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EXHIBIT 10.11
JOINT VENTURE AGREEMENT
THIS AGREEMENT is made and entered into as of February 08, 1996, by and between
Pacific Marine and Steel Inc., Peru S.A. a corporation organized and existing
under the laws of Peru(hereinafter "PMSI-PERU") and El Chipe S.A., a Piura, Peru
Corporation organized and existing under the laws of Peru (hereinafter "EL
CHIPE").
WHEREAS, the Ventures intend to enter into an agreement to initially develop
approximately 1,000 housing units. The project is know as "The Piura Project."
PMSI-PERU will prepare foundations and construct the buildings, manage the
advertising, and arrange financing for the Joint Ventrue project, so as the
financement for the urban habilitation while El Chipe will provide the land that
the housing units and project will be constructed upon (property description to
be provided per deed), assist in selling the housing units, ensure that the
property is properly zoned for the intended project, and provide site security
during construction; and
WHEREAS, the parties desire to work jointly to construct and sell all housing
units for the project;
NOW, THEREFORE, in consideration of the mutual promises and convenats contained
herein, the parties agree as follows:
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GENERAL PROVISIONS
1.01 Formation of Joint Venture
The Venturers hereby form and establish a joint venture (the
"Venture"), to be named "Pacific Marine and Steel Inc., Peru S.A., and El Chipe
S.A. Joint Venture" for the limited purpose of constructing housing units and
other buildings in Peru for a housing project to be known as "The Piura
Project." The Venture shall engage in no other business.
1.02 Duration of the Venture
The Venture shall commence as of the date of executing of this
Agreement by all the Ventures, and shall continue until dissolved by mutual
consent of the Ventures, or terminated as hereinafter provided.
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1.03 Title To and Ownership of Venture Property.
Any property hereinafter owned or acquired by the Venture, whether
tangible or intangible, including, but not limited to, all rights title and
interest in equipment otherwise acquired in the performance of this Agreement,
may be taken in the name of the Venture, and shall be deemed to be the joint
property of all of the Venturers, and shall not be used in any manner by any one
of the Venturers with out the prior written consent of the other Venturer.
II
CAPITAL CONTRIBUTIONS
2.01 Capital Contributions
Phase I of this project shall consist of 1,000 housing units and lots.
El Chipe has represented to PMSI-PERU that for Phase I there is a potential
market identified and that the buyers could be capable and in agreement to
provide a 25% cash down payment at the time the sales agreement is signed with
each buyer. PMSI-PERU will provide a 45, 60, 75 and 90 square meter house with
selling prices ranging from US$ 22,000 to U.S. $37,000. PMSI-PERU will arrange
a mortgage for the balance to be financed for a terms of either 15, 20 or 30
years at interest rates shown in the example in Attachment 1, 2, 3 and 4.
The initial capital contributions of the Venturers shall consist of the
assets that each Venturer has agreed to contribute to the Joint Venture.
PMSI-PERU will provide the material and labor for the construction of the
houses, including foundations and floor slabs, and will arrange financing for
the habilitation, and permanent mortgage financing for the houses and lad, and
El Chipe will provide the land of an extension of 320,000 square meters, without
habilitation in a justiprice of US$ 5.00 per square meter, provide marketing and
selling in cooperation with PMSI-PERU sales personnel, ensure that the property
is properly zoned for the intended project. PMSI-PERU will provide all plans and
engineering for the foundations and houses. The mentioned contributions will be
done in steps, in accordance with the different legal entity with respect to the
Venturers; therefore the mentioned contributions will not be a transference of
property for the Joint Venture, but a contribution in benefit of it. At the
moment of transference of the finished houses, each Venturer will sign the
Contract in the portion of property that corresponds to that Venturer.
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II
MANAGEMENT
3.01 Management of the Venture
The management and control of the business and affairs of the Venture
shall be vested in PMSI-PERU. Except as may otherwise be mutually agreed upon,
all decisions affecting or arising out of the management, conduct and operations
of the business of the Venture shall be made by PMSI-PERU.
3.02 Services to be Performed by the Venturers.
The work to be performed under the Agreement shall be
performed primarily by PMSI-PERU and El Chipe. Specific work assignments may be
delegated from time to time as mutually agreed upon among the Venturers. Each
Venturer shall be responsible for the timely performance or its designated share
of the work to be performed. Subject to the foregoing, no Venturer shall be
required to devote full time to Venture work and each Venturer may at all times
engage in and possess interests in other business Venturers.
In the event that any Venturer is unable to complete any assigned task
within the agreed time, the other Venturer shall, upon notice to the defaulting
Venturer, be free to assign any such uncompleted task to such other Venturers as
shall be willing to complete any such uncompleted work. Additionally, the
Venturer who completes any such task shall be entitled to payment at the work.
Additionally, the Venturer who completes any such task shall be entitled to
payment at the rate set forth in this Agreement. Further provided, that in the
event that any Venturer is unable to complete more than half of the total work
allocated to him under this Agreement within a reasonable time, the remaining
Venturers shall upon notice, be entitled to compensate the noncomplying Venturer
for the work actually completed (based upon the total charge), and to eliminate
that Venturer from further participation in the Venture and in the profits
received thereunder.
3.03 Authority of Venturers.
Notwithstanding any other provision of this Agreement, the Ventures
shall not have the power, without the written consent of all the other
Venturers, to:
(i) Borrow money in the Venture's name;
(ii) Loan any Venture funds;
(iii) Incur any obligation in the name or on the credit of
the Venture; or
(iv) Transfer, sell, lease or encumber any Venture
property or enter into any contract for such
purpose.
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3.04 Liability for Debts
Any Venturer who incurs any obligation in the name and on the credit of
the Venture in violation of this Agreement may be held individually liable by
the other Venturers for the entire amount of the obligation thus incurred.
3.05 Indemnification Among Venturers.
Any liability incurred by any Venturer arising out of any claim of any
fault or defect in the product provided related to this Agreement, or any breach
of warranty, or any liability shall be prorated to the Venturers. In the event
any legal action or other proceeding shall be commenced against any of the
Venturers respecting the above, then the cost of defending such action,
including attorneys fees, shall be borne prorated among the Venturers. However,
such indemnification shall not extend to, and each Venturer shall be
individually liable for and shall hold each other Venturer harmless from, any
work, conduct or dealings not authorized by all the Venturers, or which is the
result of negligent or other wrongful conduct by the individual Venturer which
is not related to any claimed fault of defect in the services.
PMSI-PERU makes no warranty, either expressed or implied, as to
findings, recommendations, plans, designs, specifications, of professional
advice made by professional advice made by professional of non-professional
persons not directly employed or hired by PMSI-PERU.
IV
EXPENSES, INCOME AND ROYALTIES
4.01 Expenses
All operating expenses incurred by the Venture in conducting its
business and affairs, such as, but not limited to, legal and account services,
taxes and other fees, if any, shall be paid for by the Venture, and charged
against income and profits. Office and other overhead expenses shall be charged
in proportion to the Venture work being conducted, as appropriate.
Pre-established fixed expenses shall be utilized wherever possible. Other
expenses, such as assembly facilities, special tools, customs clearing,
engineering, transportation, housing of the mobilized personnel, and other
mobilization expenses shall be allowed where necessary to complete the
contribution of each Venturer.
Each Venturer shall assume the expense of providing finished work
product to the Agreement, abscent any agreement to the contrary by the
Venturers; provided, that any costs related to the production of transmittal of
work product shall be limited to the actual costs incurred.
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4.02 Distrubution of Net Income and Profits.
The net income and profits of the Venture shall be paid to PMSI-PERU,
and to El Chipe, at the time that the Mortgage Investment Company has sign the
mortgage Agreement with each buyer, and after first deducting all operating
expenses, the payment of the houses or other building systems and related costs
to PMSI-PERU, and payment of land habilitation, related land costs. Each
Venturer shall be entitled to be reimbursed for its costs and expenses incurred
in the performance of its share of the work under the Agreement. Receipt,
invoices, and other appropriate documentation shall be submitted to determine
the actual costs incurred and allow for payment to the Venturers and other
parties. El Chipe will receive a flat commission of US$1,000 for each sold
house, the $1,000 shall be paid to El Chipe when the down payment is received
from each buyer. PMSI-PERU shall be free to utilize the remainder of the down
payment for construction expenses in building the houses. El Chipe will be paid
for any related land costs, and other authorized costs when the permanent
mortgage financing is received for each house.
V
ATTRIBUTION AND CONFIDENTIALITY
5.01 Attribution.
All services performed pursuant to this Agreement shall be the joint
effort of the Venturers regardless of any independent of parallel endeavors of
the Venturers of any consultants who may become involved in the construction
process. Credits for the projects shall be attributed to the Venturer and the
joint efforts of the Venturers, with appropriate recongnition to any consultants
of other parties involved as agreed upon in writting by the Venturers. All
listings for the construction project shall be made in the following form:
Pacific Marine and Steel Inc. - Peru S.A. and El Chipe S.A. Joint Venture,
except that the priority of listing shall be discretionary. Each Venturers shall
at all times and in all places acribe and attribute to the Venturers joint
origin, Venturers shall not make an innuendo or statement, oral or written,
public or private, contrary to such joint attribution. In the event of any such
statement by a Venturer, the Venture shall reafirm, as Venturers, that Venturer
shall issue restatement to the effect of the joint nature of the effort
described herein.
Whenever the question of cooperation under the terms of this Agreement
arises, the parties shall undertake to be completely open with each other
regarding the economic stipulation in the inquiry and/or contract. Both parties
agree to cooperate with each other in every way on the project.
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5.02 Confidentiality
Each Venturer agrees to hold in confidence any and all designs, plans
and other confidential information developed or acquired in the performance of
the work pursuant to this Agreement. Such confidential information shall be
disseminated only on a "need to know" basis, and as may be required by the
interaction of the Venturers among themselves and within the scope of the
Agreement, and any consultants or other contractors engaged by the Venturers.
All such confidential information shall be coded and labeled as agreed upon by
the Venturer so as to avoid unnecessary or inadvertent dissemination. No
Venturer shall use any such confidential information to compete with, or to
assist any other person in competing with, the Venture, any other Venturer, or
the Contractor.
El Chipe agrees that it will not compete with PMSI-PERU on any project
or company undertaking for prefabricated housing for Peru, and that it will not
circumbent PMSI-PERU in any manner on any project or undertaking for such
prefabricated buildings.
PMSI-PERU retains all rights and title in and to its information and
designs in prefabricated houses and other builings. El Chipe acknowledges that
the ownership of and all copyright and intellectual property rights in the
design remains the sole property of PMSI-PERU or its affiliates and designs,
documents, systems, drawings, and other products of PMSI-PERU without the
consent of the other party to this Agreement. Neither party to this Agreement
shall allow the use of any drawings, etc. of the other party on projects and
locations other than those involving PMSI-PERU and El Chipe.
VI
RECORDS AND ACCOUNTING
6.01 Books and Records;
PMSI-PERU shall keep such books of account and other records with
respect to the operations on behalf of the Venture as will enable financial
statements for the Venture to be prepared in accordance with generally accepted
accounting principles.
6.02 Fiscal Year.
The fiscal year of the Venture shall end on December 31st of each year.
6.03 Tax Returns
The Venturers shall cause all required income tax (information) returns
for the Venturer to be prepared and timely filed with the appropriate
authorities.
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6.04 Bank Accounts.
All receipts and income of the Venture shall be deposited in such bank
account(s) at such bank(s) as shall be approved from time to time by PMSI-PERU.
All such funds shall be and remain the property of the Venture. No other funds
shall be commingled with the funds belonging to the Venture. Withdrawls from
such account(s) shall be made only upon the signature(s) of such person(s) as
may from time to time be designated by PMSI-PERU.
VII
ASSIGNABILITY OF INTERESTS
No Venturer may sell, transfer, assign, pledge, or otherwise dispose of
all or any part of its interest in the Venture (whether voluntarily,
involuntarily or by opetation of law) without the prior written consent of the
other Venturers.
VIII
DISSOLUTION
8.01 Events of Dissolution.
(a) The Venture shall be dissolved:
(i) upon the occurrence of any event specified under Peruvian
laws as on effecting dissolution;
(ii) upon the withdrawal of dissolution of any Venturer, or
upon the filing by any Venturer of a voluntary petition in bankruptcy or upon an
adjudication of any Venturer as bankrupt of insolvent, or any Ventuer's seeking,
or consenting to, or acquiescing in, the appointment of any trustee, receiver,
conservator or liquidator of itself or of all, or any substantial portion of,
its property of its interest in the Venture; or
(iii) upon the unanimous consent of the Venturers.
(b) Upon dissolution, the Venturers shall liquidate the assets of the
Venturer, and apply and distribute the proceeds thereof as contemplated by this
Agreement, and as provided by law.
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CONSTRUCTION SCHEDULE
The construction schedule for the delivery and erection of the homes
and site preparation will be as mutually agreed to by both parties in the Joint
Venture. Routine meetings between the two parties and other coordination
communications will take place concerning proper execution of marketing efforts
and coordination of site preparation and house erections and completions.
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X
MISCELLANEOUS
10.01 Succesors and Assigns
Subject to the restriction on transfer set forth herein, this Agreement
shall be binding upon and shall inure to the benefit of the Venturers, and their
respective successors and assigns.
10.02 Amendments.
This Agreement contains the entire agreements between the parties
relating to projects and provisions of services to the projects. Any prior
agreements, promises, negotiations or representations not expressly set forth in
this Agreement are on no force of effect. Subsequent amendments to this
Agreement shall be in writing and signed by both parties.
10.03 Attorney's Fees and Costs.
If any legal action, arbitration or other proceeding shall be commenced
because of the alleged breach of default of, or request for a declaratory
judgement by, a party in connection with any provision of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
other costs incurred, in addition to any other relief to which that party may be
entitled.
10.04 Notices.
Unless written notice of change of address is given, all notices
pertaining to this Agreement shall be delivered personnally, or sent by first
class mail, postage prepaid, or by telefax, charges prepaid, to the Venturers at
the following address:
To: Pacific Marine and Steel, Inc. - Peru S.A.
Xx. Xxx Xxxxxxxx 000 Xxxxxxxx X
Xxxxxxx, Xx Xxxxxx, Xxxx, Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Contact: Xxxxxxx Xxxxxxxxxx C.
Title: General Mananger
To: El Chipe S.A.
Xx. Xxxx 0000 Xxxxx, Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Contact: Sr. Xxxx Camminati R.
Title: Manager Director
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10.05 Applicable Law.
This Agreement shall be deemd to have been entered into and shall be
construed and enforced in accordance with the laws of Peru.
9.06 Venue.
The Venturers hereby consent to and submit to the jurisdiction of the
courts located in Lima, Peru, and any legal action or suit respecting this
Agreement among the Venturers shall be brought only in the courts with
jurisdiction in Lima, Peru. In the case of any legal of administrative action or
requirement from PMSI-PERU against El Chipe, such action must be brought in the
jurisdiction of courts presiding over Peru.
IN WITNESS WHEREOF, the parties hereto have agreed to execute
this Agreement on the date first above written.
PACIFIC MARINE AND STEEL, INC. - PERU S.A.
Date: 02-08-96 By: /s/ Xxxxxxx Xxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxx
/s/ Title: General Manager
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Witness
EL CHIPE S.A.
Date: 02-08-96 By: /s/ Louis Camminati R
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Name: Xxxx Camminati R.
/s/ Title: Manager Director
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Witness
