EXHIBIT 10.1
AGREEMENT FOR THE
TRANSFER OF TECHNOLOGY
Subscribed between EMBOTELLADORA "LA XXXXXXX LTDA.", represented by their
general managers Xx. Xxxx Xxxxxxx Xxx Xxxxxxx with I.D. # 1479436 - SC and Xx.
Xxxxxxxx Xxxxxxx de Eid with I.D. # 1984600 -SC, with the power of attorney by
affidavit # 305 by and in front of the notary public Xx. Xxxxxx Xxxxxxx,
hereinafter referred to as "XXXXXXX" and PAPAYA U.S.A. CORPORATION, represented
by its President Xx. Xxxx Xxxxxxxxxx Gahona with I.D. #00474716 (South Dakota
USA), also with power of attorney by document form # N/A, in front of Xxxxx X.
Xxxxxxx, hereinafter referred to as "USASUNRISE", under the following clauses
and conditions.
FIRST: (CONTRACTING PARTIES)
'XXXXXXX", being a Partnership of Limited Responsibility dedicated to the
industry of soft-drinks, with legal domicile in the city of La Paz, Bolivia, by
articles of constitution #138 on the 26 day of April, 1978, front of Notary Mr.
Hereto Osigna, with capacity of manufacturing, bottling and distributing of its
different lines of products, amongst them the line of soft-drinks.
"USASUNRISE" a Commercial and Industrial Corporation constituted in the city of
Rapid City, in the, State of South Dakota, United States of America by document
#N/A in front of the Secretary of State of South Dakota Xx. Xxxxx Xxxxxxxxx, and
dedicated to the manufacturing and distributing of non-alcoholic soft-drinks, by
services of Industrial, Commercial and Transport entities under contract to the
good satisfaction of labor.
"USASUNRISE", is formed under as a closely held stock with the name of PAPAYA
U.S.A., and presently pursuing a name change and the placement of stock on the
open market, to allow the generating of resources to upcoming acquisition of
Industrial Entities with ownership characteristics to increment its
manufacturing and distributing capabilities of soft-drinks lines of products,
both owned and franchised. (Product lines of others that have given the license
of manufacturing, bottling and/or distribution).
SECOND: (PURPOSE OF AGREEMENT) .-
Under this Agreement and for being satisfactory to its own interest, "XXXXXXX"
grants in favor of "USASUNRISE" the rights of manufacturing, bottling and
distributing of its LINE OF SOFT-DRINKS, limited to the restrictions defined
within the following clauses to this document
THIRD: (PRODUCT LINE GRANTED)
Of the Line of Sodas of "XXXXXXX", by the present agreement, "USASUNRISE" is
authorized to have the knowledge of the formulation, production bottling and
distributing of the following Products:
(a).- Papaya; (b).- Guarana Champagne; (c).- Durazno (peach); (d) Mondiarin
(mandarina); (e). - Pomelo (toronja);(f)- Fresoda (frutilla); (.g). -Naranjada:
(h).- Xxxxx; (I). - Xxxx and (j).- Lima Xxxxx (Citrus).
These 10 (ten) products conform the scope limit of the present agreement,
however, within the next development of other flavors that may be launched in
the Bolivian market by "XXXXXXX" ther possibility is open of granting same to
"USASUNRISE", to which other accords shall necessarily be subscribed as a
complement to the presents.
Excluded from this agreement all other lines and/or flavors in the market
presently under the proprietorship
-60-
of "XXXXXXX".
FOURTH: FORMULATION AND SUPPLY OF INGREDIENTS).
Having been verified by "XXXXXXX", the availability of industrial installations
by "USASUNRISE" as having the adequate industrial equipment, upon execution of
this agreement are released to "USASUNRISE", the formulas to each of the
products described above in third clause of the present agreement.
Regarding supply of the required basic materials, "XXXXXXX" shall provide to
"USASUNRISE", the addresses of the different suppliers and shall notify same
that "USASUNRISE" can acquire them directly and without limitations without
prior approval by "XXXXXXX".
In the event of "XXXXXXX" having to provide directly some of the basic
materials, those shall be sold at preferential pricing, but in no event
affecting "XXXXXXX'X" interest.
FIFTH: (EXCLUSIVITY AND AREAS OF INFLUENCE BY "USASUNRISE").-
"XXXXXXX" accepts and recognizes 'USASUNRISE" as exclusive producer, and
distributors of the products described on third clause of this agreement within
the territory of North America, Central America and the Caribbean, likewise all
of the military installations that United States of America may have in the
World are considered direct areas of influence of "USASUNRISE"', except the ones
located in South America, which shall be supplied by "XXXXXXX".
Should "USASUNRISE" gain access to other markets not defined on the preceding
paragraph, could access same as long as for each case an express agreement with
"XXXXXXX" be in place; This authorization shall be extended in function to a
revision and accord of the Royalties for each market area other than the
previously described.
SIXTH: (TECHNICAL ASSISTANCE). - : "XXXXXXX" shall train the technical
personnel of "USASUNRISE" at its Industrial Installation of Xxxxx Xxxxxx at
La Paz, Bolivia, as long as necessary until emitting a certificate of
capacitation. The cost of this training shall be free, however, "USASUNRISE"
shall be responsible for the cost of transportation, stay and remuneration of
its own personnel during their stay in Bolivia.
Personnel having the certification of "XXXXXXX" shall be the only one to effect
the preparation of product within the territory of 'USASUNRISE"; should the need
arise for more training of subordinated personnel in other "USASUNRISE" plants,
same may be conducted in the United States. In such event, "USASUNRISE" shall
bear the cost of transportation and stay , plus $US 100.00 per day, per person.
Quality Control. Periodically, not longer than 30 days, "USASUNRISE" shall
provide "XXXXXXX" samples of product in the market, so this last one may conduct
quality tests. In the certification of quality and/or suggestions by "XXXXXXX",
"XXXXXXX" agrees to let "USASUNRISE" know any betterment achieved over the
flavors hereby agreed, without this meaning an imposition of formulation
changes.
SEVENTH: (PRICE AND PAYMENT MODE).-
"USASUNRISE", shall pay "XXXXXXX", the amount of One Dollar ($US l.00) and other
valuable consideration, which shall be in time defined. The payment is effected
in, cash upon execution of this agreement.
-61-
EIGHTH: (TERM)
It is agreed that the term shall be continuos with revisions every 10 years or
when the parties, by mutual accordance find it pertinent.
NINTH: (PRODUCT PRESENTATION)
(a).- Etiquetas.- The "XXXXXXX" logo shall be displayed visibly on the label
together with the symbol TM and a legend clarifying that "'XXXXXXX" is the owner
of the trade marks. Otherwise the product may be marketed under the name SUNRISE
o XXXXXXX-SUNRISE. The label design shall be done by "USASUNRISE", in accordance
to the preferences of its trade areas; "XXXXXXX", shall only approve the
location of its logo and the legend of its trademark.
(b).- Containers.- The container to be utilized shall be defined by
"USASUNRISE"; however, the containers over which royalty payments shall be
calculated will be 10 ounces, with ounces corresponding to the American gallon
containing 128 fluid ounces.
(c).- Closures.- Product shall be marketed with printed caps. To the extent of
space allowing, somewhere on the printing shall also be seen the "XXXXXXX" logo.
NINTH. - (OTHER DEFINITIONS)
(a).- Supply of Ingredients. To the margin of the definition made in clause
fourth above, it is expressly agreed that, "USASUNRISE" may acquire ingredients
with any other supplier it deems necessary, warranting no variation in flavor or
quality by this change of supplier. In the event of existing variations
unacceptable by "XXXXXXX", "USASUNRISE" shall return immediately to the
authorized suppliers or corresponding penalties will be applied.
(b) Payments.- All payments effected by "USASUNRISE" to "XXXXXXX", for
ingredients or royalties, shall be made to a bank account specifically designed
by "XXXXXXX". Payment shall be considered against the reception of a deposit
slip by "XXXXXXX" and/or against the receipt of bank statement as long as
payment is shown on it. The payment date shall be the one shown on the bank
statement.
(c).- Independent Relationship.- It is expressly understood and agreed, that
this agreement, does not create a relation, fiduciary or economic between the
parties; Exclusively defined is the purchase-sale of a license, without any of
the parties having to respond, or help to respond to the needs financially,
economically, administratively, commercially or productively of the other.
Therefore, nothing in this agreement, shall be judged to create between
"XXXXXXX" and "USASUNRISE", a relationship of Principal and Agent,
Employer/Employee, Shared Risk (Joint-Venture), Partnership or any other similar
relationship or representative of each other. Each party shall never be
responsible or subject to the debts, acts, obligations or offenses of the other,
whether as Companies or Owners or Employees Representatives.
(d).- Rights of Ownership: All the registered names, such as product names
logos, themes and publicity art, belongs to the party having them registered and
will be simple understood as a support to this agreement, without meaning that
the other party could argue rights partially or totally over registry not
effected by itself or with characteristics prior to this agreement.
-62-
Likewise is established that any translation of language by registry is only one
with the original language of registry, in such manner that there will not be
possibilities of separating of announcements in English and the same in Spanish.
Therefore, the name LA XXXXXXX, shall always be the exclusive property of
"XXXXXXX"' and the name SUNRISE, shall always be property of "USASUNRISE" as are
the slogans "Drink of Paradise" (Bebida del Paraiso) and "A South American
Delight" (Una Xxxxxxx Sudamericana).
The property and rights of' names and slogans to be created as emerging of' this
contract, can be shared in proportion, defining on each case the factors of the
proportion.
Audit.- "USASUNRISE" shall supply quarterly to "XXXXXXX", with a printed report
of sales and "XXXXXXX" shall have the right to audit and verify said report, by
having access to the receipts of warehouse, production of concentrate, shipping,
bottling orders, supplier orders of basic materials and inventories on hand.
TENTH: (RESTRICTIONS AND PENALTIES).- During the life of this agreement,
"USASUNRISE" may not manufacture, bottle or distribute, foreign products to the
United States of America of similar flavors to the ones accorded on clause third
above, that not belong to the trade names of "XXXXXXX" The use of any other
brand in the flavors accorded will be basis of non-compliance ton this
restriction and will void as whole the agreement, same that shall be governed by
applicable laws, until satisfaction of damages.
Likewise. "USASUNRISE" shall not re-sell, endorse or rent the trade name
"XXXXXXX", to any person natural or judicial, having or not partnership
relations. Relationship involving products with the trade name "XXXXXXX",
between "SUNRISE" and other companies or persons shall be limited to aspects of
services of bottling, distributing, marketing promoting and advertising. This
limitation shall not be construed as an impediment to transfer of stock of
investors, as in reality each share of stock in part contains its proportion of
the rights hereby granted; therefore, when certain stock is sold or transferred,
the rights are being transferred to the new holder(s) of same.
In the event of the indication of hostile take over aiming to a change of
management and control of "USASUNRISE", and due that the genesis of the present
agreement is rooted in the mutual trust to Xx. Xxxx Xxxxxxxxxx, "XXXXXXX" shall
be previously consulted and may opt unilaterally on the continuity or not of the
rights hereby compromised.
"XXXXXXX" may not intervene in the relationship that "USASUNRISE" maintains with
other suppliers of franchises and in general with any company that acts
conjunctively in the fabrication, distribution, etc., of other trade marks that
not involucrate similar flavors to the ones hereby accorded.
Without changing the present affidavit, by which the two parties become
independently affiliated, regulations are established in the event that
"USASUNRISE" does not comply with the specific delineations defined for quality
control,. event under which "XXXXXXX" may ask the certification of an
independent laboratory authorized in the United States of America and this
certification shall be enough to force the application of clause sixth above. If
even so, "USASUNRISE" persists non-complying, the accord as whole shall be void
and "USASUNRISE" blocked of the utilization of the "XXXXXXX" franchise.
Likewise, if any of the two parties exceeds the scope of the present agreement
regarding the rights of brands and property, areas of market influence and any
other, it shall reimburse to the other party the
-63-
proven expenses that may have caused.
ELEVENTH. (CONTINUITY).- It is established a mutual compromise that neither,
"XXXXXXX" or "SUNRISE", may have freely available the time hereby compromised,
meaning that, in the next 10 years, starting with and or each of the revisions
as provided on the eight clause above, "USASUNRISE", may not bottle any other
registered trade xxxx in the flavors hereby accorded, even if the present
agreement is voided. Likewise, "XXXXXXX" may not grant such products to any
other bottler within the agreed territories (North America, Central America and
the Caribbean), even if the present agreement is voided.
TWELVETH: (CONFORMING AND GOVERNING LAW)
The signatories of this agreement, declare to have the corresponding resolutions
of the Board of Directors authorizing the execution to the present agreement and
that we are executing same upon our free and spontaneous will, without any vice
or impediment.
Hereby, we ascertain that everything described within this document constitutes
the entire agreement, there are no other agreements that weakens the one written
hereby, because each one of us are trusting in the honesty of the other. Reason
why, in the future there may be supplementation and/or elimination of some
clauses to introduce others; said supplementation shall be effective only when
approved, reduced to a written form and executed by both parties.
For effecting arbitrage, we agree to submit this agreement to the governing laws
of the state of South Dakota, which is the state of the United States of America
where "USASUNRISE" has obtained its registry and license of operations.
Now, therefore, we subscribe initially in 2 counterparts in English and 2
counterparts in Spanish (being the four one and the same), all of the same
context and with the same effect of law, additional copies , however may be made
(always one in English and a corresponding one in Spanish) for any ulter
business needed, compromising ourselves to the faithful and strict compliance of
all and each one of its clauses on this 3d day of September 1993.
EMBOTELLADORA "LA XXXXXXX LTDA."
/s/ Xxxx Xxxxxxx Xxx Xxxxxxx /s/ Xxxxxxxx Xxxxxxx de Eid
General Manager Co-General manager
PAPAYA U.S.A. CORPORATION
/s/ Xxxx Xxxxxxxxxx
President
-64-
VALUABLE - ADDENDUM TO THE AGREEMENT
OF TECHNOLOGY TRANSFER
Subscribed between EMBOTELLADORA "LA XXXXXXX LTDA.", represented by its general
managers Xx. Xxxx Xxxxxxx Xxx Xxxxxxx with I.D. # 1479436-SC and Xx. Xxxxxxxx
Xxxxxxx de Eid with I.D. # 1984600-SC, with the power of attorney by affidavit #
305 by and in front of the notary public Xx. Xxxxxxx Xxxxxxx, hereinafter
referred to as "XXXXXXX" and PAPAYA U.S.A. CORPORATION, represented by its
President Xx. Xxxx Xxxxxxxxxx Gahona with I.D. #00474716, and with power of
attorney in force by means of a corporate resolution that is part of this
addendum, hereinafter referred to as "USASUNRISE", under the following clauses
and conditions.
FIRST: (PRECEDING).
With the same date as today, "XXXXXXX" as well "USASUNRISE" have subscribed an
agreement for the transference of technology and formulation of the soft-drinks
line of "XXXXXXX" in favor of "USASUNRISE", so the last one may manufacture said
product in the territories of the North American Continent, Central America and
the Caribbean.
In said document, on its SEVENTH clause: (PRICE AND PAYMENT MODE), has been
defined that the amount that "USASUNRISE", must pay to "XXXXXXX" for this
transfer to be $US l.00 (One Dollar), plus other valuable considerations that
will be timely defined.
SECOND: (PURPOSE OF THE ADDENDUM)
Under the present Addendum, it is defined what are the valuable considerations,
that are the ones that in reality establish the real amount of the technology
transfer, hereby is declared also that the present document form an integral
part of the Agreement of Technology Transfer.
THIRD: (REAL VALUE OF THE TRANSFER)
The amount freely agreed without pressure of any kind is that "USASUNRISE" must
pay to "XXXXXXX" is One Million, One Hundred Forty Four Thousand, Five Hundred
American Dollars ($US 1,144,500.00), as a retribution that justly compensates
the value of the transferred technology.
FOURTH: (MANNER OF PAYMENT).-
"USASUNRISE" has proposed, and "XXXXXXX" has accepted, that this payment be
effected by the transfer of a block of stock of l52,600 (One Hundred Fifty Two
Thousand, Six Hundred) shares, of the total of the stock issued by PAPAYA U.S.A.
CORPORATION as of July 17, 1993, which as declared by "USASUNRISE" constitutes
5% (Five percent) of the stock issued on said date and also declared by
"USASUNRISE" each share with market value of $7.50. However, according to
"USASUNRISE", the par value of each share is $0.0l (One Cent of a Dollar) per
share. Being the concept of par value, the one given to effect the filing of the
stock with the South Dakota Secretary of State, being such merely a nominal
value. and in no way can the par value be considered as the equivalent that
"USASUNRISE" pays to "XXXXXXX".
In the event of any problem arising with the verification of the correct number
of shares that represent the number agreed, "USASUNRISE" agrees to come forward
and evict and sanitize the $1,144,500.00 that must pay to "XXXXXXX", in shares.
-65-
FIFTH: COMMERCIALIZATION OF "XXXXXXX'X" STOCK
Presently, "USASUNRISE" is pursuing the acquisition and/or merge with other
entities that are operating as public entities, and that in the future may form
one block of stock with the stock of PAPAYA U.S.A.
The block of stock with which "USASUNRISE" pays "XXXXXXX", are part of the
"privately held" stock of 3,052.000 shares of PAPAYA U.S.A., therefore, after
the merger process of PAPAYA U.S.A. to "USASUNRISE", there will be a certain
lapse of time, during which this stock may not freely trade over the counter in
the United States of America, in compliance to the rules and regulations of the
Securities and Exchange Commission and the Securities Act of 1934 as amended.
This restriction of free trading in the open market is two years, during this
time these stock is known as "Letter stock", after such time, "USASUNRISE"
guarantees that same may freely be traded in the open market, provided that the
company has become public.
Should "XXXXXXX" wanted to sell its stock within the time considered "letter
stock", (two years), it may do so under the same condition, for which it will
give to "USASUNRISE" the first option of purchase, this option shall be valid
for 90 days (Ninety days), starting with date of notification to "USASUNRISE",
the price under which "USASUNRISE" may exercise the option shall be the price at
which "XXXXXXX" is receiving them under the present document, ($7.50 per share).
It is agreed that "USASUNRISE", shall respond to "XXXXXXX", within 15 days;
(fifteen days), following receipt of notification, letting it know if it will
exercise, partially or totally its option.
In the event that "USASUNRISE", opts not to exercise the option or fails to
respond within the 15 days "XXXXXXX" shall be free to sell its stock to a third
party.
In the event that "XXXXXXX" wanted to sell its stock totally or partially when
same are free trading, it shall follow the same procedure of the option to
"USASUNRISE" except that the price of stock shall be the average in the open
market of the thirty days prior to notification.
SIXTH: DELIVERY AND ENDORSEMENT OF STOCK
Under this act of subscription to the agreement of valuable consideration,
"USASUNRISE", delivers the block of stock hereby agreed, duly executed with
approval of its Board.
SEVENTH: GOVERNING LAW.-
By virtue of the present act, "XXXXXXX" becomes a stockholder with all its
rights to "USASUNRISE" and/or PAPAYA U.S.A. with legal domicile in the Sate of
South Dakota, United Sates of America., the present agreement is subject and
governed under the laws of the state of South Dakota.
EIGHT: CONFORMITY-
We, Xxxx Xxxxxxx Xxx Xxxxxxx and Xxxxxxxx Xxxxxxx de Eid, and representing
EMBOTELLADORA "LA XXXXXXX LTDA." and Xxxx Xxxxxxxxxx, representing of U.S.A.
SUNRISE ENTERPRISES and PAPAYA U.S.A. CORPORATION, declare to have read and
understood the meanings of all and each of the clauses of the present
ADDENDUM-VALUABLE TO THE AGREEMENT OF TECHNOLOGY TRANSFER, expressing our
absolute conformity to same, reason why we execute same as evidence in two
counterparts in English and two counterparts in Spanish (being the four one and
the same), all of the same context and for the same purposes of law on this 30
day of September 1993.
-66-
EMBOTELLADORA "LA XXXXXXX LTDA."
/s/ Xxxx Xxxxxxx Xxx Xxxxxxx /s/ Xxxxxxxx Xxxxxxx de Eid
General Manager Co-General manager
PAPAYA U.S.A. CORPORATION
U.S.A. SUNRISE CORPORATION
/s/ Xxxx Xxxxxxxxxx
President
-67-
