AGREEMENT
UNION PACIFIC RAILROAD COMPANY
AND
TIETEK, INC.
Confidential treatment has been requested for portions of this exhibit. The
copy filed here omits the information subject to the confidentiality request.
Omissions are designated as XXXXX. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
AGREEMENT
This Agreement (the "Agreement") is made by and between TIETEK, INC.
("TieTek") and UNION PACIFIC RAILROAD COMPANY ("UP" or "Railroad"). TieTek and
UP are collectively referred to as "Parties" and sometimes individually referred
to as a "Party".
WHEREAS, UP desires to purchase from TieTek, and TieTek desires to
sell to UP, certain composite cross ties ("Cross Ties") manufactured by TieTek
at its facility at 00000 Xxxx Xxxxx Xxxx, Xxxxxxx, XX (the "Facility").
NOW, THEREFORE, the Parties herein agree to the following terms and
conditions:
1. CROSS TIES.
Each Cross Tie will be a 7"x9"x9' product manufactured according to the
specifications and minimum technical data set forth in Schedule A, attached
hereto and by this reference made a part hereof, as modified from time to time
by written mutual agreement of the Parties (the "Specifications").
2. QUALITY.
The following actions will be taken in an effort to improve, during the
term of this Agreement, the quality of Cross Ties sold to UP by TieTek
hereunder:
(1) TieTek will provide to UP a quality assurance process, including
written confirmation that Specifications have been met for each Cross
Tie sold to UP;
(2) The Facility will be accessible to UP quality control personnel upon
reasonable request during normal business hours and will inform UP of a
need for inspection once agreed upon number of ties have been
manufactured; and
(3) TieTek will seek ISO 9000 Quality Certification for the Facility and
manufacturing process, working with UP's Engineering and Supply
Departments during the term of this Agreement.
3. TERM.
Except as otherwise provided herein, the initial term of this Agreement
shall be from March 1, 2000 through February 28, 2002 (the "Initial Term");
provided, however, that UP shall have the option to extend this Agreement for a
period of two (2) years beyond the Initial Term (the "Extension"), subject only
to the Parties' agreement upon the purchase price per Cross Tie and the Cross
Tie production schedule during the Extension; and, provided, further, that
either Party may terminate this Agreement at any time during the Initial Term or
the Extension upon the giving of one (1) year's prior written notice of
termination to the other Party.
4. PRICE.
The purchase price per Cross Tie during the Initial Term shall be as set
forth below; provided, however, that in recognition of the special relationship
and development history between UP and TieTek, the purchase price per Cross Tie
charged UP hereunder shall not exceed the purchase price per Cross Tie charged
by TieTek to any other of its customers during the term of this Agreement. Each
volume level must be completed before the next volume level pricing is
effective.
QUANTITY DURING TERM OF AGREEMENT PURCHASE PRICE PER CROSS TIE
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XXXXX Ties $XXXXX
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XXXXX Ties $XXXXX
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XXXXX Ties $XXXXX
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XXXXX Ties $XXXXX
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XXXXX Ties $XXXXX
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XXXXX XXXXX
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5. PRODUCTION SCHEDULE; PERFORMANCE.
TIETEK CROSS TIE PRODUCTION SCHEDULE
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YEAR 2000 UP
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January 2000 XXXXX
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February 2000 XXXXX
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March 2000 XXXXX
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April 2000 XXXXX
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May 2000 XXXXX
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June 2000 XXXXX
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July 2000 XXXXX
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August XXXXX
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September 2000 XXXXX
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October 2000 XXXXX
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November 2000 XXXXX
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December 2000 XXXXX
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TOTAL: XXXXX
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YEAR 2001 UP
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January 2001 XXXXX
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February 2001 XXXXX
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March 2001 XXXXX
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April 2001 XXXXX
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May 2001 XXXXX
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June 2001 XXXXX
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July 2001 XXXXX
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August 2001 XXXXX
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September 2001 XXXXX
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October 2001 XXXXX
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November 2001 XXXXX
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December 2001 XXXXX
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TOTAL: XXXXX
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2-YEAR TOTAL: XXXXX
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TieTek shall meet the following minimum performance requirements; provided,
however, that TieTek will not be required to exceed the production schedule set
forth above. TieTek shall use all reasonable efforts to exceed such minimum
performance requirements if so requested by the UP Representative (as such term
is defined below):
(1) Band XXXXX Cross Ties/Week during 2000: Band XXXXX Cross Ties/Week
during 2001.
(2) Load XXXXX Cross Ties/Week during 2000; Load XXXXX Cross Ties/Week
during 2001.
(3) XXXXX
(4) XXXXX
6. FORECAST FOR CAPITAL EXPENDITURES.
TieTek will spend a minimum of $1.5 million at the Facility from November
1999 to February 28, 2002 to provide the Facility with on-going safety, quality
and productivity improvements which will ensure that TieTek will meet or exceed
the minimum technical data set forth in Schedule A.
7. UNION PACIFIC REPRESENTATIVE.
UP, in its sole discretion, shall assign to the Facility, as needed on a
full or part time basis, one or more representatives (each, a "UP
Representative") to accept or reject Cross Ties in a timely manner and to
otherwise act on behalf of UP in all matters pertaining to this Agreement.
TieTek shall, without cost to UP, furnish any such UP Representative with
suitable office space
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with telephone and necessary computer equipment (fax, PC, keyboard and printer)
at the Facility. TieTek to xxxx cars using UP Internet billing procedures.
8. RIGHT TO REJECTION AND INSPECTION.
UP shall have the right, through the UP Representative(s), to reject, prior
to shipment from the Facility, any Cross Ties not meeting the requirements of
Schedule A of this Agreement, the right of access to the Facility, the right to
inspect and test the Cross Ties at the Facility and the right to inspect the
handling of all Cross Ties. The basic records of TieTek, insofar as they relate
to this Agreement, shall be open at all reasonable times to inspection by the UP
Representative(s) during regular office hours.
9. FORCE MAJEURE.
In the event of fire, flood, drought, earthquake, windstorm, accident,
explosion, war, civil commotion, act of governmental authority, labor trouble,
embargo, transportation failure, reduced supply of materials, breakage of
machinery or apparatus, inability to obtain from regular sources of supply any
commodity necessary or customarily used in the performance of this Agreement, or
any other circumstances beyond the reasonable control of a Party hereto,
preventing such affected Party from fulfilling, in whole or in part, its
obligations hereunder, such obligations shall be so suspended during the period
of such occurrence without liability on the part of the affected Party, but this
Agreement shall otherwise remain unaffected,
10. XXXXX
XXXXX.
11. ENVIRONMENTAL AND OTHER CONCERNS.
Nothing contained herein shall be construed or interpreted as making UP a
generator of hazardous substances or wastes or an operator of a treatment,
storage or disposal facility pursuant to the provisions of the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA), the Resource
Conservation Recovery Act (RCRA), or any state statute governing the generation,
treatment, storage and disposal of hazardous substances or wastes.
TieTek shall assume and be responsible for all compliance with the
provisions of RCRA, CERCLA and any state statute governing the generation and
handling of hazardous substances or wastes at the Facility,
If, notwithstanding the provisions of this Section, UP shall be interpreted
to be a hazardous substance or waste generator or operator of a treatment,
storage or disposal facility under RCRA, CERCLA or any state statute governing
the treatment, storage and disposal of hazardous waste, as a result of the
activities provided for hereunder which occur at the Facility, TieTek agrees to
indemnify, hold harmless and defend UP for any and all costs, damages or
expenses of any sort resulting from such an interpretation.
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12. SHIPPING.
Cross ties will be banded in 15-piece bundles and will be priced FOB the
Facility, loaded in gondola cars or equivalent. During the initial period of
operation until and if a rail spur and siding is constructed, TieTek will load
the Cross Ties in railcars on the UP freight track in Houston, Aldine Team Track
third track, not mainline, opposite the Facility. TieTek will execute a UP
"Contractor's Release of Liability" form prior to commencing loading of ties at
the Aldine Team Track. XXXXX. XXXXX.
XXXXX.
TieTek and UP will work cooperatively in good faith to expedite the
construction of a rail spur and siding into the Facility. XXXXX. XXXXX.
Responsibility for cost of rail, ballast and switch(es) will be negotiated at
the time a final decision is made on rail spur and siding.
13. TERMS OF SALE.
This Agreement will serve as the basis for purchase orders from UP. TieTek
will invoice UP, under such purchase orders, when Cross Ties are shipped to UP
from the Facility. TieTek's invoice will reflect Cross Ties shipped FOB the
Facility loaded in UP contracted trucks or UP railcars and will be due and
payable in thirty (30) days after receipt, in UP's Accounting Department, Omaha,
NE, of correct invoice and signed shipping document indicating car numbers or
truck numbers. TieTek to be EDI purchase order and invoice ready by March 1,
2000.
14. TECHNICAL ASSISTANCE.
TieTek will provide field support for handling and installation of Cross
Ties when requested by UP Supply and/or Engineering Departments.
15. TIETEK CROSS TIE DISPOSAL.
TieTek will accept Cross Ties discarded or replaced by UP. TieTek will
credit UP with a recycling payment of XXXXX Dollars ($XXXXX) per Cross Tie
delivered to TieTek's Facility or other mutually agreeable location.
16. GOVERNING LAW.
The construction and Interpretation of this Agreement shall be in
accordance with the laws of the State of Nebraska and the applicable laws of the
United States.
17. NOTICE.
Any notice required or permitted hereunder shall be deemed to have been
properly given when made in writing and delivered personally to an officer of
the party for whom it is intended or upon mailing the notice by registered or
certified mail to the following address:
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If to TieTek: TieTek, Inc.
00000 Xxxx Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
ATTN.: Xxxxx X. Xxxxxxxx
FAX: 000-000-0000
If to UP: Union Pacific Railroad Company
Supply Department
0000 Xxxxx Xxxxxx, Xxxx 000
Xxxxx, Xxxxxxxx 00000-0000
ATTN.: Xxxx X. Xxxxxx
FAX: 000-000-0000
18. AMENDMENTS.
This Agreement shall not be modified, amended or otherwise varied by any
oral agreement or representation, and all modifications, amendments and
variations shall be by an instrument in writing executed by the Parties hereto.
19. ASSIGNMENT.
This Agreement may not be assigned, in whole or in part, by either Party
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld.
20. NO PARTNERSHIP.
Nothing in this Agreement shall in any way be construed to make the Parties
partners, joint venturers, agents, servants or employees of one another and no
such relationship is intended.
21. CONFIDENTIALITY.
During the performance of each Party's obligation under this Agreement,
each Party may obtain confidential and/or proprietary information from the other
Party which is identified in writing as such. Each Party agrees that all such
information, whether technical, financial, business or other nature, shall be
held in confidence and not used to the detriment of the disclosing Party by the
non-disclosing Party. This Section shall not apply to any information which (a)
is now or hereafter (by operation of law) becomes information in the public
domain, (b) can be shown by a Party to have received on a non-confidential basis
from a third Party who did not acquire same, directly or indirectly, from the
other party, (c) can be shown by a Party to have been developed without access
to any confidential information otherwise covered by this Section, (d) is
required to be disclosed as a matter of law, or (e) is required to be disclosed
pursuant to written agreement between the Parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement this 31
day of January, 2000.
TIETEK, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: President
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UNION PACIFIC RAILROAD COMPANY
By: /s/ Xxx Xxxxx
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Name: Xxx Xxxxx
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Title: President
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SCHEDULE A
(PAGE 1 OF 3)
SPECIFICATIONS
1. Material: Polymer (plastic) component consisting of polyolefins, vulcanized
rubber polymeric component, reinforcements, additives, fillers and not toxic
preservatives,
2. Dimensions: 7"x9"x9' Cross Ties will have the following characteristics:
a. Width/thickness (-0" + 1/2") of specified size.
b. Length: (-1/2" + 2") of specified size.
c. Flatness in the rail seat area: XXXXX" concave and/or XXXXX" convex
maximum.
3. General Quality: Every Cross Tie will be inspected visually and by
nondestructive test methods to detect any defects that will affect their
strength, utilization or durability as Cross Ties such as: dimensions,
surface imperfections and manufacturing defects. XXXXX.
4. Inspection:
a. Facility: Cross ties, process and procedures will be open to inspection
and review during normal business hours, subject to the terms of
confidentiality under Article 21 of this Agreement.
b. No void greater than 1/2" in diameter and 6" long will be allowed within
1 1/2" of any surface of the Cross Tie.
c. XXXXX.
5. Straightness/Twisting Defects: Any Cross Tie which does not meet the
following characteristics of good manufacturing will be rejected:
No Cross Tie will deviate from straightness by more than 1" along its
length. Straightness will be measured from any edge of a Cross Tie to a
straight line parallel to the edge of the Cross Tie. This will be true for
the top to bottom of the Cross Tie, as well as from side to side of the
Cross Tie.
6. Any Cross Tie not meeting the above Specifications will be rejected.
7. XXXXX.
SCHEDULE A
(PAGE 2 OF 3)
8. Shipping:
a. Trucked Cross Ties - All trucked Cross Ties will have a prenumbered
shipping ticket accompanying each truckload. Each load will have
adequate dunnage to allow forklift unloading
b. Rail Cross Ties - All Cross Ties will be loaded securely in gondolas or
centerbeam cars, with each car loaded to the maximum practical capacity.
c. All Cross Ties will be bundled in groups of 15 and banded (2 each) with
1 1/4" .029 high tensile banding.
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SCHEDULE A
(PAGE 3 OF 3)
MINIMUM TECHNICAL DATA
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APPEARANCE Xxxx to matte black
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SIZE 7"x9"x9'(other sizes by special order)
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WEIGHT 235 to 260 lbs. For standard size
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SURFACE HARDNESS XXXXX
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DENSITY XXXXX
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THERMAL EXPANSION XXXXX
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MODULUS OF RUPTURE XXXXX
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MODULUS OF ELASTICITY XXXXX
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COMPRESSION XXXXX
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SPIKE INSERTION XXXXX
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SPIKE LATERAL XXXXX
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SPIKE WITHDRAWAL XXXXX
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RESISTIVITY XXXXX
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SINGLE TIE PUSH XXXXX
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XXXXX XXXXX
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XXXX
XXXX
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