Agreement to Manufacture, Supply, and Market Among Hyundai RFmon Corp. and Joytoto USA, Inc. Dated February 20, 2008
EXHIBIT
10.1
Agreement
to Manufacture, Supply, and Market
Among
Hyundai RFmon Corp.
Dated
February 20, 2008
Agreement
to Manufacture, Supply, and Market
Among Hyundai
RFmon Corp.
and
This
Agreement to Manufacture, Supply, Market (this “Agreement”)
is dated as of February 20, 2008, by and among
Hyundai RFmon Corp., a
California corporation with its principal place of business located at 0000
Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx 00000 (“RFmon”), and
Joytoto USA, Inc., a corporation organized and
operated under the laws of Nevada (“Nevada”),with its principal
place of business located at 0000 Xxxxx Xxxx., Xxxxx 000,Xxxxx Xxxxx,
Xxxxxxxxxx 00000 (“JoyTOTO”).
As used
in this Agreement, the term “Parties”
refers to RFmon and JoyTOTO.
WHEREAS, RFmon manufactures
and markets, among other things, RFID readers and tags, EMI, and other
security products; and
WHEREAS, JoyTOTO manufactures
and markets various electronic and digital products; and
WHEREAS, RFmon has an existing
contract (the “Contract”)
with its major strategic alliance customers to supply ATM (automatic teller
machines), DVD download dispensers, smart teller machines, and kiosk machines
(“Products”) as those
Products can benefit from sophistication of JoyTOTO manufacturing
know-how, starting with approximately Ten Million Dollars ($10,000,000),
and with option for more purchase orders subsequently, meeting the
specifications set forth in the purchase orders; and
WHEREAS, such Products shall
include additional components, including, but not limited to, scanner
and printer for ATM, terabyte storage devices, management software,
etc.; and
WHEREAS, JoyTOTO has a ISO
compliant factory (the “Factory”)
available directly or through subcontractors;
WHEREAS, the Parties wish to
engage JoyTOTO to manufacture and supply the Products and devices for
the Contract on the terms and conditions set forth in this Agreement;
and
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual representations,
warranties, covenants, and agreements contained herein, the
adequacy and legal sufficiency of which are hereby acknowledged,
the Parties hereby agree as follows:
ARTICLE
1 SCOPE, DURATION AND REVENUES
1.1. Scope. This Agreement
shall cover the Products to be manufactured and supplied under the Contract
and such additional products as JoyTOTO or RFmon shall request
and JoyTOTO may agree to manufacture and supply.
1.2. Term. Unless terminated
sooner as provided in Section 2.12 or extended by mutual agreement of the
Parties, this Agreement shall terminate on December 31,2012 (the “Scheduled
Termination Date”).
1.3.
Revenues.
(a) For manufacturing the
Products for the Contract, JoyTOTO agrees to manufacture and to supply
the Products for which JoyTOTO can recognize and qualify as revenues under
the Generally Acceptable Accounting Principles (“GAAP”).
(b) Profit or Margin.
(c) RFmon expects that during
the term of this Agreement (the “Term”) it
will generate additional business that it may seek for JoyTOTO support to
manufacture and to supply such Products to RFmon or RFmon customers. While
it is impossible to predict the amount of such future business, it is not
unreasonable to expect that such additional Contracts may approach or exceed
$100,000,000per year. RFmon and JoyTOTO will cooperate and insure
that JoyTOTO receives (the Contract) a fair and equitable percentage
of the manufacturing requirement (additional Business).
ARTICLE
2 GENERAL PROVISIONS
2.1. Cooperation. The Parties
shall cooperate with each other to jointly decide on the details for
implementing this Agreement.
2.2. Purchase
Orders. All
Products to be manufactured and supplied under this Agreement shall be ordered
on written purchase orders (“Purchase
Orders”) subject to JoyTOTO acceptance. Prior to placing any Purchase
Orders:
(a) RFmon
shall have technical discussions with JoyTOTO concerning the format for the
Purchase Orders and the specifications for the Products so ordered; (b) the
Parties shall agree on the logistics of and schedule for manufacturing such
Products; and (c) RFmon and JoyTOTO shall forecast to the best of their
knowledge any additional Products which will be ordered in the
following3-month period.
2.3. Delivery of Products.
With respect all Products manufactured and delivered under this
Agreement, the Parties shall agree in advance: (a) on the
production schedules; (b) quality assurance; (c) packaging
suitable for relevant specifications and international ocean
going ships; and (d) warranty and post-warranty service. The relevant
specifications shall mean specifications germane to specific customers and
their customary practices, which RFmon shall share with, and fully
knowledgeable by, JoyTOTO well in advance or within reasonable
time.
2.4. No Sales
to Third Parties. JoyTOTO agrees that all
Products ordered under this Agreement shall be sold to RFmon. In the event
JoyTOTO customers, who are not the customers of RFmon (“Non-RFmon Customers”), have
demands for the Products, Parties shall cooperate with such Non-RFmon
Customers demands.
2.5. Payment. (a) Manufacturing Cost. JoyTOTO
shall fund the cost of manufacturing all Products manufactured and
delivered under this Agreement.
(b) Customer Payment Terms.
JoyTOTO and RFmon shall follow all applicable collection rules,
arrangement, and agreements with customers in collecting on the accounts
receivable
and customer payment terms (“Customer Payment
(c) LockBox. RFmon and JoyTOTO
shall cause all Customer Payments to be deposited into the Lock Box
jointly managed by Parties or RFmon shall pay directly to JoyTOTO only
the portion of Customer Payments payable to JoyTOTO. In the event JoyTOTO
elects the LockBox option, then LockBox can be named RFmon-JoyTOTO, receive full
amount of all accounts receivable while giving JoyTOTO chances for full
revenue recognition and not giving RFmon a full control over lockbox. If the
lockbox cannot be defined to the satisfaction of JoyTOTO, RFmon shall make
separate payments to JoyTOTO.
(d) The
Factory margin shall be decided on a case by case basis in consultation
with JOYTOTO and HGLLLP.
2.6. Registration and Compliance with
U.S. Law. JoyTOTO shall be fully responsible for registering with
any registration requirement within the U.S., if any. JoyTOTO agrees
to comply with all laws, rules and regulations in the United States with
respect to the Products manufactured and delivered under this
Agreement.
2.7. Indemnification Regarding
Intellectual Property. RFmon agrees to defend, indemnify and hold
harmless JoyTOTO and its respective affiliates, officers,
directors, shareholders, employees, partners, agents,
representatives, successors and assigns from and against all claims,
demands, obligations, losses, liabilities, damages, recoveries
and deficiencies, including interest, penalties and
reasonable attorneys’ fees, costs and expenses arising out
of, resulting from or related in any way whatsoever to any third party
claim that the Products infringe on the intellectual property of such third
party, other than those claims relating to any intellectual property of
JOYTOTO incorporated into the Products.
JoyTOTO
agrees to defend, indemnify and hold harmless RFmon and its respective
affiliates, officers, directors, shareholders, employees, partners, agents,
representatives, successors and assigns from and against all claims,
demands, obligations, losses, liabilities, damages, recoveries
and deficiencies, including interest, penalties and
reasonable attorneys’ fees, costs and expenses arising out
of, resulting from or related in any way whatsoever to any third
party claim that the intellectual property of JOYTOTO incorporated into the
Products infringe on the intellectual
2.8. Force Majeue. Any delay
in or failure of performance by any Party under this Agreement (other
than failure to pay amounts owed) will not be considered a breach of
this Agreement and will be excused to the extent caused by any occurrence
beyond the reasonable control of such Party, including but not limited to
fires, floods, epidemics, famines, earthquakes, hurricanes and other
natural disasters or acts of God; regulation or acts of any civilian or
military authority or act of any self-regulatory authority; wars, terrorism,
riots, civil unrest, sabotage, or theft or other criminal acts of third
parties; failure of electronic or mechanical equipment; and fluctuations in
or failures of electric power, heat, light ,telecommunications and
shortages of relied-upon services or supplies.
2.9. Cooperation. (a) The
Parties shall cooperate with each other to maximize the amount of business in
addition to the Contract that can be awarded to JOYTOTO and manufactured
thereby.
(b) The Parties shall
cooperate with each other on technical matters, including the improvement
of existing manufacturing engineering for the Products.
(c) The Parties shall
cooperate with each other in providing and obtaining information necessary
to comply with various rules and regulations applicable to the
Contracts.
2.10. Assignment. (a) This
Agreement and all of the provisions hereof will be binding upon and inure
to the benefit of the Parties and their respective successors
and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by any Party (whether
voluntarily, involuntarily, by operation of law or otherwise) without the
prior written consent of all other Parties.
(b) In
the event Customer imposes penalties either on JOYTOTO and/or RFmon,
Parties with penalties shall pay the penalty, if agreeable or unable to
dispute successful the penalties.
2.11. Confidentiality. This
Agreement and the Transactions contemplated hereby shall be confidential
and shall not be disclosed except to counsel and except to the minimum
extent permitted by applicable law. The customer list, technical information,
production and marketing strategies, know-how and all confidential business
information of each Party shall remain the property of such Party and shall
not be used or disclosed by any other Party without the prior written
consent of the owner. Each Party shall cause its employees to comply with
the terms and provisions of this Agreement, including, without limitation,
the terms and provisions of this Section 2.11.
2.12. Termination. (a) This
Agreement may be terminated by the mutual agreement of the Parties
expressed in a written termination agreement or RFmon may unilaterally
terminate JOYTOTO or JoyTOTO terminate RFmon as per and subject to other
terms hereon.
(b) This Agreement may also be
terminated by any Party upon the occurrence of an Event of Default
specified in Section 2.12 (c)(i) or Section 2.12(c)(iii) as to
any other Party and shall automatically terminate upon the occurrence
of an Event of Default specified in Section2.12(b)(ii) as to any other Party. In
the event of any termination initiated by either JOYTOTO or RFmon or
both, the entire assignment shall be cancelled, terminated, and return
to RFmon.
(c) As used in the Agreement,
an Event of Default with respect to any Party shall mean:
(i) such Party shall fail to
perform any of its obligation under this Agreement and such failure
shall continue for a period of 30 days after such Party shall have
received notice of such failure from any other Party; or
(ii) such Party (or a material
subsidiary of such Party) shall make an assignment for the benefit
of creditors, or admit in writing its inability to pay its debts as
they mature or become due, or shall petition or apply for the appointment
of a trustee or other custodian, liquidator or receiver of such Party (or a
material subsidiary of such Party) or of any substantial part of its assets
or shall commence any case or other proceeding relating
to its assets under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, or shall take any action to authorize or
in furtherance of any of the foregoing; or any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against such Party (or a material subsidiary of such Party), and
the same shall not have been dismissed within 60 days of the filing or
commencement thereof or such Party (or a material subsidiary of such Party)
shall indicate its approval thereof, consent thereto or acquiescence
therein; or a decree or order shall be entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating such Party (or a material
subsidiary of such Party)bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order for relief shall
be entered in respect of such Party (or a material subsidiary of such
Party) in an involuntary case under any such bankruptcy or insolvency laws;
or
(iii) such Party (or a
material subsidiary of such Party) shall take any corporate action to
liquidate its assets, dissolve or sell all or substantially all of
its assets or capital stock, or otherwise, or shall take any corporate
action to consolidate or merge with or into any other corporation or
business entity unless such Party shall be the surviving legal entity of
such consolidation or merger.
Section 2.13. Damages for Breach of
this Agreement. Each Party shall be liable to the other Parties for
any losses suffered by the other Parties as the result of the breach
of this Agreement by the breaching Party. The extent of such liability shall be
comparable to the standard set forth in Section 2.7.
Section 2.14. Amendment
and Modification. Subject to applicable law, this Agreement may be
amended or modified by the Parties at any time with respect to any of the
terms contained herein; provided, however, that all
such amendments and modifications must be in writing and duly executed by
all of the Parties hereto.
Section 2.15. Waiver of Compliance;
Consents. Any failure of a Party to comply with any obligation,
covenant, agreement or condition herein may be expressly waived in
writing
by the Party or Parties entitled hereby to such compliance, but such waiver
or failure to insist upon strict compliance with such obligation, covenant,
agreement or condition will not operate as a waiver of, or
estoppels with respect to, any subsequent or other failure. No single or
partial exercise of a right or remedy will preclude any other or further
exercise thereof or of any other right or remedy hereunder. Whenever this
Agreement requires or permits the consent by or on behalf of a Party, such
consent will be given in writing in the same manner as for waivers of
compliance.
Section 2.16. No Third Party
Beneficiaries. Nothing in this Agreement will entitle any person or
entity (other than a Party hereto and its respective successors
and assigns permitted hereby) to any claim, cause of action, remedy or
right of any kind.
Section 2.17. Notices.
All notices, requests, demands and other communications required or
permitted hereunder will be made in writing and will be deemed to have been
duly given and effective: (i) on the date of delivery, if delivered
personally; (ii) on the earlier of the fourth(4th) day after mailing or the date
of the return receipt acknowledgement, if mailed, postage prepaid, by
certified or registered air mail, return receipt requested; or (iii)on the
date of transmission, if sent by facsimile, telecopy, telegraph, telex or
other similar telegraphic communications equipment. Each Party shall afford
the other Party with advance notification of any change in address or
contact information.
3. Non-Disclosure, Non-Circumvention,
and Invention Parties agree to sign
non-disclosure, non-competition, non-circumvention, and invention transfer
agreement.
If to
JOYTOTO: With a copy
to:
0000
Xxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxx, Xxxxxxxxxx 00000 Telephone:
000-000-0000
Fax:
000-000-0000
Email:
xxxx@xxxxxxx.xxx
| If to RFmon: | With a copy to: |
| 0000 Xxxxxxx Xxxxx, Xxxxx 000,Xxx Xxxx, Xxxxxxxxxx 00000 | |
| Telephone: | |
| Fax: | |
|
Email:
|
Section 2.18. Governing Law.
This
Agreement and the legal relations among the Parties hereto will be
governed by and construed in accordance with the internal substantive laws of
the State of California (without regard to the laws of conflict that might
otherwise apply) as to all matters, including without limitation matters of
validity, construction, effect, performance and remedies.
Section 2.19. Counterparts.
This Agreement may be executed simultaneously in one or more counterparts, each
of which will be deemed an original, but all of which together will constitute
one and the same instrument.
Section 2.20. Facsimile and Scanned
Execution. Receipt by any Party of a counterpart of this Agreement
manually signed and then scanned electronically and emailed to the other Parties
or manually signed and then sent by facsimile transmission to the other Parties
shall, for all purposes, be deemed to be an original counterpart with the same
force and effect as the manually signed counterpart from which it was
electronically reproduced.
Section 2.21. Headings. The
headings of the Articles and Sections of this Agreement are inserted for
convenience only and will not constitute a part hereof.
Section 2.22. Entire
Agreement. This Agreement embodies the entire agreement and understanding
of the Parties in respect of the transactions contemplated by this Agreement
(the “Transactions”).
There are no restrictions, promises, warranties, agreements, covenants or
undertakings, other than those expressly set forth or referred to in this
Agreement. This Agreement supersedes all prior agreements and understandings
between or among the Parties with respect to the Transactions. Provisions of
this Agreement will be interpreted to be valid and enforceable under applicable
law to the extent that such interpretation does not materially alter this
Agreement; provided,
however, that if any such provision becomes invalid
or unenforceable under applicable law such provision will be stricken to the
extent necessary and the remainder of such provisions and the remainder of this
Agreement will continue in full force and effect.
IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be duly executed as of the day and
year first above written and to be amended and restated as of the day and year
second above written. Hyundai RFmon Corp. JoyToto Company Ltd.
By: /s/ Young
Yoo
Young Yoo
President
Date:
___________________
