This document contains confidential and proprietary information of Trussnet USA, Inc. and is not be disclosed, reviewed or used, except with the express written consent of Trussnet.
EXHIBIT
10.5
This
document contains confidential and proprietary information of Trussnet USA, Inc.
and is not
be
disclosed, reviewed or used, except with the express written consent of
Trussnet.
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Page 1 of
8
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THIS FRAMEWORK AGREEMENT
(this “Framework Agreement”) is dated 7th April 2008 and made
between:
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1
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Trussnet USA, Inc.
(“Trussnet”), a company incorporated under the laws of Nevada, USA;
and
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2
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CECT-Chinacomm Communications
Co., Ltd. (‘‘Chinacomm”), a company incorporated under the laws of
the People’s Republic of China.
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Trussnet
and at-Xxxxxxx are each hereinafter referred to individually as a “Party"
or collectively as “Parties”.
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| Background |
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1
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Trussnet
is in the business of designing, developing, operating and maintaining
wireless communications facilities globally. Chinacomm is the major holder
of a 3.5G Hz spectrum licenses (“3.5 G Licenses”) from
the Ministry of Information Industry of China and desires to deploy 3.5
GHz wireless broadband operation in 2 cities throughout
China.
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2
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By
an agreement dated l November 2007 (“Initial Agreement”)
and made between the Parties, Trussnet: agrees to provide financial and
professional assistance to Chinacomm for building and operating such 3.5 G
Hz wireless broadband in 29 cities throughout China.
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3
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In
accordance with the Initial Agreement, Trussnet may purchase up to 49%
equity interests of
Chinacomm.
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4
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To
facilitate Chinacomm’s future financing plan, the Parties have agreed to
jointly set up a wholy foreign owned company in China (“WOFIE”) (as defined
below) with 49% equity interests owned indirectly by Trussnet and .51%
equity interests owned indirectly by Chinacomm’s shareholders, WOFIE will
enters series of exclusive agreements with Chinacormm in connection with
the construction, operation and maintenance of such 3.5 G Hz wireless
broadband in 29 cities throughout China.
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5
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Therefore,
the Parties have agreed to enter into this Framework Agreement as an
Addendum to. the Initial Agreement
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| Definitions |
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The
following capitalized terms used herein shall have the following
meanings:
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“Chinacomm Cayman” means
Chinacomm Limited, a company incorporated under the laws of Cayman Islands
and owned by two companies incorporated under the laws of British Virgin
Islands both owned by Xx. Xxxx Sin, who is a Hong Kong
resident:
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“Chinacomm HK” means a
company to be incorporated under the laws of Hong Kong and wholly owned by
Chinacomm Cayman;
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This
document contains confidential and proprietary information of Trussnet USA, Inc.
and is
not
be disclosed, reviewed or used, except with the express written consent of
Trussnet.
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Page 2 of
8
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“Gulfstream” means
Gulfstream Limited, a company incorporated under the laws of Hong Kong and
owned by Trussnet;
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“WOFIE” means a wholly
owned foreign invested enterprise to be incorporated under the laws China
and wholly owned by Chinacomm HK.
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“Trussnet WOFIE” means a
company incorporated or to be incorporated under the laws of China and
owned directly or indirectly by Trussnet;
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“Nortel” means Nortel
Networks (China) Limited.
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Both
Parities agree as follows:
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Article 1. Proposed
Transaction Structure
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[INSERT
ORG. CHART]
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a
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Gulfstream
will sign an investment agreement with Chinacomm Cayman and its owner(s)
(“Investment
Agreement”), by which Gulfstream will invest USD196,000,000.00
(“Acquisition
Price”) to acquire 49% equity interests of Chinacomm
Cayman.
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This
document contains confidential and proprietary information of Trussnet USA, Inc.
and is
not
be disclosed, reviewed or used, except with the express written consent of
Trussnet.
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Page 3 of
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b
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Chinacomm
Cayman will set up Chinacomm HK in Hong Kong, and then Chinacomm HK will
set up WOFIE in China. The board of directors of WOFIE shall be appointed
by both Parties in accordance with the percentage of the shareholdings of
each shareholder of Chinacomm Cayman. The composition of the board of
directors of Chinacomm Cayman, Chinacomm HK and WOFIE shall be identical.
Each of the Parties shall appoint one person as bank signatory of
Chinacomm Cayman, Chinacomm HK and WOFIE after the First Payment has been
paid to Chinacomm Cayman.
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c
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Trussnet
or Trussnet WOFIE will provide to WOFIE the relevant professional services
and will enter into services agreements with WOFIE in connection with the
operation and maintenance of 3.5G Hz wireless broadband and WOFIE shall
pay the relevant service fees to Trussnet in accordance with such services
agreements. Such service fees may be paid by Chinacomm Cayman for WOFIE in
any lawful way. Such services agreements should be exclusive and WOFIE
will not enter any similar agreements with any other parties, unless
agreed by Trussnet.
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d
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WOFIE
will provide to Chinacomm the relevant professional services and will
enter into services agreements with Chinacomm in connection with the
operation and maintenance of 3.5G Hz wireless broadband and Chinacomm
shall pay the relevant service fees to WOFIE in accordance with the such
services agreements. Such services agreements should be exclusive and
Chinacomm will not enter any similar agreements with any other parties,
unless agreed by Trussnet.
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e
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Trussnet
and WOFIE will have priority to purchase from Nortel (or other
manufactures of which the products arc recognized by Nortel) the necessary
equipments required by Chinacomm for the construction and operation of
3.5G Hz wireless broadband network after Trussnet has received the
documents listed in Article2 (b) below and sign lease agreement with WOFIE
(“Lease Agreements”), by which
Trussnet will lease such equipments to WOFTE. Such equipments expenditure
shall not exceed USD50,000,000.00. Such equipments will be transferred to
WOFIE at USD1.00 of the transfer price when Chinacomm Cayman goes to
listing in stock exchange.
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f
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The
WOFIE will sub-lease the same equipments to Chinacomm. WOFIE and
Chinacomm. shall enter into a sub-lease agreement (“Sub-Lease
Agreements”), by which Chinacomm shall pay rental to
WOFIE.
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g
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Subject
to the laws of PRC the annual rental and service fees payable by Chinacomm
to WOFIE under the various agreements above shall be 100% of the turnover
after deducted the all the tax payable and other necessary operation cost
in accordance with the approved budget by both Parties.
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h
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The
certain shares (up to 49%) of Chinacomm shall be legally and validly
transferred to Mr. Xing Hongjin or a Chinese company designated by Mr.
Xing proportionally in accordance with the payment of the Acquisition
Price at the transfer price of USD1.00. The ownership of such shares shall
be held by Mr. Xing through a qualified trust company or other legal
mechanism mutually agreed by the parties and Mr. Xing shall have the right
to appoint the directors of Chinacomm in accordance with the percentage of
the shares owned by him Such transfer of the slims to Mr. Xing shall be
conducted at the same time when Trussnet obtains equity of Chinacomm
Cayman through Gulfstream. Such 49% shares of Chinacomm will be
transferred back to the previous shareholders after Chinacomm Cayman goes
to listing in stock exchange at the transfer price of
USD1.00.
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i
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The
Parties have agreed to have Chinacomm Cayman or another mutually agreed
upon company in having an exit plan strategy of an IPO in an agreed upon
stock exchange.
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| Article 2. The Payment of Acquisition Price |
This
document contains confidential and proprietary information of Trussnet USA, Inc.
and is
not
be disclosed, reviewed or used, except with the express written consent of
Trussnet.
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Page 4 of
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a
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After
the execution of this Framework Agreement by both Parties and within 10
business days after Trussnet has duly received the originals of the signed
shareholders’ meeting resolution and board resolution of Chinacomm Cayman
both approving the acquisition of the 49%.equity interests of Chinacomm
Cayman by Trussnet through Gulfstream, Trussnet will pay USD5,000,000,00
(“First Payment”)
in cash in two separate payment as part of the above Acquisition Price
into Chinacomm Cayman through Gulfstream, then Chinacomm HK shall pay such
First Payment into WOFIE as part of the capital injection required by the
laws of China.
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b
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Trussnet will pay USD141,000,000.00 of the Acquisition Price in cash, within 10 business days upon the receipt of the following documents, into Chinacomm Cayman through Gulfstream then Chinacomm HK shall pay such payments into WOFIE as part of the capital injection required by the laws of China, subject to the following documents being received and acceptable by Trussnet: | |
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I
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the
Investment Agreement for the acquisition of 49% shares of Chinacomm Cayman
duly signed by the relevant parties and, disbursement plan of all parts of
the Acquisition Price shall be provided in the Investment
Agreement;
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ii
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the
revised articles of association of Chinacomm Cayman reflecting that the
certain equity interests of Chinacomm Cayman proportionally in accordance
with the payment of the Acquisition Price are owned by
Gulfstream;
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iii
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the
written documents showing that Trussnet has validly appointed directors,
bank signatory, general manager and corporate financial officer for
Chinacomm Cayman and Chinacomm HK;
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iv
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the
governmental approval in relation to the establishment of WOFIE and the
certificate of approval and business license of WOFIE and the articles of
association of WOFIE agreed by Trussnet;
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v
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the
certified copies of all corporate documents of Chinacomm HK, including but
not limited, commercial certificates, certificate of incorporation,
articles of associations, the list of the shareholders and the directors,
bank information, etc.;
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vi
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the
Lease Agreements duly signed by Trussnet WOFIE and WOFIE and the Sub-Lease
Agreements and the service agreements duly signed by Trussnet and WOFIE
and the service agreements duly signed by WOFIE and
Chinacomm;
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vii
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the
written legal evidence showing that the Article 1 (h) is duly performed;
and
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viii
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all
the documents and information materially necessary for conducting the
comprehensive legal and financial due diligence on
Chinacomm.
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The
above documents shall be provided by Chinacomm with 30 business days after
the payment of the First
Payment.
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This
document contains confidential and proprietary information of Trussnet USA, Inc.
and is
not
be disclosed, reviewed or used, except with the express written consent of
Trussnet.
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Page 5 of
8
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a
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The
remaining USD50,000,00000 of the Acquisition Price shall be deemed being
fully paid by Trussnet if Trussnet WOFIE has transferred the equipments to
WOFIE in accordance with Article 1(e).
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b
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If
Chinacomm fails to provide the documents listed in the Article2 (b) above
within the time required herein the First Payment shall be refundable to
Trussnet within 180 days after expiration of such required time
limit.
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c
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Within
7 business days after the payment of above USD141,000,000,00 Chinacomm
shall provide to Trussnet the written evidences showing that the
acquisition of 49% equity interests or Chinacomm Cayman and its amended
articles of association, as well as the change of directors, managers, and
bank signatory of Chinacomm Cayman and Chinacomm HK have been properly
filed with relevant agencies (if necessary).
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d
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Chinacomm
shall provide to Trussnet the legal evidences showing that all of the 3.5G
Licenses for 29 cities have been duly extended, and
valid.
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Article 3. The
validity of this Framework Agreement and the Governing
Law
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a
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The
Framework Agreement will be valid after it has been duly signed by the
authorized representatives of Chinacomm and Trussnet
respectively.
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b
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This
Framework Agreement shall be governed by and construed in accordance with
the laws of Hong Kong. Any disputes arising from this Framework Agreement
shall be submitted to arbitration at Hong Kong International Arbitration
Center applying its arbitration rules then applicable and the arbitration
reward will be final.
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c
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Notwithstanding
other provisions herein if the First Payment is not paid by Trussnet in
accordance with Article 2(a) above, this Framework Agreement shall be
void.
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Article 4. The
validity of the Initial Agreement
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a
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Except
for otherwise provided in this Framework Agreement, the provisions of the
initial Agreement shall remain valid.
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b
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Recitals
H, I, K, M, N and O as relevant provisions of the Initial Agreement shall
be void.
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c
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Recital
E o the Initial Agreement shall be replaced with the following: “The parties have also reached
an agreement pursuant to which Trussnet will: (i) build and operate
Xxxxxxx (Xxxxxxxx Xxxxxxxx), Xxxxxxxx (Xxxxxxx Xxxxxxxx), and Shenzen
(Futian District) initially; (ii) complete initial coverage for
aforementioned cities, Beijing, Shanghai, and Shenzhen in the future,
(iii) build and operate additional broadband wireless networks in
Guangzhou, Tianjin, Dalian, Ningbo, Xiamen, Hangzhou, Nanjing and other 19
cities, for a grand total of 19 cities, for Chinacomm in connection wit
Chinacomm’s 3.5G Hz spectrum license and to deploy such networks utilizing
similar equipment ad services to those being deployed for the Beijing
(Chaoyang District), Shanghai (Jiading Dsitrict), and Shenzhen (Futian
District);”
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This
document contains confidential and proprietary information of Trussnet USA, Inc.
and is
not
be disclosed, reviewed or used, except with the express written consent of
Trussnet.
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Page 6 of
8
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Framework
Agreement
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d
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Recital
G of the Initial Agreement shall be replaced with the following: “The Parties are entering into
this Agreement to set forth their respective rights, duties and
obligations the equipment, services and related activities related to the
Xxxxxxx (Xxxxxxxx Xxxxxxxx), Xxxxxxxx (Xxxxxxx Xxxxxxxx), Xxxxxxxx (Futian
District) cities along with Guangzhou, Tianjin, Dalian, Nignbo, Xiamen,
Hangzhou, Nanjing and
other 19 cities for a grand total of 29
cities.”
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e
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Recitals
F and K and relevant provisions of the Initial Agreement shall be replaced
with relevant articles of this Framework Agreement.
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Article 5. Exclusivity
of this Framework .Agreement.
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After
the payment made by Trussnet according to Articie2 (a) above in this
Framework Agreement, Chinacomm and Chinacomm registered/actual
shareholders shall not, without Trussnet’s prior written consent, enter
into any agreement or arrangement which may directly or indirectly load to
the transfer of shares or business of Chinacomm onshore or
offshore.
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IN
.WITNESS whereof, the Parties have execute d. this Framework Agreement on
the date first written above.
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This
document contains confidential and proprietary information of Trussnet USA, Inc.
and is
not
be disclosed, reviewed or used, except with the express written consent of
Trussnet.
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Page 7 of
8
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Framework
Agreement
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Trussnet
USA, Inc.
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Signature
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Name:
Xxxxx Xxx YongLee
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Title:
Managing Director / Co-Founder
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CECT-Chinacomm
Communications Co., Ltd.
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Signature
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Name:
iu Ping
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Title:
President
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This
document contains confidential and proprietary information of Trussnet USA, Inc.
and is
not
be disclosed, reviewed or used, except with the express written consent of
Trussnet.
Page 8
of 8
