Agreement
Leo Motors, Inc.
Leo Motors Inc. (hereinafter referred to as "Company") and M&M Co., Ltd.
(hereinafter referred to as "Distributor", collectively "Parties") execute an
agreement for sales of electronic motorcycles (hereinafter referred to as
"Agreement").
Article 1 (PURPOSE) The purpose of this Agreement is to set forth the rights and
duties of the Parties in exclusively selling an electronics motorcycle
manufactured by Company.
Article 2 (SCOPE OF WORK AND CONTECTS)
1. Products sold exclusively by Distributor under this Agreement shall be
developed and manufactured by Company and limited to the following products
("Products"):
A. Hilless 1
B. Hilless 3
C. Hilless 5 (Passenger)
D. Hilless5 (Business)
E. Electronic motorcycle which will be developed and manufacture by
Company
F. Parts for an electronic motorcycle
2. Company and Distributor agree to share the information of customers to
carry out this Agreement, and cooperate in works which require a close
cooperation.
3. Company grants an exclusive and sole rights to sell the Products to
Distributor under this Agreement.
Article 3 (PERFORMANCE OF WORK)
1. Company and Distributor shall do its duties and obligations upon a spirit
of mutual trust and a good faith regarding the business.
2. Company and Distributor shall closely cooperate in critical issues
incurred during the term of this Agreement.
3. Distributor shall promptly cooperate and support Company's work when
Company enters into an agreement with a third party to develop a business.
Article 4 (DEPOSIT AND FIRST TIME QUANTITY)
1. Distributor shall pay 400,000,000 Korean Won to Company as deposit as of
the execution date of this Agreement under this Agreement and the payment for
Products as set forth hereunder shall be set off against deposit.
[First order quantity]
Number Model name Quantity
- ------ --------------------- --------
1 Hilless 5 (Business) 49
- ------ --------------------- --------
2 Hilless 5 (Passenger) 39
- ------ --------------------- --------
3 Hilless 3 40
- ------ --------------------- --------
4 Hilless 1 42
- ------ --------------------- --------
2. Price and delivery term for the first time order shall be set forth in an
attached agreement hereof upon the Parties' mutual agreement.
3. In the event this Agreement is terminated, Company shall refund the
balance by calculating within fourteen (14) days after the termination date.
Article 5 (TERRITORY)
1. The territory governed by this Agreement shall be limited to Korea's
territory; provided, however, that Distributor shall have the first refusal
right to sell in foreign countries under the same conditions as a third party
does.
2. Company shall not grant distributor ship to others during the term of
this Agreement within the territory set forth above.
Article 6 (SUPPLY OF PRODUCTS)
1. A territory being subject to the right to sell under this Agreement is
the same area defined in Article 5; provided, however, that Company may adjust
sales of other areas upon Distributor's consent if unavoidably required.
2. The price for the Products manufactured and supplied by Company shall be
based on the factory price, and Company provides manufacturing cost to
Distributor for calculating the factory price.
3. Delivery shall be in accordance with an order issued by Distributor, and
Company shall comply with the due date and quantity requested by but may adjust
the conditions upon mutual agreement.
4. Distributor shall not return the Products one the Products are released
from Company unless there are reasons contributed to Company.
5. Section 2 in Article 10 in Fair Transaction in Subcontracting Act shall
apply to the decision whether unfair return or not.
Article 7 (SALES OF PRODUCTS)
1. Distributor shall do its best efforts to extend sales upon a spirit of
trust and faith, not do anything may harm the reputation of Company and/or
Products.
2. Company provides a Work Manual regarding product liability and
Distributor shall inform and warn the other party according to the Work Manual
regarding the sales.
3. Distributor shall mark Company as a manufacturer in selling the Products.
Article 8 (DELIVERY AND SHIPMENT) Delivery of the Products shall be made in a
port designated by Company and any duty and cost incurred by shipping the
Products shall be borne by Distributor.
Article 9 (PAYMENT)
1. Distributor shall, in principle, pay for the Products within 80% of the
deposit.
2. Distributor shall pay back an amount equal to 80% of Products price
delivered unless otherwise agreed with Company.
Article 10 (AFTER SERVICE (A/S))
1. A/S for the Products sold by Distributor shall be performed by
Distributor or a maintenance center, and Distributor shall promptly and
sincerely respond to the complaints from customers to resolve them.
2. Upon Distributor's request for A/S certificate, Distributor shall take
part in a certain course provided by Company. Distributor with the certificate
may serve as A/S center.
3. In the event Distributor dose not serve as A/S, Distributor lets a
maintenance center get A/S certificate from Company and provide A/S for Products
regardless of the time to be sold. Company shall assist and support Distributor
to get a maintenance center.
4. Company shall provide a maintenance center with training course and
relevant facilities required for such training.
5. Company may appoint and run other maintenance center for A/S, when a
maintenance center designated by Distributor does not perform his duties
sincerely.
Article 11 (PRICE)
1. Price for the Products sold by Company to Distributor shall be set forth
in a purchase order upon mutual agreement
2. Company and Distributor agree to comply with Fair Trade Acts and relevant
laws in deciding the price, including a factory price and a suggested retail
price.
Article 12 (WARRANTY)
1. Company warrants that it will provide a free repair of manufacturing
defects for one (1) year from the purchase date of a final customer; provided,
however, that the customer shall pay for repair if the defects occur due to the
customer's negligence in use.
2. In no event Company Sole shall be liable for the Products which pass a
test performed by a certified organization and/or Company's test other than
caused by Company's willful misconduct or gross negligence which Distributor can
prove.
3. Company, Distributor and a maintenance center shall decide a cost for the
Products whose one year guarantee expires based on 'Table for unit price of
Government wage' reasonably.
Article 13 (SUPPLY AND MANAGE PRODUCTS)
1. Company shall supply Distributor with necessary materials and facilities
to maintain the Products' stability, and Company and Distributor shall decide
upon mutual agreement when there are differences what materials and facilities
are needed.
2. Distributor shall not provide with, lease, dispose of or move the
materials and facilities supplied to a third party without Company's prior
written approval.
Article 14 (DUTY TO REPORT)
1. Distributor shall, upon Company's request, report sales circumstances
regarding this Agreement in writing.
2. Distributor shall immediately notify Company of infringement or dispute
in relation with a trade name, trade mark, service mark or patent right granted
by Company as soon as Distributor learns about it.
3. In the event Distributor desires to close temporarily, Distributor shall
report the reasons in writing in advance.
4. Company and Distributor shall collect and provide the information of
customers to smooth customer services to the extent relevant regulations and
laws regarding personal information protection permit.
Article 15 (INTERNET SITE AND MISCELLANEOUS) Company shall support advertising
and promotion using Company's internet site (www.leomotors.com) for
-----------------
Distributor's sake without charge.
Article 16 (TERM)
1. This Agreement shall be effective as of the delivery date of the first
time quantity and last for two (2) years thereafter.
2. In the event a Party intends to terminate this Agreement, such Party
shall notify the other Party of its intention in writing two (2) month before
the expiration date of this Agreement.
3. This Agreement shall be renewed for one (1) year with the same conditions
unless terminated according to section 2 above.
Article 17 (ASSIGNABILITY)
1. No Party can assign or mortgage any and all rights and obligations under
this Agreement to a third party without the other party's written consent.
2. A Party shall not receive premium from an assignee even if the Party
assigns his rights and duties with the other Party's written approval.
Article 18 (CANCELLATION AND TERMINATION)
1. Either Party may cancel or terminate all or any party of this Agreement
without a notification in any of the following events:
(1) The other Party is declared of disposition of transaction
suspension by a financial organization;
(2) The other Party is declared of disposition of business
cancellation or business suspension from a government body;
(3) A Party decides, in its discretion, that the other Party cannot
perform this Agreement due to material events including but not limited to
bankruptcy, compulsory execution by a third party (including provisional
seize and provisional injunction), insolvency, commencement of composition
and corporate reorganization procedure;
(4) A Party cannot perform this Agreement due to breaking up, transfer
or merger with other company;
(5) Parties agree that a Party cannot perform this Agreement or
individual agreements due to natural disaster or other causes;
(6) A Party assign or grant again the right to sell the Products to
other;
(7) Distributor causes material damages to Company by disclosing
Company's business secret;
(8) Distributor sells, stores, advertizes, repairs or introduce other
company's products (electronic motorcycle and parts) which may compete with
Products without Company's consent (excluding parts developed and
manufactured by Distributor)
2. Either Party may notify the other Party, who breaches or neglects its
duties, to remedy such breaches or perform its duties within fourteen (14) days.
The notifying Party can terminate this Agreement when the breaching Party fails
to cure his faults within the period.
Article 19 (EFFECTIVENESS)
1. This Agreement becomes effective as of the execution date of this
Agreement.
2. This Agreement shall not be regarded as being amended or waived unless it
is done by the Parties' authorized signing document bearing the Parties'
representative signature.
3. In the event the Agreement is terminated (cancelled, rescinded or
expired), Distributor shall return all information regarding Products to Company
or destroy pursuant to Company's order.
4. In the event the Agreement is terminated, Distributor provides the
original copies of all business materials, customer information and may keep the
copies thereof but shall not use such copies other than the business management
purpose.
Article 20 (CONFIDENTIALITY)
1. During and after the term of this Agreement, Company and Distributor
shall not disclose any business secret received from the other Party under this
Agreement to a third party.
2. Distributor shall not print or copy the education materials, manuals
without Company's prior approval unless it is permitted by this Agreement for
the work specified herein.
3. Distributor shall not directly or indirectly manage the same business
without Company's prior approval.
4. Distributor shall make its employees comply with the section 1 through 3
above.
Article 21 (DISTRIBUTOR'S RESPONSIBILITY)
1. Distributor shall train its employees to perform their works and duties
effectively under this Agreement and to make the employees provide the best
service to customers.
2. Distributor shall be solely responsible for damages incurred willful
misconduct or gross negligence of its employees.
Article 22 (COMPENSATION)
1. In the event, a Party is suffered from the other Party's breach or gross
negligence, such defaulting Party shall be liable for the damages and losses;
provided, however, such defaulting Party shall be exempted from such liability
if it happens due to natural disaster and force majeure.
2. The termination or cancellation of this Agreement shall not affect to the
rights for compensation herein.
Article 23 (MISCELLANEOUS)
1. 1. Any conflicts or disputes arising out of this Agreement shall be
construed by the laws of the Republic of Korea and amicably settled.
2. Anything not set forth herein shall be decided by mutual agreement
pursuant to a general commercial practice.
3. Company and Distributor may execute a separate agreement regarding this
Agreement, and such separate agreement shall be attached herein.
Article 13 (DISPUTE RESOLUTION) Disputes arising out of or in connection with
this Agreement shall be amicably settled by mutual agreement. Despite such
efforts, it is not resolved; it shall be settled by arbitration in Korean
Commercial Arbitration Board.
IN WITNESS OF, the Party shall make this Agreement executed by signing in
duplicate and keep one copy respectively.
March 25, 2010
"Company" Leo Motors Inc.
291-1 Hasangok-dong, Hanam-si, Kyunggi-do
Signed by ____________________________
Si Chul Kang, CEO & President
"Distributor" M&M Co., Ltd.
27-9 Hangdong-7ga, Jung-gu, Incheon
Signed by ______________________________
Eul Jin Nam, CEO& President