title to
all personal property purported to be leased by it, in each case free and clear
of any Liens, other than Permitted Liens. 
The Company’s machinery, equipment, vehicles and other tangible assets
have been maintained in good working condition (normal wear and tear
excepted).  The Company owns or properly
leases all the assets necessary to and currently utilized in the operation of
the Business.  No Seller owns any of the
assets currently utilized in the Business.


3.18         Real Property.


(a)           Schedule 3.18 sets forth
a correct and complete list of all real property owned, leased, occupied or
used by the Company (collectively, the “Real Property”) and indicates
whether such property is owned or leased by the Company.


(b)           Schedule 3.18 sets forth
a correct and complete list of (i) all leases, subleases and other
material agreements or rights pursuant to which any Person has the right to
occupy or use any Real Property owned by the Company and (ii) all leases,
subleases and other material agreements or rights pursuant to which the Company
has the right to occupy or use any Real Property owned by others.


(c)           Except as set forth on Schedule
3.18, the Company has good and marketable and fee simple title to all Real
Property purported to be owned by it and good leasehold title to all Real
Property purported to be leased by it, in each case free and clear of any
Liens, other than Permitted Liens.


(d)           All buildings and other improvements
located on the Real Property (including without limitation all water, sewer,
gas, electrical and HVAC systems servicing the same) are in good repair and
operating condition and are suitable for the purposes for which they are
used.  The Real Property constitutes all
real property, buildings and other improvements necessary for the Company to
conduct its business as currently conducted and as currently planned to be
conducted.


(e)           All buildings and other improvements
located on the Real Property, and the use of the Real Property by the Company
and all Persons claiming under it, comply with all Governmental Rules relating
to zoning and land use and with all easements, covenants and other restrictions
applicable to the Real Property, except where such non-compliance would, individually
or in the aggregate, have a Material Adverse Effect.


(f)            The Real Property:  (i) is adequately serviced by all
utilities necessary for the Company to conduct its business as currently
conducted and as currently planned to be conducted thereon; (ii) has
adequate means of ingress and egress, either directly or by means of perpetual
easements or rights-of-way which run with the Real Property; (iii) has
adequate parking that is sufficient to meet the needs of the Company’s
employees and business invitees and to comply with applicable Laws; and
(iv) is not located in whole or in part within an area identified as a
flood hazard area by any Governmental Authority.


 


14

















 


3.19         Environmental Matters.


(a)           the operations of the Company is in
compliance with all applicable Environmental Laws and all Licenses and Permits
issued pursuant to the Environmental Laws or otherwise;


(b)           the Company has obtained all Licenses
and Permits required to operate its business in compliance with all applicable
Environmental Laws;


(c)           the operations of the Company have
not resulted in Releases of Hazardous Material into the environment;


(d)           the Company is not the subject of any
outstanding Court Order or Contract, nor, to the Knowledge of the Company, is
it threatened to be the subject of any Court Order or Contract, with any
Governmental Authority respecting (i) compliance with Environmental Laws,
(ii) Remedial Action, or (iii) any Release or threatened Release of a
Hazardous Material, and the Company has not received any written communication
alleging that the Company may be in violation of any Environmental Law or any
License or Permit issued pursuant to Environmental Law, or may have any
liability under any Environmental Law;


(e)           there are no investigations of the
Business, or currently or previously owned, operated or leased property of the
Company pending or, to the Knowledge of the Company, threatened which alleges
any liability or other obligation pursuant to any Environmental Law;


(f)            no Hazardous Substances have been or
are being generated, used, processed, treated, stored, released, transported or
disposed of by the Company, except in compliance with applicable Environmental
Laws;


(g)           to the Company’s knowledge,
no Person who has owned, leased, occupied or used any real property now or
previously owned, leased, occupied or used by the Company generated, used,
processed, treated, stored, released or disposed of any Hazardous Substances on
such property; and


(h)           to the Company’s knowledge, no
underground storage tanks are located on any real property owned, leased,
occupied or used by the Company.


3.20         Intellectual Property.  Schedule 3.20 sets forth a
correct and complete list of (a) all patents, registered and unregistered
trademarks, service marks, logos, corporate and trade names, domain names and
registered and unregistered copyrights, and all applications therefor, which
are owned, licensed or used by the Company (together with all inventions,
discoveries, techniques, processes, methods, formulae, designs, computer
software, trade secrets, confidential information, know-how and ideas which are
owned, licensed or used by the Company, the “Intellectual Property”),
(b) all licenses or other agreements pursuant to which any Person has the
right to use any Intellectual Property owned by the Company and (c) all
licenses or other agreements pursuant to which the Company has the right to use
any Intellectual Property owned by others (excluding “shrink-wrapped” software
applications that are generally available to the public).  The Company has the lawful right to use all
of the Intellectual Property, and no such use infringes upon the lawful rights
of any other Person.  To the Company’s
knowledge, no Person is using any Intellectual Property in a manner which
infringes upon the lawful rights of the 


 


15

















 


Company.  The
Intellectual Property constitutes all intellectual property necessary for the
Company to conduct its business as currently conducted.


3.21         Powers of Attorney.  There are no outstanding powers of attorney
in effect with respect to the Company.


3.22         Insurance.  Schedule 3.22 sets forth a
correct and complete list of all insurance policies of which the Company is the
owner, insured, loss payee or beneficiary and indicates for each such policy
any pending claims thereunder.  Except as
otherwise disclosed on Schedule 3.22;  (a) there has been no failure to give
any notice or present any material claim under any such policy in a timely fashion
or as otherwise required by such policy; (b) all premiums under such
policies which are due and payable have been paid in full; (c) no such
policy provides for retrospective or retroactive premium adjustments;
(d) the Company has not received notice of any material increase in the
premium under, cancellation or non-renewal of or disallowance of any claim
under any such policy; (e) the Company has not been refused any insurance,
nor has its coverage been limited by any carrier; and (f) since January 1,
2003, the Company has maintained, or been the beneficiary of, general liability
and product liability policies reasonable, in both scope and amount, in light
of the risks attendant to their respective businesses and which provide
coverage comparable to coverage customarily maintained by others in similar
lines of business, and such policies have been “occurrence” policies and not “claims
made” policies.


3.23         Business Relationships.  The Company has not received any notice with
respect to any actual or threatened termination or cancellation of, or any
adverse modification or material change in, the business relationship between
the Company, on the one hand, and any vendor, distributor, supplier or
customer, on the other hand, and to the Knowledge of the Company, there is no
basis for such termination or cancellation of any such business relationships,
other than the termination of any such relationships upon expiration of the
agreement related thereto.  Schedule
3.23 contains a list of the 10 largest customers, and the 10 largest
suppliers of the Company for each of the two most recent fiscal years
(determined on the basis of the total dollar amount of gross sales) showing the
total dollar amount of gross sales to each such customer and the percentage of
all sales during each such year and the total amount of purchases made to each
such supplier and the percentage of all purchases made during each such year.


3.24         Inventories.  Except to the extent of inventory reserves
reflected in the Company Historical Financials, the items included in such
inventories are normal items of inventory carried by the Company, and are
current, suitable and merchantable at customary prices for the filling of
orders in the normal course of business, and are not obsolete, damaged, defective
or slow moving.  The Company has all
right, title and interest in the inventories reflected in the Company
Historical Financials (except to the extent they have been sold in the ordinary
course of business since the date thereof). 
Except for such items acquired or produced after June 30, 2007, all
items of inventory carried by the Company are reflected on the Company
Historical Financials at the lower of cost (determined on a first-in, first-out
bases) or market in accordance with Mexican GAAP applied on a consistent basis,
with adequate provisions or adjustments having been made for excess and
slow-moving inventory and inventory obsolescence and shrinkage.


 


16
















3.25         Depository and Other Accounts.  Schedule 3.25 sets forth a true,
correct and complete list of all banks and other financial institutions and
depositories at which the Company maintains (or has caused to be maintained)
deposit accounts, lockbox accounts, spread accounts, yield supplement reserve
accounts, operating accounts, trust accounts, trust receivable accounts or
other accounts of any kind or nature into which funds of the Company are
deposited from time to time.  Such Schedule
3.25 correctly identifies the name and address of each depository, the name
in which each account is held, the purpose of the account, the type of account,
the account number, the specific contact person at such depository and his or
her direct telephone number and email address.


3.26         Books and Records.  The minute books and similar records of the
Company contain true and complete records of all actions taken at any meeting
of the Company’s stockholders, directors, or any committees thereof, as the
case may be, and of all written consents executed in lieu of the holding of any
such meeting, and have been maintained in accordance with good business
accounting and bookkeeping practices.


3.27         Brokers.  None of the Company nor any of its Affiliates
is obligated to pay any fee or commission to any broker, finder, investment
banker or other intermediary, in connection with this Agreement, any other
agreement, or any of the transactions contemplated hereby or thereby for which
Buyer (or the Company after the Closing Date) will have any liability.


3.28         Compliance with Laws.  Except as set forth in Schedule 3.28,
the Company is in compliance in all material respects with all applicable
Laws.  The Company is not subject to any
Court Orders.  Except as set forth on Schedule
3.28, no investigation or review by any Governmental Authority with respect
to the Company is pending or filed or, to the Knowledge of the Company,
threatened nor, to the Knowledge of the Company, has any Governmental Authority
indicated an intention to conduct the same.


3.29         Interim Changes.  Except as set forth on Schedule 3.29,
since December 31, 2006, there has been no:


(a)           change in the condition, financial or
otherwise, of the Company, which had, or would reasonably be expected to have,
a Material Adverse Effect;


(b)           material loss, damage or destruction
of or to any of the Company’s assets, whether or not covered by insurance;


(c)           sale, lease, transfer or other
disposition by the Company of, or mortgages or pledges of or the imposition of
any Lien (other than Permitted Liens) on, any portion of the Company’s assets,
other than the sale of assets in the ordinary course of the Company’s business;


(d)           adjustment or write-off of accounts
receivable not reflected in the Company Historical Financials or any change in
the collection, payment or credit experience or practices of the Company;


(e)           change in the Tax or cash basis
accounting methods or practices employed by the Company or change in
depreciation or amortization policies;


 


17

















 


(f)            payment by the Company of any
dividend, distribution or extraordinary or unusual disbursement or expenditure;


(g)           termination, waiver or cancellation
of any material rights or claims of the Company, under any Contract or
otherwise;


(h)           the Company has not made, or
committed to make, any capital expenditures in excess of U.S.$25,000  in the aggregate;


(i)            other transaction not in the
ordinary course of business and consistent with past practice;


(j)            the Company has not granted or is
committed to grant any salary or other compensation increase to any of its
employees other than in the ordinary course of business; or


(k)           binding commitment with respect to
any of the foregoing.


3.30         No Omissions or Misstatements.  None of the representations or warranties of
the Company included in this Agreement as qualified by the disclosure schedules
hereto, or other Transaction Documents furnished or to be furnished by the
Company contains any untrue statement of a material fact or is misleading in
any material respect or omits to state any material fact necessary in order to
make any of the statements herein or therein not misleading in light of the
circumstances in which they were made.


Article
IV

Representations and Warranties of Sellers


As
a material inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated herein, each Seller, severally and not jointly,
hereby represents and warrants to Buyer, with respect to such Seller only, as
follows:


4.1           Ownership of Capital Stock.  Such Seller is the beneficial and record
owner of the Stock identified next to such Seller’s name on Schedule A
hereto, free and clear of any Liens. 
Such Seller has the requisite right, power and authority to transfer the
Stock owned by such Seller, and immediately following the Closing, Buyer will
own 100% of the capital stock of the Company (except Rafael Morales Cuevas
shall retain one share of the Company following the Closing), free and clear of
any Liens.


4.2           Legal Capacity.  Such Seller has the legal capacity to
execute, deliver, carry out and perform its obligations under this Agreement
and each other Transaction Document to which it is a party and to consummate
the transactions contemplated hereby and thereby.


4.3           Authorization; Binding Obligation.  No action, consent or approval on the part of
such Seller is necessary to authorize such Seller’s due and valid execution,
delivery and consummation of this Agreement and each other Transaction Document
to which it is a party.  This Agreement
has been duly executed and delivered by such Seller and, at the Closing, each
of the other Transaction Documents to which such Seller is a party will be duly
executed and delivered by such Seller. 
This Agreement is, and at the Closing each of the other Transaction


 


18

















 


Documents to which such Seller is a party will be, a
legal, valid and binding obligation of such Seller, enforceable against such
Seller in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance or similar Laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability, and except as rights of
indemnity or contribution may be limited by securities Laws or the public
policy underlying such Laws.


4.4           Conflict.  Neither the execution, delivery and
performance by such Seller of this Agreement or any of the other Transaction
Documents to which such Seller is a party nor the consummation of the
transactions contemplated hereby or thereby, will conflict with, violate, or
cause a default under, result in the imposition of any Lien under or give rise
to a right of termination, acceleration, suspension, revocation, cancellation
or amendment under (a) any Contract to which such Seller is a party, or by
which its assets are bound, which could reasonably be expected to adversely
impact such Seller’s obligations under this Agreement, or (b) any applicable
Laws, which could reasonably be expected to adversely impact such Seller’s
obligations under this Agreement.


4.5           Consents and Approvals.  No consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority or any
other Person is required to be made or obtained by such Seller in connection
with the execution, delivery and performance of this Agreement or the
Transaction Documents to which such Seller is a party and the consummation of
the transactions contemplated hereby and thereby.


4.6           Litigation.  There is no pending, or to such Seller’s
knowledge, threatened, investigation, action or proceeding to which such Seller
is a party or which relates to such Seller, which questions the validity of
this Agreement or impairs the ability of such Seller to consummate the
transactions contemplated hereby or the transactions contemplated by the other
Transaction Documents to which such Seller is a party.


4.7           Brokers.  Such Seller is not obligated to pay any fee
or commission to any broker, finder, investment banker or other intermediary,
in connection with this Agreement, any other agreement, or any of the
transactions contemplated hereby or thereby for which Buyer (or the Company
after the Closing Date) will have any liability.


Article
V

Representations and Warranties of Buyer


As
a material inducement to the Company and Sellers to enter into this Agreement
and to consummate the transactions contemplated hereunder, Buyer hereby
represents and warrants to Sellers, as follows:


5.1           Organization.  Buyer is a corporation duly organized,
validly existing and in good standing under the Laws of the State of
Nevada.  Buyer is duly qualified or
licensed to do business in each jurisdiction in which the character of the properties
or assets owned, leased or operated by it or the nature of the activities
conducted makes such qualification or licensing necessary.


 


19

















 


5.2           Corporate Power.  Buyer has all requisite corporate power and
authority to own and/or lease and operate its properties and assets and to
carry on its business as now conducted. 
Buyer has all requisite corporate power and authority to execute,
deliver, carry out and perform its obligations under this Agreement and each
other Transaction Document to which it is a party and to consummate the
transactions contemplated hereby and thereby.


5.3           Authorization; Binding Obligations.  The execution, delivery and performance by
Buyer of this Agreement and each other Transaction Documents to which Buyer is
a party, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all requisite action on the part of
Buyer.  This Agreement has been duly
executed and delivered by Buyer, and, at the Closing, each of the other Transaction
Documents to which Buyer is a party will be duly executed and delivered by
Buyer.  This Agreement is, and at the
time of the Closing each of the other Transaction Documents to which Buyer is a
party will be, a legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or conveyance or similar Laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability, and
except as rights of indemnity or contribution may be limited by securities Laws
or the public policy underlying such Laws.


5.4           Conflict; Existing Defaults.  Neither the execution, delivery and performance
by Buyer of this Agreement or the other Transaction Documents to which Buyer is
a party nor the consummation of the transactions contemplated hereby or
thereby, will conflict with, violate, or cause a default under, result in the
imposition of any Lien under or give rise to a right of termination,
acceleration, suspension, revocation, cancellation or amendment under, (i) the
organizational documents of Buyer, (ii) any Contract to which Buyer is a party,
or by which its assets are bound, or (iii) any applicable Laws.


5.5           Consents and Approvals.  No consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority or any
other Person is required to be obtained or made by Buyer in connection with the
execution, delivery and performance of this Agreement or any other Transaction
Document to which Buyer is a party and the consummation of the transactions
contemplated hereby and thereby.


5.6           Brokers.  Other than certain fees payable to a finder, for which Buyer will be solely responsible, Buyer has not
paid and is not obligated to pay any fee or commission to any broker, finder,
investment banker or other intermediary in connection with this Agreement, any
other agreement or any of the transactions contemplated hereby or thereby for
which Sellers will have any liability.


5.7           Compliance with Laws.  Buyer is in compliance in all material
respects with all applicable Laws.  Buyer
is not subject to any Court Orders.  No
investigation or review by any Governmental Authority with respect to Buyer is
pending or filed or, to the Knowledge of Buyer, threatened nor, to the
Knowledge of Buyer, has any Governmental Authority indicated an intention to
conduct the same.


 


20

















 


Article
VI

Covenants of the Parties


6.1           Conduct of Company Business.  From the date hereof to the Closing, except
as expressly contemplated by this Agreement or otherwise consented to by Buyer
in writing, Sellers shall use their reasonable best efforts to cause the
Company to, and the Company shall:


(a)           conduct its business only in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted;


(b)           maintain in all material respects all
of the structures, equipment, vehicles and other tangible personal property of
its business in its present condition, except for ordinary wear and tear and
damage by unavoidable casualty and sales of inventory in the ordinary course of
business;


(c)           keep in full force and effect
insurance comparable in amount and scope of coverage to insurance now carried
with respect to its business;


(d)           perform in all material respects all
obligations under Contracts relating to or affecting its business;


(e)           maintain the books of account and
records of its business in the usual, regular and ordinary manner consistent
with past practice;


(f)            comply in all material respects with
all Laws applicable to the conduct of its business;


(g)           not enter any employment agreement or
commitment to employees of its business or effect any increase in the
compensation or benefits payable or to become payable to any officer, director
or employee of the Business other than increases in non-officer employee
compensation effected in the ordinary course of business;


(h)           create or permit to exist any Lien on
the assets of the Company other than a Permitted Lien;


(i)            not enter into or materially modify
any agreement for indebtedness or any Contract obligating the Company to
purchase goods or services for a period of 90 days or more, or sell, lease,
license or otherwise dispose of any asset of its business (other than
dispositions of obsolete assets and inventory in the ordinary course of
business) or acquire any substantial assets other than replacement assets,
inventory and supplies to be used in its business;


(j)            not take any action with respect to,
or make any material change in its accounting or Tax policies or procedures;


(k)           not make, change or revoke any Tax
election or settle or compromise any Tax Liability, or amend any Tax Return,
change an annual accounting period, adopt or change any accounting method, file
any amended Tax Return, enter into any closing agreement, settle any Tax claim
or assessment, surrender any right to claim a refund of Taxes, consent to any 


 


21

















 


extension or waiver of the limitation period
applicable to any Tax claim or assessment, or take any other similar action
relating to the filing of any Tax Return or the payment of any Tax, if such
election, adoption, change, amendment, agreement, settlement, surrender,
consent or other action would have the effect of increasing the Tax Liability
of the Company for any period ending after the Closing Date or decreasing any
Tax attribute of the Company existing on the Closing Date; and Company shall
promptly notify Buyer if Company makes any amendment to a Tax Return or files
and amended Tax Return;


(l)            not issue any capital stock or
securities convertible into capital stock; or


(m)          not authorize or enter into any
commitment with respect to any of the matters described above.


6.2           Access to Information.


(a)           Buyer’s Investigation.  Between the date of this Agreement and the
Closing Date, the Company will (i) give Buyer and its authorized
representatives (including lenders, legal counsel and accountants) access to
all officers, employees, independent accountants, attorneys and any other
advisors or contractors of the Company, all offices, warehouses and other
facilities and property of the Company’s business and all of the Company’s books
and records, including without limitation, financial statements, tax returns
and Contracts, (ii) permit Buyer and its authorized representatives to make
such inspections thereof as Buyer may require, and (iii) furnish Buyer and its
representatives and advisers with such financial and operating data and other
information with respect to the business and properties of the Company’s
business as Buyer may from time to time request; provided, however,
that any such investigation shall be conducted in such a manner as not to
interfere unreasonably with the operation of the Business.


(b)           Confidentiality.  If the transactions contemplated by this
Agreement are not consummated (and in any event prior to the Closing Date),
Buyer, Sellers and the Company will maintain the confidentiality of all
information and materials obtained from the other Parties and will not use or
permit others to use such information for any other purpose, except to the
extent disclosure of any such information is authorized by the other Parties or
required by Law, and upon termination of this Agreement, Buyer, Sellers and the
Company and their respective representatives will promptly return to the other
Parties all materials obtained from such other Parties in connection with the
transactions contemplated by this Agreement and all copies thereof.  The provisions of this Section 6.2(b) will
not apply to any information, documents or material which are in the public
domain other than by reason of a breach of this Section 6.2(b).


6.3           Efforts to Consummate Transaction.  The Parties shall use their commercially
reasonable efforts to take or cause to be taken all such actions required to
consummate the transactions contemplated hereby including, without limitation,
such actions as may be necessary to obtain, prior to the Closing, all necessary
governmental or other third-party approvals and consents required to be
obtained by the Company, Sellers or Buyer in connection with the consummation
of the transactions contemplated by this Agreement.


 


22

















 


6.4           No Solicitation.  Unless this Agreement shall have been
terminated pursuant to Section 9.1, Sellers shall not, and shall not permit the
Company to, directly or indirectly through any officer, director, employee,
agent, affiliate, representative or otherwise, accept or enter into any
agreement, agreement in principle or other commitment (whether or not legally
binding) relating to a Competing Transaction or solicit or initiate the
submission of any proposal or offer from any person or entity (including the
Company’s officers, partners, employees and agents) relating to any Competing
Transaction, nor participate in any discussions or negotiations regarding, or
furnish to any other person or entity any information with respect to, or
otherwise consider, entertain, cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
person or entity to effect a Competing Transaction.  The Company and Sellers shall immediately
cease any and all contacts, discussions and negotiations with third parties
regarding any Competing Transaction. 
Sellers shall, and shall cause the Company to, notify Buyer if any such
offer or proposal regarding a Competing Transaction (or any inquiry or contact
with any person or entity with respect thereto) is made and shall advise Buyer
of the contents thereof (and, if in written form, provide Buyer with copies
thereof).  Notwithstanding the foregoing,
nothing contained in this Section 6.4 shall prohibit the Company, directly or
indirectly through any officer, director, employee, agent, affiliate,
representative or otherwise, from taking any of the actions described in this
Section 6.4 in response to an unsolicited inquiry, offer or proposal to the
extent that the Board of Directors of the Company determines in good faith that
the fiduciary obligations of the directors to the Company require that such
actions be taken.  In the event of (i) a
breach by Sellers or the Company of this Section 6.4 or (ii) the approval of a
Competing Transaction by the Board of Directors of the Company, then the
Company and Sellers jointly and severally agree to pay to Buyer a break-up fee
of U.S.$500,000 within three (3) Business Days of such termination.


6.5           Tax Matters.


(a)           Sellers will be responsible for and
shall cause the Company to timely file any income Tax Returns with a filing due
date that is after the Closing Date for Tax periods of the Company that end on
or before the Closing Date.  Sellers
shall permit Buyer to review and comment on each such Tax Return described in
the preceding sentence prior to filing, and Sellers shall make any revisions to
such Tax Returns as may be reasonably requested by Buyer in order to comply
with applicable Laws.  Buyer will be
responsible for and shall cause the Company to timely file any income Tax
Returns with a filing due date that is after the Closing Date for Tax periods
of the Company that begin after the Closing Date.


(b)           Each Seller jointly and severally
indemnifies, defends and holds harmless the Company, Buyer, and each Buyer
Affiliate and the Buyer Indemnified Parties and hold them harmless from and
against without duplication, any loss, claim, liability, expense, or other
damage attributable to (i) all Taxes (or the non-payment thereof) of the
Company for all taxable periods ending on or before the Closing Date and the
portion through the end of the Closing Date for any taxable period that
includes (but does not end on) the Closing Date (“Pre-Closing Tax Period”),
(ii) all Taxes of any member of an affiliated, consolidated, combined or
unitary group of which the Company (or any predecessor of any of the foregoing)
is or was a member on or prior to the Closing Date, including pursuant to U.S.
Treasury Regulation § 1.1502 6 or any analogous or similar state, local or
foreign Law, and (iii) any and all Taxes of any person (other than the Company)
imposed on the Company as a transferee or successor, by contract or 


 


23

















 


pursuant to any Law, which Taxes relate to an event or
transaction occurring before the Closing. 
Sellers shall reimburse Buyer for any Taxes of the Company that are the
responsibility of Sellers pursuant to this Section 6.5(b) within 15 Business
Days after payment of such Taxes by Buyer or the Company.


(c)           Buyer and the Company agree that, in
the case of any taxable period that includes (but does not end on) the Closing
Date (a “Straddle Period”), the amount of any Taxes based on or measured
by income or receipts of the Company for the Pre-Closing Tax Period shall be
determined based on an interim closing of the books as of the close of business
on the Closing Date (and for such purpose, the taxable period of any
partnership or other pass-through entity in which the Company holds a
beneficial interest shall be deemed to terminate at such time) and the amount
of other Taxes of the Company for a Straddle Period that relates to the Pre-
Closing Tax Period shall be deemed to be the amount of such Tax for the entire
taxable period multiplied by a fraction the numerator of which is the number of
days in the taxable period ending on the Closing Date and the denominator of
which is the number of days in such Straddle Period.


(d)           Except to the extent required by Law,
Buyer shall not amend, and shall not permit the Company to amend, any income
Tax Return or election made in connection with such income Tax Return for any
Tax period ending on or prior to Closing without the prior written consent of
Sellers if such amendment would have the effect of increasing the amount of Tax
payable by Sellers with respect to such period.


(e)           Buyer and Sellers covenant and agree
to cooperate with each other regarding Tax matters as follows:


(i)            Buyer, the Company and Sellers shall
cooperate fully, as and to the extent reasonably requested by the other Party,
in connection with the filing of Tax Returns pursuant to this Section 6.5(e)
and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include the retention
and (upon the other Party’s request) the provision of records and information
that are reasonably relevant to any such audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.  Buyer, the Company and Sellers agree (A) to
retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by
Buyer or Sellers, any extensions thereof) of the respective taxable periods,
and to abide by all record retention agreements entered into with any taxing
authority, and (B) to give the other Party reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
other Party so request, the Company or Sellers, as the case may be, shall allow
the other Party to take possession of such books and records.


(ii)           Buyer and Sellers further agree, upon
request, to use their best efforts to obtain any certificate or other document
from any Governmental Authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).


 


24

















 


(iii)          Buyer and Sellers further agree, upon
request, to provide the other Party with all reasonably requested information
related to Taxes that either Party may be required to report to any
Governmental Authority.


(f)            Buyer shall notify Sellers in
writing within five (5) Business Days after receipt by Buyer or the Company of
any notice of audit or request for information regarding any Taxes and upon
notice of any determination of liability for Taxes from an official inquiry,
examination, audit or proceeding (each, a “Tax Determination”) regarding
any Tax Return related to a period that ends on or prior to the Closing
Date.  Sellers shall have the right to
exercise control, on behalf of the Company for any such Tax Return, and at its
own expense, at any time over the handling, disposition or settlement of any
issue raised in any such Tax Determination, if and to the extent the
disposition or settlement would be reasonably expected to result in a liability
to the Company or Sellers.  Buyer and the
Company shall cooperate with Sellers, as reasonably requested in connection with
any such Tax Determination.


(g)           Sellers shall notify Buyer in writing
within five (5) Business Days after receipt by Sellers of any Tax Determination
regarding any Tax Return for the Straddle Period or any period thereafter.  Sellers, on behalf of the Company, for any
pre-Closing period, and Buyer, on behalf of the Company, with respect to any
post-Closing period, in each case, at its own respective expense, shall have
the right to exercise control at any time over the handling, disposition or
settlement of any issue raised in any such Tax Determination regarding any
Straddle Period, if and to the extent the disposition or settlement would be
reasonably expected to result in a liability to the Company for such
period.  Buyer and the Company shall
cooperate with Sellers, as reasonably requested, in connection with any such
Tax Determination.


(h)           Sellers and Buyer shall cooperate
with each other in allocating the Purchase Price among the classes of assets of
the Company for any Tax purposes.  To the
extent requested by Buyer, within 120 days after the Closing Date, Sellers and
Buyer shall agree on an allocation of such Purchase Price among the classes of
assets of the Company to be reported to any Governmental Authority.


6.6           Noncompete.  In partial consideration of the Purchase
Price:


(a)           Each Seller agrees that for the five
(5) year period following the Closing Date (the “Noncompete Period”), he
shall not, directly or indirectly, either for himself or for any other Person
participate in any business similar to that of the Company or any of its Affiliates
anywhere in Mexico, other than on behalf of the Company or such Affiliate.  For purposes of this Agreement, the term ‘participate’
includes any direct or indirect interest in any enterprise, whether as an
officer, director, employee, partner, member, sole proprietor, agent,
representative, independent contractor, consultant, franchisor, franchisee,
creditor, lender, owner or otherwise; provided that the term ‘participate’
shall not include ownership of less than 1% of the stock of a publicly-held corporation
whose stock is traded on a national securities exchange or in the
Over-The-Counter market.  Each Seller
agrees that this covenant is reasonable with respect to its duration,
geographical area and scope.


(b)           Each Seller agrees that during the
Noncompete Period, such Seller shall not, directly or indirectly, (i) induce or
attempt to induce any employee of the Company or any


 


25

















 


of its Affiliates (including Buyer) to leave the
employ of Company or any such Affiliate or in any way interfere with the
relationship between the Company or any such Affiliate and any employee
thereof, (ii) induce or attempt to induce any customer or supplier of the
Company or any of its Affiliates (including Buyer) to cease doing business or
reduce their volume of business with the Company or any such Affiliate, or
(iii) except to the extent required by applicable Law or in connection with a
claim under Article VIII, use for their own personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of any
Person, any confidential information of the Company or any of its Affiliates
(including Buyer).


(c)           Each Seller agrees that Buyer would
suffer irreparable harm from a breach by such Seller of any of the covenants or
agreements contained in this Section 6.6. 
In the event of an alleged or threatened breach by a Seller of any of
the provisions of this Section 6.6, Buyer or its successors or assigns may, in
addition to all other rights and remedies existing in its favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce or prevent any violations of the provisions
hereof.  To the extent of any breach of
this Section 6.6 by any Seller, the Noncompete Period (with respect to such
breaching Seller) shall automatically be extended by the length of such breach.


(d)           If, at the time of enforcement of any
of the provisions of this Section 6.6, a court holds that the restrictions
stated therein are unreasonable under the circumstances then existing, the
Parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area.  Each Seller acknowledges
that, without provisions contained in this Section 6.6, Buyer would have not
entered into this Agreement.


6.7           Certain Taxes.  All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and interest)
incurred in connection with this Agreement (including any corporate-level gains
tax triggered by the sale of the Stock), shall be paid by Sellers when due, and
Sellers will, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use,
stamp, registration and other Taxes and fees and, if required by applicable
Law, Buyer will, and will cause its Affiliates to, join in the execution of any
such Tax Returns and other documentation.


6.8           Notification of Certain Matters.  Each of Buyer, Sellers and the Company shall
give prompt written notice of the occurrence or non-occurrence of any event
which would be likely to cause (i) any representation or warranty by such Party
contained in this Agreement to be untrue or inaccurate in any material respect,
or (ii) any failure by such Party to comply with or satisfy, or be able to
comply with or satisfy, in any material respect any condition, covenant or
agreement to be complied with or satisfied by it hereunder.


6.9           Supplementation and Amendment of
Schedules.  From time to time prior
to the Closing, the Company shall have the right to supplement or amend the
Schedules with respect to any matter arising in the ordinary course of business
after the date hereof; provided, however, that all such
supplements or amendments shall be disregarded for purposes of determining
whether the conditions to Buyer’s obligations to close this Agreement contained
in Section 7.1(a) have been satisfied. 
Notwithstanding the foregoing, if the Closing shall occur, then Buyer
shall be deemed to have waived any right or claim pursuant to the terms of this
Agreement or


 


26

















 


otherwise, including pursuant to Article VIII hereof,
with respect to any and all matters disclosed pursuant to any such supplement
or amendment relating to any event occurring after the date hereof.


Article
VII

Closing Conditions


7.1           Obligation of Buyer to Close.  The obligation of Buyer to close the transactions
contemplated hereby shall be subject to the fulfillment and satisfaction, prior
to or at the Closing, of the following conditions, or the written waiver
thereof by Buyer:


(a)           Representations and Covenants.  The representations and warranties of the
Company and Sellers contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date.  Sellers and the Company shall have performed
and complied in all material respects with all covenants and agreements
required by this Agreement to be performed or complied with by Sellers or the
Company on or prior to the Closing Date.


(b)           No Injunction.  No Court Order shall be in effect which
forbids or enjoins the consummation of the transactions contemplated by this
Agreement, no proceedings for such purpose shall be pending, and no Law shall
have been enacted which prohibits, restricts or delays the consummation of the
transactions contemplated hereby.


(c)           Approvals.  All governmental and third party approvals,
consents (including, without limitation, with respect to all leased real
property), permits or waivers necessary for consummation of the transactions
contemplated by this Agreement and any other Transaction Document shall have
been obtained in form and substance reasonably satisfactory to Buyer.


(d)           Good Standing.  Buyer shall have received good standing
certificates, dated within 10 days of the Closing Date, issued by the
appropriate Mexican authorities with respect to the Company.


(e)           Material Adverse Effect.  No Material Adverse Effect shall have
occurred with respect to the Company or Sellers.


(f)            Stock Certificates.  Buyer shall have received the stock
certificates representing the Stock (except Rafael Morales Cuevas shall retain
one share of the Stock) duly endorsed for transfer and accompanied by any
applicable documentary stamp tax.


(g)           Audited Financial Statements.  Buyers hall have received, at least five (5)
Business Days prior to the Closing Date, audited balance sheets and statements
of income, operations and cash flows for the fiscal years ended
December 31, 2005 and December 31, 2006 and a review of such
statements for the six months ended June 30, 2007 (and any other required interim
periods) in accordance with Buyer’s disclosure requirements under Form 8-K of
the U.S. Securities Exchange Act of 1934, as amended, which financial
statements will be presented in accordance with U.S. GAAP and otherwise in form
and substance reasonably satisfactory to Buyer.


 


27
















(h)           Legal Opinion.  Buyer shall have received a legal opinion
customary for acquisitions of the type contemplated by this Agreement in the
United States from counsel to the Company and Sellers in form and substance
satisfactory to Buyer and its counsel.


(i)            Other Document Deliveries.  The Company and Sellers shall have delivered
to Buyer copies of each of the other Transaction Documents to which they are
party duly executed thereby and such other documents as Buyer or its counsel
may reasonably request to evidence the transactions contemplated hereby.


(j)            Due Diligence.  Buyer shall be satisfied, in its sole and
absolute discretion, with the results of its legal, financial or business due
diligence investigations of the Company and Sellers.


(k)           Trademark Assignment Agreement.  The transactions contemplated by the
Trademark Assignment Agreement shall have been consummated.


7.2           Obligation of Sellers to Close.  The obligation of Sellers to close the
transactions contemplated hereby shall be subject to the fulfillment and
satisfaction, prior to or at the Closing, of the following conditions, or the
written waiver thereof by Sellers:


(a)           Representations and Covenants.  The representations and warranties of Buyer
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date.  Buyer shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by Buyer
on or prior to the Closing Date.


(b)           No Injunction.  No Court Order shall be in effect which
forbids or enjoins the consummation of the transactions contemplated by this
Agreement, no proceedings for such purpose shall be pending, and no federal,
state, local or foreign statute, rule or regulation shall have been enacted
which prohibits, restricts or delays such consummation.


(c)           Approvals.  All governmental and third party approvals,
consents, permits or waivers necessary for consummation of the transactions
contemplated by this Agreement shall have been obtained in form and substance
satisfactory to the Company.


(d)           Material Adverse Effect.  No Material Adverse Effect shall have
occurred with respect to Buyer.


(e)           Other Document Deliveries.
Buyer shall have delivered to Sellers copies of each of the other Transaction
Documents to which it is party duly executed thereby and such other documents
as Sellers or their counsel may reasonably request to evidence the transactions
contemplated hereby.


(f)            Purchase Price.  Buyer shall have delivered to the Sellers the
Purchase Price in immediately available funds.


 


28

















 


(g)           Trademark Assignment Agreement.  The transactions contemplated by the
Trademark Assignment Agreement shall have been consummated.


Article
VIII

Indemnification


8.1           Indemnification.


(a)           By Sellers.  Each Seller, jointly and severally, hereby
agrees to indemnify, defend and hold harmless Buyer, the Company and their
respective directors, officers, employees, stockholders, agents, attorneys,
representatives, successors, permitted assigns and Affiliates (collectively,
the “Buyer Indemnified Parties”) from and against any Losses arising
from or relating to: (i) any breach of any representation or warranty made by
the Company in this Agreement; (ii) any breach of any covenant or agreement
made by the Company or Sellers in this Agreement; (iii) any breach of any
representation, warranty, covenant or agreement made by Julia Olavarri de Arana
in the Trademark Assignment Agreement; and (iv) any indemnification obligations
pursuant to Section 6.5.  In addition,
each Seller, severally and not jointly, hereby agrees to indemnify, defend and
hold harmless the Buyer Indemnified Parties from and against any Losses based
upon or arising from any breach of the representations and warranties of such
Seller contained in Article IV.


(b)           By Buyer.  Following the Closing, Buyer shall indemnify,
defend and hold harmless Sellers at all times from and against any Losses
arising from or relating to: (i) any breach of any representation or warranty
made by Buyer in this Agreement; and (ii) any breach of any covenant and
agreement made by Buyer in this Agreement.


8.2           Limitations of Indemnity.


(a)           Notwithstanding the foregoing, no
claim for indemnification under Section 8.1 shall first be asserted after the
two year anniversary of the Closing Date; provided, however, that
(i) a claim for indemnification under Section 3.2 (Corporate Power), Section
3.6 (Capitalization), Section 4.1 (Ownership of Capital Stock) and Section 4.2
(Legal Capacity) shall survive indefinitely, and (ii) a claim for
indemnification under Section 3.12 (Welfare Plans), Section 3.13 (Taxes) and
Section 3.19 (Environmental Matters) shall survive until the expiration of the
applicable statute of limitations.


(b)           Claims for indemnification by Buyer
under this Article IX shall be reduced to the extent of any insurance proceeds
received by or paid on behalf of the Indemnitee from any insurance policy in
effect immediately prior to the Closing (the “Pre-Closing Insurance Policies”)
(and for clarification, not from insurance policies bound by Buyer following
the Closing with respect to the Company) covering the occurrence(s) that is or
are the basis for such claims.  In
addition, where applicable, Buyer agrees to, and shall cause the Company to,
submit all claims covered by the Pre-Closing Insurance Policies to the
respective insurance carrier and pursue recovery from the insurers under such
Pre-Closing Insurance Policies in accordance with the terms of such policies.


 


29

















 


(c)           The liability of Sellers under the
indemnification provisions of Section 8.1(a) shall be recovered first from the
Escrow Funds.  Recourse to the Escrow
Funds shall not be a limitation on, or an election of, Buyer’s remedies, or
Sellers’ remedies, at law or in equity.


8.3           Indemnification Procedures - Third
Party Claims.


(a)           The rights and obligations of a Party
claiming a right of indemnification hereunder (each an “Indemnitee”)
from a Party to this Agreement (each an “Indemnitor”) in any way
relating to a Third Party Claim shall be governed by the following provisions
of this Section 8.3:


(i)            The Indemnitee shall give prompt
written notice to the Indemnitor of the commencement of any claim, action suit
or proceeding, or any threat thereof, or any state of facts which Indemnitee
determines will give rise to a claim by the Indemnitee against the Indemnitor
based on the indemnity provisions contained in this Agreement setting forth, in
reasonable detail, the nature and basis of the claim and the amount thereof, to
the extent known, and any other relevant information in the possession of the
Indemnitee (a “Notice of Claim”). 
The Notice of Claim shall be accompanied by any relevant documents in
the possession of the Indemnitee relating to the claim (such as copies of any
summons, complaint or pleading which may have been served and, or any written
demand or document evidencing the same). 
No failure to give a Notice of Claim shall affect, limit or reduce the
indemnification obligations of an Indemnitor hereunder, except to the extent
such failure actually prejudices such Indemnitor’s ability successfully to
defend the claim, action, suit or proceeding giving rise to the indemnification
claim.


(ii)           In the event that an Indemnitee
furnishes an Indemnitor with a Notice of Claim, then, upon the written
acknowledgment by the Indemnitor given to the Indemnitee within 30 days after
receipt of the Notice of Claim, stating that the Indemnitor is undertaking and
will prosecute the defense of the claim under such indemnity provisions and
confirming that based on the information available as between the Indemnitor
and the Indemnitee, the claim covered by the Notice of Claim is subject to this
Article VIII and that the Indemnitor will be able to pay the full amount of
potential liability in connection with any such claim (including, without
limitation, any action, suit or proceeding and all proceedings on appeal or
other review which counsel for the Indemnitee may reasonably consider
appropriate) (an “Indemnification Acknowledgment”), then the claim
covered by the Notice of Claim may be defended by the Indemnitor, at the sole
cost and expense of the Indemnitor; provided, however, that the
Indemnitee is authorized to file any motion, answer or other pleading that may
be reasonably necessary or appropriate to protect its interests during such
30-day period.  The delivery of an
Indemnification Acknowledgment shall not preclude Indemnitor’s subsequent right
to deny indemnification and Indemnitor’s right to reimbursement of all costs of
any nature incurred, if it is ultimately determined that such claim was not
indemnifiable by Indemnitor.  However, in
the event the Indemnitor does not furnish an Indemnification Acknowledgment to
the Indemnitee or does not offer reasonable assurances to the Indemnitee as to
Indemnitor’s financial capacity to satisfy any final judgment or settlement,
the Indemnitee may, upon written notice to the Indemnitor, assume the defense
(with legal counsel chosen by the Indemnitee) and dispose of the claim, and the
Indemnitor shall be responsible for Indemnitee’s reasonable costs and
expenses.  Notwithstanding receipt of an Indemnification
Acknowledgment, the Indemnitee 


 


30

















 


shall have the right to employ its own counsel in
respect of any such claim, action, suit or proceeding, but the fees and
expenses of such counsel shall be at the Indemnitee’s own cost and expense,
unless (A) the employment of such counsel and the payment of such fees and
expenses shall have been specifically authorized by the Indemnitor in
connection with the defense of such claim, action, suit or proceeding, or (B)
the Indemnitee shall have reasonably concluded based upon a written opinion of
counsel that there may be specific material defenses available to the
Indemnitee which are different from or in addition to those available to the
Indemnitor, in which case the costs and expenses incurred by the Indemnitee for
such counsel shall be borne by the Indemnitor, provided that Indemnitor shall
not be obligated to pay for the costs and expenses of more than one counsel to
the Indemnitee.


(iii)          The Indemnitee or the Indemnitor, as
the case may be, who is controlling the defense of the claim, action, suit or
proceeding, shall keep the other party fully informed of such claim, action,
suit or proceeding at all stages thereof, whether or not such party is represented
by counsel.  The Parties hereto agree to
render to each other such assistance as they may reasonably require of each
other in order to ensure the proper and adequate defense of any such claim,
action, suit or proceeding.  Subject to
the Indemnitor furnishing the Indemnitee with an Indemnification Acknowledgment
in accordance with Section 8.3(a)(ii), the Indemnitee shall cooperate with the
Indemnitor and provide such assistance, at the sole cost and expense of the
Indemnitor, as the Indemnitor may reasonably request in connection with the
defense of any such claim, action, suit or proceeding, including, but not
limited to, providing the Indemnitor with access to and use of all relevant
corporate records and making available its officers and employees for depositions,
pre-trial discovery and as witnesses at trial, if required.  In requesting any such cooperation, the
Indemnitor shall have due regard for, and attempt not to be disruptive of, the
business and day-to-day operations of the Indemnitee and shall follow the
requests of the Indemnitee regarding any documents or instruments which the
Indemnitee believes should be given confidential treatment.


(b)           Neither Party shall make or enter
into any settlement of any claim, action, suit or proceeding which one Party
has undertaken to defend, without the other Party’s prior written consent
(which consent shall not be unreasonably withheld, delayed or conditioned),
provided that no consent shall be required if (i) there is no obligation,
directly or indirectly, on the part of such other Party to contribute to any
portion of the payment for any of the Losses, (ii) such other Party receives a
general and unconditional release with respect to the claim (in form, substance
and scope reasonably acceptable to such other Party), (iii) there is no finding
or admission of any violation of law by, or effect on any other claim that may
be made against such other Party and, (iv) in the reasonable judgment of such
other Party, the relief granted in connection therewith is not likely to have a
Material Adverse Effect on such other Party or its reputation or prospects.


(c)           Any claim for indemnification that
may be made under more than one subsection under Section 8.1 may be made under
the subsection that the claiming party may elect in its sole discretion,
notwithstanding that such claim may be made under more than one subsection.


 


31

















 


8.4           Indemnification Procedures - Other
Claims, Indemnification Generally.


(a)           A claim for indemnification for any
matter not relating to a Third Party Claim may be asserted by giving reasonable
notice directly by the Indemnitee to the Indemnitor.  The Indemnitee shall afford the Indemnitor
reasonable access to all relevant corporate records and other information in
its possession relating thereto.


(b)           If any Party becomes obligated to
indemnify another Party with respect to any claim for indemnification hereunder
and the amount of liability with respect thereto shall have been finally
determined in accordance with this Article VIII, the Indemnifying Party shall
pay such amount to the Indemnified Party in immediately available funds within
ten (10) days following written demand therefor by the Indemnified Party.  The indemnifying Party shall not be obligated
to pay any amount under this Article VIII until such final determination.


8.5           Exclusive Remedy.  Except as specifically provided elsewhere
herein, the provisions for indemnification set forth in this Article VIII are
the exclusive remedies of Sellers, Buyer and the Company arising out of or in
connection with this Agreement, and shall be in lieu of any rights under
contract, tort, equity or otherwise (other than claims based on actual fraud or
intentional breach of this Agreement).


Article
IX

Miscellaneous


9.1           Termination.  Anything herein to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date: (i) by mutual written consent of Buyer and Sellers; (ii) by
either Buyer (if Buyer negotiates in good faith and makes commercially
reasonable efforts to consummate the Closing), or Sellers (if Sellers negotiate
in good faith and makes commercially reasonable efforts to consummate the
Closing), if for any reason the Closing shall not have occurred on or before 60  days after the date hereof (or such other date as may be
mutually agreed by the Parties); (iii) by either Buyer or Sellers in the event
that a condition to the terminating Party’s obligations to close the
transactions contemplated by this Agreement shall become incapable of
satisfaction, without fault by the terminating Party; (iv) by Buyer in the
event of any occurrence or occurrences, having individually or in the
aggregate, a Material Adverse Effect on the Company or Sellers; (v) by Sellers
in the event of any occurrence or occurrences, having individually or in the
aggregate, a Material Adverse Effect on Buyer; (vi) by Buyer in the event it is
not satisfied, in its sole and absolute discretion, with the results of its
legal, financial or business due diligence investigations of the Company and
Sellers; or (vii) by the Company, Sellers or Buyer in the event the Board of
Directors of the Company shall have approved a Competing Transaction; provided,
however, that no Party shall be entitled to terminate this Agreement in
the event that the failure of the Closing to occur or any condition to Closing
to be satisfied shall be attributable to such Party’s willful breach of this
Agreement.  If this Agreement is
terminated pursuant to this Section 9.1, all rights and obligations of the
Parties hereunder shall terminate, and no Party shall have any liability to the
other Party, except for obligations of the Parties in Sections  6.4, 9.2, 9.6, 9.7 and 9.8, which shall
survive the termination of this Agreement, and except that nothing herein will
relieve any Party from liability for any willful breach of this Agreement prior
to such termination.


9.2           Expenses.  The Company and each Seller, on the one hand,
and Buyer, on the other hand, shall bear all of their own expenses in connection
with the execution, delivery and


 


32

















 


performance of this Agreement and the transactions
contemplated hereby, including without limitation all fees and expenses of its
agents, representatives, counsel and accountants.  Notwithstanding the foregoing, Buyer shall
reimburse the Company for any reasonable expenses incurred by the Company in
connection with the Form 8-K compliant financial statements to be delivered by
the Company pursuant Section 7.1(h) which are in excess the expenses ordinarily
incurred by the Company in preparing its financial statements for such periods.


9.3           Entire Agreement; Amendments and
Waivers.  This Agreement, together
with all Exhibits and Disclosure Schedules hereto and the other Transaction
Documents, constitutes the entire agreement among the Parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the Parties, except
that the Confidentiality Agreement and the confidentiality provisions of the
Letter of Intent shall survive and continue in full force and effect until the
Closing.  This Agreement may not be
amended or modified except by an instrument in writing signed by Buyer and the
Representative.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.  Neither the failure nor the delay by any
Party in exercising any right, power or privilege hereunder shall operate as a
waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege shall preclude any other or further exercise
of any such right, power or privilege or the exercise of any other right, power
or privilege.  To the maximum extent
permitted by applicable Law, (a) no waiver that may be given by a Party shall
be applicable except in the specific instance for which it was given and (b) no
notice to or demand on one Party shall be deemed to be a waiver of any
obligation of such Party or the right of the Party giving such notice or demand
to take further action without notice or demand as provided in this Agreement
or the other Transaction Documents.


9.4           Notices.  All notices, demands and other communications
to be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given (i) when delivered if
personally delivered by hand (with written confirmation of receipt), (ii) when
received if sent by a nationally recognized overnight courier service (receipt
requested), or (iii) when receipt is acknowledged by an affirmative act of the
Party receiving notice, if sent by facsimile, telecopy or other electronic
transmission device (provided that such an acknowledgement does not include an
acknowledgment generated automatically by a facsimile or telecopy machine or
other electronic transmission device). 
Notices, demands and communications to Buyer, Seller and the Company
will, unless another address is specified in writing, be sent to the address
indicated below:


	
  If to Buyer, to:

  
	
   

  
	
  Nascent Wine Company, Inc.

  
	
  2355 Paseo de Las Americas

  
	
  San Diego, California 92154

  
	
  Attention: Sandro Piancone, Chief Executive Officer

  
	
  Telephone:      (619)
  661-0458

  
	
  Facsimile:       (619)
  661-97345

  



 


33

















 


	
  with a copy (which shall not serve as notice) to:

  
	
   

  
	
  Brownstein Hyatt Farber Schreck, P.C.

  
	
  410 17th Street, Suite 2200

  
	
  Denver, Colorado 80202

  
	
  Attention: Adam J. Agron

  
	
  Telephone:      (303)
  223-1100

  
	
  Facsimile:       (303)
  223-1111

  
	
   

  
	
  If to the Company to:

  
	
   

  
	
  Comercial Targa, S.A. de C.V.

  
	
  Blvd. Insurgentes 19801 Nave 4-A

  
	
  Parque Industrial FIM-HER C.P.22216

  
	
  Tijuana, B.C., Mexico

  



 


or at such other address
or addresses Buyer, the Company or Sellers, as the case may be, may specify by
written notice given in accordance with this Section 9.4.


9.5           Waivers and Amendments.  This Agreement may be amended, superseded,
canceled, renewed or extended and the terms hereof may be waived only by a
written instrument signed by the Parties or, in the case of a waiver, by the
Party waiving compliance.


9.6           Governing Law.  IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEVADA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT
REGARD TO THE CHOICE OF LAW OR CONFLICTS OF LAW PROVISIONS THEREOF) AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.


9.7           Consent to Jurisdiction and Venue.  THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY CONSENT AND AGREE THAT ALL ACTIONS, SUITS OR OTHER PROCEEDINGS
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED
IN STATE OR FEDERAL COURTS LOCATED IN THE STATE OF NEVADA, WHICH COURTS SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY AND ALL CLAIMS,
CONTROVERSIES AND DISPUTES ARISING OUT OF OR RELATED TO THIS AGREEMENT.  NOTWITHSTANDING THE FOREGOING, NOTHING
CONTAINED IN THIS SECTION 9.7 SHALL PRECLUDE BUYER FROM BRINGING ANY ACTION,
SUIT OR OTHER PROCEEDING IN THE COURTS OF ANY OTHER LOCATION WHERE THE COMPANY
OR SELLERS OR ANY ONE OF THEM OR ANY OF ITS OR THEIR ASSETS OR THE COLLATERAL
MAY BE FOUND OR LOCATED OR TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF BUYER.


EACH
OF THE COMPANY AND EACH SELLER, FOR ITSELF AND ITS PROPERTY, (A) IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH 


 


34

















 


COURT AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION, SUIT
OR OTHER PROCEEDING COMMENCED IN ANY SUCH COURT, (B) WAIVES ANY RIGHT IT MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR ANY OBJECTION THAT SUCH
PERSON MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION OR IMPROPER VENUE AND
(C) CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.


TO
THE EXTENT PERMITTED UNDER THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH
OF THE COMPANY AND EACH SELLER HEREBY WAIVES, IN RESPECT OF ANY SUCH ACTION,
SUIT OR OTHER PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS THAT
NOW OR HEREAFTER, BY REASON OF SUCH PARTY’S PRESENT OR FUTURE DOMICILE, OR
OTHERWISE, MAY BE AVAILABLE TO IT.


9.8           Waiver of Trial by Jury.  BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, AND UNDERSTANDING THEY
ARE WAIVING A CONSTITUTIONAL RIGHT, EACH OF THE PARTIES HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL,
WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION, SUIT OR OTHER PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY
RELATING TO (a) THIS AGREEMENT, INCLUDING ANY PRESENT OR FUTURE AMENDMENT
HEREOF, OR ANY OF THE TRANSACTIONS CONTEMPLATED BY OR RELATED TO THIS
AGREEMENT, OR (b) ANY CONDUCT, ACT OR OMISSION OF THE PARTIES OR THEIR
AFFILIATES (OR ANY OF THEM) WITH RESPECT TO THIS AGREEMENT, INCLUDING ANY
PRESENT OR FUTURE AMENDMENT HEREOF, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR OTHER
PROCEEDING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH ACTION,
SUIT OR OTHER PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF
ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.


9.9           Counterparts.  This Agreement may be executed in two or more
counterparts (delivery of which may occur via facsimile), each of which shall
be binding as of the date first written above, and, when delivered, all of
which shall constitute one and the same instrument.  A facsimile signature or electronically
scanned copy of a signature shall constitute and shall be deemed to be
sufficient evidence of a Party’s execution of this Agreement, without necessity
of 


 


35

















 


further proof. 
Each such copy shall be deemed an original, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.


9.10         Invalidity.  If any term or other provision of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal
or incapable of being enforced under any applicable Law in any particular
respect or under any particular circumstances, then, so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any Party, (a) such term or provision shall
nevertheless remain in full force and effect in all other respects and under
all other circumstances, and (b) all other terms, conditions and provisions of
this Agreement shall remain in full force and effect.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the Parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner
so that the transactions contemplated hereby are fulfilled to the fullest
extent possible.


9.11         Negotiated Agreement.  The Parties hereby acknowledge that the terms
and language of this Agreement were the result of negotiations among the
Parties and, as a result, there shall be no presumption that any ambiguities in
this Agreement shall be resolved against any particular Party.  Any controversy over construction of this
Agreement shall be decided without regard to events of authorship or
negotiation.


9.12         Assignment.  This Agreement shall inure to the benefit of,
and be binding upon, the Parties and their respective successors and permitted
assigns.  In addition, it is the intent
of the Parties that the Indemnitees that are not a party hereto be third party
beneficiaries of Article VIII.  No Party
may assign, transfer or delegate any of their rights and obligations hereunder
or any interest herein or therein, by operation of law or otherwise, without
the prior written consent of the other Parties; provided, however,
that Buyer may assign its rights and obligations under this Agreement to a
successor to Buyer’s business.


9.13         Further Assurances.  From time to time after the Closing, each
Party will timely execute and deliver to the other such instruments of sale,
transfer, conveyance, assignment and delivery, and such consents, assurances,
powers of attorney and other instruments, as may be reasonably requested by
such Party or its counsel in order to carry out the purpose and intent of this
Agreement.


 


[Remainder
of Page Intentionally Left Blank]


 


36

















 


IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date
first above written.


	
  BUYER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NASCENT WINE COMPANY,
  INC., a Nevada corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Sandro Piancone

  
	
   

  	
  Sandro Piancone

  
	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  SELLERS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Julia Olavarri de
  Arana

  	
   

  	
   

  
	
  Julia Olavarri de Arana

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Luís I. Arana Olavarri

  	
   

  	
   

  
	
  Luís I. Arana Olavarri

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Juan Carlos Arana
  Olavarri

  	
   

  	
   

  
	
  Juan Carlos Arana Olavarri

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMERCIAL TARGA, S.A. de
  C.V., a Mexican corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Juan Carlos Arana

  
	
   

  	
  Name: Juan Carlos Arana

  
	
   

  	
  Authorized Signatory

  
				



 

















 


Schedule A


 


Sellers; Stock


 




	
  Shareholders

  	
   

  	
  Series A Shares Owned

  	
   

  	
  Series B Shares Owned

  	
   

  
	
  Julia Olavarri de Arana

  	
   

  	
  6,720

  	
   

  	
  2,619,964

  	
   

  
	
  Luís I. Arana Olavarri

  	
   

  	
  80

  	
   

  	
  151,920

  	
   

  
	
  Juan Carlos Arana Olavarri

  	
   

  	
  1,200

  	
   

  	
  158,800

  	
   

  
	
  Total:

  	
   

  	
  8,000

  	
   

  	
  2,930,684