EXHIBIT 10.2
JOINT VENTURE AGREEMENT BETWEEN CORPORATIONS TO
JOINTLY SEEK, CONSTRUCT, AND OPERATE FUEL AND SUPPLY
CONCESSION FOR THE PANAMA CANAL
AGREEMENT dated this 12th day of December, 1996, between
ENVIRONMENTAL REMEDIATION HOLDING CORPORATION (hereinafter referred to as
"ERHC"), a Colorado corporation, with offices located 000 Xxxxxxx Xxxxxxxx,
Xxxxxxx, Xxx Xxxx and CENTRAM MARINE SERVICES, S.A. (hereinafter referred to as
"CENTRAM"), a Panama corporation, with offices located at APARTADO 1202 Colon,
Rep. De Panama.
W I T N E S S E T H :
WHEREAS, the parties desire to confirm the existence of a
Joint Venture for the purpose of complementing one another in jointly entering a
Concession with Texaco to supply fuel oil and supplies to ships going through
the Panama Canal and to jointly furnish the funds therefor and to so share the
expenses thereof; and
WHEREAS, ERHC and CENTRAM desire to operate such a system
in a joint manner; and
WHEREAS, ERHC and CENTRAM are both corporations duly qualified
to furnish such marine and fuel services in the area of the Panama Canal; and
WHEREAS, ERHC is utilizing local counsel in New York
State and has prepared the within Agreement; and
WHEREAS, an amount of Five Million ($5,000,000) U.S. Dollars
is estimated as that sum which shall be necessary to acquire the Tugs, Offices,
Boats, Letter of Credit, Barges and/or equipment and supplies; and
NOW, THEREFORE, the parties agree as follows:
I. Formation of Joint Venture
(a) The parties hereto have agreed and formed, in accordance
with the provisions of the Agreement, a Joint Venture, which is hereinafter
referred to as the "Joint Venture".
(b) The Joint Venture may conduct business as "ERHC/CENTRAM".
II. Powers and Purposes of the Joint Venture
The Joint Venture is formed for the purposes of (1) leasing or
purchasing certain real property situated the Country of Panama; (2)
constructing buildings and purchasing Tugs, Boats and/or equipment and supplies
to be used in connection with the development and maintenance of a fuel and
supply concession; (3) borrowing money for the purposes of the Joint Venture and
pledging or mortgaging the capital commitments of the parties and all or any
part of the Joint Venture properties therefor; (4) obtaining a Letter of Credit
for Two Million Five Hundred Thousand, U.S.D (2,500,000);
(5) selling, exchanging or otherwise disposing of any or all of the
properties of the Joint Venture for cash, stock, securities or any combination
thereof upon such terms and conditions as the Parties may from the time
determine; and (6) employing such agents, managers, laborers and other employees
as may be necessary to carry out the purposes of the said Joint Venture.
III. Properties
(a) The properties of the Joint Venture shall consist of
certain real property situated and all equipment necessary for the establishment
of a fuel and supply concession together with such other related equipment as
shall be necessary to carry out the intent of this Joint Venture, including the
easements and rights appurtenant thereto or which may be received in connection
with the use of the land, all buildings, fixtures, machinery and equipment to be
located on such real property or used in connection with the operations of the
Joint Venture in the Country of Panama and all other property, real or personal,
tangible or intangible, owned or acquired by the Joint Venture.
IV. Contributions
(a) On the execution of this Joint Venture Agreement,
ERHC will apply and has applied for the financing of said Joint
Venture in the amount of Five Million ($5,000,000) U.S. Dollars,
which includes the procurement of a Letter of Credit for $2,500,000
U.S.D. for Texaco to obtain the necessary fuel for this concession.
(b) CENTRAM shall provide any and all documents required by
the Government of Panama, the Panama Canal Commission and/or Texaco, including
but not limited to all applicable licenses, permits and/or documents necessary
to operate said concession.
(c) If ERHC does not make such additional investments required
of it by paragraph (a), then it shall forfeit all rights to such contributions
as have been made by it to the Joint Venture as of such time, and any and all
other rights that it shall have in properties of the Joint Venture shall be
deemed abandoned by it to the other party which shall assume the liabilities of
the Joint Venture.
(d) If CENTRAM does not provide the necessary documents to
enable the Joint Venture to operate as required by Paragraph (b), then it shall
forfeit all rights to such contributions as have been made by it to the Joint
Venture as of such time, and any and all other rights that shall have in
properties of the Joint Venture shall be deemed abandoned by it to the other
party which shall assume the liabilities of the Joint Venture.
(e) In the event that the Boards of Directors shall determine
that the capital, exclusive of financing, needed by the Joint Venture for the
implementation of the fuel and supply concession exceeds $5,000.000 U.S.D., the
decision as to the manner in which such excess above $5,000,000 U.S.D. shall be
acquired shall be determined by the shareholders of each of the parties to
the Joint Venture at a duly called meeting of all of said shareholders.
V. Allocation of Income and Losses
The net income and net losses of the Joint Venture for any
fiscal year shall be shared as follow:
51% to ERHC
49% to CENTRUM Marine Services, S.A.
VI. Term of Agreement
This Joint Venture shall continue for a period of
ten (10) years from the date of this Agreement and shall be renewed for the same
time periods as the concession continues, unless it is sooner terminated
pursuant to the provisions herein.
VII. Governing Committee
(a) The Board of Directors of ERHC shall select three (3)
persons and CENTRAM will select two (2) persons, which three (3) persons who,
together with two (2) persons, shall constitute the Governing Committee of the
Joint Venture. A vacancy in the Governing Committee caused by death, resignation
or removal shall be filled by the Board of Directors that shall have appointed
the departed member to the position which has become vacant and by both of the
said Boards of Directors if the vacancy shall have occurred in the office of a
member appointed by both of said Boards of Directors. A Board of Directors or
Boards of Directors which appointed him, as the case may be.
(b) The Governing Committee shall conduct the ordinary
business operations of the Joint Venture. The Committee shall have
authority to appoint a Managing Agent who, subject to its control, shall have
the power to execute contracts in the name of the Joint Venture, to appoint and
discharge agents and employees, and to take such other steps as shall be
necessary to carry out the day to day operations of the Joint Venture.
(c) Regular meetings of the Governing Committee may be held
without call or notice at such times and places as the Governing Committee at a
meeting of all of its members from time to time may fix; other meetings of the
Governing Committee may be called by any member thereof either by oral,
telegraphic or written notice, not later than the day prior to the date set for
such meeting. Such notice shall state the time and place of the meeting and
shall be sent to each member at his address as shown on the records of the Joint
Venture.
(d) At any meeting of the Governing Committee, all of the
members shall constitute a quorum. Members of the Committee may be present
through telephonic methods. No action of the Governing Committee shall be
effective unless authorized by the affirmative vote of a majority of the members
thereof.
(e) Minutes of the meetings of the Governing Committee shall
be kept by an individual designated by the Committee and the said minutes shall
be presented to each of the parties hereto for their information.
VIII. Termination of Joint Venture
(a) The Joint Venture shall be terminated upon:
(i) the expiration of the term specified in
Article VI hereof;
(ii) the occurrence of an event providing for
termination in either paragraphs (a) or
(b) Article IV hereof; or
(iii) consent of all of the parties.
(b) Upon the termination of the Joint Venture for any reason,
its liabilities and obligations to creditors shall be paid from cash on hand, or
if such cash on hand is insufficient, then first from the proceeds of the sale
of personal property of the Joint Venture, including automobiles, trucks,
machinery and equipment and next, from the sale of other properties of the Joint
Venture. Any liabilities still remaining shall then be borne in the portion set
forth herein, by the parties in accordance with paragraph V hereof. Or, if any
assets remain after payment of all liabilities, they shall then be distributed
in the following manner, but not to any party who shall be deemed to have
abandoned all of its rights in the Joint Venture, to wit:
(i) All cash on hand shall first be distributed to each
party in an amount equal to the unliquidated balance
of its capital account plus the amount of the credit
balance of its income account and the remainder, if
any, shall be distributed to the said party in
accordance with Article V hereof; and
(ii) All tangible personal property of the Joint Venture
shall be segregated and either be distributed in
accordance with subparagraph (i) above, or shall be
sold and the proceeds thereof shall be distributed
in the manner described in subparagraph (i) above;
and
(iii) All real property and all intangible personal
property of the Joint Venture shall be distributed in
the manner described in subparagraph (i) above.
(c) In the event that a distribution under the terms of this
Article shall be other than cash, then the value to be applied to such property
shall be its market value as of the termination date, provided, that in the case
of real property such market value shall be determined by a competent
professional appraiser of real property to be selected by the parties or their
legal representatives, as the case may be.
IX. Fiscal Year; Accounting Basis; Income and Capital
Account
The fiscal year of the Joint Venture shall be the fiscal year
of ERHC, a public company. The Joint Venture's books and records shall be kept
in the same manner and fashion as ERHC and in accordance with standard
accounting procedures. The priority of income distribution after payment of the
necessary and ordinary business expenses shall be in payment in satisfaction of
the capital contribution/LOAN provided by ERHC under Article IV. Thereafter, the
income account of each party shall be credited with its share, if any, of the
net income of the Joint Venture for each fiscal year and shall be charged with
(i) its share, if any, of the net loss of the Joint Venture for each fiscal
year, and (ii) any amounts distributed to it by the Joint Venture, but only to
the
extent of the credit balance of its income account before charging such
distributions. The capital account of each party shall be credited with the
capital contributions, if any, made by it under Article IV above, and such
account shall be charged with any amounts distributed to it, if any, which
pursuant to the preceding sentence, are not properly chargeable to its income
account. The balance in a party's capital account at any time shall be referred
to as its undistributed capital account.
X. Banking
(a) The funds of the Joint Venture shall be kept in an account
designated, or in any other manner which may be agreed upon between the parties,
on deposit in a bank designated by the Joint Venture Governing Committee to be
drawn upon checks jointly signed by the designees of the Governing Committee or
any other duly authorized officer (or representative) of each party.
(b) A separate account entitled the ERHC/CENTRAM Working
Account may be established by the parties, at such place and in such manner as
they shall determine, to be used in the day to day operation of the Joint
Venture. All funds in such account shall be subject to the control of the
Governing Committee and may be drawn upon checks signed by any two of the
members of the Governing Committee or by the Managing Agent acting alone if so
authorized by the Governing Committee.
XI. Transfer Restrictions
Without the written consent of the other party, a party shall
not sell, assign or transfer all or any part of its interest in the Joint
Venture except in accordance with the following procedures:
(a) Initial Offer:
The selling party shall first deliver to the other party a
written Notice of Intention to sell, offering all (but not less that all) of the
interest of the selling party in the Joint Venture at the purchase price and on
the terms specified therein, whereupon the other party shall have the right and
option for a period of sixty (60) days following receipt of such Notice, to
accept the offer made in such Notice, to all of the said interest at the
purchase price and upon the terms stated therein. Such acceptance shall be made
by delivering a written Notice of Acceptance to the selling party within said
sixty (60) day period.
(b) Sale to Outside Purchaser:
If an effective acceptance shall not be received pursuant to
paragraph (a) above, then the selling party may sell all (but not less than all)
of its interest to any outside purchaser, at a price not less than and on terms
not more favorable than the price and terms stated in the original Notice of
Intention to sell, at any time during the period of sixty (60) days next
following the expiration of the offers required by said paragraph (a); provided,
that such transferee shall agree to be bound by the terms of this Article XI.
(c) Failure to Sell to an Outside Purchaser:
If the selling party shall fail to sell all of its
interest as contemplated by paragraph (b) above within the sixty (60) day
period, then the provisions of the said Article shall continue to apply to such
interest as if no Notice of Intention to sell had been originally given in
connection therewith.
XII. Definition
For the purposes of this Agreement, the terms net income and
net loss shall mean the income (including the gain, if any, resulting from the
sale of all or any part of the properties of the Joint Venture) or loss of the
Joint Venture as reflected in its books as audited by the accountant or
accounting firm servicing the Joint Venture.
XIII. General Provisions, Miscellaneous
(a) All notices, requests, consents and statements hereunder
shall be deemed to have been properly given if mailed from by Federal Express,
Express Mail or by certified U.S. mail,postage prepaid, or if sent by prepaid
telegram, addressed in each case as follows:
(i) If to ERHC, care of:
Xxxxx X. Xxxxxxx, Esq.
000 Xxxxxxx Xxxxxxxx,
Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
(ii) If to CENTRAM, care of:
Xxxxxxx Xxxxxx
x/x XXXXXXX
XXXXXXXX 0000 Xxxxx
Xxx. Xx Xxxxxx
(x) This Agreement shall be deemed a contract made under the
laws of the State of New York and together with the rights and obligations of
the parties hereunder shall be construed and enforced in accordance with and
governed by the laws of such State.
(c) Each party agrees to execute and file all such
certificates, counterparts, amendments, instruments or other documents as may be
required by the laws of the State of New York and by the laws of any other
state, county or municipality, to comply with any fictitious or assumed name
statutes, and to qualify the Joint Venture for the transaction of business
therein.
(d) The parties hereto agree to take such further action as
shall be necessary to carry out the intention of this Agreement including the
execution and filing of such documents and taking such steps as may be required
by any appropriate statute or regulation.
(e) This Agreement shall be binding upon and shall inure to
the benefit of the respective heirs, successors, assigns and legal
representatives of the parties hereto.
(f) This Agreement may be executed simultaneously in two or
more counterparts, all of which together shall constitute one and the same
instrument.
(g) The headings of Articles are solely for the convenience of
reference and if there be any conflict between such headings and the text of
this Agreement, the text shall control.
IN WITNESS WHEREOF,
ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
Dated: December 12, 1996
/s/ Xxx X. Xxxx
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XXX X. XXXX, CEO
/s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX, SECRETARY
CENTRAM MARINE SERVICES, S.A.
Dated: December 12, 1996
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX, PRES.
business.ven\joint3.ven
