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video game basis with respect to the fees for the lease employees
and other services.
Under the Agreement, which sets forth a nonexclusive list of
10 “Services”, PPI agreed to provide “Day to day management of
employees leased by EAPR pursuant to Section 2 [of the
Agreement].” Section 2 of the Agreement, entitled “Lease of
Employees”, provides in pertinent part as follows:
All employees leased by PPI hereunder shall be located
in the Premises leased by EAPR from PPI and shall be
under the general supervision of EAPR. EAPR shall also
supervise and control all technical and product-related
training required by such employees. EAPR shall have
the right to locate its own employees in the building
space leased by it from PPI for the purpose of
overseeing and directing the work of the employees
leased to it by PPI subject to the requirements of the
Lease attached hereto as Exhibit A. [The Lease is not
attached to the stipulated copy of the Agreement, but
the Lease is in the record in the instant cases as a
separately stipulated exhibit.]
The Lease provides in pertinent part as follows:
3. USE: The Premises are to be used as a
manufacturing facility for the manufacture of videogame
cartridges and shall be used solely by those employees
leased from Lessor [PPI] by Lessee [EAPR] pursuant to a
manufacturing services agreement and by one additional
employee of Lessee, unless Lessor consents to use by
other employees, and for no other purpose, without the
prior written consent of Lessor.
PPI invoiced EAPR for all labor costs as specified under the
Agreement on the basis of the number of completed video games.
This invoice charge included the amount of any taxes and
unemployment contributions paid with respect to lease employees.
The amount invoiced was determined based on labor costs, taxes,
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