JOINT VENTURE DEVELOPMENT AND OPERATING AGREEMENT
THIS JOINT VENTURE DEVELOPMENT AND
OPERATING AGREEMENT is made and dated effective (the “Effective Date”) as of 22
October 2009.
BETWEEN:
TechMedia
Advertising Mauritius, a company incorporated under the laws of Mauritius
and having its address for notice and delivery located at x/x 00 Xxxxx Xxxxx
Xxxxxx, #00-00, Xxxxxxxxx 000000
(“TMM”)
OF
THE FIRST PART
AND:
Peacock
Media Ltd., a company incorporated under the laws of India and having its
address for notice and delivery located at X00, Xxxxxx Xxxxxxxxxx Xxxxxx, Off
Mahakali Caves Road, Andheri East, Mumbai – 400093. India.
(“PML”)
OF
THE SECOND PART
(TMM and
PML collectively, or individually also referred to as a “Party” or the “Parties”)
WHEREAS:
A.
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PML
has been granted a 5 years exclusive license (the “License”) by the
Government of Tamil Nadu to operate the business of installing,
commissioning and maintaining mobile digital advertising platform hardware
and software in public transport vehicles (the “Technology”), such as
buses and the Indian Railway trains, which Technology will be used to
display third party commercial content and advertising (such third party
commercial content and advertising to be displayed in exchange for a fee
to be paid by such third parties), and PML anticipates obtaining a similar
license from the governments of the Indian states of Xxxxx Pradesh,
Gujarat, Maharastra, Kerala and Karnataka, and any other Indian states
possible (the “Participating
State”);
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B.
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PML
has represented to TMM that the License permits PML to operate the
Business on more than 10,000 buses within the state of Tamil Nadu in
India, and on more than 30 railway trains throughout
India;
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C.
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PML
has the capability to perform the technical aspects of the Business and
the skills to manage the operational aspects of the
Business;
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D.
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TMM
has the knowledge and has the capability to provide the necessary capital
and funding for the operation of the
Business;
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1
E.
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TMM
and PML have determined to form a joint venture (the “Joint Venture”), which
Joint Venture will be an incorporated company, to conduct the Business and
any related future businesses which is derived there from or may be
developed in such Joint Venture, all as more particularly set out
herein.
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NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the mutual covenants and agreements
herein contained and the sum of $10.00 now paid by the parties, each to the
other (the receipt and sufficiency of which is hereby acknowledged), the parties
agree as follows:
DEFINITIONS
In this
Agreement, including the recitals and schedules hereto, unless there is
something in the subject matter or context inconsistent therewith, the following
words and expressions will have the following meanings:
(a)
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“Agreement” means this
Joint Venture agreement, as amended from time to
time;
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(b)
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“Board” means the board
of directors of the Company, as more specifically set out under section 2
of this Agreement;
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(c)
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“Business” means the
operations of installing, commissioning and maintaining mobile digital
advertising platform hardware and software in public transport vehicles
such as buses and trains solely in the Territory, and includes the use of
media technology and advertising to manage and commercialize the Business,
in order to generate Revenues;
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(d)
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“Company” means a company
having the proposed name of TechMedia Mobile (India) Pte. Ltd or such
other name as determined by TMM in consultation with PML to be duly
incorporated under the laws of India pursuant to this Agreement, the
business purpose of which company will be to conduct the Business and any
future businesses which is derived therefrom or may be developed in such
Joint Venture;
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(e)
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“Confidential
Information” will mean all information contributed by the Parties
or acquired or developed by the Joint Venture which the Board considers
confidential, proprietary, or useful in the Business and not generally
known in the public and includes all technical information such as data,
know-how, research, designs, drawings, plans, specifications, models,
quality controls, trade secrets, software, processes, equipment,
controllers, patents, and Business information such as equipment, devices,
methods relevant to the Joint Venture’s Business, organizational charts,
business plans, policies, corporate structure, financial information and
resources, transactions, contracts and Joint Venture customers such as
their names, requirements and necessities, and any collateral information
which may be in the nature of a latent interest or expectation or
corporate opportunity such as inventions, discoveries or improvements
conceived, developed or made by employees, in whole or in part, or other
persons associated with the Joint Venture and all and every other
information which would reasonably be considered confidential in the
industry or by employment of reasonable judgement and the burden will be
on a Party to show that information alleged by the Board or a Party to be
confidential is not;
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2
(f)
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“Costs” mean all costs,
expenses, obligations, liabilities and charges of whatsoever kind or
nature incurred or chargeable, directly or indirectly, in connection with
the Business and the Joint Venture, which costs, expenses, obligations,
liabilities and charges include, without limiting the generality of the
foregoing, the following:
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(i)
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the
Management Fee;
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(ii)
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all
monies, of whatsoever nature, expended directly or indirectly in
maintaining and operating the Joint Venture and the
Business;
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(iii)
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professional
costs associated with the Joint Venture, the Business or the financing
thereof;
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(iv)
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development
plans, marketing plans, and all other studies or
reports;
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(v)
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filing
costs whether for securities regulations or other
matters;
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(vi)
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suppliers,
contractors, trades, services, and all other inputs of goods, services, or
labour for the Business and Joint Venture
thereof;
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(vii)
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employees,
contract labour, management, and all other personnel
costs;
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(viii)
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services
of third parties or provided by the Parties at fair market
value;
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(ix)
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administration,
travel, office supplies, and all other costs reasonably incurred by or
chargeable to the Business and its
administration;
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(x)
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marketing,
advertising, promotion, and such related
expenses,
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(xi)
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costs
of sales including commissions, transaction fees, and other such
charges;
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(xii)
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the
costs of raising equity or debt financing to capitalize the Business and
the Joint Venture;
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(xiii)
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interest
costs and payment, amortization or otherwise, of debt relating to the
Joint Venture or the Business; and
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(xiv)
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all
other costs as may be determined by the Board, from time to time, and
normally charged to a business such as the Business in accordance with
industry standards and generally accepted accounting principals
consistently applied;
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(g)
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“JV Assets” means the
License and any other assets provided by the Parties to the Joint
Venture;
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(h)
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“Management Fee” means
the fee to be paid to TMM in consideration for TMM’s management of the
operational aspects of the Business, in accordance with the terms of
section 3 hereof;
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(i)
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“Parties”, “Party”, means the
parties, singly or collectively as appropriate, to this Agreement or their
proper successors, assigns, or other recipients of a party’s rights, in
whole or in part, in or to this
Agreement;
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(j)
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“Profits” means the
Revenues less Costs, which net result is available for distribution to the
Parties hereof;
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3
(k)
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“Revenues” or “Revenue” means gross
sales proceeds and income of whatsoever nature realized through the
conduct of the Business and the realization of the Business conducted
pursuant to this Agreement; and
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(l)
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“Territory” means
India.
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1. THE COMPANY & THE JOINT
VENTURE
FORMATION
OF THE COMPANY
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1.01
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The
Parties hereby agree to form, and on such date as this Agreement is
executed by both Parties hereto, there will be formed, the Joint
Venture.
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1.02
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The
Parties agree to contribute in accordance with this Agreement the License
and all required working capital to the Joint Venture to be owned and
operated jointly as assets of the Joint Venture, develop the Business as
co-venturers in the Territory, conduct the Business in accordance with
this Agreement, and share in the Profits of the Joint Venture in
accordance with the terms of this
Agreement.
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1.03
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The
business of the Joint Venture will be limited strictly to the Business and
will not be extended by implication, or otherwise, unless specifically
agreed to by the shareholders of the Company. The Business will not be
altered or changed to unrelated endeavors from that of the present
Business without unanimous consent of the shareholders of the Company,
with such consent not to be unreasonably
withheld.
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1.04
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The
Business will employ the JV Assets as determined by the
Board. The Joint Venture may not be terminated except by
consent in writing of all Parties to this
Agreement.
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1.05
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In
order to form the Joint Venture and conduct the Business, TMM and PML will
incorporate the Company under the laws of India, and the JV Assets will be
held in the Company, and the Business and all other affairs of the Joint
Venture will be conducted through the Company. The Company
shall reimburse each of PML and TMM respectively for all legal and other
costs and expenses, including stamp duty payable (if any), incurred by the
Parties in connection with this Agreement and the transactions
contemplated hereby.
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1.06
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The
proposed name of the Company will be TechMedia Mobile (India) Pvt. Ltd.,
or such other name as determined by TMM in consultation with
PML. The authorized share capital of the Company will consist
of an unlimited number of ordinary shares with a par value of US$1.00, of
which 100 common shares will be issued and outstanding as
follows:
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Name
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No.
of Shares
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Consideration
Payable
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||
TMM
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85
Shares
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INR4,250.00
(equivalent to USD85.00)
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||
PML
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15
Shares
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INR750.00
(equivalent to
USD15.00)
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(TMM’s 85
shares in the Company and PML’s 15 shares in the Company hereinafter
collectively, the “Shares”)
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1.07
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Each
Equity share in the capital of the Company will entitle the holder thereof
to attend all meetings of the shareholders of the Company, and to one vote
for each ordinary share held. In the event of the liquidation
or dissolution of the Company or other distribution of assets of the
Company among its shareholders for the purpose of winding up its affairs,
whether voluntary or involuntary, the holders of the Shares will be
entitled to share on a pro rata basis as to the number of ordinary shares
of the Company held, in the distribution of the property and assets of the
Company.
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4
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1.08
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The
Company shall not issue any options to purchase securities of the Company
or any rights convertible into securities of the Company without the
approval of the Board.
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1.09
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There
shall be no liquidation preference as only equity shares shall be
authorized and issued.
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1.10
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The
Company will remain a private Company at all times, and the issuance of
shares in the capital of the Company will be subject to restriction and
limitation as set out in this
Agreement.
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1.11
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PML
acknowledges and agrees that for so long as PML is a shareholder of the
Company, and for a period of (5) years after ceasing to be a shareholder
of the Company, neither PML, nor any of its subsidiaries or associated
companies (the “PML Group”), nor any Directors, Officers, Employees or
Shareholders of the PML group, will use the Technology or will engage
directly or indirectly in any business which is similar to or in
competition with the Business (as the Business is constituted on the date
of PML ceasing to be a shareholder of the
Company).
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1.12
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The
Parties have not created a partnership hereby and nothing contained in
this Agreement will in any manner whatsoever constitute a Party the
partner, agent or legal representative of any other Party or create any
fiduciary relationship between them for any purpose
whatsoever. No Party will have any authority to act for or to
assume any obligations or responsibilities on behalf of any other Party
except as may be from time to time agreed upon in writing between the
Parties or as otherwise expressly provided
herein.
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RIGHT
TO THE JV ASSETS
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1.13
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PML
acknowledges and agrees that upon the execution of this agreement PML
shall assign to the Company the exclusive right to use and exploit the
License for the Business for a consideration of US$25Million as stated in
Section 3 in this Agreement. The Parties acknowledge and agree that any
and all intellectual property rights in and to the content provided for
the Business will remain the sole property of
PML.
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2.
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ORGANIZATION OF THE
COMPANY
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MANAGEMENT
& DIRECTORS
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2.01
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The
Board of the Company will at all times be comprised of five (5)
directors.
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2.02
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Upon
incorporation of the Company, each of PML will nominate Two (2) member to
the Board and TMM will nominate Three (3) members to the Board, and both
PML and TMM will vote their Shares so that the initial Board will be
comprised of the following
individuals:
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Page
5
Xxxxxxx
Xxxxxx
Xxxxxx
Xxxxx Xxxx
Xxxxxx
Xxxx
Xxxxxx
Vellu
Xxxxxxx
Xxx Xxx Xxxxx
In the
event that a position on the Board is open for any reason whatsoever, such
vacancy will be filled by a nominee from whichever of PML or TMM whose director
nominee formerly occupied such position.
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2.03
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The
Chairman of the Board of the Company shall be Xx Xxxxxx Xxxx or such other
person nominated by him solely at all material times & the Chairman or
his nominee shall have a casting vote in the case of a deadlock on any
matters put before the Board.
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2.04
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In
the event that the Board should increase in size for any reason
whatsoever, then such increase will be such as to entitle TMM to nominate
85% of the new directors and PML to nominate 15% of the new directors to
fill such vacancies. .
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2.05
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A
quorum required for the transaction of business at a meeting of the Board
will be all five members of the Board, present in person or by telephone
or other electronic means. If, within one-half hour from the
time set for the holding of a Board meeting, a quorum is not present, the
meeting stands adjourned for 48 hours at the same time and
place. If, at the re-convened meeting, a quorum is not present
within one-half hour from the time set for the holding of the meeting,
then the presence in person or by telephone or other electronic means of
the majority of the Board will constitute quorum at such re-convened
meeting.
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2.06
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The
Board will have one Board meeting in each three-month period, which
meeting will be held at a time and place to be determined by the
directors. Any one director may call a meeting by providing 2
days’ (48 hours) notice prior to the meeting. Notice may be
waived by the directors, and directors may elect to attend a Board meeting
by telephone or other electronic
means.
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2.07
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All
matters put before the Board will only be undertaken with approval by a
majority of the directors at a duly and validly held meeting or by
unanimous written consent resolution if approved without a
meeting. The directors will use their best efforts to reach an
agreement on all matters to be approved by the directors. Where
the directors are unable to come to an agreement on a matter to be
approved by a majority of the directors at a meeting, then the Chairman of
the Board and/or his nominee shall have the casting vote to resolve such
matter.
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2.08
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The
election, appointment and determination of the auditors and advisors of
the Company, the defining of their duties and functions and the salaries
and remuneration to be paid to them will be determined by the
Board.
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2.09
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There
will be kept, in such bank or banks (including trust companies) as may be
determined by the Board, bank accounts of the Company (the “Company Accounts”) in
which will be deposited all monies received by the Company in the course
of carrying on its Business from time to time. All payments on
account of the Company will be made by cheques drawn on the Company
Accounts and all cheques, drafts or other instruments drawn and made for
the purposes of the Business of the Company will be executed by two
directors, or by such directors, officers or employees as may from time to
time be authorized to do so by the
Board.
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6
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2.10
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The
Company will control all invoicing to clients for services provided by the
Company.
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SHAREHOLDERS
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2.11
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The
following matters will only be undertaken with the unanimous approval of
the shareholders of the Company:
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(a)
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the
sale, lease, transfer, mortgage, pledge or other disposition of
substantially all of the assets and/or undertaking of the Company, or any
of its subsidiaries;
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(b)
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any
transfer, sale, lease or grant of any rights in the JV Assets or any other
assets of the Company;
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(c)
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any
increase or reduction in the capital of the
Company;
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(d)
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the
consolidation, merger or amalgamation of the Company with any other
company, association, partnership or legal entity, or any other form of
capital or corporate reorganization, or any change in control of the
Company or liquidation of the
Company;
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(e)
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any
increase or decrease in the number of issued shares of the Company, or the
granting of any securities having rights preferences or privileges, on
parity with or senior to the Parties, by the Company to any person to
purchase securities of the Company;
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(f)
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the
creation of any class of securities of the Company having rights,
privileges or preferences on parity or in preference to the
Shares;
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(g)
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any
changes to the maximum number of directors appointed to the
Board;
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(h)
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any
borrowing or incurrence of liabilities by the
Company;
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(i)
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any
changes to the constating documents (memorandum or articles of
association) of the Company;
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(j)
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any
transaction out of the ordinary course of business;
or
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(k)
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any
contract between the Company and any shareholder or affiliate of the
Company.
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2.12
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No
shares of the Company will be allotted or issued unless PML and TMM have
first been offered a pro
rata allotment and have been given a minimum of 60 calendar days to
purchase their allotment. Any allotment not taken up by either
TMM or PML will first be offered to the remaining of the two parties until
no Shareholder wishes to purchase any further Shares and the payment
period will remain the same with each stage of the offer. The
Shareholders may in writing waive the payment period or right to any
allotments.
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Page
7
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2.13
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PML
and TMM will, on an annual basis, or on a more frequent basis as
determined by the Board or in accordance with the Articles of Association
of the Company, hold a shareholders’ meeting, whereby they can discuss the
Company’s overall status, including but not limited to, the Company’s
financial status. The requirements for the meeting of
shareholders will be in accordance with the Articles of Association of the
Company.
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2.14
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Except
as specifically provided herein, neither PMM nor TML will mortgage,
pledge, charge, hypothecate or otherwise encumber his or her interest or
any part thereof without the prior written consent of the other
Shareholders, which consent may be arbitrarily
withheld.
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2.15
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In
addition to the foregoing, the Company will not register nor permit the
registration of any transfer of an interest, which must be the entire
shareholdings of a Shareholder, in the Shares except as otherwise
expressly permitted in this Agreement, or as
follows:
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(a)
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neither
TMM nor PML will sell, transfer or otherwise dispose or offer to sell,
transfer or otherwise dispose, of their respective shares in the Company
unless that party (in this section the “Offeror”) first offers
by notice in writing (in this section the “Offer”) to the other
party (in this section the “Other”) pro rata in accordance
with their shareholdings in the Company, the prior right to purchase,
receive or otherwise acquire the
same;
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(b)
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the
Offer will set forth:
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(i)
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the
number of shares (which must be the entire shareholdings of the Offeror)
the Offeror desires to sell (the “Offered
Shares”);
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(ii)
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the
price, expressed in Indian Currency, for the Offered
Shares;
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(iii)
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the
terms and conditions of the sale;
and
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(iv)
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that
the Offer is open for acceptance for a period of 60 days after receipt of
such Offer by the Other(s);
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(c)
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the
Other may accept such Offer by notice in writing to the
Offeror;
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(d)
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if,
and to the extent the Offer is not accepted, the Offeror may sell,
transfer or otherwise dispose of the Offered Shares to any other person,
firm or corporation (a “Third Party”) only for
the consideration and upon the terms and conditions as set out in the
Offer but only within the period of 30 days after the expiry of the period
for acceptance by the Other and, if the Offeror does not do so, the
provisions of this Section 2.15 will again become applicable to the sale,
transfer or other disposition of the Offered Shares and so on from time to
time;
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(e)
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no
disposition of any interest permitted by this Section 2.15 will be made
unless the Third Party will have entered into an agreement with the Other
by which the Third Party will be bound by and entitled to the benefit of
the provisions of this Agreement and the Other will enter into such an
agreement; and
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Page
8
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(f)
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any
Shareholder who will have disposed of all of its interest in compliance
with the provisions of this Agreement will be entitled to the benefit of
and be bound by only the rights and obligations which arose pursuant to
this Agreement prior to such
disposition.
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2.16
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The
provisions as to the transfer of Shares contained in Section 2.15 above
will not apply if, prior to the proposed transfer of Shares, the Other
waives its right, in writing, to receive the
Offer.
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2.17
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The
clauses of the Memorandum and Articles of Association of the Company shall
be amended to reflect the provisions of this Agreement after the
completion of the initial investment by
TMM.
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3.
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CAPITAL CONTRIBUTIONS,
MANAGEMENT FEE & DIRECTOR’S
FEE
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|
3.01
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The
Business Plan sets out the objectives of the Company, performance
milestones, capital and operating expenditure estimates and profit and
loss budget estimates. The budget contained in the Business Plan is to be
approved by the Board at the first Board
meeting.
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3.02
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TMM
will on a commercially reasonable best effort basis raise up to
US$25,000,000, which is the initial intended working capital (i.e. the
capital and operating expenses to install, commission, maintain and
commercialize mobile digital advertising platforms onto buses and trains)
(the “Working
Capital”) required for launching the Business and the Joint
Venture, of which US$5,000,000 of the US$25,000,000 is to be set aside as
a contingency fund for the Company, and is anticipated to be provided by
TMM as follows:
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(a)
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an
aggregate of US$12,270,000 is to be advanced by TMM to the Company during
the first year of incorporation of the Company, in order to facilitate the
start of operations and for PML to conduct PML’s Responsibilities (as
hereinafter defined); The first US$1,000,000 is to be provided by TMM to
the Company by October 31 2009 and a subsequent amount of US$4,000,000 is
to be provided by TMM to the Company as soon as certain expenses have been
incurred by PML and certified by
TMM;
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(b)
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additional
amounts of US$1,932,500 are to be advanced by TMM to the Company on a
yearly basis for the following four (4) years; however, the Board in its
sole discretion may determine to reduce or eliminate such additional
capital contributions by TMM depending on the amount of revenues produced
by the Company available to satisfy the required Working
Capital.
|
It is
anticipated by the Parties that the Company will reimburse PML up to
US$20,000,000 for expenses incurred and invoiced by PML in performing PML’s
Responsibilities (as hereinafter defined) over the next five (5)
years.
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3.03
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Any
working capital required by the Company, in addition to and including the
Working Capital, for the Business and the Joint will be provided by TMM in
the form of shareholder’s loans (the “TMM
Loans”). The Company will enter into loan agreements
with TMM each time funds are advanced by TMM to the Company, which
agreements will evidence the TMM Loans, and the Company will at all times
keep an accounting record of all TMM
Loans.
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Page
9
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3.04
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In
addition to TMM Loans, TMM may also provide capital to the Company by
conducting equity or debt financings at TMM’s sole
discretion.
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|
3.05
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All
capital contributions made by TMM, including without limiting the
generality thereof, all Working Capital and TMM Loans, will be repaid by
the Company to TMM from the
Profits.
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3.06
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In
addition to all capital contributions to be made by TMM, TMM will also be
responsible for managing all operational aspects of the Business,
including providing the Company with sufficient personnel to enable the
Company to manage and commercialize the Business, in consideration for
which services TMM will receive a Management Fee on a quarterly basis
equivalent to 10% of the gross profit of the Company for that quarter,
subject to a minimum annual fee of US$2,000,000 for the first year of
operations. The Management Fee shall be reviewed annually and shall only
be paid out of profits.
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|
3.07
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Upon
the Company reaching profitability, the Company shall pay to the 5
Directors named herein under Section 2 collectively a management fee as
mentioned in clause 3.06; equivalent to 10% of the gross profit shared
equally among the 5 Directors.
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4.
|
INTEREST OF THE
PARTIES IN AND TO THE JOINT
VENTURE
|
|
4.01
|
Subject
to the provisions of this Agreement, the relevant ownership and interests
of the Parties in the Joint Venture will initially be and are an 85%
(eighty five percent) interest to TMM (the “TMM Interest”) and a 15%
(fifteen percent) interest to PML (the “PML Interest”)(such
interests are collectively called the “Interests” or singularly
the “Interest”).
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|
4.02
|
The
Interests of the Parties hereto will not be effected, altered, or amended,
except pursuant to the provisions of this Agreement, or as subsequently
agreed by the Parties hereto in writing. The TMM Interest and
the PML Interest in the Joint Venture will be reflected in the share
ownership of each respective party in the
Company.
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|
4.03
|
The
parties acknowledge and agree that TMM’s interest in the Joint Venture is
non-dilutive, and TMM will at all times remain the owner of at least 85%
of the Joint Venture. Accordingly, the parties acknowledge and
agree that pursuant to section 4.02 hereof, TMM will at all times hold at
least that number of shares of the Company as is equal to 85% of the
issued and outstanding shares of the
Company.
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5.
|
PML’S
RESPONSIBILITIES
|
|
5.01
|
In
consideration for its interest in and to the Joint Venture and the
Company, PML undertakes, free of any fees, charges or any additional
consideration, without limiting the generality thereof,
to:
|
|
(a)
|
with
the exception of the State of Tamil Nadu, use its best efforts to secure
licensing rights similar to the License for all the Participating States,
and insofar as possible, ensure that the Company is the contracting party
and recipient of such licenses, and where such licensing rights are
granted to PML, then PML will ensure to immediately transfer such rights
to the Company for its exclusive use on a first right of
refusal basis by the Company;
|
Page
10
|
(b)
|
make
available to the Company and to TMM such office and work facilities and
infrastructure as may be required by the Company and TMM in order to
conduct the operations of the Business at the cost borne by the
Company;
|
|
(c)
|
ensure
that its management, employees, contractors and sub-contractors cooperate
at all times with TMM and the Company, as required, to conduct the
Business;
|
|
(d)
|
provide
TMM and the Company with full access (including providing the names,
contact details and any introductions as may be necessary) to all existing
clients of PML in order for the marketing and commercialization of the
Business;
|
|
(e)
|
ensure
all existing and new clients procured for the Company, insofar as
possible, enter into agreements directly with the
Company;
|
|
(f)
|
conduct
all marketing of PML’s services to existing and future clients of PML
jointly with the Company’s marketing for the herein mentioned Business of
the Company in the conduct of the
Business;
|
|
(g)
|
promptly
provide TMM and the Company with access to all information and documents
as may be required from time to time, to conduct the Business;
and
|
|
(h)
|
continually
and actively use its best efforts to market the Business, and secure
orders for the Company from existing and new
clients.
|
|
5.02
|
In
addition to the items set out in section 5.01 above, and subject to the
control and direction of the Board and the other terms and conditions of
this Agreement, PML will:
|
|
(a)
|
be
responsible for the installation of the Technology and for ensuring that
on completion of the installation, the Technology is fully functional and
upon certification by the Company, PML will be reimbursed for its costs as
evidenced by invoices;
|
|
(b)
|
be
responsible for the maintenance of the Technology, and for ensuring that
once installed, the Technology remains in good working order at all
times.
|
|
(c)
|
conduct
and perform its obligations hereunder on such premises as it will
determine, including its own premises, and will permit access to the JV
Assets at all reasonable times for the purpose of inspecting work being
done thereon;
|
|
(d)
|
employ
and engage any such employees, agents and independent contractors as it
may consider necessary or advisable to carry out its duties and
obligations hereunder and in this connection to delegate any of its powers
and rights to perform its duties and obligations hereunder, but PML will
not enter into contractual relationships with a party without approval
from the Board;
|
Page
11
|
(e)
|
execute
all documents, deeds and instructions, do or cause to be done all such
acts and things and give all such assurances as may be necessary so that
the Company has good and valid title to the JV Assets;
and
|
|
(f)
|
diligently
conduct and perform its obligations hereunder in accordance with the
development plans of the Business approved by the Board and in compliance
with all applicable laws, rules, orders and
regulations;
|
|
(g)
|
abide
by and adhere to the control standards as imposed by TMM, in its sole
discretion, in the Company in the areas including but not limited to
finance, legal, operations and risk
management.
|
(the
matters outlined in sections 5.01 and 5.02 above are collectively “PML’s
Responsibilities”)
|
5.03
|
Subject
to any specific provisions of this Agreement, PML, in carrying out its
duties and obligations hereunder, will at all times be subject to the
direction and control of the Board and will perform its duties hereunder
in accordance with the instructions and directions as from time to time
communicated to it by the Board and will make all reports to the Board
except where otherwise specifically provided herein. PML will act in good
faith and in the best interest of the Company and the Joint Venture at all
times and conducts the affairs of the Company with a view to maximizing
Revenue.
|
6.
|
PML’S FIRST RIGHT TO
EQUIP AND MAINTAIN MOBILE DIGITAL ADVERTISING
PLATFORMS
|
|
6.01
|
PML
shall have the first right to perform for the Company all installation,
commissioning and maintenance of the mobile digital advertising platforms
on buses and trains, on a cost basis without any xxxx
up.
|
|
6.02
|
TMM
and PML have unfettered and reserved rights to replace and/or obtain
and/or appoint another separate or independent technology provider in the
event the nominated technology provider of PML for any reasons whatsoever
in the opinion of TMM and PML lacks the ability to better fulfill its
obligations adequately owing to situations including, but not limited to,
the following:
|
|
(a)
|
inability
of the Technology provider to provide cutting edge but practical
technological services at the instance of
TMM;
|
|
(b)
|
inability
of the Technology provider to provide technologically competitive
solutions compared to other similar providers in
India;
|
|
(c)
|
failure
of the Technology provider to keep up with the technological advancement
in their industry, confined to
India;
|
|
(d)
|
inability
of the Technology provider to provide services dictated by TMM to better
enable market delivery of TMM strategic objectives;
and
|
Page
12
|
(e)
|
where
the Technology provider is acquired by an entity deemed by TMM as its
competitor in India.
|
7.
|
REPRESENTATIONS &
WARRANTIES
|
REPRESENTATIONS
& WARRANTIES OF THE PARTIES
|
7.01
|
Each
Party represents and warrants to the other Party hereto that, to the best
of its knowledge:
|
|
(a)
|
it
has full power and authority to carry on its business and to enter into
this Agreement and any agreement or instrument referred to or contemplated
by this Agreement, except where regulatory or shareholder approval may be
required;
|
|
(b)
|
neither
the execution and delivery of this Agreement nor any of the agreements
referred to herein or contemplated hereby, nor the consummation of the
transactions hereby contemplated conflict with, result in the breach of or
accelerate the performance required by, any agreement to which it is a
party;
|
|
(c)
|
the
execution and delivery of this Agreement and the Agreements contemplated
hereby will not violate or result in the breach of the laws of any
jurisdiction applicable or pertaining thereto or its constating
documents.
|
|
7.02
|
Each
Party covenants, warrants and agrees with the
other:
|
|
(a)
|
to
perform or cause to be performed its obligations and commitments under
this Agreement;
|
|
(b)
|
not
to engage either alone or in association with others in any activity in
respect of the JV Assets or the Business in the Territory except as
provided or authorized by this
Agreement;
|
|
(c)
|
to
be just and faithful in all its activities and dealings with the other
Party; and
|
|
(d)
|
any
information which the Parties may provide to each other or the Joint
Venture or any permissible person or company will be accurate and complete
in all material respects and not misleading, and will not omit to state
any fact or information which would be material to the Parties or the
Joint Venture or such permissible person or
company.
|
REPRESENTATIONS
& WARRANTIES OF PML
|
7.03
|
PML
represents and warrants to TMM that the License permits PML to operate the
Business on more than 10,000 buses within the State of Tamil Nadu in
India, and on more than 30 Indian Railway trains throughout
India.
|
|
7.04
|
PML
represents and warrants to TMM that the JV Assets to be contributed to the
Joint Venture will be contributed to the Joint Venture free and clear of
encumbrances of any nature and the same are transferred and contributed
with full right, title, and interest to the Company and free of claims by
any party whatsoever, and no person has any agreement or option or any
right or privilege capable of becoming an agreement or option for any
right to the License;
|
Page
13
|
7.05
|
PML
represents and warrants that all existing clients of PML will be given the
first right to procure the mobile digital advertising platforms services
from the Company on arms’ length commercial rates and terms. In
the event that PML’s clients accept bundled services from both PML and the
Company, PML agrees that all invoicing of the clients for the bundled
services will be handled via separate invoices of the respective parties
but submitted jointly.
|
|
7.06
|
PML
represents and warrants to TMM that all representations and warranties
made by PML herein and all information provided by PML or by PML’s
advisors, agents, employees, officers and representatives to TMM in the
course of the negotiations leading to the execution of this Agreement
were, when given, and remain, true and accurate in all material respects,
and are not misleading, and copies of all contracts and documents provided
by PML to TMM are true and complete and the contents of such contracts and
documents comprise the entire agreement between the parties
thereto. PML further represents and warrants that it is not
aware of any fact or matter not disclosed in writing to TMM which renders
any such information or representation untrue, incorrect, inaccurate or
misleading, or the disclosure of which may affect the willingness of TMM
to enter into this Agreement. If any of the representations and
warranties of PML are found to be incorrect or if there is a breach by PML
of any of the covenants or agreements, which incorrectness or breach will
result in any loss or damage sustained directly or indirectly by TMM, then
PML will pay the amount of the loss or damage to TMM within 30 days of
receiving notice of the loss or
damage.
|
8.
|
COVENANTS
|
|
8.01
|
PML
undertakes to use its best efforts to keep the License, and/or any other
licensing rights obtained from other Participating States or otherwise
(collectively, the “Licenses”), valid and in good standing at all
times. PML further undertakes that it will not assign,
transfer, encumber, pledge or hypothecate the Licenses, or do any act or
cause any omission which will in any way, directly or indirectly, result
in the loss of the Licenses, or affect the ability of the Company to
conduct the Business or result in a reduction in the
Revenue. PML shall not undertake any act or enter into any
contract or agreement that may, or would, in any way adversely affect the
Licenses, and PML undertakes to notify TMM and the Company in writing if
PML is in breach of its obligations under the Licenses or if any of the
Licenses are or may be adversely affected for any reason
whatsoever.
|
|
8.02
|
The
covenants hereinbefore set out are conditions on which TMM has relied in
entering into this Agreement and PML will indemnify and save TMM harmless
from all loss, damage, costs, actions and suits arising out of or in
connection with any breach of such covenants by PML or any other
representations or obligations of PML contained in this
Agreement.
|
Page
14
9.
|
DISTRIBUTION OF
PROFITS & DIVIDEND
POLICY
|
|
9.01
|
The
Revenue generated from the Business will be first used to pay for all
Costs. The Profits of the Company will be used to first pay the
Management Fee and the repayment of any TMM loans, second to pay the
Director’s Fee, and then the remaining will be distributed to TMM and PML
on the basis of TMM receiving 85% of the Profits and PML receiving 15% of
the Profits as a dividend (the “Dividend”). Such
Profits will be calculated before income tax and other such costs which
are attributable only to each the Party separately from the
Company. Profits will be distributed at such time and in such
manner as may be determined in accordance with the dividend policies
established by the Board but, absent agreement to the same, will be
payable no less than on a quarterly basis and within thirty (30) days of
the end of each quarter. The Board will retain such reserves
for approved budgets and working capital as the Board considers prudent.
In the event of an error in the calculation of the Profits, or if, for any
other reason, a Party has received an attribution or payment greater than
its entitlement then the Board may balance the Profit accounts, by debits
and credits to the Party upon the next Profit allocation or may demand
repayment of excess distributions and the relevant Party will refund such
excess within thirty (30) days of
demand.
|
10.
|
CONFIDENTIALITY AND
COMPETITION
|
|
10.1
|
PML
agrees that for so long as it remains a shareholder of the Company and for
a period of 5 years thereafter upon ceasing to be a shareholder, PML and
its subsidiaries and associated companies (the “PML Group”) and the
directors and shareholders of the PML Group shall not directly or
indirectly be engaged or interested in any business, in any country in
which the Company or any of its subsidiaries and associated companies (the
“TM Group”) has
operations from time to time, that is, in the sole opinion of the Company,
in competition with the Business carried on by the TM
Group.
|
|
10.2
|
A
Party hereunder will not, except as authorized or required by the Party’s
duties hereunder or as flow as a consequence of law or contract (for
example TMM’s parent company’s reporting requirements as a public company
in accordance with applicable securities laws or consequent upon a merger
or consequent upon a sale of Interests by a Party hereto), reveal or
divulge to any person or companies any Confidential Information concerning
the Joint Venture or its Business or of any of the Parties or of any
affiliates, which may come to the Party’s knowledge during this Agreement,
and the Parties will keep in complete secrecy all Confidential Information
and will not use or attempt to use any such Confidential Information in
any manner which may injure or cause loss either directly or indirectly to
the Joint Venture’s Business. This restriction will continue to
apply after the termination of this Agreement without limit in point of
time but will cease to apply to information or knowledge which may come
into the public domain through no act or fault of the alleged offending
Party.
|
|
10.3
|
The
Parties acknowledge that the Confidential Information is crucial to the
Business and to the Parties individually and that in the event of
unauthorized disclosure or use of the Confidential Information, which the
Parties acknowledge would be an act of bad faith as well as a breach of
this undertaking, the damage will be irreparable or the affected Party
will not be adequately compensated by monetary
award. Accordingly, the offending Party agrees that in the
event of any such breach, the affected Party will be entitled as a matter
of right, without notice and prior to service of an originating action in
India and on an ex parte application, to apply to a Court of competent
jurisdiction in India, for determination in accordance with the laws of
the United Kingdom, for relief by way of restraining order, injunction,
decree or otherwise as may be appropriate to ensure compliance with the
provisions hereof. The offending Party shall reimburse the
affected Party for all costs and expenses, including reasonable attorneys’
fees, incurred by such affected Party in enforcing the obligations of the
offending Party hereunder. The Parties also agree and acknowledge that the
offending Party will also be liable, as liquidated damages, for an amount
equal to the amount received and earned by the offending Party as a result
of and with respect to any breach hereof, in addition to any other losses
the affected Party may suffer, including loss of economic
opportunity.
|
Page
15
11.
|
FORCE
MAJEURE
|
11.01
|
No
Party will be liable for its failure to perform any of its obligations
under this Agreement due to a cause beyond its reasonable control (except
those caused by its own lack of funds) including, but not limited to, acts
of God, fire, storm, flood, explosion, strikes, lockouts, or other
industrial disturbances, riots, laws, rules and regulations or orders of
any duly constituted governmental authority, including environmental
protection agencies, or non-availability of materials or transportation
(each an “Intervening
Event”).
|
11.02
|
All
time limits imposed by this Agreement will be extended by a period
equivalent to the period of delay resulting from an Intervening
Event.
|
11.03
|
A
Party relying on the provisions of section 11.0l will take all reasonable
steps to eliminate any Intervening Event and, if possible, will perform
its obligations under this Agreement as far as practical, but nothing
herein will require such Party to settle or adjust any labour disputes or
to question or to test the validity of any law, rule, regulation, or order
of any duly constituted governmental authority or to complete its
obligations under this Agreement if an Intervening Event renders it
uneconomical or impossible of
completion.
|
12.
|
NOTICE
|
12.01
|
Any
notice, direction, or other instrument or communication required or
permitted to be given under this Agreement will be in writing and may be
given by the delivery of the same or by mailing the same by prepaid
registered or certified mail or by sending the same by facsimile,
electronic communication or other similar form of communication, in each
case addressed to the intended recipient at the address of the respective
Party set out on the first page
hereof.
|
12.02
|
Any
notice, direction, or other instrument or communication will, if
delivered, be deemed to have been given and received on the day it was
delivered, and if mailed, be deemed to have been given and received on the
seventh business day following the day of mailing, except in the event of
a disruption of the postal service in which event notice will be deemed to
be received only when actually delivered on the address and, if sent by
facsimile, electronic communication or other similar form of
communication, be deemed to have been given or received on the day it was
so sent.
|
12.03
|
Any
Party may at any time give to the other notice in writing of any change of
address of the Party giving such notice and from and after the giving of
such notice the address or addresses therein specified will be deemed to
be the address of such Party for the purposes of giving notice
hereunder.
|
Page
16
13.
|
WAIVER
|
13.01
|
If
any provision of this Agreement will fail to be strictly enforced, or any
Party will consent to any action by any other Party, or will waive any
provisions as set out herein, such action by such Party will not be
construed as a general waiver thereof but only a waiver for the specific
time that such waiver or failure to enforce takes place and will at no
time be construed as a consent, waiver, or excuse for any failure to
perform and act in accordance with this Agreement at any past or future
occasion.
|
14.
|
FURTHER
ASSURANCES
|
14.01
|
Each
of the Parties hereto, will from time to time and at all times, do all
such further acts and execute and deliver all further deeds and documents
as will be reasonably required in order to fully perform and carry out the
terms of this Agreement. This section will not be construed as
imposing any obligation on any Party to provide
guarantees.
|
15.
|
USE OF
NAME
|
15.01
|
No
Party will, except with written permission or when required by this
Agreement, or by any law, by-law, ordinance, rule, order or regulation,
use, suffer or permit to be used, directly or indirectly, the name of any
other Party for any purpose related to this Agreement or the
Business.
|
16.
|
TERMINATION AND
WIND-UP
|
|
16.01
|
Upon
termination of this Agreement for whatever cause, the Board will
administer wind-up of the Company and the Joint Venture and will dispose
of JV Assets in such manner as the Board determines, consistent with this
Agreement, and practices of corporate law and practice, and will
distribute the net assets of the Company, after discharge of all
encumbrances, in accordance with outstanding interests of the
Parties. At the time of wind-up of the Company or termination
of the Business for any reason, the Board will meet and approve a
procedure for the retention, maintenance and disposal of documents (the
“Documents”) and
will appoint such Party as may consent thereto to ensure that all proper
steps are taken to implement and maintain that procedure. If
the Board fails to approve a procedure as aforesaid, the Party holding the
majority interest in the Company as at the date immediately preceding the
date the Board was called to meet, will retain, maintain and dispose of
the Documents according to such procedure, in compliance with all
applicable laws, as it deems fit. The Party entrusted with the
retention, maintenance and disposal of the Documents will estimate the
costs and expenses incidental thereto and will be entitled to receive
payment of those costs and expenses prior to any distribution being made
of the assets of the Company or the revenues received on the disposal
thereof.
|
Page
17
16.02
|
Upon
termination of this Agreement:
|
|
(a)
|
The
Parties hereby acknowledge and agree that all personally possessed Joint
Venture property, including without limitation, all books, manuals,
records, reports, notes, contracts, lists, and other documents,
Confidential Information, copies of any of the foregoing, and equipment
furnished to or prepared by the Joint Venture or a Party for such and in
the course of or incidental to the Business or this Agreement, all belong
to the Joint Venture and will be promptly returned to the Joint Venture
upon termination but that all intellectual property rights in and to the
content provided for the Business shall remain the sole property of
TechMedia Advertising (India) Pte. Ltd.;
and
|
|
(b)
|
The
Parties acknowledge that all Confidential Information is received or
developed in confidence and for the exclusive benefit of the Joint Venture
and the successors thereof. During this Agreement and
thereafter in accordance with this Agreement’s restrictions, the Parties
will not, directly or indirectly, except as required by the normal
business of the Joint Venture and the Company, or unless expressly
consented to in writing by the
Board:
|
|
(i)
|
disclose,
publish or make available, other than to an authorized person any
Confidential Information;
|
|
(ii)
|
acquire,
possess for their own interest, sell, transfer or otherwise use or exploit
any Confidential Information;
|
|
(iii)
|
permit
the sale, transfer, or use or exploitation of any Confidential Information
by any third party; or
|
|
(iv)
|
retain
upon termination or expiration of this Agreement any Confidential
Information, any copies thereof or any other tangible or retrievable
materials containing or constituting Confidential
Information;
|
17.
|
GENERAL
|
17.01
|
This
Agreement embodies the entire agreement and understanding among the
Parties hereto and supersedes all prior agreements and undertakings,
whether oral or written, relative to the subject matter
hereof.
|
17.02
|
This
Agreement may not be changed orally but only by an agreement in writing,
executed by each of the Parties.
|
17.03
|
Unless
earlier terminated by default or by agreement of all Parties or as a
result of one Party acquiring the whole of the other Party’s Interest, the
Joint Venture and this Agreement will remain in full force and effect for
so long as any part of the Joint Venture or Business is held or conducted
in accordance with this Agreement.
|
17.04
|
No
Party hereto will purport to terminate this Agreement for any event of
default except pursuant to the terms of this
part.
|
17.05
|
Except
for emergency proceedings in respect to a default by a Party which
materially jeopardizes the Business or finances or credit or the JV
Assets, no Party hereto will take proceedings for default, or otherwise,
unless it has given the defaulting Party notice in writing of the nature
and scope of the default and the defaulting Party has failed to correct
such default within ten (10) business days of notice of such
default.
|
Page
18
17.06
|
This
Agreement will enure to the benefit of and be binding upon the Parties
hereto and their respective successors and permitted
assigns.
|
17.07
|
This
Agreement will be governed by and interpreted in accordance with the laws
of the United Kingdom. The Parties will comply with all laws applicable to
the Parties hereunder.
|
17.08
|
If
any one or more of the provisions contained herein should be invalid,
illegal or unenforceable in any respect in either India or England, then
the Parties shall forthwith enter into good faith negotiations to amend
such provision in such a way that, as amended, it is valid and legal under
the laws and regulations of India and England and to the maximum extent
possible carries out the original intent of the Parties as to the points
in question.
|
17.09
|
The
division of this Agreement into articles and sections and the insertion of
headings are for convenience of reference only and will not affect the
construction or interpretation of this
Agreement.
|
17.10
|
Time
will be of the essence in the performance of this
Agreement.
|
17.11
|
If
any terms of this Agreement are inconsistent or conflict with the
Memorandum and Articles of Association of the Company, then the terms of
this Agreement shall prevail.
|
17.12
|
Any
dispute arising out of or in connection with this Agreement, including any
question regarding its existence, validity or termination, shall be
referred to and finally resolved under the .Rules of Arbitration of the
International Chamber of Commerce (the “Rules”) by one or more
arbitrators appointed in accordance with the Rules. The
arbitration shall be settled in London, United Kingdom in the English
language.
|
IN WITNESS WHEREOF the Parties
hereto have executed this Agreement as of the date first written
above.
Signed
by Xx Xxxxxxx Xxx Xxx Xxxxx
|
)
|
||
for
and on behalf of
|
)
|
||
TechMedia
Advertising Mauritius
|
)
|
/s/
Xxxxxxx Xxx
|
|
in
the presence of
|
)
|
||
)
|
|||
)
|
|||
/s/ Xxxxxx Xxxx Xxxx Xxxx
|
)
|
||
Xx
Xxxxxx Xxxx Xxxx Xxxx
|
)
|
||
NRIC
No. : S1758653/Z
|
)
|
||
Signed
by Xx Xxxxxxx Xxxxxx
|
)
|
||
for
and on behalf of
|
)
|
||
Peacock
Media Ltd
|
)
|
/s/
Xxxxxxx Xxxxxx
|
|
in
the presence of
|
)
|
||
)
|
|||
)
|
|||
/s/ Xxxxxx Xxxxx Suri
|
)
|
||
Xx
Xxxxxx Xxxxx Suri
|
)
|
||
Indian
Passport No. : Z1776253
|
)
|
Page
19