EXHIBIT 10.32
TECHNICAL ASSISTANCE AGREEMENT
THIS AGREEMENT is made as of July 23, 1997.
BETWEEN
(1) SATURN COMMUNICATIONS LIMITED, a corporation incorporated under the
laws of New Zealand whose registered office is at X.X. Xxx 000, Xxxxxxxxxxx, Xxx
Xxxxxxx (the "Company").
(2) SASKTEL HOLDING (NEW ZEALAND) INC., a Saskatchewan corporation, the
principal executive office of which is at 0000 Xxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxx, Xxxxxx, X0X 0X0 ("SaskTel").
WHEREAS
(A) SaskTel, through its own personnel and through personnel made available
to it by its Affiliates, has extensive experience in designing, engineering,
constructing, marketing, and managing telephone networks in Canada and the
United Kingdom; and
(B) The Company owns, operates, and is completing construction of wireline
and wireless networking for the provision of multi-channel television, telephony
and data services in New Zealand (the "Network") and in connection therewith the
Company wishes to obtain the benefit of SaskTel's experience and assistance with
respect to the administrative and technical operations of the telephony and data
services portion of the Network on the terms and conditions hereinafter
appearing.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATIONS
1.1 In this Agreement unless the context otherwise requires:
"Affiliate" of a person shall mean any entity (including, without
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limitation, any person, partnership, corporation, limited liability company or
other entity), which, directly or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with the person. For
purposes of this Agreement, the only Affiliates of SaskTel shall be (a)
Saskatchewan Telecommunications Holding Corporation ("STHC"), (b) any entity
controlled by STHC, or (c) any entity controlled by Crown Investment Corporation
of Saskatchewan that is engaged in a telecommunications business.
"Company" shall mean the Company or any operating subsidiary of the
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Company which will design, build and operate broadband networks and pursuant to
which a multi-channel television, telephony and data service shall be provided
to its customers.
"Exchange" shall mean all telephone switch central office equipment
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including, without limitation, the building, associated power, air conditioning,
electrical, etc.
"Gross Revenues" shall mean the consolidated gross revenues of the
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Company from services sold to subscribers or other customers in the ordinary
course of business, including, without limitation, subscriber fees, installation
fees, disconnection fees, pay channel fees and advertising revenue, but not
including customer deposits, consultancy fees, financial income and gain from
the sale of any asset, net of sales taxes, value added taxes and similar taxes,
determined in accordance with the accounting rules of New Zealand as amended
from time to time.
"Related Entity" of a party shall refer to any entity in which such
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party holds a beneficial interest, directly or through one or more
intermediaries.
2. APPOINTMENT
The Company hereby appoints SaskTel, along with UIH Asia/Pacific
Communications, Inc. ("UAP"), as a technical adviser to provide services with
respect to the design, construction, operation, maintenance, administration and
marketing and programming of the telephony, broadcast and data services portion
of the Network, and SaskTel hereby accepts such engagement pursuant to the
provisions of this Agreement.
3. GENERAL DUTIES OF SASKTEL
3.1 From time to time, on its own initiative and additionally, when
reasonably requested by the Company's Board of Directors or Executive Committee
of the Board of Directors, SaskTel shall, through its officers, employees,
agents and other personnel, provide technical assistance to the Company in
accordance with the terms of this Agreement.
3.2 SaskTel shall devote its best effort to carrying out the advisory
and consultancy functions specified in this Agreement, and shall perform its
duties hereunder in a professional, expert and diligent manner and in accordance
with the same standards SaskTel customarily applies in the operation or
management of telephony, broadcast and data networks owned or managed by SaskTel
or its Affiliates.
3.3 SaskTel agrees to provide whatever personnel (whether employed
directly by SaskTel or any of its Affiliates or Related Entities) as are
reasonably required to fulfill its obligations under this Agreement, and agrees
that, as reasonably required by the Company, such personnel shall provide the
services called for by this Agreement on-site at the Systems or the offices of
the Company in New Zealand.
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4. SPECIFIC DUTIES OF SASKTEL
From time to time as reasonably requested by the Company, SaskTel, and in
cooperation with UAP, shall provide, through advice, consultation and other
means, technical assistance to the Company with respect to the matters described
below:
4.1 MARKETING FOR COMPANY
SaskTel shall, provide advice regarding marketing, selling and
advertising functions, including assistance and advice with respect to:
(a) the development of sales procedures and reporting functions;
(b) incentive programs;
(c) training of sales personnel;
(d) brochures and advertising programs;
(e) customer complaint handling;
(f) billing, rates and tariffs;
(g) promotional offers and other sales techniques;
(h) research and analysis;
(i) regulatory issues; and
(j) advice on selection and packaging of basic and pay channels.
4.2 SUBSCRIBER MANAGEMENT AND INFORMATION SYSTEMS
SaskTel will assist the Company in the design, planning,
acquisition, implementation, operation and monitoring of all phases of the
Information Technology associated with the Network. This will include, but not
be limited to, the following:
(a) Addressable Control System which directly control, manage
and maintain the Exchange and transmission equipment attached to the Network;
(b) Computer Aided Design and Drafting which assists Network
designers in engineering the Network;
(c) Project Management System which tracks materials, time and
money associated with the construction phase of the project;
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(d) Purchasing and Material Acquisition which functions to
control material acquisition, handling and issuance;
(e) Accounting including Nominal Ledger, Payables, Receivables,
Payroll, Budgeting, Fixed Assets, and Management Reporting;
(f) Office Systems including word processing, planning, graphics
and electronic mail systems;
(g) Subscriber Management and Billing;
(h) Facilities management system;
(i) Customer care management system;
(j) Call distribution management system; and
(k) Miscellaneous Related Systems such as Vehicle Management,
Advertising sales and Tracking Systems, Automated Telephone Response Units,
Status Monitoring Systems, and others which directly connect and interact with
various systems mentioned above.
4.3 PERSONNEL AND TRAINING
(a) SaskTel shall provide advice regarding the establishment of
standards and methods for the selection, training, monitoring and work safety of
the personnel involved in the operation, maintenance and administration of the
telephony, broadcast and data services portion of the Network.
(b) From time to time, as reasonably requested by the Company,
SaskTel shall:
(i) Provide training for officers, employees or agents of
the Company;
(ii) Assign personnel to undertake advisory, training or
operational duties in the Company, in each case subject to the direct
supervision of the Company or its representatives; and/or
(iii) Assist the Company in the identification and
evaluation of candidates with the relevant experience for senior management
positions.
(c) The Company shall at all times and at the cost of the
Company maintain relevant insurance for all employees and personnel of SaskTel
providing on-site services, covering both personal damages and third party
liability.
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4.4 DESIGN, CONSTRUCTION, INSTALLATION AND MAINTENANCE OF THE NETWORK
AND CUSTOMER PREMISE EQUIPMENT
(a) SaskTel shall, in consultation with the Company, assist in
all aspects of the design and construction of the Network, and shall give advice
regarding the implementation of such plan.
(b) The items to be considered by SaskTel in assisting the
Company in developing and implementing the design and construction of the
Network shall include, without limitation, the following matters:
(i) The type of equipment to be used in the construction
of the telephony, broadcast and data services portion of the Network;
(ii) Recommendations as to manufacturers and the equipment
to be provided by them;
(iii) Appropriate costs and expenditures;
(iv) Terms of contracts for purchase and installation of
equipment;
(v) Mapping of the operating areas using computerized
design techniques;
(vi) The use of electronics and/or fiber optics for both
above ground and underground installations;
(vii) Advice in selecting contractors;
(viii) Recommendations on methods to be used by
contractors to build the Network;
(ix) Acceptability of prices and bids for construction;
(x) Policies for supervision of construction work and
scheduling of construction work;
(xi) Techniques and methods for conduit and cable
placement;
(xii) Advice in the location and installation of the
Exchange and other transmission or reception equipment and the selection and
purchase thereof;
(xiii) Advice in selecting and applying for spectrum; and
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(xiv) Techniques and methods for the installation and
maintenance for the Exchange, transmission and customer premises equipment.
4.5 PROGRAMMING
SaskTel shall assist the Company with the filling of the array of
television channels of the Systems through the selection of programming offered
by international sources.
4.6 PUBLIC RELATIONS
SaskTel shall assist the Company with its governmental and community
relations.
5. APPOINTMENT AND SECONDMENT OF CERTAIN OFFICERS
During the term of this Agreement, SaskTel shall have the right to
designate the persons who serve as the Chief Technology Officer, Controller and
Switch Engineer of the Company, including persons chosen as replacements upon
any resignation of such persons from such positions. SaskTel shall consult with
the Company to determine whether the Company shall employee such persons
directly or whether such persons shall be seconded from employment of SaskTel or
its Affiliates.
6. OFFICE WORK SPACE AND OTHER ASSISTANCE
To the extent reasonably required for the provision of SaskTel's services
pursuant to this Agreement, the Company shall furnish to any of SaskTel's
employees and personnel who are temporarily in New Zealand, at the sole cost and
expense of the Company, adequate office or other work space, computers, and
secretarial, clerical or other assistance. Likewise, the Company will make
available to SaskTel's employees who are performing services under this
Agreement access to all records, equipment, and areas within the control of the
Company as may be reasonably requested by such personnel. SaskTel undertakes
not to use any facilities or assistance provided by the Company hereunder other
than for the sole purpose of performing its obligations pursuant to this
Agreement.
7. INDEPENDENT CONTRACTOR
In the performance of its duties and responsibilities under this Agreement,
SaskTel shall be and shall act solely as an independent contractor, and nothing
contained in this Agreement or in the relationship of the Company and SaskTel
shall constitute or be construed to be or to create a partnership or joint
venture between the Company and SaskTel.
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8. FEES AND PAYMENT
8.1 During the period of this Agreement, the Company shall reimburse
SaskTel for all expenses reasonably incurred by its employees and personnel in
the provision of services pursuant to this Agreement ("Expenses"), which
Expenses shall include the following:
(a) Travel, meal and lodging expenses, either in New Zealand or
elsewhere;
(b) Salary and reasonable administrative expenses, including
expenses with respect to the persons seconded for SaskTel or its Affiliates
pursuant to Section 5, which shall include without limitation, bonuses, cost-of-
living adjustments, reimbursement for leave days, pension, disability, medical
and life insurance and other benefits consistent with those provided by SaskTel,
vehicle, relocation and repatriation expenses and other coasts associated with
international ex patriate employees; and
(c) Fees and expenses of advisors, consultants and independent
contractors (such as accountants, market consultants and attorneys) engaged by
SaskTel with the written consent of the Company.
8.2 Thirty days after the end of each calendar month, SaskTel shall
supply to the Company a report of the above-mentioned Expenses and the Company
shall pay SaskTel for such Expenses within 30 days after the receipt of such
report.
8.3 SaskTel shall be entitled to receive a fee (the "Fee") of (a) 2.5
percent (2.5%) of the gross revenues so long as SaskTel owns at least 20% or
greater of the Company or (b) if SaskTel owns less than 20% of the Company, the
percentage of the gross revenues equal to 5 multiplied by SaskTel's ownership
percentage interest in the Company.
8.4 The Fee shall be paid within 45 days following the end of the
month for which the Fee is due.
8.5 All payments due under this Clause shall be made in Canadian
dollars strictly in accordance with this Clause.
8.6 All payments made to SaskTel hereunder shall be by means of
official telegraphic transfer remittance, mail transfer remittance or banker's
cheque to an account established at bank(s) designated by SaskTel.
9. WARRANTY AND INDEMNITY
The Company shall indemnify and keep SaskTel fully indemnified from and
against any loss, claim or damage incurred by SaskTel or the Company as a result
of any action or claim brought against it by any third party in respect of the
provision by SaskTel of the services stipulated under this Agreement.
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10. DURATION
This Agreement shall be effective upon the date hereof, and shall expire on
a date ten years thereafter, or unless terminated earlier in accordance with
Section 11 below. Thereafter, unless terminated earlier in accordance with
Section 11 below, this Agreement shall be continued from year to year unless
SaskTel or the Company provides written notice to the other party ninety (90)
days prior to the end of such yearly extension.
11. TERMINATION
11.1 This Agreement shall forthwith terminate with respect to one
party upon written notice of termination to it by the other party if the first
party is in breach of its material obligations hereunder (including but not
limited to the payment of any sums due hereunder) and such breach, if capable of
remedy, has not been remedied at the expiry of thirty (30) days following
written notice to that effect having been served on such party by the other
party indicating the steps required to be taken to remedy the failure.
11.2 This Agreement may be terminated by SaskTel or the Company upon
sixty (60) days written notice in the event SaskTel or an Affiliate of SaskTel,
no longer has an equity interest in the Company.
12. CONFIDENTIALITY
Each party hereto acknowledges that, in connection with the services to be
provided by SaskTel hereunder, it may receive confidential and proprietary
information of a business, financial, technical or other type, from the other
party or from an Affiliate of the other party. The Company agrees that any such
information that it receives is to be used by the Company only for exploitation
of the Network. SaskTel agrees that any such information that it receives will
be used only for the performance of its obligations hereunder. Without limiting
the generality of the foregoing, neither party shall commercially exploit any
confidential proprietary information for purposes other than those contemplated
by this Agreement. Each party shall use its best efforts to keep confidential
all information of a proprietary nature that it receives in connection with this
Agreement; provided, however, that the party's respective obligations under this
Clause shall not relate to any matter falling within the public domain otherwise
than by reason of a breach of this Agreement by the party that has received the
information. The provisions of this Clause shall be binding upon the
affiliates, partners, officers, directors, shareholders, employees and agents of
the parties, and shall survive the termination of this Agreement.
13. MISCELLANEOUS
13.1 No variation of this Agreement shall be effective unless in
writing and signed by or on behalf of all of the parties.
13.2 If any term or provision of this Agreement shall be held to be
illegal or unenforceable, in whole or in part, under any enactment or rule of
law, such term or provision or
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part shall to that extent be deemed not to form part of this Agreement and the
enforceability of the remainder of this Agreement shall not be affected.
13.3 All notices, demands, requests or other communications to be
sent by one party to the other hereunder or required by law shall be in writing
and shall be deemed to have been validly given or served by delivery of the same
in person to the intended addressee, by facsimile transmission to such party at
the facsimile number set forth for such party on the signature pages below, or
by depositing the same with Federal Express or another reputable private
international courier service for the soonest business day delivery offered by
such courier service to the intended addressee at its address set forth below,
or at such other address or telecopy number as may be designated by such party.
Any notice, demand or other communication so addressed to the relevant
party shall be deemed to have been delivered (a) if delivered in person, when
actually delivered to the relevant address; (b) if given by courier, on the
fifth business day (of the sending party) after submitted to the courier with
appropriate delivery instructions; or (c) if given or made by facsimile, when
dispatched if the transmission report has the correct number of pages and
correct facsimile number of the recipient on it.
For purposes of this Agreement, Denver, Colorado time shall be used in
the calculation of any notice period. With the start of any notice period being
deemed to commence on the date, Denver time, that such action occurred,
regardless of in which time zone such action occurred, and the notice period
being deemed to end at the end of the day, Denver time, of the last day of the
requisite period following the deemed start date.
To the Company: Saturn Communications Limited
00 Xxx Xxxxxxxxx
Xxxxxx, X.X. Xxx 00-000
Xxxxxxxxxx, Xxx Xxxxxxx
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
To SaskTel: SaskTel Holding (New Zealand), Inc.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx
Xxxxxx X0X 0X0
Attention: President
Facsimile: (000) 000-0000
13.4 No failure or delay by any party in exercising any right, power
or remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of the same preclude any further exercise thereof or
the exercise of any other right, power or remedy. Without limiting the
foregoing, no waiver by any party of any breach of any provision hereof shall be
deemed to be a waiver of any subsequent breach of that or any other provision
hereof.
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13.5 No party shall be entitled to assign this Agreement or its
rights or obligations hereunder save as expressly provided herein or with the
written consent of the other parties; however this Agreement may be assigned by
SaskTel to an Affiliate.
13.6 This Agreement shall be governed by the laws of New Zealand.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.
SATURN COMMUNICATIONS LIMITED
By:/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Director
SASKTEL HOLDING (NEW ZEALAND), INC.
By:/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Chairman of the
Board
By:/s/ X. X. Xxxxxx
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X.X. Xxxxxx, President
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