PURCHASE AGREEMENT – PLASMA CONVERTER SYSTEM
Exhibit 10.1
INFORMATION
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS IDENTIFIED
BY THREE ASTERISKS, AS FOLLOWS “* * *”. AN UNREDACTED VERSION OF THIS DOCUMENT
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
PURCHASE
AGREEMENT – PLASMA CONVERTER SYSTEM
This
Purchase Agreement entered into on this 10th day of
May, 2007, for the sale and purchase of goods and services consisting of two (2)
10 Tons Per Day (rated capacity) and one (1) 5 TPD (rated capacity) integrated
Plasma Converter Systems (PCS) to process various solid, liquid and gaseous
feeds including hazardous waste and Municipal Solid Wastes. This Purchase
Agreement is made between STARTECH ENVIRONMENTAL CORPORATION, (hereinafter
“Company”) a corporation organized and existing under the laws of the State of
Colorado, U.S.A., with its principal office at 00 Xxxxxxx Xxxx, Xxxxxx
Xxxxxxxxxxx and ENVIROSAFE INDUSTRIAL SERVICES CORPORATION (hereinafter,
“Customer”), a corporation organized and existing under the laws of the
Commonwealth of Puerto Rico, U.S.A., with its principal office at Corporate
Center at Roosevelt Avenue, 6th Floor
Suite #603, #1445 Roosevelt Avenue, Corner Renaissance Street, San
Xxxxxxxx Xxxx, San Xxxx, Puerto Rico.
Goods and
Services
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Company
will sell, two (2) 10 TPD (rated capacity) PCS and one (1) 5 TPD (rated
capacity) Startech Environmental Corporation integrated Plasma Converter
Systems (PCS).
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Company
will coordinate and provide crating for the purchased goods to be shipped
to Customer.
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The
final installation location will be at one (1) site location selected by
the Customer.
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Company
shall furnish Startech parts and accessories required for the integration
of the Plasma Converter Systems equipment, instrumentation and skids
specified in Exhibit D.
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Equipment
for the use and disposal of the Plasma Converted Gas (PCG) has not been
included in this sales agreement.
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The
Company will provide on-site startup and systemization training services
at Customers site location to coordinate the PCS installation after the
Plasma Converter Systems arrive on site. The scope of this service
includes up to *** of a Company engineer/technician at Customer’s location
in Puerto Rico, travel and living expenses
included.
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The
Company will provide the Customer’s operators training and operator
certification.
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The
Company will provide a *** Product Warranty as described in Exhibit
A.
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The
Company will provide a Performance Warranty that will be effective during
systems startup and commissioning.
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The
Company will provide a comprehensive spare parts
kit.
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Shipment, Delivery and
Startup
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The
one (1) 5 TPD (rated capacity) PCS System shall be targeted for shipment
from the Company’s Bristol, CT plant on or about *** from the date of this
Purchase Agreement and payment of the initial down payment specified in
Exhibit C. The two (2) 10 TPD (rated capacity) PCS Systems will be
targeted for shipment in *** and ***
respectively.
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Company
shall be responsible for the proper packaging and crating of the
Goods/Equipment, which shall be done at Company’s
expense.
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Shipping
from the Company’s Bristol, CT plant to the Customer’s designated facility
in Puerto Rico will be coordinated by the Company. The cost of this
shipping service will be billed directly to the Customer by the shipping
company selected by the Company. Notwithstanding Customer’s assumption of
the shipping costs, the delivery of the Goods/Equipment shall not be
considered made until they reach the Customer’s designated facility in
Puerto Rico and Company shall bear all risk of loss or damage to the
Goods/Equipment until such time as they are delivered at the Customer’s
designated facility in Puerto Rico.
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Customer
shall receive, provide support to Company to unload, and store each
shipment of components of the Systems, as may be required, at the Customer
Premises. However, Customer shall not uncrate or unpack such components
without prior permission and/or supervision from
Company.
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Upon
final delivery of the systems to the designated site, it will take
approximately *** for systems installation, training and startup with
Company coordination and support.
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Training and
Documentation
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Company
shall provide Customer with *** of training course materials and operating
documentation materials for each of the Plasma Converter Systems. The
training consists of the following
items:
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1)
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System
Installation Manual and Operating and Maintenance
Manuals.
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2)
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Training
for operating and maintenance personnel for up to *** operators for the
PCS, with the option to add additional trainees under separate terms and
conditions to be negotiated by the Company and the
Customer.
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3)
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The
specific training to be conducted by the Company includes the following
major areas:
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PCS
Operations and maintenance
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Troubleshooting
(What if Analysis)
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Control
System Procedures (System Start-up, Processing & Shutdown
Protocols)
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One
(1) week of equipment familiarization orientation and training will be
conducted at the Company facility in Bristol, CT for the Customer
personnel indicated above.
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All
travel and living expenses for the Customer’s personnel during training
are the responsibility of the
Customer.
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General Representations and
Warranties
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Company
hereby warrants to Customer that:
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(1)
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it
has full power and authority to enter into this Agreement and perform its
obligations hereunder; and
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(2)
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it
has good and marketable title to Goods and Services or Equipment to be
delivered to Customer;
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(3)
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the
Goods and Services or Equipment to be provided hereunder do not infringe
any patent, copyright, trademark, trade dress or other intellectual
property right of any third party; and (ii) there is no pending
litigation, claim, opposition, reissue or reexamination proceeding
involving a patent or pending patent application or other intellectual
property similar thereto which could serve as the basis for any claim,
that would prevent or be likely to prevent Company from performing its
obligations hereunder or prevent Customer from using manufacturing,
selling or distributing the Good and Service or Equipment. Company will
promptly notify Customer of any such claim or any infringement claim or
any basis for such a claim, or of any such proceeding of which Company
becomes aware after effective date of this Agreement and throughout the
Term of this Agreement and/or the Term of any Distribution Agreement that
Customer may have with Company; and
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(4)
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neither
this Agreement nor compliance with the Agreement’s terms and conditions
will (i) violate any United States or foreign law, statute, rule or
regulation, or any order of any court or governmental instrumentality,
(ii) conflict with, result in any breach of, constitute a default under,
or result in any lien upon any of its property or assets pursuant to the
terms of any indenture, mortgage, deed of trust, license, franchise,
permit, agreement, patent or other instrument to which it is a party or to
which any of its property or assets is subject, or (iii) violate the
parties’ Certificate of Incorporation or
By-Laws.
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Customer
hereby warrants to Company that:
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(1)
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it
has full power and authority to enter into this Agreement and perform its
obligations hereunder; and
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(2)
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neither
this Agreement nor compliance with the Agreement’s terms and conditions
will (i) violate any United States or foreign law, statute, rule or
regulation, or any order of any court or governmental instrumentality,
(ii) conflict with, result in any breach of, constitute a default under,
or result in any lien upon any of its property or assets pursuant to the
terms of any indenture, mortgage, deed of trust, license, franchise,
permit, agreement, patent or other instrument to which it is a party or to
which any of its property or assets is subject, or (iii) violate the
parties’ Certificate of Incorporation or
By-Laws.
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(3)
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Customer
shall not reverse-engineer, fabricate, or cause to be fabricated a PCS
unit or equipment substantially equivalent
thereto.
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Customer
Requirements
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Provide
a Customer Facility (building) for installation of the Plasma Converter
System with all the required utility hookups at the Plasma Converter
System skid locations (i.e. appropriate electrical power, water
etc.).
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The
Company will provide technical supervision for the installation and
commissioning of the Plasma Converter System (PCS) equipment installation.
The Customer shall provide on-site contractor and craft labor and
construction equipment in support of Startech field personnel during
installation.
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Grant
to Company Personnel access to the Customer Premises, including the
System, Customer Facilities, and Customer Equipment, as may be necessary
or appropriate for Company to perform its responsibilities under this
Agreement.
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Customer
will provide all language translation for all documentation, if
necessary.
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Customer
will be responsible for all necessary permits to operate the PCS in the
designated facility as intended, providing that Company will supply
Customer all the information that is deemed necessary to obtain such
permits.
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Price and Terms of Goods and
Services
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In
consideration of Company's obligations as recited herein, the Customer
shall pay the Total Price of NINETEEN MILLION TWO HUNDRED SEVENTY FIVE
THOUSAND DOLLARS ($19,275,000 USD) for the two (2) 10 TPD (rated capacity)
and one (1) 5 TPD (rated capacity) integrated Plasma Converter Systems
specified in Exhibit D. The required payment milestone schedule is
included in Exhibit C. This Total Price shall not be subject to any
adjustments, except for incremental cost limited to those mentioned in
Exhibit D, changes in design or scope requested and approved by the
Customer the shipping costs to be paid by the Customer and the performance
insurance cost to be paid ***, which costs will be quoted at a later
time. The insurance cost which shall be paid by the Customer
and the Company and the agreement for such payment are stipulated in a
more comprehensive manner in a Letter Agreement executed on this same date
by and between the Company and the Customer. The Company and
the Customer agree to execute an amendment to this agreement, once the
final costs are determined, so that this Purchase Agreement will clearly
state the actual Total Price paid by the
Customer.
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In
addition to the Total Price, Customer shall duly report and pay all
international, federal, state, local, and other taxes, value added tax
(VAT), customs duties or other charges (other than income or franchise
taxes payable by Company) directly applicable to the sale, installation,
maintenance, or use of the System.
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Where
in any payment made by Customer to the Company pursuant to this agreement,
the value of unfixed materials and or goods has been included and
materials and or goods have been intended for the manufacture of the
integrated PCS and placed on or adjacent to the Company’s manufacturing
facility, the materials and or goods shall remain the property and
ownership of the Company. The Company shall be responsible for any loss or
damage, and the materials or goods shall not be removed, except for the
use in the manufacture of the
equipment.
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Customer
grants Company, and Company reserves, a purchase-money security interest,
as that term is defined pursuant to Articles One and Nine of the Uniform
Commercial Code, to the extent of all obligations of Customer to Company
under this Agreement, in all components of the System procured, installed
and/or delivered hereunder and in any proceeds that may arise in
connection with the sale or conversion thereof. Customer shall cooperate
with Company in filing financing statements covering such security
interest and authorizes Company to execute and file financing statements
without Customer's signature in any jurisdiction where such procedure is
authorized.
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All
amounts, other than the down payment, not paid by Customer within thirty
(30) days after such amounts become due and payable to Company shall bear
interest at the lesser of two percent (2%) per month or the maximum rate
of interest allowed by applicable
law.
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Other Terms and
Conditions
Indemnification
and Infringement
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Company
agrees to indemnify and hold Customer harmless from and against any and
all losses, liabilities, damages, actions or claims (including, without
limitation, amounts paid in settlement and reasonable costs of
investigation and reasonable attorneys’ fees and disbursements)
(collectively “Claims”), arising from (i) a breach of representations and
warranties made in this Agreement; (ii) a breach or non compliance by the
Company of its obligations under this Agreement; (iii) bodily injury and
property damage arising out of or resulting from the failure of the Goods
and Service or Equipment to meet the Specifications or due to Company’s
failure to comply with its obligations under this Agreement; (iv) loss,
injury or damage incurred by third parties or by Customer’s personnel or
damage to such persons’ property attributable to equipment malfunction due
to manufacturing defects; and (v) any claim that the Goods and Service or
Equipment, or the use or sale of Goods and Service or Equipment, infringes
any patents or other proprietary rights of a third party, including
without limitation, trade secrets, trademarks and
copyrights.
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It
is understood that the Company shall not be obligated to indemnify
Customer for Claims arising from the Customer’s negligent acts, omissions
or wrongful conduct in connection with the operation of the
PCS.
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Customer
agrees to indemnify and hold Company harmless from and against any and all
losses, liabilities, damages, actions or claims (including, without
limitation, amounts paid in settlement and reasonable costs of
investigation and reasonable attorneys’ fees and disbursements)
(collectively “Claims”), arising from (i) a breach of representations and
warranties made in this Agreement; (ii) a breach or non compliance by the
Customer of its obligations under this Agreement; (iii) bodily injury and
property damage arising out of or resulting from the misuse of the Goods
and Service or Equipment or due to Customer’s failure to comply with its
obligations under this Agreement; (iv) loss, injury or damage incurred by
third parties or by Customer’s personnel or damage to such persons’
property attributable to the Customer’s negligent acts, omissions or
wrongful conduct in connection with the operation of the
PCS.
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The
parties hereto agree and acknowledge that the indemnification obligations
provided hereunder are different and separate from the Company’s
obligations under the Product Warranty and the Performance Warranty
provisions. The Indemnification obligations stated herein shall extend for
a period of three (3) years from the Completion
Date.
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Confidentiality
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Customer
and Company agree that each will not disclose to any third party (other
than their respective attorneys or other persons related to either which
need to know such information), or utilize for its own benefit or that of
any third party, information regarding the terms of this Agreement and/or
any other agreements or contracts between the parties, unless the other
party shall provide its written consent to such
disclosure.
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Warranties
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Company
provides a *** Product Warranty for each integrated Plasma Converter
System (PCS) which warranty period shall commence on the Completion Date.
The specific warranty provisions are included as Exhibits A and B of this
contract.
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Company
provides a Performance Warranty that will be effective during system
startup and commissioning. The Performance Warranty will be that the
Company shall warrant and guaranty the proper and complete performance of
the Goods and Services/Equipment and Systems to be provided under this
Contract, which in turn will be verified by the Customer and the Company
by conducting a series of performance tests (the “Performance Tests”),
which tests shall be defined and agreed upon by both the Customer and the
Company upon final completion of the design of the System. The parties
hereto agree and acknowledge that the feed materials which will be used as
a design basis for the Performance Tests shall be Municipal Solid Wastes
and a material, to be specified and agreed between Customer and Company,
consisting of Pharmaceutical Manufacturing hazardous waste. The
Performance Tests shall be conducted at the time of start-up and
commissioning of the Equipment and the date of satisfactory completion of
the Performance Tests shall be defined as the “Completion Date”. In the
event that the system or any component thereof fails to meet the
Performance Tests which form part of the Performance Warranty then the
Company shall have the obligation to work diligently and without
interruption in order to make the necessary repairs and/or adjustments
necessary to satisfy the Performance Tests and thereby comply with the
Performance Warranty. In the event that the Company fails to get the
Equipment and System operating properly (to meet the Performance Tests)
within a period of *** from the date of installation, then the Customer
shall have the sole discretion to either give the Company additional time
to try to work to achieve compliance with the Performance Tests, or seek
any and all remedies available at
law.
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Performance
Insurance
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In
addition to the warranties and liability provisions provided within this
Purchase Agreement and Exhibit A, Company will obtain, with the active
assistance and involvement of Customer, insurance coverage on the Startech
system satisfactory to Customer and Company, where the cost for such
insurance will be paid *** and the portion paid by the Customer shall be
considered as addition to the cost of the purchased equipment. The details
for the transaction involving this insurance are stipulated in a more
comprehensive manner in a Letter Agreement executed on this same date by
and between the Company and the
Customer.
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Force
Majeure
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Neither
party shall be liable for any costs or damages attributable to
nonperformance (including delays on the part of Company in making
deliveries hereunder) arising out of any "Event of Force Majeure," which
shall consist of any cause not within its reasonable control and not due
to its fault or negligence.
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Each
party shall give the other party prompt notice of the occurrence of any
Event of Force Majeure that is expected to cause delay hereunder, and the
date of performance by any such party shall be extended for a period not
exceeding the period of delay caused by the Event of Force Majeure
identified in such notice.
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Dispute
Resolution
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Applicable
Law and Jurisdiction. This Sales Agreement shall be
governed by and be construed in accordance with the laws of the State of
Connecticut. The Company and the Customer agree and stipulate
that the Courts of the Judicial District of Hartford, Connecticut, at
Hartford, shall have jurisdiction and venue for purposes of all legal
proceedings arising out of or relating to this Sales Agreement, the other
agreements, and the transactions contemplated hereby. The parties hereto
may serve notice to each other by registered or certified mail, return
receipt requested, addressed to the respective party at the address
stipulated in the Notice provision included
herein.
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No
Strict Construction. The parties have hereto
participated jointly in the negotiation and drafting of this Sales
Agreement. In the event an ambiguity or questions of intent or
interpretation arises under any provision of this Sales Agreement, it
shall be construed as if drafted jointly by the parties thereto, and no
presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Sales
Agreement.
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Miscellaneous
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Approval. Except
as expressly required by this Agreement the parties agree that no order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or
public body or authority, or any subdivision thereof, or any other person
or entity, is required to authorize, or is required in connection with (i)
the execution, delivery and performance by it of this Agreement or (ii)
the legality, validity, binding effect or enforceability against it of
this Agreement.
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Entire
Agreement. Except for any Maintenance and Service Agreement that
may be entered into by the parties, this Agreement constitutes the entire
agreement between Company and Customer with respect to Company’s Goods and
Services to be supplied to the Customer in this Purchase
Agreement.
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Counterparts and
Headlines. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same agreement. The
headings of sections and paragraphs of this Agreement have been inserted
for convenience only, and do not constitute or modify any of the terms or
provisions hereof.
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Amendments. This
Agreement may be amended or modified only by a written instrument executed
by each party hereto expressly stating that it is an amendment to the
terms of this Agreement. Without limiting the generality of the
foregoing, all sales and purchases of Good and Service or Equipment
contemplated by this Agreement shall be made solely pursuant to the terms
of this Agreement.
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Severability. If
any provision or covenant of this Agreement shall contravene or be
illegal, invalid or unenforceable under the laws of any State, County or
jurisdiction in which this Agreement shall be performed or enforced, then
such contravention illegality, invalidity or unenforceability shall not
invalidate the entire Agreement. Such provision shall be deemed
to be modified to the extent necessary to render it valid, legal and
enforceable, and if no such modification shall render it valid, legal and
enforceable, then the Agreement shall be construed as if not containing
the provision held to be invalid, and the validity, legality and
enforceability of the provisions or covenants of this Agreement shall be
unaffected, and the rights and obligations of the parties shall be
construed and enforced accordingly.
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Assignment. This
Agreement shall be binding upon the successors and assignees of both
parties; provided, however, that no assignment shall be made by either
party without the prior consent of the other. Any attempt by either party
to assign this Agreement or any of the rights or duties hereunder contrary
to the foregoing provision shall be
void.
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Compliance with
Laws. In the performance of this Agreement, Company
shall comply with all applicable federal or national, state or regional
and local or municipal laws, regulations, ordinances, permits and orders,
including, without limitation, all environmental, health, safety, child
welfare, wage & hour, label and other workplace laws and regulation.
Company shall obtain all necessary permits and approvals and give all
stipulations, certifications and representations that may be required for
performance of the Agreement.
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Notices. All
notices, demands, requests, or other communications that may be or are
required to be given, served or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be mailed by
certified mail, return receipt requested, or by verifiable overnight
delivery postage prepaid, addressed at the address set forth beneath each
of the respective names of the parties hereto on the execution page of
this Agreement.
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All
notices to Company shall be directed to the following address:
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00
Xxxxxxx Xxxx
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Xxxxxx,
XX 00000
All
notices to Customer shall be directed to all the following
addresses:
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Corporate
Center @ Roosevelt Avenue
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6th Floor
Suite #603
#1445
Roosevelt Avenue, Corner Renaissance Street
San
Xxxxxxxx Xxxx
San Xxxx,
Puerto Rico 00920
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XX
XXX 00000
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XXX XXXX
XX 00000-0000
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000
Xxxx #0
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Xxxxxxxx,
XX 00000-0000
Each
party may designate by notice in writing a new address to which any
communication may thereafter be so given, served or sent. Each notice or
communication that is mailed or delivered in the manner described above shall be
deemed given at such time as it is delivered to the addressee (with the return
receipt or the delivery receipt being deemed exclusive evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in
duplicate by their duly authorized corporate officers as of the day and year
first above written.
ACCEPTED
BY;
PURCHASER
(Customer):
EnviroSafe
Industrial Services Corporation
By:
__________________________ Date:
________________________
Xxxxxxxx
Xxxxxx Xxxxx, X.X.
President
EnviroSafe
Industrial Services Corporation
SELLER:
Startech
Environmental Corporation
BY:
___________________________ DATE:
________________________
Xxxxxx X. Xxxxx
President & CEO