AGREEMENT
between
Hyundai Motor Company ("HMC")
and
U.S. Electricar ("USE")
Systronix Corporation ("SC")
(Collectively "USE/"SC")
April 12, 1996
Whereas HMC is the leader in electric vehicle technology in Korea
and
Whereas USE/SC is a leader in electric vehicles and drivetrains,
now therefore
HMC and USE/SC have reached the following agreement in order to
cooperate in the field of
electric vehicle technology:
1. HMC shall grant to USE/SC the fleet EV contract utilizing Panther(tm)60
systems.
2. HMC shall grant to USE/SC the MPV Production Phase 1 contract utilizing
Panthertm90 systems.
3. HMC shall pay US$ 250,000 to USE or SC within 45 days of HMS receiving an
invoice, for an option to purchase 12,000,000 shares of USE at a price of
US$ 0.467 per share, the blended rate paid by the major new capital
investors in USE/SC. The option shall expire on March 1, 1997. If the
option is exercised before March 1, 1997, the US$ 250,000 option price
shall be applied toward the share purchase.
4. Upon the full exercise of the share purchase option, USE/SC shall grant to
HMC a manufacturing and distribution license to the Panthertm systems, as
defined in the November 1995 SC business plan, including upgrades
developed by USE/SC, without payment of any additional fee and without
payment of any royalties by HMC or HMC's appointed manufacturer, for use
within vehicles or for use as spare parts for such vehicles built by HMC
or built by subsidiaries owned more than 50% by HMC, or for use within
vehicles or for use as spare parts for such vehicles assembled by any
company from completely knocked down ("CKD") kits built by HMC or built by
subsidiaries owned more than 50% by HMC.
5. If HMC decides not to purchase shares in USE as described above in
paragraph three (3), then USE/SC shall grant to HMC a manufacturing and
distribution license to the Panthertm systems, as defined in the November
1995 SC business plan, including upgrades developed by USE/SC, for a fee
of US$ 1,500,000 and for
royalties equivalent to 4% of HMC's procurement cost beginning with
systems sold in the year 2000. The license shall apply only to systems
manufactured by HMC and/or HMC's appointed manufacturer, for use within
vehicles or for use as spare parts for such vehicles built by HMC or built
by subsidiaries owned more than 50% by HMC, or for use within vehicles or
for use as spare parts for such vehicles assembled by any company from
completely knocked down ("CKD") kits built by HMC or built by subsidiaries
owned more than 50% by HMC. Beginning in 2004 the royalty shall be reduced
to 3%. Beginning in 2008 the royalty shall be reduced to 2%. Beginning in
2012 no further royalty shall be required. The US$ 250,000 option amount
described above in paragraph three (3) shall be applied toward the
purchase of this license if the license is purchased prior to March 1,
1997.
6. The manufacturing and distribution licenses to the Panthertm systems shall
also be exclusive to HMC for the territory of Korea. The vehicles
manufactured in accordance with paragraph four (4) and five (5) above may
be exported to any country.
7. The licenses described above in paragraph four (4), five (5) and six (6)
shall include the right to "make or have made" the Panthertm hardwares.
8. USE/SC will support HMC and/or HMC's appointed manufacturer in setting up
production lines, processes, procedures, and automated testing of
Panthertm products. This support will include assistance with production
and test of subassemblies, units, and complete systems. USE/SC will also
assist HMC and/or HMC's appointed manufacturer with procurement of
components, including the development and qualification of sources for
unique electric vehicle and Panthertm system electronic components.
/s/ H. K. Lee /s/ Roy Kusumoto /s/ Don Kang
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H. K. Lee Roy Y. Kusumoto Don C. Kang
Director Chief Executive Officer President
Corporate Planning Director U.S. Electricar Systronix Corporation