EXHIBIT 10.3
JOINT VENTURE AGREEMENT
This Joint Venture Agreement [hereinafter "Agreement" or "JVA"] is entered into
by Corazon & Corazon ["Corazon"] and Ruby Mining Company, d/b/a Admiralty
Corporation ["Admiralty"], hereinafter "the Parties", for purposes of managing
the exploration and recovery of valuable shipwrecks and cargoes and other
underwater cultural heritage ["property"] at a site at Half Moon Reefs off the
coast of Honduras, such exploration and recovery to be referred to in this JVA
as "the Project".
1. ADMIRALTY'S DUTIES UNDER THE JVA.
Admiralty agrees to use its best efforts, consistent with its sound
business judgment, to pursue this Project. This shall include the provision
of vessel platforms, personnel, and equipment for the exploration and
recovery of property at the site, along with its proper stabilization,
conservation, curation, storage, security, appraisal, and marketing.
Admiralty agrees to host up to two (2) observers designated by Corazon on
board any vessels engaged in operations at the site, providing for their
transportation to and from the site on regularly-scheduled re-supply voyages
only, their bunk and board (such expenses to be treated as a net expense
under section 4.). Admiralty also agrees to give access to observers
accredited by Corazon at any location or facility used and maintained by
Admiralty of the stabilization, conservation, curation, storage, appraisal,
and marketing of property recovered from the site.
2. CORAZON'S DUTIES UNDER THE JVA.
Corazon agrees to use its best efforts, consistent with its sound
business judgment, to pursue this Project. This shall include making the
necessary disclosures of the site's location and other archival, historic,
and operational data necessary for the success of the project. Such
disclosures will be made to Admiralty and its officers and employees and
agents under confidentiality terms and conditions agreeable to both parties.
3. DIVISION OF PROPERTY.
The net proceeds of any property (as defined in the following
sections) recovered from the site, pursuant to the Project, will be spilt
among the Parties, according to the following formula: Corazon - 40%,
Admiralty - 60%. Should another party establish a valid claim to part of the
property, a 40% share by each Corazon and Admiralty shall be diminished
equally unless mutually agreed otherwise.
For Corazon property we mutually agree:
At Corazon's option Admiralty will purchase Corazon's property on the
following basis:
a. Coins base metal value times 2
b. Bars base metal value times 1.2
c. Jewelry/Jewels international wholesale value
d. Everything else Admiralty's net times 0.25
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At Admiralty's options Admiralty may purchase Corazon's property on the
following basis:
a. Coins base metal value times 5
b. Bars base metal value times 1.5
c. Jewelry/Jewels international wholesale value times 1.5
d. Everything else Admiralty's net times 0.5
It is agreed that Corazon may retain any amount up to and including 100% of
its share for its own purposes either to keep or to give away. Corazon
agrees not to sell any of its share directly or indirectly except via
Admiralty.
4. DEFINITIONS OF NET PROCEEDS
Sub-Section A. It is the intention of the Parties that the division of
property recovered from the site, pursuant to this Project, will be net of
reasonable, actual expenses. Only those reasonable, actual expenses directly
attributable to the Project's operations will be deducted from gross
proceeds. Among the categories of legitimate expenses to be deducted from the
gross proceeds are the following:
(a) Reasonable, actual vessel operation expenses while a vessel is on
station or traveling to and from the site (including
depreciation, chartering (if applicable), fuel, food, insurance,
crew and manning expenses, the costs of hosting Corazon's
observers (as per section 1 above), as well as any repairs or
equipment replacement attributable to activities undertaken for
the Project);
(b) Reasonable, actual expenses for salaries, compensation, benefits
and expenses of Project consultants, which shall include only
archaeologists, conservators, appraisers, marketers and similar
professionals or vendors. It is specifically contemplated by the
parties that the salaries, compensation, benefits and expenses of
the corporate directors, officers, counsel and principals of
Corazon and Admiralty will not be subject to treatment as a net
expense under this JVA;
(c) All reasonable, actual expenses related to the transport
(including dockage, clearance and customs fees (if applicable),
stabilization, conservation, curation, storage, appraisal,
security, insurance, and marketing of property recovered from the
site).
Those expenses not designated as net expenses shall be borne
exclusively by the Party which incurs them.
Sub-Section B. The Parties, may by mutual written agreement,
supplement or modify this list of permissible net expenses, or designate
or disqualify certain expenses as net expenses.
Sub-Section C. Each Party agrees to ledger and documents all expenses
to be treated as net expenses under this provision, and allow the
examination, accounting and audit of
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such expenses by the other Party, on demand within thirty (30) days of
the presentation of the expense for deduction. If no demand is made
within the prescribed period, the expense will be treated as a net
expense.
5. VALUATION OF PROPERTY.
Sub-Section A. All property recovered from the Project site will be
subject to appraisal as individual items or lots.
Sub-Section B. Admiralty will be responsible for the provision of at
least two (2) appraisals for such property, such appraisals to be performed
by independent, publicly recognized specialists or experts for the type of
property being appraised. In the event that the two appraisals yield a
valuation of an item (or lot of items) that is less than 50% of variance in
value, the higher appraisal will control and be the final valuation. In the
event that the two appraisals yield a valuation of an item (or lot of items)
that is more than 50% variance in value, the average appraisal will control
and be the final valuation. Corazon may, at his election, seek a third
appraisal for an item (or lot of items), at its own expense and not subject
to treatment as a net expense under section 4 of this JVA, if it so requests
within thirty (30) days of receiving a valuation from Admiralty for a
particular item (or lot of items). If a third appraisal is sought, the final
valuation of an item (or lot of times) shall be average of all three
appraisals, according to the following formula:
((Appraisal 1 + Appraisal 2)/2) + Appraisal 3
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and such will be the final valuation.
6. BORROWING AGAINST SHARE
By Mutual written agreement of the Parties, a Party may seek to borrow
against its share of proceeds under this JVA
7. INTANGIBLE AND INTELLECTUAL PROPERTY.
Any intangible and intellectual property including to, but not limited
to
(a). Writings (such as books, catalogues, pamphlets and brochures);
images (such as photographs, videos, films, prints, posters, postcards,
website images (including thumbnail images for on-line indexes)); movie,
television, video and media rights; all of these to included print, digital,
or other mechanical means or any other media now known or later developed.
(b). rights of publicity and rights of privacy;
(c). any and all derivative works associated with the Project;
(d). the marketing of any souvenir items associated with the
Project; and
(e). any or all rights in copyright or trademarks associated with
the Project, shall be the property of Admiralty. Admiralty (at its sole
discretion) shall develop and market such intangible and intellectual
property rights in the Project.
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Corazon & Corazon is in the process of writing a book and producing a video
concerning Corazon & Corazon. Some reference may be made in these works to
the activities of this JVA. It is understood that the focus will be Corazon
& Corazon and not ships found as a result of this JVA.
8. PROPRIETARY TECHNOLOGIES. Admiralty stipulates, and Corazon agrees,
that in discharging its duties under this JVA, Admiralty will be
employing proprietary technologies and trade secrets in the search
for, recovery, and conservation of property from the site, pursuant to
the Project. Under no circumstances will this JVA be construed as
granting a license to Corazon, transferring to Corazon, or giving
access to Corazon for these proprietary technologies and trade
secrets, provided, however, that Admiralty hereby grants a
royalty-free license to the Joint Venture created by this Agreement to
utilize such technologies and trade secrets for the purposes set forth
above. Admiralty may take all measures necessary to exclude Corazon's
officers, employees, agents, vendors and contractors from access to
these proprietary technologies and trade secrets. In the event that
Admiralty decides to grant such access (at its sole discretion), such
access may be conditioned under confidentiality terms and conditions
to be stipulated by Admiralty.
9. JVA GOVERNANCE. As stipulated in sections 1 and 2 above, Admiralty and
Corazon will fully cooperate in the successful pursuance of the
Project. As indicated in those sections, Admiralty has the primary
operational role for all aspects of the Project, but hereby recognizes
its duty to regularly inform and consult with Corazon on all aspects
of the Project. At any time, Corazon may request and obtain from
Admiralty a full accounting of Project funds, finances, and expenses.
10. PROJECT PHASES. The initial term of this JVA shall be six (6) months.
If at the conclusion of six months, no significant find of property at
the site has been made, the JVA may be terminated by either Party at
their sole discretion. If a significant find of property at the site
has been made by the conclusion of the six month initial term, the JVA
will be deemed to be extended of further term of two (2) years. At the
conclusion of that two (2) year period, the JVA will be extended for
further two (2) year terms, unless the Parties mutually agree to
terminate the JVA.
11. DISPUTE SETTLEMENT PROVISIONS.
A. Sub-Section A. Should any dispute arise out of this JVA (other than
in regard to sections 7 and 8), the matter in dispute shall be
referred to three persons for arbitration at Washington, District
of Columbia, one arbitrator to be appointed by each of the parties
hereto, and the third by the two so chosen; their decision or that
of any two of them shall be final, and for the purpose of enforcing
any award, this agreement may be made a rule of any court in the
United States. This JVA shall be governed by the federal maritime
law of the United States of America, and shall be construed as a
contract for salvage and /or co-salvage. Any arbitration
proceedings contemplated under this sub-section shall be conducted
in accordance with
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the Rules of the Society of Maritime Arbitrators, Inc. The
arbitrators shall be members of the Society of Maritime
Arbitrators, Inc.
B. Sub-Section B. Should any controversy, claim or dispute arise out
of the Parties' performance or lack of performance of their
obligations under sections 7 and 8 of this JVA, the matter in
dispute shall be referred to three persons for arbitration at
Washington, District of Columbia, one arbitrator to be appointed by
each of the Parties hereto, and the third by the two so chosen;
their decision or that of any two of them shall be final. Sections
7 and 8 of the JVA shall be governed by the laws of New York. Any
arbitration proceedings contemplated under this sub-section shall
be administered by the American Arbitration Association under its
Commercial Arbitration Rules, and judgment on the award rendered by
the arbitrators may be entered in any court having jurisdiction
thereof.
12. AGREEMENT AMENDMENTS AND NOTIFICATIONS. This JVA reflects the full
agreement of the Parties. The JVA may be amended by the written,
mutual agreement of the Parties. Any notifications required under this
JVA shall be made in writing, transmitted by courier, post, facsimile
to the contact addresses listed below (or as they may be changed from
time to time by subsequent notification).
/s/ G. Howard Collingwood /s/ Dr. Steven Foster
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G. Howard Collingwood, CEO & COB Dr. Steven Foster
Admiralty Corporation Corazon & Corazon
3490 Piedmont Road, #304 2705 Airport Road, Suite 101
Atlanta, GA 30305 Dalton, GA 30721
404-231-8500 Office 706-275-4444 Office
404-231-9400 Fax 404-428-2297 Cell
404-433-5272 Cell
Date 3-23-05 Date 3-23-05