SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): Janauary 10, 1997.
Definition, Ltd.
(Exact name or registrant as specified in its charter)
NEVADA 0-20598 75-2293349
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
1334 South Killian Drive, Lake Park, Florida 33403
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (561) 844-7701<PAGE>
Form 8-K
Definition, Ltd.
Item 5. Other Events.
Effective December 31, 1996, and executed January 10, 1997,
Definition, Ltd., a Nevada corporation (the "Company"), entered into a Joint
Venture Agreement (the "JV Agreement") with W3D, L.L.C., a Texas
limited liability company ("W3D"), whereby the Company and W3D formed
a joint venture known as "World Wide Internet Business Centres, J.V." (the
"Joint Venture").
The stated purpose of the Joint Venture is to develop, establish and
operate 26, or more, business operations to be known as "World Wide
Internet Business Centres", or IBCs. The IBCs will be established as
partnerships, joint ventures, limited liability companies or corporations, in
the discretion of W3D, as Managing Venturer of the Joint Venture. The Joint
Venture is to be a majority (in equity interest) owner, partner, participant or
shareholder, as the case may be, in each of the IBCs to be established. Under
the terms of the JV Agreement, it is the obligation of W3D, as agent of the
Joint Venture, to locate, qualify and bring investors to the Joint Venture for
the purpose of becoming participants in the individual IBCs to be established.
The concept of the IBCs can be described as follows: each IBC to be
established by the Joint Venture will provide, for use by the public
customers, computer hardware and software for Internet access and usage,
Internet access providers, world wide web publishing, world wide web
promotion and sales, video teleconferencing, special marketing projects,
financial services, cyberbanking, information on hotels, restaurants and
conference facilities, a virtual casino, cruise information and an institute for
Internet training, Webmaster certification and job placement. Each of the
IBCs will be established with investment from participating investors, who
will be active in the business.
The Company has a 49% interest, and W3D has a 51% interest, in the
capital, profits and losses of the Joint Venture. Upon formation of the Joint
Venture, the Company contributed (1) trade accounts receivable generated by
the Company in its business in the sum of $2,011,750, face value, which
receivables are anticipated to be actually received by the Joint Venture over
a period of two years, and (2) 1,340,000 shares of the $.001 par value
Common Stock of the Company, with an agreed value, for purposes of the JV
Agreement, of $2,000,00, to the capital of the Joint Venture. Upon formation
of the Joint Venture, W3D committed to contribute to the capital of the Joint
Venture cash in the amount of $4,000,000, which shall be contributed over
a period of two years, in equal quarterly, or more frequent, increments,
commencing April 1, 1997.
The Company is dependent upon W3D, as Managing Venturer of the
Joint Venture, for the success of the Joint Venture. There is no assurance that
the Joint Venture will be successful in implementing its proposed operations.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: January 21, 1997.
DEFINITION, LTD.
By: /s/ Gerald L. Beeson
Gerald L. Beeson
Chief Executive Officer
<PAGE>
Sequentially
Numbered
Exhibit No. Description Page
10.1 Joint Venture Agreement of World Wide
Internet Business Centres, J.V., a Texas joint
venture, dated as of December 31, 1996,
between Registrant and W3D, L.L.C., a Texas
limited liability company. 5
<PAGE>
EXHIBIT 10.1
Joint Venture Agreement of
World Wide Internet Business Centres, J.V.<PAGE>
JOINT VENTURE AGREEMENT
OF
WORLD WIDE INTERNET BUSINESS CENTRES, J.V.
Dated as of December 31, 1996
Section Index Page
I General 1
II. Definitions 1
III. Term 2
IV. Purpose 3
V. Joint Venture Office and Registered Agent 3
VI. Capital and Contributions 3
VII. Net Income and Losses from Operations; and 4
Net Gains and Losses from Disposition of Assets
VIII. Distributions 5
IX. Control and Management 6
X. Obligations of the Managing Joint Venturer 7
XI. Dissolution and Termination 7
XII Accounting 8
XIII. Reports and Statements 8
IV. Bank Accounts 9
XV. Notices 9
XVI. Arbitration 9
XVII. Binding Effect 10
XVIII No Oral Modification 10
XVIX. Applicable Laws 10
XX. Counterparts 10
XXI. Entire Agreement 10
XXII. Translation of Agreement 10
Exhibits: A - Contributed Assets of DFNL
B - Joint Venture Management Agreement
JOINT VENTURE AGREEMENT
OF
WORLD WIDE INTERNET BUSINESS CENTRES, J.V.
This Joint Venture Agreement, dated as of December 31, 1996, by
and between Definition, Ltd. a Nevada corporation, "DFNL" herein, and
W3D, L.L.C., a Texas Limited Liability Company, "W3D" herein,
collectively sometimes referred to as the "Joint Venturers" or the "Venturers"
herein.
SECTION I - GENERAL
1.1. Venture Name. The name of the Joint Venture is World
Wide Internet Business Centres, J.V.
1.2. Addresses of Venturers. The address of DFNL is 1334 South
Killian Drive, Lake Park, Florida 33403. The address of W3D is 3617 Kim
Street, Irving, Texas 75062.
SECTION II - DEFINITIONS
2.1. "Affiliate" means any person or entity directly or indirectly
controlling, controlled by or under common control with another person or
entity.
2.2. "Agreement" means this Joint Venture Agreement of World
Wide Internet Business Centres, J.V.
2.3. "Capital Account" means, for each Venturer, the amount of its
capital contribution, which amount shall be increased by (i) its additional
capital contributions to the Joint Venture, if any, and (ii) his proportionate
share of Joint Venture profits and gains, and decreased by (iii) distributions
by the Joint Venture to such Venturer and (iv) such Venturer's proportionate
share of Joint Venture losses.
2.4. "Gross Receipts" means the amount of Joint Venture revenue
from all sources whatsoever.
2.5. "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
2.6. "Joint Venture" means the joint venture formed under this
Agreement under the name "World Wide Internet Business Centres, J.V."
2.7. "Joint Venture Agreement" means this Joint Venture
Agreement of World Wide Internet Business Centres, J.V.
2.8. "Managing Venturer" means W3D, L.L.C., a Texas Limited
Liability Company.
2.9. "Net Cash Flow" means Gross Receipts from Joint Venture
operations for each fiscal year, less cash operating expenses for each fiscal
year.
2.10. "Partnership Act" means Article 61326, et seq., as amended,
Vernon's Texas Civil Statutes Annotated, known as the Texas Uniform
Partnership Act.
2.11. "Registered Agent" means the person named in the Joint
Venture Agreement to receive legal service upon the Joint Venture.
2.12. "Registered Office" means the office named in the Joint
Venture Agreement where all of the Joint Venture's books and records will
be kept.
2.13. "Remaining Net Cash Flow" means Net Cash Flow less
payments for the satisfaction of current debts and obligations of the Joint
Venture and establishing such Working Capital Reserves as the Managing
Venturer deems necessary for Joint Venture operations.
2.14. "Unrecovered Cash Contributions" means the amount of cash
contributed to the capital of the Joint Venture which has not been returned to
the contributing Joint Venturer by distributions from the Joint Venture
pursuant to Section VIII.
2.15. "Working Capital Reserves" means the amount of cash
reserves taken from Net Cash Flow of the Joint Venture, which the Managing
Venturer deems necessary to the prudent operation of the Joint Venture.
SECTION III - TERM
3.1. The term of the Joint Venture shall be from the date of the
execution of this Joint Venture Agreement until December 31, 2021, unless
extended or sooner terminated in accordance with this Agreement.
SECTION IV - PURPOSE
4.1 The purpose of the Joint Venture is to develop, establish and
operate twenty-six, or more, business operations to be known as "World
Wide Internet Business Centres" ("IBC"s), or similar name. The IBCs will
be established as partnerships, joint ventures, limited liability companies or
corporations, in the discretion of the Managing Venturer; the Joint Venture
shall be a majority (in equity interest) owner, partner, participant or
shareholder, as the case may be, in each of the IBCs to be established. It
shall be the obligation of the Managing Venturer, as agent of the Joint
Venture, to locate, qualify and bring investors to the Joint Venture for the
purpose of becoming participants in the individual IBCs to be established.
It is the further purpose of this Joint Venture to earn profits.
SECTION V - JOINT VENTURE OFFICE
AND REGISTERED AGENT
5.1. Joint Venture Office. The Registered Office of the Joint
Venture in the State of Texas shall be 3617 Kim Street, Irving, Texas 75062,
or at such other location as the Venturers may determine.
5.2. Registered Agent. The Registered Agent of the Joint Venture
in the State of Texas shall be L. A. Newlan, Jr., 5525 North MacArthur
Boulevard, Suite 670, Irving, Texas 75038.
5.3. Documents to be Maintained. The Managing Venturer shall
keep the following documents at the Registered Office of the Joint Venture
specified in Section 5.1 hereinabove:
(a) a copy of this Agreement and all amendments hereto.
(b) copies of the Joint Venture's federal, state and local
tax returns and reports for the three (3) most recent
years, if any; and
(c) copies of financial statements of the Joint Venture for
the three (3) most recent years, if any.
Such documents shall be available for inspection and copying during
ordinary business hours at the request of, and at the expense of, the
requesting Venturer.
SECTION VI - CAPITAL AND CONTRIBUTIONS
6.1. Upon formation of the Joint Venture, the Managing Venturer
will contribute to the capital of the Joint Venture cash in the amount of
$4,000,000(U.S.D.). The capital to be contributed by the Managing Venturer
shall be contributed over a period of two years, in equal quarterly, or more
frequent, increments, commencing on April 1, 1997.
6.2. Upon formation of the Joint Venture, DFNL will deliver to the
Joint Venture as a contribution to its capital (i) the assets listed on Exhibit
"A" hereto, consisting of trade accounts receivable generated by DFNL in its
business in the sum of $2,011,750, face value, which receivables are
anticipated to be actually received by the Joint Venture over a period of two
years, and (ii) 1,340,000 shares of the $.001 par value of Common Stock of
DFNL with an agreed value for purposes of this Agreement of $2,000,000.
6.3. Capital Accounts. Each Venturer's capital account shall be
increased (credited) by
(a) the amount of its capital contributions to the Joint
Venture pursuant to Sections 6.1 and 6.2;
(b) the amount of income from operations allocated to it
pursuant to Section 7.1(a);
(c) the amount of gains allocated to it pursuant to Section
7.2(b);
and shall be decreased by
(d) the amount of losses from operations allocated to it
pursuant to Section 8.1;
(e) all amounts paid or distributed to it pursuant to
Section 8.1 (other than distributions to any Venturers
in repayment of principal and interest on loans); and
(f) the amount of any losses allocated to it pursuant to
Section 8.2.
SECTION VII - NET INCOME AND LOSSES FROM OPERATIONS;
AND NET GAINS AND LOSSES FROM DISPOSITION OF ASSETS
7.1 Operations. All "net income" and "net losses" of the Joint
Venture from operations for any calendar quarter or part thereof, as
determined for federal income tax purposes, shall be allocated as follows:
(a) for each fiscal year of the Joint Venture from date of
its formation, all net losses shall be allocated 49% to
DFNL and 51% to W3D;
(b) for each fiscal year of the Joint Venture from the date
of its formation, all net income shall be allocated 49%
to DFNL and 51% to W3D.
7.2 Interim Capital Transactions. All net gains and net losses of
the Joint Venture, as determined for Federal income tax purposes, in
connection with the sale of software programs, licensing or sale of other
assets, and any similar transactions which, in accordance with generally
accepted accounting principles, are attributable to capital but which do not
result in dissolution of the Joint Venture (an "Interim Capital Transaction")
shall be allocated as follows:
(a) first, an amount of the net gains up to the amount of
proceeds to be distributed pursuant to Section
8.2(a)(I) shall be allocated to the Joint Venturers in
the same amounts as the proceeds are to be
distributed;
(b) then, after adjustment of the capital accounts of the
Joint Venturers to reflect the allocation of gains under
Section 7.1 and distributions and amounts available
for distribution pursuant to Section 8.2(a)(i), the net
gains or net losses shall be allocated as provided for
allocation of net gains and losses pursuant to Sections
7.1(a) (losses) and (b) (gains).
7.3 Dissolution and Termination. All net gains and net losses of
the Joint Venture, as determined for Federal income tax purposes, in
connection with a dissolution and termination of the Joint Venture, shall be
allocated between the Joint Venturers as follows:
(a) 49% to DFNL and 51% to W3D.
SECTION VIII - DISTRIBUTIONS
8.1 Definition of "Taxable Distributable Income". "Taxable
Distributable Income" shall be determined at the end of each fiscal year of the
Joint Venture, and shall mean Gross Receipts from operations of the Joint
Venture for each fiscal year, less cash operating expenses for each fiscal
year.
For purposes of determining Net Operating Income and Net Cash Flow,
"Gross Receipts" shall mean proceeds from sales of products by the Joint
Venture in excess of the cost to the Joint Venture for such products.
8.2 (a) Operations. During the period of operations of the Joint
Venture, from the date of its formation and ending upon the dissolution and
termination of the Joint Venture, after providing for the satisfaction of the
current debts and obligations of the Joint Venture and establishing such
working capital reserves (the "Working Capital Reserves") as the Managing
Venturer deems necessary for Joint Venture purposes. The Managing
Venturer, may, in his sole discretion, make distributions of "Remaining Cash
Flow" (Net Cash Flow less the above payments), at the end of each calendar
quarter, as follows:
(i) 49% to DFNL and
51% to W3D.
(ii) any Working Capital Reserves subsequently
included in Remaining Net Cash Flow and
distributed shall be distributed in the same
manner as described in Section 8.2(a)(i).
(b) Dissolution and Termination Proceeds. Upon the
dissolution and termination of the Joint Venture, the Net Gross Proceeds of
the sale of all the assets of the Joint Venture after making payment of or
provision for the liabilities and obligations of the Joint Venture shall be
distributed or paid, as appropriate, in the following order of priority:
(i) first, an amount equal to the unpaid interest
and principal of any unpaid loan by a Venturer
to the Joint Venture, such distributions being
treated first as in payment of accumulated
interest and next as in payment of principal of
such loans;
(ii) next, 49% to DFNL and 51% to W3D.
8.3. Cash Distributions. All cash distributions to the Joint
Venturers shall be made to the Joint Venturers at the addresses specified in
Section 1.2 or such other addresses of which the Joint Venturers shall notify
the Joint Venture in writing.
8.4 Limitation to Cash in Return of Capital. No Venturer shall be
entitled to demand and receive property other than cash in return for its
capital contributions to the Joint Venture.
SECTION IX - CONTROL AND MANAGEMENT
9.1. Management. The Managing Venturer shall, except as
specifically limited herein, have full, exclusive and complete discretion in the
management and control of the Joint Venture for the purposes set forth in
Section 4.1. In any exercise of management authority by the Managing
Venturer under this Section, the Managing Venturer agrees to manage and
control the affairs of the Joint Venture to the best of its ability, and to
conduct the operations contemplated under this Agreement in a careful and
prudent manner and in accordance with good industry practice.
9.2. Specific Management Rights. Subject to any limitations
expressly set forth in this Agreement, the Managing Venturer shall invest the
capital of the Joint Venture in pursuit of the purposes of the Joint Venture as
set forth in Section IV hereof. Without limiting the generality of the
foregoing, the Managing Venturer is expressly authorized on behalf of the
Joint Venture to:
(a) enter into a Joint Venture Management Agreement
with W3D in the form attached hereto as Exhibit "B";
(b) procure and maintain with responsible companies
such insurance as may be available in such amounts
and with respect to such risks as are deemed
appropriate by the Managing Venturer;
(c) execute and deliver on behalf of and in the name of
the Joint Venture, or in the name of an agent of the
Joint Venture, notes, financing statements, any and all
documents, agreements and undertakings relating to
institutional financing, leases, subleases, bills of sale
and any and all other instruments necessary or
incidental to the conduct of the Joint Venture's
business;
(d) coordinate all accounting and clerical functions of the
Joint Venture and employ such accountants, lawyers,
managers, agents or other personnel as may be
required from time to time to carry on the business of
the Joint Venture; and
(e) control and perform, or cause to be performed, all
other activities incident to managing the operations
and affairs of the Joint Venture unless otherwise
specifically stated in Section 10.3 hereinbelow.
9.3. Limitation on Management Rights. Notwithstanding the
generality of the foregoing, the Managing Venturer shall not, without the
consent of the W3D, be empowered to:
(a) do any act in contravention of this Agreement;
(b) do any act which would make it impossible to carry
on the ordinary business of the Joint Venture;
(c) confess a judgment against the Joint Venture;
(d) possess Joint Venture property or assign any rights in
specific Joint Venture property for other than a Joint
Venture purpose; and
(e) change or reorganize the Joint Venture into
any other legal form.
9.4. Conflicts of Interest. Any Venturer may engage in or possess
an interest in other business ventures of any nature or description
independently or with others, except that no venturer shall invest in, manage,
own, participate in directly or indirectly in any business, corporation,
partnership or other juridical entity, including a sole proprietorship, having
a business substantially similar to that embodied in an IBC as such are to be
established hereunder. To the extent any venturer shall engage in or possess
an interest in any other business not prohibited hereunder, no other venturer
shall have any rights in or to such independent ventures or the income or
profits derived therefrom.
9.5. Limitations on Managing Venturer's Liability. The Managing
Venturer will not be liable, responsible or accountable in damages or
otherwise to its co-venturer for any acts performed by it, or for its failure to
act, in good faith and within the scope of this Agreement, and not attributable
to gross negligence, malfeasance, fraud, breach of fiduciary duty or breach
of any express warranty or representation in this Agreement; and the Joint
Venture, but not any Venturer, shall indemnify and hold harmless the
Managing Venturer from any loss, damage, liability, cost or expense
(including reasonable attorneys' fees) arising out of any act or failure to act
by it, if such act or failure to act is in good faith, within the scope of this
Agreement, and is not attributable to gross negligence, malfeasance, fraud,
breach of fiduciary duty or breach of any express warranty or representation
in this Agreement.
SECTION X - OBLIGATIONS OF THE MANAGING VENTURER
10.1. Joint Venture Management. The Managing Venturer shall act
as the agent of the Joint Venture as sole Manager and in such capacity shall
perform for the Joint Venture all services customarily performed by a
Managing Venturer of a Joint Venture engaged in the activity to be
undertaken by the Joint Venture.
SECTION XI - DISSOLUTION AND TERMINATION
11.1. Dissolution. The Joint Venture shall be dissolved and its
business wound up, upon the earliest to occur of:
(a) December 31, 2021;
(b) the unanimous written consent of the Joint Venturers,
that the Joint Venture should be dissolved;
(c) the bankruptcy or insolvency of the Managing
Venturer; or
(d) the sale of all or substantially all of the Joint
Venture's assets.
For the purposes of this Agreement, the term "Bankruptcy" means the filing
of a petition for relief as to any person as debtor or bankrupt under the
Federal bankruptcy laws (except if such petition is contested by such person);
or the filing by such person or by another of a petition or application to
declare the insolvency of such person or for the appointment of a receiver or
a trustee for such person or a substantial part of his assets; provided that if
such proceeding is commenced by another and such person indicates his
approval of such proceeding, consents thereto or acquiesces therein, such
proceeding is not contested by such person. The insolvency of a person shall
be deemed to occur when such person's assets are insufficient to pay his
liabilities and he shall so admit to the Venturers.
11.2. No Release of Contractual Obligations. It is understood and
agreed, however, that no dissolution of the Joint Venture shall release or
relieve any of the parties hereto of their contractual obligations under this
Agreement.
11.3. Distributions of Cash or In Kind. Upon any such dissolution,
all Joint Venture assets shall be sold and the proceeds distributed, or such
assets distributed in kind if the Managing Venturer so elects, to the Venturers
in their respective shares as provided herein.
SECTION XII - ACCOUNTING
12.1. Fiscal Year. The fiscal year of the Joint Venture shall be the
calendar year.
12.2. Method of Accounting. The Managing Venturer may
maintain the Joint Venture's management reports on a cash transaction basis;
nevertheless, it shall keep, or cause to be kept, full and accurate records of
all transactions of the Joint Venture either on a cash or accrual method of
accounting.
12.3. Books of Accounts. All of such books of account shall, at all
times, be maintained at the Registered Office of the Joint Venture, and shall
be open during reasonable business hours for the reasonable inspection and
examination by the Joint Venturers or their authorized representatives, who
shall have the right to make copies thereof.
12.4. Tax Returns. The Managing Venturer shall prepare, at Joint
Venture expense, or cause to be prepared (by March 1st of the year after the
tax year to which such tax return relates), a federal income tax return and
such state tax returns as are required for the Joint Venture on either the
accrual or cash method of accounting.
SECTION XIII - REPORTS AND STATEMENTS
13.1. Reports and Statements.
(a) Within sixty (60) days after the end of each fiscal
year of the Joint Venture, the Managing Venturer
shall cause to be delivered to the Joint Venturers an
annual Cash Flow Report for the prior fiscal year of
the Joint Venture showing all income and expenses
for said fiscal year. Said report shall be delivered to
the Joint Venturers together with any amounts
distributable to such Joint Venturers pursuant to
Section VIII.
(b) On or before March 15th of the year following the end
of each fiscal year of the Joint Venture, the Managing
Venturer shall cause to be delivered to each of the
Venturers such information as shall be necessary
(including a statement for that year of each such
Venturer's share of net income, net gains and losses,
and other items of the Joint Venture) for the
preparation by each Venturer of federal and state
income and other tax returns.
(c) Within ninety (90) days after the end of each fiscal
year of the Joint Venture, beginning with the fiscal
year ending December 31, 1996, the Managing
Venturer shall cause to be delivered to the Joint
Venturers financial statements which shall have been
certified by a firm of Certified Public Accountants, at
the expense of the Joint Venture, which certification
shall state that such statements fairly present the
financial position and results of operations of the Joint
Venture in accordance with generally accepted
accounting principles applied on a consistent basis.
SECTION XIV - BANK ACCOUNTS
14.1. The Managing Venturer shall open and maintain a special bank
account or accounts in which shall be deposited all funds of the Joint
Venture. Withdrawals from such account or accounts shall be made upon the
signature or signatures of such person or persons as the Managing Venturer
shall designate.
SECTION XV - NOTICES
15.1. Whenever any notice is required or permitted to be given
under any provisions of this Agreement, such notice shall be in writing,
signed by or on behalf of the person giving the notice, and shall be deemed
to have been given when delivered by personal delivery or mailed by certified
mail, postage prepaid, return receipt requested, addressed to the person or
persons to whom such notice is to be given at the offices set forth in Section
1.2.
SECTION XVI - ARBITRATION
16.1 Any dispute arising under this Joint Venture agreement shall
be resolved by arbitration in Charlestown, Nevis, St. Kitts and Nevis, British
West Indies, under the Rules of Arbitration of the International Chamber of
Commerce as then in effect. Such arbitration shall be undertaken by a sole
arbitrator appointed by the parties. Any appointee shall be a member of the
Bar of St. Kitts and Nevis. Should the parties fail to agree on the arbitrator
to be appointed, the appointment shall be made by the presiding judge of the
court of general jurisdiction in Charlestown, Nevis, upon petition of either
party. The determination and award of the arbitrator shall be final and
binding on the parties and may be entered as a judgment in any competent
jurisdiction.
SECTION XVII - BINDING EFFECT
17.1. Except as herein otherwise provided to the contrary, this
Agreement shall be binding upon, and inure to the benefit of, the parties
hereto, their personal representatives, successors and assigns.
SECTION XVIII - NO ORAL MODIFICATION
18.1. No modification or waiver of this Agreement or any part
hereof shall be valid or effective unless in writing and signed by the party or
parties sought to be charged therewith; and no waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other
subsequent breach or condition, whether of like or different nature.
SECTION XIX - APPLICABLE LAWS
19.1. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
SECTION XX - COUNTERPARTS
20.1. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, and said counterparts shall constitute
but one and the same instrument which may be sufficiently evidenced by one
counterpart.
SECTION XXI - ENTIRE AGREEMENT
21.1. This Agreement constitutes the entire agreement and
understanding between the parties and may not be modified or amended
except as specifically provided for in this Agreement.
SECTION XXII- TRANSLATIONS OF AGREEMENT
22.1 The official and controlling version of this Agreement shall
be that set forth in English. In the event of any conflict between the English
version and the version in any other language, the English language version
will control.
IN WITNESS WHEREOF, the parties hereto have executed and
certified this Certificate and Agreement of Joint Venture as of the day and
year first above written.
W3D, L.L.C. DEFINITION, LTD.
By: /s/ Jane M. Rudolph By: /s/ Gerald Beeson
Jane M. Rudolph Gerald Beeson
Manager Chief Executive Officer
<PAGE>
EXHIBIT "A"
to World Wide Internet Business Centres, J.V.
Statement of Contributed Assets of Definition, Ltd.<PAGE>
THE FOLLOWING IS A LIST OF ACCOUNTS RECEIVABLE
OWNED BY DEFINITION, LTD., WHICH ARE BEING ASSIGNED
AS A CONTRIBUTION TO THE CAPITAL OF WORLD WIDE
INTERNET BUSINESS CENTRES, J. V., PURSUANT TO THE JOINT
VENTURE AGREEMENT TO WHICH THIS LIST IS ATTACHED AS
EXHIBIT "A":
Definition, Ltd. Underlying
<TABLE>
<C> <C> <C>
Number Debtor Amount Invoice Item
#1111 Lapa $ 600,000 Lopre titles
#41596 Da Verona, Inc. 150,000 Paintings
#30496 Bernard Keil 8,500 Commercial
#30496 Massimino Nidini 8,350 Film Footage
#33196 World Wide Trdng 1,199,900 600 Films
#96195 M & P Valsugana
Liquori 45,000 Infomercial
$2,011,750
<PAGE>
EXHIBIT "B"
to World Wide Internet Business Centres, J.V.
Joint Venture Management Agreement<PAGE>
JOINT VENTURE MANAGEMENT AGREEMENT
THIS AGREEMENT made as of the 1st day of January, 1997,
between World Wide Internet Business Centres, J.V., a Texas Joint Venture
("Owner"), and W3D, L.L.C., a Texas Limited Liability Company
("Manager").
ARTICLE I
ESTABLISHMENT OF AGENCY AND
MANAGEMENT RESPONSIBILITY
1.1 Exclusive Agency. Owner intends to engage in business. The
business in which Owner is to engage is the development, establishment and
operation as going concerns twenty-six business establishments to be know
as "World Wide Internet Business Centres" ("IBCs"). Such IBCs are
intended to consist of a first class physical facility in the nature of both a
professional office environment and a commercial sales showroom. These
facilities will provide for use of the public customers computer hardware and
software for Internet access and usage, Internet access providers, worldwide
web publishing, world wide web promotion and sales, video conferencing,
special marketing projects, financial services, cyberbanking, information on
hotels, restaurants and conference facilities, representation for local Chamber
of Commerce, youth movements and charities, a virtual casino, gaming
arcade and web surfing kiosks, a W3D Cruise information booth and a W3D
Web Institute for the offering of Internet training courses, Webmaster
certification and job placement.
Owner hereby appoints Manager and Manager hereby accepts
appointment on the terms and conditions hereinafter provided as sole and
exclusive management agent of Owner with respect to the operation of
Owner.
1.2 Owner's Representative. Owner shall designate one (1) person
to serve as Owner's Representative in all dealings with Manager hereunder.
Whenever the approval or consent or other action of Owner is called for
hereunder, such approval, consent or action shall be binding on Owner if
specified in writing and executed by Owner's Representative. Owner's
exclusive Representative shall be Gerald L. Beeson. Such representative may
be changed at the discretion of Owner, at any time, by writing delivered to
Manager.
ARTICLE II
SERVICES TO BE PERFORMED BY MANAGER
2.1 Expense of Owner. Everything done by Manager under the
provisions of this Agreement shall be done as the agent of Owner, and all
obligations or expenses incurred hereunder shall be for the account of, on
behalf of and at the expense of Owner, except as otherwise specifically
provided in this Article II. All payments to be made by Manager hereunder
shall be reimbursed from funds deposited in an account established pursuant
to Section 2.3 hereof. Manager shall not be obligated to make any advance
to or for the account of Owner or to pay any sums, except out of funds held
in an account maintained under Section 2.3, nor shall Manager be obligated
to incur any liability or obligation for the account of Owner without
assurance that the necessary funds for the discharge thereof will be provided.
2.2 Employment of Personnel. Manager shall investigate, hire,
train, pay, supervise and discharge the personnel necessary to be employed
in order to operate successfully the business of Owner. Such personnel shall,
in every instance, except those persons hired as independent contractors, be
deemed employees of Owner and not of Manager. All reasonable salaries,
wages and other compensation (as permitted in Section 2.1 hereof) of
personnel employed by Manager hereunder, including so-called fringe
benefits, medical and health insurance plans, social security, taxes,
workmen's compensation insurance and the like, shall be deemed to be
reimbursable expenses of Manager. Nothing contained in this Agreement
shall be deemed or construed to create a partnership or joint venture between
Owner and any other party (but nothing contained herein shall affect
Manager's responsibility to transmit payments for the account of Owner as
provided herein), it being the intention of the parties that the only relationship
hereunder is that of agent and principal, and Manager shall not represent to
anyone that its relationship to Owner is other than that set forth herein.
Neither Manager (nor any employee of Manager) shall be liable, responsible
or accountable in damages or otherwise to Owner for any acts performed by
it in good faith and within the scope of this Agreement. Owner shall
indemnify and hold harmless Manager (and each employee of Manager) from
any loss, damage, liability, cost or expense (including reasonable attorneys'
fees) arising out of any act or failure to act (including negligence) by
Manager (or any employee thereof) if such act or failure to act is in good
faith, within the scope of this Agreement and is not attributable to gross
negligence, malfeasance or fraud.
2.3 Bank Accounts. Manager shall establish one or more bank
accounts for the deposit of funds collected by the Joint Venture and the
disbursement of funds pursuant to this Article II.
2.4 Insurance. Manager shall cause to be placed and kept in force
all forms of insurance required by law or needed to protect adequately Owner
and Manager, including, but not limited to, workmen's compensation
insurance, public liability insurance, fire and extended coverage insurance,
and burglary and theft insurance. All insurance coverage shall be placed with
such companies, in such amounts, and with such beneficial interest appearing
therein, as shall be reasonable and prudent, within the discretion of Manager.
Manager shall promptly investigate and make a full and timely written report
to the insurance company as to all accidents, claims for damages relating to
the Joint Venture facilities and the estimated cost of repair thereof and shall
prepare any and all reports required by any insurance company in connection
therewith. All such reports shall be timely filed with the insurance company
as required under the terms of the insurance policy involved. Manager is
authorized to settle any and all claims against insurance companies arising
out of any policies, including the execution of proofs of loss, the adjustment
of losses, signing of receipts and the collection of money.
2.5 Collection of Monies. Manager shall collect any and all
monies due and owing Owner.
2.6 Manager Disbursements. The Manager shall, from the funds
collected and deposited, cause to be disbursed regularly and punctually (a)
Manager's compensation hereunder; (b) the amounts reimbursable to
Manager hereunder; and (c) the amount of all sales taxes, personal property
taxes and other impositions levied by appropriate authorities, including,
without limitation, payroll and related taxes. Any balance remaining at the
end of each calendar month during the term of this Agreement shall be
disbursed to Owner.
2.7 Records; Reporting. (a) Records. All statements, receipts,
invoices, checks, leases, contracts, worksheets, financial statements, books
and records, and all other instruments and documents relating to or arising
from the operation of the Joint Venture shall be maintained by Manager, and
Owner and Manager shall have the right to inspect and to copy all such
matters, at such party's expense, at all reasonable times, and from time to
time, during the term of this Agreement and for a reasonable time thereafter
not to exceed three (3) years. Upon the termination of this Agreement, all of
such books, records and other information shall be the property of Owner;
provided, however, that the Manager or his representatives shall have the
right to inspect such books, records and other information and to make copies
thereof during the three (3) year period referred to in the preceding sentence
at Owner's place of business upon reasonable advance notice to Owner.
(b) Monthly Reports. Within 10 days after the end of each
month of operations of the Joint Venture under this Agreement, Manager
shall deliver to Owner an unaudited statement of operations.
(c) Returns Required by Law. Manager shall execute and
file punctually when due all forms, reports and returns required by law
relating to employment of personnel and other matters, including the
operation of the Joint Venture.
(d) Compliance with Legal Requirements. Manager shall
take such action as may be necessary to comply with any and all orders or
requirements affecting Owner by any federal, state, county or municipal
authority having jurisdiction thereover. Manager, however, shall not take any
such action as long as Owner is contesting, or has affirmed its intention to
contest and promptly institutes proceedings contesting, any such order or
requirement, except that if failure to comply promptly with any such order or
requirement would or might expose Manager to criminal liability, Manager
shall cause the same to be complied with. Manager shall promptly, and in no
event later than 72 hours from the time of the receipt, notify Owner in writing
of all such orders and notices or requirements.
ARTICLE III
MANAGER'S TERMS OF ENGAGEMENT
3.1 Manager's Compensation. In consideration of the services to
be rendered pursuant to this Agreement, Manager shall receive a monthly
Management Fee in an amount equal to $--- per month, payable in arrears on
the 1st day of every calendar month during the term of this Agreement..
3.2 Term and Termination. The initial term of this Agreement
shall be for a term of five (5) years and shall renew automatically for an
additional term of five (5) years, unless written notice to the contrary shall be
given by Owner or Manager within sixty (60) days of the expiration of the
initial, or any additional, term of this Agreement. This Agreement may be
terminated at any time by Manager upon sixty (60) days' written notice to
Owner.
3.3 Non-Disclosure. Manager shall not at any time or in any
manner, either directly or indirectly, divulge, disclose or communicate to any
person, firm or corporation in any manner whatsoever any information
concerning any matters affecting or relating to the business of Owner, its
manner of operation, its plans, processes, techniques or other data without
regard to whether all of the foregoing matters will be deemed confidential,
material or important, the parties hereto stipulating that as between them, the
same are important, material and confidential and gravely and materially
affect the effective and successful conduct of the business of Owner, and
Owner's good will, and that any breach of the terms and conditions of this
Section shall be a material breach of this Agreement.
Manager and Owner recognize that the services to be rendered under
this Agreement by Manager are special, unique and of extraordinary
character, and that in the event of the breach by Manager of the terms and
conditions of this Agreement to be performed by it, or in the event Manager
performs services for any person, firm or corporation engaged in a competing
line of business with Owner, then Owner shall be entitled, if it so elects, to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to obtain damages for any breach of this
Agreement, or to enforce the specific performance thereof by Manager, or to
enjoin Manager from performing services for any such other person, firm or
corporation.
3.4 Termination for Cause. Owner agrees not to terminate this
Agreement except for "just cause", and agrees to give Manager written notice
of its belief that acts or events constituting "just cause" exist. Manager has
the right to cure, within thirty (30) days of Owner's giving of such notice, the
acts, events or conditions which led to Owner's notice. For purposes of this
Agreement, "just cause" shall mean (i) the willful failure or refusal of
Manager to implement or follow the written policies or directions of Owner,
provided that Manager's failure or refusal is not based upon Manager's belief
in good faith, as expressed to Owner in writing, that the implementation
thereof would be unlawful; (ii) conduct which is inconsistent with Manager's
position with Owner and which results in a material adverse effect (financial
or otherwise) or misappropriation of assets of Owner; (iii) the intentional
causing of material damage to Owner's tangible or intangible property; and
(iv) any act involving personal dishonesty or criminal conduct against Owner
by any agent of Manager.
If Manager should cease his employment hereunder voluntarily for
any reason, or is terminated for just cause, all compensation payable to
Manager shall thereupon, without any further writing or act, cease, lapse and
be terminated. However, all defined compensation and reimbursements
which accrued prior to Manager's ceasing employment or termination, will
become immediately due and payable.
3.5 Non-Competition. Manager agrees and covenants that it will
not, directly or indirectly, in any capacity whatsoever, for a period of one
year from any termination of its engagement hereunder, in any country in
which Owner shall have then established, or shall have then taken definite,
objective actions toward establishing, a business offering the same or
reasonably similar products, services and facilities as the IBCs established
and installed and to be installed by the Joint Venture, and competitive
therewith. Manager agrees that a breach of this covenant not to compete with
Owner or any of its IBCs would result in irreparable damage to Owner.
Owner shall be entitled, at its election, to initiate and prosecute proceedings
in any court of competent jurisdiction, either at law or in equity, to obtain
damages for any breah of this covenant, and to obtain injunctive relief to
prevent any such breach.
3.5 No Assignment by Manager. Without the prior written
consent of Owner, Manager shall not have the right to assign, transfer or
convey any of its rights, title or interest hereunder nor shall it have the right
to delegate any of the obligations or duties required to be kept or performed
by it hereunder except to a corporation of which the majority of voting stock
is owned by Manager.
3.6 Notices. All notices, demands, consents, approvals and
requests given by either party to the other hereunder shall be in writing and
shall be sent by registered or certified mail, postage prepaid, to the parties at
the following addresses:
If to Owner: World Wide Internet Business Centres, J.V.
3617 Kim Street
Irving, Texas 75062
If to Manager: W3D, L.L.C.
3617 Kim Street
Irving, Texas 75062
With Copy to: Newlan & Newlan
5525 N. MacArthur Boulevard
Suite 670
Irving, Texas 75038
Either party may, at any time, change its address by sending written notice
to the other party of the change in the manner hereinabove prescribed.
Notices shall be deemed to be given on the third business day after mailing.
ARTICLE IV
COVENANTS
4.1 Manager covenants that it has full authority to enter into this
Joint Venture Management Agreement.
4.2 Owner covenants that it has full corporate authority to enter
into this Joint Venture Management Agreement.
ARTICLE V
MISCELLANEOUS
5.1 If any term or provision of this Agreement or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such
term or provision to persons or circumstances other than those as to which it
is held invalid or unenforceable, shall not be affected thereby, and each term
and provision of this Agreement shall be valid and be enforced to the fullest
extent permitted by law.
5.2 The failure of Owner or Manager to seek redress for any
violation of, or to insist upon the strict performance of, any term or condition
of this Agreement shall not prevent a subsequent act by Owner or Manager,
which would have originally constituted a violation of this Agreement by
Owner or Manager, from having all the force and effect of an original
violation. Owner or Manager may restrain any breach or threatened breach
by Owner or Manager of any term or condition herein contained, but the
mention herein of any particular remedy shall not preclude Owner or
Manager from any other remedy one might have against the other, either at
law or in equity. The failure by Owner or Manager to insist upon the strict
performance of any one of the terms or conditions of this Agreement or to
exercise any right, remedy or election herein contained or permitted by law
shall not constitute or be construed as a waiver or relinquishment for the
future of such term, condition, right, remedy or election, but the same shall
continue and remain in full force and effect. All rights and remedies that
Owner or Manager may have at law, in equity or otherwise upon breach of
any term or condition of this Agreement, shall be distinct, separate and
cumulative rights and remedies and no one of them, whether exercised by
Owner or Manager or not, shall be deemed to be in exclusion of any other
right or remedy of Owner or Manager.
5.3 This Agreement contains the entire agreement between the
parties hereto with respect to the matters herein contained and any agreement
hereafter made shall be ineffective to effect any change or modification, in
whole or in part, unless such agreement is in writing and signed by the party
against whom enforcement of the change or modification is sought.
5.4 In the event that Owner or Manager shall fail to perform any
duty or fulfill any obligation hereunder, to the material detriment of the other,
Owner or Manager, in addition to any rights or remedies available to them
under law, shall have the right (but shall not be obligated) to perform any
such duty or fulfill any such obligation.
5.5 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
5.6 Neither this Agreement nor any part hereof nor any service,
relationship or other matter alluded to herein shall inure to the benefit of any
third party, to any trustee in bankruptcy, to any assignee for the benefit of
creditors, to any receiver by reason of insolvency, to any other fiduciary or
officer representing a bankrupt or insolvent estate of either party, or to the
creditors or claimants of such an estate. Without limiting the generality of
the foregoing sentence, it is specifically understood and agreed that
insolvency or bankruptcy of either Owner or Manager shall at the option of
the other, void all rights of such insolvent or bankrupt party hereunder (or so
many of such rights as the other party shall elect to void).
5.7 Unless the context clearly requires otherwise, the singular
number herein shall include the plural, the plural number shall include the
singular, and any gender shall include all genders.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed as of the date first above written.
W3D, L.L.C..
By: /s/ Jane M. Rudolph
Jane M. Rudolph
Manager
WORLD WIDE INTERNET BUSINESS
CENTRES, LTD.
By: W3D, L.L.C.
By: /s/ Jane M. Rudolph
Jane M. Rudolph
Manager
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