This Transfer pricing Agreement (this "AGREEMENT") is entered into as of
this 31st day of December ……… by and between XYZ, Inc. ("XYZ") and
YYY Technologies, Inc. ("YYY").
W I T N E S S E T H:
WHEREAS, XYZ is in the business of assembling and marketing …………. (referred to herein sometimes as "PRODUCTS ......." or ".......") and electronic safes, manufactured to either stand alone or operate connected to the PRODUCTS ....... (the "PRODUCTS") (the PRODUCTS and PRODUCTS ....... are referred to herein sometimes as the "PRODUCTS"); and
WHEREAS, YYY owns all patent, copyright, trademark and other intellectual
property rights in and to the hardware and software relating to the PRODUCTS
....... and the PRODUCTS (the "INTELLECTUAL PROPERTY RIGHTS"); and
WHEREAS, XYZ has a Marketing Research and Development Department (the "R&D
DEPARTMENT"), established to development enhancements and improvements to the
PRODUCTS ....... and PRODUCTS' hardware and software (the "INTELLECTUAL
PROPERTY ENHANCEMENTS"); and
WHEREAS, pursuant to the terms of this Agreement, YYY shall retain actual
and proprietary ownership in and to the Intellectual Property Rights and the
Intellectual Property Enhancements; and
WHEREAS, XYZ specializes in the design, manufacture and assembly of
automated ......., including the PRODUCTS ....... and PRODUCTS and has
proprietary manufacturing and assembly procedures and protocols for such
products; and
WHEREAS, XYZ has a small assembly facility and maintains manufacturing and
vendor relationships that can be used to manufacture the products; and
WHEREAS, XYZ has a Field Service Department, that can be used to install
and provide on-going maintenance on XYZ and YYY's installed PRODUCTS .......
and PRODUCTS (the "FIELD SERVICE DEPARTMENT"); and
WHEREAS, XYZ also has an accounting department, that can be used to provide
certain accounting services, more specifically outlined in this Agreement (the
"XYZ ACCOUNTING DEPARTMENT"); and
WHEREAS, YYY has a unique financing program and specializes in financing
programs, designed and established to provide financing for the placement of the
Products in the lodging industry on a lease or revenue sharing basis (the "YYY
FINANCING PROGRAM"); and
WHEREAS, included in the YYY Financing program are financing options not
available to other minibar companies similarly situated to XYZ; and
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WHEREAS, XYZ shall have the exclusive right to sell, domestically, the
PRODUCTS ....... and PRODUCTS to YYY pursuant to the YYY Financing Program;
and
NOW THEREFORE, in consideration of the monetary consideration herein
recited, the mutual promises herein contained and subject to the fulfillment of
the conditions set forth herein, the parties agree as follows:
ARTICLE I
PLACEMENT OF THE PRODUCTS ....... AND PRODUCTS
SECTION 1.1 PLACEMENT OF THE PRODUCTS ....... AND PRODUCTS. YYY
shall market the Products on a sale, lease or revenue sharing basis. Upon
receipt of an order for placement of the Products (sale, lease or revenue
sharing) from a hotel or third party entity (the "CONTRACTING PARTY"), YYY shall
complete a "Hotel Revenue Sharing Lease Agreement" (the "REVENUE SHARING
AGREEMENT") or "Standard Lease Application" or "Customer Order--Purchase /
Finance Options" (the Standard Lease Application and Customer Order--Purchase /
Finance Option agreements are referred to herein collectively as the
"LEASE/PURCHASE AGREEMENT") with the Contracting Party, in the forms attached
hereto as Exhibit "A-1" - "A-3" and incorporated herein by reference. Upon
execution of the Revenue Sharing Agreement or the Lease/Purchase Agreement with
each Contracting Party, YYY shall do the following:
A. PURCHASE ORDER TO XYZ. YYY shall remit a purchase order (the
"
the
- Name and address of the Contracting Party;
- Number of the Products ordered (the "ORDERED PRODUCTS");
- Model number of the Products;
- Specifications relative to the Products, i.e. regular door or
glass door, cabinet or without cabinet, etc.;
- Delivery time;
- Place of delivery and whether XYZ should deliver the Ordered
Products directly to the Contracting Party, f.o.b., or whether
the same should be delivered directly to YYY;
- Purchase price; and
- Any other information relevant to the Products described on the
B. XYZ'S DUTIES UPON RECEIPT OF
shall do the following:
- Acknowledge to YYY in writing of the receipt and acceptance of
the
- Order all parts necessary for the manufacture and assembly of the
Ordered Products;
- Notify the Field Service Department in writing, obtain clearance
for installation and notify YYY, in writing of the proposed
installation schedule;
- Confirm in writing to YYY the estimated date of completion and
installation of the Ordered Products; and
- Provide, in conjunction with the XYZ Accounting Department, an
accounting to YYY of the actual costs of the Ordered Products,
including actual costs of
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parts, labor costs, sales commissions and estimated
installation costs (the "FULLY BURDENED COST"). An
approximate schedule of the Fully Burdened Costs is attached
hereto as Exhibit "C" and incorporated herein by reference.
Exhibit "C' may be amended and modified upon the written
consent of the parties to this Agreement.
C. YYY'S PAYMENT TO XYZ OF THE ORDERED PRODUCTS. YYY shall pay XYZ
the Fully Burdened Cost, plus an additional five percent (5%) thereon (the
"COMPLETE PURCHASE PRICE") within one hundred and twenty (120) days of
installation of the Ordered Products. Other than the Complete Purchase
Price, YYY shall have no other financial or monetary obligation to XYZ
pursuant to the
D. RIGHT OF FIYYY REFUSAL. XYZ shall have a right of fiYYY refusal
to manufacture any and all of YYY's other products, provided however that
XYZ remits an estimate of costs to YYY within sixty (60) days of YYY's
submission of product specifications to XYZ.
SECTION 1.2 XYZ'S MANUFACTURING EXCLUSIVITY. XYZ shall be YYY's
exclusive manufacturer of the PRODUCTS ....... and the PRODUCTS, and all
hardware and software attendant thereto, solely for the domestic (
and
manufacturing or any manufacturing program agreement with any of XYZ's
competitors or any other third party or entity, without XYZ's express written
consent.
SECTION 1.3 THE YYY FINANCING PROGRAM EXCLUSIVITY. XYZ and YYY agree
that XYZ shall use the YYY Financing Program as its exclusive program for lease
and revenue sharing financing for the Products placed pursuant to a Revenue
Sharing Agreement.
SECTION 1.4 OWNERSHIP OF THE PRODUCTS. YYY shall retain ownership of
any and all of the Products ordered from XYZ under this Agreement.
Notwithstanding the foregoing, any and all of the Products manufactured pursuant
to a
BRE.
SECTION 1.5 MAINTENANCE AGREEMENT. As further consideration hereunder,
YYY agrees to require, pursuant to the Revenue Sharing Agreement, that each
Contracting Party, enter into a "Hotel Installation, Maintenance and License
Agreement" (the "MAINTENANCE AGREEMENT") with XYZ, whereby XYZ shall provide
after-sale maintenance during the term of the Revenue Sharing Agreement, a copy
of the form is attached hereto as Exhibit "B" and incorporated herein by
reference. Furthermore, upon a Contracting party entering into a Lease/Purchase
Agreement, YYY will use its best efforts to ensure that such Contracting Part
enters into a Maintenance Agreement with XYZ. The Maintenance Agreement shall
provide for payment to XYZ of at least $.08 per day, or as otherwise agreed to
by the parties hereto, for each of the Products installed under this Agreement,
for the length of the term of the relevant Revenue Sharing Agreement or
Lease/Purchase Agreement (the "MAINTENANCE FEE").
A. COLLECTION AND REMITTANCE OF THE MAINTENANCE FEE. YYY agrees to
act as XYZ's servicer with respect to the Maintenance Fee, in that YYY
shall collect the Maintenance Fee from each Contracting Party monthly and
remit the same to XYZ within fifteen (15) days of YYY's receipt thereof.
SECTION 1.6 TERM. The term of this Agreement shall be for seven (7)
years, unless earlier terminated by the parties hereunder.
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ARTICLE II
PATENT AND INTELLECTUAL PROPERTY RIGHTS
SECTION 2.1 OWNERSHIP OF THE INTELLECTUAL PROPERTY RIGHTS. At all times
hereunder, and at all times after the termination of this Agreement, YYY shall
own any and all of the Intellectual Property Rights, relating to or associated
with the PRODUCTS ......., the PRODUCTS and all software and hardware used
in the operation thereof.
SECTION 2.2 OWNERSHIP OF THE INTELLECTUAL PROPERTY ENHANCEMENTS. At all
times hereunder, and at all times after the termination of this Agreement, YYY
shall own any and all of the Intellectual Property Enhancements, relating to or
associated with the PRODUCTS ......., the PRODUCTS and all software and
hardware used in the operation thereof.
SECTION 2.3 DUTY TO ENHANCE THE PRODUCTS. During the term of this
Agreement, XYZ shall have an affirmative duty to support and finance the R&D
Department's enhancement, modification and improvement of the Products,
including all software used in connection with the Products.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XYZ
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF XYZ. XYZ hereby
represents and warrants as follows:
A. ARMS LENGTH TRANSACTION. That the matters contained in this
Agreement have been negotiated in an arms' length manner.
B. BINDING AGREEMENT. That upon execution and delivery hereof and
at the execution of this Agreement and any agreements contemplated herein,
all of such shall be legal, valid and binding obligations of XYZ and shall
be enforceable against XYZ in accordance with their respective terms.
C. OTHER AGREEMENTS. That except as otherwise herein provided, the
execution and delivery of this Agreement and the consummation of the
transactions provided for herein will not result in a breach of any terms
or provision of, or constitute a default under any other agreement or
instrument to which XYZ is a party or by which XYZ is bound.
D. THIRD PARTY APPROVALS. Except as otherwise herein set forth, no
consents or approvals of any third party or parties are required prior to
the execution, delivery and performance of this Agreement and the other
documents referred to herein.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE YYY
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. YYY
hereby represents and warrants as follows:
A. ARMS LENGTH TRANSACTION. That the matters contained in this
Agreement have been negotiated in an arms' length manner.
B. BINDING AGREEMENT. That upon execution and delivery hereof and
at the execution of this Agreement and any agreements contemplated herein,
all of such shall be legal, valid and binding obligations of YYY and shall
be enforceable against YYY in accordance with their respective terms.
C. OTHER AGREEMENTS. That except as otherwise herein provided, the
execution and delivery of this Agreement and the consummation of the
transactions provided for herein will not result in a breach of any terms
or provision of, or constitute a default under any other agreement or
instrument to which YYY is a party or by which YYY is bound.
D. THIRD PARTY APPROVALS. Except as otherwise herein set forth, no
consents or approvals of any third party or parties are required prior to
the execution, delivery and performance of this Agreement and the other
documents referred to herein.
ARTICLE V
CONDUCT OF THE XYZ'S and YYY'S BUSINESS
Section 5.1 CONDUCT OF BUSINESS. XYZ and YYY agree that, pending the
execution of this Agreement and during term hereof, that the businesses of the
XYZ and YYY shall be conducted only in the ordinary course and substantially in
accordance with their prior business practices.
ARTICLE VI
DEFAULT
Either party shall be in default under this Agreement upon the happening
of the following:
SECTION 6.1 DELINQUENT PAYMENT. A payment or any part of the subsequent
costs hereunder is not made within thirty (30) days after the due date of such
payments; or
SECTION 6.2 DEFAULT IN OTHER OBLIGATIONS. Any party defaults in the
performance of any covenant that is contained in this or any document or
instrument entered into by the parties hereto relating to this Agreement and
such default is not cured within the lesser of any "cure" period that is
prescribed in such document or instrument or thirty (30) days.
ARTICLE VII
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REMEDIES
SECTION 7.1 REMEDIES. Time is the essence of this Agreement. Upon
the occurrence of any default hereunder, or under the documents and
instruments described herein, and at any time thereafter while such default
remains uncured, the non-defaulting party shall have the option, upon giving
notice to the defaulting party, to declare all of the obligations immediately
due and payable. Whether or not such party exercises such right of
acceleration, the non-defaulting party shall have the following remedies.
A. GENERAL RIGHTS. Shall be entitled to exercise any and all rights
and remedies available under applicable Nevada law, including injunctive
relief.
B. NOTICE OF DEFAULT. The non-defaulting party shall give notice of
default by the defaulting party by mailing such notice, postage prepaid,
at least thirty (30) days before any event is to take place, to the address
of the defaulting party that is set forth in this Agreement.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.1 MISCELLANEOUS PROVISIONS. The following miscellaneous
provisions are an integral part of this Agreement.
A. BINDING OBLIGATION. This Agreement shall inure to the benefit of
and constitute a binding obligation upon the contracting parties, their
respective heirs, legal representatives and permitted assigns.
B. MODIFICATIONS. This Agreement may not be modified except by an
instrument in writing signed by the parties hereto.
C. HEADINGS. The headings used in the Agreement are inserted for
reference purposes only and shall not be deemed to limit or affect in any
way, the meaning or interpretation of any of the terms or provisions of
this Agreement.
D. SEVERABILITY. The provisions of this Agreement are severable,
and should any provision hereof be void, voidable, unenforceable, or
invalid, such a void, voidable, unenforceable or invalid provision shall
not affect any other portion or provision of this Agreement.
E. WAIVER. Any waiver by any party hereto of any breach of this
Agreement of any kind or character whatsoever by the other party, whether
such waiver is direct or implied, shall not be construed as a continuing
waiver or consent to any subsequent breach of this Agreement on the part of
the other party.
F. APPLICABLE LAW. This Agreement shall be interpreted, construed,
and enforced according to the laws of the State of Nevada.
G. ATTORNEYS' FEES. In the event any action or proceeding is
brought by any party under this Agreement, the prevailing party shall be
entitled to recover attorneys' fees and costs of court in such an amount as
such court may adjudge reasonable.
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H. ASSIGNMENT. This Agreement and the rights and obligations herein
may not be assigned or assumed by any party hereto without the prior
written consent of the other parties, which consent shall not be
unreasonably withheld.
I. ARBITRATION. The parties agree that, in the event of a dispute
between the parties relative to or arising out of this Agreement, the
parties agree to offer such dispute to the American Arbitration Association
for a binding resolution of such dispute(s).
J. INTERPRETATION AND ENFORCEMENT. Any notices, requests, demand or
other communication required or permitted hereunder shall be deemed to be
proper when deposited in the United States mail, postage prepaid or when
deposited with a public telegram company for transmittal, charges prepaid
each party's last known address
Entered into on the date fiYYY written above.
XYZ, INC.
By: /s/ …………….
----------------------
…………………..
Its: Chief Executive Officer
YYY TECHNOLOGIES, INC.
By: /s/ ……………..
-----------------------
…………………………..
Its: Secretary
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