EXHIBIT 10(w)
JOINT DEVELOPMENT AGREEMENT
BY AND BETWEEN
VITECH ENTERPRISES, INC.
AND
STARTECH ENVIRONMENTAL CORP.
This JOINT DEVELOPMENT AGREEMENT (this "Agreement") is made as of December
____, 2001 by and between VITECH ENTERPRISES, INC., a North Carolina corporation
("ViTech") and STARTECH ENVIRONMENTAL CORP., a Colorado corporation
("Startech").
RECITALS:
A. ViTech desires to issue and sell to Startech, and Startech desires to
purchase from ViTech, 1,750,000 shares of common stock, no par value per share
(the "Common Shares"), for the consideration hereinafter set forth.
B. Startech desires to sell to ViTech, and ViTech desires to purchase from
Startech a 00 Xxx Xxxxxxxx Xxxxxx Converter(TM)System (the "Plasma System")..
C. ViTech and Startech have agreed to co-operate in the installation,
development and commercialization of the Plasma System in Chesterfield, South
Carolina based on their respective expertise, business relationships and
technologies.
D. ViTech and Startech have agreed to enter into this Agreement for the
purpose of recording the terms and conditions regulating their relationship with
each other.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties to
this Agreement hereby mutually agree as follows:
ARTICLE 1
BUSINESS SCOPE AND OBJECTIVES
1.1 The primary objective of the Agreement is to govern the purchase,
installation, development, testing, commercialization and licensing of the
Plasma System in South Carolina and to achieve the other objectives set out in
this Agreement. The focus of the Business will be the use of the Plasma System
for the destruction of Pharmaceutical Products as more fully set forth in that
document entitled "Business Plan" and attached hereto and made a part hereof.
1.2 The central management and control of ViTech shall be vested in the
Directors and such Persons as they may delegate the exercise of their powers.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of ViTech: ViTech hereby represents and
warrants to Startech as follows, as of the Closing Date:
2.1.1 Organization: ViTech is an corporation duly organized, validly
existing and in good standing under the laws of the State of North Carolina, and
has all the requisite corporate power and authority to own and lease its
properties, to carry on its business as presently conducted and as proposed to
be conducted and to carry out the transactions contemplated hereby.
2.1.2 Authorization: The execution, delivery and performance by ViTech
of this Agreement, including the issuance of the Common Shares, have been duly
authorized by all requisite corporate actions; this Agreement has been duly
executed and delivered by ViTech and is the valid and binding obligation of
ViTech, enforceable against it in accordance with its terms except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the enforcement of creditors' rights generally,
and except as enforcement of rights to indemnity and contribution hereunder may
be limited by United States federal or state securities laws or principles of
public policy. The Common Shares, when issued as contemplated hereby, will be
validly issued and outstanding, fully paid and non-assessable.
2.1.3 No Conflicts: The execution, delivery and performance by ViTech
of this Agreement, the issuance, sale and delivery of the Common Shares, and
compliance with the provisions hereof by ViTech, will not:
(i) violate any provision of applicable law, statute, rule
or regulation applicable to ViTech or any ruling, writ, injunction,
order, judgment or decree of any court, arbitrator, administrative
agency or other governmental body applicable to ViTech or any of its
properties or assets;
(ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute (with notice or
lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under the charter or
organizational documents of ViTech or any material contract to which
ViTech is a party, except where such violation, conflict or breach
would not, individually or in the aggregate, have a material adverse
effect on ViTech; or
(iii) result in the creation of any Encumbrance upon any of
the properties or assets of ViTech.
2.1.4 Approvals: No permit, authorization, consent or approval of or
by, or any notification of or filing with, any Person is required in connection
with the execution, delivery or performance of this Agreement by ViTech. ViTech
has full authority to conduct its business as contemplated in the Business Plan.
2.1.5 Disclosure: This Agreement does not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements contained herein not misleading. ViTech is not aware of any material
contingency, event or circumstance relating to its business or prospects, which
could have a material adverse effect thereon, in order for the disclosure herein
relating to ViTech not to be misleading in any material respect.
2.2 Representations and Warranties of Startech: Startech hereby represents
and warrants to ViTech as follows:
2.2.1 Organization: Startech is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado, and has
all the requisite corporate power and authority to own and lease its properties,
to carry on its business as presently conducted and as proposed to be conducted
and to carry out the transactions contemplated hereby.
2.2.2 Authorization: The execution, delivery and performance by
Startech of this Agreement have been duly authorized by all requisite corporate
actions; this Agreement has been duly executed and delivered by Startech and is
the valid and binding obligation of Startech, enforceable against it in
accordance with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the enforcement of creditors' rights generally, and except as
enforcement of rights to indemnity and contribution hereunder may be limited by
United States federal or state securities laws or principles of public policy.
2.2.3 No Conflicts: The execution, delivery and performance by
Startech of this Agreement, the purchase of the Common Shares, and compliance
with the provisions hereof by Startech will not:
(i) violate any provision of applicable law, statute, rule
or regulation applicable to Startech or any ruling, writ, injunction,
order, judgment or decree of any court, arbitrator, administrative
agency or other governmental body applicable to Startech or any of its
properties or assets;
(ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute (with notice or
lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under the charter or
organizational documents of Startech or any material contract to which
Startech is a party, except where such violation, conflict or breach
would not, individually or in the aggregate, have a material adverse
effect on Startech; or
(iii) result in the creation of any Encumbrance upon any of
the properties or assets of Startech.
2.2.4 Approvals: No permit, authorization, consent or approval of or
by, or any notification of or filing with, any Person is required in connection
with the execution, delivery or performance of this Agreement by Startech.
2.2.5 Investment Representations: Startech is sophisticated in
transactions of this type and capable of evaluating the merits and risks of its
investment in ViTech. Startech has not been formed solely for the purpose of
making this investment and Startech is acquiring the Common Shares for
investment for its own account, not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution of any part thereof.
Startech understands that the Common Shares have not been registered under the
Securities Act or applicable state and foreign securities laws by reason of a
specific exemption from the registration provisions of the Securities Act and
applicable state and foreign securities laws, the availability of which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of Startech's representations as expressed herein. Startech understands
that no public market now exists for the Common Shares and that there is no
assurance that a public market will ever exist for such Common Shares.
ARTICLE 3
AUTHORIZATION AND OBLIGATIONS AT CLOSING
3.1 ViTEch has authorized the issuance to Startech of 1,750,000 Common
Shares issuable as provided in Article 3.3 hereof. These shares shall be equal
to 25% of the issued and outstanding shares of ViTech on the Closing Date.
3.2 Startech hereby subscribes for the number of Common Shares set forth in
Article 3.1 in exchange for certain goods and services in consideration
therefore, as provided in Article 3.4.1.
3.3 The closing (the "Closing") shall take place at the offices of Xxxxxx
Xxxxxxx Xxxxx & Xxxxxx, LLP at 0000 Xxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
Xxxxxxxx 00000 on the Closing Date or such other time and place as the Parties
may agree.
3.4 At the Closing, Startech shall take or cause to be taken the following
actions, as appropriate:
3.4.1 Startech shall purchase from ViTech, in exchange for the reduced
purchase price and consulting services specified in the Purchase Agreement,
1,750,000 Common Shares;
3.4.2 Startech ViTech shall execute and deliver to ViTech a mutually
agreeable Purchase Agreement not inconsistent with the discussions had between
the parties leading up to the execution of this Joint Development Agreement.
3.4.3 Startech shall execute and deliver to ViTech a mutually
agreeable Noncompetition Agreement not inconsistent with the discussions had
between the parties leading up to the execution of this Joint Development
Agreement.
3.4.4 Startech shall execute and deliver to ViTech a mutually
agreeable Shareholder Agreement not inconsistent with the discussions had
between the parties leading up to the execution of this Joint Development
Agreement.
3.4.5 Startech shall execute and deliver to ViTech any certificates,
resolutions or documents which ViTech shall reasonably require.
3.5 At the Closing, ViTech shall take or cause to be taken the following
actions, as appropriate:
3.5.1 ViTech shall issue and sell to Startech, in exchange for the
reduced purchase price and consulting services specified in the Purchase
Agreement, 1,750,000 Common Shares.
3.5.2 ViTech shall execute and deliver to Startech a mutually
agreeable Purchase Agreement not inconsistent with the discussions had between
the parties leading up to the execution of this Joint Development Agreement.
3.5.3 ViTech shall execute and deliver to Startech a mutually
agreeable Noncompetition Agreement not inconsistent with the discussions had
between the parties leading up to the execution of this Joint Development
Agreement.
3.5.4 ViTech shall execute and deliver to Startech a mutually
agreeable Shareholder Agreement not inconsistent with the discussions had
between the parties leading up to the execution of this Joint Development
Agreement.
3.5.5. ViTech shall appoint Xxxxxx X. XxXxxxxx as a Director of
ViTech;
3.5.6 ViTech shall execute and deliver to Startech certificates in
respect of the Common Shares described above and any other certificates,
resolutions or documents which Startech shall reasonably require.
3.6 Exemption from Registration: The Common Shares will be issued under an
exemption or exemptions from registration under the Securities Act. Accordingly,
the certificates evidencing the Common Shares shall, upon issuance, contain the
following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF A STATE OR OTHER JURISDICTION
AND MAY NOT UNDER ANY CIRCUMSTANCES BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED
OF (OTHER THAN TO AN AFFILIATE OF THE ORIGINAL HOLDER OR AS OTHERWISE PERMITTED
IN THE AGREEMENT PURSUANT TO WHICH THEY WERE ISSUED) EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE
SECURITIES ACT (OR ANY SIMILAR RULE UNDER THE SECURITIES ACT RELATING TO THE
DISPOSITION OF SECURITIES) TOGETHER WITH AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE
STATE SECURITIES LAWS.
ARTICLE 4
DIRECTORS
4.1. Directors:
4.1.1 Size of Board. The Shareholders agree that for so long as this
Agreement remains in effect, they shall vote all shares of capital stock of
ViTech owned or controlled, directly or indirectly, by them to maintain the
Board with an authorized size of five (5) members, unless such number is
increased or decreased by amendment of this Agreement.
4.1.2 Election of Directors. The Shareholders shall from time to time
vote their shares of capital stock of ViTech, and their transferees shall so
vote, for the election of five (5) directors, one of whom shall be nominated by
and representative of Startech and one of whom shall be nominated by and
representative of ViTech. In the event any vacancy occurs on the Board of
Directors with respect to a director nominated and elected pursuant to the
preceding sentence, to the extent possible such vacancy shall be filled in
accordance with the intent of this Section 5.1.2. In case of such a vacancy, the
parties to this Agreement agree to use their best efforts to cause a special
meeting of the shareholders of ViTech to be called or a written consent of the
shareholders of the ViTech to be executed as quickly as possible for the purpose
of filling the vacancy thereby created so that the Board at all times is
constituted so as to have the number of directors specified in Section 5.1.1 of
this Agreement.
ARTICLE 5
THE BUSINESS PLAN AND DEVELOPMENT FUNDING
5.1 The Directors shall meet together as soon as reasonably practicable
after the Closing Date to approve and implement the Business Plan.
5.2 It is estimated that ViTech will require approximately $7,000,000 in
equity contributions and equipment financing to commence and continue the
acquisition, installation and development of the Plasma System.
5.3 Subject to all applicable state and federal securities laws, Startech
will assist ViTech in locating potential investors and lenders in order to
obtain the Development Funding and any and all additional funding to develop the
Plasma System by introducing representatives of ViTech potential investors and
lenders known to Startech and to and by providing technical information and
explanations regarding the technology and capabilities of the Plasma System.
5.4 Startech shall perform substantially all the installation and intitial
testing for the Plasma System in accordance with the terms and conditions of the
Purchase Agreement.
ARTICLE 6
COMMERCIALIZATION
6.1 ViTech shall diligently pursue the development, utilization and
commercialization of the Plasma System as provided in the Business Plan.
6.2 In return for the completion of the commercialisation of the Startech
Plasma Converter as outlined in the Business Plan, ViTech shall have exclusive
processing rights in the US market for the following specific industry category
defined as follows:
Pharmaceutical products in all forms; liquid, solid and gaseous,
including: outdates, recalls, withdrawn products, unwanted products,
damaged products, off-spec products, over-production, contraband, and
cleaning agents and raw materials used in the manufacturer and
processing of pharmaceuticals. Said pharmaceuticals may be both
finished and unfinished products coming from independent pharmacies,
chain pharmacies, physicians' offices, clinics, dentists' offices,
national, regional and local pharmaceutical wholesalers and
distributors, clinical research organizations, pharmaceutical recall
centers, reverse logistic pharmaceutical companies, pharmaceutical
manufacturers and biotechnology manufacturers which outsource product
destruction and federal, state and local law enforcement agencies
which outsource their product destruction.
Above exclusivity shall be subject to ViTech's attaining the following specific
milestones:
o Obtaining required environmental, business and DEA permits and
licenses to own and operate a pharmaceutical destruction company.
o Be operational and processing pharmaceuticals one year from signing of
purchase agreement for initial PC unit.
ViTech's rights as outlined above shall not preclude pharmaceutical
manufacturers or hospitals involved in the pharmaceutical industry from
purchasing PC on their own account for "inside-the-fence' processing of their
own products or materials provided said companies do not act as a source of
destruction for other companies and transport pharmaceuticals back on site once
ownership of products have changed hands.
ARTICLE 7
TERMINATION
7.1 This Agreement shall remain effective until the earlier of (i)
termination by written agreement of all Parties hereto and (ii) termination for
the following:
7.1.1 it commits a material breach of its representations, warranties
or obligations under this Agreement and fails to cure it within 30 days of being
specifically required in writing to do so by the other Party; provided, however,
that if the breaching Party has proposed a course of action to cure the breach
and is acting in good faith to cure same but has not cured the breach by the
30th day, such period shall be extended by such period as is reasonably
necessary to permit the breach to be cured, provided that such period shall not
be extended by more than 60 days, unless otherwise agreed in writing by the
Parties; or
7.1.2 it is unable to pay its debts in the normal course of business;
or
7.1.3 it ceases wholly or substantially to carry on its business,
otherwise than for the purpose of a reconstruction or amalgamation, without the
prior written consent of the other Party (such consent not to be unreasonably
withheld); or
7.1.4 the appointment of a liquidator, receiver, administrator,
examiner, trustee or similar officer of such Party or over all or substantially
all of its assets under the law of any applicable jurisdiction; or
7.1.5 an application or petition for bankruptcy, corporate
re-organization, composition, administration, examination, arrangement or any
other procedure similar to any of the foregoing under the law of any applicable
jurisdiction is filed, and is not discharged within 60 days, or a Party applies
for or consents to the appointment of a receiver, administrator, examiner or
similar officer of it or of all or a material part of its assets, rights or
revenues or the assets and/or the business of a Party are for any reason seized,
confiscated or condemned.
7.2 If either Party commits a Relevant Event, the other Shareholder shall
have in addition to all other legal and equitable rights and remedies hereunder,
the right to terminate this Agreement upon 30 days' written notice.
ARTICLE 8
GENERAL
8.1 Exclusion of liability:
Notwithstanding anything to the contrary in this Agreement, no Party shall
be liable to any other Party by reason of any representation or warranty,
condition or other term or any duty of common law, or under the express terms of
this Agreement, for any consequential, special or incidental or punitive loss or
damage (whether for loss of current or future profits, loss of enterprise value
or otherwise) and whether occasioned by the negligence of the respective
Parties, their employees or agents or otherwise.
8.2 Good Faith:
Each of the Parties agrees to act reasonably in giving effect to the
provisions of this Agreement.
8.3 Further Assurance:
At the request of either of the Parties, the other Party shall (and shall
use reasonable efforts to procure that any other necessary parties shall)
execute and perform all such documents, acts and things as may reasonably be
required subsequent to the signing of this Agreement for assuring to or vesting
in the requesting Party the full benefit of the terms hereof.
8.4 No Representation:
Each of the Parties hereto hereby acknowledges that in entering into this
Agreement it has not relied on any representation or warranty except as
expressly set forth herein or in any document referred to herein.
8.5 Force Majeure:
Neither Party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay is caused by or
results from causes beyond its reasonable control, including without limitation,
acts of God, fires, strikes, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances or intervention of any relevant government authority, but any such
delay or failure shall be remedied by such Party as soon as practicable.
8.6 Relationship of the Parties:
8.6.1 Nothing contained in this Agreement is intended or is to be
construed to constitute ViTech and Startech as partners, or Startech as an
employee or agent of ViTech, or ViTech as an employee or agent of Startech.
8.6.2 No Party hereto shall have any express or implied right or
authority to assume or create any obligations on behalf of or in the name of
another Party or to bind another Party to any contract, agreement or undertaking
with any third party.
8.7 Counterparts:
This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute this Agreement.
8.8 Notices:
Any notice to be given under this Agreement shall be sent in writing by
U.S. certified mail return receipt requested or reputable overnight courier or
telefaxed to:
ViTech at: ___________________
________________, North Carolina ________
Attn: Xxxxxxx Xxxxxx
Telephone: (919) ____-_____
Fax: (919) ____-_____
with a copy to: Xxxxxx Xxxxxxx Xxxxx Xxxxxx LLP,
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Startech at:
___________________
___________________, ___________________
Attn: _______________
Telephone: (____) ____-_____
Fax: (____) ____-_____
with a copy to:
___________________
___________________, ___________________
Attn: _______________
Telephone: (____) ____-_____
Fax: (____) ____-_____
or to such other address as may from time to time be notified by any Party to
the other hereunder. Any notice sent by mail shall be deemed to have been
delivered within three (3) business days after posting; any notice sent by
overnight courier shall be deemed to have been delivered within one (1) business
day of delivery to such courier; and any notice sent by telefax shall be deemed
to have been delivered upon confirmation of receipt. Notices of change of
address shall be effective upon receipt. Notices by telefax shall also be sent
by another method permitted hereunder.
8.9 Governing Law:
This Agreement shall be governed by and construed in accordance with the
laws of the State of North Carolina.
8.10 Severability:
If any provision in this Agreement is agreed by the Parties to be, deemed
to be or becomes invalid, illegal, void or unenforceable under any law that is
applicable hereto, such provision will be deemed amended to conform to
applicable laws so as to be valid and enforceable or, if it cannot be so amended
without materially altering the intention of the Parties, it will be deleted,
with effect from the date of such agreement or such earlier date as the Parties
may agree, and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be impaired or affected in any way.
8.11 Amendments:
No amendment, modification or addition hereto shall be effective or binding
on any Party unless set forth in writing and executed by a duly authorized
representative of both Parties.
8.12 Waiver:
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged with such
waiver, and no waiver of any breach or failure to perform shall be deemed to be
a waiver of any future breach or failure to perform or of any other right
arising under this Agreement.
8.13 Assignment:
8.13.1 Neither of the Parties shall be permitted to assign its
respective rights or obligations hereunder without the prior written consent of
the other Party hereto.
8.13.2 Any permitted assignee under this Article 23.13 shall assume
all obligations of the assignor under this Agreement.
8.14 Whole Agreement:
This Agreement (including the Exhibits attached hereto) and the Definitive
Documents set forth all of the agreements and understandings between the Parties
with respect to the subject matter hereof, and supersede and terminate all prior
agreements and understandings between the Parties with respect to the subject
matter hereof. There are no agreements or understandings with respect to the
subject matter hereof, either oral or written, between the Parties other than as
set forth in this Agreement and the Definitive Documents.
No provision of this Agreement shall be construed so as to negate, modify
or affect in any way the provisions of any other agreement between any of the
Parties unless specifically referred to, and solely to the extent provided
herein. In the event of a conflict between the provisions of this Agreement and
the provisions of the any other agreements between the Parties, the terms of
this Agreement shall prevail unless this Agreement specifically provide
otherwise.
8.15 Costs: Each Party shall bear its own legal and other costs incurred in
relation to preparing and concluding this Agreement and the Definitive
Documents.
8.16 Successors: This Agreement shall be binding upon and inure to the
benefit of the Parties hereto, their successors and permitted assigns.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
day first set forth above.
VITECH:
VITECH ENTERPRISES, INC.
By:
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Name:
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Title:
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STARTECH:
STARTECH ENVIRONMENTAL, CORP.
By:
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Name:
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Title:
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