JOINT VENTURE AGREEMENT
THIS AGREEMENT MADE AS OF THE 24TH DAY OF JUNE 1998
BY AND BETWEEN
SOUTHERN PHILIPPINES DEVELOPMENT AUTHORITY, a
government-owned and controlled corporation, organized
and existing under P.D. 690, as amended, by P.D. 1703
with its principal office at Xx 00 Xxxxxxxxx Xxxxxxx,
Xxxxx Xxxx, Xxxxxxxxxxx represented by its Administrator,
ATTY. BLO UMPAR ADIONG, Al Haj hereinafter referred to as
SPDA.
AND
WARISAN GROUP JOINT VENTURE, a company, registered and
organized under the existing laws of the Republic of the
Philippines, with its principal office address at Xxxx
00, Xxxxxx Xxxxxxxxx, X. Xxxxxxxx Xxx., Xxxxxxxx, Xxxxx
Xxxx, Xxxxxxxxxxx represented by its JV Partners GUEMAR
X. XXXX, President and Director (Amin and Sons
Corporation) and PG. HASHIM PSR PG HJ JAYA, Executive
Vice-President and Director, (XXXX International
Limited), hereinafter referred to as WARISAN GROUP JOINT
VENTURE.
WITNESSETH THAT:
WHEREAS, the parties have agreed to form a Joint Venture,
hereinafter referred to as the "Joint Venture" for the purpose
of participating in a Socialized Low-Cost Housing Project for
the Southern Philippines; and
WHEREAS, the Parties have set forth in this Agreement the terms
and conditions governing their relationship as Joint Venturers
and the organization and operation of the Joint Venture.
IN CONSIDERATION OF the promises and mutual covenants and
agreements herein described, the Parties hereto agree as
follows:
1. COMPLIANCE OF HEADS OF AGREEMENT (MOU)
1.1 This Agreement is in compliance with the Memo of
Understanding entered into between SPDA and
WARISAN GROUP JOINT VENTURE signed in Manila
last May 22, 1998.
2. CREATION AND OBJECTIVE OF JOINT VENTURE
2.1 In consideration of the efforts to be expended
by each Party for the mutual benefit of the
Parties hereby associate themselves as Joint
Venturers and hereby create a Joint Venture for
the purposes set forth below.
2.2 The name of the Joint Venture is "SPDA-WARISAN
JOINT VENTURE."
2.3 The objective of the Joint Venture is to build
1.0 million socialized low cost housing and
related livelihood projects in accordance with
the Applicable laws of the Philippines and
pursuant to SPDA Mandate herein referred to as
the "Project."
3. OBLIGATIONS AND RIGHTS OF JOINT VENTURERS
3.1 SPDA shall secure the necessary permits,
contracts, guarantees, and approvals for each
project from all involved Government entities in
the Republic of the Philippines on behalf of the
SPDA-WARISAN JV.
3.2 WARISAN GROUP shall arrange for the underwriting
and issue of 10-year corporate bond in the
principal amount of $250 M and provide the net
proceeds of this bond issue to the JV for the
purposes describe in para 2.3.
3.3 Upon completion of the funding the parties
hereto shall be reimbursed for all prior costs
and expenses directly related to the project
described herein subject to the submittal to the
Joint Venture of an itemized accounting of such
costs and expenses.
3.4 With reference to future obligations, if either
party is required to perform any obligation or
discharge any liability that exceeds in scope or
amount the proportion of such liability or
obligation undertaken by such Party under this
Agreement, such Party shall require the other
Party to contribute thereto in accordance with
this Agreement.
4. ACCEPTANCE OF PRIOR CONTRACTS
4.1 The parties to this Agreement recognize that
WARJSAN GROUP has entered into agreements for
Project management services and Project
architectural engineering services. WARISAN
GROUP hereby assigns all of its interest in and
to these agreements to the SPDA-WARISAN JV, and
the Joint Venture shall assume all rights and
obligations of these agreements.
4.2 The parties also agreed to abide of the duties
and responsibilities, terms and conditions as
stated in the attached MOU.
5. TERM OF JOINT VENTURE
5.1 The term of the Joint Venture shall commence on
15 July 1998.
5.2 The Joint Venture shall continue for a minimum
of ten (10) years and until the project is fully
completed
5.2.1 all obligations and liabilities assumed
by the Joint Venture pursuant to said
project have been performed or
discharged, and
5.2.2 all disputes, claims, causes of action,
obligations, and liabilities to third
parties and other similar matters
arising out of or in connection with
said Project have been resolved or
discharged, and
5.2.3 the Joint Venture has received payment
in full of all sums due it under said
Project, and
5.2.4 the final accounting and settlement
provided for below have been agreed to
and completed.
6. OFFICES OF THE JOINT VENTURE
6.1 The principal office of the Joint Venture shall
be in Manila, Republic of the Philippines, in a
facility to be leased by the Joint Venture.
6.2 The Joint Venture shall establish and maintain
field offices and facilities in different
locations in Mindanao as the Executive Committee
may approved.
7. INTEREST OF PARTIES
7.1 WARISAN GROUP JOINT VENTURE: Seventy Percent
(70%)
7.2 SOUTHERN PHILIPPINES DEVELOPMENT AUTHORITY;
Thirty Percent (30%) in the form of land owned
by SPDA
7.3 Each Party shall assume and bear the obligations
and liabilities of the Joint Venture, including
any losses that the Joint Venture may incur, in
the same percentages as set forth above in
aragraphs 7.1 and 7.2, and as maybe determined
by the Executive Committee.
8. BANK ACCOUNTS
8.1.1 All funds received by the Joint
Venture from its funding source(s)
shall be deposited in an account to be
opened and maintained in the name of
the SPDA-WARISAN JV at an
international bank agreeable to the
funding source(s). The transfer of any
and all funds from this account shall
require the unanimous consent of the
Executive Committee and all other
parties of interest.
8.1.2 A "working capital" banks account
shall be opened and maintained in a
bank located in Manila and Davao City,
Philippines. The signatures of two
members of the Executive Committee,
one of whom shall be the Program
Manager defined hereafter, shall be
required for all checks and drafts and
all other transactions with respect to
this account.
8.1.3 Operating accounts may be opened and
maintained by the Joint Venture with
such other banks as may be authorized
by the Executive Committee with such
signatories as the Executive Committee
shall determine. Such accounts shall
be funded from time to time from the
account referenced in Paragraph 8.1.2
above.
8.1.4 Neither Party to this Joint Venture
may borrow money upon, or otherwise
pledge or commit, the credit of the
other Party without prior and express
written consent of the other Party
except by action taken by the
Executive Committee within the limits
of its authority as defined herein.
9. EXECUTIVE COMMITTEE
9.1 The operations of the Joint Venture shall be
carried out under the general management and
direction of the EXECUTIVE COMMITTEE consisting
of Five (5) members, three (3) from WARISAN
GROUP and Two (2) From SPDA to be nominated by
and designated in writing by each party hereto
represent respectively, SPDA shall be the
Chairman and WARISAN GROUP shall be the
President. If a member of the Executive
Committee fails to or is unable to serve, the
party or parties designating said member shall
designate another member within five (5) days
after notification.
9.2 Each member of the Executive Committee shall
have full power and authority to act for the
Party by whom said member was designated, in all
matters relating to the management and operation
of the business and affairs of the Joint
Venture. Any action taken by the Executive
Committee, within the authority herein granted
shall be binding and conclusive upon both
Parties.
9.3 The Executive Committee shall meet once every
month or at other agreed to intervals to review
the progress of the Project and to take any
action required on matters within its authority.
Special meetings may be called by either Party
or by the Program Manager with a minimum of
fifteen (15) days notice. Meetings shall be held
at a mutually agreed location. The reasonable
and necessary travel and living expenses
incurred by the members of the Executive
Committee in connection with such meetings shall
be charged to and paid by the Joint Venture.
Majority of the five members of the Executive
Committee. All resolutions and decisions made
and resolutions passed at said meetings shall
become effective only by unanimous vote. Minutes
shall be kept of all meetings, recording all
actions taken, and said minutes shall be signed
by all members. From time to time meetings may
be held by conference telephone followed by
distribution in writing to all members of
actions to be taken.
9.4 Each party shall designate its representatives
on the Executive Committee by notice in writing
to the other Party. Each party may thereafter,
at any time, change such designations by written
notice to the other Party. Any change of
representative shall be effective upon receipt
of said notice by the party so notified. A
member of the Executive Committee representing
either Party may at any time, by written notice
to the other Party, designate an alternate to
attend and act in his or her place at any and
all meetings of the Executive Committee. Any
vote by such alternate at any meeting shall have
the same effect as made by the originally
designated member.
9.5 The Executive Committee shall designate the "key
management personnel" of the Joint Venture
including PROGRAM MANAGER who shall be
responsible for the day to day management of the
Joint Venture.
10. PROGRAM MANAGER
10.l The Program Manager shall be designated by the
Joint Venture to be nominated by WARISAN GROUP.
10.2 The program Manager shall have the authority to
conduct the day to day business and affairs of
the SPDA-WARISAN, subject to the limitations set
forth in this Agreement and any other future
limitations that may be imposed by the Executive
Committee. The Program Manager shall be
responsible for the selection and supervision of
Project contractors, and the selection and
supervision of all Project employees, subject to
confirmation by the Executive Committee.
10.3 The Program Manager shall not do or cause any
of the following without the express and
written approval the Executive Committee.
10.3.1. sell, exchange, encumber, lease,
abandon, or otherwise dispose of any
asset or other property of the Joint
Venture.
10.3.2 borrow any money for, or against the
credit of the Joint Venture.
10.3.3 obligate the Joint Venture to any
third party as a surety, guarantor,
accommodation party, or similar
undertaking.
10.3.4 enter into any contract including
modification or any extension of any
contract, or make any commitment to
any third party for or on behalf of
the Joint Venture without express
permission of the Executive Committee.
10.3.5 make or authorize any distribution of
Joint Venture profits, assets, or any
repayment of working capital advances to
any Party.
10.4 Deputy Program Manager
10.4.1 The Executive Committee may appoint a
Deputy Program Manager who would serve
in the capacity of Program Manager in
the event the Program Manager fails to
serve or is unable to serve.
10.4.2 The Program Manager may be removed by
unanimous vote of the representatives of
the Executive Committee designated by
the parties to this Agreement. Any
employment contracts negotiated with the
Program Manager shall contain the
foregoing removal.
11. JOINT VENTURE ORGANIZATION AND OPERATIONS
11.1 The Joint Venture shall be fully staffed to
carry out the business and affairs of the Joint
Venture.
11.2 From time to time the staffing requirements
shall be reviewed by the Executive Committee.
11.3 The Parties to this Agreement may assign
qualified personnel from their respective
corporations to fill key management positions on
the staff of the Joint Venture with the approval
of the Executive Committee.
11.4 All joint venture employee costs including
but not limited to salaries, benefits,
travel, living, and lodging expenses with
the exception of travel expense advance as
limited above, shall be approved by the
Executive Committee.
12. DISTRIBUTION OF PROFITS
12.1 Distribution of any and all profits earned by
the Joint Venture shall be made from time to
time to the parties hereto in the proportions
specified above in Paragraph 7 and in such
amounts as the Executive Committee shall
determine, provided that no distribution shall
be made until all advances of working capital
(Section 3.3) have been repaid to the Parties
hereto by the Joint Venture.
12.2 Distribution of profits shall be made only
after all other current obligations of the joint
venture have been paid including but not
limited to short and long term debt and
interest payments and costs of operations.
13. WORK PROGRAMS AND BUDGETS
13.1 The budget shall consist of two parts,
(I) Management Program and Budget, and (2) the
Project Program and Budget.
13.1.1 The Management Program and Budget for the
next calendar year shall be prepared by
the Program Manager and submitted to the
Executive Committee for approval. The
Budget shall include annual costestimates
for the day-to-day administration of the
Joint Venture and the cost of carrying
out the management instructions of the
Executive Committee. The Executive
Committee shall review, discuss, and
modify if necessary the proposed
Management Program and Budget and
corresponding payment schedule and
approve in writing a final form each
year, however, a revision or addition to
the approved Management Program and
Budget maybe made at any time throughout
the operating year by unanimous consent
of the Executive Committee.
13.1.2 The Executive Committee shall approve an
Authorization For Expenditure (AFE) for
each phase of the Project after careful
review, discussion, and modification if
necessary within thirty (30) days after
receipt of the report from the Program
Manager. Subsequent revisions to the AFE
may be made at any time during the course
of the Project by unanimous consent of
the Executive Committee.
14. ACCOUNTING AND RECORDS
14.1 Books of accounts and supporting records shall be
maintained by the Joint Venture in accordance
with generally accepted accounting practices and
may be examined at any time by either Party.
14.2 Financial statements including a balance sheet and
statement of profit and loss shall be prepared
monthly in such detail as may be required by the
Executive Committee and submitted to each Party.
15. ARBITRATION
15.1 Any dispute, controversy or claim arising out of
or relating to this Joint Venture Agreement, or the
breach, termination or invalidity thereof, shall be
finally settled by arbitration administered by the
Philippines Dispute Resolution Center, Inc. (PDRCI)
in accordance with its own International Commercial
Arbitration Rules as at present in force.
15.2 It shall be understood and agreed that the Joint
Venture Agreement shall be governed by and
interpreted under Philippine Laws.
15.3 The number of arbitrators shall be three (3).
Each Party shall appoint one arbitrator. The two
arbitrators thus appointed shall choose the third
arbitrator who will act as the presiding arbitrator
of the tribunal.
15.4 The place of arbitration shall be in Manila,
Philippines.
15.5 The language to be used in the arbitral proceedings
shall be English.
15.6 The parties may be represented or assisted by a
person of their choice in the arbitral proceedings.
The names and addresses of such persons must
specify whether the appointment is being made for
purposes of representation or assistance.
16. NOTICES AND CORRESPONDENCE
16.1 All notices and correspondence concerning this
Joint Venture shall be sent to the respective
Parties as follows;
MEMORANDUM OF UNDERSTANDING
---------------------------
This Memorandum of Understanding is made and entered into on this 00xx xx Xxx
0000, xx Xxxxxx, Xxxxxxxxxxx
BY AND BETWEEN
SOUTHERN PHILIPPINES DEVELOPMENT AUTHORITY,
a government-owned and controlled corporation, organized and existing under P.D.
690, as amended, by P.D. 1703 with its phncipal office at Xx 00. Xxxxxxxxx
Xxxxxxx, Xxxxx Xxxx, Xxxxxxxxxxx represented by its Administrator, ATTY. BLO
UMPAR ADIONG, Al Haj hereinafter referred to as SPDA.
AND
WARISAN GROUP JOINT VENTURE, a company, registered and
organized under the existing laws of the Republic of the Philippines, with its
principal office address at Xxxx 00, Xxxxxx Xxxxxxxxx, X. Xxxxxxxx Xxx.
Xxxxxxxx, Xxxxx Xxxx, Xxxxxxxxxxx represented by its JV Partners GUEMAR X. XXXX
President and Director (Amin and Sons Corporation) and PG. HASHIM PSR PG HJ
JAYA, Executive Vice President and Director, (XXXX International Limited),
hereinafter referred to as WARISAN GROUP JOINT VENTURE.
WITNESSETH
WHEREAS, there is an estimated shortage of at least one
million housing units in the region administered by the Southern Philippines
Development Authority (SPDA);
WHEREAS, the Special Zone of Peace and Development (SZOPAD)
in the Southern Philippines was created in 1996 by Executive Order No. 371,
which in Section 3 provides that the SPDA shall be one of the institutional
mechanisms for carrying out development efforts in the Southern Philippines;
WHEREAS, the Housing and Urban Development Coordinating
Council (HUDCC) was created in 1996 by Executive Order No. 90, and further
strengthened in 1989 by Executive Order No.357;
WHEREAS, the National Shelter Program (NSP) was created by
the Development and Housing Act of 1992;
WHEREAS, the HUDCC acts as the highest policy making body on
shelter and provides overall direction in the implementation of the NSP;
WHEREAS, the SPDA and HUDCC Special Mindanao ZOPAD Housing
Task Force entered into a Memorandum of Agreement of joint cooperation on
October 22, 1997;
WHEREAS the Warisan Group Joint Venture has agreed to bring
private sector business to Muslim Mindanao to develop and construct socialized
low-cast housing for beneficiaries who are members of the GSIS, SSS and PAG-lBIG
fund and other beneficiaries who are members of the cooperatives;
WHEREAS, SPDA manifests its interests in the Mass Housing
project in Mindanao in accordance with its mandate and pursuant to its role as
corporateimplementing arm of the Southern Philippines Council for Peace and
Development (SPCPD) with priority to the Special Zone of Peace and Development
(SZOPAD) areas.
Therefore and in consideration of the above, the parties
hereby mutually agree as follows:
1. CREATION OF JOINT VENTURE
1.1 The Parties agree to form a Joint Venture to be known
as SPDAWARISAN GROUP JOINT VENTURE.
1.2 The equity structure of the Joint Venture shall be
Warisan Group as majority and SPDA as minority
shareholders.
1.3 During the process of organization an Executive
Committee shall be created to be composed of experts
from SPDA and WARISAN Group Joint Venture to formulate
immediately the joint venture set-up the determination
of projects, the financial requirements and other
details subject to confirmation by both parties.
2. DUTIES AND RESPONSIBILITIES
2.1 SPDA
2.1.1 Provide administrative services for the projects and
ensure Government approval for the establishment of
the joint venture.
2.1.2 Identify and contribute land and contact other private
land owners that will be developed as project site.
2.1.3 Assist in the procurements of additional land areas
for the project.
2.1.4 Assist in the selection of highly qualified and
skilled manpower.
2.1.5 Co-manage the low cost housing projects, includin
marketing.
2.1.6 Assist in the organization of various cooperatives fo
its Member beneficiaries for low cost housing.
2.1.7 Create linkage with LGU, other government agencies and
private sector, housing and subdivision developers, as
may be required.
2.2 WARISAN GROUP
2.2.1 Prepare and finance feasibility studies, subdivision
development schemes and detailed architectural and
engineering plans;
2.2.2 Provide development funds for land development and
housing construction;
2.2.3 Undertake land development and/or housing development;
2.2.4 Ensure installation of basic utilities and services
per existing housing rules and regulations;
2.2.5 Assist in marketing of developed lots and/or completed
housing units;
2.2.6 Maintain projects until turnover to the homeowners'
associations as required by law;
2.2.7 Participate in previously approved projects with
third-party developers who are required to provide low
income housing units.
NOW, THEREFORE, the SPDA and the WARISAN JV agree to the following:
o To enter into a joint venture relationship for the purpose of accomplishing
the housing goals of the SPDA at an ultimate annual production rate of as
many as one hundred thousand (100,000) low-income housing units;
o To complete the definitive joint venture housing development agreement
within thirty (30) calendar days after the date of execution of this
Memorandum of Understanding (MOU), but not later than June 30,1998;
o To organize the Executive Committee for the documentation of the Joint
Venture, formulate the organization, preparation of the master development
plan and feasibility studies, and licenses, application permits and
financing packages;
o To facilitate the application for housing accreditation with government and
housing agencies, including the application for commitment line from the
housing financial institutions;
o To treat as confidential and proprietary all documents and supporting
information developed pursuant to this MOU.
AGREED TO AND ACCEPTED:
/s/ Blo Umparadiong, Al Haj Illegible Signature
-------------------------------- ----------------------------
BLO UMPAR ADIONG, Al Haj Witness
Administrator
SOUTHERN PHILIPPINES DEVELOPMENT AUTHORITY
/s/ Guemar X. Xxxx Illegible Signature
-------------------------------- ----------------------------
GUEMAR X. XXXX Witness
President and Director
AMIN AND SONS CORPORATION
WAROSPM JV PARTNER
/s/ Pg. Hashim Psr Pg H. J. Jaya Illegible Signature
-------------------------------- ----------------------------
PG. HASHIM PSR PG H. J. JAYA Witness
Executive Vice President and Director
XXXX INTERNATION LTD.
WARISON JV PARTNER
SOUTHERN PHILIPPINES DEVELOPMENT AUTHORITY
3/F Basic Petroleum Xxxx. 000 X. Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx, Xxxxxx Xxxx
Tel. #000-0000 Fax #000-0000
WARISAN GROUP JOINT VENTURE
Xxxx 00, Xxxxxx Xxxxxxxxx, X. Xxxxxxxx Xxx. Xxxxxxxx,
Xxxxx Xxxx
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective as of this 24th day of June 1998.
SOUTHERN PHILIPPINES DEVELOPMENT AUTHORITY
BY: /s/ Atty. Blo Umpar Adiong, Al Haj
--------------------------------------
ATTY BLO UMPAR ADIONG, Al Haj
Administrator
WARISON GROUP JOINT VENTURE
BY: /s/ Guemar X. Xxxx /s/ Pg. Hashim PSR Pg HJ Jaya
-----------------------------------------------------
GUEMAR X. XXXX & PG. XXXXXX PSR PG HJ JAYA
President & Director Executive Vice-President & Director
