Joint Venture Agreement
This Joint Venture Agreement dated for reference purposes as
1995, by and between 21st Century Telesis, Inc. ("2lst(I)") and
21st Century Telesis,Inc. ("21st(II)"), both Delaware
corporations.
Witnesseth:
Whereas,the parties hereto wish to bid on and secure from the
Federal Communications Commission licenses to build and operate
Personal Communication Service ("PCS") systems in one or more
Basic Trading Areas ("BTA's"); and
WHEREAS, the parties deem it desirable to pursue such licenses as
a joint venture, on the terms and conditions as hereinafter set
forth.
NOW THEREFORE, in consideration of the mutual promises hereinafter
set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the par-
ties agree as follows:
1. The parties hereby form a joint venture under the laws of
the State of Delaware governing general partnerships. The joint
venture shall be called the "21st Century Telesis Joint Venture,"
and all assets and transactions of the joint venture shall be held
and done in such name. Neither party shall be deemed to be a joint
venturer, partner or agent of the other by virtue of this
agreement or by virtue of actions taken in furtherance hereof
except to the extent necessary for the specific purpose of this
joint venture.
2. The primary purpose of the joint venture is to participate
in auctions to be conducted by the Federal Communications
Commission and thereby secure a license or licenses to operate PCS
services In one or more BTA's; and thereafter, to build and
operate such systems. The joint venture will not engage in any
other business or devote itself to any other objective unless such
business or objective Is reasonably related and incidental to the
joint venture's primary purpose. Neither member of the joint
venture will carry on any business activity relating to PCS except
through this joint venture.
3. Management of all joint venture business, including, by way
of illustration and not by way of limitation, selection and
supervision of all executive and managerial personnel for the
project, setting of salaries and other compensation levels,
participation in the PCS auction, selection of markets to bid on,
design and supervision of the project infrastructure and man-
agement of the project during the term of the license will rest in
the hands of 21st(I), and 21st(II) shall be without authority to
act on behalf of the joint venture.
The joint venture will pay a management fee to 21st(I) for its
management services equal in amount to all direct and indirect
costs incurred by 21st(I) in the course of supplying such
management services.
Neither 21st(I) nor its officers, directors, employees or agents
shall be liable to 21st(II) or to the joint venture for acts or
omissions affecting 2lst(II) or the joint venture, and such
officers, directors, employees and agents shall not be liable to
21st(I) for acts or omissions affecting it, except insofar as the
same are the result of gross negligence or willful misconduct, and
the joint venture and 21st(II) hereby jointly and severally agree
to defend, indemnify and hold harmless 21st(I) and its officers,
directors, employees and agents, and 2lst(I) hereby agrees to
defend, indemnify and hold harmless such officers, directors,
employees and agents, from any claims arising out of or related to
the management of the joint venture by 21st(I), except insofar as
such claims are finally determined to be based upon gross
negligence or willful misconduct. No person who renders services
to the joint venture shall be deemed to be disabled by a conflict
of interest or In breach of his fiduciary duties by virtue of the
fact that such person is an officer, director, employee, agent or
stockholder of 21st(I) at the time such services are rendered.
4. Each party shall make capital contributions to the joint
venture at such times and in such amounts as the parties shall
otherwise agree. No interest shall be paid on such capital
contributions, and no portion of such contributions may be with-
drawn except with the advance approval of a majority In interest
of holders of each class of capital stock of each joint venture
member, voting as a class. 2lst(II) hereby covenants to use its
best efforts to raise up to $50,000,000 through the sale of its
capital stock, or through other means jointly agreed by the
parties, to contribute to the joint venture. Neither party shall
make loans to the joint venture except as the manager shall
approve in advance.
5. 2lst(I) as manager of the joint venture will keep accurate
books of account reflecting the parties' capital accounts and all
items of income, cost and expense of the joint venture. All
operating and capital costs and expenses will be accounted for at
the joint venture level, and will be subtracted from joint venture
revenues; the distributive share of 21st(I) shall be 30% of the
joint venture's profits, gains and losses and the distributive
share therein of 2lst(II) shall be 70%. All distributions to the
members will be in accordance with the foregoing distributive
shares, will be made only from profits, and will be made at such
times and in such amounts as shall be determined by 21st(I), in
the exercise of its sole discretion as manager.
6. The interests of each member in the assets of the joint
venture and the obligation of each member for the liabilities of
the joint venture shall be in the same proportion as the
distributive shares of the two members stated in Para. 5 above.
7. The auditors of the joint venture shall be Messrs.
Postlethwaite & Xxxxxxxxxxx, of Baton Rouge, Louisiana, or such
other firm of auditors as the manager shall hereafter select. The
fiscal year of the joint venture shall be as fixed by 2lst(I), as
manager.
8. Neither member of the joint venture shall sell, assign,
hypothecate or otherwise transfer its interest in the joint
venture without the prior written consent of the other.
9. (a) The joint venture shall terminate upon the first to
occur of the following:
(i) at the conclusion of the auctions conducted by
the Federal Communications Commission for PCS BTA licenses, if the
joint venture shall have failed to secure any such licenses:
(ii) upon the expiration, unrenewed, of any PCS
licenses In which the joint venture shall hold an interest;
(iii) pursuant to resolution adopted by the board of directors of
each member and approved by a majority in interest of holders of
each class of stock of each member, voting as a class.
(b) Withdrawal from or other termination of the joint venture by
either party except as specified in Para. 9(a) above shall be
wrongful, and shall entitle the other party to continue the
business of the joint venture under the same name, utilizing all
assets of the joint venture for such purpose, without liquidating
distribution to either party. A party wrongfully withdrawing from
or otherwise wrongfully terminating the joint venture shall be
liable to the other for damages caused by such wrongful withdrawal
or termination.
10. Upon termination of the joint venture in the manner and for
the reasons specified in Para. 9(a) above, the manager shall first
marshal and liquidate the assets of the joint venture, and shall
pay or establish appropriate reserves for payment of all
outstanding obligations of the joint venture; after all such
obligations are paid or reserved for payment, the manager shall
make a liquidating distribution of all the joint venture assets to
the members. Such liquidating distribution shall be in the same
proportion as the members' distributive shares in the profits and
losses of the joint venture, as specified in Para 5 above, unless
made as a consequence of the failure of the joint venture to
secure a PCS license as specified in 9(a)(i) above, in which event
it shall shall be made in proportion to the capital contributions
of the two members to the joint venture, as determined by the
joint venture's accounting records.
11. Each party represents and warrants to the other (a) that it
has all requisite power and authority to enter into this agreement
and to discharge the obligations undertaken hereby and (b) that
the person executing this agreement on behalf of such party is
duly authorized in the premises.
12. This agreement is the sole and en-tire agreement between the
parties respecting the subject matter hereof and all prior or
contemporaneous understandings contrary to the tenor of this
agreement are hereby declared void.
13. Neither this agreement nor any provision of this agreement
may be modified, waived, discharged or terminated except by a
writing signed by both parties.
14. Each party will perform such other acts and execute and
deliver such other documents as may be necessary or appropriate to
carry out the intent and purposes of this agreement.
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed by their duly authorized representatives and attorneys-
in-fact.
21st Century Telesis, Inc.:
By: Xxxxxx Xxxxxx Xxxx IV
21st Century Telesis (II), Inc.
By: Xxxxxx X. Xxxxxxx
