JOINT VENTURE AGREEMENT
BETWEEN
XXXXXX XXXXXXXX CORP.
AND
USA UNITED SUPPLIERS OF AMERICA, INC.
This Joint Venture Agreement is made and entered into as of this October 18,
2000, ("Effective Date") by and between Xxxxxx Xxxxxxxx Corp. ("Xxxxxx"), with
offices at 00 Xxxxxxx Xxxxx, Xxxx Xxxxxxxx, XX 00000 and USA United Suppliers of
America, Inc. ("USA"), with offices at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
WHEREAS, Xxxxxx is a distributor, packager, and assembler of various proprietary
accessories and kits to the aftermarket automotive industry; whereas, Xxxxxx
maintains and markets air conditioning kits under the trademark, Easy Test(R),
WHEREAS, USA is a supplier of proprietary air conditioning refrigerant products
to the aftermarket automotive industry; whereas, USA maintains and markets air
conditioning refrigerant products under the trademark, AutoFrost(TM),
WHEREAS, Xxxxxx and USA are desirous about entering into a relationship to
develop, market and distribute a unique series of air conditioning kits under
the name of Easy Test(R) AutoFrost(TM) Kit as defined within the Definitions
section with the following terms and conditions:
DEFINTIONS
The following definitions set forth herein will be the basis for the terms and
conditions:
o Kits: The term "Kits" will be used to define any and all products sold
whereas Autofrost(TM)refrigerant is packaged in any form (boxed, clamshell,
bag, etc.) with any form of Can Tap, Conversion Fittings, Can Adapter, Hose
Assembly and/or Hose Adapter;
o Can Tap: The term "Can Tap" will be used to define any device that
punctures a can and allows the release of the refrigerant;
o Can Adapter: The term "Can Adapter" will be used to define any device that
attaches to the refrigerant can and attaches to a Can Tap or Hose Assembly
or any appartus that allows the refrigerant to be transported into another
refrigerant system;
o Hose Assembly: The term "Hose Assembly" will be used to define any hose
device and/or appartus that allows refrigerant to be tranported from the
refrigerant can to another refrigerant system;
o Conversion Fittings: The term "Conversion Fittings" will be used to define
any fixtures or devices which convert other refrigerant systems such as
R-12 (Freon) based to Autofrost(TM) refrigerant based systems;
o Hose Adapter: The term "Hose Adapter" will be used to define a device which
connects the Hose Assembly to the Conversion Fittings;
o Easy Test(R) Autofrost(TM) Kit: The term "Easy Test(R) Autofrost(TM) Kit"
will be used to define the kits under this agreement and will contain
Xxxxxx Xxxxxxxx'x Easy Test(R) Air Conditioning TotalTap(TM) Can Tap (can
clam will NOT be included) and Hose Assembly, Xxxxxx Xxxxxxxx'x Easy
Test(R) Autofrost(TM) Can Adapter and USA United Suppliers of America's
Autofrost(TM) canned refrigerant; These kits may contain additional non
proprietary items such as Conversion Fittings, Instructions or other
specialized items.
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WITHNESSETH
In consideration of the mutual covenants set forth herein, the parties hereto
hereby agree to the following:
1. Xxxxxx Xxxxxxxx will incur the costs to draft and administrate this
agreement;
2. Xxxxxx Xxxxxxxx will promote, market and sell Easy
Test(R)Autofrost(TM)kits;
3. Xxxxxx Xxxxxxxx will design, develop, maintain, and provide specialized
Easy Test(R) Can Tap and Hose Assembly;
4. Xxxxxx Xxxxxxxx will design, develop, maintain and provide specialized Easy
Test(R) Can Adapter uniquely designed for Autofrost(TM) refrigerant
specifications;
5. Xxxxxx Xxxxxxxx will initially design and develop packaging for two (2)
kits for the initial season, February through August 2001;
6. Xxxxxx Xxxxxxxx will design and develop packaging for the Easy Test(R)
Autofrost(TM) Retobaggie which will include the Hose Adapter, High and Low
Side Fittings, and Retro-Fit Label supplied by USA United Suppliers at
cost; to offered separately;
7. Xxxxxx Xxxxxxxx will provide prototypes on a best efforts basis by
September 1, 2000;
8. Xxxxxx Xxxxxxxx will purchase Autofrost(TM) refrigerant at a maximum rate
of $4.00 per can. Xxxxxx Xxxxxxxx'x payment terms for product from USA
United Suppliers of America will be standard 5%Net 90 days terms (special
extended terms may be required on a case by case basis to promote and/or
introduce the kits to certain clients, Xxxxxx Xxxxxxxx will submit written
notice for any special terms requirements) Xxxxxx Xxxxxxxx'x initial credit
line will be $250,000 with the possibility to increase depending on the
size of initial orders from particulary large clients (The Xxxxx Group, the
parent company of Xxxxxx Xxxxxxxx Corp, agrees to pledge common stock in
The Xxxxx Group as colateral for any overdue outstanding balance of Xxxxxx
Xxxxxxxx'x accounts payable to USA. In the event that HW fails to pay USA
within agreed upon terms, USA will notify HW that is has 30 days to return
its account status to current or USA may opt to convert the amount of HW's
overdue balance into an equal value of common stock in The Xxxxx Group);
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9. Xxxxxx Xxxxxxxx will provide warehousing, packaging labor and distribution
for kits;
10. Xxxxxx Xxxxxxxx will maintain a minimum level between August through
February at the request of USA United Suppliers of America in which USA
United Suppliers of America will advance the cost of the materials and
labor to Xxxxxx Xxxxxxxx at time of request to be reimbursed upon shipping
and payment of this product; For example, if USA deems it necessary to
carry inventory during the off-peak months, USA will advance funds to
Xxxxxx Xxxxxxxx to cover costs for requrested out of season inventory to be
repaid upon shipment of inventory;
11. Xxxxxx Xxxxxxxx will maintain the rights to the trademarks for any Easy
Test(R) Autofrost(TM) Kits developed under this agreement as well as the
kit designs, engineering, molds, and artwork;
12. USA United Suppliers of America will supply the Autofrost refrigerant
requirements within two (2) weeks of purchase order date on a best efforts
basis, unless purchase orders exceed projectons, which could cause raw
material shortages. In the case of the latter, Xxxxxx Xxxxxxxx would
require the extent of the possiblities of shortages;
13. USA United Suppliers of America will provide an initial supply of
Conversion Fittings with caps, Hose Adapters, and Retrofit labels to Xxxxxx
Xxxxxxxx on consignment; USA United Suppliers of America will reimburse
Xxxxxx Xxxxxxxx for any and all expenses related to artwork, mold costs,
plate costs and other development costs except design, testing and labor
upon signing agreement. The initial projections for the three skus in
discussion is approximately $10,000 with a cap of $12,000 (initial molds
will be jointly owned);
14. USA United Suppliers of America will supply complete customer list for
Autofrost(TM) to Xxxxxx Xxxxxxxx upon signing agreement and refer any
prospective clients to Xxxxxx Xxxxxxxx;
15. USA United Suppliers of America will provide existingindependent testing
results for Autofrost(TM) refrigerant to Xxxxxx Xxxxxxxx for marketing and
sales purposes;
16. Xxxxxx Xxxxxxxx and USA will jointly develop new marketing brochures and
sales literature at USA's expense;
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17. USA United Suppliers of America will provide marketing brochures and sales
literature for Autofrost(TM) to Xxxxxx Xxxxxxxx to assist with marketing
and sales as needed with prior approval from USA;
18. USA United Suppliers of America will reimburse Xxxxxx Xxxxxxxx for 50% of
any special promotion expenses which Xxxxxx Xxxxxxxx will submit in
writing;
19. USA United Suppliers of America may be required from time to time to
participate in sales presentations as applicable; USA United Suppliers of
America will comply by sending representatives as required at its expense
and with advanced notice from Xxxxxx Xxxxxxxx;
20. USA United Suppliers of America will obtain proper documentation to Xxxxxx
Xxxxxxxx on EPA Acceptance of specialized Easy Test(R) "Can Adapter"
uniquely designed for Autofrost(TM) refrigerant specifications by October
1, 2000 and prior to any initial Xxxxxx Xxxxxxxx production runs can be
authorized;
21. The Kits bearing the name Easy Test(R) Autofrost(TM) Kit as defined will be
exclusively manufactured, assembled and distributed by and through Xxxxxx
Xxxxxxxx both within the domestic United States and internationally and/or
worldwide;
22. The term of this agreement will be for five (5) years from the Effective
Date of this agreement to be renewable for an additional five (5) years on
terms mutually agreeable to both parties.
23. Notices: All notices with respect to this agreement will be forwarded to the
following addresses:
Xxxxxx Xxxxxxxx Corp.
00 Xxxxxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000
XXX United Suppliers of American
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
24. Governing Laws: This Agreement and the obligations of the parties shall be
interpreted, contrued, and enforced in accordance with the law of the State
of New Jersey;
25. This agreement may be executed in one or more counterparts, each of which
shall for all purposes be deemed to be an original but all of which shall
constitute one and the same Agreement;
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26. Entire Agreement: This Agreement contains the entire agreement among the
parties hereto relative to the formation of this joint venture. No
variations, modifications or changees herein or hereto shall be binding
up0on any party unless set forth in a document duly executed by or on
behalf of such party;
27. Serverability: If any provision of this Agreement or the application
thereof to any person or circumstance shall be invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provisions to other persons or circumstances shall not be affected thereby
and shall be enforced to the fullest extent permitted by law;
28. Both parties warrant that the companys are legally able to enter into this
Agreement, that the parties signing on behalf of the companies are legally
authorized to do so, and that the trademarks are of legal property of the
companies;
29. Binding Agreement: Subject to the restrictions on transfers and
encumbrances set forth herein, this Agreement shall inure to the benefit of
and be binding upon the undersigned parties and their respective
representatives, heirs, successors and assigns; and
30. Headings: The heading of this Agreement are for convenience only and shall
in no wise be deemed part of the terms, convenants or conditions of this
Agreement or interpretive of the contents of this Agreement.
IN WITNESS WHEREOF the parties hereunto have caused this Agreement to be signed
by duly authorized representatives as of the day and year first above written.
Xxxxxx Xxxxxxxx Corp. USA United Suppliers of America, Inc.
/s/ Xxxxxx X. Xxxxxx /s/ Xxx Xxxxxx
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Xxxxxx X. Xxxxxx Xxx Xxxxxx
President President
/s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx
Secretary
