EXHIBIT 10.1
JOINT VENTURE AGREEMENT
THIS AGREEMENT made effective the 8th day of May, 2003.
AMONG:
CYBERNET INTERNET SERVICES INTERNATIONAL, INC., a corporation
-----------------------------------------------
organized under the laws of Delaware, having its office at
Suite 1620 - 400 Burrard Street, Vancouver, British Columbia
V6C 3A6
("Cybernet")
AND:
RAVIN PRAKASH, businessman, having an address at 1st Floor,
--------------
13 Babar Lane, New Delhi, 11001 India
("Prakash")
WHEREAS:
A. Cybernet and Prakash have agreed to enter into a joint venture for the
purpose of providing customer relationship management services through an
internet enabled contact center in India for technology companies and financial
institutions in the European and United States markets (the "Joint Venture");
and
B. Cybernet and Prakash will form a bare trustee entity in the form of a
limited partnership, trust or other entity ("TrusteeCo") to carry out the
purposes of the Joint Venture set out in this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the respective covenants and agreements herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each of the parties hereto, the parties covenant and agree as
follows:
ARTICLE 1
DEFINITION AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, including the recitals hereto, unless there is something in
the subject matter or context inconsistent therewith, the following capitalized
words and terms shall have the following meanings respectively:
(a) "Agreement" means this agreement made as the same may be
amended or supplemented from time to time;
-2-
(b) "Budget" means the budget showing, inter alia, the nature,
purpose, amount and estimated timing of expenditures in
connection with the acquisition, development and operation
of the Property as approved by the Joint Venturers from time
to time under section 5.2 hereof;
(c) "Business" means the business of Worldturf which includes
the business of developing, operating and maintaining internet
enabled contact centers in India to provide, inter alia, the
following services to technology companies and financial
institutions: computer software and hardware support; customer
support, including customer billing enquires, customer service,
query handling and product information requests; and sales
support, including outbound cold calling, outbound sales lead
generation, cross selling, collections and customer
satisfaction surveys, and all ancillary activities or
services related thereto;
(d) "Committee" means such committee appointed under section
5.6 hereof;
(e) "Contribution Account" has the meaning set forth in section
6.5 hereof;
(f) "Contribution" means any contribution to the Joint Venture
by a Joint Venturer and "Contributions" mean the aggregate
of such Contributions;
(g) "Co-Project Managers" means Cybernet and Prakash as appointed
under the provisions of section 5.1 hereof and "Project
Manager" means any one of the Co-Project Managers;
(h) "Default" means, with respect to a Joint Venturer:
(i) the existence of a Event of Insolvency with respect
to that Joint Venturer; or
(ii) the default by that Joint Venturer in the performance
or observance of any of its obligations under this
Agreement if that default is not cured within 30 days
after receipt by that Joint Venturer of a Notice of
the default from another Joint Venturer;
(i) "Defaulting Joint Venturer" means a Joint Venturer in respect
of whom a Default has occurred which has not been cured;
(j) "Encumbrance" means any encumbrance of whatever kind or
nature, regardless of form, whether or not registered or
registrable and whether or not consensual or arising by law
(statutory or otherwise), including any Mortgage, lien, easement,
right-of-way, encroachment, restrictive or statutory covenant,
profit-a-prendre, right of re-entry, lease, licence, assignment,
option or claim, or right of any person of any kind which
may constitute or become by operation of law or otherwise
an encumbrance on the Property;
(k) "Event of Insolvency" means, with respect to any person, the
occurrence of any one of the following events:
-3-
(i) if that person, other than in connection with a bona
fide corporate reorganization, is wound up, dissolved,
liquidated or otherwise has its existence terminated
(either voluntarily or involuntarily) unless such existence
is immediately reinstated or has any resolution passed
therefor or makes a general assignment for the benefit
of its creditors or a proposal under bankruptcy or
insolvency legislation or is adjudged bankrupt or
insolvent or proposes a compromise or arrangement under
bankruptcy or insolvency legislation or files any petition
or answer seeking any reorganization, arrangement,
composition, re-adjustment, liquidation or similar relief
for itself under any present or future law relating to
bankruptcy, insolvency, or other relief for or against
debtors generally;
(ii) if a court of competent jurisdiction enters an order,
judgment or decree approving a petition filed against
that person seeking any reorganization, arrangement,
composition, readjustment, liquidation, winding up,
dissolution, termination of existence, declaration of
bankruptcy or insolvency or similar relief under any
present or future law relating to bankruptcy, insolvency
or other relief for or against debtors generally and
that person consents to or acquiesces in the entry of an
order, judgment or decree or that order, judgment or
decree remains unvacated or unstayed for an aggregate of
60 days (whether or not consecutive) from the date of
entry of any trustee in bankruptcy, receiver, receiver and
manager, liquidator or any other officer with similar
powers is appointed for that person (or, in the case
of a Joint Venturer, of its Joint Venturer's Interest)
and that person consents to or acquiesces in the
appointment or the appointment remains unvacated and
unstayed for an aggregate of 60 days (whether or not
consecutive);
(iii) in the case of a Joint Venturer, if an encumbrancer takes
possession of its Joint Venturer's Interest or any part of
it or a distress or execution or any similar process is
levied or enforced upon or against its Joint Venturer's
interest or any part of it and the same remains
unsatisfied for the shorter of 60 days or such period
as would permit the same or any part of it to be sold
unless such taking of possession, distress or execution,
is being, in good faith, disputed by the Joint Venturer
and the Joint Venturer has provided security satisfactory
to the other Joint Venturers;
(iv) if the Joint Venturer admits in writing its inability to
pay its debts as they mature and fall due or otherwise
commits an act of bankruptcy; or
(v) if the Joint Venturer gives notice to any governmental
body of insolvency or pending insolvency or suspension
of operation;
(l) "Joint Financing" means financing arranged by the Project
Manager under section 6.2 hereof;
(m) "Joint Venture" means the joint venture created by this
Agreement;
-4-
(n) "Joint Venturer's Interest" means, with respect to a Joint
Venturer, the undivided right, title, benefit and interest of
such Joint Venturer from time to time as tenant-in-common in
the Property and "Joint Venturers' Interests" means the Joint
Venturer's Interest of all Joint Venturers collectively;
(o) "Joint Venturers" means Cybernet and Prakash and "Joint Venturer"
means any one of such Joint Venturers;
(p) "Liabilities" means all indebtedness, liabilities, obligations,
costs, expenses, claims and judgments incurred in connection with
the Project and the Property which have been unanimously approved
by the Joint Venturers or otherwise incurred in accordance with
this Agreement;
(q) "Major Decisions" has the meaning set forth in section 5.2
hereof;
(r) "Project" means the development of the Business through the
Joint Venture;
(s) "Property" means the assets or interests acquired or to be
acquired by the Joint Venturers from time to time in connection
with operating the Joint Venture;
(t) "Proportionate Share" means, with respect to each Joint
Venturer, its undivided interest in the Property and in the
Joint Venture expressed in the percentage of the interest in to
the Joint Venture of each Joint Venturer set forth in Article 3
hereof;
(u) "Required Funds" means all funds required for the development
of the Property or as are otherwise determined by the Project
Manager to be required with respect to the Project and Property;
(v) "Subsequent Investment" has the meaning ascribed thereto in
Section 3.5 of this Agreement;
(w) "Worldturf" means WorldturfDotcom Pvt., Ltd.;
(x) "Worldturf Assets" means all of the assets of Worldturf of
every kind and description owned by Worldturf or to which
Worldturf is entitled relating to the Business including: (a)
all lands, personal property and current assets of Worldturf;
(b) the benefit of all contracts, licences and permits of
Worldturf; (c) the right to all designs, processes, technology
and other property of Worldturf which relate exclusively to the
Business; (e) all property used in the Business; and (f) all
goodwill of Worldturf including trade or brand names, trademarks,
trademark registrations, copyrights, know-how, technology and
other intellectual property; and
(y) "Worldturf Shares" means all the issued and outstanding shares
in the capital of Worldturf.
-5-
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this Agreement into articles, sections, subsections and
paragraphs and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of the provisions of
this Agreement. The terms "this Agreement", "hereof", "herein", "hereunder" and
similar expressions refer to this Agreement as a whole and not to any particular
article, section, subsection or paragraph and include any agreement or
instrument supplementary or ancillary hereto.
1.3 NUMBER AND GENDER
Unless the context otherwise requires, words importing the singular number only
shall include the plural and vice versa; words importing the use of either
gender shall include both genders and neuter; and words importing persons shall
include an individual, corporation, body corporate, partnership, joint venture,
association, trust or unincorporated organization or any trustee, executor,
administrator or other legal representative.
1.4 CURRENCY
All sums of money which are referred to in this Agreement are expressed in
lawful money of the European Union, unless otherwise specified.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF CYBERNET
Cybernet represents and warrants to Prakash as follows:
(a) Cybernet is a corporation duly incorporated and organized,
validly existing and in good standing under the laws of Delaware
and has the corporate power to enter into this Agreement and to
perform its obligations hereunder;
(b) This Agreement has been duly executed and delivered by and
constitutes a legal, valid and binding obligation of Cybernet,
enforceable by Prakash against it in accordance with its terms,
subject to the availability of equitable remedies and the
enforcement of creditors' rights generally; and
(c) The execution and delivery by Cybernet of this Agreement
and the performance of its obligations hereunder will not give
rise to any rights in favour of third parties and will not
result in a violation or breach of any provision of or constitute
a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of or
under: (i) its constating documents or organizational documents;
(ii) any applicable law, order, judgment or decree; or (iii) any
agreement, arrangement or understanding to which Cybernet is a
party which would individually or in the aggregate have a material
adverse effect on Cybernet.
-6-
2.2 REPRESENTATIONS AND WARRANTIES OF PRAKASH
Prakash represents and warrants to Cybernet as follows:
(a) This Agreement has been duly executed and delivered by Prakash
and constitutes a legal, valid and binding obligation of Prakash,
enforceable by Cybernet against him in accordance with its terms,
subject to the availability of equitable remedies and the
enforcement of creditors' rights generally;
(b) The execution and delivery by Prakash of this Agreement and
the performance of his obligations hereunder will not give rise
to any rights in favour of third parties and will not result
in a violation or breach of any provision of or constitute a
default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of or
under: (i) any applicable law, order, judgment or decree; or
(ii) any agreement, arrangement or understanding to which Prakash
or Worldturf is a party which would individually or in the
aggregate have a material adverse effect on Prakash or Worldturf;
(c) Worldturf is a corporation duly organized, validly existing and in
good standing under the laws of its organization and currently
carries on the Business;
(d) There is no agreement, judgement, injunction, order, decree
binding on Worldturf which has or could reasonably be expected
to have the effect of materially prohibiting or materially
impairing any of the Business or Projects, or the conduct of the
Business or Projects as currently conducted or proposed to be
conducted; and
(e) The Worldturf Shares are duly authorized and validly issued, are
fully paid and non-assessable, are free from any Encumbrances and
are not subject to any option, right of first refusal or other
right or agreement that may impair Prakash's ability to contribute
the Worldturf Shares to the Joint Venture.
ARTICLE 3
FORMATION, CONTRIBUTIONS AND TERM
3.1 FORMATION OF JOINT VENTURE
Prakash and Cybernet agree, subject to all necessary third party and regulatory
approvals (if any), to associate in and form the Joint Venture as described in
this Agreement for the purposes set out in Section 3.2 and agree that all of
their rights and obligations in and to the Joint Venture and the Property will
be governed by this Agreement.
3.2 PURPOSES
This Agreement is entered into for the following purposes and for no others, and
will serve as the exclusive means by which the parties hereto directly or
indirectly accomplish such purposes. The parties agree to form the Joint
Venture to:
-6-
(a) pursue the Project and any other projects similar or ancillary
to the Project or involving a business similar to the
Business; and
(b) perform any other activities necessary or incidental to any
of the foregoing.
3.3 CONTRIBUTION BY PRAKASH
Prakash will contribute to the Joint Venture, for the exclusive use and benefit
of the Joint Venture, the Worldturf Shares or, at the sole option of Cybernet,
the Worldturf Assets and will receive a 42% interest in the Joint Venture.
3.4 CONTRIBUTION OF CYBERNET
Cybernet will contribute to the Joint Venture, Euro 100,000 and will receive a
52% ownership interest in the Joint Venture.
3.5 SUBSEQUENT INVESTMENT
Cybernet may, in it's sole discretion, at any time contribute up to an
additional Euro 8.0 million to the Joint Venture by way of a senior loan to the
Joint Venture, or by any other means reasonably acceptable to the Joint
Venturers, and upon such Contribution, Cybernet's interest in the Joint Venture
will be increased,pro rata, to up to an 80% interest in the Joint Venture.
3.6 WORKING CAPITAL CONTRIBUTIONS
Each of the Joint Venturers will not be required to contribute any advances or
further capital as required for working capital purposes on an equal basis,
without its prior written approval.
3.7 OWNERS' AGREEMENT
The Joint Venturers shall enter into an owners' agreement in connection with the
formation, ownership and management of TrusteeCo (the "Owners' Agreement") which
will contain provisions customary for such agreements, including providing:
(a) for the ownership of Joint Venturer's respective interests in
TrusteeCo in proportion to their respective interests in the
Joint Venture;
(b) for mutual rights of first refusal on any sale of their
respective interests in TrusteeCo;
(c) for piggyback rights, whereby if one party proposes to sell its
interest to a third party (after giving effect to the right of
first refusal), the other party can require that the third
party purchase its interest on the same terms as the first party;
(d) for the appointment of representatives to the board or governing
body of TrusteeCo;
-8-
(e) that certain major business decisions will require three-quarters
approval of the board or governing body of TrusteeCo;
(f) that no party will be required to provide any advances or
further capital without its prior approval;
(g) that, upon the occurrence of a triggering event (such events to
include an act of insolvency or bankruptcy, a change of control,
a material default or breach of any representation, warranty or
covenant in the Owners' Agreement which is not remedied on 30
days' notice, and other matters to be mutually agreed upon), the
defaulting party will be required to offer to sell its interest
to the other party for a price to be determined pursuant to a
third party valuation;
(h) for a mechanism for valuation in the event of a sale of an
interest upon a triggering event, whereby the non-defaulting
party shall be entitled to appoint one qualified independent
valuer, the defaulting party may, at its option, appoint a second
qualified independent valuer and if two valuers are appointed and
(i) if the values determined by them do not differ by more than
20%, the value shall be equal to the average of such valuations
and (ii) if the values determined by such valuers differ by more
than 20%, they shall mutually select a third qualified independent
valuer whose valuation shall be final and binding on all parties;
(i) that no owner may be forced to sell its interest without its
consent, except upon the occurrence of a triggering event;
(j) that any party acquiring an interest in TrusteeCo will be
required to enter into and/or acknowledge the Owner's Agreement
and related agreements; and
(k) for standstill provisions for three years whereby, inter
alia, each party agrees not to offer to purchase or acquire
each other's interest in TrusteeCo in whole or in part, solicit
such offers, nor to increase its ownership interest in TrusteeCo
other than by way of purchases of shares of TrusteeCo from other
shareholders (excluding the Joint Venturers) made jointly by the
Joint Venturers in pro rata proportion to their ownership interest
in TrusteeCo on the completion of the transaction contemplated
hereby.
3.8 TERM
This Agreement will continue in force and effect until the earliest of:
(a) any Joint Venturer purchasing the entire Joint Venturer's
Interest of the other Joint Venturer, such termination to be
effective only after the completion of the purchase and payment
of all amounts payable under this Agreement;
(b) this Agreement being terminated by the mutual written agreement
of the Joint Venturers;
-9-
(c) any person other than the Joint Venturers purchasing the
Joint Venturers' Interests; or
(d) _____ years have elapsed since the date of this Agreement, and
the term of this Agreement has not otherwise been extended
by the mutual written agreement of the Joint Venturers.
3.9 SURVIVAL OF CERTAIN OBLIGATIONS
All obligations of all Joint Venturers to each other which are incurred before
the date of the termination of this Agreement under section 3.8 hereof shall
survive termination and continue in full force and effect.
ARTICLE 4
RELATIONSHIP BETWEEN JOINT VENTURERS
4.1 DISCLAIMER OF PARTNERSHIP
The Joint Venturers expressly disclaim any intention to create a partnership or
to constitute the Joint Venturer as partner or agent of the other or any other
relationship whereby either could be held liable for any act or omission of the
other (except as expressly provided in this Agreement) with respect to the
subject matter of this Agreement. Except as specifically provided in this
Agreement, no Joint Venturer shall have any authority to act for the other or to
incur any obligation on behalf of the other with respect to the subject matter
of this Agreement.
4.2 SEPARATE ACTIVITIES
Except as provided to the contrary in this Agreement, each Joint Venturer may
independently engage in any business endeavor, whether or not competitive with
the objects of the Joint Venture, without consulting the other Joint Venturer
and without in any way being accountable to the other Joint Venturer.
4.3 NAME OF PROJECT
The Project is called the Worldturf.com Joint Venture.
4.4 GOOD FAITH
Each Joint Venturer shall act honestly and in good faith and in the best
interest of the Joint Venture, the Project and the conduct of the Business by
the Joint Venture and to exercise the degree of care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
-10-
ARTICLE 5
DECISIONS AND DETERMINATIONS
OF THE JOINT VENTURERS
5.1 OVERALL MANAGEMENT
(a) The overall management and control of the development and
operation of the Joint Venture and the Project shall be vested
in the Joint Venturers, pro rata in proportion to their then
respective interests in the Joint Venture. Except as expressly
provided to the contrary in this Agreement, all decisions with
respect to the acquisition, development, management, control and
operation of the Joint Venture and the development of the Project
approved by the Joint Venturers shall be binding upon the Joint
Venturers.
(b) The Joint Venturers hereby appoint Michael J. Smith, or in his
place another representative of Cybernet (the "Cybernet Nominee")
and Prakash as the Co-Project Managers and the Cybernet Nominee
and Prakash until the earliest of:
(i) the Joint Venturers agreeing that a Project Manager
should cease to serve as Project Manager; or
(ii) the Joint Venture Agreement being terminated pursuant
to section 3.8 hereof.
(c) Subject to the provisions of section 5.2 hereof, the Co-Project
Managers shall be responsible for managing the development
of the Business and the Project and generally the day-to-day
activities and affairs of the Joint Venture in connection with
the Business and are authorized for and on behalf of and in the
name of the Joint Venturers to make all expenditures and
incur all obligations reasonably necessary for such purpose.
(d) Any cheques or withdrawals of the Joint Venture shall
require the signature or endorsement of a signing officer of
each of the Joint Venturers.
5.2 MAJOR DECISIONS
Unless approved by the Joint Venturers in accordance with section 5.6 hereof,
the Joint Venturers and the Co-Project Managers shall not act, expend any sum of
money, make a decision or incur any obligation with respect to a matter within
the scope of any of the major decisions as enumerated below:
(a) the Budget and business plans for the Project and any material
changes thereto;
(b) all forms of financing for the Project;
(c) the terms and conditions of any sale, syndication, or refinancing
of the Project;
(d) the acquisition of any land;
-11-
(e) the distribution of revenue, income or profit; and
(f) any other decision which could be reasonably expected to
materially affect the future profitability, cash flow, and/or
equity value of the Project,
(collectively, the "Major Decisions")
except that, if any Joint Venturer is in Default under this Agreement, the Joint
Venturer which is not in default shall have the sole right to approve any Major
Decisions.
5.3 DUTIES OF THE CO-PROJECT MANAGERS
Subject to the provisions of section 5.2 hereof, the Co-Project Managers shall,
at the expense of the Joint Venturers, for and on behalf of and in the name of
the Joint Venturers, implement or cause to be implemented all decisions and
determinations approved by the Joint Venturers in accordance with section 5.6(b)
hereof, coordinate and supervise all activities required by the Business, and
operate and conduct or cause to be conducted the day-to-day activities and
affairs of the Joint Venturers in connection with the Business, all in
accordance with and as limited by this Agreement, including, without limitation,
the following:
(a) hiring and supervising the activities of consultants;
(b) liaising and entering into agreements with all persons
having jurisdiction over any activities conducted in connection
with the Business;
(c) obtaining policies of insurance considered necessary or desirable
by the Co-Project Managers to protect the Joint Venturers from
liability, damage or loss in respect of the Business;
(d) assuring that any contractor performing work for the Business
maintain satisfactory performance bonding, if required, workers'
compensation insurance and insurance against liability for
injury to persons and property caused by that contractor;
(e) advising the Joint Venturers immediately upon becoming aware
of or anticipating a material deviation from an approved Budget;
(f) carrying out other activities as would normally be carried out
by in connection with a business of the size, type and location of
the Business; and
(g) supervising day to day operations, relating to the marketing and
selling of the services of the Business.
The powers of the Committee are plenary and the Committee may expand or reduce
the powers of the Co-Project Managers from time to time, provided that any such
action shall not be considered a Major Decision for the purposes of this
Agreement.
-12-
5.4 CONTRACTS BY CO-PROJECT MANAGERS WITH AFFILIATES
The Co-Project Managers shall not enter into any contract or other arrangement
in relation to their duties under this Agreement with any Person which is an
Affiliate of or non-arm's length party to a Project Manager unless the identity
and relationship of such person to such Project Manager has been disclosed to
the Joint Venturers and the material terms of the contract or other arrangement
have been unanimously approved by the Joint Venturers.
5.5 PROJECT MANAGEMENT FEES
The Joint Venturers shall pay no project management fees to the Cybernet Nominee
or Prakash in their capacity as Co-Project Managers for the performance of their
duties hereunder.
5.6 OWNER'S COMMITTEE
The Joint Venturers agree as follows:
(a) the Joint Venturers hereby create a Committee composed of
two representatives of Cybernet and one representative of Prakash
to undertake and fulfil those duties set forth in this Agreement
and as may be delegated under this Agreement as duties of the
Committee. The representatives of each of the Joint Venturers on
the Committee shall be as follows:
Cybernet - Michael J. Smith and a second representative to be
named by Cybernet
Prakash - Ravin Prakash
If any Joint Venturer substitutes any of its representative(s) on
the Committee, such other individual so designated will become the
representative of that Joint Venturer on the latest of: (i) the
effective date of such other individual's designation; or (ii) the
date upon which notice of such designation is given to and
received by the other Joint Venturer in the form and manner set
forth in section 9.1 hereof;
(b) the quorum at any meeting of the Committee shall be two
representatives. Each representative on the Committee will be
entitled to one vote. Except for Major Decisions, action may be
taken on the affirmative vote of a majority of the
representatives present at the meeting of the Committee,
provided however, that while any Default has occurred and is
continuing, the quorum and voting requirement for the taking of
action at any meeting of the Committee will be reduced by the
number of each Defaulting Joint Venturer. During such period of
Default the representative of the Defaulting Joint Venturer will
not be entitled to vote on any matters before the Committee.
Action may be taken on Major Decisions on the affirmative vote of
all representatives present at the meeting of the Committee;
-13-
(c) the Joint Venturers delegate to the Committee the authority to
make all Major Decisions and do all things and execute all
documents necessary, desirable or useful to enable the Committee
to carry out its duties under this Agreement;
(d) the Committee will, when matters are referred to it by either
Joint Venturer or the Co-Project Managers, act upon those
matters within 10 days of receipt of notice of those matters;
and
(e) the Committee may take any action required to be taken by it
without a meeting if all the members of the Committee entitled
to vote consent in writing to that action. The Committee may
hold its meetings in person or by conference telephone call on
not less than 7 days' written notice given by any member of the
Committee to the other members.
ARTICLE 6
FINANCIAL MATTERS
6.1 REVENUES
Each Joint Venturer will be entitled to receive its Proportionate Share of all
revenues arising from or out of the Business to the extent they are available
for distribution and distribution of those revenues has been approved by the
Committee.
6.2 FINANCING
It is intended that, to the greatest extent possible, the Required Funds be
obtained by and from revenues arising from or out of the Business and the
Projects. The Co-Project Managers shall use reasonable efforts to arrange to
obtain the Required Funds from such sources and use their best efforts to obtain
the most favourable terms possible with respect to such financing and the
parties hereto shall provide joint and several guarantees with respect to any
such financing if required by a lender.
6.3 CONTRIBUTION ACCOUNTS
The Co-Project Managers shall maintain a record of a separate account
established for each Joint Venturer (each account a "Contribution Account")
which will consist of the total of the Contributions, provided that a
Contribution Account may never be a negative amount.
6.4 DISTRIBUTION OF PROCEEDS
The Joint Venturers shall, to the extent that funds from any Joint Financing or
advanced as Contributions or revenues arising from or out of the Property are
available for these purposes, apply those funds in the following order (unless
otherwise unanimously approved) to:
(a) pay unpaid Liabilities (including, for greater certainty,
amounts payable to the Consultant);
-14-
(b) provide reserves as approved by the Joint Venturers as
being prudent to pay unpaid Liabilities or Liabilities to
be incurred in the future;
(c) repay to the Joint Venturers their outstanding Contribution
Accounts pro rata in accordance with the amount outstanding
Hereunder provided that the amount payable to any
Non-Contributing Joint Venturer on account of Default Loans
plus interest shall be paid out of the Non-Contributing Joint
Venturer's pro rata share hereof to the Contributing Joint
Venturers and the Non-Contributing Joint Venturer hereby
irrevocably directs such payment to the Contributing Joint
Venturers; and
(d) pay the balance of such funds to or to the credit of the Joint
Venturers in accordance with their Proportionate Share.
6.5 PROVISION OF FINANCIAL INFORMATION
The Co-Project Managers shall be responsible for the following:
(a) to keep all books of account and other records required in
connection with the Property, the Project or the Business as
would normally be kept by a person in connection with the
managing of such Project, including keeping vouchers,
statements, receipted bills and invoices covering all receipts
and disbursements in connection with the Property, and providing
each Joint Venturer free access at all times during normal
business hours to inspect, examine and copy those records and
promptly furnishing each Joint Venturer with any information
in connection with the Property, the Project or the Business and
the activities of the Co-Project Managers reasonably requested
by each Joint Venturer;
(b) to provide the Joint Venturers with financial statements with
respect to revenues and expenditures relating to the Project
within 140 days after the fiscal year end of the Worldturf.com
Joint Venture or as otherwise unanimously approved by the Joint
Venturers;
(c) to prepare reports of the state of the Project, including a
project expense summary showing, in reasonable detail, costs,
outlays and expenses made or incurred by the Joint Venturers in
connection with the Project and Property and comparing such
costs, outlays and expenses to the amounts provided for in the
Budget; and
(d) to maintain a record of each Joint Venturer's Contribution
Account consisting of the total of the Joint Venturer's
Contributions in accordance with section 5.6 hereof.
6.6 ACCESS TO RECORDS
Each Joint Venturer shall furnish to the other Joint Venturer information which
it has in its possession or control regarding the Property, the Project or the
Business as and when such information may be reasonably requested by the other
Joint Venturer. Each Joint Venturer shall give the other Joint Venturer, or
that other Joint Venturer's agent, employee or an independent chartered
accountant designated by it, at all reasonable times
-15-
during normal business hours and at that other Joint Venturer's expense, the
opportunity to inspect, examine and make copies of or extracts from its books
and records pertaining to the Property, the Project or the Business.
ARTICLE 7
PARTITION AND SALE
7.1 WAIVER OF PARTITION AND SALE
Each Joint Venturer waives the benefit of all provisions of law relating to
actions for a partition or sale in lieu of partition or administration of real
and personal property and no Joint Venturers shall resort to any action at law
or in equity for partition or sale in lieu of partition of the Property or seek
administration in respect of the Property, except as provided in this Agreement.
ARTICLE 8
DEFAULT
8.1 NOTICE OF DEFAULT
Any Joint Venturer which is not in Default may deliver to the Defaulting Joint
Venturer a notice in the manner set forth in section 9.1 hereof specifying the
Default.
8.2 RIGHTS UPON DEFAULT
If the Defaulting Joint Venturer does not cure the Default specified in the
notice referred to in section 10.1 within the time prescribed in this Agreement
after receipt of such notice, any other Joint Venturer shall have any and all of
the following rights:
(a) to bring any proceedings in the nature of specific
performance, injunction or other equitably remedy, it
being acknowledged by the Joint Venturers that damages at
law may be inadequate remedy for a default, breach or threatened
breach of this Agreement; and
(b) to bring any action at law or in equity as may be permitted in
order to recover damages.
8.3 NON-WAIVER
No consent or waiver of any breach or Default by any Joint Venturer in the
performance of its obligations under this Agreement shall be deemed to be
construed to be consent to or waiver of any other breach or Default in the
performance by that Joint Venturer of the same or any other obligations of that
Joint Venturer under this Agreement. Failure by any Joint Venturer to complain
of any act or failure to act of any other Joint Venturer or to declare any other
Joint Venturer in Default, irrespective of how long such failure continues, will
not constitute a waiver by that Joint Venturer of its rights under this
Agreement.
-16-
ARTICLE 9
INDEMNIFICATION
9.1 INDEMNIFICATION
(a) Each Joint Venturer shall indemnify the other Joint Venturer and
hold it harmless from all claims, losses, costs, charges,
fees, expenses, damages, obligations and responsibilities arising
by reason of any action or omission of the other outside the
scope of the authority specifically provided by this Agreement.
(b) The Joint Venturers shall indemnify the Trustee from and
against all liabilities losses, costs, actions, claims or
expenses resulting from the Trustee's holding of the legal
title to or dealing with the Property, except to the extent that
the same results from a dishonest, fraudulent or negligent act
or omission of the Trustee.
9.2 EXCEPTION
If either Joint Venturer, with the consent of the other Joint Venturer, becomes
liable, indebted or a guarantor for moneys borrowed or other obligations
incurred by the Joint Venture, the other Joint Venturer shall indemnify the
first Joint Venturer to the extent of the Proportionate Share of the other Joint
Venturer.
ARTICLE 10
NOTICES
10.1 NOTICES
Unless a particular provision of this agreement requires delivery in a specified
manner, all notices, demands, approvals, consents or requests and other
communications which may or are required or permitted to be given under this
Agreement, shall be given or made in writing and shall be delivered personally
or sent by facsimile at the offices of each of the parties as follows:
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
c/o Suite 1620 - 400 Burrard Street
Vancouver, British Columbia V6C 3A6
Fax#: (604) 683-3205
Attention: President
RAVIN PRAKASH
1st Floor, 13 Babar Lane, New Delhi, 11001 India
Fax #: 91 124 2396285
Attention: Ravin Prakash
Where given by prepaid mail, any notice shall be deemed to have been given on
the third postal delivery day next following mailing. During any period of
disruption of postal service, notices shall be delivered personally or by
facsimile. Where sent by facsimile, any notice shall be deemed to have been
given on the next business day.
-17-
By giving to the other parties at least 7 days' notice, any party may change its
address for delivery for purposes of this Article to any other address.
ARTICLE 11
GENERAL PROVISIONS
11.1 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the Turks and Caicos Islands.
11.2 BINDING EFFECT
This Agreement shall enure to the benefit of and be binding on the parties to it
and their respective successors and permitted assigns.
11.3 ASSIGNMENT
Except as otherwise provided herein, a party may not assign its rights and
obligations under this Agreement to another person without the written consent
of the other parties hereto. Notwithstanding the foregoing, Cybernet may assign
its rights and obligations under this Agreement to a wholly-owned subsidiary
which agrees to be bound by the terms and provisions contained herein.
11.4 INVALIDITY
Each provision of this agreement is intended to be severable and if any
provision is found to be illegal, invalid or unenforceable, the finding shall
not affect the validity of the other provisions.
11.5 ENTIRE AGREEMENT
This Agreement represents the entire agreement between the parties pertaining to
the subject matter of this Agreement and supersede all prior agreements,
understandings, negotiations and discussions whether oral or written of the
parties and there are no warranties, representations or other agreements between
the parties in connection with the subject matter of this Agreement except as
specifically set forth in this Agreement.
11.6 AMENDMENT OF AGREEMENT
No supplement, modification, waiver or termination of this Agreement will be
binding unless executed in writing by the Joint Venturer to be bound thereby.
11.7 TIME
Time will be of the essence of this Agreement, except as specifically provided
otherwise in this Agreement.
-18-
11.8 FURTHER ASSURANCES
The parties shall execute all such further documentation and take all such
further documentation and take all such further action as may be desirable to
give full effect to this Agreement.
11.9 COUNTERPARTS
This Agreement may be executed in any number of counterparts with the same
effect as if all parties had signed the same document. All counterparts will
constitute one and the same agreement. This Agreement may be executed and
transmitted by facsimile transmission and if so executed and transmitted this
Agreement will be for all purposes as effective as if the parties had delivered
an executed original Agreement.
IN WITNESS THEREOF the parties have caused this Agreement to be executed as of
the date first above written.
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
Per: /s/ Michael J. Smith
----------------------------
Authorized Signatory
/s/ Ravin Prakash
- ----------------------------------
RAVIN PRAKASH