EXHIBIT 10.57
DATED THIS 17th DAY OF NOVEMBER 1997
BETWEEN
PNB EQUITY RESOURCE CORPORATION SDN. BHD.
(COMPANY NO 197031-X)
AND
FEDERAL POWER SDN., BHD.
(COMPANY NO. 17892-V)
AND
FIBERCORE INC.
*********************************
JOINT VENTURE AGREEMENT
*********************************
ABDULLAH, ABD. RAHMAN & CO.
(ADVOCATES & SOLICITORS)
17th Floor, Wisma Xxx Rubber
Xxxxx Xxxxxx
00000 Xxxxx Xxxxxx
(REF: AM/DL/SM/MISC/1703/97)
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JOINT VENTURE AGREEMENT
-----------------------
THIS JOINT VENTURE AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into this 17th day of November, 1997 Between
PNB EQUITY RESOURCE CORPORATION SDN. BHD. (COMPANY NO 197031-X) a company
incorporated in Malaysia and having its registered office at 4th Floor, Balai
PNB, 000-X, Xxxxx Xxx Xxxxx, 00000 Xxxxx Xxxxxx, Xxxxxxxx (hereinafter referred
to as "PERC") And FEDERAL POWER SDN. BHD. (COMPANY NO. 17892-V), a company
incorporated in Malaysia and having its registered office at Xxx 0, Xxxxx Xxxxx
00/00, X.X. Xxx 0000, 40702 Xxxx Xxxx, Xxxxxxxx Xxxxx Xxxxx, Xxxxxxxx
(hereinafter referred to as "FP"), jointly forming a Malaysian Consortium
(hereinafter referred to as "MC") And FIBERCORE INC., a Nevada corporation
incorporated under the laws of the United States of America with offices at 000
Xxxxxxxxx Xxxx, X.X. Xxx 000, Xxxxxxxx, Xxxxxxxxxxxxx 00000 Xxxxxx Xxxxxx of
Amenca (hereinafter referred to as "FCI").
WHEREAS, MC is interested in establishing a manufacturing facility for
optical fiber preforms and optical fiber (hereinafter referred to as the
"Products") in Malaysia; and
WHEREAS, FCI owns certain United States and other patents and possesses
extensive experience and know-how covering the manufacture of Products and
currently operates a production facility for the Products in Jena, Germany; and
WHEREAS, MC and FCI desire to establish a joint venture company
(hereinafter referred to as "FCM") to set up, own and operate a facility to
manufacture the Products in Malaysia;
NOW IT IS HEREBY AGREED as follows:
1. Definitions
-----------
In this Agreement unless the contrary intention appears
1.1 "Party " refers to any one of PERC, FP or FCI.
1.2 "Parties" refer to PERC, FP and FCI collectively.
1.3 "Completion Date" shall mean the date on which the parties
executed this Agreement.
1.4 "Product" refers to optical fiber and preforms.
1.5 "Board" or "Board of Directors" shall mean the Board of
Directors of FCM.
1.6 "Ringgit Malaysian and the symbol "RM" refers to the lawful
currency of Malaysia.
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1.7 US Dollar" and the symbol "US$" refers to the lawful currency
of the United States of Amenca.
1.8 The singular includes the plural and vice versa.
1.9 The masculine gender includes the feminine and neuter genders.
2.0 Words denoting person includes corporations and vice versa.
2. Formation of Company
--------------------
2.1 MC and FCI shall cause a company to be incorporated in
accordance with the laws of Malaysia, under the name FIBERCORE
(M) SDN. BHD. (hereinafter called "FCM").
2.2 Upon the execution of this Agreement and subject to the terms
and conditions hereinafter contained, the parties hereto shall
cause FCM and FCM shall inter alia carry out the joint venture
contemplated herein to carry on the business of manufacturing
distributing marketing exporting and sale of the FCM Products.
2.3 The parties hereto hereby agree that FCM shall be operated and
managed in accordance to the Memorandum and Articles of
Association of FCM and in accordance with the terms and
conditions herein contained.
2.4 In the event of any conflict between the provisions of the
Memorandum and Articles of Association of FCM and that of this
Agreement, the provisions of this Agreement shall prevail.
2.5 The parties hereto hereby covenant to do all acts and to
execute all documents and all that is necessary, through their
nominees on the Board of Directors of FCM or otherwise,
including but not limited to the amendment of the Memorandum
and Articles of Association of FCM to ensure consistency with
the terms of this Agreement, to give effect to the provisions
of this Agreement.
2.6 The main objective of FCM shall inter alia be:
(a) To manufacture, distribute, market and sell the
products in Malaysia.
(b) To export and sell the products worldwide through
such sales and distribution networks that have been
established by FCI in various countries worldwide or
that may be established by FCM in the future.
(c) To conduct research and develop projects related or
connected to the optical fiber and communication.
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(d) To do any other business incidental thereto
(hereinafter called the business").
2.7 Notwithstanding anything contained herein, the objects clause
of the Memorandum and Articles of Association of FCM shall
stipulate every possible kind of business that may be
undertaken by FCM
2.8 The parties hereto hereby agree and covenant with each other
that, unless otherwise stated in this Agreement, they will not
do any acts or take any action(s) which will be detrimental to
FCM contemplated herein.
2.9 FCM shall be in the business of manufacturing and marketing
optical fiber preforms and optical fiber and performing
directly related functions including, for example, research
and development projects.
2.10 The costs of preparing incorporation documents and related
contracts and this Agreement shall be advanced by the Parties,
subject to reimbursement by FCM.
3. Capitalization
--------------
3.1 FCM's initial share capital shall be Ringgit Malaysia Fifty
Two Million Thirty Seven Thousand Four Hundred and Eighty Six
(RM52,037,486) divided into ordinary shares and preference
shares as provided in Section 3.2 below.
3.2 The capital of FCM shall be apportioned, initially, as
follows:
PERC: 1,863,809 ordinary shares and 4,207,231 preference
shares for which it will pay Ringgit Malaysia Six Million
Seventy One Thousand and Forty (RM6,071,040).
FP: 5,964,190 ordinary shares and 13,463,138 preference shares
for which it will pay Ringgit Malaysia Nineteen Million Four
Hundred Twenty Seven Thousand Three Hundred and Twenty Eight
(RM19,427,328).
FCI: 8,147,509 ordinary shares and 18,391,609 preference
shares issued in exchange for technology as defined in Section
3.4 below, valued at Ringgit Malaysia Twenty Six Million Five
Hundred Thirty Nine Thousand One Hundred and Eighteen
(RM26,539,118).
3.3 At the Completion Date, PERC and FP shall purchase the
ordinary and preference shares by depositing a total of
Ringgit Malaysia Twenty Five Million Four Hundred Ninety Eight
Thousand Three Hundred and Sixty Eight (RM25,498,368) in FCM's
Malaysian bank account.
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3.4 At the Completion Date, FCI shall be issued the ordinary and
preference shares in Section 3.2 above in exchange for a
non-exclusive, royalty-free license for the technology
provided by FCI to FCM in accordance with a License Agreement
as in Exhibit "D" under which FCI shall provide its technology
to FCM.
3.5 During the first twelve (12) months after the Completion Date,
FCI shall have the right to subscribe up to 2,662,585
additional ordinary shares and 6,010,329 additional preference
shares for Ringgit Malaysia Eight Million Six Hundred Seventy
Two Thousand Nine Hundred and Fourteen (RM8,672,914).
3.6 The ordinary shares shall be voting, shares.
3.7 The preference shares shall be non-voting shares and shall be
converted into ordinary shares on a one preference share for
one ordinary share basis in accordance with the schedule and
achievement of certain bench marks as in Exhibit "C". The
conversion of each parties preference shares shall be
concurrent with the conversion of the other Parties'
preference shares in the same ratio as each Parties' initial
ordinary share ownership so as to maintain the initial
ownership percentage and ratio.
3.8 In the event that the preference shares are not converted into
ordinary shares in accordance with the schedule as in Exhibit
"C", the preference shares held by PERC and FP shall be
entitled to a preference dividend of nine percent
(9(degree)/O) on Purchase Price of preference shares (RM1.00
per share) for each year after Year 1" (as defined in the
Support Contract Exhibit "A") for as long as the preference
shares remain not converted.
3.9 The share capital of PERC and FP is subject to the Put Option
Agreement attached hereto as Exhibit `'F".
4. Condition Precedent
-------------------
4.1 Notwithstanding anything contained herein to the contrary the
joint-venture contemplated herein shall be conditional upon
the attainment of the written approvals of:
(a) The Ministry of International Trade & Industry
(hereinafter called "MITI") by FCM in respect of the
joint-venture contemplated herein subject to the
terms and conditions contained herein or such other
terms and conditions as may be reasonably acceptable
to the parties hereto.
(b) Such other governmental approval as may be necessary
from any competent authority in Malaysia in
connection with the joint venture contemplated herein
and FCI, PERC and FP participation in the equity
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4.2 FCI shall take all reasonable steps to submit the applications
for the approvals as soon as practicable after the execution
of this Agreement. PERC and FP undertake that they will take
all necessary steps to assist FCI in procuring the approvals
for FCM. FCM shall reimburse ail parties for all reasonable
costs and expenses incurred in relation to the approvals.
4.3 Upon the receipt by the parties hereto of the approvals, this
Agreement shall be unconditional (the date of which shall be
referred to as the Effective Date"). Provided always that if
the approvals or any one thereof shall be granted subject to
conditions attached to the approvals or any one thereof shall
be reasonably acceptable to the party adversely affected
thereby.
4.4 In the event that the approvals or any one thereof shall not
be obtained within one (1) year from the date of this
Agreement or such extended period as may be agreed in writing
by the parties hereto, any party hereto shall be entitled to
terminate this Agreement by notice in writing to the other
parties hereto and this Agreement shall thereafter have no
further force and effect and no parties hereto shall have any
claims against the other Parties in respect of this Agreement.
5. Management
----------
5.1 The registered office of FCM (Company No. 435423-P) shall be
at c/o Ontime Management Services, Suite 4.02, 4th Floor,
Wisma Xxx Xx, No 480, 3rd Mile, Xxxxx Xxxx, 00000 Xxxxx
Xxxxxx, Xxxxxxxx or as the Board of Directors of FCM may
choose from time to time.
5.2 The Board of Directors of FCM shall be comprised of not more
than five (5) Directors. The Board shall have ultimate
responsibility for the management and operation of FCM and
shall act in accordance with the terms and conditions of the
Articles of Association
5.3 MC shall have the right to appoint two (2) Directors, each
Director to be appointed from PERC and FP. FCI shall have the
right to appoint three (3) Directors. The right to appoint
such Directors shall include the right to remove any director
so appointed and appoint other Director(s).
5.4 The travel expenses of Directors traveling on the business of
FCM shall be paid by FCM , but the Directors shall receive no
remuneration for their services, except as may be approved by
the Board of Directors of FCM in accordance with the laws of
Malaysia.
5.5 Three (3) Directors, of whom at least one shall be from MC and
two from FCI, shall constitute a quorum for Board meetings.
Board meetings shall be held quarterly, unless otherwise
decided by the Board.
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5.6 The Board of Directors shall appoint a Chairman who shall
serve in a non-executive capacity, at the discretion of the
Board.
5.7 At the Completion Date, the Board shall cause FCM to enter
into a Support Contract with FCI as in Exhibit "A", which
provides, among others things, for the management of FCM.
Pursuant to the Support Contract, FCI shall have the sole
responsibility for the management of FCM for the period
specified in the Support Contract. To implement the management
policy and initiatives contained in the management portion of
the Support Contract, the Board shall appoint the Chief
Executive Officer.
5.8 MC may propose to FCI a list of qualified candidates for the
position of Chief Financial Officer or any executives to be
employed by FCM.
5.9 MC shall have the right to inspect the books and records of
FCM.
5.10 All funds received by FCM shall be deposited in FCM's Malaysia
bank account. FCM's Board of Directors shall appoint the
authorized signatories to the account. The signatories to
cheque shall be in the manner as set out below:
(a) For amounts up to Ringgit Malaysia One Million
(RM1,000,000) two (2) signatories namely either the
Chief Executive Officer or the Chief Financial
Officer and other officer to be appointed by FCM's
Board of Directors
(b) For amounts exceeding Ringgit Malaysia One Million
(RM1,000,000) two (2) signatories namely one (1)
Director representing FCI and another Director
representing either PERC or FP
6. Financial Requirements
----------------------
6.1 As provided in Exhibit "A" the sum of US Dollars Three Million
Eight Hundred Thousand (US$3,800,000) shall be paid to FCI for
design services and contract management. The details of such
services shall be as in the Support Contract. Of that sum US
Dollars Five Hundred and Twenty Thousand (US$520,000) shall be
paid to FCI by FCM, in cash, within ten (10) days of the
Completion Date. The balance shall be paid in accordance with
the Support Contract.
6.2 As provided in Exhibit "B", the projected financial
requirements and project budget of FCM shall be based on data
available at the time the projections were prepared. It is
recognized that revisions will be required as more detailed
specifications are developed and as costs change with time
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6.3 As shown in Exhibit "B" the Project Budget shall include
estimates of the cost of machinery and equipment to be
installed in FCM's facility. Within thirty (30) days after the
completion date, these estimates shall be revised by FCI and
presented to FCM's Board of Directors for approval.
6.4 As provided in Exhibit "B" there shall be a firm bank loan
commitment, in the amount of US Dollars Forty Million
(US$40,000,000) or equivalent in Ringgit Malaysia representing
a portion of the project financing.
7. Warranties, Representations and Undertakings
--------------------------------------------
7.1 PERC and FP represent and warrant that they are entities
legally constituted under the laws of Malaysia and that they
and their representatives, individually, are authorized to
take the actions specified in this Agreement.
7.2 FCI represents and warrants that it is a duly existing
corporation formed and in good standing under the laws of
Nevada and that it and its representatives, individually, are
authorized to take the actions specified in this Agreement.
7.3 Each Party undertakes to advise the other Parties and take
appropriate remedial action in the event that any
representation or warranty by such Party contained in Section
7.1 and 7.2 become untrue during the term of this Agreement.
7.4 Under no circumstances shall PERC or FP take any action or
cause FCM to take any action that would cause any Party, or
any affiliated or associated person or company to be deemed in
violation of the United States Export Administration Act or
those provisions of the Federal Income Tax Law or Regulations,
non-compliance with which would increase or accelerate the
U.S. tax liability or that of any affiliated or associated
person or company with respect to income earned under this
Agreement or pursuant to the transactions contemplated by this
Agreement. FCI represents and warrants that the proprietary
information referred to in Section 15.1 and 15.2 are the
original works of authorship of FCI and that it owns the
proprietary information, including all intellectual property
rights, free and clear of all liens, encumbrances, and claims
or demands of third parties; and that it knows of no patent,
trade secret rights or copyrights of others which would be
infringed by acts contemplated by this Agreement.
7.5 Each Party undertakes and agrees that it shall not, and shall
not permit FCM directly or indirectly to, offer, pay, promise
to pay or authorize the payment or giving of any money, or
anything of ,value (i) to any official of any government of
any instrumentality thereof, or (ii) to any person, while
knowing or having reason to know that all or a portion of such
money or thing of value will be offered, given, or promised,
directly or indirectly, to any official of any government or
any instrumentality thereof, for the purposes of:
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(a) influencing any act or decision of such official in
his official capacity including a decision to fail to
perform his official functions or
(b) inducing such official to use his influence with any
government or any instrumentality thereof to affect
or influence any act or decision of such government
or instrumentality, in order to obtain or retain
business for or with, or direct business to, any
person.
7.6 Under no circumstance may one Party sign any document, perform
any act, or make any commitment, undertaking, warranty or
representation on behalf of the other Parties without the
express written consent of such other Parties. No Party may
sign any document, perform any act, or make any commitment,
understanding, warranty or representation on behalf of FCM
without the express prior written consent of the other
Parties, except as provided in the Support Contract with
respect to FCI.
7.7 Each Party agrees to indemnify and hold harmless the other
Parties and FCM from and against any loss, liability, cost or
expense any of them may suffer or incur as a result of the
indemnifying Party's breach of any representation, warranty or
undertaking contained in this Agreement.
8. Mutual Covenants Regarding Business Opportunities and Dealings
with FCM
8.1 No Party shall make any representation to the other Parties as
to the likely success or profitability of FCM and no Party
shall be responsible to the other for any losses suffered or
liabilities incurred by FCM, except to the extent he or it is
liable therefor by virtue of holding its interest in FCM.
8.2 Except as otherwise provided for in the Support Contract, FCM
may contract, upon terms which are commercially competitive,
with any Party for the supply of goods and services including
without limitation;
(a) design, engineering and construction services;
(b) construction equipment materials, supplies and tools;
(c) housing and office space;
(d) translation services; and
(e) technical assistance and consulting.
8.3 FCI shall retain the right to enter into ventures similar to
FCM in areas outside Malaysia. FCI shall give FCM the right of
first offer to participate in any such new ventures in the
ASEAN area, unless such participation inhibits the new venture
from being consummated.
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9. Exclusion 0f Partnership
------------------------
9.1 Nothing contained or implied in this Agreement shall
constitute or be deemed to constitute a partnership between
the parties hereto and neither party shall have any authority
to bind or commit the other party.
9.2 Except as specifically provided in this Agreement:
(a) Nothing herein contained shall be deemed to
constitute any party the legal representative or
agent of the other party(s) or any of them; and
(b) No party shall have any authority to act for or to
assume any obligation, responsibility or liability in
behalf of the other party(s) or any one of them FCM.
10. Dividends
---------
10.1 It is hereby agreed by the parties hereto that all net profits
of FCM (after setting aside a portion thereof as reserves) for
each and every accounting year shall be distributed by way of
dividends to its shareholders PROVIDED ALWAYS all current and
accumulated losses, actual and contingent, of FCM shall have
first been absorbed and taken into account AND PROVIDED ALWAYS
the amount of the dividends to be declared by FCM shall be
agreed by the parties hereto in writing. The portion of net
profits to be set aside as reserves shall be determined by the
Board of Directors of FCM.
10.2 Any sums which FCM shall be required to withhold under the
Malaysian Tax law for the account of each of the parties
hereto in connection with the dividends payable shall be
withheld and shall be paid by FCM on behalf the parties hereto
to the appropriate tax authorities of Malaysia. FCM shall
furnish to the parties hereto the official tax receipts issued
by such authorities for such taxes paid by FCM on behalf of
the parties hereto.
11. Shareholders Consent
--------------------
11.1 The Board of Directors of FCM shall obtain the prior unanimous
approval of the Shareholders' in general meeting in respect of
the following matters:
(a) Amendment to the Memorandum and Articles of
Association of FCM including the increase or
reduction of the authorized and issued share capital
or the variation of any rights attaching to such
shares;
(b) Except as provided in Section 3.5 any new issue of
shares of FCM;
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(c) The amalgamation, merger or subject to Section 1 102
or Section 12, the winding-up of FCM;
(d) Formation of any subsidiary or investment in another
company or any other form of business organization
where (i) the purposes of formation is other than for
purposes of marketing and sourcing raw materials and
(ii) which investment exceeds more than ten percent
(10%)of the net tangible asset value of FCM based on
the latest audited accounts of FCM;
(e) FCM entering into partnership;
(f) The declaration and distribution of dividends of
fifty percent (50%) or more of the net profits of
FCM;
(g) The (i) making of any agreement, deed, guarantee or
contract whatsoever not in the ordinary course of
business of FCM which values in excess of Ringgit
Malaysia Five Million (RM5,000,000) (ii) the
borrowing from any third party providing any
guarantee or indemnity for a third party's obligation
not in the ordinary course of business of FCM which
values in excess of Ringgit Malaysia Five Million
(RM5,000,000) or (iii) creation of mortgages,
charges, pledges or other securities not in the
ordinary course of business of FCM which values in
excess of Ringgit Malaysia Five Million
(RM5,000,000). Without limiting the generality of
ordinary course of business", the aforesaid
transactions shall exclude any transaction for the
sale and purchase of stock in trade (including raw
materials, semi-finished products);
(h) The purchase, sale, transfer or disposal of any
property or other assets:
(i) during the Construction Stage with a value
excess of Ringgit Malaysia Ten Million
(RM10,000,000) only. "Construction stage"
means the stage of the joint venture where
the factory of FCM for the manufacture of
the FCM's Products is being constructed;
(ii) during the Operation Stage, with a value in
excess of Ringgit Malaysia Five Million
(RM5,000,000) only. "Operation Stage" means
from the commencement of the business;
11.2 Should there be a deadlock (as defined below) as to the
passing of resolutions requiring unanimous approval pursuant
to Section 11.1, any Proposing Party (as defined below) may
give notice to FCM and the board of directors of FCM shall
convene an extraordinary general meeting ("EGM") to wind up
FCM, any Proposing Party may elect to purchase the shares of
all the other parties in accordance with Section 11.6,
whereupon the EGM to be convened for winding up of FCM shall
lapse but without prejudice to any Proposing Party giving a
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further notice. In this Section, the expression "deadlock"
means any proposed resolution pursuant to Section 11.6 which
is proposed and/or supported by shareholders (singularly
"Proposing Party") holding in aggregate sixty percent (60%) or
more the total issued and paid up share capital in FCM, but
which resolution is opposed by the remaining shareholders at
two (2) consecutive meetings of the shareholders.
11.3 To the extent permitted by-law, the shareholders may pass
resolutions without a meeting upon written consent of
shareholders representing 70% or more of the then outstanding
shares.
11.4 At all general, special and/or annual meetings of the
shareholders, shareholders representing 60% of the outstanding
shares, in person or by proxy, shall constitute a quorum.
11.5 If within one hour from the time appointed for the meeting a
quorum is not present, the meeting shall stand adjourned to a
date which is seven (7) days from the date of such meeting at
the same time and place. If at the adjourned meeting the
quorum is still lacking after one hour from the time appointed
for holding the adjourned meeting, the members holding in
aggregate 60% of the shares in FCM in person or by proxy shall
constitute a quorums.
11.6 The purchase of shares by the proposing Party pursuant to
Section 11.2 shall be in accordance with the following
provisions:
(a) The Proposing Party shall give notice in writing to
FCM of its desire to purchase the shares stating the
sum which it fixes as the fair value of the shares.
The fair value so fixed by the Proposing Party shall
be determined by an intentionally recognized
investment banking firm as to be the fair value
thereof as between a willing buyer and a willing
seller having taken into consideration, inter alia,
the relative interests of the shareholders, FCM's
earnings potential, goodwill, book value and
contingencies at the relevant time.
(b) The costs of the values certification shall be done
by the Proposing Party and a copy of such
certification shall be given to FCM. The notice
hereunder shall appoint FCM as the Proposing Party's
agent for the purchase of the shares specified
therein at the price so fixed.
(c) The offer made by such notice shall remain open for
at least thirty (30) days. FCM upon receipt of the
Proposing Party's notice as aforementioned in Section
11.6(a) hereof shall forthwith by notice in writing
inform the other shareholders ("Offerees") of the
Proposing Party's offer.
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(d) If all (and not part only) of the shares are agreed
to be sold by the offerors within the period of
thirty (30) days after such notice as aforesaid has
been given and notice of such acceptance has been
given to the Proposing Party, the Offerees shall be
bound upon the purchase price for all (and not part
only of the shares being paid to it within thirty
(30) days from the date of the last acceptance by the
Offerees, to transfer the shares concerned to the
Proposing Party. If the Proposing Party is required
to obtain approval from the relevant authorities to
purchase the said shares, and provided that the time
for obtaining all the approvals shall not be later
than ninety (90) days from the date of the last
acceptance or such extended time as the Proposing
Party or the Offerees may agree upon in writing, the
time for payment of the purchase price and transfer
of the shares hereunder shall be thirty (30) days
from the date all approvals are obtained.
(e) The parties hereto shall take all steps necessary to
ensure that the purchaser of shares of FCM pursuant
to this Section 11.6 is promptly registered by FCM as
the holder of those shares.
12. Termination
-----------
12.1 This Agreement shall take effect upon execution and shall
continue in full force and effect until FCM shall be wound up
or otherwise cease to exist as a separate corporate entity
unless terminated earlier pursuant to Clause 12.2 hereof.
12.2 Notwithstanding anything contained herein to the contrary,
this Agreement may be terminated forthwith by FCI, PERC or FP
by notice in writing to the other parties:
(a) FCI, PERC or FP shall:
(i) commit any breach of its obligations under this
Agreement and shall fail to make good such breach
within thirty (30) days of receipt of notice from the
other party requiring it to do so; or
(ii) go into liquidation(except in the case of voluntary
liquidation for the purpose of reconstruction or
amalgamation upon terms previously approved in
writing by the other parties) or be declared bankrupt
or if receiver is appointed over any of its assets;
or
(b) If any order is made or a effective resolution is passed or
analogous proceeding are taken for the winding up of FCM
except as provided in Section 11.2 and 11.6, above; or
(c) If all or substantially all of the assets of FCM are
expropriated or Otherwise placed under the direct control of
any government or if FCM is unable to pay its
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debts or make a general assignment for the benefit of its
creditors or has a receiver or manager appointed over all or a
substantial part of its undertaking or assets; or
(d) If any relevant approvals of license with respect to the joint
venture, Business or FCM is not received.
13. Assistance by the Parties
-------------------------
13.1 At the request of FCI or otherwise provided in this Agreement.
MC shall provide assistance to FCM in connection with the
start-up and operation of FCM, subject to such additional
terms and conditions as the Parties may from time to time
agree. Such assistance may include but not be limited to:
(a) locating land for the facility;
(b) obtaining necessary licenses or permits required by
the Malaysian government;
(c) participating in management of FCM through the Board
of Directors and other means as defined in the
Articles of Association;
(d) recruiting local personnel;
(e) providing advice to the Board and the executive
officer(s) as to how problems involving any Malaysian
government official or agency should best be
resolved; and
(f) providing advice to the Board and the executive
officer(s) as to how problems involving any Malaysian
national or local resident should best be resolved.
13.2 FCI shall provide ongoing assistance to FCM under the Support
Contract as provided in Exhibit "A".
14. Responsibilities of FCM
-----------------------
14.1 Immediately upon execution of this Agreement and the formation
of FCM the Board of Directors shall cause FCM to:
(a) with FCI, identify and select a suitable site for
current and future needs and select a contractor to
construct a building to specifications developed by
FCI;
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(b) as a priority, obtain Multimedia Super Corridor
status approval. Such status shall be obtained if at
all possible prior to construction of the facility;
(c) develop, with FCI, a schedule for construction of the
facility and for installation and commissioning of
all equipment recruit personnel as required; and
(d) obtain all necessary governmental licenses and
permits.
14.2 At the direction of the Board and when appropriate, FCM shall
use its best efforts to be publicly listed on an appropriate
stock exchange.
14.3 To assure that FCM keeps pace with state of the art
technology, FCM will fund ongoing research and development by
FCI at 3% for year two (2) and year three (3) and at 5%
thereafter of its gross sales subject to the approval of FCM's
Board. FCI shall grant FCM a royalty-free license covering all
improvements to the technology at FCM such as upgrading and
training, documentation and new process methods, new product
development such as multi-mode fiber, etc.
15. Confidentiality
---------------
15.1 FCI has developed, in the course of its business, a number of
trade secrets, including formulas, methods, processes,
techniques, designs, information, knowledge, know-how and
trade practices in various forms, including computer software
(hereinafter referred to as "Proprietary Information").
Notwithstanding anything to the contrary contained in this
Agreement, the Parties agree that FCI is and shall remain, at
all times, the sole owner of all Proprietary Information that
the Proprietary Information shall be made available to FCM by
way of the License Agreement, and that the Proprietary
Information shall be returned to FCI as provided in Section
17. Neither MC nor FCM shall disclose Proprietary Information
except as permitted in Section 15.2 below. Proprietary
Information shall not include any information which is
generally available for public use, unless such information
has become available to the public due to unauthorized
disclosure of such information by a Party or FCM.
15.2 If any Proprietary Information is (or has, prior to the date
of this Agreement, been) communicated by FCI or FCM to another
Party the following provisions shall apply:
(a) the receiving Party shall take every reasonable
precaution to safeguard and keep secret all such
Proprietary Information and shall comply with all
reasonable and specific precautions which may be
requested by FCI or FCM as to its non-disclosure; and
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(b) the receiving Party will disclose Proprietary
Information only to such of its employees who require
the information in the performance of their duties,
and all personnel likely to receive Proprietary
Information shall be advised of its secret and
confidential nature and of the restrictions on its
use and further disclosure.
15.3 Section 15 shall survive the termination of this Agreement.
16. Transfers, Termination
----------------------
16.1 This Agreement shall remain in full force and effect with
respect to each Party until such time as this Agreement is
terminated pursuant to this Section or as otherwise provided
herein or that Party ceases to have a stock ownership interest
in FCM or FCM is dissolved, whichever occurs first;
16.2 No Party shall sell, pledge, devise, give or otherwise
transfer any of its shares to any third party without the
prior written consent of the other Parties. Any such transfer
or attempted transfer shall be null and void.
16.3 Unless otherwise herein expressly provided, no Party which has
transferred his or its shares in accordance with the
provisions of this Agreement shall be bound by its terms and
conditions after the date of such transfer, provided that the
Party to which such shares have been transferred agrees in
writing with the other Parties, in a form reasonably
acceptable to the other Parties, that the transferee shall be
bound by the terms and conditions of this Agreement.
16.4 If FCM is dissolved or liquidated for any reason, this
Agreement shall be terminated automatically at the end of such
liquidation except for the obligations under any provisions
hereof which are expressed to survive this Agreement including
but not limited to the terms contained in Section 15.
16.5 Any disagreement between the Parties shall be resolved in
accordance with and pursuant to Section 21.
16.6 In the event that FCI is acquired by another party, MC shall
have the right of the first offer to sell its shares in FCM.
16.7 The restriction contained in this Section 16 shall not apply
to any transfer to (i) in the case of PERC and/or FP to FCI in
accordance with the terms of the Put Option Agreement, any
(ii) by PERC, to its related corporations within the meaning
of the Malaysian Companies Xxx 0000 and it is hereby agreed
that PERC may in addition by notice to the other parties
transfer the whole of its shareholding to any unit trust
managed by PERC's holding company, Permodalan Nasional Berhad
("PNB") or managed by any of PNB's wholly owned subsidiaries.
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17. Procedure Upon Termination
--------------------------
17.1 In the event a Party fails to perform any of its obligations
under this Agreement subject to reasonable time to remedy such
default whether this Agreement is terminated or not, the other
Party shall be entitled to recover from the defaulting Party
reasonable attorney's fees on a solicitor and client basis and
necessary disbursements in addition to any other relief to
which it may be entitled.
17.2 Upon termination of this Agreement, the Parties shall cause
FCM to promptly return to FCI all relevant documents, data,
drawings, sketches and other information disclosed to FCM by
FCI in accordance with this Agreement or Technical Assistance
Agreement, and further cause FCM to stop its business which
used the technical assistance. Upon termination of this
Agreement, all relevant documents, data, drawings, sketches
and other information generated at FCM shall be owned by and
promptly delivered to FCI.
17.3 In the event that the Parties shall elect to dissolve FCM upon
the termination of this Agreement, then the Parties shall
proceed as promptly as practicable to wind-up the affairs of
FCM and distribute its assets. A final accounting shall be
made by the Parties and FCM's auditors shall review the
financial accounting and shall render their opinion with
respect thereto.
17.4 In case at the time of termination of this Agreement, FCI is
required by governmental order or court to transfer its shares
to MC or in case that the Parties agree that FCI's shares be
transferred to MC, the price of the shares shall be determined
on going concern basis by an independent internationally
recognized certified public accountant acceptable to the
parties.
18. Force Majeure
-------------
18.1 No Party shall be liable for the non-performance or for delays
in the performance of this Agreement owing to compliance with
policies, laws, orders or regulations of Malaysia or the
United States of America or owing to acts of God, wars, armed
conflicts, riots, embargoes, sabotage, blockades, epidemics,
hijackings, kidnappings, other acts of terrorism, strikes and
other labor disturbances or any other cause beyond the
reasonable control of that Party
19. Fees and Costs: Taxes
---------------------
19.1 All costs paid in connection with the preparation of this
Agreement shall be borne by FCM. If MC or FCI incur costs in
connection with the preparation of this Agreement, they shall
be reimbursed by FCM. Such reimbursement to MC shall not
exceed US$5,000. Reimbursement to FCI shall not exceed
US$10,000.
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19.2 Except as otherwise expressly agreed in writing, eactl Party
shall be solely responsible for payment of any Malaysian tax
it is obligated to pay by reason of its participation in FCM.
Each Party may authorize FCM to make such payments for the
Party's account and FCM shall be required to provide the Party
with proper accounting for such payments.
20. Governing Law
-------------
20.1 This Agreement shall be governed by and construed in
accordance with the laws of Malaysia. Nothing in this
Agreement shall be construed to require FCI to take or omit to
take any action if such act or omission is contrary to the
laws of Malaysia.
21. Dispute Resolution
------------------
21.1 The parties hereto shall first use their endeavors to resolve,
through mutual consultation between the parties hereto without
involving any third party or parties, any disputes that might
arise between the parties hereto in relation to this
Agreement. All disputes which may arise under, out of, or in
connection with or in relation to this agreement and which
cannot be resolved amicably shall be submitted to the
arbitrator of Kuala Lumpur Regional Arbitration Center under
and in accordance with its rules at the date hereof. The
arbitration shall be conducted in the English Language. The
parties hereto agree that service of any notices in the course
of such arbitration at its addresses as given in this
Agreement shall be valid and sufficient, the parties hereto
agreeing to submit to the jurisdiction of such arbitration and
to any award thereunder. This Agreement shall be governed by
and construed and enforced in accordance with the laws of
Malaysia.
22. Notices
-------
22.1 Any notices given hereunder shall be deemed to be sufficiently
given if in writing and delivered by postpaid registered mail
or international air courier or facsimile addressed as
follows:
(i) in the case of PNB Equity Resource Corporation Sdn.
Bhd.:
Balai PNB
4th Floor
201-A, Xxxxx Xxx Xxxxx
00000 Xxxxx Xxxxxx, Xxxxxxxx
FAX: 00-000-0000,
Attention: Mior Xxxxx Xxxxxx/Chief Operating Officer
86
(ii) in the case of Federal Power. Sdn. Bhd.:
Xxx 0, Xxxxx Xxxxx 00/00
X.X. Xxx 0000
00000 Xxxx Xxxx
Xxxxxxxx Xxxxx Xxxxx, Xxxxxxxx
FAX: 00 000-0000
Attention: Misron Bin Yusof/Managing Director
(iii) in the case of FIBERCORE, INC.
000 Xxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Xxxxxx Xxxxxx of America
FAX: (000) 000-0000
Attention: Xxxx X. Xxxxxx/Chairman/CEO
or to such other address or facsimile number or person as a
Party may hereafter designate.
22.2 A notice shall be deemed to have been given and received: (i)
when left at the appropriate address if sent by registered
mail or international air courier; or (ii) when actually
received or when dispatched and safe receipt is acknowledged
by the receiving facsimile machine, if sent by facsimile.
23. Effect of Headings
------------------
23.1 The headings used throughout this Agreement are inserted for
reference purposes only and are not to be considered or taken
into account in construing the terms and provisions of any
paragraph nor to be deemed in any way to qualify, modify or
explain the effects of any such provisions or terms.
24. Miscellaneous
-------------
24.1 In the event of any conflict or inconsistency between the
provisions of this Agreement and the Articles of Association
of FCM, the following order of precedence shall prevail as
between the Parties: this Agreement and then the Articles of
Association and for the purpose of avoiding doubts the
provision of this agreement shall prevail. This Agreement also
shall prevail over Put Option Agreement, Support Contract
Agreement and Technology License Agreement in the event of any
conflict
87
24.2 If any provisions of this Agreement are found to be
inconsistent with Of void under applicable law, the validity
of the remaining provisions shall not be adversely affected.
In such case the Parties shall re-negotiate in good faith
concerning the ineffective provision with the object of
replacing it as closely as possible with a provision affording
the same basic rights, obligations and economic effects, both
to the Parties and to FCM.
24.3 This Agreement constitutes the full understanding and entire
agreement among the Parties and defines all rights granted
herein and all obligations assumed by each party at the date
of execution of this Agreement. No modification or amendment
to this Agreement shall be effective as to any Party who has
not consented thereto in the form of a written addendum to
this Agreement signed by the authorized representative of that
Party.
24.4 This Agreement shall inure to the benefit of and be binding
upon the Parties and their respective heirs, successors and
permitted assigns.
24.5 The Parties declare that they have not concluded, and shall
not conclude, any contracts or agreements which are
inconsistent with the provisions of this Agreement.
24.6 This Agreement has been prepared and executed by the parties
in the English language in seven (7) original counterparts.
Unless mutually agreed otherwise, the English text shall
govern and each document, certificate, statements report,
accounts, agenda, minutes and other written material referred
to in this Agreement, shall be in the English language or
shall be accompanied by a certified English translation
thereof.
24.7 The failure of any Party to enforce any of the provisions of
this Agreement at any time shall not be construed to be a
waiver of such provision unless so notified by such Party
explicitly in writing. No waiver of any breach of this
Agreement shall be held to be a waiver of any other breach.
24.8 FCM shall act in full compliance with the provisions of this
Agreement and shall have full responsibility for and assume
all the risks of all matters relating to the business scope of
FCM described in Section 2.6 hereof. For the ratification of
this Agreement by FCM, the Parties shall cause this Agreement
to be signed by a duly authorized officer of FCM upon
incorporation of FCM and thereafter FCM shall be deemed to be
a party to this Agreement and shall be bound by the terms and
conditions thereof in so far as the same applies to it.
88
24.9 Nothing in this Agreement shall be construed to imply the
existence of a partnership between the Parties other than as
shareholders in FCM in the terms of this Agreement or to make
one Party the representative or agent of the other Party and
no Party shall so hold itself out, nor shall any Party be
liable Of bound by any act or omission of the other Party.
IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands and seal
the day and year first above written.
The Common Seal of )
PNB EQUITY RESOURCE )
CORPORATION SDN. BHD. )
(COMPANY NO 197031-X) was )
hereunto duly affixed in the )
presence of: )
/s/ Dato Xxxx Xxxxxx bin Xxxx Taib /s/ Meriam Binte Haji Jaacob
----------------------------------- -----------------------------------
Director Secretary
Name: Dato Xxxx Xxxxxx bin Xxxx Taib Name: Meriam Binte Haji Jaacob
Nric No: 4460859 Nric No.: 2439153
The Common Seal of )
FEDERAL POWER SDN. BHD. )
(COMPANY NO. 17892-V) was )
hereunto duly affixed in the )
presence of: )
/s/ Tan Sri Abu Zarim bi Oman /s/ Ahmad @ Misron bin Yusof
------------------------------ -----------------------------
Chairman Director
Name: Tan Sri Abu Zarim bi Oman Name: Ahmad @ Misron bin Yusof
Nric No: 240126-05-5035 Nric No.: 430618-01-5037
Signed by MOHD. XXXXX XXXXXX )
PASSPORT NO: 000000000 (USA) for )
and on behalf of FIBERCORE INC. )
in the presence of: ) /s/ Xxxx Xxxxxx.
-----------------------------
MOHD. XXXXX XXXXXX
PASSPORT NO: 000000000 (USA)
/s/ Xxxxxx Xxxx
------------------------------
TREVOR XXXX XXXX
PASSPORT NO: 000000000 (GREAT BRITAIN)
89
FIBERCORE (M) SDN. BHD. HEREBY RATIFIES AND AGREES TO BE BOUND BY THIS AGREEMENT
AS IF IT WERE A PARTY HERETO.
/S/ XX. XXXX X. XXXXXX /S/ IR AHMAD/@ MISRON BIN YUSOF
--------------------------- --------------------------------
Xx. Xxxx X. Xxxxxx Ir Ahmad/@ Misron bin Yusof
Director Director
90
