PROFIT PARTICIPATION AGREEMENT BETWEEN GO SOLAR USA, INC. A NEVADA CORPORATION AND XIAMEN SOLAR ELECTRONICS A CHINESE CORPORATION PROFIT PARTICIPATION AGREEMENT
BETWEEN
A NEVADA
CORPORATION
AND
XIAMEN
SOLAR ELECTRONICS
A CHINESE
CORPORATION
THIS
PROFIT PARTICIPATION AGREEMENT (the “PPA”) is made as of the 5th day of January,
2011 by and between GO SOLAR USA, INC., a Nevada corporation, (“GSLO”), and
XIAMEN SOLAR ELECTRONICS (XSE), a Chinese corporation.
R E C I T A L
S:
WHEREAS,
GSLO is in the business of identifying and developing new energy and technology
solutions, and
WHEREAS,
XSE is in the business of developing wireless energy sources and other energy
technology;
A G R E E M E N T
:
NOW,
THEREFORE, in consideration of the above and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1. GSLO
agrees to pay to XSE the sum of SIXTY-SIX THOUSAND US DOLLARS AND
NO/100 ($66,000.00) payable as follows:
a. $33,000.00
to be paid within 10 days of the signing by both parties with deliveryto
GSLO;
b. $33,000.00
to be paid 30 days following the first payment.
2. As
consideration for GSLO’s payment of $66,000.00 to XSE, XSE has agreed to pay to
GSLO, FIVE PERCENT (5 %) of the NET PROFITS generated and realized by XSE
exclusive of any net profit generated from GSLO under its distribution
agreement.
As
used herein, “NET PROFITS” shall be as defined by GAAP.
a. As
further consideration for GSLO's payment to XSE, XSE hereby grants GSLO
exclusive distribution rights of the Volt Technology for the Territory hereby
defined as North America. The terms of the distribution agreement are
attached hereto as Addendum A and made a part hereof.
3. The
payment obligation to GSLO shall begin 30 days following XSE’s achieving net
profit.
4. If
at any time, GSLO determines, at its sole discretion, that it is not in the best
interest of the company to continue with this PPA, GSLO may immediately
terminate this PPA and any obligation owed by GSLO for payments to XSE would end
subject to the following:
a. If
GSLO terminates this PPA at any time after the initial payment but prior to the
second payment, GSLO shall be eligible to receive profits from XSE on a pro-rata
basis. For example, payment of one-half of the $66,000.00 obligation
prior to termination would then obligate XSE to pay to GSLO 2.5% of the net
profits.
b. Notice
of termination under this clause may be by facsimile, email, hand delivery,
fed-ex or U.S. mail or any other method selected by GSLO as long as it is in
writing.
5. Payment:
a. The
Accounting. Accounting regarding Net Profit shall be done on a
quarterly basis. Not less than thirty (30) business days after
the close of each quarter, XSE shall complete and submit to GSLO, in a detailed
Accounting (defined below), XSE’s best estimate of the net profit amount due. As
used herein, “Accounting” shall mean a report prepared by XSE showing in
reasonable detail (including reasonable back-up documentation) the calculation
of the PPA net payment.
b. Simultaneous
with the submission of the Accounting, XSE shall tender payment in full of the
amount XSE’s calculation determined the Net Profit payment due.
6. Resolution
of Disputes:
a. If
GSLO objects to XSE’s Accounting and/or the Net Profit payment tendered by XSE,
GSLO shall have thirty (30) business days from the receipt of the
Accounting and payment within which to provide written notice via registered
mail, to XSE of GSLO’s objection.
b. Once
GSLO places its written notice of objection in the mail, GSLO shall thereafter,
negotiate the payment instrument.
c. GSLO
shall have the option to request from XSE any additional documentation or
information needed for GSLO to determine the correct Net Profit payment
due. GSLO shall thereafter have sixty (60) days within which to
perform its own Accounting and submit same to XSE for payment. Unless
XSE can demonstrate to GSLO the error in GSLO’s determination, XSE agrees to
submit any additional payment due with the next scheduled quarterly
payment. Any credit amount due XSE shall be included in its next
scheduled Accounting report. All fees applicable under paragraphs 5.a
and 5.b will also be applicable to this section.
d. Failure
by GSLO to timely object to XSE’s Accounting and/or the Net Profit payment does
not mean GSLO forfeits any additional payment that may be due. GSLO
may raise the issue of XSE’s Accounting and/or Net Profit payment amount during
the Year-End Accounting as described in 5.c above.
e. If
the parties do not agree to the Year-End Accounting and/or any additional Net
Profit payment or credit due to either party, within thirty (30) days following
the date the final Accounting is due:
i. The
objecting party shall obtain the services of an independent certified public
accountant. Both parties shall cooperate in providing all information
requested by the accountant. The accountant shall be limited solely to the
determination of the final year-end Net Profit payment or credit
due.
ii. The
accountant shall, within forty-five (45) days following his engagement reach a
decision and notify each party. The decision of the accountant shall
be binding. If the accountant determines an additional payment is due
GSLO, XSE shall remit same within thirty (30) days following notice from the
accountant. All fees applicable under paragraphs 5.a and 5.b will
also be applicable to this section, up to a period of ninety (90) days. If the
accountant determines XSE has overpaid and is entitled to a credit, that credit
amount shall be included in the next quarterly Accounting.
f. If
the objecting party fails to engage the services of an accountant within thirty
(30) days following the date the final Accounting is due then that party shall
be deemed to have waived its right to any objection and the final Accounting
shall be considered as approved and agreed to by both parties.
7. Financial
Records. XSE shall keep and maintain, or cause to be kept and
maintained, accurate financial books and records with respect to the
Accountings, Net Profit determination, and/or any other documentation necessary
to make the Accounting determinations outlined above. Such financial books and
records shall include all supporting documentation relative to the quarterly
and/or yearly accountings, and shall be maintained by XSE and made available to
GSLO for two (2) years after the date on which the yearly Accounting is
agreed to by the parties or made final by the terms of this
agreement.
8. Default
and Remedies.
a. Default.
Each of the terms, conditions, covenants and provisions of this Agreement is a
material consideration for this Agreement, the breach of which shall be deemed a
default hereunder. Said default shall be deemed to have occurred if the
defaulting party has not effected a cure within ten (10) days after a written
notice from the other party specifying the default.
b. Default
Interest. In the event of a default by XSE in the payment of
any funds required to be paid by XSE hereunder, all amounts which remain unpaid
for a period of ten (10) days from the date such payment is due hereunder,
shall bear interest from the initial due date through the date actual payment is
received by GSLO at a rate equal to the lesser of (i) TEN (10) percent or
(ii) the maximum rate permitted under applicable law. The imposition or
payment of such default interest shall not excuse any default.
c. Remedies. In
the event of a default by either party hereunder, the non-defaulting party shall
have all rights and remedies available to it at law or in equity. To the maximum
extent permitted by law, all rights, options and remedies of GSLO contained in
this Agreement, or under law, shall be cumulative, and no one remedy shall be
exclusive of any other remedy, and GSLO shall have the right to pursue any one
or all such remedies.
d. No
Continuing Waiver. No waiver by a party of a breach of any of
the terms, covenants or conditions of this Agreement by the other party shall be
construed or held to be a waiver of any succeeding or preceding breach of the
same or any other term, covenant or condition herein contained. No waiver of any
default by a party hereunder shall be implied from any omission by the other
party to take any action on account of such default if such default persists or
is repeated, and no express waiver shall affect default other than as specified
in such waiver. The consent or approval by a party to or of any act by the other
party requiring consent or approval, shall not be deemed to waive or render
unnecessary the party’s consent or approval to or of any subsequent similar acts
by the first party.
9. Miscellaneous.
a. Notices. All
notices or other communications required or permitted hereunder shall be in
writing and personally delivered (including by means of professional messenger
service) by nationally recognized overnight courier service, messenger service
or registered or certified mail, postage prepaid, return receipt requested, via
facsimile or electronic mail (email). All written
communications in accordance with the foregoing shall be deemed given
(i) three (3) days after the date it is posted if sent by mail, or
(ii) the date the overnight courier or personal delivery is made, or
refused by the addressee, at the address set forth below, if delivered by 5:00
P.M., CST on a business day, or immediately if by confirmed facsimile or
electronic mail. If one party fails to provide the other party with a
notice of change of address, then notice by the first party shall be deemed
given if properly addressed with proper postage to the last known
address.
b. Interpretation;
Governing Law. This Agreement shall be construed as if prepared by both
parties. Accordingly, any rule of law or legal decision that would
require interpretation of any ambiguities in this Agreement against the party
that has drafted it is not applicable and is waived. This Agreement shall be
construed, interpreted and governed by the laws of the State of
Texas. The parties agree that any action or proceeding to
enforce or relating to this Agreement, shall be brought exclusively in the
federal or state courts located in Xxxxxx County, Texas, and the parties hereto
consent to the exercise of personal jurisdiction over them by any such courts
for purposes of any such action or proceeding.
c. Severability. If
any provision of this Agreement, or the application thereof, shall for any
reason and to any extent be invalid or unenforceable, by a court of competent
jurisdiction, the remainder of this Agreement and application of such provision
to other circumstances, shall be interpreted so as best to reasonably effect the
intent of the parties hereto.
d. Performance
of Acts on Business Days. Unless specifically stated to the contrary,
all references to days herein shall be deemed to refer to calendar days. In the
event that the final date for payment of any amount or performance of any act
hereunder falls on a Saturday, Sunday or holiday, such payment may be made or
act performed on the next succeeding business day.
e. Attorney
Fees. If either party files any action or brings any proceeding
against the other arising out of this Agreement, whether or not such action or
proceeding is prosecuted to judgment (“Action”), then:
i. The
unsuccessful party therein shall pay all costs incurred by the prevailing party
therein, including reasonable attorneys’ fees and costs, court costs and
reimbursements for any other expenses incurred in connection therewith,
and
ii. As
a separate right, severable from any other rights set forth in this Agreement,
the prevailing party therein shall be entitled to recover its reasonable
attorneys’ fees and costs incurred in enforcing any judgment against the
unsuccessful party therein, which right to recover post-judgment attorneys’ fees
and costs shall be included in any such judgment. The right to recover
post-judgment attorneys’ fees and costs shall (A) not be deemed waived if
not included in any judgment, (B) survive the final judgment in any Action,
and (C) not be deemed merged into such judgment. These rights and
obligations shall survive the termination of this Agreement.
f. Entire
Agreement; Amendments. This Agreement is intended by the
parties to be the final expression of their agreement with respect to GSLO’s
right to share in certain profits from XSE and is intended as the complete and
exclusive statement of the terms of the agreement with respect thereto between
the parties. As such, this Agreement supersedes any prior understandings between
the parties regarding the subject matter hereof, whether oral or written. Any
amendments to this Agreement shall be in writing and shall be signed by all
parties hereto.
g. Assignment. GSLO
shall have the right to sell or assign its rights and obligations hereunder
without the prior written consent of XSE.
h. Headings;
Cross-References; Exhibits. The headings and captions used in this Agreement are
for convenience and ease of reference only and shall not be used to construe,
interpret, expand or limit the terms of this Agreement.
i. Counterparts.
This Agreement may be executed in several original counterparts, each of which
and all together will constitute this Agreement in its entirety.
ALL
SIGNATURES ON FOLLOWING PAGE
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the day and year first above written.
XIAMEN
SOLAR ELECTRONICS
|
BY:
|
/s/
Xxxxxxx Xxxxxxxx
|
| _______________________________ | |
|
XXXXXXX
XXXXXXXX, President
|
|
BY:
|
/s/
Xxxxx Xxxxx
|
| _______________________________ | |
|
XXXXX
XXXXX, Chairman and CEO
|
ADDENDUM "A"
A. Volt Technology: Volt
Technology is hereby defined as any external battery case that affixes to
wireless devices such as cell phones and is able to be charged via any
combination of AC power outlets, USB connection to an external power source, or
photovoltaic solar panel. Volt Technology also includes all future improvements
and embodiments that are developed by XSE. The term “Volt” is used for the
convenience of drafting this Agreement, and shall not affect its binding nature
should GSLO market the Technology under a different name.
B. XSE
hereby grants GSLO exclusive distribution rights for the Territory for a period
of three years. Should GSLO purchase at least 20,000 units of the Volt
Technology within one year of the first commercial purchase, the duration of
exclusivity will be extended for an additional five years. Should GSLO fail to
meet this minimum amount, XSE shall have the right but not the obligation to
enter into discussions with other entities for distribution within the
Territory. Failure to meet the minimum amount will not preclude GSLO to continue
to be a distributor of the Volt Technology for a period of eight years from the
date of this Agreement. In the event that GSLO is unable to distribute the Volt
Technology in North America due to regulatory constraints, intellectual property
infringements, or other unforeseen circumstances, XSE agrees to extend GSLO’s
Territory to include China. Should this occur, all other provisions in this
section will remain unchanged.
C. GSLO
shall purchase the Volt Technology directly from the Manufacturer and will pay a
royalty to XSE as follows:
1. $5
per unit for the first 50,000 units sold by GSLO;
2. $4
per unit for units from 50,001-100,000 sold by GSLO;
3. $3
per unit thereafter for units sold by GSLO;
4. No
royalty payment shall be due unless and until the unit held in inventoryby GSLO
is sold and collected on.
D. Royalty
payments shall be made on a quarterly basis subject to the following
adjustment: XSE agrees that at no time will the ratio of its royalty
payments to GSLO profits exceed a ratio of 1:5. Should this occur, the
allocation of profits (the wholesale price at which GSLO sells the Volt
Technology minus its total costs) shall be adjusted to accommodate this
ratio.
E. XSE
agrees to interface with Chinese manufacturers to ensure quality control,
conduct new product development, lower manufacturing costs, handle change orders
and/or returns, coordinate purchase orders, and oversee the exportation and
shipping of the Volt Technology FOB to GSLO’s destination of
choosing.
F. GSLO
agrees to use its best efforts to obtain CE Certification for the product in the
Territory as well as to pay for shipping costs and import taxes on all units
ordered by GSLO.
G. Any
intellectual property pertaining to the Volt Technology either applied for or
issued to XSE shall not affect this Distribution Agreement and royalties paid
herein. XSE agrees that this agreement encompasses the full understanding
between the parties and that no further license is required to sell the Volt
Technology.
H. XSE
and GSLO shall make available to the other all financial, operational,
manufacturing, and research and development records pertaining to the Volt
Technology. Both parties shall keep and maintain, or cause to be kept
and maintained, accurate financial books and operational records with respect to
the sales and cost of sales associated with the Volt Technology, and/or any
other documentation necessary to make the Accounting determinations outlined
below. Such financial books and records shall include all supporting
documentation relative to the quarterly accountings.
I. If
at any time, GSLO determines, at its sole discretion, that it is not in the best
interest of the company to continue with this Distribution Agreement, GSLO may
immediately terminate this Agreement. Notice of termination under this clause
may be by facsimile, email, hand delivery, fed-ex or U.S. mail or any other
method selected by GSLO as long as it is in
writing. Termination shall not affect any obligation for
royalty payments accrued on sold items or to be accrued from inventory once
sold.
J. Accounting
regarding Royalty Payments to XSE shall be done on a quarterly
basis. Not less than thirty (30) business days after the close
of each quarter, GSLO shall complete and submit to XSE, in a detailed Accounting
(defined below), GSLO’s best estimate of the Royalty Payment amount due. As used
herein, “Accounting” shall mean a report prepared by GSLO showing in reasonable
detail (including reasonable back-up documentation) the calculation of the
Royalty Payment.
K. Simultaneous
with the submission of the Accounting, GSLO shall tender payment in full of the
amount GSLO’s calculation determined as due under this Agreement.
L. Resolution
of Disputes:
a. If
XSE objects to GSLO’s Accounting and/or the Royalty Payment tendered by GSLO,
XSE shall have thirty (30) business days from the receipt of the Accounting
and payment within which to provide written notice via registered mail, to GSLO
of XSE’s objection.
b. Once
XSE places its written notice of objection in the mail, XSE shall thereafter,
negotiate the payment instrument.
c. XSE
shall have the option to request from GSLO any additional documentation or
information needed for XSE to determine the correct Royalty payment
due. XSE shall thereafter have sixty (60) days within which to
perform its own Accounting and submit same to GSLO for payment. After
review by GSLO if the parties agree, the appropriate adjustments shall be made
and any credit amount due XSE shall be included in its next scheduled Accounting
report.
d. After
each party has had the opportunity to conduct its own accounting and have it
reviewed by the other, if a dispute remains, the objecting party shall obtain
the services of an independent certified public accountant in the United States.
Both parties shall cooperate in providing all information requested by the
accountant.
e. The
accountant shall, within forty-five (45) days following this engagement reach a
decision and notify each party. The decision of the accountant shall
be binding. If the accountant determines an additional payment is due
XSE, GSLO shall remit same within thirty (30) days following notice from the
accountant. If the accountant determines GSLO has overpaid and is
entitled to a credit, that credit amount shall be included in the next quarterly
Accounting. If GSLO is found to owe additional funds to XSE, it shall pay for
the accounting fees, otherwise any accounting fees incurred shall be paid by
XSE.
f. If
the objecting party fails to engage the services of an accountant before the
subsequent quarterly Accounting statement then that party shall be deemed to
have waived its right to any objection of the previous quarterly Accounting and
it shall be considered as approved and agreed to by both parties.
M. Assignment. GSLO
shall have the right to sell or assign its rights and obligations hereunder
without the prior written consent of XSE.
AGREED
TO:
|
XIAMEN
SOLAR ELECTRONICS
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BY:
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/s/
Xxxxxxx Xxxxxxxx
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BY:
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/s/
Xxxxx Xxxxx
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| ______________________ | _____________________ | |||
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Xxxxxxx
Xxxxxxxx, President
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Xxxxx
Xxxxx, Chairman and
CEO
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