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Exhibit 10.12
JOINT VENTURE AGREEMENT
BETWEEN
ORBITRONICS INVESTMENTS LTD.
AND
OMNIVISION AFRICA LTD
a subsidiary of
NOSTRAD TELECOMMUNICATIONS PTE. LTD.
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ARTICLE HEADING PAGE
I PARTIES I
2, 3 ,4 & 5 ESTABLISHMENT OF COMPANY 2
6 & 7 PURPOSE AND PRINCIPAL BUSINESS ACTIVITIES 2 - 4
8 DURATION 4
9, 10, 11,
12 & 13 SHARE CAPITAL 5 - 6
14 ADMINISTRATION 7 -
15 BOARD OF DIRECTORS 7
16 MANAGEMENT 9
17 AUDITING BOARD 9
18 LABOUR 9
19 BUSINESS OF THE COMPANY 10
20 RESPONSIBILITIES OF PARTIES 10
21 MANAGEMENT AND TECHNICAL ASSISTANCE 14
22 ACCOUNTING MATTERS AND DMDEND POLICY 14
23 TAXES 16
24 PROMOTION OF COMPANY'S BUSINESS 16
25 CONFIDENTIALITY 17
26 FORCE MAJEURE 17
27 SHARE TRANSFERS 18
28 TERMINATION 19
29 CONSEQUENCES OF NOTICES UNDER ARTICLE 29 20
30 REPRESENTATIONS AND WARRANTIES 22
31 MORE FAVOURABLE LAWS 22
32 SUPREMACY AND COVENANTS 23
33 SUBSEQUENT LAWS 23
34 INVESTMENT GUARANTEE 24
35 OTHER TERMS 24
36 GENERAL 24
37 NOTICES 25
38 ARBITRATION 26
39 LANGUAGE TEXT 27
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PARTIES
Article 1
This Agreement is made between;
Orbitronics Investments Ltd a registered company in the Bahamas and having and
address at XX Xxx X-0000, Xxxxxxxxxx House, East Hill Street, Nassau, the
Bahamas and at Xxxxxx Xxxxx 0xx xxxxx, Xxxxx 000, XX xxx 0000 Xxxxxxx, Xxxxxx.
And;
OmniVision Africa Ltd. a registered company in the British Virgin Islands, and
with an address at 00 Xxxxxxxx Xxxx, #00-00 Xxxxxxxxxx Xxxxxxxx, Xxxxxxxxx
000000.
ESTABLISHMENT OF COMPANY
Article 2
The Company has been formed in accordance with the Foreign Investment Law, the
Law on Economic Entities, the Partnership and Company Law and other relevant
Ugandan laws and regulations.
Article 3
3.1 The name of the Company is OmniVision (U) Uganda Ltd.
3.2 The registered office of the Company is at 0 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx,
Xxxxxx.
Article 4
The Company may upon the decision of the Board of Directors change its
registered office and establish branch offices or other places of business in
Uganda or elsewhere as the business of the Company may require from time to
time.
All activities of the Company shall be governed by the laws, decrees and
pertinent rules and regulations of Uganda.
Article 5
The parties shall share the profits and bear the risks and losses in accordance
with the proportions of their respective holdings of shares in the share capital
of the Company.
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PURPOSE AND PRINCIPAL BUSINESS ACTIVITIES
Article 6
The purpose of the Company shall be to establish, own and operate wireless Pay
Television network, Paging Network, Internet Service Provider and other
Telecommunications services in Uganda and to transact all other business not
prohibited by the laws of Uganda.
Article 7
The principal business activities of the Company shall insofar as they are not
prohibited under the laws of Uganda include the following:
7.1 to distribute subscription television services in Uganda and to provide
marketing, sale, administration, editing and post-production services for
subscriber television services;
7.2 to provide television programme services and sound broadcasting services and
to write, film, record and supply programmes or parts of programmes suitable for
television, video or sound broadcasting whether by the Company or by any other
person, firm, corporation or authority;
7.3 to obtain all necessary permits or licences required for the purpose of
enabling the Company to carry on its business upon such terms and conditions as
may be acceptable to it; including other telecommunications ventures.
7.4 to acquire by purchase, exchange, lease or otherwise any land or building
in, on or from which or in relation to which any production or occurrence in
connection with the making of a television, video or sound broadcasting
programme may take place, or which is otherwise suitable for the business of the
Company;
7.5 to produce, promote, present, organise, arrange and provide every kind of
entertainment, diversion or instruction which may provide suitable material for
inclusion in a television, video or sound broadcasting programme;
7.6 to carry on any and all business and investment as provided for under the
Articles of Association dated the 4th day of June 1997
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DURATION
Article 8
8.1 The duration of this agreement is for 50 years commencing on May 15 1997.
8.2 Where the parties agree to extend the duration of the Company they shall
take all relevant and necessary steps to procure that the Company applies for
and obtains an extension of the duration of the Company from the relevant
authority.
SHARE CAPITAL
Article 9
The share capital of the Company is USD 100,000 divided into 100,000 shares of
USD1.00 each.
Article 10
The shares subscribed and to be taken by each party in the share capital of the
Company shall be as follows:
10.1 Orbitronics Investments Ltd has subscribed to 2,000 shares of USD1.00 each
which is equal to 20% of the share capital of the Company
10.2 OmniVision has subscribed to 8,000 shares of USD1.00 each which is equal to
80% of the share capital of the Company.
The share capital of the Company may be subscribed and paid by the parties in
cash (freely convertible currency) or by way of contribution of licenses,
frequency spectrum, capital goods or industrial property (such as equipment,
machinery, tools, components, spare parts, materials, technical know/how and or
services) or premises or any combination thereof. The value of any capital goods
or industrial property contributed as share capital by any party shall be agreed
by the parties based on their assessment of international market prices
applicable at the contribution.
Article 11
The share capital of the Company shall be subscribed and paid by the parties in
such instalments at such time and in such manner and for such consideration as
may be stipulated from time to time by resolution of the Board of Directors
having regard to the
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requirements of the projects and the business of the Company and as may be
determined by law
Article 12
It shall be a precondition to the obligation of OmniVision BVI to make the first
or any subsequent instalment of its subscription to the share capital of or of
any other contribution to the Company that there shall be delivered to
OmniVision BVI the written opinion of a legal counsel agreed by OmniVision BVI
confirming that OmniVision (U) is limited liability company duly constituted and
of good standing under the laws of Uganda, with all corporate powers and
authority and government approvals necessary in order to own or lease property
and that it can carry out the business activities contemplated by the parties
throughout its contemplated duration.
Article 13
13.1 Any further capital or finance which in the opinion of the parties is
required by the Company shall be provided or guaranteed by the parties in the
same proportions as their holdings of shares in the share capital of the
Company. Such further capital or finance shall be provided or guaranteed at the
time and in the manner stipulated by resolution of the Board of Directors.
13.2 The parties agree that to the extent that any of them suffers any loss in
relation to loans made or credit given to the Company or guarantees, indemnities
or security given in respect of the same they shall make contributions one to
the other to the intent and effect that such losses are borne in the same
proportions as their holdings of shares in the share capital of the Company.
13.3 The parties agree that should OmniVision BVI elect to vend-in any or all
its shares into a PUBCO, that Orbitronics Ltd. will have the option to convert
its shares to the PUBCO at the same price as OmniVision.
ADMINISTRATION
Article 14
14.1 Unless otherwise agreed by the Board of Directors:
14.1.1 the company secretary of the Company shall be Xxxxxxxxxxx Xxxxxx
Xxxxxxxxx
14.1.2 the first auditors of the Company shall be determined by the parties at a
later date
14.1.3 the bankers of the Company shall be TBA
14.2 the financial year of the Company shall commence on the first day of
January and
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end on the thirty-first day of December in each year.
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BOARD OF DIRECTORS
Article 15
15.1 At all times while this agreement remains in force that the Board of
Directors shall comprise of 5 persons of whom 3 shall be nominated by OmniVision
BVI and two by Orbitornics. In the event of any change in the proportions of
holdings in the share capital of the Company, as set forth in Article 10, each
party's representation on the Board of Directors shall be adjusted to a number
of directors proportionate to the proportion of holdings of shares held after
such change.
15.2 Any party shall be entitled at any time to remove or substitute any member
or members of the Board of Directors so appointed by it, and to appoint another
member in place of any member so appointed who for any reason ceases to be a
member. Any such removal, substitution or appointment shall be made by notice in
writing to the registered office of the Company with a copy to the other party
and shall take effect at such date as may be specified in the notice. Any party
removing a member of the Board of Directors shall further be responsible for and
shall indemnify the other party and the Company against any claim by such member
for unfair or wrongful dismissal or other compensation arising out of such
removal.
15.3 Subject to the right of a party to remove any member appointed by it, the
term of office of members of the Board of Directors shall be [3] years and may
be renewed Provided that in the event that a member has been removed and
replaced by another member during his term of office, the other member shall
only hold office for the unexpired period of the said term.
15.4 OmniVision BVI shall be entitled to appoint the Chairman of the Board of
Directors and one of the members.
15.5 The Board of Directors shall have the powers sufficient and necessary:
15.5.1 to establish the general policy of the Company;
15.5.2 to do all such acts and things as are not by law or by agreement or the
Articles of Incorporation required to be exercised and done exclusively by the
Company in general meeting; and
15.5.3 to enable its members to promote the best interest of the Company and to
protect the respective interest of the parties.
The Board of Directors shall discharge its responsibilities in accordance with
the provisions of this Agreement and the Articles of Association, the Foreign
Investment Law and the Partnership and Company Law and other relevant laws.
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MANAGEMENT
Article 16
16.1 The Board of Directors shall appoint an executive director, one or more
deputy executive directors, a company secretary, a general accountant and such
other officers as the Board of Directors considers necessary for the proper
conduct of the business of the Company.
16.2 The officers shall be appointed by the Board of Directors for such term, at
such remuneration and upon such conditions as it may think fit and any officer
so appointed may be removed by the Board of Directors whenever in its judgement
the best interests of the Company will be served thereby.
16.3 All officers of the Company shall have such authority and perform such
duties in the management of the Company as may be provided in the Articles of
Association or as may be determined by the Board of Directors.
AUDITING BOARD
Article 17
The parties shall appoint one or more persons who are members of an
internationally recognised body of accountants and have adequate knowledge and
experience in international accounting principles standards and practices
recognised by the Ministry of Finance of Uganda to, serve as members of the
Auditing Board of the Company to supervise the activities of the Board of
Directors and the financial affairs of the Company.
LABOUR
Article 18
The Company shall be free to recruit, employ, dismiss, pay wages and bonuses and
give other benefits to, and negotiate and sign separate labour contracts with
individual employees subject to the laws of Uganda and in accordance with
policies formulated by the Board of Directors. The policies with respect to the
recruitment, employment, dismissal, resignation, wages, welfare benefits, labour
insurance, labour discipline and other terms and conditions of employment shall
be determined by the Board of Directors in accordance with the laws of Uganda.
The executive director shall be authorised by the Board of Directors to act in
all matters of employment within the scope of such policies.
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BUSINESS OF THE COMPANY
Article 19
19.1 Except as the parties may otherwise agree in writing or save as otherwise
provided or contemplated in this Agreement or in the annual business plan the
parties shall exercise their powers in relation to the Company so as to ensure
that:
19.1.1 the Company carries on and conducts its business and affairs in a proper
and efficient manner and for its own benefit and in accordance with the annual
business plan.
19.1.2 the Company transacts all its business on arms length terms;
19.1.3 the Company shall not enter into any agreement or arrangement restricting
its competitive freedom to provide and take goods and services by such means and
from and to such persons as it may think fit;
19.1.4 all business of the Company, other than routine day to day business,
shall be undertaken and transacted by the Board of Directors;
19.1.5 subject to the annual business plan, the business of the Company shall be
carried on pursuant to policies laid down from time to time by the Board of
Directors;
19.1.6 the Company shall maintain with a well established and reputable insurer
adequate insurance against all risks usually insured against by companies
carrying on the same or a similar business and (without prejudice to the
generality of the foregoing) for the full replacement or reinstatement value of
all its assets of an insurable nature;
19.1.7 the Company shall not acquire, dispose of, hire, lease, license or
receive licences of any assets, goods, rights or services otherwise than at the
best price reasonably obtainable in the circumstances; and
19.1.8 if the Company requires any approval, consent or licence for the carrying
on of its business in the places and in the manner in which it is from time to
time carried on or proposed to be carried on the Company will use its best
endeavours to maintain the same in full force and effect.
Article 20
The parties shall be respectively responsible for the following matters:
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20.1 In addition to and without prejudice to Orbitronics contractual
responsibilities specified elsewhere in this Agreement, the Uganda Party's
responsibilities shall be as follows:
20. 1.1 registering the Company with the Taxation Authority, opening in the name
of the Company the foreign currency and local bank accounts.
20.1.3 using its best efforts to obtain any preferential tax, customs, foreign
exchange or other treatment that is or may become available to the Company;
20.1.4 providing the Company with suitable office and control room, studio space
comprising an area of at least 500 square metres at the most favourable rent and
other terms obtainable;
20.1.5 assisting in the selection of Uganda contractors to participate in the
design and construction of the Company's facilities;
20.1.6 applying for all permissions, consents, approvals, licences, certificates
and permits in legally effectual form as may be necessary lawfully to commence
and carry on the erection, assembly, testing, commissioning and initial
operation of the Company's wireless pay television network and
telecommunications business and , assisting OmniVision BVI's personnel Party and
any foreign contractors engaged in connection therewith to obtain any necessary
registrations or licences in Uganda;
20.1.8 applying for any necessary import and export licences (including for
those items imported as part of the contribution to the share capital) and
handling customs formalities on behalf of the Company;
20.1.9 assisting the Company to procure (by purchase, lease or otherwise) within
Uganda stable and adequate supplies of all materials, components, equipment and
of office supplies, water, gas, electricity, and telephone\fax and facsimile
services, and all other items and facilities required for the business of the
Company including connections to public roads, sewage and storm water
facilities), on terms no less favourable than those available to state
enterprises or other domestic business entities;
20.1.10 assisting the Company to handle procedures for transportation within
Uganda of the items mentioned in Articles 20.1.8 and 20.1.9 above;
20.1.11 assisting the Company to recruit Uganda management personnel, staff and
workers on the basis of merit in accordance with the open selection system
specified in Article 18;
20.1.12 assisting foreign personnel (including foreign directors, managers,
technicians, workers, contractors, professional advisers and others engaged on a
full or part-time basis in relation to the operation of the Company, and their
families) to obtain Ugandan visas
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and work permits, and making satisfactory accommodation arrangements for them in
Uganda;
20.1.13 contacting banks and other financial organisations in Uganda as directed
by the board of directors, holding discussions with them in respect to the
raising of finance and provision of guarantees required by the Company, and
obtaining all documents, approvals or registrations required under Ugandan law
in order to make such loans or guarantees effective;
20.1.14 providing the Company with copies of Ugandan laws, regulations, notices
and other relevant information needed by them;
20.1.15 supplying the Company with relevant information on the domestic Ugandan
market (including pricing and distribution information) to facilitate its
operations;
20.1.16 in the event of the issue of any law, regulation or notice within Uganda
that is detrimental to the interests of the Company, or the occurrence of any
other administrative or commercial event that is detrimental to their interests,
liaison with the relevant authorities and using its best endeavours to remove
the detrimental effects of such law, regulation, notice or event; and
20.1.17 handling other matters entrusted to it by the Company.
20.2 In addition to and without prejudice to OmniVision BVI contractual
responsibilities specified elsewhere in this agreement, OmniVision BVI's
responsibilities shall be as follows
20.2.1 supplying the technical know-how required for the establishment,
commissioning, testing and operation of the wireless pay television network;
20.2.2 co-ordinating, superintending and supervising of the erection, assembly
testing, commissioning and initial operation of the Company's wireless pay
television network and generally of the carrying out of the business of the
Company;
20.2.3 making available to the Company an experienced executive director to
manage the business;
20.2.4 providing training in the operation of the wireless pay television
network for local personnel of the Company;
20.2.5 assisting the Company to select foreign contractors to manage the
erection, assembly, testing, commissioning and initial operation of the
Company's wireless pay television network;
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20.2.6 assisting the Company to procure (by purchase, lease or otherwise) from
overseas materials, components, equipment, office supplies, means of transport
and other items at the most favourable prices obtainable;
20.2.7 assisting the Company to handle procedures for transportation to Kampala,
Uganda of the items mentioned in Article 20.2.6 above;
20.2.8 assisting the Company to recruit foreign management personnel and
technicians on the basis of merit in accordance with the open selection system
specified in Article 18;
20.2.9 assisting Uganda personnel (including the Company's directors, managers,
technicians, workers and others engaged on a full or part-time basis, and their
families) to obtain visas and work permits abroad in order to participate in
technical training, board meetings or other work relating to the operation of
the Company;
20.2.10 contacting banks and other financial organisations outside Uganda and
holding discussions with them in respect to the raising of finance and provision
of guarantees required by the Company;
20.2.11 advising on promotional and marketing campaigns for the wireless pay
television network;
20.2.12 assisting the Company to promote its services on the Uganda market by
providing relevant data in its possession on pricing, supply and demand, and the
like in targeted segments of the markets;
20.2.13 providing the Company with information available outside of Uganda which
is required by it to carry out its responsibilities under Article 20.1 above;
and
20.2.14 handling other matters entrusted to it by the Company.
MANAGEMENT AND TECHNICAL ASSISTANCE
Article 21
The parties shall as soon as may be practicable after the registration of the
Company procure that the Company shall enter into a Management and Technical
Assistance Agreement in respect of the Company's business with OmniVision BVI to
provide:
21.1 proprietary technology and know-how on the establishment and operation of
the wireless pay television network in consideration of a technical assistance
fee equal to 3 percent of the gross monthly subscription fees received by the
Company from subscribers of the wireless pay television network; and
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22.2 exclusive programming and operational management services to the Company in
consideration of a management fee equal to 3 percent of the gross monthly
revenues of the Company.
ACCOUNTING MATTERS AND DIVIDEND POLICY
Article 22
22.1 The parties shall procure that:
22.1.1 the Company shall at all times maintain accurate and complete accounting
and other financial records in accordance with the requirements of all
applicable laws and generally accepted accounting principles applicable in
Uganda
22.1.2 quarterly management accounts containing such information as either party
shall reasonably require shall be prepared and despatched by the Company to the
parties within 30 days of the end of the quarter in question
22.1.3 each party and its respective authorised representatives shall be allowed
access at all reasonable times to examine the books and records of the Company
22.1.4 the accounting and other financial records of the Company shall be
audited by an independent international public accounting firm at the end of
each financial year.
22.1.5 the monetary unit to be used in bookkeeping shall be US Dollar and UShs.
22.1.6 all accounts and other records shall be kept in English language.
The Company shall submit an annual financial report (duly audited by the
auditors for the time being of the Company) and an annual management report of
its Board of Directors at the end of each financial year to the relevant
authorities after they have been presented to and approved by the parties in
their annual ordinary general meeting.
22.2 The parties shall procure that the Company shall prepare an annual business
plan which shall include the following:
22.2.1 an estimate of the working capital requirements of the Company
incorporated within a cash flow statement together with an indication of the
amount (if any) which it is consistent prudent to retain out of the previous
financial year's distributable profits to meet such working capital requirements
22.2.2 a projected profit and loss account
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22.2.3 an operating budget (including estimated capital expenditure
requirements) and balance sheet forecast
22.2.4 a review of the projected business
22.2.5 a summary of business objectives
The first annual business plan shall be prepared within [30] days of the date of
the registration of the Company. Annual business plans in respect of subsequent
financial years shall be submitted for approval by the Board of Directors not
later than [60] days before the commencement of the financial year in question].
22.3 Subject to circumstances prevailing at the relevant time including in
particular the working capital requirements of the Company, and such provisions
and transfers to reserve and depreciation as the Board of Directors shall
consider prudent and proper after consulting with the auditors for the time
being of the Company or as may be required by the laws of Ugandan, it is the
intention of the parties that the Company shall distribute by way of cash
dividend in respect of each financial year not less than 30 % of the post-tax
profits of the Company for that financial year. In deciding whether in respect
of any financial year the Company had profits available for distribution the
parties shall procure that the auditors for the time being, Company shall
certify whether such profits are available or not and the amount thereof (if
any). In giving such certificate such auditors shall act as experts and,:
arbitrators and their determination shall be binding on the parties.
Article 23
23.1 The Company shall pay all taxes in accordance with the relevant laws of
Uganda subject to such preferences, relief's, benefits, concessions, exemptions,
incentives and privileges that may have been extended to the Company.
23.2 The Ugandan Party shall use all reasonable endeavours to obtain for the
Company:
23.2.1 the most favourable tax rates and tax preferences, relief's, benefits,
concessions, exemptions, incentives, privileges and reductions available to
business entities with foreign investment capital in Uganda
23.2.2 exemption or the most beneficial reduction from import duties on all
articles, commodities, components, equipment, goods, machinery, materials,
products, materials, spare parts, transport vehicles and other items required to
be imported for the businesses and activities of the Company
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23.3 If the tax laws of Uganda shall be amended to be more favourable, then,
subject to any relevant approval that may be required the Company's tax regime
(or any category of such tax) shall be correspondingly amended.
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PROMOTION OF COMPANY'S BUSINESS
Article 24
24.1 Each of the parties to this Agreement covenants to use its best endeavours
to maintain, promote and develop the business of the Company to the best
advantage and to further the reputation and interests of the Company.
24.2 Each of the parties to this Agreement covenants that for as long as it is a
party to this Agreement and for a period of [24] months thereafter it shall not
and shall procure that no company owned or controlled by it shall be engaged
concerned or interested either directly or indirectly and whether on its own
behalf or on behalf of or in association with others or in any capacity whatever
in carrying on in competition with the Company anywhere within Uganda the
business of providing wireless pay television services or any other business
conducted by the Company.
24.3 Each of the parties to this Agreement covenants that for as long as it is a
party to this Agreement and for a period of [24] months, thereafter it shall not
and shall procure that no company owned or controlled by it and no person on it
or their behalf shall canvass solicit the custom of or endeavour to entice away
from the Company any person firm or company which has at any time during the 12
months before the termination of Agreement been a customer of or in the habit of
dealing with the Company.
24.4 The restrictions contained in respectively Articles 25.2 and 25.3 are
consider reasonable by the parties but in the event that any such restriction
shall be found to be unenforceable but would be valid if some part or parts of
it were deleted or the period or area of application reduced such restriction
shall apply with such modification as may be necessary to make it valid and
effective.
CONFIDENTALITY
Article 25
25.1 Each party shall at all times use its best endeavours to keep confidential
(and to procure that its respective employees and agents shall keep
confidential) any confidential information which it or they may acquire in
relation to the Company or in relation to the clients business or affairs of the
other party to this Agreement or of the Company and shall not use or disclose
such information except with the consent of that other party and/or of the
Company or in accordance with the order of a court of competent jurisdiction or
in the case of information relating to the Company for the advancement of the
business of the Company.
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25.2 The parties to this Agreement shall procure that the Company shall use all
reasonable endeavours to ensure that its officers employees and agents observe a
similar obligation of confidence in favour of the parties.
25.3 The obligations of each of the parties contained in Article 25.1 shall
continue without limit in point of time but shall cease to apply to any
information coming into the public domain otherwise than by breach by any such
party of its said obligations Provided that nothing contained in this Article 25
shall prevent any party from disclosing any such information to the extent
required in or in connection with legal proceedings arising out of this
Agreement or any matter relating to or in connection with the Company.
25.4 For the purposes of this Article 25 the expression 'party' shall include
the subsidiary companies of any party and any other company controlled by such
other party and the employees or agents of that party and of such subsidiary or
controlled companies.
FORCE MAJEURE
Article 26
26.1 In the event that either of the parties ('Relevant Party') to this
Agreement
26.1.1 forthwith notify the other party in writing;
26.1.2 within 14 days thereof provide detailed information of the event and
explaining the reasons for its inability to perform this agreement; and
26.1.3 use and continue diligently to use all reasonable efforts to remove the
cause of the force majeure, then the Relevant Party shall be excused performance
or the punctual performance, as the case may be, as from the date of such notice
for so long as the event of force majeure shall continue.
26.2 For the purposes of this Agreement, 'force majeure' shall mean, in respect
of the party claiming force majeure, any event which:
26.2.1 is beyond the control of the Relevant Party;
26.2.2 is unforeseen, or if foreseen, is unavoidable; and
26.2.3 totally or substantially prevents the performance of any obligation under
this Agreement by the Relevant Party.
Force majeure events shall include but shall not be limited to exceptional
adverse weather conditions, floods, droughts, storms, lightning, high winds,
typhoons, earthquakes,
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natural disasters, aircraft's or aerial objects, explosion, fire, war,
hostilities, insurgencies, terrorism's, civil commotion's, riots, strikes or
lock-outs on a city or industrial scale, industrial disputes, industrial actions
by workmen, shortage of [labour, goods and materials, and (in the case where
OmniVision BVI is the Relevant Party) acts or regulations of government and
political interference's with the activities of the Relevant Party or the
Company.
26.3 Each party undertakes, notwithstanding that it is not the party whose
performance is affected, to co-operate and use its best endeavours to assist in
removing the cause of the force majeure.
SHARE TRANSFERS
Article 27
Save as otherwise expressly provided in this Agreement neither party/ shall be
entitled during the term of this Agreement to sell, transfer, encumber grant
options over or otherwise dispose of any of the shares or any beneficial
interest in any of the shares now owned or to be acquired after the date of this
Agreement by it in the share capital of the Company under or pursuant to this
Agreement or by virtue of its holding of shares in the share capital of the
Company except in compliance with the provisions of the Articles of
Incorporation of the Company.
TERMINATION
Article 28
28.1 This Agreements hall continue in full force and effect until terminated in
accordance with the provisions of this Article.
28.2 Either of the parties to this Agreement shall be entitled to terminate this
Agreement immediately by notice in writing to the other party (but not after 90
days of the event in question first coming to the attention of the party
entitled to give the notice) if any of the events set out below shall occur. The
said events are:
28.2.1 if the other party shall commit any breach of any of its obligations
under this Agreement and shall fail to remedy such breach (if capable of remedy)
within 30 days after being given notice by the first party so to do or
28.2.2 if the other party shall go into liquidation or dissolution whether
compulsory or voluntary (except for the purposes of a bona fide reconstruction
or amalgamation with the consent of the first party such consent not to be
unreasonably withheld) or if the other
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party shall have an administrator appointed or if a receiver administrative
receiver or manager shall be appointed over any part of the assets or
undertaking of the other party
28.2.3 if the accumulated losses of the Company are so great that the Company
cannot carry out its objectives or continue its business activities successfully
28.2.4 if the Company is no longer in a position to pay its debts or becomes
insolvent or ceases to carry on business
28.2.5 if any event of force majeure continues for a period of 6 months
28.2.6 pursuant to Article 38.4 where applicable
28.3 OmniVision BVI shall be entitled to terminate this Agreement immediately by
notice in writing to Orbitronics Party if any of the events set out below shall
occur:
28.3.1 any change in the circumstances or laws of Uganda which affects or is
likely to affect in a material manner:
28.3.1.1 the viability of the business of the Company including that resulting
from an increase in tax payable or the imposition of additional tax;
28.3.1.2 OmniVision BVI's expected returns in terms of capital or profits
including that resulting from an increase in tax payable or the imposition of
additional tax;
28.3.1.3 the rights or interests of OmniVision BVI's in the Company or under
this agreement; or
28.3.1.4 the ability of OmniVision BVI's to repatriate its capital or profits or
the timing in respect thereof
28.3.2 the nationalisation or expropriation of the assets of the Company or the
assets of or investment of OmniVision BVI's in the Company
28.3.3 pursuant to Articles 33 or 38.4 where applicable.
28.4 This Agreement hall terminate if at any time as a result of a transfer of
shares made in accordance with this Agreement and/or the Company's Articles of
Incorporation either party holds no shares in the share capital of the Company
but without prejudice to any rights which either party may have against the
other party arising prior to such termination (including without limit the
provisions of Article 36.1 below).
28.5 This Agreement shall terminate immediately if an effective resolution is
passed to dissolve the Company or if a liquidating commission is otherwise
appointed (but without
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prejudice to any rights either party may have against the other arising prior to
such termination).
CONSEQUENCES OF NOTICES UNDER ARTICLE 28
Article 29
29.1 If either party shall serve a valid notice of termination under Article
28.2 that party, ('the Terminator') shall be entitled by that notice to require
the other party ('the Terminatee') either to purchase all (but not some only) of
the shares in the Company of the Terminator or to sell to the Terminator all
(but not some only) of the shares of the Terminatee in the Company in either
case at a price determined in accordance with the provisions of Article 29.2.
Upon exercise of any such right by the Terrriinator it and the Terrninatee shall
become bound respectively to sell or purchase on the terms set out below. If in
a valid per Truncation notice no such power of sale or purchase is exercised by
the Terminator the parties shall procure that the Company shall be immediately
dissolved.
29.2 The purchase price of the shares to be bought and sold pursuant to Article
29.1 shall be their fair value as agreed between the parties to such sale and
purchase or in default of agreement within 15 days after the service of the
notice of termination such sum as shall be certified (at the request of either
such party) by the auditors for the time being of the Company to be the fair
value of such shares on the date when the termination notice was served. In so
certifying the auditors are irrevocably instructed to value the shares to be
bought and sold as the same proportion of the market value of the Company as a
whole on that date as the relevant shareholding bears to the whole issued share
capital of the Company on that date but otherwise they shall take into account
all such circumstances as shall seem to them relevant. In so acting such
auditors are instructed to act as experts and not as arbitrators and their
decision shall (save in respect of manifest error) be final and binding on the
parties to such sale and purchase for all purposes and their costs shall be
borne in equal shares by such parties.
29.3 Completion of the sale and purchase of shares pursuant to the provisions of
Article 29.1 shall take place at the registered office of the Company at [10.00
am] on the [second] business day after the price payable for such shares has
been agreed or determined in accordance with the provisions of Article 29.2 (or
such other time and/or place as the parties may agree) and in respect of which
the provisions of Articles 29.4, 29.5 and 29.6 shall then have effect.
29.4 At any completion of the sale and purchase of shares pursuant to Article 29
in return for cash (or such other means of payment which is agreed by the
seller) for the full amount of the purchase money for the shares being bought
and sold (determined in accordance with the respective provisions of Article 29
(as applicable)) and such other amounts as are referred to in Article 29.5 the
seller shall deliver to the purchaser duly
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executed share transfers for the shares being sold in favour of the purchaser or
as it may direct together with the relevant share certificate(s) (or an
acceptable indemnity in lieu).
29.5 If any party ('the Outgoing Party') shall elect or become bound to transfer
all its shares in the Company to the other party to this Agreement under or
pursuant to the provisions of Article 29.5 that other party shall upon or
immediately prior to completion of such transfer procure: ,
29.5.1 the immediate release of all guarantees indemnities and similar covenants
(if any) given by the Outgoing Party in favour or for the benefit of the other
Company under or pursuant to Article 13 (and pending such release shall
indemnify and keep the Outgoing Party fully and effectively indemnified from and
against all claims arising under such guarantees indemnities and similar
covenants (if any).
29.5.2 the immediate repayment to the Outgoing Party of all money advanced to
the Company under or pursuant to Article 13.1 that Outgoing Party by way of loan
and then outstanding (if any) together with all interest (if any) down to the
date of actual payment (as well before as after judgement)
29.6 The parties shall exercise all voting and other rights available to them to
ensure the implementation of the preceding provisions of this Article and that
any provisions contained in the Articles of Incorporation of the Company
restricting transfers of shares (including without limit the provisions of
Article 14) shall be waived or suspended to allow such sales and purchases to
proceed as provided above and the parties shall procure the registration of any
transfer of any shares in the Company pursuant to this Agreement accordingly.
REPRESENTATIONS AND WARRANTIES
Article 30
Each of the parties represents and warrants to the other that it has full power
to enter into and perform its obligations under this Agreement and the execution
of this Agreement on its behalf and the performance of its obligations under
this Agreement have been duly authorised by all necessary corporate action, and
the obligations expressed as being assumed by it under this Agreement constitute
its valid, legal and binding obligations enforceable against it in accordance
with their terms.
MORE FAVOURABLE LAWS
Article 31
Should the laws of Uganda relating to participation in such investment as is
contemplated by this Agreement and to the relations established thereby, be
amended to be more
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favourable to either or both of the parties, then, provided neither of the
parties is put at a disadvantage thereby, this Agreement shall be amended to
take advantage of such new legislation.
SUPREMACY
Article 32
32.1 If any provisions of the Articles and Covenants of Incorporation of the
Company at any time conflict with any of the provisions of this Agreement the
provisions of this Agreement shall prevail and the parties shall whenever
necessary exercise all voting and other rights and powers available to them to
procure the amendment of the Articles of Incorporation to the extent necessary
to permit the Company and its affairs to be carried out as provided in this
Agreement.
32.2 Each of the parties shall exercise all voting rights and other powers of
control available to them in relation to the Company so as to procure (so far as
each is respectively able by the exercise of such rights and powers) that at all
times during the term of this Agreement the provisions concerning the structure
and organisation of the Company and the regulation of its affairs set out in
this Agreement are duly observed and given full force and effect and all actions
required of the parties under this Agreement and the Articles of Incorporation
are carried out in a timely manner. Without prejudice to the generality of the
above each party to this Agreement shall procure that (subject to their
fiduciary duties) each of the directors appointed by it under or pursuant to
Article 16.1 shall execute and do all such acts and things and give and confer
all such powers and authorities as they would have been required to execute do
give and/or confer had they been a party to this Agreement and had covenanted in
the same terms as the party which appointed them.
32.3 Each of the parties shall exercise all voting rights and other powers of
control available to them to ensure that any meeting of the Board of Directors
and every general meeting has the necessary quorum throughout.
SUBSEQUENT LAWS
Article 33
Uganda or any governmental agency after the registration of the, no subsequently
enacted laws, ordinances, decrees or regulations of the Government authority or
agency shall have a retroactive effect on this agreement or incorporation, the
Articles of Incorporation and the conduct of the Company's operations and
business in Uganda. Any application of such adverse laws, ordinances, decrees or
regulations to the aforesaid shall entitle the OmniVision BVI to terminate this
Agreement.
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INVESTMENT GUARANTEE
Article 34
The capital and assets invested in the Company by OmniVision Party shall not be
requisitioned or expropriated through administrative measures of the Government
of Uganda and the Company shall not be nationalised by the Government of Uganda.
In the event that the Government of Uganda requisitions, expropriates or
nationalises the capital and assets of OmniVision BVI or of the Company, the
Orbitronics shall use its best efforts to procure by the Government of Uganda
promptly pays full compensation for such capital and assets.
OTHER TERMS
Article 35
All other terms relating to the activities of the Company which are not
stipulated in this Agreement or the Articles of Association shall be implemented
by the parties in accordance with the Foreign Investment Law of Uganda, the Law
on Partnerships and Companies and other relevant laws.
GENERAL
Article 36
36.1 This Agreement shall be binding upon the parties to this Agreement and
their respective successors and permitted assigns Provided that neither of the
parties to this Agreement shall be entitled to assign this Agreement or any of
its rights and obligations under this Agreement except by a transfer of that
party's shares in the Company which is permitted under the express terms of this
Agreement and/or which is made in accordance with the Articles of Incorporation
or which is otherwise approved in writing by the other party to this Agreement
and (in either case) on terms that the transferee shall covenant with that other
party to perform all the obligations of the transferor under this Agreement.
36.2 No exercise or failure to exercise or delay in exercising any right power
or remedy vested in any party under or pursuant to this Agreement shall
constitute a waiver by that party of that or any other right power or remedy.
36.3 Nothing in this Agreement shall be deemed to constitute a partnership
between the parties to this Agreement or constitute any party the agent of the
other party or otherwise entitle any party to have authority to bind the other
party for any purpose.
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36.4 Each party shall bear its own costs of or in connection with the
preparation and execution of this Agreement but all costs, legal fees and other
expenses incurred in the formation of the Company shall be borne and paid by the
Company.
36.5 This Agreement(together with the Articles of Association and all agreements
and documents executed contemporaneously with it or referred to in it)
constitutes the entire agreement between the parties in relation to its subject
matter and supersedes all prior agreements and understandings whether oral or
written with respect to such subject matter and no variation of this Agreement
shall be effective unless reduced to writing and signed by or on behalf of a
duly authorised representative of each of the parties to this Agreement.
36.6 In the event that any term condition or provision of this Agreement is
found or held to be inconsistent or a violation of any applicable law statute or
regulation the same shall be deemed to be deleted from this Agreement and shall
be of no force and effect and this Agreement shall remain in full force and
effect as if such term condition or provision had not originally been contained
in this Agreement. Notwithstanding the above in the event of any such deletion
the parties shall negotiate in good faith in order to agree the terms of a
mutually acceptable and satisfactory alternative provision in place of the
provision so deleted. If an agreement on the alternative provision cannot be
reached by the parties within 30 days of the provision in question being so
found or held to be inconsistent or a violation, an alternative provision
reflecting the economic and legal substance of the provision so deleted as
closely as possible shall be determined by arbitration pursuant to Article 38.
36.7 This Agreement may be executed in any number of counterparts or duplicates
each of which shall be an original but such counterparts or duplicates shall
together constitute but one and the same agreement.
36.8 Time shall be of the essence for the purposes of any provision of this
Agreement.
NOTICES
Article 37
37.1 Any notice to be given by any party to this Agreement shall be, in writing
and shall be deemed duly served if delivered personally or by facsimile
transmission or by prepaid registered post (airmail in the case of an address
for service outside Uganda) to the addressee at the address or (as the case may
the facsimile number of that party set opposite its name below:
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Orbitronics Investments Ltd
XX Xxx X-0000, Xxxxxxxxxx House
East Hill Street, Nassau
the Bahamas
and at Xxxxxx Xxxxx
0xx xxxxx, xxxxx 000
XX xxx 0000
Xxxxxxx, Xxxxxx
Fax 25641-230388
OmniVision East Africa Ltd.
00 Xxxxxxxx Xxxx
#00-00 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxx
Facsimile number: (00) 000-0000
or at such other address (or facsimile number) as the party to be served may
have not been in accordance with the provisions of this Article.
37.2 Any notice sent by facsimile shall be deemed served when despatched and any
notice served by prepaid registered post shall be deemed served [7] days after
posting to an address in Uganda or [14] days after posting to an address outside
Uganda. In proving the service of any notice it will be sufficient to prove in
the case of a letter that such letter was properly stamped addressed and placed
in the post or delivered or left at the current address if delivered personally
and in the case of a facsimile that such facsimile transmission was duly
despatched to the facsimile number of the addressee given above or subsequently
not filed for the purposes of this Agreement.
ARBITRATION
Article 38
38.1 Any dispute arising from the performance or interpretation of this
Agreement or the Articles of Association which cannot be resolved amicably by
the parties, and any other matter specifically referred to arbitration under any
provision of this Agreement or the Articles of Incorporation shall be referred
to arbitration in Singapore before a single arbitrator in accordance with the
Rules of the Singapore International Arbitration Centre. The language to be used
in the arbitration shall be English.
38.2 In reaching a decision, the arbitration body shall:
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38.2.1 first apply the provisions of this Agreement or the Articles of
Association interpreted in accordance with the plain meaning, of its terms save
to the extent that they are inconsistent, mandatory provision of the laws of
Uganda;
38.2.2 give effect to all mandatory provisions of the laws of Uganda;
38.2.3 apply the laws of Uganda which are specifically referred to and
incorporated in this Agreement and the Articles of Incorporation; and
38.2.4 apply the laws of Singapore if Articles 38.2.1, 38.2.2 and 38.2.3 prove
insufficient for a decision.
38.3 The decision of the arbitrator shall be made and binding upon the parties
and the party liable to carry out a decision or award given in pursuance of this
Article 39 shall abide by and comply with the decision or award within the time
specified for compliance or, if no time is specified, within 30 days after the
communication thereof to the parties. Judgement upon the award rendered may be
entered in any court having jurisdiction or application may be made to such
court for a judicial acceptance of the award without re-examination of the
merits of the case and for an order of enforcement, as the case may be. To this
effect, neither party shall interpose any procedural objection to the
enforcement of any such decision by the other party through any competent court
of law.
38.4 If a party liable to carry out a final decision or award given in
accordance with this Article 39 fails to comply therewith within the time
specified for compliance or, if no time is specified, within 30 days after the
communication thereof to the parties, the party in favour of which the decision
or award has been given, shall be entitled to terminate this Agreement by notice
in writing to the other party.
38.5 During any arbitration, the parties shall continue to perform and observe
all provisions of this Agreement and the Articles of Association to the extent
that the same are not affected by the matter in dispute.
LANGUAGE TEXT
Article 39
This Agreement is made in English.
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IN WITNESS WHEREOF the authorised representatives of the parties have made and
subscribed this Agreement this 30th day of May 1997.
For and on behalf of:
Orbitronics Investments Ltd )
) : ----------------------------
Mr. Xxxxx Xxxx, Director
For and on behalf of:
OmniVision Africa Ltd. )
) : ----------------------------
Xx. Xxxxx Xxxxxxxxx, Director
