EXHIBIT 10.3
JOINT VENTURE AGREEMENT
THIS AGREEMENT is done this 28th day of December, 2000, by and between SUNGLOBE
FIBER SYSTEMS CORPORATION, a Delaware corporation with principal offices located
at 0000 Xxxxxxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 ("Sunglobe");
and MULTI HOLDING CORPORATION, a Cayman Islands corporation with principal
offices located at Ave. Xxxxxx Xxxxx, Xxxxx Hong Kong Bank, 11th floor, Panama
City, Panama ("MHC").
WITNESSETH:
WHEREAS, MHC is a holding company involved in the telecommunications
industry in Panama; and
WHEREAS, Sunglobe provides international telecommunications services in
the Caribbean utilizing terrestrial, submarine and satellite facilities; and
WHEREAS, the parties wish to collaborate with one another in the
creation of a network access point ("NAP") in Panama for the provision of
broadband Internet services into and out of that country;
NOW, THEREFORE, in consideration for the covenants and conditions
contained herein and for other good and valuable consideration, the parties
hereto have agreed and undertake as follows:
I. THE PROJECT
1.1 The parties will jointly undertake design, construction and
operation of the NAP (the "Project") in accordance with the terms more
specifically set forth in Article II below at a location in Panama to be
mutually agreed upon by the parties. Ownership and any division of profits from
operation of the NAP shall be governed by the provisions of Article III hereof.
1.2 It is agreed that the NAP shall be ready to commence operations
within 12 months of the execution of this Agreement (the "Provisional
Operational Date"), and the parties hereby agree to cooperate with one another
in the performance of their respective duties hereunder and to use all
reasonable commercial efforts to have the NAP operational by the Provisional
Operational Date.
1.3 The parties will establish a separate corporation in Panama ("JV
Corporation") for the design, construction, ownership and operation of the NAP,
which entity shall be owned in accordance with the provisions of Article III
below.
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II. CONTRIBUTIONS OF THE PARTIES
2.1 MHC shall contribute to the Project up to a maximum of U.S. Ten
Million Dollars (U.S.$10,000,000), in cash or in kind, to pay for the
construction and operation of the Project. This contribution will be comprised
of the following elements:
(a) A site of appropriate size for the construction and
operation of the NAP. Selection of such site shall be subject to Sunglobe's
reasonable prior approval, which approval shall be based on assuring that the
NAP is able to meet the technical specifications provided by Sunglobe. Any
improvements on such site which must be constructed, completed or altered in
order to meet Sunglobe's design specifications shall be provided at MHC's sole
cost. The site shall comply with the parties' jointly agreed security concerns
and with all governmental environmental and other regulatory requirements for
the operation of the NAP. MHC shall decide whether the site will be contributed
to the equity of the JV Corporation or will be leased by it,..
(b) All requisite governmental authorizations, including any
necessary zoning approvals, for the Project.
(c) Securing guarantees for the procurement of credit.
(d) At Sunglobe's request, capacity on terrestrial
telecommunications networks and undersea fiber optic cables and satellites
necessary to support the operation of the NAP beyond the fiber optic and
satellite capacity which Sunglobe will make available to the Project.
2.2 Sunglobe shall contribute to the Project as follows:
(a) Preparation of technical specifications for the site and
any improvements thereon required to house and operate the NAP, excluding,
however, architectural designs.
(b) Network technical design, business plan and operating
budgets for the NAP.
(c) Oversight of the technical construction of the NAP,
(d) Capacity on undersea fiber optic cables and satellites to
support operation of the NAP. Sunglobe will be paid by the Project at its most
favored customer rate for the use of such fiber optic and satellite capacity.
The JV Corporation shall not be required to use Sunglobe's capacity if other
less expensive alternatives or better services are available to it.
(e) Client development and marketing efforts,
(f) Other technical support requested by the parties for
development of the Project.
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2.3 The parties will agree on the fair value of all assets and services
contributed in kind to the Project or JV Corporation pursuant to Section 2.1 and
2.2 above.
III. FINANCIAL TERMS; OWNERSHIP
3.1 In consideration for the parties' respective contributions to the
Project, as set forth in Article II above, it is agreed that MHC will own
Eighty-Five Percent (85%) and Sunglobe will own Fifteen Percent (15%) of the
Project, including assets, liabilities and revenues. Promptly after the
execution of this Agreement, the parties shall incorporate the Project as a
separate entity. The cost of such incorporation will be funded out of MHC's
initial contribution to the Project. MHC, or a wholly-owned subsidiary of MHC,
will own 85% of the shares, and Sunglobe will own 15% of the shares, of the
jointly owned entity.
3.2 Until the incorporation of the JV corporation as a separate entity,
each party shall be responsible for the timely payment of all income and other
taxes (including social security contributions) relating to its execution and
delivery of this Agreement and the performance of its respective obligations
contemplated in this Agreement.
3.3 In the event that construction or operation of the NAP exceed the
aggregate cost of the respective contributions of the parties set forth in
Sections 2.1. and 2.2. (the "Projected Project Cost"), then MHC shall contribute
Eighty-Five Percent (85%) and Sunglobe shall contribute Fifteen Percent (15%) of
the costs in excess of the Projected Project Cost (the "Excess Project Cost").
Should Sunglobe be unable, or unwilling, to contribute all of its agreed portion
of the Excess Project Cost, Sunglobe's equity in the Project shall be reduced in
an amount proportionate to the portion of its agreed contribution it is unable
to pay. The parties agree that new partners or investors may be brought into the
Project.
IV. PROJECT MANAGEMENT & MARKETING
4.1 Primary responsibility for the operation and marketing of the NAP
from and after the Provisional Operational Date will rest with an independent
management team hired by the joint venture for this purpose with the technical
advice of Sunglobe. If Sunglobe is retained as - management or technical
consultant to the Project after the Provisional Operational Date, it will be
compensated for fulfillment of its responsibilities at rates to be agreed by the
parties.
4.2 Once this Project is incorporated as a separate entity, decisions
will be taken by the Board of Directors of the jointly owned entity. The parties
will be represented at the Board of Directors according to their respective
ownership interests in the jointly owned entity.
4.3 As a condition subsequent to the effectiveness of this Agreement,
and prior to the N Corporation becoming operational, the parties will negotiate
in good faith and agree upon the terms of the Articles of Incorporation and/or
of a shareholders agreement governing the operation of the JV Corporation, to
incorporate standard preemptive rights, rights of first refusal, proportional
representation of shareholders in the Board of Directors and supermajority vote
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for extraordinary corporate actions such as dissolution of the company, merger,
filing forbankruptcy, substantial technical changes, and sale of all or
substantially all assets of the corporation. All other corporate actions will be
adopted by a majority of votes.
V. TERM
5.1 The term of this Agreement shall commence upon its execution by the
parties and shall continue for a two-year period, unless terminated earlier in
accordance with Article XIV below. No later than Sixty (60) days prior to the
end of such initial term, the parties shall meet to discuss whether (a) they
elect to extend the term, (b) one of them elects to acquire the interests of the
other in the Project on terms to be agreed, or (c) they elect to terminate the
Project and not renew or extend the term of the Agreement.
VI. REPRESENTATIONS AND W ARRANTIES
6.1 As an inducement to Sunglobe entering into and performing this
Agreement, MHC hereby represents and warrants to Sunglobe as follows:
(a) MHC is a corporation duly organized and validly existing
and is in good standing under the laws of the Cayman Islands.
(b) MHC has full power and authority to enter into this
Agreement and carry out the transactions contemplated hereunder. MHC has taken
all necessary action required by law, its [articles of incorporation and
by-laws] and otherwise to authorize the execution and performance of this
Agreement, and this Agreement is a valid and binding obligation of MHC
enforceable in accordance with its terms.
(c) The execution, delivery and performance of this Agreement
does not and will not violate any provision of the articles of incorporation of
MHC, except as disclosed to Sunglobe prior to the date of this Agreement, any
provision of any agreement or commitment to which MHC is a party, or which is
applicable to MHC, or to its knowledge violate any statute, law, regulation or
rule or any judicial or administrative judgment, decree or order to which it is
a party or is subject.
(d) No consent, order, permit, or other authorization,
approval or similar action is required from any party, court, governmental
authority or agency for MHC to enter into this Agreement and assume the
responsibilities assigned to it hereunder.
6.2 As an inducement to MHC entering into and performing this
Agreement, Sunglobe hereby represents and warrants to MHC as follows:
(a) Sunglobe is a corporation duly organized and validly
existing and is in good standing under the laws of the State of Delaware, United
States of America.
(b) Sunglobe has full power and authority to enter into this
Agreement and carry out the transactions contemplated hereunder. Sunglobe has
taken all necessary action required by law, its articles of incorporation and
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by-laws and otherwise to authorize the execution and performance of this
Agreement, and this Agreement is a valid and binding obligation of Sunglobe
enforceable in accordance with its terms.
(c) The execution, delivery and performance of this Agreement
does not and will not violate any provision of the articles of incorporation or
by-laws of Sunglobe, any provision of any agreement or commitment to which MHC
is a party, or which is applicable to Sunglobe, or to its knowledge violate any
statute, law, regulation or rule or any judicial or administrative judgment,
decree or order to which it is a party or is subject.
(d) No consent, order, permit, or other authorization,
approval or similar action is required from any party, court, governmental
authority or agency for Sunglobe to enter into this Agreement and assume the
responsibilities assigned to it hereunder.
VII. RELATIONSHIP OF PARTIES
7.1 It is expressly understood and agreed that this Agreement
establishes a relationship of independent contractors and, except as their
respective roles in the Project are expressly described herein, creates no
partnership between the parties, and neither party shall be empowered or
authorized to act as an agent for the other or to bind the other in any manner
except as specifically herein provided.
VIII. TRADE NAMES AND TRADEMARKS
8.1 Neither party will in any manner represent that it has any rights
in or to the trade names or trademarks of the other party hereto (the "Trademark
Party") used to identify such the Trademark Party's business, services or
products, nor will it attempt to use or display such trade names or trademarks
unless the Trademark Party gives prior written approval for such representation
or usage to be made. Neither party hereto shall register or attempt to register
any such trade name or trademark of the Trademark Party under the laws of any
jurisdiction and will not at any time do or cause to be done any act or thing
impairing the distinctiveness of such trade names or trademarks or any part of
the Trademark Party's interest therein, whether or not such trade names or
trademarks are registered.
IX. INDEMNIFICATION
9.1 Each party (the "Indemnifying Party") shall indemnify and hold
harmless the other party, its directors, officers, employees, agents, successors
and permitted assigns (collectively , the "Indemnified Parties") from and
against any losses, damages, liabilities, expenses, costs, claims, suits,
demands, actions, causes of action, proceedings, judgments, assessments,
deficiencies and charges, including physical damage to tangible property and
personal injuries, including death, to all persons arising from:
(a) any negligent act or omission or willful or reckless
misconduct by the Indemnifying Party in the performance of this Agreement;
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(b) the Indemnifying Party's relationships with its employees,
suppliers, subcontractors, agents and consultants in the course of its
performance of this Agreement; or
(c) any claim that the Indemnifying Party, in the course of
performance of this Agreement, has violated any letters patent, copyright, mask
work, trademark, trade name, trade secret or other intellectual property of any
third party.
9.2 In the event an Indemnified Party is entitled to indemnification
hereunder for any claim, the Indemnified party shall promptly, and in no event
more than fifteen (15) days after becoming aware of the claim for which
indemnification is sought, provide written notice of such claim to the
Indemnifying Party .The Indemnifying Party shall promptly defend such claim by
counsel of its own choosing and the Indemnified Party shall cooperate with the
Indemnifying Party in the defense of such claim, including the settlement of the
matter on the basis stipulated by the Indemnifying Party, with the Indemnifying
Party being responsible for all costs and expenses associated with such
settlement. The Indemnifying Party shall keep the Indemnified Party reasonably
advised of the progress of any lawsuit or other proceeding or negotiation, and
of any settlement proposal and discussions with respect to such claim. If the
Indemnifying Party within a reasonable time after notice of an indemnified claim
fails to defend the Indemnified Party, the Indemnified Party shall be entitled
to undertake the defense, compromise or settlement of such claim at the expense
of and for the account and risk of the Indemnifying Party .The Indemnifying
Party shall be entitled to settle or compromise a claim hereunder as it sees
fit, provided, however, that
(a) if there is a reasonable probability that the settlement
or compromise of the claim may materially and adversely affect the Indemnified
Party, the Indemnifying Party will not settle or compromise the claim without
the consent of the Indemnified Party, which consent shall not be unreasonably
withheld or delayed, and
(b) if the facts giving rise to indemnification hereunder
involve a possible claim by the Indemnified party against a third party, the
Indemnifying Party that is providing indemnification hereunder shall be
entitled, at its own cost and expense, to undertake the prosecution, settlement
and compromise of such claim against such third party.
X. LIMITATION OF LIABILITY
10.1 Except as provided under Article X above, neither party shall be
liable to the other for any amounts representing loss of profits, loss of
business, or other indirect, special, exemplary, consequential or punitive
damages of any nature whatsoever, whether for breach of contract, tort or under
any other legal theory.
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XI. FORCE MAJEURE
11.1 Neither party hereunder shall be liable to the other for any delay
in performance or failure to perform due to or resulting from acts of God or of
the public enemy or of a governmental agency of appropriate jurisdiction, fires,
floods, earthquakes, epidemics, quarantines, strikes, walkouts or work
stoppages, war, civil strife or insurrection.
11.2 The failure of a party to perform due to Force Majeure as defined
above shall be excused for so long as such cause of Force Majeure persists,
provided, however, that the party whose performance is impacted by such Force
Majeure shall take all reasonable steps to avoid or remove such causes of
nonperformance and shall continue or resume performance promptly upon the
removal of such causes of Force Majeure.
11.3 In the event any cause of Force Majeure prevents the timely
performance of this Agreement for a period of sixty (60) days or more, either
party shall be entitled to terminate this Agreement without any further
liability to the other party.
XII. CONFIDENTIALITY AND MEDIA RELEASES
12.1 It is understood that, in the course of their performance of this
Agreement, the parties might gain access to financial information, business
plans, personnel information, software, inventions (whether patented or not),
intellectual property, trade secrets and other confidential and proprietary
information of one another not routinely disclosed to the public (collectively,
"Confidential Information"). Each party (the "Receiving Party") agrees to treat
such Confidential Information of the other party (the "Disclosing Party") with
confidentiality and not to disclose it to any other party or to use it for any
purpose other than the performance of this Agreement.
12.2 This covenant of confidentiality shall not apply to Confidential
Information of a Disclosing Party which is known to the other Receiving Party
prior to its disclosure during the course of performance of this Agreement, or
which becomes public information without disclosure by the Receiving Party, or
which is required to be disclosed to a court or administrative agency of
competent jurisdiction, provided that, in such latter case, the Receiving Party
shall inform the Disclosing Party of the judicial or administrative order for
disclosure and shall give the Disclosing Party a reasonable opportunity to
oppose such order, or which is required to be disclosed by law or rules and
regulations of any stock exchange of appropriate jurisdiction.
12.3 This covenant of confidentiality shall survive the termination of
this Agreement for any reason whatsoever by three years.
12.4 Except for disclosures required by legal, accounting or regulatory
requirements beyond the reasonable control of either party hereto (including,
rules of any stock exchange), any media release, public announcement or public
disclosure of this Agreement shall be coordinated by the parties and mutually
approved in advance of being publicized.
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12.5 The parties acknowledge that a violation of the terms of this
article shall not be susceptible to adequate remedy through the payment of
monetary damages and that, as a result, either party shall be entitled to
equitable relief to enjoin the other party from breaching or continuing to
breach the terms of this article.
XIII. TERMINATION
13.1 This Agreement may terminate under any of the following
circumstances:
(a) Upon expiration of the term of this Agreement, or any
renewal or extension thereof, without agreement by the parties for renewal or
further renewal.
(b) At any time by mutual agreement of the parties.
(c) By unilateral decision of either party (the "Terminating
Party") following a default of a material provision of this Agreement by the
other party (the "Defaulting Party") and failure by the Defaulting Party to cure
such default within thirty (30) days of receiving written notice thereof from
the Terminating Party; it being understood and agreed by the parties that
failure to provide quality services that must be provided under this Agreement
would be deemed a default of a material provision of this Agreement. ,
(d) By unilateral decision of the Terminating party in the
event the other party voluntarily seeks protection of the bankruptcy laws of any
appropriate jurisdiction, or has a petition for involuntary bankruptcy filed
against it which petition it is unable to dismiss within sixty (60) days, or
makes a general assignment for the benefit of its creditors, or ceases to
function as a going concern.
XIV. NOTICES
14.1 Any notices required or permitted to be given or made by a party
under this Agreement shall be in writing and shall be provided to the other
party to the following addressees:
If to MHC: Xx. Xxxxxxx Xxxxxxxx-Xxxxxxx L.
HSBC Building, II th Floor
Xxxxxx Xxxxx Avenue
Panama City, Republic of Panama
Fax: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxx, Fabrega & Fabrega
Bancomer Xxxxxxxx, 00 Xxxxx
00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx of Panama
Fax: (000) 000-0000
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If to Sunglobe: Xx. Xxxxx Xxxxxxxxx, CEO
Sung1obe Fiber Systems Corporation
Xxxxx 000
0000 Xxxxxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Fax: 000-000-0000
With a copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxxx & Xxxxxxx LLP
Suite 300 South
0000 Xxxxxxxxxxxx Xxx., X.X.
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
14.2 Notices given hereunder may be made by personal delivery,
facsimile (with confirmation of transmittal completed) or prepaid international
courier, with confirmed tracking number. Notice shall be deemed to be received
on the earliest of (a) the date of actual receipt, (b) the first business day
following facsimile transmittal with confirmation of transmittal, or (c) two
business days following dispatch by international courier.
XV. DISPUTE RESOLUTION
15.1 In the event of a dispute arising under or with regard to the
terms of this Agreement which cannot be resolved by the good faith efforts of
the parties within fifteen (15) days, either party may commence a binding
arbitration of such dispute under the rules of the American Arbitration
Association. Such arbitration shall be conducted in Miami, Florida, in the
English language. Each party shall appoint, within ten business (10) days of the
filing of a request for arbitration, an arbitrator and the two arbitrators
appointed by the parties shall, within another ten (10) business days of their
appointment, appoint a third arbitrator to consider the case.
15.2 The parties agree that the results of any such arbitration shall
be legally binding on them, provided that the successful party in such an
arbitration may seek enforcement of the arbitral award in a court of competent
jurisdiction.
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XVI MISCELLANEOUS PROVISIONS
16.1 This Agreement, and any disputes arising under it, shall be
governed by and construed in accordance with the terms of the laws of Panama,
without giving effect to the conflict of law provisions thereof.
16.2 The parties agree that they shall enter into such further
undertakings or agreements, and sign such other documents, as shall be necessary
and appropriate for the fulfillment of the terms of this Agreement.
16.3 All documentation, notices, reports and correspondence under this
Agreement shall be submitted and maintained in the English language.
16.4 Neither party shall have the right to assign this Agreement or any
rights or responsibilities arising under it without the prior written consent of
the other party, except that MHC may assign this Agreement to any wholly-owned
subsidiary of MHC, for the performance of which MHC will remain responsible to
Sunglobe hereunder.
16.5 During the term of this Agreement and for a period of one year
after the termination of this Agreement, Sunglobe will not, directly or
indirectly, participate in another project, nor will it provide services to a
third party, to create a network access point in Panama for the provision of
broadband Internet services into and out of Panama, unless such termination
resulted from the breach of the terms of this Agreement on the part of MHC or
MHC's bankruptcy.
16.6 If any provision of this Agreement is declared or found to be
illegal, unenforceable, contrary to public policy or otherwise void, the parties
shall negotiate in good faith to agree upon a substitute provision that is legal
and enforceable and is as nearly as possible consistent with the intentions
underlying the original provision. If the remainder of this Agreement is not
materially affected by such declaration or finding and is capable of substantial
performance, then the remainder of the Agreement shall be enforced to the extent
permitted by law.
16.7 A waiver or failure to enforce by either party of any of the
covenants, conditions or undertakings to be performed by the other party
hereunder shall not constitute or be construed as a waiver of any succeeding
breach thereof or of any other covenant, condition or undertaking or of this
Agreement taken generally.
16.8 Nothing in this Agreement is intended or shall be construed to
confer upon or give to any person, firm or entity , other than the parties
hereto and their respective successors and permitted assigns any right,
authority, remedy or claim by reason of this Agreement or any term, covenant or
condition hereof, all of which shall be for the sole and exclusive benefit of
the parties hereto.
16.9 This Agreement constitutes the entire and exclusive understanding
of the parties regarding the subject matter hereof and supersedes any and all
oral or other written representations, understandings or agreements relating
thereto. This Agreement may not be amended except by the joint written agreement
of both parties hereto.
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IN WITNESS WHEREOF, the parties hereto have affixed their
signatures and seals below, the first date set forth above, intending to be
bound thereby.
SUNGLOBE FIBER SYSTEMS MULTIHOLDING CORPORATION
CORPORATION
By: Illegible By: Illegible
------------------------ --------------------------
President and CEO Chief Executive Officer
