Exhibit 10.2
MEMORANDUM OF AGREEMENT
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KNOW ALL MEN BY THESE PRESENTS:
This MEMORANDUM OF AGREEMENT, mad and entered into by and between:
The CITY GOVERNMENT OF PUERTO PRINCESA, a political subdivision existing
under the laws of the Republic of the Philippines, herein referred to as the
FIRST PARTY, and represented by its City Mayor, ▇▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
- and -
▇▇▇ MOTORS, INC., with office address at (153-829)1004-12 Doksan-dong,
Geumcheon-Gu, Seoul, Korea, represented by ▇▇▇▇ ▇▇▇▇'▇▇▇ and SEA MOTORS, INC.,
with office address at A ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Jamsil Dong, Songpa Gu, Seoul,
Korea, represented by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇ (▇▇▇▇▇▇) ▇▇▇▇, are herein
called as SECOND PARTY.
WITNESSETH: THAT -
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WHEREAS, the FIRST PARTY as a local government unit is totally committed to
the preservation of its environment and the protection of its existing ecology
as part of its primordial duty. As such, its guiding principle in governance
and in promoting the general welfare of its people is the sustainable
development of its environment and natural resources, including the protection
of its air and water resources;
WHEREAS, in line with the said guiding principles, and as a vital component
of its implementation of the Clean Air Act, the FIRST PARTY is intent on
replacing the existing local mode of transportation, more specifically the
motorcycles/tricycles, with environmentally friendly vehicles;
WHEREAS, such a move if likewise proven economically feasible will as
uplift the economic life of tricycle drivers and operators in the City;
WHEREAS, in pursuit of this goal, the ▇▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ visited the
offices and workshops of the SECOND PARTY, and found the latter to be a leader
in the development of electric driven vehicles (EV) as well as
environment-friendly vehicle batteries;
WHEREAS, the FIRST PARTY has requested the SECOND PARTY to develop and
Electric Vehicle ideally feasible for use in Puerto Princesa City, and in
response thereto, the SECOND PARTY has donated to the FIRST PARTY an electric
scooter prototype;
WHEREAS, the SECOND PARTY has also submitted to the FIRST PARTY its
proposal including socio-economic assessment, environmental impact study, EV
market and technology background, EV(EP) development plan, engineering design,
detailed schedule, pricing, financial plan for end-users, and battery swap
centers;
WHEREAS, on 15 September 2008, the above-mentioned proposal was presented
to the ▇▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the Sangguniang Panlungsod, which
conditionally accepted the same subject to the execution of Joint Venture
Agreement;
WHEREAS, there is an urgent need in the meantime to execute a Memorandum of
Agreement containing the general agreements of the parties, subject to the
execution at a late date of the Joint Venture Agreement, to enable the SECOND
PARTY to immediately start development of the prototypes;
NOW, THEREFORE, for and in consideration of the foregoing premises, the
parties hereto herby agree to the following:
I
GENERAL PROVISIONS
1. The parties hereto hereby agree to execute a Joint Venture Agreement
(JVA) creating a Joint Venture Company (JVC) and embodying their commitments and
obligations relative to their agreed co-production of the EV, herein
redenominated as the EP, or Electric Princesa.
2. The FIRST PARTY agrees to allow the SECOND PARTY to manage the Joint
Venture Company as far as the technical aspects of the production is concerned;
3. The SECOND PARTY agrees to allow the FIRST PARTY to handle the
financial aspects of the Joint Venture Company;
4. A governing board shall be created to handle the policy directions
of the Joint Venture Company;
5. The parties hereto further agree to look into the possibility of
selling the EP outside the territorial jurisdiction of the FIRST PARTY, with the
latter granted exclusive selling right;
6. All rights and interests of the SECOND PARTY under the MOA may not
be assigned to any other entity. It is hereby agreed that the rights granted
under this MOA are exclusive and personal to the parties;
7. The Joint Venture Company shall initially produce at least 2,500
EVs;
II
UNDERTAKINGS OF THE FIRST PARTY
The FIRST PARTY shall:
8. Undertake to allow the SECOND PARTY access to available technical and
other information required for the completion of the prototype and assembly
plant;
9. Assist the SECOND PARTY in organizing and recruiting the needed labor
pool for the venture;
10. Assume responsibility for all taxes of whatever kind and nature
including but not limited to real property taxes, pursuant to City Ordinance No.
331, otherwise known as the Investment Incentives Ordinance of 2007, and its
implementing rules and regulations, arising from or in connection with the
proposed Joint Venture Agreement;
11. Provide the SECOND PARTY a suitable site for the establishment of the
assembly plant;
12. Agree to contribute a total capital investment of Php200,000,000.00 to
the Joint Venture Company to be remitted in four (4) tranches of
Php14,000,000.00; Php75,000,000.00 and Php36,000,000.00
These capital investments shall cover co-production expense as well as
subsidy in favor of beneficiaries who may avail of the conversion to EP on a per
unit basis;
The first tranche shall be remitted upon receipt of the funds available for
the purpose from the Malampaya Share of the FIRST PARTY to help cover initial
production cost of the three (3) EP prototypes.
13. Approve and audit transactions
14. Identify battery swap centers;
III
UNDERTAKINGS OF THE SECOND PARTY
The SECOND PARTY SHALL:
15. Develop the project prototype EP;
16. Supply semi-complete knockdown or disassembled parts;
17. Conduct trainings for qualified residents of Puerto Princesa City to
ensure proper technological transfer in assembling the EP;
18. Remit the amount of US$300,000.00 as equity capital to the proposed
Joint Venture Company, the same to be utilized in the same manner as that of the
FIRST PARTY;
19. Operate and produce/make available the batteries for the batter swap
centers;
20. Set up and operate the assembly plant.
IV
MISCELLANEOUS PROVISIONS
21. The SECOND PARTY hereby undertakes that all necessary approval and
permits from the appropriate agencies of the Government of the Republic of the
Philippines shall be secured by them including, but not limited to authority to
do business in the Philippines and all environmental requirements;
22. The failure of the FIRST PARTY to insist upon a strict performance of
any of the terms, conditions and covenants hereof shall be not deemed a
relinquishment or waiver of any right or remedy that FIRST PARTY may have, nor
shall it me construed as waiver of any subsequent breach or default of the
terms, conditions and covenants herein contained, which shall be deemed in full
force and effect. No waiver by FIRST PARTY shall be deemed to have been made
unless expressed in writing and signed by FIRST PARTY;
23. This agreement, except for the actual Joint Venture Agreement, contains
the entire understanding and agreement between the parties, and all prior
written or oral understanding or arrangements are merged herein. No amendment or
modification hereof shall be binding upon either party unless in writing and
signed by the party to be charged therewith;
24. The parties agree to revise or amend the pertinent portions of this
Agreement whenever necessary in the interest of public service;
25. The interpretation, validity and performance of this Agreement shall be
governed in all respects by the laws of the Philippines;
26. Any dispute between the parties whether resulting from claim in
contract, tort otherwise, or any claim or controversy which may arise out or in
connection with this Agreement or the application, implementation, validity,
breach or termination of this Agreement, any provision thereof or any agreement
shall be solely and exclusively filed with the proper courts or tribunals of
Puerto Princesa City.
IN WITNESS WHEREOF, the parties have hereunto set their hands this ____day
of ____ 2008, at Puerto Princesa City, Philippines.
FOR THE CITY GOVERNMENT OF PUERTO PRINCESA
FIRST PARTY REPRESENTED BY:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
City Mayor
FOR THE ▇▇▇ MOTORS, INC. AND SEA MOROTS, INC.
SECOND PARTY REPRESENTED BY:
JUNG ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ SHI ▇▇▇▇ ▇▇▇▇
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▇▇▇ MOTORS, INC SEA MOTORS, INC
WITNESSES:
___________________ _________________
ACKNOWLEDGEMENT
REPUBLIC OF THE PHILIPPINES)
CITY OF PUERTO PRINCESA )S.S
BEFORE ME, A Notary Public for and in the City of Puerto Princesa,
personally appeared:
CTC NUMBER/
NAME PASSPORT NO. ISSUED ON ISSUED AT
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All are known to me and known to be the same persons who executed the
foregoing Memorandum of Agreement and they acknowledged to me that the same is
their free and voluntary act and deed.
