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JOINT VENTURE AGREEMENT
This Joint Venture Agreement ("Agreement") is dated January
21, 2016, between American Wireless United Corporation, a
corporation organized under the laws of California, United
States ("USCO"), and Argentina Utility Company, a corporation
organized under the laws of Argentina ("ARGCO"). USCO and
ARGCO are sometimes hereinafter referred to individually as a
"Party" and jointly as the "Parties".
WHEREAS, the Parties intend to submit an application (the
"Application") to obtain a license (the "License") from the
Superintendency of Telecommunications of Argentina (the
"Regulator") to manufacture telecommunication products in
Argentina and to construct and operate a wireless
telecommunications system in Argentina (the "Project"), which
Application shall be submitted no later than April 30, 2016;
WHEREAS, the Parties shall cooperate with each other in
preparing and submitting the Application; and
WHEREAS, if the License is awarded to the Parties, the Parties
intend to form a corporation (the "JV Corporation") under the
laws of Argentina to manufacture telecommunications products
in Argentina and to operate a wireless telecommunications
system in Argentina pursuant to the License.
This Agreement sets forth the principal terms of the agreement
between the Parties regarding the Project. The Parties agree
that, in the event the License is awarded to them, each Party
shall enter into a Shareholders' Agreement substantially in the
form of Exhibit A attached hereto (the "Shareholders'
Agreement"). Further, the Parties shall enter and cause the JV
Corporation to enter, as appropriate, a License Agreement
substantially in the form of Exhibit B attached hereto (the
"License Agreement"), an International Distribution Agreement
substantially in the form of Exhibit C attached hereto (the
"Distribution Agreement"), and a Domestic Distribution
Agreement substantially in the form of Exhibit D attached
hereto (the "Domestic Distribution Agreement"), no later than
five (5) days after the date of the License.
INVESTMENT
A. Initial Ownership;
Expenses of Formation:
Shares of stock of the JV Corporation ("Shares") shall, initially,
be issued in accordance with this Section I(A). Initially, USCO
(or a subsidiary of USCO if permitted under the terms of the
License) shall own fifty-one percent (51%) of the Shares, and
ARGCO shall own forty-nine percent (49%) of the Shares.
Each Party will be responsible for its proportionate share (based
upon such Party's respective percentage ownership interest in
the JV Corporation as set forth in the preceding sentence) of the
costs, fees and expenses incurred by it in connection with
formation of the JV Corporation.
B. Required Capital
Contributions:
If the License is awarded and the JV Corporation is established,
the Parties shall be required to make initial capital contributions
to the JV Corporation (“Required Capital Contributions”), in
consideration for issuance of Shares to them pursuant to Section
I(A) above, in amounts sufficient to cover the cost of the
License fee plus the cost of the initial phase of the Project
described in the Business Plan attached as Exhibit F hereto (the
"Business Plan"). The Required Capital Contributions
obligation of each Party shall be determined by multiplying the
aggregate Required Capital Contributions of both Parties by a
fraction, the numerator of which is that Party's percentage
ownership interest in the JV Corporation and the denominator of
which is 100. The total Required Capital Contributions are
currently estimated to be US$120 million. Each Party shall be
required to make its proportionate share of the Required Capital
Contributions to the JV Corporation, and upon any failure to do
so, the JV Corporation shall, in addition to all other remedies
available to it at law or in equity, have the right to bring an
action against any such defaulting Party to enforce such
obligation, and shall be entitled to recover all costs, fees and
expenses incurred by it in enforcing such obligation.
C. Additional Capital Contributions:
Upon the approval of the holders of at least sixty-six and two-
thirds percent (66 2/3%) of the Shares, additional capital
contributions to the JV Corporation, in excess of the Required
Capital Contributions, may be requested from each shareholder
of the JV Corporation (each, a "Shareholder"), on the basis of
their respective pro rata ownership interests in the JV
Corporation. A Shareholder which does not approve such
additional capital contribution request and fails to provide a
requested additional capital contribution to the JV Corporation
shall not be deemed a defaulting Shareholder but shall have its
ownership interest in the JV Corporation diluted to a percentage
determined by dividing the aggregate amount of capital
provided to the JV Corporation by such Shareholder by the
aggregate amount of capital contributed to the JV Corporation
by all Shareholders after the payment of such requested
additional capital contributions.
RIGHTS OF SHAREHOLDERS
A. Preemptive Rights:
Each Shareholder shall be entitled to preemptive rights that will
enable it to maintain its respective fully diluted percentage
ownership interest in the Company by purchasing additional
Shares at the time of each issuance of additional Shares or any
securities convertible into or exchangeable for Shares. If the JV
Corporation proposes to issue any additional Shares pursuant to
a transaction in which the existing Shareholders are entitled to
preemptive rights in accordance with the foregoing, the JV
Corporation shall provide written notice to each Shareholder
which shall specify the aggregate number of Shares that the JV
Corporation proposes to issue, the issue price, the pro rata
number of Shares which each Shareholder is entitled to
purchase, any other material terms and conditions of the
issuance, and the date by which each Shareholder must notify
the JV Corporation in writing of such Shareholder's intention to
purchase such additional Shares.
B. Right of First Offer:
If any Shareholder proposes to sell or transfer any of its Shares
to any unaffiliated third party (any such Shareholder referred to
as a "Selling Shareholder"), such Selling Shareholder must first
offer for a period of thirty (30) days (a "Sale Period") to sell
such Shares by written notice (a "Sale Notice") to the other
Shareholders. A Sale Notice shall set forth the number of
Shares which the Selling Shareholder offers to sell to the other
Shareholders, the purchase price per Share at which it will sell
such Shares, and the other material terms and conditions of such
offer. If, during the Sale Period, any one or more of such other
Shareholders provides to the Selling Shareholder written
acceptance of such offer (any such Shareholder referred to as an
"Accepting Shareholder"), the Selling Shareholder shall be
required to sell the Shares which are the subject of the offer in
question, and the Accepting Shareholders shall be required to
purchase such Shares, on the terms and conditions set forth in
the Sale Notice. Each Accepting Shareholder shall have the
right to buy its proportionate share of the Shares being sold by
the Selling Shareholder on the basis of such Accepting Owner's
pro rata ownership of Shares. If the Selling Shareholder does
not receive an offer during the Sale Period from the other
Shareholders to purchase all of the Shares it has offered for sale
pursuant to the Sale Notice, the Selling Shareholder will have a
period of one hundred fifty (150) days (the "Open Period") from
the date of its receipt of such offer to seek and accept a written
offer from an unaffiliated third party (any such offer referred to
as a "Third Party Offer") to purchase such Shares, so long as
such Third Party Offer specifies a purchase price and other
terms and conditions which are no more favorable to the Third
Party than the terms and conditions contained in the Sale Notice
from the Selling Shareholder. If the Selling Shareholder does
not accept a Third Party Offer during the Open Period, the
Selling Shareholder may not subsequently sell any of its Shares
to an unaffiliated third party unless it first complies with the
right of first offer provisions of this Section II(B).
C. Tag Along Rights:
Each Shareholder shall have the right (a "Tag Along Right") in
the event of a sale or disposition initiated by another
Shareholder (a "Disposing Shareholder") of twenty (20%)
percent or more of its Shares in a single transaction or a series
of related transactions to an unaffiliated third party. Pursuant
to the Tag Along Right, each Shareholder other than a
Disposing Shareholder (a "Non-Disposing Shareholder") shall
have the right to sell to such third party purchaser, on the same
terms and conditions and at the same purchase price for each
1% of Shares of the JV Corporation as in the proposed sale of
each 1% of Shares of the JV Corporation by the Disposing
Shareholder, up to that percentage of the Shares of the JV
Corporation then owned by such non-Disposing Shareholder
that bears the same proportion to the total number of Shares
owned by such Non-Disposing Shareholder as the percentage of
the Shares being sold by the Disposing Shareholder bears to the
percentage of the total number of Shares of the JV Corporation
owned at that time by the Disposing Shareholder.
D. Drag Along Rights:
Commencing three years after the License is granted, upon any
sale by USCO to an unaffiliated third party of all of its Shares,
USCO shall have the right (a "Drag Along Right"), so long as it
has first complied with the right of first offer provisions set
forth in Section II(B) above, to require each other Shareholder
to sell all of its Shares to such third party on the same terms and
conditions and at the same price for each 1% of Shares of the
JV Corporation as the terms and conditions and the price at
which USCO is selling its Shares to such third party; provided,
however, that (i) if the price specified by USCO in fulfilling its
obligations pursuant to the right of first offer is at least 110% of
the price at which all Shares would be sold in accordance with
such Drag Along Right, the other Shareholders shall be required
to sell their Shares as herein provided, and (ii) if the price
specified by USCO in fulfilling its obligations pursuant to the
right of first offer is less than 110% of the price at which
Shares would be sold in accordance with such Drag Along
Right, then the other Shareholders shall have the right to
approve any such sale, which approval shall not be
unreasonably withheld or delayed.
E. Transfers to Affiliates:
Each Shareholder shall be entitled, without the prior approval or
consent of any other Shareholder, to sell, assign or otherwise
transfer any of its Shares to any Affiliate. For the purposes of
this Agreement, an "Affiliate" of any Shareholder is any
corporation, partnership or other entity which is controlled by,
controls or is under common control with such Shareholder.
The right of first offer, Tag Along Right and Drag Along Right
provisions of this Agreement shall not apply in the event of any
such sale, assignment or other transfer in accordance with the
foregoing provisions of this Section II(E). Any person who or
which becomes a purchaser, assignee or other transferee of
Shares shall, as a condition to such purchase, assignment or
other transfer, be required to sign an agreement reasonably
satisfactory in form and substance to the JV Corporation,
pursuant to which such person agrees to be subject to and bound
by all of the terms and conditions of this Agreement and the
Shareholders' Agreement, to the same extent as other
Shareholders.
F. Board of Directors:
The JV Corporation will have a Board of Directors (the
"Board") consisting of seven (7) members. USCO shall have
the right to appoint four (4) members of the Board and ARGCO
shall have the right to appoint three (3) members of the Board.
The presence, whether in person or by telephonic participation,
of a majority of the members of the Board at any meeting of the
Board shall constitute a quorum of the Board for all purposes.
Board actions shall require the affirmative vote of a majority of
the members of the Board taken at a meeting at which a quorum
is present. The JV Corporation shall pay all out-of pocket costs
and expenses incurred by members of the Board acting as such.
G. Calling of Meetings:
Meetings of the Shareholders may be called by the holders of
twenty percent (20%) or more of the issued and outstanding
Shares. The presence at a meeting of the holders of at least
fifty-one percent (51%) of the issued and outstanding Shares
shall constitute a quorum of the Shareholders for all purposes.
H. Non-Compliance:
USCO shall have the right to require a sale of the JV
Corporation (including the right to exercise Drag Along Rights
pursuant to Section II(E) above) upon the same pro rata terms
and conditions (by merger, sale of Shares or assets or
otherwise) if the JV Corporation or any of its Affiliates
breaches any of its material covenants or agreements and such
breach, if not intentional, is not cured within any applicable
cure period.
I. Supermajority Approvals:
All actions of the JV Corporation shall require the prior
approval of the holders of more than 50% of the issued and
outstanding Shares, except that the following actions shall
require the prior approval of more than 66 2/3% of such Shares:
i. a merger or consolidation, or a sale of all or substantially
all of the assets of the JV Corporation or any of its subsidiaries;
ii. acquisition of the shares of stock or other ownership
interests, or all or substantially all of the assets, of any other
entity or any investment involving in the aggregate US $5
million or more;
iii. the issuance of any additional Shares;
iv. amendment of the charter or by-laws of the JV Corporation
or any of its subsidiaries;
v. entering into any joint venture between the JV Corporation
or any of its subsidiaries and a third party;
vi. adoption, approval or amendment of the Business Plan or
any annual operating or capital expenditure budget of the JV
Corporation or any of its Affiliates;
vii. expenditures (including capital expenditures) by the JV
Corporation or any subsidiary, in an isolated transaction or a
series of related transactions, which is not provided for in a
budget previously approved by the Board and which exceeds by
more than 15% the aggregate amount of an annual operating or
capital expenditure budget then in effect;
viii. approval of the JV Corporation's independent certified
public accountants; and
ix. agreements to do any of the foregoing.
J. Information Rights:
The JV Corporation shall furnish to the Shareholders the
following with respect to the JV Corporation: (i) audited yearly
financial statements, within ninety (90) days of year-end,
accompanied by an opinion of the JV Corporation's independent
certified public accountants; (ii) unaudited quarterly financials,
within forty-five (45) days of the end of each calendar quarter;
and (iii) such other information that the Shareholders may
reasonably request. All members of the Board shall be
furnished with a proposed annual operating budget for the
following year before the prior year's end, which budget shall
require the approval of a majority of the Shareholders no later
than thirty (30) days after the commencement of the year to
which it relates. Until the annual operating budget for a
succeeding year is approved, the operating expenses in the
operating budget for the prior year shall be utilized for such
succeeding year.
PROJECT Implementation
A. Responsibilities of Parties; Bond:
The Parties intend to submit the Application to the Regulator on
or before April 30, 2016. In accordance with procedures
governing submission of the Application, the Parties are
required to submit a bond in the amount of $3 million (the
"Bond") to secure their obligation to pay the License fee to the
Regulator in the event the License is awarded to the JV
Corporation. USCO shall be responsible for fifty-one percent
(51%) of the premium for the bond and ARGCO shall be
responsible forty-nine percent (49%) of such premium. Once
the Application is submitted, the Bond is required to remain in
effect for a period of at least ninety (90) days. The Parties
agree to execute an Escrow Agreement substantially in the form
of Exhibit E attached hereto (the "Escrow Agreement") no later
than five (5) days after the date of this Agreement, which will
control their rights concerning funds deposited in the escrow
account established in accordance with the Escrow Agreement.
In the event the Regulator requests that the Application and/or
the Bond be extended beyond ninety (90) days from the date of
submission, such extension may not be granted without the prior
written consent of each Party. In the event the License is
awarded, but either Party fails to fulfill its commitment to pay
its pro rata share (based upon ownership interests in the
Corporation) of the cost of the License (referred to as a
"Defaulting Party") and as a result thereof the Bond is forfeited
to the Regulator, the Defaulting Party shall pay the entire cost
of the premium for the Bond, the principal amount of the Bond
forfeited to the Regulator, and all costs and expenses of the
other Party (a "Non-Defaulting Party") in any way related to the
submission of the Application (including but not limited to
costs of preparation of the Application). The Parties agree that
the Bond has been submitted by Citibank, N.A. ("Citibank"), at
the request of ARGCO and that in order to provide security to
Citibank in the event the License fee is not paid, ARGCO has
deposited $3 million into an account at Citibank. In the event
ARGCO is the Defaulting Party, Citibank shall be entitled to
take ownership and possession of all funds in such account. In
order to secure USCO's obligation to pay $3 million to ARGCO
if USCO is the Defaulting Owner, USCO has deposited US$3
million into the escrow account pursuant to the Escrow
Agreement.
B. Application Support
Subsequent to Filing:
The Parties agree to support the Application submission after
filing the Application, in a concerted effort to succeed in having
the License awarded. Such support will include, but not be
limited to, public relations events, presentations to the
Regulator and other governmental bodies, and responding to
inquiries from governmental and non-governmental agencies
associated with the licensing decision process.
C. Escrow Deposit:
USCO shall exert its best efforts to obtain a letter from Citibank
no later than 4 p.m. Eastern Standard Time on January 31, 2016,
confirming that USCO has deposited $3 million into the Escrow
Account.
D. Execution of Exhibits:
The Parties shall execute and cause the JV Corporation to
execute the Agreements attached as Exhibits A, B and C hereto
within five (5) days after the date on which the License is
awarded.
E. Further Assurances:
The Parties agree to take all steps necessary or appropriate from
time to time, including but not limited to adopting, amending
and modifying the Articles of Incorporation and By-laws of the
JV Corporation in order to implement all provisions of this
Agreement the Agreements attached as Exhibits A, B and C
hereto.
F. Business Goal:
The goal of the JV Corporation shall be to design, construct,
maintain and operate a wireless telecommunications system in
Argentina, establish facilities in Argentina for manufacturing
equipment used in telecommunications systems, and establish an
international distribution network for sale outside of Argentina
of telecommunications equipment manufactured by the JV
Corporation of Argentina, all in accordance with the Business
Plan.
G. Operational Business
Model:
The Parties agree to establish an operational business model for
the JV Corporation outlining the projecting operating income,
capital expenditures and sources/uses of funds associated with
the Project prior to submission of the Application to the
Regulator.
H. Technology License:
Promptly after issuance of the License the Parties shall cause
the JV Corporation to execute the License Agreement with
USCO, and USCO shall execute the License Agreement.
I. Manufacture in
Argentina:
Promptly after issuance of the License, the Parties shall cause
the JV Corporation to establish a facility for the manufacture of
telecommunications products in Argentina, pursuant to the
License Agreement, including, without limitation, leasing or
purchasing land, constructing a suitable facility, hiring
employees, obtaining requisite local approvals and permits, and
other necessary matters.
J. International Distribution
and Sale of Products
Promptly after issuance of the License the Parties shall cause
the JV Corporation to execute the International Distribution
Agreement with USCO, and USCO shall also execute the
International Distribution Agreement. Thereafter, distribution
and sale of telecommunications products manufactured by the
JV Corporation shall be distributed and sold outside Argentina
pursuant to the International Distribution Agreement.
K. Domestic Distribution
and Sale of Products:
Promptly after issuance of the License the Parties shall cause
the JV Corporation to execute the Domestic Distribution
Agreement with ARGCO, and ARGCO shall also execute the
Domestic Distribution Agreement. Thereafter, distribution and
sale of telecommunications products manufactured by the JV
Corporation shall be distributed and sold Argentina pursuant to
the Domestic Distribution Agreement.
MISCELLANEOUS
A. Public Announcements
and Confidentiality
The Parties agree to hold in strict confidence the terms of this
Agreement and further agree that, except as required by
applicable law, they will not, without the prior written consent
of the other Party, disclose to any person or entity the contents
of this Agreement or the subject matter of the negotiations of
the Agreements attached as Exhibits A, B and C hereto (other
than to their respective officers, directors, bankers, investment
bankers, attorneys, accountants and other representatives who
are involved in analyzing the transactions contemplated hereby)
or publish or issue any press release or announcement
concerning the subject matter hereof or thereof. Except as
required by applicable law, upon the execution of the
Agreements attached as Exhibits A, B and C hereto, neither
Party shall publish or issue any press release without the prior
written consent of the other Party.
B. No Shopping:
In consideration of the obligations of the undersigned, each
Party agrees that until the License is awarded and payment for
the License has been made to the Regulator, neither Party nor
any of its Affiliates shall, directly or indirectly, alone or
through any officers, directors, employees, shareholders,
intermediaries, agents or representatives, discuss, negotiate or
participate, agree with, or provide information to, any other
person, firm or entity seeking to submit an Application to obtain
the License, or form any entity in order to seek to obtain the
License, or take any steps that may circumvent this "No Shop"
provision.
C. Foreign Corrupt
Practices Act:
Each Party and each of its respective officers, employees,
directors, representatives and agents shall not, during the term
of this Agreement, make any payment, or offer or provide any
other inducement, to officials of any government with the intent
to influence the governmental actions of those officials in a way
that would violate United States law, if it were applicable,
against corrupt payments or inaccurate recordkeeping.
D. Binding Agreement:
The parties agree that this Agreement constitutes a binding
agreement of the Parties.
E. Severability:
If any term, provision, covenant or restriction of this Agreement
is held to be invalid, void or unenforceable, such provision shall
be amended by the Parties only to the extent necessary to be
enforceable consistent with the Parties' intent, and the
remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect, unless such
action would substantially impair the benefits to either Party of
the remaining provisions of this Agreement.
F. Specific Enforcement:
The Parties each acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this
Agreement are not performed in accordance with their specific
terms or are otherwise breached. It is accordingly agreed that
the Parties shall be entitled to preliminary relief to prevent or
cure breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof, this being
in addition to any other remedy to which they may be entitled
by law.
G. Notices:
Any notices or other communications required or permitted
hereunder shall be in writing and shall be delivered by hand,
registered mail, international courier, or email (in this last case,
with proper electronic evidence of delivery) addressed as
follows:
If to USCO:
American Wireless United Corporation
If to ARGCO:
Argentina Utility Company
Either Party may, by means fifteen (15) days prior notice given
in accordance with the foregoing to the other Party, designate
another address for receipt of notices hereunder. Notices given
according to this Section IV(G) shall be deemed delivered (i) on
the date included in the receipt, if delivered by mail upon
receipt; and (iii) on the date of confirmation of transmission
receipt, if sent by e-mail.
H. Waivers:
No waiver by either Party of any default with respect to any
provision, condition or requirement hereof shall be deemed to
be a continuing waiver in the future thereof or a waiver of any
other provision, condition or requirement hereof; nor shall any
delay or omission of either Party to exercise any right hereunder
in any manner impair the exercise of any such right accruing to
it thereafter.
I. Successor and Assigns:
Assignment:
This Agreement shall be binding upon and inure to the benefit
of the Parties and their successors and permitted assigns.
Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by either Party without the prior
written consent of the other Party, except that either Party may
assign its rights and obligations under this Agreement to any of
its Affiliates without the other Party's prior consent.
J. Entire Agreement:
This Agreement contains the entire understanding of the Parties
with respect to the subject matter hereof, and supersedes all
other prior understandings between the Parties with respect to
such subject matter, including without limitation the Letter of
Intent between them dated December 15, 2016 (the "Letter of
Intent"). This Agreement may be amended only by a written
instrument executed on behalf of both Parties.
K. Governing Law:
This Agreement shall be governed by the laws of the State of
New York without giving effect to conflicts of law principles so
long as not prohibited by Argentina law.
L. English Language
This Agreement shall be translated into Spanish but in the event
of any conflict or inconsistency between the English and
Spanish versions, the English version shall prevail, and as
between the Parties, the English version shall govern.
M. Counterparts:
This Agreement may be executed in any number of separate
counterpart copies, but all such counterparts taken together
shall constitute one and the same instrument.
N. Costs and Expenses:
Each Party shall be responsible for, and shall pay, all costs and
expenses, including without limitation legal and accounting
fees, travel expenses and other costs and expenses incurred by it
in connection with negotiation and execution of this Agreement
and the Letter of Intent, preparation and filing of the
Application, and in otherwise pursuing or advancing the Project
or the transactions contemplated by this Agreement.
Agreed to and Signed by:
Dated: January 21, 2016
AMERICAN WIRELESS UNITED CORPORATION ("USCO")
By: __________________________________
Name:
Title:
Dated: January 21, 2016
ARGENTINA UTILITY COMPANY ("ARGCO")
By: __________________________________
Name:
Title:
EXHIBIT A
SHAREHOLDERS’ AGREEMENT
EXHIBIT B
LICENSE AGREEMENT
EXHIBIT C
INTERNATIONAL DISTRIBUTION
AGREEMENT
EXHIBIT D
DOMESTIC DISTRIBUTION
AGREEMENT
EXHIBIT E
ESCROW AGREEMENT
EXHIBIT F
BUSINESS PLAN
0109-1007 / 387549.2
1
Joint Venture Agreement for Wireless Telecom Project in Argentina

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Joint Venture Agreement for Wireless Telecom Project in Argentina

  • 1. JOINT VENTURE AGREEMENT This Joint Venture Agreement ("Agreement") is dated January 21, 2016, between American Wireless United Corporation, a corporation organized under the laws of California, United States ("USCO"), and Argentina Utility Company, a corporation organized under the laws of Argentina ("ARGCO"). USCO and ARGCO are sometimes hereinafter referred to individually as a "Party" and jointly as the "Parties". WHEREAS, the Parties intend to submit an application (the "Application") to obtain a license (the "License") from the Superintendency of Telecommunications of Argentina (the "Regulator") to manufacture telecommunication products in Argentina and to construct and operate a wireless telecommunications system in Argentina (the "Project"), which Application shall be submitted no later than April 30, 2016; WHEREAS, the Parties shall cooperate with each other in preparing and submitting the Application; and WHEREAS, if the License is awarded to the Parties, the Parties intend to form a corporation (the "JV Corporation") under the laws of Argentina to manufacture telecommunications products in Argentina and to operate a wireless telecommunications system in Argentina pursuant to the License. This Agreement sets forth the principal terms of the agreement between the Parties regarding the Project. The Parties agree that, in the event the License is awarded to them, each Party shall enter into a Shareholders' Agreement substantially in the form of Exhibit A attached hereto (the "Shareholders' Agreement"). Further, the Parties shall enter and cause the JV Corporation to enter, as appropriate, a License Agreement substantially in the form of Exhibit B attached hereto (the "License Agreement"), an International Distribution Agreement substantially in the form of Exhibit C attached hereto (the "Distribution Agreement"), and a Domestic Distribution Agreement substantially in the form of Exhibit D attached
  • 2. hereto (the "Domestic Distribution Agreement"), no later than five (5) days after the date of the License. INVESTMENT A. Initial Ownership; Expenses of Formation: Shares of stock of the JV Corporation ("Shares") shall, initially, be issued in accordance with this Section I(A). Initially, USCO (or a subsidiary of USCO if permitted under the terms of the License) shall own fifty-one percent (51%) of the Shares, and ARGCO shall own forty-nine percent (49%) of the Shares. Each Party will be responsible for its proportionate share (based upon such Party's respective percentage ownership interest in the JV Corporation as set forth in the preceding sentence) of the costs, fees and expenses incurred by it in connection with formation of the JV Corporation. B. Required Capital Contributions: If the License is awarded and the JV Corporation is established, the Parties shall be required to make initial capital contributions to the JV Corporation (“Required Capital Contributions”), in consideration for issuance of Shares to them pursuant to Section I(A) above, in amounts sufficient to cover the cost of the License fee plus the cost of the initial phase of the Project described in the Business Plan attached as Exhibit F hereto (the "Business Plan"). The Required Capital Contributions obligation of each Party shall be determined by multiplying the aggregate Required Capital Contributions of both Parties by a fraction, the numerator of which is that Party's percentage ownership interest in the JV Corporation and the denominator of which is 100. The total Required Capital Contributions are currently estimated to be US$120 million. Each Party shall be required to make its proportionate share of the Required Capital Contributions to the JV Corporation, and upon any failure to do so, the JV Corporation shall, in addition to all other remedies available to it at law or in equity, have the right to bring an action against any such defaulting Party to enforce such
  • 3. obligation, and shall be entitled to recover all costs, fees and expenses incurred by it in enforcing such obligation. C. Additional Capital Contributions: Upon the approval of the holders of at least sixty-six and two- thirds percent (66 2/3%) of the Shares, additional capital contributions to the JV Corporation, in excess of the Required Capital Contributions, may be requested from each shareholder of the JV Corporation (each, a "Shareholder"), on the basis of their respective pro rata ownership interests in the JV Corporation. A Shareholder which does not approve such additional capital contribution request and fails to provide a requested additional capital contribution to the JV Corporation shall not be deemed a defaulting Shareholder but shall have its ownership interest in the JV Corporation diluted to a percentage determined by dividing the aggregate amount of capital provided to the JV Corporation by such Shareholder by the aggregate amount of capital contributed to the JV Corporation by all Shareholders after the payment of such requested additional capital contributions. RIGHTS OF SHAREHOLDERS A. Preemptive Rights: Each Shareholder shall be entitled to preemptive rights that will enable it to maintain its respective fully diluted percentage ownership interest in the Company by purchasing additional Shares at the time of each issuance of additional Shares or any securities convertible into or exchangeable for Shares. If the JV Corporation proposes to issue any additional Shares pursuant to a transaction in which the existing Shareholders are entitled to preemptive rights in accordance with the foregoing, the JV Corporation shall provide written notice to each Shareholder which shall specify the aggregate number of Shares that the JV Corporation proposes to issue, the issue price, the pro rata number of Shares which each Shareholder is entitled to purchase, any other material terms and conditions of the issuance, and the date by which each Shareholder must notify the JV Corporation in writing of such Shareholder's intention to
  • 4. purchase such additional Shares. B. Right of First Offer: If any Shareholder proposes to sell or transfer any of its Shares to any unaffiliated third party (any such Shareholder referred to as a "Selling Shareholder"), such Selling Shareholder must first offer for a period of thirty (30) days (a "Sale Period") to sell such Shares by written notice (a "Sale Notice") to the other Shareholders. A Sale Notice shall set forth the number of Shares which the Selling Shareholder offers to sell to the other Shareholders, the purchase price per Share at which it will sell such Shares, and the other material terms and conditions of such offer. If, during the Sale Period, any one or more of such other Shareholders provides to the Selling Shareholder written acceptance of such offer (any such Shareholder referred to as an "Accepting Shareholder"), the Selling Shareholder shall be required to sell the Shares which are the subject of the offer in question, and the Accepting Shareholders shall be required to purchase such Shares, on the terms and conditions set forth in the Sale Notice. Each Accepting Shareholder shall have the right to buy its proportionate share of the Shares being sold by the Selling Shareholder on the basis of such Accepting Owner's pro rata ownership of Shares. If the Selling Shareholder does not receive an offer during the Sale Period from the other Shareholders to purchase all of the Shares it has offered for sale pursuant to the Sale Notice, the Selling Shareholder will have a period of one hundred fifty (150) days (the "Open Period") from the date of its receipt of such offer to seek and accept a written offer from an unaffiliated third party (any such offer referred to as a "Third Party Offer") to purchase such Shares, so long as such Third Party Offer specifies a purchase price and other terms and conditions which are no more favorable to the Third Party than the terms and conditions contained in the Sale Notice from the Selling Shareholder. If the Selling Shareholder does not accept a Third Party Offer during the Open Period, the Selling Shareholder may not subsequently sell any of its Shares to an unaffiliated third party unless it first complies with the
  • 5. right of first offer provisions of this Section II(B). C. Tag Along Rights: Each Shareholder shall have the right (a "Tag Along Right") in the event of a sale or disposition initiated by another Shareholder (a "Disposing Shareholder") of twenty (20%) percent or more of its Shares in a single transaction or a series of related transactions to an unaffiliated third party. Pursuant to the Tag Along Right, each Shareholder other than a Disposing Shareholder (a "Non-Disposing Shareholder") shall have the right to sell to such third party purchaser, on the same terms and conditions and at the same purchase price for each 1% of Shares of the JV Corporation as in the proposed sale of each 1% of Shares of the JV Corporation by the Disposing Shareholder, up to that percentage of the Shares of the JV Corporation then owned by such non-Disposing Shareholder that bears the same proportion to the total number of Shares owned by such Non-Disposing Shareholder as the percentage of the Shares being sold by the Disposing Shareholder bears to the percentage of the total number of Shares of the JV Corporation owned at that time by the Disposing Shareholder. D. Drag Along Rights: Commencing three years after the License is granted, upon any sale by USCO to an unaffiliated third party of all of its Shares, USCO shall have the right (a "Drag Along Right"), so long as it has first complied with the right of first offer provisions set forth in Section II(B) above, to require each other Shareholder to sell all of its Shares to such third party on the same terms and conditions and at the same price for each 1% of Shares of the JV Corporation as the terms and conditions and the price at which USCO is selling its Shares to such third party; provided, however, that (i) if the price specified by USCO in fulfilling its obligations pursuant to the right of first offer is at least 110% of the price at which all Shares would be sold in accordance with such Drag Along Right, the other Shareholders shall be required to sell their Shares as herein provided, and (ii) if the price specified by USCO in fulfilling its obligations pursuant to the
  • 6. right of first offer is less than 110% of the price at which Shares would be sold in accordance with such Drag Along Right, then the other Shareholders shall have the right to approve any such sale, which approval shall not be unreasonably withheld or delayed. E. Transfers to Affiliates: Each Shareholder shall be entitled, without the prior approval or consent of any other Shareholder, to sell, assign or otherwise transfer any of its Shares to any Affiliate. For the purposes of this Agreement, an "Affiliate" of any Shareholder is any corporation, partnership or other entity which is controlled by, controls or is under common control with such Shareholder. The right of first offer, Tag Along Right and Drag Along Right provisions of this Agreement shall not apply in the event of any such sale, assignment or other transfer in accordance with the foregoing provisions of this Section II(E). Any person who or which becomes a purchaser, assignee or other transferee of Shares shall, as a condition to such purchase, assignment or other transfer, be required to sign an agreement reasonably satisfactory in form and substance to the JV Corporation, pursuant to which such person agrees to be subject to and bound by all of the terms and conditions of this Agreement and the Shareholders' Agreement, to the same extent as other Shareholders. F. Board of Directors: The JV Corporation will have a Board of Directors (the "Board") consisting of seven (7) members. USCO shall have the right to appoint four (4) members of the Board and ARGCO shall have the right to appoint three (3) members of the Board. The presence, whether in person or by telephonic participation, of a majority of the members of the Board at any meeting of the Board shall constitute a quorum of the Board for all purposes. Board actions shall require the affirmative vote of a majority of the members of the Board taken at a meeting at which a quorum is present. The JV Corporation shall pay all out-of pocket costs and expenses incurred by members of the Board acting as such.
  • 7. G. Calling of Meetings: Meetings of the Shareholders may be called by the holders of twenty percent (20%) or more of the issued and outstanding Shares. The presence at a meeting of the holders of at least fifty-one percent (51%) of the issued and outstanding Shares shall constitute a quorum of the Shareholders for all purposes. H. Non-Compliance: USCO shall have the right to require a sale of the JV Corporation (including the right to exercise Drag Along Rights pursuant to Section II(E) above) upon the same pro rata terms and conditions (by merger, sale of Shares or assets or otherwise) if the JV Corporation or any of its Affiliates breaches any of its material covenants or agreements and such breach, if not intentional, is not cured within any applicable cure period. I. Supermajority Approvals: All actions of the JV Corporation shall require the prior approval of the holders of more than 50% of the issued and outstanding Shares, except that the following actions shall require the prior approval of more than 66 2/3% of such Shares: i. a merger or consolidation, or a sale of all or substantially all of the assets of the JV Corporation or any of its subsidiaries; ii. acquisition of the shares of stock or other ownership interests, or all or substantially all of the assets, of any other entity or any investment involving in the aggregate US $5 million or more; iii. the issuance of any additional Shares; iv. amendment of the charter or by-laws of the JV Corporation or any of its subsidiaries; v. entering into any joint venture between the JV Corporation or any of its subsidiaries and a third party; vi. adoption, approval or amendment of the Business Plan or any annual operating or capital expenditure budget of the JV Corporation or any of its Affiliates; vii. expenditures (including capital expenditures) by the JV Corporation or any subsidiary, in an isolated transaction or a
  • 8. series of related transactions, which is not provided for in a budget previously approved by the Board and which exceeds by more than 15% the aggregate amount of an annual operating or capital expenditure budget then in effect; viii. approval of the JV Corporation's independent certified public accountants; and ix. agreements to do any of the foregoing. J. Information Rights: The JV Corporation shall furnish to the Shareholders the following with respect to the JV Corporation: (i) audited yearly financial statements, within ninety (90) days of year-end, accompanied by an opinion of the JV Corporation's independent certified public accountants; (ii) unaudited quarterly financials, within forty-five (45) days of the end of each calendar quarter; and (iii) such other information that the Shareholders may reasonably request. All members of the Board shall be furnished with a proposed annual operating budget for the following year before the prior year's end, which budget shall require the approval of a majority of the Shareholders no later than thirty (30) days after the commencement of the year to which it relates. Until the annual operating budget for a succeeding year is approved, the operating expenses in the operating budget for the prior year shall be utilized for such succeeding year. PROJECT Implementation A. Responsibilities of Parties; Bond: The Parties intend to submit the Application to the Regulator on or before April 30, 2016. In accordance with procedures governing submission of the Application, the Parties are required to submit a bond in the amount of $3 million (the "Bond") to secure their obligation to pay the License fee to the Regulator in the event the License is awarded to the JV Corporation. USCO shall be responsible for fifty-one percent (51%) of the premium for the bond and ARGCO shall be responsible forty-nine percent (49%) of such premium. Once the Application is submitted, the Bond is required to remain in
  • 9. effect for a period of at least ninety (90) days. The Parties agree to execute an Escrow Agreement substantially in the form of Exhibit E attached hereto (the "Escrow Agreement") no later than five (5) days after the date of this Agreement, which will control their rights concerning funds deposited in the escrow account established in accordance with the Escrow Agreement. In the event the Regulator requests that the Application and/or the Bond be extended beyond ninety (90) days from the date of submission, such extension may not be granted without the prior written consent of each Party. In the event the License is awarded, but either Party fails to fulfill its commitment to pay its pro rata share (based upon ownership interests in the Corporation) of the cost of the License (referred to as a "Defaulting Party") and as a result thereof the Bond is forfeited to the Regulator, the Defaulting Party shall pay the entire cost of the premium for the Bond, the principal amount of the Bond forfeited to the Regulator, and all costs and expenses of the other Party (a "Non-Defaulting Party") in any way related to the submission of the Application (including but not limited to costs of preparation of the Application). The Parties agree that the Bond has been submitted by Citibank, N.A. ("Citibank"), at the request of ARGCO and that in order to provide security to Citibank in the event the License fee is not paid, ARGCO has deposited $3 million into an account at Citibank. In the event ARGCO is the Defaulting Party, Citibank shall be entitled to take ownership and possession of all funds in such account. In order to secure USCO's obligation to pay $3 million to ARGCO if USCO is the Defaulting Owner, USCO has deposited US$3 million into the escrow account pursuant to the Escrow Agreement. B. Application Support Subsequent to Filing: The Parties agree to support the Application submission after filing the Application, in a concerted effort to succeed in having the License awarded. Such support will include, but not be limited to, public relations events, presentations to the
  • 10. Regulator and other governmental bodies, and responding to inquiries from governmental and non-governmental agencies associated with the licensing decision process. C. Escrow Deposit: USCO shall exert its best efforts to obtain a letter from Citibank no later than 4 p.m. Eastern Standard Time on January 31, 2016, confirming that USCO has deposited $3 million into the Escrow Account. D. Execution of Exhibits: The Parties shall execute and cause the JV Corporation to execute the Agreements attached as Exhibits A, B and C hereto within five (5) days after the date on which the License is awarded. E. Further Assurances: The Parties agree to take all steps necessary or appropriate from time to time, including but not limited to adopting, amending and modifying the Articles of Incorporation and By-laws of the JV Corporation in order to implement all provisions of this Agreement the Agreements attached as Exhibits A, B and C hereto. F. Business Goal: The goal of the JV Corporation shall be to design, construct, maintain and operate a wireless telecommunications system in Argentina, establish facilities in Argentina for manufacturing equipment used in telecommunications systems, and establish an international distribution network for sale outside of Argentina of telecommunications equipment manufactured by the JV Corporation of Argentina, all in accordance with the Business Plan. G. Operational Business Model: The Parties agree to establish an operational business model for the JV Corporation outlining the projecting operating income, capital expenditures and sources/uses of funds associated with the Project prior to submission of the Application to the Regulator.
  • 11. H. Technology License: Promptly after issuance of the License the Parties shall cause the JV Corporation to execute the License Agreement with USCO, and USCO shall execute the License Agreement. I. Manufacture in Argentina: Promptly after issuance of the License, the Parties shall cause the JV Corporation to establish a facility for the manufacture of telecommunications products in Argentina, pursuant to the License Agreement, including, without limitation, leasing or purchasing land, constructing a suitable facility, hiring employees, obtaining requisite local approvals and permits, and other necessary matters. J. International Distribution and Sale of Products Promptly after issuance of the License the Parties shall cause the JV Corporation to execute the International Distribution Agreement with USCO, and USCO shall also execute the International Distribution Agreement. Thereafter, distribution and sale of telecommunications products manufactured by the JV Corporation shall be distributed and sold outside Argentina pursuant to the International Distribution Agreement. K. Domestic Distribution and Sale of Products: Promptly after issuance of the License the Parties shall cause the JV Corporation to execute the Domestic Distribution Agreement with ARGCO, and ARGCO shall also execute the Domestic Distribution Agreement. Thereafter, distribution and sale of telecommunications products manufactured by the JV Corporation shall be distributed and sold Argentina pursuant to the Domestic Distribution Agreement. MISCELLANEOUS A. Public Announcements and Confidentiality The Parties agree to hold in strict confidence the terms of this
  • 12. Agreement and further agree that, except as required by applicable law, they will not, without the prior written consent of the other Party, disclose to any person or entity the contents of this Agreement or the subject matter of the negotiations of the Agreements attached as Exhibits A, B and C hereto (other than to their respective officers, directors, bankers, investment bankers, attorneys, accountants and other representatives who are involved in analyzing the transactions contemplated hereby) or publish or issue any press release or announcement concerning the subject matter hereof or thereof. Except as required by applicable law, upon the execution of the Agreements attached as Exhibits A, B and C hereto, neither Party shall publish or issue any press release without the prior written consent of the other Party. B. No Shopping: In consideration of the obligations of the undersigned, each Party agrees that until the License is awarded and payment for the License has been made to the Regulator, neither Party nor any of its Affiliates shall, directly or indirectly, alone or through any officers, directors, employees, shareholders, intermediaries, agents or representatives, discuss, negotiate or participate, agree with, or provide information to, any other person, firm or entity seeking to submit an Application to obtain the License, or form any entity in order to seek to obtain the License, or take any steps that may circumvent this "No Shop" provision. C. Foreign Corrupt Practices Act: Each Party and each of its respective officers, employees, directors, representatives and agents shall not, during the term of this Agreement, make any payment, or offer or provide any other inducement, to officials of any government with the intent to influence the governmental actions of those officials in a way that would violate United States law, if it were applicable, against corrupt payments or inaccurate recordkeeping. D. Binding Agreement:
  • 13. The parties agree that this Agreement constitutes a binding agreement of the Parties. E. Severability: If any term, provision, covenant or restriction of this Agreement is held to be invalid, void or unenforceable, such provision shall be amended by the Parties only to the extent necessary to be enforceable consistent with the Parties' intent, and the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect, unless such action would substantially impair the benefits to either Party of the remaining provisions of this Agreement. F. Specific Enforcement: The Parties each acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached. It is accordingly agreed that the Parties shall be entitled to preliminary relief to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they may be entitled by law. G. Notices: Any notices or other communications required or permitted hereunder shall be in writing and shall be delivered by hand, registered mail, international courier, or email (in this last case, with proper electronic evidence of delivery) addressed as follows: If to USCO: American Wireless United Corporation If to ARGCO:
  • 14. Argentina Utility Company Either Party may, by means fifteen (15) days prior notice given in accordance with the foregoing to the other Party, designate another address for receipt of notices hereunder. Notices given according to this Section IV(G) shall be deemed delivered (i) on the date included in the receipt, if delivered by mail upon receipt; and (iii) on the date of confirmation of transmission receipt, if sent by e-mail. H. Waivers: No waiver by either Party of any default with respect to any provision, condition or requirement hereof shall be deemed to be a continuing waiver in the future thereof or a waiver of any other provision, condition or requirement hereof; nor shall any delay or omission of either Party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter. I. Successor and Assigns: Assignment: This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either Party without the prior written consent of the other Party, except that either Party may assign its rights and obligations under this Agreement to any of its Affiliates without the other Party's prior consent. J. Entire Agreement: This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all other prior understandings between the Parties with respect to such subject matter, including without limitation the Letter of
  • 15. Intent between them dated December 15, 2016 (the "Letter of Intent"). This Agreement may be amended only by a written instrument executed on behalf of both Parties. K. Governing Law: This Agreement shall be governed by the laws of the State of New York without giving effect to conflicts of law principles so long as not prohibited by Argentina law. L. English Language This Agreement shall be translated into Spanish but in the event of any conflict or inconsistency between the English and Spanish versions, the English version shall prevail, and as between the Parties, the English version shall govern. M. Counterparts: This Agreement may be executed in any number of separate counterpart copies, but all such counterparts taken together shall constitute one and the same instrument. N. Costs and Expenses: Each Party shall be responsible for, and shall pay, all costs and expenses, including without limitation legal and accounting fees, travel expenses and other costs and expenses incurred by it in connection with negotiation and execution of this Agreement and the Letter of Intent, preparation and filing of the Application, and in otherwise pursuing or advancing the Project or the transactions contemplated by this Agreement. Agreed to and Signed by: Dated: January 21, 2016 AMERICAN WIRELESS UNITED CORPORATION ("USCO") By: __________________________________ Name: Title: Dated: January 21, 2016
  • 16. ARGENTINA UTILITY COMPANY ("ARGCO") By: __________________________________ Name: Title: EXHIBIT A SHAREHOLDERS’ AGREEMENT EXHIBIT B LICENSE AGREEMENT EXHIBIT C INTERNATIONAL DISTRIBUTION AGREEMENT EXHIBIT D DOMESTIC DISTRIBUTION AGREEMENT EXHIBIT E ESCROW AGREEMENT EXHIBIT F BUSINESS PLAN 0109-1007 / 387549.2 1