\n EXODUS 670 U.S. $ 67,000,000
\n ASIA GLOBAL CROSSING 330 U.S. $ 33,000,000
\n Total 1000 U.S. $100,000,000
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n (c) In-Kind Capital Contributions.
\n —————————– <\/p>\n
(i) Except for the Intellectual Property Rights licensed pursuant
\n to the Licensing Agreement and subject to Section 6.14 concurrent with
\n the subscription <\/p>\n
9<\/p>\n
of Shares provided for in subsection (b) above, each of the
\n Shareholders shall contribute to the Company, free and clear of all
\n liens, security interests, mortgages or other encumbrances, all
\n tangible and intangible assets, real and personal, necessary to the
\n conduct of the Business in the Territory now owned or hereafter
\n acquired by such Shareholders, including all equity ownership
\n interests in Persons, data centers, equipment, real property,
\n improvements, software, applications, databases, employees, customers,
\n agreements, prospective Web addresses, licenses and permits, in each
\n case to the Company or to the Company’s Subsidiaries organized to
\n pursue the Business in the Territory, which assets shall include at a
\n minimum those set forth on Schedule 6.13 (collectively, the
\n ————-
\n “Contributed Assets”).<\/p>\n
(ii) Each Shareholder shall pay all sales, use, transfer, real
\n property transfer, recording, gains, stock transfer and other similar
\n taxes and fees (“Transfer Taxes”) incurred in connection with their
\n respective in-kind capital contributions to the Company and shall be
\n responsible for filing all necessary documentation and tax returns
\n with respect to such Transfer Taxes.<\/p>\n
(d) Each of the Shareholders shall take or cause to be taken the
\n following steps at Directors’ and Shareholders’ meetings of the Company (as
\n appropriate):<\/p>\n
(i) the appointment of the individuals specified in Section 12.1
\n as Directors of the Company ;<\/p>\n
(ii) the appointment of KPMG as statutory auditor(s) of the
\n Company; <\/p>\n
(iv) the allotment and issue by the Company of 670 Shares to
\n EXODUS;<\/p>\n
(v) the allotment and issue by the Company of 330 Shares to ASIA
\n GLOBAL CROSSING; and<\/p>\n
(vi) the execution of the Licensing Agreement, the Network
\n Agreements and the Services Agreement.<\/p>\n
(e) The Shareholders shall commence efforts to identify, recruit and
\n hire senior management personnel, subject to Board approval and
\n appointment.<\/p>\n
3.2 Payment for Shares. The Shares shall be subscribed for cash and shall
\n ——————
\nbe issued only upon the Company’s receipt of payment in full.<\/p>\n
3.3 Duration. The Term of this Joint Venture Agreement shall commence on
\n ——–
\nthe Effective Time and shall continue in effect until terminated upon:<\/p>\n
(a) The mutual agreement of all Shareholders;<\/p>\n
10<\/p>\n
(b) if the Effective Time does not occur and the Merger Agreement is
\n terminated; or<\/p>\n
(c) A resolution of Shareholders (subject to Section 7.4(a)(ii)) or of
\n a court with jurisdiction over the Company’s affairs causing the Company to
\n be wound-up.<\/p>\n
Upon the occurrence of the event specified in Section 3.3(a) (“Trigger Event”),
\neither Shareholder may, within twenty-one (21) days of the Trigger Event, serve
\na notice on the other Shareholder stating its desire to terminate this Joint
\nVenture Agreement (a “Termination Notice”) whereupon the Company shall be wound-
\nup and dissolved in accordance with Article 13 hereof.<\/p>\n
(d) In the event that EXODUS shall no longer have the right to appoint
\n a majority of the Directors comprising the Company’s Board, then upon the
\n occurrence of any of the following events:<\/p>\n
(i) the unauthorized use by the Company of the EXODUS Core
\n Technologies or EXODUS Marks (as each term is defined in the
\n Licensing Agreement), and such use is not promptly
\n terminated by the Company upon its receipt of notice
\n thereof; or<\/p>\n
(ii) the failure of the Company to adhere in any material
\n respect to EXODUS Technical Specifications and Standards or
\n the EXODUS Standard Business Practices and Methodologies
\n and such failure is not cured by the Company within thirty
\n (30) days upon its receipt of notice thereof; or<\/p>\n
(iii) the failure of the Company to make any payment under the
\n Licensing Agreement and such failure continues for a period
\n of not less than sixty (60) days; or<\/p>\n
(iv) any action by the Company which materially injures or
\n degrades the “EXODUS” brand;<\/p>\n
then EXODUS may by written notice served upon the other Shareholders (a “EXODUS
\nTermination Notice”) terminate this Joint Venture Agreement whereupon the
\nCompany shall be wound-up and dissolved in accordance with Article 13 hereof.<\/p>\n
ARTICLE 4:
\n APPOINTMENT OF DIRECTORS
\n ————————<\/p>\n
4.1 Number. The maximum number of Directors holding office at any time
\n ——
\nshall be six (6) unless otherwise approved by the Shareholders in accordance
\nwith this Joint Venture Agreement.<\/p>\n
11<\/p>\n
4.2 Appointment. The Directors of the Company shall be appointed as
\n ———–
\nfollows:<\/p>\n
(a) EXODUS shall be entitled to appoint four (4) Directors to be
\n designated as the EXODUS Directors (“EXODUS Directors”); and<\/p>\n
(b) ASIA GLOBAL CROSSING shall be entitled to appoint two (2) Director
\n to be designated as the ASIA GLOBAL CROSSING Director (“ASIA GLOBAL
\n CROSSING DIRECTORS”).<\/p>\n
In the event that the Board shall delegate any of its responsibilities to a
\ncommittee of the Board, the proportion of EXODUS Directors to ASIA GLOBAL
\nCROSSING Directors shall be no greater than two to one (2-1)<\/p>\n
4.3 Appointment of Chief Executive Officer. As soon as practicable after
\n ————————————–
\nthe Effective Time, EXODUS shall nominate a candidate for election as the
\nCompany’s Chief Executive Officer subject to the approval of the Company’s Board
\nof Directors (the “Chief Executive Officer”). The Chief Executive Officer shall
\nserve for four (4) years from the date of such appointment. If the Chief
\nExecutive Officer’s employment shall terminate for any reason during this four
\nyear period, EXODUS may nominate a further Chief Executive Officer to serve for
\nthe remainder of such four (4) year term, subject to Board approval.<\/p>\n
ARTICLE 5:
\n ADDITIONAL FUNDING
\n ——————<\/p>\n
5.1 Subscription for Additional Equity Share Capital by the Shareholders.
\n ——————————————————————–
\nSubject to Section 11.9 hereinbelow, as determined by the Board, each
\nShareholder may required to subscribe for additional Shares in the Agreed
\nProportions, up to an aggregate additional amount of (i) $200,000,000 (including
\nthe $100,000,000 initial capital subscription) during the fiscal year, (ii)
\n$200,000,000 during the second year, and (iii) $200,000,000 during the third
\nyear, each such period being measured from the Effective Time. Such Shares shall
\nbe subscribed for in such amount and at such times as determined by the Board
\nupon a simple majority vote at which a Quorum is present and acting throughout,
\nas may be necessary and\/or prudent to fund the requirements of the Company as
\ndeterminedin the sole discretion of the Board (the “Required Additional Equity
\nShare Capital”). All subscriptions for Required Additional Equity Share Capital
\nshall be made at a subscription price per Share based upon the valuation of the
\nCompany at the time of subscribtion, as determined in good faith by the Board.
\nIf any other person shall become a Shareholder, such person shall be obligated
\nto subscribe for addtional Shares in the Agreed Proportions, as amended, at the
\nsame time as the existing Shareholders and the REquired Additional Equity Share
\nCapital shall be increased in accordance with the following formula:<\/p>\n
E = R x EQ’\/ EQ<\/p>\n
where:<\/p>\n
12<\/p>\n
E = the Required Additional Equity Share Capital after admission
\n of the additional Shareholder, in U.S. Dollars.<\/p>\n
R = the Required Additional Equity Share Capital prior to
\n admission of such Additional Shareholder, in U.S. Dollars.<\/p>\n
EQ’ = the aggregate amount of Equity Share Capital, in U.S.
\n Dollars, paid in by all Shareholders of the Company,
\n including the additional Shareholder.<\/p>\n
EQ = the aggregate amount of Equity Share Capital, in U.S.
\n Dollars, paid in by all Shareholders of the Company,
\n excluding the additional Shareholder.<\/p>\n
Notwithstanding the foregoing, the Shareholders shall cause the Company to
\nprocure that the requirements of the Company for further capital to finance the
\nBusiness are met, as far as reasonably practicable in order to reduce the
\nShareholders’ capital contributions and maximize their return on invested equity
\non the most favorable terms readily available which may include, without
\nlimitation: borrowings from banks and other similar sources on the most
\nfavorable terms reasonably obtainable as to interest, repayment and security,
\nbut without allowing a prospective lender a right to participate in the Equity
\nShare Capital of the Company as a condition of a loan.<\/p>\n
5.2 Notice and Acceptance. Shareholders must respond, if at all, to the
\n ———————
\nNotice within thirty (30) days of receipt, informing the Company in writing how
\nmany Shares they wish to purchase, which may be more or less than their
\nEntitlement (an “Acceptance”). Such Acceptances, once given, shall be
\nirrevocable by the Shareholder. If, with respect to any Notice, Shareholders
\nfail to give Acceptances within the requisite time period, in respect of all
\nShares offered, the Company shall have ninety (90) days after the expiration of
\nthe time in which the Acceptances are required to be delivered, in which to sell
\nthe number of Shares for which Acceptances have not been received at a price not
\nless than that described in the Notice to such persons as holders of a majority
\nof the Shares held by Shareholders who have submitted Acceptances shall approve.<\/p>\n
5.3 Excess Acceptances. If the number of Shares in respect of which
\n ——————
\nAcceptances have been received exceeds the number of Shares being offered, the
\nCompany may (i) increase the size of the offering to equal the number of Shares
\nin respect of which Acceptances have been received or (ii) allot each accepting
\nShareholder its Entitlement and allot the balance of the Shares among those
\nShareholders whose Acceptances are for a greater number of Shares than their
\nEntitlement, pro rata in accordance with their Entitlement, but not to exceed
\nthe number of Shares specified in their respective Acceptances.<\/p>\n
5.4 Loan Finance. Subject to Section 7.4(a), following the subscription
\n ————
\nby the Shareholders of all Required Additional Equity Share Capital or otherwise
\nat any time, the Shareholders may cause the Company to procure that the
\nrequirements of the Company for <\/p>\n
13<\/p>\n
working capital to finance the Business are met, as far as reasonably
\npracticable, by borrowings from banks and other similar sources on the most
\nfavorable terms reasonably obtainable as to interest, repayment and security,
\nbut without allowing a prospective lender a right to participate in the Equity
\nShare Capital of the Company as a condition of a loan.<\/p>\n
5.5 Guarantees Given by Shareholders. Any guarantee or indemnity given by
\n ——————————–
\nthe Shareholders to secure indebtedness or obligations of the Company for the
\npurpose of financing the Business shall be approved by the Shareholders as set
\nforth in Section 7.4(a) and provided by the Shareholders on a several basis in
\nproportion to their Agreed Proportions from time to time. If any guarantee or
\nindemnity to be provided by any Shareholder pursuant to this Section 5.5 is not
\nacceptable to the relevant lender or obligee, then one or more of the remaining
\nShareholders may, in their sole discretion, guarantee or indemnify the
\nunacceptable Shareholder’s Agreed Proportion of such guarantee or indemnity as
\nwell as their own on condition that the unacceptable Shareholder shall provide
\nto the guaranteeing or indemnifying Shareholder a guarantee to pay its Agreed
\nProportion of any actual liabilities incurred by such guaranteeing or
\nindemnifying Shareholder pursuant to the guarantee or indemnity provided by them
\nin accordance with this Section 5.5.<\/p>\n
ARTICLE 6:
\n COVENANTS, REPRESENTATIONS AND WARRANTIES
\n —————————————–<\/p>\n
6.1 Compliance with Applicable Law. Each Shareholder shall comply with
\n ——————————
\nall applicable laws, regulations, rules and orders of governmental authorities
\nthe non-compliance with which could have a material adverse effect on the
\nbusiness affairs or financial condition of the Company.<\/p>\n
6.2 No Restrictive Covenants. No Shareholder shall enter into or become
\n ————————
\nsubject to any contract, agreement, restriction or covenant which would apply to
\nthe Company so as to impair or inhibit the Company’s ability to conduct its
\nbusiness as contemplated herein or otherwise frustrate the Business of the Joint
\nVenture.<\/p>\n
6.3 Organization. Each Shareholder represents and warrants that, on and as
\n ————
\nof the date of this Joint Venture Agreement, it is duly organized and existing
\nunder the laws of its jurisdiction of organization, that it has the corporate
\n(or other) power and authority to own, lease and operate its properties and to
\ncarry on its business as now being conducted and as proposed to be conducted and
\nto perform its obligations under any contracts by which it is bound, including,
\nwithout limitation, this Joint Venture Agreement and the Related Agreements.
\nEach Shareholder has all requisite corporate (or other) power and authority to
\nenter into this Joint Venture Agreement and the Related Agreements and to
\nconsummate the transactions contemplated hereby and thereby.<\/p>\n
6.4 No Conflict. Except as set forth on Schedule 6.4, subject only to the
\n ———– ————
\napproval of the principal terms of this Joint Venture Agreement and the Related
\nAgreements by each Shareholder’s Board of Directors or other governing body, the
\nexecution and delivery of this Joint Venture Agreement by each Shareholder does
\nnot, and as of the Effective Time, the <\/p>\n
14<\/p>\n
consummation of the transactions contemplated hereby and by the Related
\nAgreements will not conflict with, or result in any violation of, or default by
\nsuch Shareholder under (with or without notice or lapse of time, or both), or
\ngive rise to a right of termination, cancellation or acceleration of any
\nobligation or loss of any benefit under (a) any provision of such Shareholders’
\nMemorandum of Incorporation or Bylaws or other constituent documents, (b) any
\nmaterial contract assigned by or assumed by the Company from such Shareholder,
\n(c) any instrument, permit, concession, franchise, license, judgment, order or
\ndecree applicable to the Company or its properties, assets or subsidiaries, or
\n(d) any agreement or governing documents relating to existing joint venture or
\nother interests to be contributed by a Shareholder to the Company.<\/p>\n
6.5 Governmental Consents. Each Shareholder represents and warrants that
\n ———————
\nit will use all commercially reasonable efforts to obtain any and all approvals
\nor consents of, and to make all notices and filings with, all governmental
\nauthorities necessary for the Shareholders to enter into this Joint Venture
\nAgreement and for the Company to conduct its Business as contemplated hereby,
\nincluding, without limitation:<\/p>\n
(a) a notice of the intent to enter into the Joint Venture and to form
\n the Company shall have been filed with the appropriate authorized
\n competition authority in the Territory, if applicable;<\/p>\n
(b) subject to Section 6.11 hereinbelow, export licenses, as required
\n by the United States government;<\/p>\n
(c) consent of Bermuda Monetary Authority to Share issuance.<\/p>\n
If, notwithstanding all commercially reasonable efforts of the Shareholders
\nhereto, any of such necessary governmental licenses, approvals or consents are
\nnot granted, with the result that the purposes of this Joint Venture Agreement
\nare substantially frustrated, the Shareholders shall enter into good faith
\nnegotiations with the objective of restructuring the relationship between them
\nsuch that the effects of such nonoccurrence shall be minimized.<\/p>\n
6.6 Other Approvals. Each Shareholder represents and warrants that it
\n —————
\nwill use all commercially reasonable efforts to obtain all other consents and\/or
\napprovals of any third parties necessary for such Shareholder to enter into this
\nJoint Venture Agreement and for the Company to conduct its Business as
\ncontemplated hereby; provided, that if, notwithstanding the all commercially
\n ——–
\nreasonable efforts of the Shareholders hereto, any of such consents and\/or
\napprovals are not granted, with the result that the purposes of this Joint
\nVenture Agreement are substantially frustrated, the Shareholders shall enter
\ninto good faith negotiations with the objective of restructuring the
\nrelationship between them such that the effects of such nonoccurrence shall be
\nminimized.<\/p>\n
6.7 Litigation. There is no action, suit or proceeding of any nature
\n ———-
\npending or, to each Shareholder’s knowledge, threatened against such
\nShareholder, its properties or any of its officers, directors or employees that
\nwould prohibit, alter or delay the consummation of the transactions contemplated
\nby this Joint Venture Agreement or which would prohibit or restrict the Business
\nof the Company as it is currently contemplated to be conducted, nor, to the<\/p>\n
15<\/p>\n
knowledge of each Shareholder, is there any reasonable basis therefor. To each
\nShareholder’s knowledge, there is no investigation pending or threatened against
\nsuch Shareholder, its properties or any of its officers, directors or employees
\nby or before any governmental authority. No governmental authority has at any
\ntime challenged or questioned the legal right of each Shareholder to conduct its
\noperations as presently or previously conducted.<\/p>\n
6.8 Businesses of Shareholders. Subject to Section 6.9 hereinbelow, any
\n ————————–
\nShareholder and its respective Affiliates may engage in and\/or possess an
\ninterest in other business ventures of any nature and description, independently
\nor with others; and neither the Company nor the other Shareholders hereto shall
\nhave any right by virtue of this Joint Venture Agreement in or to any such
\nindependent venture or to any income or profits derived therefrom and no
\nShareholder or any Affiliate of any Shareholder shall be obligated to present
\nany particular investment opportunity to the Company even if such opportunity is
\nof a character that, if presented to the Company, could be taken by the Company,
\nand each of them shall have the right to take for its own account (individually
\nor as a trustee) or to recommend to others any such particular investment
\nopportunity.<\/p>\n
6.9 Exclusivity. Subject to the terms and conditions set forth below in
\n ———–
\nthis Section 6.9 and in Section 6.14, the Company will be the exclusive vehicle
\nfor the Shareholders to pursue the Restricted Business in the Territory. Each
\nof the Shareholders hereby covenants to and with the other Shareholders that
\nneither they nor any of their respective Affiliates which they control will do
\nany one or more of the following:<\/p>\n
(a) enter into any negotiations, discussions, deliberations,
\n agreements or arrangements of any nature whatsoever with any third party to
\n either directly or indirectly carry on or be engaged or interested in a
\n Restricted Business or be directly or indirectly engaged, concerned or
\n interested whether on its own account or as a member, shareholder,
\n consultant, agent, beneficiary, trustee or otherwise in any enterprise,
\n corporation, firm, trust, joint venture or syndicate which is engaged,
\n concerned or interested in or carrying on any Restricted Business;<\/p>\n
(b) on its own account or for any person, enterprise, firm, trust,
\n joint venture or syndicate directly or indirectly entice (or attempt to
\n entice) away from the Company any Restricted Business of any customer of
\n the Company;<\/p>\n
(c) on its own account or for any person, enterprise, firm, trust,
\n joint venture or syndicate directly or indirectly entice (or attempt to
\n entice) away from the Company any supplier to the Company to the extent
\n related to any Restricted Business;<\/p>\n
(d) on its own account or for any person, enterprise, firm, trust,
\n joint venture or syndicate directly or indirectly entice (or attempt to
\n entice) away from the Company any employee, officer, agent consultant,
\n advisor, or any individual who is employed by the Company in any capacity
\n whatsoever. As used herein, “entice” means contact or communicate in any
\n manner whatsoever, including, but not limited to, contacts or
\n communications by or through intermediaries, agents, contractors,
\n representatives, or<\/p>\n
16<\/p>\n
other Shareholders, provided, however, that nothing herein shall be
\n ——– ——-
\n construed to prohibit the Shareholders from (a) placing advertisements for
\n employment which are aimed at the public at large in any newspaper, trade
\n magazine, or other periodical in general circulation or advertising for
\n employment through any other mass medium such as radio, television or the
\n Internet, (b) responding to any unsolicited inquiry by an employee
\n concerning employment or (c) employing an employee of the Company after
\n first having obtained the approval of the Board which approval, with
\n respect to EXODUS and its Affiliates, should be unanimous; or<\/p>\n
(e) personally or by its employees or agents or by circulars, letters
\n or advertisements whether on its own account or for any other Person,
\n enterprise, firm, trust, joint venture or syndicate directly or indirectly
\n interfere with the Restricted Business of the Company or divulge to any
\n Person any information concerning the Restricted Business of the Company or
\n the Company or any of its respective dealings, transactions or affairs
\n except to the extent it is required to do so:<\/p>\n
(i) to comply with applicable laws, to defend or prosecute
\n litigation or to comply with government regulations; or<\/p>\n
(ii) as part of normal report or review procedure to its parent
\n company, auditors or attorneys.<\/p>\n
Each Shareholder acknowledges that each of the prohibitions and
\nrestrictions contained in Sections 6.9(a) through (e) are reasonable as to
\nperiod, territorial limitations and subject matter in order to protect the
\nBusiness and material breach of any of the prohibitions and restrictions
\ncontained herein may not be adequately compensated by an award of damages and
\ntherefore any breach by a Shareholder of any of those prohibitions and
\nrestrictions will entitle any other Shareholder, in addition to any other
\nremedies available at law or in equity, to seek an injunction to restrain the
\ncommitting of any breach (or continuing breach) of any of those prohibitions or
\nrestrictions. Notwithstanding anything to the contrary herein, in the event
\nthat the Hong Kong assets of ASIA GLOBAL CROSSING have not been contributed to
\nthe Company on or prior to the Closing, for so long as such transfer has not
\nbeen completed: (i) Hong Kong shall be excluded from the definition of
\nTerritory for purposes of this Section 6.9 as it applies to EXODUS, and (ii)
\nASIA GLOBAL CROSSING’s ownership of its Hong Kong assets and its compliance with
\nthe terms and conditions under the agreements governing the ownership of such
\nassets shall be excluded from this Section 6.9 as it applies to ASIA GLOBAL
\nCROSSING. The provisions of this Section 6.9 shall terminate with respect to
\nany Shareholder on the date that is the earlier of (x) two (2) years following
\nan underwritten offering of the Company’s securities on a national exchange, (y)
\nthe date that such Shareholder’s Joint Venture Interest in the Company is less
\nthan ten percent (10%) of the total outstanding Shares, provided that such
\nreduction in a Shareholder’s Joint Venture Interest in not as a result of such
\nShareholder’s failure to make any capital contribution duly approved and called
\nfor by the Board and (z) with respect to ASIA GLOBAL CROSSING, only upon the
\nfirst date when the Company shall no longer be obligated to purchase network
\ncapacity under the Network Agreement pursuant to the terms thereof. In the
\nevent that this Joint Venture Agreement shall be terminated (other than pursuant
\nto Section <\/p>\n
17<\/p>\n
3.3(b) hereto) prior to the second anniversary of the Closing, ASIA GLOBAL
\nCROSSING shall remain subject to this Section 6.9 until, but not later than, the
\nsecond anniversary of the Closing and this Section 6.9 shall survive such
\ntermination to such extent.<\/p>\n
(f) Notwithstanding the provisions of paragraph (a) of this Section 6.9,
\nEXODUS and ASIA GLOBAL CROSSING, INC. and their respective Affiliates who they
\ncontrol shall be permitted to:<\/p>\n
(i) maintain investments existing on the date hereof and make
\n investments of ten percent (10%) or less of any class of equity securities
\n of any Person directly or indirectly engaged in Internet Web-Hosting,
\n provided that neither EXODUS nor ASIA GLOBAL CROSSING members participates
\n in the management or control of such Person;<\/p>\n
(ii) acquire securities representing a majority of the voting
\n power of a Person whose business includes an Internet Web-Hosting business
\n that represents greater than 25% of such Person’s consolidated revenues for
\n the most recent four calendar quarters, provided that the acquiring company
\n divests such Internet Web-Hosting business within one year of its
\n acquisition (prior to divesting such business, such Shareholder shall
\n provide written notice to the Company of the consideration it intends to
\n receive in respect of such divestiture and the other relevant principal
\n terms and the Company shall, within 15 days of receiving such notice,
\n provide the relevant Shareholder with written notice of whether it is
\n interested in acquiring such business on such terms, and if the Company is
\n so interested, the parties shall in good faith negotiate long form
\n definitive documents setting forth the details of such transaction within
\n the following thirty (30) days, and if the parties cannot reach mutually
\n acceptable terms within such time period the Company shall be permitted to
\n sell such business to other parties, provided no such sale shall be at a
\n materially lower price or on terms which, in the aggregate, are materially
\n less favorable to the Company than those offered to such Shareholder);<\/p>\n
(iii) acquire securities representing a majority of the voting
\n power of a Person whose business includes an Internet Web-Hosting business
\n that represents less than 25% of such Person’s consolidated revenues for
\n the most recent four calendar quarters, provided that the acquiring company
\n shall, at the time of the acquisition, provide written notice of the
\n acquisition to the Company and, if the Company is interested in acquiring
\n such business, consider any proposal from the Company to purchase such
\n business from the acquiring company.<\/p>\n
(iv) acquire securities representing less than thirty percent
\n (30%) of the voting power of a Person whose business includes a Restricted
\n Business that represents less than 25% of such Person’s consolidated
\n revenues for the most recent four calendar quarters, provided that neither
\n EXODUS nor ASIA GLOBAL CROSSING members participate in the management or
\n control of such Restricted Business;<\/p>\n
18<\/p>\n
(v) provide, directly or indirectly, services on its Dedicated
\n Private Extranet Network including, without limitation, the provision of
\n remote access, Internet access and redundancy, in each case in connection
\n or associated with providing such services; and<\/p>\n
(vi) without limitation to clause (v) above, continue to provide,
\n directly or indirectly, the products and services provided at present by
\n IXnet (the parties contemplated that IXnet will be a customer of the
\n Company for hosting services).<\/p>\n
(g) If ASIA GLOBAL CROSSING or EXODUS (the “Relevant Party”) is
\nacquired by a third party, the provisions of this Section 6.9 shall not prevent
\nthe new parent of the Relevant Party from engaging in, owning, managing,
\ncontrolling or participating in the ownership, management or control of entities
\nengaged in the Restricted Business but all members of the Relevant Party’s
\nGroup, excluding the acquiror, will continue to be bound by this Section 6.9,
\nexcept as provided in the next sentence. If the Relevant Party is acquired by a
\nthird party and, upon its acquisition by such third party, (i) the Relevant
\nParty or a member of the Relevant Party’s Group is merged with or into the
\nacquiror or a substantial portion of the Relevant Party’s assets are acquired by
\nthe acquiror pursuant to an asset acquisition and such Relevant Party’s Group
\nassets are commingled with those of the acquiror such that the Relevant Party’s
\nGroup assets do not remain independently identifiable, and (ii) the acquiror is
\nmaterially engaged in the Restricted Business, then the provisions of this
\nSection 6.9 shall cease to apply to such Relevant Party’s Group assets and (iii)
\nif the Relevant Party is ASIA GLOBAL CROSSING, then EXODUS will have the right
\nto terminate the Network Agreement effective immediately upon the closing of the
\ntransaction and (iv) if the Relevant Party is EXODUS, then the provisions of
\nthis Section 6.9 will terminate with respect to ASIA GLOBAL CROSSING effective
\nimmediately upon the closing of the transaction.<\/p>\n
6.10 No Encumbrances on Joint Venture Interest. Except as otherwise set
\n —————————————–
\nforth on Schedule 6.10 hereto and further subject to the provisions of this
\n ————-
\nJoint Venture Agreement, no Shareholder shall pledge, mortgage, charge or
\notherwise encumber its Joint Venture Interest, including the Shares held by such
\nShareholder without the prior written consent of the other Shareholder.<\/p>\n
6.11 Export Assurances. The Company and each of ASIA GLOBAL CROSSING and
\n —————–
\nEXODUS and each of their respective Affiliates acknowledges and agrees that, all
\nTechnical Data may be subject to export controls imposed by the United States
\nExport Administration Act of 1979, as amended (the “Export Administration Act”)
\nor any future United States export control legislation and the regulations
\npromulgated thereunder. The Company and each of ASIA GLOBAL CROSSING and EXODUS
\nand their respective Affiliates agrees not to export or re-export, directly or
\nindirectly, any Technical Data without complying with the Export Administration
\nAct. The Company and each of ASIA GLOBAL CROSSING and EXODUS certify that
\nneither the Technical Data nor its direct product: (a) are intended to be used
\nfor any purpose prohibited by the Export Administration Act or regulations
\nincluding, without limitation, nuclear related activities or chemical\/biological
\nweapons or missiles; and (b) are intended to be released, shipped or re-
\nexported, either directly or indirectly, to a national of a country <\/p>\n
19<\/p>\n
in Country Groups D:1 (Albania, Armenia, Azerbaijan, Belarus, Bulgaria,
\nCambodia, China (PRC), Estonia, Georgia, Kazakhstan, Kyrgyzstan, Laos, Latvia,
\nLithuania, Moldova, Mongolia, Romania, Russia, Tajikstan, Turkmenistan, Ukraine,
\nUzbekistan and Vietnam) or E:2 (Cuba, North Korea, Libya) or Angola, Iraq, Iran,
\nSudan or Syria, or to any other destination to which the United States has
\nprohibited shipment. This Section 6.11 shall survive any termination or
\nexpiration of this Joint Venture Agreement and the Related Agreements. Each
\nShareholder acknowledges and agrees that this Section 6.11 is required by the
\nExport Administration Act and is not intended to, nor does it, modify more
\nrestrictive provisions in this Joint Venture Agreement or the Related Agreements
\nregarding the use by any Shareholder or the Company of Technical Data.<\/p>\n
6.12 Referral and Solicitation of Additional Customers. Each Shareholder
\n ————————————————-
\nwill refer all inquiries of customers for Services in the Territory to the
\nCompany.<\/p>\n
6.13 No Other Restricted Business Interests in the Territory. Each
\n ——————————————————-
\nShareholder hereby represents and warrants that, after giving effect to the
\ntransactions contemplated hereby and except as otherwise set forth in Schedule
\n ——–
\n6.13 hereto, neither it nor any of their respective Affiliates, has any other
\n—-
\ninterests (equity or voting) in any Person in the Territory engaged in a
\nRestricted Business and that neither Shareholder nor any of their respective
\nAffiliates is obligated under any agreement, understanding or other obligation
\nto enter into, acquire or otherwise hold an interest (equity or voting) in any
\nPerson that is or is contemplated to be engaged in a Restricted Business that
\nwould compete directly or indirectly with the Business of the Company in the
\nTerritory.<\/p>\n
6.14 Combination of Interests.
\n ———————— <\/p>\n
(a) Each Shareholder hereby covenants to use their commercially
\n reasonable best efforts to assist the Company in effectuating a combination
\n of the business interests in Japan that each Shareholder is contributing to
\n the Joint Venture pursuant to this Joint Venture Agreement.<\/p>\n
(b) ASIA GLOBAL CROSSING hereby covenants to use its commercially
\n reasonable best efforts to conform the existing relationship between ASIA
\n GLOBAL CROSSING and Hutchinson Whampoa with respect to the Internet Data
\n Center Services business currently being conducted in Hong Kong through
\n their Hutchinson Global Crossing joint venture to the provisions herein or
\n as otherwise agreed to that such Internet Data Center Services business can
\n be contributed to the Joint Venture.<\/p>\n
(c) In the event that ASIA GLOBAL CROSSING is not able on or prior to
\n the Closing to effectuate the transfer of its Hong Kong assets as
\n contemplated by this Joint Venture Agreement, then, ASIA GLOBAL CROSSING
\n will contribute to the Company an amount equal to the fair market value of
\n the Hong Kong assets which shall in no event exceed $25,000,000; provided,
\n however, that if at the Closing ASIA GLOBAL CROSSING is negotiating in good
\n faith to obtain all consents and\/or approvals necessary to effectuate such
\n contribution and receipt of such consents and approvals is reasonably<\/p>\n
20<\/p>\n
likely, then EXODUS will extend for an additional one-hundred eighty (180)
\n days from the date of Closing the period during which the Hong Kong assets
\n are required to be transferred to the Company.<\/p>\n
(d) Each Shareholder hereby agrees that in many countries within the
\n Territory it may be desirable or necessary to engage in the Business with a
\n local entity (each such entity, a “Local Participant”). Each Shareholder
\n agrees that, for each of the following countries, the Joint Venture intends
\n to conduct the Business with the Local Participant(s) indicated: Japan
\n (Softbank Corp and Internet Research Institute) and Hong Kong (Hutchison
\n Whampoa). With respect to other jurisdictions within the Territory,
\n EXODUS, in consultation with ASIA GLOBAL CROSSING, shall identify each
\n potential Local Participant and, subject to Board Approval, shall negotiate
\n the terms and conditions of such Local Participant’s participation in the
\n Business. EXODUS shall notify the Company and ASIA GLOBAL CROSSING
\n promptly upon identifying each potential Local Participant and shall
\n maintain a regular and timely flow of information regarding the discussions
\n with that potential Local Participant to the Company and ASIA GLOBAL
\n CROSSING, including providing copies of draft letters of intent, term
\n sheets, joint venture agreements and other documents.<\/p>\n
6.15 Enforcement of Rights Under Related Agreements. The Company shall
\n ———————————————-
\nenforce its rights under each of the Related Agreements as though each such
\nagreement were a comparable arm’s length transaction with an unrelated Person.<\/p>\n
6.16 Tax Election. Each Shareholder hereby covenants and agrees that with
\n ————
\nrespect to the Company and each Subsidiary of the Company, they shall mutually
\ndetermine whether the Company or such Subsidiary shall make a “check the box”
\nelection for tax reporting purposes or other relevant tax matters so as to
\nmaximize the benefits to be received by all Shareholders and each Shareholder
\nshall execute and file all required documents related to such mutual
\ndeterminations.<\/p>\n
6.17 Termination of Existing Joint Venture. At the time of the Closing,
\n ————————————-
\nASIA GLOBAL CROSSING agrees to, and EXODUS agrees to cause Global Center Inc.
\nto, terminate the existing joint venture agreement between ASIA GLOBAL CROSSING
\nand Global Center Inc.<\/p>\n
ARTICLE 7:
\n CONDUCT OF THE COMPANY’S AFFAIRS
\n ——————————–<\/p>\n
7.1 Shareholders. The Shareholders shall exercise all voting rights and
\n ————
\nother powers available to them in relation to the Company so as to procure
\n(insofar as they are reasonably able to do so by the exercise of those rights
\nand powers) that:<\/p>\n
(a) the business of the Company consists exclusively of the Business;<\/p>\n
(b) the Company complies with the provisions of its Memorandum of
\n Association;<\/p>\n
21<\/p>\n
(c) the Board determines the general policy of the Company (subject to
\n the provisions of this Joint Venture Agreement) including the scope of the
\n Company’s activities and operations, the Board reserving to itself and to
\n Shareholders matters involving major or unusual decisions as described in
\n Section 7.4 below, subject to the applicable law of the Company’s
\n jurisdiction of organization.<\/p>\n
7.2 Board of Directors. The business, property and affairs of the Company
\n ——————
\nshall be managed by the Board in accordance with the provisions of this Joint
\nVenture Agreement, the Memorandum of Association, and all applicable law. The
\nBoard shall use all reasonable efforts to maximize the Company’s profitability.<\/p>\n
(a) Voting. Each Director shall cast one vote on each resolution to
\n ——
\n be voted upon.<\/p>\n
(b) Dismissal and Suspension. A Director shall only be suspended or
\n ————————
\n dismissed upon the written request of the Shareholder who had the authority
\n to nominate such Director for election.<\/p>\n
(c) Vacancies. A vacancy shall only occur in the event of a
\n ———
\n resignation or a dismissal of a Director, and any vacancy shall be filled
\n only by the Shareholder who was entitled to appoint such resigning or
\n dismissed Director.<\/p>\n
(d) Meetings of the Board of Directors. The Shareholders agree that:
\n ———————————- <\/p>\n
(i) at least four (4) meetings of the Board will take place
\n each Fiscal Year;<\/p>\n
(ii) additional meetings of the Board will be convened at the
\n written request of any Director;<\/p>\n
(iii) meetings of the Board will be held at the principal
\n office of the Company or such other places as the
\n Chairman of the Board, after consultation with the rest
\n of the Board, decides and specifies in the Notice of such
\n meeting; and<\/p>\n
(iv) meetings of the Board may be conducted by telephonic
\n conference or any similar means of communication which
\n enables all participants to hear and be heard.<\/p>\n
(e) Board Action. Except as otherwise set forth in this Joint Venture
\n ————
\n Agreement, an action or decision of the Board or any committee thereof
\n shall require the consent or vote of a simple majority of all of the
\n Directors. A majority of the total number of directors (or the Directors
\n who are members of a committee) (which majority shall, subject to Section
\n 7.2(f), include at least one EXODUS Director and one ASIA GLOBAL CROSSING
\n Director) shall be necessary to constitute a quorum (“Quorum”) <\/p>\n
22<\/p>\n
for the transaction of business at any meeting of the Board, and except as
\n otherwise provided in this Joint Venture Agreement or by the applicable
\n laws of Bermuda, the action of a simple majority of Directors (or the
\n Directors who are members of a committee) present at any meeting at which
\n there is a Quorum, when duly assembled, is valid. A meeting at which a
\n Quorum is initially present may continue to transact business,
\n notwithstanding the withdrawal of directors, if any action taken is
\n approved by a majority of the required Quorum for such meeting. No
\n Shareholder, acting in its capacity as a Shareholder, shall have the
\n authority to act for and bind the Company unless such matter has been
\n approved by the Board as set forth herein.<\/p>\n
(f) Notice of Meetings. Notices of meetings of the Board (or any
\n ——————
\n committee thereof), including the time and place of any proposed meeting
\n and a proposed agenda for such meeting, shall be delivered personally to
\n each of the Directors (or the Directors who are members of a committee) or
\n personally communicated to them by an officer of the Company by telephone
\n and confirmed in writing by facsimile, or communicated by overnight courier
\n service (receipt requested) at least thirty (30) days in advance of such
\n proposed meeting, unless waived by each of the Directors (or the Directors
\n who are members of a committee). Notice shall be transmitted to the last
\n known facsimile number or address of the Director as shown on the records
\n of the Company. Such notice as above provided shall be considered due,
\n legal and personal notice to such Director. If at any meeting of the Board
\n (or any committee thereof) that has been duly called or noticed, at least
\n one Director appointed by each Shareholder is not present, such meeting
\n shall be adjourned and reconvened in two (2) business days, unless such
\n adjournment has been waived by all of the Directors (whether or not present
\n at the meeting). Notice of the revised meeting date shall be given to each
\n director pursuant to the foregoing provisions excluding the number of days
\n of advance notice. Notwithstanding the provisions of the second sentence
\n of Section 7.2(e) above, in the event that at least one Director appointed
\n by each Shareholder is not present at such reconvened meeting, such meeting
\n shall be deemed to have a Quorum if a majority of the total number of
\n Directors is present. Meetings of the Board (or any committee thereof)
\n shall be delayed only once for lack of participation of the Directors
\n appointed by any Shareholder. With respect to a meeting which has not been
\n duly called or noticed pursuant to the foregoing provisions, all
\n transactions carried out at the meeting are as valid as if they had been
\n carried out at a meeting regularly called and noticed if: (i) all
\n Directors are present at the meeting, and sign a written consent to the
\n holding of such meeting, (ii) a majority of the Directors are present and
\n if those not present sign a waiver of notice of such meeting or a consent
\n to holding the meeting or an approval of the minutes thereof, whether prior
\n to or after the holding of such meeting, which waiver, consent or approval
\n shall be filed with the other records of the Company, or (iii) all
\n Directors attend a meeting without notice and do not protest prior to the
\n meeting or at its commencement that notice was not given to them.<\/p>\n
(g) Action by Unanimous Written Consent. Any action required or
\n ———————————–
\n permitted to be taken by the Directors may be taken without a meeting and
\n will have the same force and effect as if taken by a vote of Directors at a
\n meeting properly called and noticed, if <\/p>\n
23<\/p>\n
authorized by a writing signed individually or collectively by all, but not
\n less than all, the Directors. Such consent shall be filed with the records
\n of the Company.<\/p>\n
(h) Compensation and Reimbursement of Directors. The Directors shall
\n ——————————————-
\n be reimbursed by the Company for any expenses reasonably incurred in
\n connection with their services as Directors.<\/p>\n
(i) Any Director may participate in any meeting of the Board (or any
\n committee thereof) telephonically or by any other electronic audio or video
\n means.<\/p>\n
7.3 Appointment of Staff. The Company shall employ such staff as the
\n ——————–
\nBoard considers necessary for the proper conduct of its Business. The Chief
\nExecutive Officer can appoint and shall use all reasonable endeavors to ensure
\nthat the appointees have experience and qualifications which are commensurate
\nwith the relevant appointment and dismiss employees in accordance with the
\nprovisions of this Joint Venture Agreement and the Memorandum of Association and
\nany applicable laws of the Territory and can grant such employees any and all
\ntitles (e.g., Vice-Chief Executive Officer or Secretary).<\/p>\n
7.4. Required Shareholder Approvals.
\n —————————— <\/p>\n
(a) Actions Requiring Unanimous Approval of Shareholders. During the
\n term of this Joint Venture Agreement, the Company shall not, and shall not
\n permit any of its Subsidiaries, to take or cause to be taken any of the
\n following actions without the unanimous approval of the Shareholders:<\/p>\n
(i) (A) Any merger or consolidation, or (B) any divestiture,
\n joint venture, partnership, acquisition or other business
\n combination with, by or of the Company into or with any
\n other Person (“Business Combination”) in which the
\n aggregate consideration for all such transactions
\n occurring in a year if occurring during the first two (2)
\n years of this Joint Venture Agreement exceeds
\n $100,000,000, or thereafter, if such transaction exceeds
\n the greater of $100,000,000 and fifteen percent of the
\n fair market value of the Company as determined in
\n accordance with Article 14.<\/p>\n
(ii) Any proposed dissolution or liquidation of the Company or
\n application for bankruptcy of the Company, winding up or
\n the taking of any action for the appointment of a
\n liquidator receiver or receiver and manager; or<\/p>\n
(iii) Any dividend, distribution, redemption or repurchase of
\n Shares; or<\/p>\n
(iv) Any issuance of any Shares to any Person other than the
\n existing Shareholder or any obligation convertible into
\n shares or the grant of any warrant, option or right to
\n acquire any of the foregoing other than pursuant to an
\n employee incentivization scheme approved by the Board; or<\/p>\n
24<\/p>\n
(v) Any expansion of the scope of the Business; or<\/p>\n
(vi) Any amendment to the Memorandum of Association; or<\/p>\n
(vii) Any increase or decrease in the number of appointed
\n Directors; or<\/p>\n
(viii) Any material amendment to any of the Related Agreements;
\n or<\/p>\n
(ix) Any determination by the Board to call for the
\n subscription of Shares in excess of one hundred twenty
\n five percent (125%) of the amounts set forth in Section
\n 5.1 with respect to the periods set forth therein;<\/p>\n
(x) Any change in the accounting policies upon which the
\n Company prepares its books, records and accounts; or<\/p>\n
(xi) Any related party transactions (other than this Joint
\n Venture Agreement and the Related Agreements) having a
\n dollar value that exceeds five million dollars (U.S.
\n $5,000,000) or meeting any of the following criteria: (i)
\n is not arms length, or (ii) has no legitimate business
\n purpose; or<\/p>\n
(xii) Incur indebtedness such that the Company’s total
\n consolidated indebtedness does not exceed the greater of
\n (i) $100,000,000 or (ii) four (4) times the Company’s
\n consolidated earnings for the prior four fiscal quarters
\n calculated before deducting expenses of interest, taxes,
\n depreciation and amortization.<\/p>\n
(b) Other Shareholder Action. Subject to the other terms of this
\n ————————
\n Joint Venture Agreement, all other actions of the Shareholders required
\n pursuant to applicable provisions of the law of the Company’s jurisdiction
\n of organization or the Company’s Memorandum of Association shall be
\n approved by a simple majority vote at a duly constituted meeting of
\n Shareholders with each Shareholder entitled to one vote per Share held of
\n record as of the record date for such meeting.<\/p>\n
7.5 Accounting and Internal Controls.
\n ——————————– <\/p>\n
(a) Maintenance of Accounting Records. The Company will conduct its
\n ———————————
\n business at all times in accordance with high standards of business ethics
\n and maintain full and accurate books, records and accounts which will, in
\n reasonable detail, accurately and fairly reflect all transactions of the
\n Company in accordance with generally accepted accounting principles,
\n procedures and practices in the United States which have been consistently
\n applied.<\/p>\n
25<\/p>\n
(b) US GAAP. The Company must ensure that a set of the Company’s
\n ——-
\n annual and quarterly accounts, based on a calendar fiscal year, is prepared
\n in English and audited in accordance with U.S. Generally Accepted
\n Accounting Practices.<\/p>\n
(c) Reports The Chief Executive Officer must provide the Board and the
\n ——-
\n Shareholders with sufficient management and financial information and
\n reports to allow the Board and the Shareholders to monitor the conduct the
\n Business.<\/p>\n
(d) Appointment of Independent Auditor. Initially, the Board of
\n ———————————-
\n Directors shall appoint KPMG as the independent auditor of the Company,
\n which auditors shall examine and audit the financial accounts of the
\n Company and report the results to the Board.<\/p>\n
(e) Approval of Annual Accounts. The authority to approve the annual
\n —————————
\n accounts of the Company lies with the Shareholders.<\/p>\n
7.6 Bank Accounts. Company funds shall be deposited in the name, and for
\n ————-
\nthe sole benefit, of the Company in such bank or savings and loan accounts of
\nthe Company as may be designated by the Board. The Board of Directors shall
\narrange for the appropriate conduct of those accounts and shall make
\ndisbursements solely for the business of the Company or for distributions to the
\nShareholders in accordance with this Joint Venture Agreement. Any security
\ndeposits shall be maintained in a segregated interest bearing account and shall
\nbe distributed pursuant to the agreement under which the deposit is received.<\/p>\n
7.7 Transactions with Affiliates.
\n —————————- <\/p>\n
(a) General. Subject to Section 7.4(a), the Chief Executive Officer
\n ——-
\n and the Board of Directors may cause the Company to transact business with
\n any Shareholder or any Affiliate of any Shareholder for the performance of
\n services or purchase of goods or other property that may at any time be
\n reasonably required in carrying on the business of the Company; except that
\n the compensation or price therefor shall not exceed that prevailing in
\n arm’s length transactions and shall be on such standard commercial terms as
\n are offered by other third parties rendering similar quality goods or
\n services on comparable transactions as an on-going activity in the same
\n geographical area.<\/p>\n
(b) Related Agreements. Notwithstanding the provisions of Sections
\n ——————
\n 7.4 and 7.7(a), each Shareholder acknowledges that the Company shall enter
\n into and be bound by each of the Licensing Agreement, the Network
\n Agreements and the Services Agreement at or prior to the Effective Time.<\/p>\n
7.8 Organization. The parties hereto shall mutually agree upon the
\n ————
\norganizational structure of the Company<\/p>\n
26<\/p>\n
ARTICLE 8:
\n DISPUTE RESOLUTION
\n ——————<\/p>\n
8.1 Negotiation Between Executives. Each of the Shareholders and the
\n ——————————
\nCompany shall attempt in good faith to resolve any dispute arising out of or
\nrelating to the interpretation, breach or termination of this Joint Venture
\nAgreement (a “Dispute”) promptly by negotiations between the Chief Executive
\nOfficers of EXODUS and ASIA GLOBAL CROSSING. For the purpose of this Joint
\nVenture Agreement, the term “Dispute” does not include any disputes or
\ncontroversies resulting from, arising out of or with respect to any of the
\nRelated Agreements, unless otherwise provided in any of the Related Agreements.
\nAny Shareholder or the Company who is a party to a Dispute shall give the other
\nShareholders and the Company written notice of any Dispute not resolved in the
\nnormal course of business. Within twenty (20) days after delivery of such a
\nnotice, executives of all Shareholders involved in the Dispute, and the Company,
\nshall meet at a mutually acceptable time and place, and thereafter as often as
\nthey reasonably deem necessary, to attempt to resolve the Dispute. All
\nnegotiations pursuant to this Section 8.1 shall be confidential.<\/p>\n
8.2 Arbitration. In the event that any Dispute cannot be resolved thereby
\n ———–
\nwithin a period of thirty (30) days after delivery of such notice has been
\ngiven, such Dispute shall be settled finally by arbitration in San Jose,
\nCalifornia, using the English language and in accordance with the rules then in
\neffect of the American Arbitration Association. The arbitrator(s), who shall be
\nexperienced in the matters that are the subject of the Dispute or fundamental to
\nunderstanding the nature of the dispute, shall have the authority to grant
\nspecific performance, and to allocate between the parties the costs of
\narbitration in such equitable manner as the arbitrator(s) may determine. The
\nprevailing Shareholder in the arbitration shall be entitled to receive
\nreimbursement of its reasonable expenses incurred in connection therewith,
\nincluding the costs of travel to, and meals and hotel accommodation in, the
\nlocation of such proceedings. Judgment upon the award so rendered may be
\nentered in any court having jurisdiction or application may be made to such
\ncourt for judicial acceptance of any award and an order of enforcement, as the
\ncase may be.<\/p>\n
8.3 Irreparable Harm. The Shareholders hereby reserve their right to seek
\n —————-
\nimmediate injunctive relief in the event of the breach of any provision of this
\nJoint Venture Agreement where such breach may cause irreparable harm, the extent
\nof which would be difficult to ascertain. Accordingly, they agree that, in
\naddition to any other legal remedies to which a non-breaching Shareholder might
\nbe entitled, such Shareholder may seek immediate injunctive relief in the event
\nof any breach of any of the provisions of this Joint Venture Agreement either
\nthrough arbitration or through the courts.<\/p>\n
ARTICLE 9:
\n INDEMNIFICATION; LIMITATION ON DAMAGES,
\n CONTRACTUAL LIMITATIONS PERIOD
\n ——————————<\/p>\n
9.1 Indemnification.
\n ————— <\/p>\n
27<\/p>\n
(a) From and after the Closing, each Shareholder shall indemnify and
\n hold harmless, the Company and each other Shareholder and any Subsidiary of
\n the Company (the “Indemnitees”) from any liability for, or arising out of
\n or based on, or relating to,<\/p>\n
(i) any Tax (i) of such Shareholder or any Subsidiary of such
\n Shareholder (other than the Company and its Subsidiaries for any
\n period beginning after the Closing date) or (ii) relating to the
\n income, business, assets, property or operation of the Contributed
\n Assets of such Shareholder, prior to and on the date of Closing and
\n with respect to any Contributed Assets, the date on which the
\n contribution of such Contributed Asset is effected to the Company.<\/p>\n
(ii) any and all Losses incurred or suffered by an Indemnitee,
\n arising out of, based on or resulting from the ownership and\/or
\n operation of the Contributed Assets prior to and on the date which the
\n contribution of such Contributed Asset is effected to the Company.<\/p>\n
(b) An Indemnitee shall notify the indemnifying Shareholder of any
\n claim for Tax or Losses in writing, and in reasonable detail, as promptly
\n as reasonably possible after receipt by such Indemnitee of notice of such
\n claim; provided, however, that failure to give such notification on a
\n timely basis shall not affect the indemnification provided hereunder except
\n to the extent that such Indemnifying Shareholder shall have been actually
\n materially prejudiced as a result of such failure. Thereafter, the
\n Indemnitee shall promptly deliver to the Indemnifying Shareholder copies of
\n all notices and documents received by the Indemnitee relating to such
\n claim.<\/p>\n
(c) If a Tax Indemnitee receives a refund or credit of Taxes for which
\n it has been indemnified pursuant to this Section 9.1 such Tax Indemnitee
\n agrees to pay the indemnifying Shareholder the amount of such refund or
\n credit (including any interest received thereon).<\/p>\n
9.2 Limitation on Damages.
\n ——————— <\/p>\n
(a) No Shareholder shall be liable for any indirect, special,
\n incidental or consequential loss or damage (including, without limitation,
\n loss of profits or loss of use) suffered by any other Shareholder arising
\n from or relating to a Shareholder’s performance, non-performance, breach of
\n or default under a covenant, warranty, representation, term or condition
\n hereof; each Shareholder, other than with respect to a claim arising from
\n such other Shareholder’s gross negligence, willful misconduct or fraudulent
\n actions, waives and relinquishes claims for indirect, special, incidental
\n or consequential damages.<\/p>\n
(b) The limitations on liability and damages set out in Section 9.2(a)
\n apply to all causes of action that may be asserted hereunder, other than a
\n cause of action resulting from another Shareholder’s grossly negligent,
\n willful misconduct or fraudulent actions, whether sounding in breach of
\n contract, breach of warranty, tort, product liability, negligence or
\n otherwise.<\/p>\n
28<\/p>\n
9.3 Contractual Limitation Period. Any arbitration, litigation, judicial
\n —————————–
\nreference or other legal proceeding involving the parties shall be commenced
\nwithin three (3) years after the accrual of the cause of action.<\/p>\n
ARTICLE 10:
\n CONFIDENTIAL INFORMATION; PUBLIC ANNOUNCEMENTS
\n ———————————————-<\/p>\n
10.1 Treatment of Confidential Information. Confidential Information will
\n ————————————-
\nbe kept confidential and shall not be disclosed, in whole or in part, to any
\nPerson other than Affiliates, officers, directors, employees, agents or
\nrepresentatives of the Company or of a Shareholder or the Company’s or such
\nShareholder’s legal counsel or independent auditors, or prospective lenders to
\nthe Company or either Shareholder (collectively, “Representatives”) who need to
\nknow such Confidential Information for the purpose of negotiating, executing and
\nimplementing this Joint Venture Agreement and the transactions contemplated
\nhereby. The Company and each Shareholder agrees to inform each of its
\nRepresentatives of the non-public nature of the Confidential Information and to
\ndirect such Persons to treat such Confidential Information in accordance with
\nthe terms of this Section. The Company and each Shareholder agrees to be liable
\nfor any breach of the terms hereof by its Representatives. Nothing herein shall
\nprevent the Company or either Shareholder from disclosing confidential
\nInformation (i) upon the order of any court or administrative agency, (ii) as
\nrequired by law or upon the request or demand of, or pursuant to any regulation
\nof, any regulatory agency or authority, (iii) to the extent reasonably required
\nin connection with the exercise of any remedy hereunder, and\/or (iv) to any
\nactual or proposed permitted assignee of all or part of its rights hereunder
\nprovided that such actual or proposed assignee agrees in writing to be bound by
\nthe provisions of this Section. Notwithstanding the foregoing, in the event
\nthat the Company or any shareholder intends to disclose any Confidential
\nInformation pursuant to clause (i) or (ii) of the preceding sentence, such
\nPerson agrees to (x) provide the other parties hereto with prompt notice before
\nsuch disclosure in order that such parties may attempt to obtain a protective
\norder or other assurance that confidential treatment will be accorded such
\nConfidential Information and (y) cooperate with such parties in attempting to
\nobtain such order or assurance. The Company and each Shareholder agrees that it
\nwill maintain all Confidential information disclosed to it in strict confidence
\nand will take all reasonable measures to maintain the confidentiality of all
\nsuch Confidential Information in its possession or control, but in no event less
\nthan the measures it uses to maintain the confidentiality of its own information
\nof similar importance. The provisions of this Article 10 will survive
\ntermination of this Joint Venture Agreement.<\/p>\n
10.2 Company Employees. The Company shall require each of its employees to
\n —————–
\nsign written undertakings or agreements with the Company not to disclose any
\nConfidential Information.<\/p>\n
10.3 Public Announcements. No Shareholder shall be entitled to make or
\n ——————–
\npermit or authorize the making of any press release or other public statement or
\ndisclosure concerning this Joint Venture Agreement, a Related Agreement or any
\nof the transactions contemplated herein without the prior written consent of the
\nother Shareholder except as otherwise may be required <\/p>\n
29<\/p>\n
by law or the rules of a exchange relevant to that Shareholder or its Affiliates
\nand then only upon the advise of such Shareholder’s legal counsel.<\/p>\n
ARTICLE 11:
\n TRANSFERS OF INTERESTS AND ISSUANCE OF ADDITIONAL INTERESTS
\n ———————————————————–<\/p>\n
11.1 Disposition of a Shareholder’s Joint Venture Interest.
\n —————————————————– <\/p>\n
(a) General. Subject to Sections 11.2, 11.3, 11.4, 11.7 11.8, 11.9,
\n ——-
\n 11.10 and 11.12 hereinbelow, no Shareholder may make any Disposition of all
\n or any part of its Joint Venture Interest or Shares, in any manner, whether
\n voluntarily or involuntarily, by operation of law or otherwise, to any
\n person. Any transfer not in accordance with this Article 11 and the
\n Memorandum of Association and applicable provisions of the law of the
\n Company’s jurisdiction of organization will be voidable at the option of
\n any of the non-transferring Shareholders or the Company.<\/p>\n
(b) Transfers Prohibited During First Five (5) Years. Subject to
\n ————————————————
\n Section 11.7 hereinbelow, each of the Shareholders agrees not to make any
\n Disposition during the first Five (5) years following the Effective Time,
\n unless otherwise unanimously approved by the Board (other than the
\n directors nominated by the Shareholder which proposes to make the
\n Disposition).<\/p>\n
11.2 Right of First Refusal. Subject to the provisions of Sections 11.3
\n ———————-
\nand 11.7 below, in the event that a Shareholder desires to Dispose of all or any
\npart of its Joint Venture Interest (a “Selling Shareholder”) to a third party
\nthe non-selling Shareholders will have a right of first refusal (“Right of First
\nRefusal”) in accordance with their Agreed Proportions on all sales of all or any
\npart of the Selling Shareholder’s Joint Venture Interest. The Selling
\nShareholder shall first provide to the non-selling Shareholders a written notice
\nof proposed sale (“Notice of Proposed Sale”) which shall specify the terms and
\nconditions for such sale (excluding any terms which are not reasonably capable
\nof acceptance or performance by the non-selling Shareholder) including the
\nportion of such Selling Shareholder’s Joint Venture Interest proposed to be sold
\nand the price therefor and the identity of the Purchaser. The non-selling
\nShareholder(s) shall then have thirty (30) calendar days from the date of such
\nNotice of Proposed Sale (“Acceptance Period”) in which to elect to purchase such
\nSelling Shareholder’s Joint Venture Interest on the same terms and conditions as
\nspecified in such Notice of Proposed Sale by providing the Selling Shareholder
\nwritten notice of its acceptance of such offer to purchase. If any component of
\nthe price specified in the Notice of Proposed Sale includes the issuance of a
\nthird party’s securities, a non-selling Shareholder will be deemed to have
\naccepted the terms of such Notice of Proposed Sale if it agrees to pay the fair
\nmarket value of such securities. If such securities are traded on a nationally
\nrecognized securities exchange, the fair market value of such securities
\ncomponent shall be the closing price of such securities on the date of such
\nNotice of Proposed Sale or if not so traded, the fair market value of such
\nsecurities will be determined by an Independent Valuer in accordance with
\nArticle 14. If the non-selling Shareholder(s) have not given notice to the
\nSelling Shareholder of their agreement to purchase the Selling Shareholder’s
\nJoint Venture Interest <\/p>\n
30<\/p>\n
within the Acceptance Period prescribed above, then the Selling Shareholder
\nshall be free to consummate the sale of its Joint Venture Interest within sixty
\n(60) days on such terms and conditions that are no less favorable to the Selling
\nShareholder than the terms and conditions specified in such Notice of Proposed
\nSale. If such sale is not consummated within such sixty (60) day period
\nimmediately following the Acceptance Period, then any sale of such Selling
\nShareholder’s Joint Venture Interest must comply with the provisions of this
\nSection 11.2 and a new Notice of Proposed Sale shall be provided to the non
\nselling Shareholder(s).<\/p>\n
11.3 Assignment to Affiliate. Notwithstanding anything to the contrary
\n ———————–
\nstated herein, a Shareholder’s Joint Venture Interest or any rights or
\nobligations of such Shareholder hereunder may be assigned to any Affiliate of
\nsuch Shareholder who becomes a party to this Joint Venture Agreement pursuant to
\nSection 11.7; provided, that the assigning Shareholder shall remain liable as
\n ——–
\nthe primary obligor of such Shareholder’s obligations under this Joint Venture
\nAgreement and subject to the provisions of Sections 6.9 and 6.13 and upon the
\nreasonable request of the Board of Directors such Shareholder shall execute any
\nand all documentation deemed reasonable and desirable to effectuate such
\ncontinuing obligation; provided, further, that in the event that any such
\nassignee shall cease to be a Affiliate of the assigning party, such assignee
\nshall promptly assign such Joint Venture Interest or rights or obligations
\nhereunder back to the original assignor. Notwithstanding the foregoing, a
\nShareholder may be released in whole or in part from its obligations under this
\nJoint Venture Agreement in connection with any such assignment upon the
\nunanimous approval of the remaining Shareholders.<\/p>\n
11.4 Deemed Offer of Shares Upon Buy-Out Event. Upon the occurrence of a
\n —————————————–
\nBuy-Out Event, the Shares of the Shareholder with respect to whom a Buy-Out
\nEvent occurs (the “Transferring Shareholder”) are deemed to be offered for
\ntransfer to (i) the other Shareholders, and (ii) the Company, on the terms and
\nconditions set out in Section 11.5 in due accordance with the provisions of the
\nMemorandum of Association, subject to the following:<\/p>\n
(a) Priority of Purchase Right. The Shareholders shall have priority
\n ————————–
\n over the Company in the exercise of their right to purchase Shares
\n following a Buy-Out Event. The Shareholders shall notify the Company
\n within 30 days of their being informed of the occurrence of the Buy Out
\n Event and the purchase consideration for the Shares. If more than one
\n Shareholder offers to purchase the Shares subject to the Buy-Out Event, the
\n Shares to be acquired from the Transferring Shareholder shall be
\n apportioned between the purchasers pro-rata according to their respective
\n Agreed Proportions.<\/p>\n
(b) No Purchase Effected. Subject to sub-section (c) below, if the
\n ——————–
\n Shares so offered, or any portion thereof, are not purchased by the other
\n Shareholders or the Company, the Transferring Shareholder may retain its
\n Shares.<\/p>\n
(c) Retention of Shares. In the event that a Transferring Shareholder
\n ——————-
\n elects to retain its Joint Venture Interest following the occurrence of a
\n Buy-Out Event the following terms and conditions shall apply:<\/p>\n
31<\/p>\n
(i) such Transferring Shareholder shall voluntarily relinquish
\n its rights to make nominations for the appointment of
\n Directors of the Company under Article 12 and\/or the Chief
\n Executive Officer under Section 4.3, as applicable as well
\n as relinquish its rights for Required Shareholder Approvals
\n under Section 7.4; and<\/p>\n
(ii) such Transferring Shareholder shall take all actions and
\n execute all such documentation as is deemed necessary or
\n desirable by the Board of Directors to relinquish such
\n power, including, but not limited to entering into a voting
\n agreement in which such Transferring Shareholder agrees to
\n vote in favor of the dismissal of those members of the Board
\n of Directors that were appointed upon the nomination of such
\n Transferring Shareholder.<\/p>\n
11.5 Terms of Contract The terms of a contract arising under Section 11.4
\n —————–
\nare as follows:<\/p>\n
(a) the purchase consideration is the fair market value of the Shares
\n of the Transferring Shareholder as agreed between the Shareholders within
\n thirty (30) days of the Buy-Out Event or, failing agreement between the
\n Shareholders, determined by the Independent Valuer in accordance with
\n Article 14;<\/p>\n
(b) the Transferring Shareholder warrants that:<\/p>\n
(i) it has, or on the date of completion of the sale and
\n purchase will have, a clear and unencumbered title to each
\n of the Shares the subject matter of the sale and purchase;
\n and<\/p>\n
(ii) each of the Shares the subject matter of the sale and
\n purchase is sold free from any encumbrance and shall be
\n transferred with all rights and obligations appurtenant
\n thereto;<\/p>\n
(c) the Transferring Shareholder must pay any stamp duty or other
\n transfer taxes payable on transfer of the Transferring Shareholder’s
\n Shares;<\/p>\n
(d) completion is subject to, and conditional upon, any necessary
\n regulatory approvals (which the Transferring Shareholder and the purchasing
\n Shareholder(s) undertake to use all reasonable efforts to obtain);<\/p>\n
(e) subject to satisfaction of any condition precedent referred to
\n Section 11.5(d) completion must occur within ten (10) days after the
\n Independent Valuer has determined the fair market value of the Transferring
\n Shareholder’s Shares; and<\/p>\n
32<\/p>\n
(f) at completion, the Transferring Shareholder must tender to the
\n other Shareholder(s) against a bank check for the purchase consideration
\n calculated in accordance with Section 11.5(a):<\/p>\n
(i) in respect of all the Transferring Shareholder’s Shares, the
\n share certificates and duly executed instruments of transfer
\n in registrable form naming as transferee the other
\n Shareholder(s) or its nominee(s), as applicable;<\/p>\n
(ii) the written resignations of each Director appointed by the
\n Transferring Shareholder; and<\/p>\n
(iii) any other document which the other Shareholder(s) require
\n to obtain good title to the Shares and to enable the other
\n Shareholder(s) to procure the registration of the Shares in
\n its name or the names of its nominee(s), as applicable.<\/p>\n
11.6 Attorney. Each Shareholder irrevocably appoints every Director from
\n ——–
\ntime to time, jointly and severally, as its attorney and attorneys, on its
\nbehalf and in its name to transfer its Shares in accordance with Section 11.5 to
\nexecute under hand or under seal and deliver (conditionally or unconditionally)
\nin any place that the attorney chooses any instrument of transfer in respect of
\nthose Shares and any other documents that in the opinion of the attorney are
\nnecessary to carry out any of the provisions of Section 11.5.<\/p>\n
11.7 Deed of Ratification and Accession. The Shareholders must procure
\n ———————————-
\nthat the Board of Directors does not register a person (who at the time of
\nregistration is not a Shareholder) as a Shareholder whether pursuant to:<\/p>\n
(a) an issue of additional Shares;<\/p>\n
(b) a transfer of Shares; or<\/p>\n
(c) otherwise,<\/p>\n
unless that person has first entered into a deed of ratification and accession
\nagreeing to be bound by the terms and conditions of this Joint Venture Agreement
\nas a Shareholder of the Company.<\/p>\n
11.8 Issuance of Additional Shares.
\n —————————–
\n (a) Generally. Subject to required Board and Shareholder approvals,
\n ———
\n the Company may from time to time offer and issue additional Shares to any
\n person in such amounts, on such terms and conditions and for such
\n consideration as the Company’s Board from time to time may determine;
\n provided, that prior to the issuance of any Shares to any such person, such
\n person shall first have executed a deed of ratification and<\/p>\n
33<\/p>\n
accession and become a party to this Joint Venture Agreement unless
\n otherwise unanimously agreed by the Board.<\/p>\n
(b) Employee Share Ownership. Subject to Board approval, the
\n ————————
\n Shareholders agree to consider the adoption of an employee incentive stock
\n option scheme, pursuant to the provisions of the applicable law of the
\n Company’s jurisdiction of organization or in the alternative the Board may
\n approve a warrant type stock option plan. In such case, each of the
\n Shareholders of the Company shall be diluted proportionately.<\/p>\n
11.9 Failure to Make Capital Contributions. In the event that any
\n ————————————-
\nShareholder shall fail to pay within thirty (30) days following the date due any
\nof (i) its Initial Capital Contribution pursuant to Section 3.1, or (ii) any
\nRequired Additional Capital Contributions or Further Contributions under
\nSections 5.1 or 5.3, respectively (such Shareholder, a “Defaulting Shareholder”)
\nthen, EXODUS in the case of ASIA GLOBAL CROSSING and ASIA GLOBAL CROSSING in the
\ncase of EXODUS, shall have the right, which right shall be the exclusive remedy
\nof such Shareholder hereunder to elect to: (i) exclude the Defaulting
\nShareholder(s) from making any further Required Equity Capital Contributions
\npursuant to Section 5.1 or otherwise and such Defaulting Shareholder(s)’
\ninterests shall be diluted accordingly upon any further capital contributions
\nmade to the Company by the remaining non-Defaulting Shareholder(s), and, (ii)
\nsolely in the event such failure results in a material adverse effect upon the
\nCompany, approve those items otherwise requiring unanimous approval of the
\nShareholders specified in Section 7.4(a) shall be approved by a simple majority
\nvote of the Company’s Board.<\/p>\n
11.10 Tag-Along Rights.
\n —————–
\n (a) Subject to Section 11.10(e), in the event that any Shareholder
\n (the “Seller”) proposes to Dispose of any Shares then collectively held by
\n it and its Affiliates, other than to an Affiliate in accordance with
\n Section 11.3, then each other Shareholder shall have the right (the “Tag-
\n along Right”) to require the proposed purchaser to purchase from such other
\n Shareholder up to the number of whole Shares not to exceed the number
\n derived from the following formula:<\/p>\n
N x TS = Tag
\n S
\n where<\/p>\n
N = total number of Shares owned by such other Shareholder<\/p>\n
TS = total number of Shares proposed to be Disposed of by the
\n Seller<\/p>\n
S = total number of Shares owned by the Seller immediately prior
\n to the Disposition<\/p>\n
Tag = number of Shares in respect of which such other Shareholder
\n may exercise Tag-Along Rights.<\/p>\n
34<\/p>\n
Any Shares purchased from the other Shareholders pursuant to this Section
\n 11.10 shall be paid for in the same consideration received by the Seller at
\n the same price per Share and upon the same terms and conditions as the
\n proposed Disposition by the Seller; provided, however, that in no event
\n shall such other Shareholder be required to make any representations or
\n provide any indemnities with respect to matters relating solely to the
\n Seller.<\/p>\n
(b) The Tag-Along Right may be exercised by the other Shareholders by
\n delivery of a written notice to the Seller (the “Tag-along Notice”) within
\n fifteen (15) days following delivery of the Notice of Proposed Sale by the
\n Seller. The Tag-Along Notice shall state the amount of Shares that such
\n other Shareholder proposes to include in such Disposition to the proposed
\n purchaser (not to exceed the number determined as aforesaid). If a
\n Shareholder has not so delivered a Tag-Along Notice as set forth above it
\n shall be deemed to have waived all of its rights with respect to
\n participating in the Transfer, and the Seller shall thereafter be free
\n (subject to Section 11.9(d)) to sell to the proposed purchaser, at a price
\n no greater than the price for such Shares set forth in the Tag-along Notice
\n and on other principal terms which are not more favorable to the Seller than
\n those set forth in the Notice of Proposed Sale, without any further
\n obligation to such other Shareholder. If, prior to consummation, the terms
\n of such proposed Disposition shall change with the result that the price
\n shall be greater than the Share price for such Shares set forth in the
\n Notice of Proposed Sale or the other principal terms shall be substantially
\n more favorable to the Seller than those set forth in the Notice of Proposed
\n Sale, it shall be necessary for a separate Notice of Proposed Sale to be
\n furnished, and the terms and provisions of this Section 11.10 separately
\n complied with, in order to consummate such proposed Disposition pursuant to
\n this Section 11.10.<\/p>\n
(c) The acceptance of any other Shareholders shall be irrevocable
\n except as hereinafter provided, and each accepting Shareholder shall be
\n severally bound and obligated to sell in the Disposition on the same terms
\n and conditions with respect to each Share sold as the Seller, such number of
\n Shares as such other Shareholders shall have specified in such Tag-Along
\n Notice; provided, however, that in the event there is any change in the
\n price or terms of the proposed Disposition, the Seller shall notify the
\n other Shareholders of such changes and such other Shareholder have the right
\n to withdraw its Tag-Along Notice, in whole or in part. In the event the
\n Seller shall be unable to obtain the inclusion in the Disposition of the
\n entire number of Shares which the Seller and the other Shareholders desire
\n to have included in the Disposition (as evidenced in the case of the Seller
\n by the Sale Notice and in the case of the other Shareholders by the Tag-
\n along Notice), the number of Shares to be sold in the Disposition by each of
\n the Seller and the Other Shareholders shall be reduced on a pro rata basis
\n in accordance with their respective Agreed Proportions.<\/p>\n
(d) If at the end of the 120th day following the date of the delivery
\n of the Sale Notice the Seller has not completed the Disposition (other than
\n as a result of a breach of this Agreement by such other Shareholders), such
\n other Shareholders shall be released from their obligations under their Tag-
\n along Notice, the Sale Notice shall be null and void, <\/p>\n
35<\/p>\n
and it shall be necessary for a separate Sale Notice to be furnished, and
\n the terms and provisions of this Section 11.10 separately complied with, in
\n order to consummate such Transfer pursuant to this Section 11.10.<\/p>\n
(e) The exercise or non-exercise of the rights of any Shareholder to
\n participate in one or more Dispositions of Shares shall not adversely affect
\n such Shareholder’s right to participate in subsequent Dispositions of
\n Shares.<\/p>\n
11.11 Termination of Restrictions on Transfer. The provisions of this
\n —————————————
\nArticle 11 restricting a Shareholder’s ability to transfer its Shares shall
\nexpire and be of no further force and effect upon the consummation of an
\nunderwritten initial public offering of the Shares of the Company approved by
\nthe Company’s Board of Directors in which the Company shall receive cash
\nproceeds of not less than $35 Million (net of underwriting discounts and
\ncommissions.).<\/p>\n
11.12 Mandatory Initial Public Offering; Registration Rights. Unless a
\n ——————————————————
\nQualified Initial Public Offering shall previously have been consummated, upon
\nreceipt of a written request by ASIA GLOBAL CROSSING at any time on or after the
\nthird anniversary of the Closing, the Company shall consummate as soon as
\npracticable a Qualified Initial Public Offering; provided, however, that such
\n ——– ——–
\noffering may be delayed for up to one year if such delay is reasonably prudent
\nas a result of market conditions at such time. In connection with the
\nconsummation of such Qualified Initial Public Offering, the Company shall agree
\nto provide customary “venture capital” registration rights to ASIA GLOBAL
\nCROSSING and EXODUS. For purposes of this Agreement, a “Qualified Initial
\nPublic Offering” shall mean an underwritten, firm commitment public offering of
\nthe Shares in the United States that results in the receipt by the Company of
\ncash proceeds of at least $35 million (net of underwriting discounts and
\ncommissions).<\/p>\n
ARTICLE 12:
\n VOTING AGREEMENT
\n —————-<\/p>\n
12.1 Election, Suspension and Dismissal of Directors; Election of Chief
\n ——————————————————————
\nExecutive Officer. The Shareholders hereby acknowledge and agree to vote to
\n—————–
\nelect at any general or special meeting of Shareholders considering such matter
\nas Directors of the Company those nominees designated by EXODUS (4) and ASIA
\nGLOBAL CROSSING (2), as provided herein and to elect the Chief Executive Officer
\nas designated pursuant to Section 4.3. Further, the Shareholders hereby agree
\nto vote in favor of any resolution for the suspension or dismissal of a Director
\nmade subject to a vote of any general or special meeting of Shareholders in
\naccordance with Section 7.2(b) hereof.<\/p>\n
12.2 Dissolution of the Company. In the event of the serving of a
\n ————————–
\nTermination Notice or an EXODUS Termination Notice pursuant to 3.3(d),
\nrespectively, the Shareholders agree to adopt and approve a resolution for the
\ndissolution and winding up of the Company pursuant to Article 13.<\/p>\n
ARTICLE 13:
\n DISSOLUTION AND WINDING UP
\n ————————–<\/p>\n
36<\/p>\n
The Company shall be dissolved and wound up upon the resolution of the
\nShareholders pursuant to Section 7.4 pursuant to a proposal approved and
\nunanimously adopted by the Board of Directors or upon the serving of a
\nTermination Notice or EXODUS Termination Notice pursuant to Section 3.3(c) or
\nSection 3.3(d), respectively. The Board shall supervise the liquidation and
\nwinding up of the Company.<\/p>\n
ARTICLE 14:
\n INDEPENDENT VALUATION
\n ———————<\/p>\n
14.1 Application of Article. This Article 14 applies where the
\n ———————-
\nShareholders are required to obtain an independent valuation of Shares under the
\nJoint Venture Agreement.<\/p>\n
14.2 Appointment of Independent Valuer.
\n ——————————— <\/p>\n
(a) If this Article 14 applies, the Board shall appoint a suitably
\n qualified and experienced independent valuer, corporate adviser, chartered
\n accountant, investment banker or merchant banker as an Independent Valuer
\n to determine the value of each Share in accordance with this Article 14.<\/p>\n
(b) If the Board fails to appoint a person as contemplated by Section
\n 14.2(a), the Independent Valuer will be appointed by KPMG. In appointing
\n the Independent Valuer, KPMG must ensure that the Independent Valuer
\n satisfies the criteria set out in paragraph (c) below;<\/p>\n
(c) The Independent Valuer must not have had any business dealings
\n with any Shareholder or any of its Affiliates in the two years before the
\n date of appointment.<\/p>\n
14.3 Valuation. The Independent Valuer must be instructed to determine
\n ———
\nthe fair market value of the Shares by valuing the Company (including any
\nsubsidiary of the Company) as a whole on a going concern basis (taking into
\naccount the terms of this Joint Venture Agreement and the Related Agreements) as
\nat the end of the month before the month in which the Independent Valuer is
\nappointed under this Article 14 (`Valuation Date’). In making his valuation,
\nthe Independent Valuer shall assume that the event which has given rise to the
\nappointment of the Independent Valuer has occurred even if, as of the Valuation
\nDate, it had not occurred. The fair market value of each Share will be the
\nproportionate amount of the value of the Company which that Share represents
\nwhen compared to the total number of Shares.<\/p>\n
14.4 Access to Information. The Board shall ensure that the Independent
\n ———————
\nValuer has a right of access at all reasonable times to the accounting records
\nand other records of the Company (including any subsidiary of the Company) and
\nis entitled to require from any officer of the Company any information and
\nexplanation which the Independent Valuer requires to value the Company.<\/p>\n
37<\/p>\n
14.5 Period of Determination. The Board must use commercially reasonable
\n ———————–
\nefforts to ensure that the Independent Valuer makes a determination as soon as
\npracticable and in any event within sixty (60) days after appointment.<\/p>\n
14.6 Process. The Shareholders agree that, in determining a value for the
\n ——-
\nShares under this Article 14, the Independent Valuer:<\/p>\n
(a) will act as an expert and not as an arbitrator;<\/p>\n
(b) may obtain or refer to any documents, information or material
\n and undertake any inspections or inquiries as he or she determines
\n appropriate;<\/p>\n
(c) must provide the Shareholders with a draft of his or her
\n determination and must give the Shareholders a reasonable opportunity to
\n comment on the draft determination before it is finalized; and<\/p>\n
(d) may engage any assistance which he or she reasonably believes is
\n appropriate or necessary to make a determination.<\/p>\n
14.7 Final and Binding. The Independent Valuer’s determination will be
\n —————–
\nfinal and binding on the Shareholders.<\/p>\n
14.8 Costs. The Shareholders will each bear a pro-rata share of the costs
\n —–
\nand expenses of the Independent Valuer in accordance with the Agreed
\nProportions.<\/p>\n
ARTICLE 15:
\n MISCELLANEOUS PROVISIONS
\n ————————<\/p>\n
15.1 Governing Law. This Joint Venture Agreement and the rights and
\n ————-
\nliabilities of the Shareholders hereunder, shall be governed by and construed in
\naccordance with the laws of Bermuda.<\/p>\n
15.2 Captions. Captions contained in this Joint Venture Agreement are
\n ——–
\ninserted only as a matter of convenience and in no way define, limit, extend or
\ndescribe the scope of this Joint Venture Agreement or the intent of any
\nprovision hereof.<\/p>\n
15.3 Construction. References in this Joint Venture Agreement to a
\n ————
\nstatute or statutory instrument include a statute or statutory instrument
\namending, consolidating or replacing them, and references to a statue include
\nstatutory instruments and regulations made pursuant to it. Whenever the context
\nmay require, any pronouns used herein shall include the corresponding masculine,
\nfeminine or neuter forms, and the singular form of nouns and pronouns shall
\ninclude the plural and vice versa. This Joint Venture Agreement has been
\nnegotiated by the Shareholders hereto, each of which has been independently
\nrepresented by counsel and shall be interpreted in accordance with its terms
\nwithout any strict construction for or against any Shareholder.<\/p>\n
38<\/p>\n
15.4 Language. This Joint Venture Agreement is in the English language
\n ——–
\nonly, which language shall be controlling in all respects, and all versions of
\nthis Joint Venture Agreement in any other language shall be for accommodation
\nonly and shall not be binding on the Shareholders to this Joint Venture
\nAgreement. All communications and notices made or given pursuant to this Joint
\nVenture Agreement, and all documentation and support to be provided, unless
\notherwise noted, shall be in the English version.<\/p>\n
15.5 Survival. All representations and warranties herein shall survive
\n ——–
\nuntil the dissolution and final liquidation of the Company, except to the extent
\nthat a representation or warranty expressly provides otherwise. In addition
\nArticle 8 (Dispute Resolution), Article 9 (Limitation on Damages; Contractual
\nLimitation Period), Article 10 (Confidentiality; Public Announcements), Article
\n15 (Miscellaneous) and Article 16 (Waiver of Conflict of Interest) shall survive
\nthe expiration or earlier termination of this Joint Venture Agreement.<\/p>\n
15.6 Severability. Every provision of this Joint Venture Agreement is
\n ————
\nintended to be severable. If any term or provision hereto is illegal or invalid
\nfor any reason whatsoever, such illegality or invalidity shall not affect the
\nvalidity of the remainder of the terms or provisions of this Joint Venture
\nAgreement and the Shareholders agree that they will negotiate in good faith to
\nachieve an agreement that produces the same or a substantially similar result.<\/p>\n
15.7 Assignment; Successors. Except as otherwise set forth herein,
\n ———————-
\nneither party may assign or delegate any of its rights or obligations hereunder.
\nAny assignment or delegation in derogation of this Section 15.7 shall be null
\nand void. Subject to the limitations on transferability contained herein, each
\nand all of the covenants, terms, provisions and agreements herein contained in
\nshall be binding upon and inure to the benefit of the successors and assigns
\n(including an assignee of all or part of an interest in the Company ) of the
\nrespective Shareholders hereto.<\/p>\n
15.8 Execution and Counterparts. This Joint Venture Agreement and any
\n ————————–
\namendment hereto may be executed in multiple counterparts, each of which shall
\nbe deemed an original and all of which together shall constitute one agreement.
\nIn addition, this Joint Venture Agreement may be executed through the use of
\ncounterpart signature pages. The signature of any Shareholder on any
\ncounterpart agreement or counterpart signature page shall be deemed to be a
\nsignature to, and may be appended to, one document.<\/p>\n
15.9 Third Party Beneficiary. No provision of this Joint Venture
\n ———————–
\nAgreement is intended to be for the benefit of or enforceable by any third party
\nexcept for the Company.<\/p>\n
15.10 No Agency. Nothing in this Joint Venture Agreement or the Schedules
\n ———
\nhereto shall be deemed to create any partnership or agency relationship between
\nany Shareholders or between all the Shareholders. The Shareholders and the
\nCompany are each independent companies who shall operate with each other in
\narm’s length transactions. No Shareholder nor the Company shall be entitled to
\nact on behalf of and\/or bind any one or more of the others without prior written
\nauthorization establishing its authority to do so.<\/p>\n
39<\/p>\n
15.11 Entire Agreement. This Joint Venture Agreement, together with all
\n —————-
\nSchedules thereto, and the Related Agreements, collectively set out the entire
\nunderstanding and agreement between the Shareholders with respect to the matters
\nspecifically addressed herein and therein and merger and supersedes all previous
\ncommunications, negotiations, representations and agreements, either oral or
\nwritten, with respect to the subject matter hereof and thereof. No agreements,
\nguarantees or representations, whether oral or in writing, have been concluded,
\nissued or made, upon which any Shareholder is relying in concluding this Joint
\nVenture Agreement and the Related Agreements except to the extent expressly set
\nout herein or therein.<\/p>\n
15.12 Amendment. The amendment of this Joint Venture Agreement shall
\n ———
\nrequire the written consent or affirmative vote of each Shareholder hereto.<\/p>\n
15.13 Notices. Any notice, consent, election, approval, payment, demand,
\n ——-
\nor communication required or permitted to be given by this Joint Venture
\nAgreement shall be in writing, must be in English and shall be deemed to have
\nbeen sufficiently given or served for all purposes if delivered personally or by
\nfacsimile to the Shareholder or to an officer of the Shareholder to which
\ndirected or if sent by registered or certified mail, postage and charges
\nprepaid, addressed to the address contained in the records of the Company. Any
\nsuch notice shall be deemed to be given on the date on which it was delivered
\npersonally, sent by facsimile with transmission confirmation (provided that the
\nShareholder giving notice shall also have deposited such notice for mailing
\npursuant to the provisions of this Section 15.13) or three (3) calendar days
\n(or, if to an address outside the United States, seven (7) calendar days) after
\ndeposited in a regularly maintained receptacle for the deposit of United States
\nAir Mail addressed as set out above. Any Shareholder may change its address for
\npurposes of this Joint Venture Agreement by giving the other Shareholders notice
\nof such change in the manner as set out above.<\/p>\n
15.14 Further Documents. The Shareholders hereto agree to execute and
\n —————–
\ndeliver to each other and\/or to the Company, as the case may be, all such
\nadditional instruments, to provide all such information, and to do or refrain
\nfrom doing all such further acts and things as may be necessary or as my be
\nreasonably requested by any Shareholder hereto, more fully to vest in, and to
\nassure each Shareholder of, all rights, powers, privileges, and remedies, herein
\nintended to be granted or conferred upon such Shareholder or the Company.<\/p>\n
15.15 Action by the Company. Wherever in this Joint Venture Agreement it
\n ———————
\nstates that any action is to be taken by the Company, it shall mean that the
\nShareholders to this Joint Venture Agreement shall endeavor to use all
\nreasonable efforts as Shareholders of the Company to cause the Company to take
\nsuch action as herein described.<\/p>\n
15.16 Several Liability. The obligations of each of the Shareholders under
\n —————–
\nthis Joint Venture Agreement are several and not joint.<\/p>\n
15.17 Fees and Expenses. Each party will pay its own fees and expenses in
\n —————–
\nconnection with the formation of the Company and the preparation and negotiation
\nof this Joint Venture Agreement and the Related Agreements.<\/p>\n
40<\/p>\n
15.18 Prevalence of Agreement. In the event of any ambiguity or conflict
\n ———————–
\narising between the terms of this Joint Venture Agreement and those of the
\nMemorandum of Association of the Company, the terms of this Joint Venture
\nAgreement shall prevail as between the Parties except as otherwise provided by
\napplicable law.<\/p>\n
15.19 Precedence. The provisions of this Joint Venture Agreement shall
\n ———-
\nprevail over any inconsistencies or conflicting provisions of any of the Related
\nAgreements.<\/p>\n
ARTICLE 16:
\n WAIVER OF CONFLICT OF INTEREST
\n ——————————<\/p>\n
EACH OF THE SHAREHOLDERS HAS BEEN REPRESENTED BY SEPARATE COUNSEL IN
\nCONNECTION WITH THIS JOINT VENTURE AGREEMENT AND THE RELATED AGREEMENTS. SUCH
\nCOUNSEL HAS NOT REPRESENTED THE COMPANY TO DATE. THE LAWYERS, ACCOUNTANTS AND
\nOTHER EXPERTS WHO HAVE PERFORMED SERVICES FOR THE SHAREHOLDERS IN THE PAST MAY
\nPERFORM SERVICES FOR THE COMPANY AND MAY CONTINUE TO ALSO PERFORM SERVICES FOR
\nTHE SEPARATE SHAREHOLDERS IN THE FUTURE. TO THE EXTENT THAT SUCH DUAL
\nREPRESENTATION CONSTITUTES A CONFLICT OF INTEREST, THE COMPANY AND EACH OF THE
\nSHAREHOLDERS HEREBY EXPRESSLY WAIVE ANY SUCH CONFLICT OF INTEREST WITH RESPECT
\nTO ANY SUCH DUAL REPRESENTATION RELATIVE TO THE NEGOTIATION, AUTHORSHIP AND
\nEXECUTION OF THIS JOINT VENTURE AGREEMENT AND THE RELATED AGREEMENTS.<\/p>\n
(REMAINDER OF THIS PAGE INTENTIONALLY BLANK)<\/p>\n
41<\/p>\n
IN WITNESS WHEREOF, the undersigned have each executed or caused this Joint
\n Venture Agreement to be executed as of the date and year first above written.<\/p>\n
\n\n
\nEXODUS COMMUNICATIONS, INC., a Delaware ASIA GLOBAL CROSSING, LTD., a company
\ncorporation organized under the laws of Bermuda<\/p>\nBy: \/s\/ Ellen M. Hancock By: \/s\/ Charles F. Carroll
\n ——————– ———————-
\n(Signature) (Signature)<\/p>\n
Its: Chief Executive Officer and Chairman Its: Senior Vice President and General Counsel
\n—————————————– —————————————–
\n(Title) (Title)<\/p>\n
EXODUS ASIA-PACIFIC LTD, a company
\norganized under the laws of Bermuda <\/p>\n
By:
\n ————————————
\n(Signature)<\/p>\n
Its:
\n ————————————
\n(Title)
\n<\/c><\/s><\/caption>\n<\/table>\n
[SIGNATURE PAGE TO JOINT VENTURE AGREEMENT]<\/p>\n
42<\/p>\n
SCHEDULE 1.52: Network Agreement
\n ————- —————–<\/p>\n
(Attached Hereto)<\/p>\n
SCHEDULE 6.4: No Conflict
\n ————- ———–
\n1. EXODUS<\/p>\n
Agreements and governing documents with respect to Exodus Japan.<\/p>\n
2. GLOBAL CROSSING<\/p>\n
Agreements and governing documents with respect to Hutchinsen Global
\n Crossing.<\/p>\n
Agreements and governing documents with respect to GCTR Japan.<\/p>\n
SCHEDULE 6.10: Encumbrances on Joint Venture Interest
\n ————- ————————————–<\/p>\n
1. Security interest to be granted by EXODUS in its Joint Venture Interest
\n pursuant a CREDIT AGREEMENT presently contemplated to be entered into among
\n EXODUS COMMUNICATIONS, INC., the LENDERS named therein, THE CHASE MANHATTAN
\n BANK, as Administrative Agent and Collateral Agent, and CHASE MANHATTAN
\n INTERNATIONAL LIMITED, as London Agent.<\/p>\n
SCHEDULE 6.13: Business Interests in the Territory
\n ————- ———————————–<\/p>\n
1. EXODUS<\/p>\n
Japan — Exodus Japan<\/p>\n
2. GLOBAL CROSSING<\/p>\n
Hong Kong – Hutchinsen Global Crossing<\/p>\n
Japan – GCTR Japan<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7490,7648],"corporate_contracts_industries":[9513,9519],"corporate_contracts_types":[9613,9617],"class_list":["post-42300","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-exodus-communications-inc","corporate_contracts_companies-global-crossing-ltd","corporate_contracts_industries-technology__software","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-operations","corporate_contracts_types-operations__jv"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42300"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42300"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42300"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}