MEMORANDUM OF UNDERSTANDING
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AND
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JOINT VENTURE AGREEMENT
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KNOW ALL MEN BY THESE PRESENTS;
This MEMORANDUM OF UNDERSTANDING made and entered into in Gagayan dc Ore City,
Philippines, 8' and between:
KAPATIRAN AGRO-INDUSTRIAL CO-OPERATIVE SETTLEMENT, (KAICS) A Corporate entity
of the SOUTHERN PHILIPPINES DEVELOPMENT AUTHORITY, (SPDA) Autonomous region of
Muslim Mindanao, (SPDA-ARMM) A duly registered co-operative existing under the
laws of Philippines, with representative offices at Cotabato City, Philippines,
herein after represented by its Administrator MR. FAROUK DUMAGAY BILAO, Chief
Executive Officer of KAICS, of legal ago, Filipino and a resident of Cotabato
City, Hereinafter referred to as the FIRST PARTY.
AND
BENTLEY HOUSE FURNITURE COMPANY, or (assigns,) a duly organized Philippine
Corporation, with offices at FOBIP Compound, Ba. hang, Tibungco, Davao City,
Philippines herein represented by its CEO/Chairman JONATHON BENTLEY-STEVENS of
legal age, single, Australian Citizen, with residence in Cambridge Circle, North
Forbes, Makali City, with Passport No. L0120094 hereinafter called the
DEVELOPER
WITNESSETH THAT
WHEREAS, KAICS has been mandated under PRESIUEN VIAL EXECUTIVE ORDER No. 142, to
Supervise, Administer and Develop, an initial area of 26,000 Hectares, under
PRESIDENTIAL PROCLAMATION 204G, as an ACRI-INDUSTRIAL COMPLEX. The initial area
is situated in the province of LANAO DEL SUR, covered by the attached maps and
documents (annex "A") and Total and comprehensive inventory of mature trees to
be harvested as part of The development, see Annex 'B R.P.-GERMAN resource
inventory, developed as the result of a joint inventory by the Philippine
Government DENR in conjunction and with the assistance of the Republic of
Gonnarry. Annex "B" : herein alter refer red to as the property, as Presidential
Proclamation holder has the exclusive of the occupancy, position and
exploitation development of and beneficial use of said properties which arc more
particularly described iii Annex'A".
WHEREAS KAICS is desirous of availing the financial technical and administrative
facilities of the DEVELOPER and which the latter accepts to develop, perfect,
Exploit and operate the aforementioned properties and the take charge of the
removal and disposal of timber and timber by products that maybe extracted,
recovered and produce therefrom providing that such products are covered by the
relevant DENR documents.
NOW THEREFORE, for and in consideration of the foregoing progress and of the
covenants warranties agreements stipulations undertaking end conditions heroin
after contained and for other good and valuable consideration the receipt of
which is hereby acknowledged the parties hereto have agreed and do hereby agree
the one with other as follows.
ARTICLE 1: Warranties AND REPRESENTATIONS
SECTION 1.1.
KAICS covenants and warrants that the properties are free and clear of any
and all liens and obligations encumbrances claims and demands of whatever kind
of nature, that all of the timber products have been properly located,
inventoried and manifested iii accordance with The provisions of the applicable
laws and 1ro presently valid subsisting rind In full force and operation that
the KAlCS title on the properties Is not considered abandoned not forfeited and
are valid Subsisting in full force and operation that the land development is
subject to the terms and conditions of this agreement, that the timber products
embrace the areas stated on the coordinates described iii ANNEX "A".
That The above plantation property are located outside of any declared
forest reservations or other areas where timber may not be lawfully located or
acquired and that each and all of the said rights and such other rights and
privileges relating or attached to The plantation property arc In effect. Such
rights which may be hereafter be procured or acquired by The KAICS within two
kilometers of The claim subject of this agreement whether directly or indirectly
shall be the subject to this agreement and shall be included as part and parcel
of the plantation herein referred to,
SECTION 1.2
The KAICS likewise warrants and covenants That the plantation property
shall also include all timber products and all other rights to which by law the
KAICS is emitted on which may hereinafter be acquired by his directly and the
KAICS undertake and agree to, subject to the same terms and conditions of this
agreement promptly upon The written request of The DEVELOPER provided that
however' that which respect to those water timber rights or properties and
privileges of any kind or marinern which may be acquired by the KAICs in the
adjoining vicinity of The plantation property alter The date of signing of
this agreement, and turnover shall be subject to the payment of a negotiated
compensation therefore if the DEVELOPER is interested thereon.
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SECTION 1.3
KAICS and the DEVELOPER both mutually warrant that they possess full power
and authority to enter into this agreement and perform their respected
obligation there under.
ARTICLE 11: EXCLUSIVE RIGHT AND PRIVILEGES
SECTION 2,1
The KAICS hereby grants to the DEVELOPER the exclusive rights amid
privilege of developing, operating, exploiting, utilizing, processing and
disposing of the plantation products and by products their or that shall be
produced from the plantation covered by this agreement and the exclusive right
and privilege to market, sell and dispose or convey in whatsoever manner or form
the valuable plantation products or by products thereof that shall be harvested,
gathered, covered or produced therefrom In accordance with the pre-vision of
this agreement, in accordance with applicable laws.
SECTION 2.2
The KAICS in order to facilitate The issuance of DENR documents and payment
of forest charges, and to effect the purpose of this clause, the KAICS hereby
Irrevocably name, constitute and appoint for and In behalf KlACS the Jonathon
Bentley-Stevens, as its duly authorized attorney in fact.
ARTICLE 3: OPERATING RIGHTS
SECTION 3.1
During The life of this arrangement The DEVELOPER shall have and KAICS
hereby grants to it for the following rights and powers iii addition to those
other rights given under this agreement:
a.) To enter pass, possess, occupy, use amid control The clearing of the
plantation property.
b.) To plan and develop the plantation property in a joint venture which may
Include the planting of palm oil and coffee as well as other fruit
trees and suitable crops.
c.) To conduct harvesting and all subsidizing associated and other
operations of the plantation property.
d.) To erect, install, or place on The plantation property any type of
structure for The purpose of operating the property under this
agreement.
e.) To construct road ways, water drainage and all oilier types of works err
or off the plantation property.
f.) To provide all equipment for the clearing operation on the designated
areas amid planting operations on Specific areas, including planting
expanses which will be deducted The parties shall share 60% KAICS and
40% DEVELOPER net profit.
g.) To remove, harvest, mill, process and market all products from The
plantation property without any restrictions or obligation as to the
amount or rate of harvesting provided that such disposal is according to
the IAOP's issued by the OENR.
h.) To enter into contract, agreement, conveyances and undertakings of any
and all kinds with reference to -the development, harvesting and
other operation's pentainirig to The plantation property and with
reference to The milling processing and marketing on The products
produced from the plantation property, that such contract agreement
assignments, conveyances and undertakings shall not extend to produce
effects beyond the period of this agreement or Impair The title to The
plantation property and other rights of the KAICS under this agreement.
i.) Subject to The revenue sharing agreement to be executed, under this
memorandum of agreement (ANNEX "B"), to receive and retain for us
uses and purposes and as Its own during the life of this agreement
thereafter any and all proceeds or property realized from The sale or
exchange or other disposition of The products from the clearing of
The plantation property and any and all proceeds or property of any
kind whatsoever realized relating to The clearing operation of The
plantation property and processing of The lumber or plantation products
during the life of tins agreement and to the building works,
Improvements, materials and equipment and any other things whatsoever
used for and in the operations and/or agreement.
j.) To plan, map, develop, harvest, process and market all the plantation
products as found on or within the plantation property which in
the sole judgment of the DEVELOPER can be processed and marketed at a
fair an reasonable profit and conducts its clearing, harvesting and
processing operations according to faceted good harvesting and
industrial practices and small pursue such work with what In its solo
judgment, constitute reasonable diligence with such rapidity, as It
should done wise and reasonable practicable provided however that In
the event The MANAGING PARTNER,
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k.) In Its sole judgment determines the need to stop or reduce its
operations due to inundation The, injury to machinery, flooding of the
plantation area, strike, typhoon, earthquake, war, insurrection, civil
Commotion, riot, importation illegal plantation, workers/squatters,
Activities or force mauve, the periods fixed in this agreement or any
extension thereof and the operation if already undertaken shall remain
suspended wholly or partially for' the duration of such cause or even or
effect thereof, DEVELOPER shall notify in writing to KAICS of such
causes or events.
l.) It is understood further more that The payments of The profit shared
mentioned in ANNEX B"
m.) (Except for which have accrued and become payable in accordance with
this agreement) shall be suspended in case there Is stoppage of
operations by KIACS KAICS and in case of partial operation the
payments shall be based proportionately on the actual harvesting.
n.) HUMAN RESOURCES:
In as much as the KAICS area is hereto re-settlement of time
former MNLF members, priority for the employment of workers, whether
skilled, semi-skilled or laborers, will be given to the former MNLF
members as well as the indigenous population of the KAICS area.
The enumeration of the above rights and powers shall not in act way be
deemed to exclude oilier rights and powers which are not enumerated but which
are pertaining to any thereof or to canny our the intent and purpose of this
agreement.
Article 1V: EXECUTION AND DELIVERY OF DOCUMENTS
Section 4.1
KAICS has, prior to the execution of this agreement made available for the
Inspection of the DEVELOPER the plan, reports, declaration of locations,
evidence of recording thereof, and all other documents or Information relating
to the plantation property amid relating to any rights and privileges on the
plantation property on' nights and privileges pretend amid relative thereto.
Section 4.2
The KAICS further covenant and agree that it will upon measurable request
al any time and from time to time made by The DEVELOPER signed, execute and
deliver or produce and deliver to the DEVELOPER all other deeds conveyances,
assignments, applications, affidavits, powers of attorney certificates and any
other recurrent of any klmrd whatsoever pertaining to the plantation property in
addition to those contemplated iii the preceding paragraphs which are deemed
necessary or proper in order to carry out the intent or purpose of this
agreement.
Section 4.3
Should The KAICS unreasonably fail or refuse to carry out time SECOND
PARTY'S request than Thin DEVELOPER shall have full irrevocable power of us
attorney in fact to sign, execute and to procure and the case maybe in any if
the above for and on behalf and in the name of the hummer provided that such
exercise of the authority shall riot in any way Impair or prejudice the former
rights on The plantation property and further carry out its intent and purpose
and also carry out its intent and purpose and also to carry out the intent and
purpose of this agreement as a whole.
The KAICS hereby irrevocably constitute and appoint for and on its behalf
The DEVELOPER as its attorney in tact to apply and secure plantation leases
patents or temporary special permits or any permits thereto err the plantation
property or any part or parts thereof which the DEVELOPER in the exercise of its
sound judgment small deem advisable and to file The same a well as airy oilier
documents mentioned In the preceding paragraphs thereof and in this section with
the plantation regional recorder amid or oilier appropriate government agencies.
Section 4.4
Both parties find the to keep in strict confidence all data derived and all
Information derived or acquired in the plantation property.
ARTICLE V: PROFIT
All payments will be made direct to a bank account to be nominated by the KAICS.
ARTICLE VI: SURFACE RIGHTS AND MAINTENANCE OF PLANTATION PROPERTY
Section 6.1
The KAICS in collaboration with the DEVELOPER hereby agrees to acquire from
and/or negotiate (morn The land owners and occupiers of private lands within or
affecting The plantation property the necessary sun taco rights of way agreement
or plantation planning or development pursuant to the provisions of The
corresponding plantation law and oilier applicable Philippine laws.
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To arrange for the betroth of the DEVELOPER the peaceful enjoyment of the
premises necessary for plantation operations provided that all expenses
reasonable, necessary to acquire such surface rights permit and the
compensations to The surface owners pursuant to time corresponding plantation
lows will be for the account of The MANAGING PARTNER.
Section 6.2 THE PLANTATION TITLE
The KAICS shall preserve and maintain his nights oven the plantation
property iii accordance with time Philippine Laws and shall secure the
corresponding lease contracts if there is noire err any or all pals of the
plantation property the expenses of lire procurement of same will be for the
account of time DEVELOPER. The DEVELOPER shall shoulder The expenses of
surveying The PROPERTY inn accordance within the latest SATELLITE GPS (Global
Positioning System) SYSTEMS survey or cause to be surveyed the The PROPERTY,
after which the SPDA will cause the issuance of a land title converting the
Presidential Property into TITLED LAND after which The land will be annotated
inn favor of the MANAGING PARTNER.
Section 6.3
The DEVELOPER shall ensure that the rights over the plantation properties
are kept In full force and effect by duly and promptly complying with all
requirements of Philippine Laws and of any government regulatory bodies having
Jurisdiction with regards thereto. With regards to performance of annual work
obligations payments of occupation fees rentals, taxes, charges, and fees filing
of necessary reports the KAICS shah co-ordinate with (lie DEVELOPER upon The
request of The latter in connection with its performance thereof.
ARTICLE VII: EXPENSES FEES AND OTHER CHARGES
Section 7.1
Subject to provisions Of this agreement all expenses Incurred for
development, operation, harvesting, utilization of plantation property and The
marketing of the products and by products thereof shall be for the account of
the MANAGING PARTNER.
ARTICLE Viii: ASSIGNMENT
Section 8.1
The Internet and nights of either the KAICS or the DEVELOPER inn amid under
tins agreement are transferable whole or in part to persons and/or entities,
whether existing or to be organized in The future under such terms as the
DEVELOPER may, in their exclusive discretion, doom right amid proper provided
The nights and Interests of both The DEVELOPER amid KAICS are preserved.
Provided that The respective rights under this agreement are preserved and
maintained and that the assignee undertakes to be bound by the provisions of
this agreement provided that further that The rights of the MANAGING PARTNER, on
the plantation property shall not be impaired and provided that furthermore the
assigning party may have The WRITTEN CONSENT of such assignment or transfer from
the oilier.
Section 8.2
Whenever The term DEVELOPER appears inn this agreement it shah rotor to the
DEVELOPER and the person and/or entities to which' this agreement may be
assigned by The DEVELOPER pursuant to time condition hereof.
Section 8.3
That The agreement shall be binding upon the panties hereto and their
respective successors and assigns including any other corporation or partnership
with which either party may be managed or consolidated.
Section 8.4
Its understood and agreed that should for any reason the plantation
property be attached or levied upon) the execution as to adversely affect or
prejudice the rights of the DEVELOPER and his operation the DEVELOPER shall
immediately take steps to release the property from such levy or attachment.
The SIDA AND/OR KAICS, undertakes and Is obligated as stipulated under
Article I above to guarantee the warrants lime peaceful occupancy and possession
of (ire plantation property by The DEVELOPER for his befit, use enjoyment and
operation.
ARTICLE IX: SUNDRY PROVISIONS
Section 9.1
Any and all plantation areas winch KAICS may locate and acquire directly or
indirectly through other persons after the execution of this agreement shall be
deemed incorporated within The operative effect of this agreement.
Section 9.2
The SPDA or KAICS, or its Authorized representative shall have free access
at to hasp act and observe the operations of the plantation property, Provided
however that such inspection shall be during reasonable office hours and inn
such manner as to not Interfere with The operations of The DEVELOPER and
provided further that (tie lodging of like manner as being provided by the
DEVELOPER to its on the field in charge of the operation be likewise extended
to The one making such inspection.
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Section 9.3
The DEVELOPER shall keep complete books of account for its operations and
shah give access to any person from the DEVELOPER to any books reports, and such
materials and relevant information and documents pertaining to the operation of
the plantation property.
Section 9.4
That The KAICS further covenant and agree that it is a special condition of
tins agreement that he shall take prompt action to Interpose all the necessary
defenses to any litigates which may be instituted against the DEVELOPER or its
self or BOTH, directly or indirectly affecting The title possession, use amid
occupancy of the plantation properly or any interest or nights thereto or the
free and exclusive operation and development of Ire properties by the DEVELOPER
as contemplated by this agreement.
Section 9.5
Subject to prior consultation with The Developer and without prejudice to
The rights of the DEVELOPER to insist compliance whir this agreement the
DEVELOPER shah have The right to bring and send suits in all matters relation to
the plantation property(s) to the extent necessary to protect the nights and
interests of both parties under this agreement. The aforesaid consultation shall
cover among others The legal issues, involved costs and expenses of suits and
suits and other relevant matters.
Section 9.6
In the event of Litigation or proceeding judicial or administrative,
seriously affecting The title to the possession, use or occupancy of The
property for across NOT attributable to the MANAGING PARTNER, as a result of
winch The DEVELOPER shall be legally corbelled, to cease or suspend operations
Inc latter may suspend payment of the Profit mentioned in this agreement due to
KAICS con responding to The damn or claims involved inn such litigation or
proceedings, during The tendency thereof, Provided that if after The period of
suspension The DEVELOPER shah have recovered income or award of damages from the
THIRD PERSON involved err The suit KAICS shah be entitled in to a share thereof
in proportion to the of their profit share reformed to Inn agreement.
ARTICLE X: AERATION
Section 10.1
In case of violation of any of The terms of this agreement by any of the
parties notice in wrung must be given to the party alleged to brave violated
the agreement and such party must be given reasonable time to correct any of The
violation attributed to it.
Section 10.2
Should there be a claim demand, dispute or controversy concerning or
involving any provisions of this agreement or the plantation products time
panties small exert every effort to settle amicably. It settlement is not
reached by thorn The claim demand dispute of Controversy shall be referred to a
bound of arbitrators composed of three members, are appointed or selected by
either party and a third panty by the two arbitrators . The parties seeking
arbitration shall give written notice of Its decision to submit and issue to
arbitration to The other party and simultaneously Identify its selected
arbitrator. Within fifteen days (15) from receipt of such notice the other
parties shall give written notice to the party seeking arbitration appoint
another arbitrator and these two arbitrators named by the parties shall select a
third arbitrator and the decision of any of the arbitrators shall be binding and
conclusive on both panties hereto;
Upon completion of the board of arbitrators the proceedings should commence
within fifteen days (15) and the liberal procedure shah be adopted by the said
board in order to enable both parties to complete The or their respective
evidence and their views amid arguments err The issue. After The parties shall
have completed presenting their evidence and their respective memoranda to the
board the latter small render a decision within 30 days from the date of the
last memoranda is submitted.
The decision of The majority of the board shall be final and binding upon
the parties and shall be enforceable by action by either party alter 30 days
from the date The decision of the board of arbitrators was rendered against The
oilier, no action in court as to any matter shall be Instituted by either party
against each except to enforce the award of the board or arbitrators winch
small be final upon both panties.
All expenses with connection with The arbitration proceeding including the fees
or arbitrators shall be bone share alike by the parties.
ARTICLE XI JOINT MANAGEMENT COMMITTEE
Section 11.1
That Within 30 days of the signing of this agreement a JOINT MANAGEMENT
COMMITTEE shall be established. Time committee shall have offices inn the city
of CAGAYAN DE ORO , Mindanao and shall as agreed for the operating expenses.
The committee shall agree to develop fine area of the KAICS into an Agriculture,
Forestry and Industrial area.
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ARTICLE XII: DURATION
Section 11.2
This AGREEMENT SHALL BE FOR A PERIOD OF TWENTY-FIVE (25) YEARS with
rollover and extension inn TWENTY-FIVE (25) YEARS increments. Commencing upon
the execution of this agreement
Section 11.3
That if and when necessary to give full force amid effect to the condition
stipulations purposes obligations warranties amid representations of KAICS they
hereby appoint name and constitute the DEVELOPER to be their true and lawful
attorney in fact for their self and In their name place and stead to do and
perform airy acts and things necessary to effect with full force and purposes of
this agreement.
In witness hereof the parties have hereunto so their hands this 5th day of
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October Inn Davao City, Philippines.
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BENTLEY HOUSE FURNITURE KAPATIRAN AGRO-INDUSTRIAL
COMPANY CO-OPERATIVE SETTLEMENT
BY: /s/ JONATHON BENTLEY-STEVENS BY: /s/ FAROUK DUMAGAY BILAO
JONATHON BENTLEY-STEVENS FAROUK DUMAGAY BILAO
CHAIRMAN/ CEO SPDA ADMINISTRATO]
CEO KAICS
/s/ REGINA S. PERALTA /s/ JBAIR (BARRY) L. MACUMBOS
REGINA S. PERALTA JBAIR (BARRY) L. MACUMBOS
PRESIDENT Exec. Asst. DENR SECRETARY
SUBSCRIBED AND SWORN to me this 5th day of Oct 1998 in Hakah City, Philippines
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Appeared Jonathon Bentley-Stevens Passport No. LO120094 Issued Inn Hong Kong
April 15 1995 and FAROUK DUMAGAY BILAO Passport No.______________ Issued _______
____ In know to me and krinownn by rue to be thio same persons wino exocutod the
foregoing instrument of - ( ) pages and acknowledge the same was their free act
and deed.
WITNESS MY HAND AND SEAL on the date and place first above written.
/s/Manual T. Sabado
DOC NO 458 Manual T. Sabado
PAGE NO 103 NOTARY PUBLIC
BOOK NO 8 UNTIL DECEMBER 31, 1999
SERIES 0F 1998 PTR NO 1272173
JANUARY 21,1998 MAKA
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