Exhibit 10.5
OPERATIONS AND MAINTENANCE AGREEMENT
BETWEEN XXXXX XXXXXXX d/b/a FAIRPLAY SHREDDING, LLC,
INDEPENDENT CONTRACTOR
AND RIPE TOUCH GREENHOUSES, INC., OWNER
1. THIS AGREEMENT outlines the relationship, duties, and responsibilities
between: Xxxxx Xxxxxxx d/b/a/ Fairplay Shredding, LLC, located in El Paso
County, Colorado, referred to herein as "Fairplay;" and Ripe Touch Greenhouses,
Inc., a Delaware corporation, with their place of business located at Castle
Rock, Colorado, referred to herein as "Ripe Touch."
2. RIPE TOUCH ENGAGES FAIRPLAY to operate and maintain a tire shredding
operation at a location in El Paso County, Colorado where Ripe Touch will
maintain a business enterprise. Ripe Touch will specifically locate the site on
their business property for the tire shredding operation. The tire shreddings
will be used as an energy source for Ripe Touch's business enterprise.
3. FAIRPLAY SHALL BE RESPONSIBLE for the following on-site activities and
related duties:
a. Day to day on-site operation of tire shredding process to insure
adequate supply of shredded tires necessary to meet energy demands of Ripe Touch
enterprise on site;
b. Employ sufficient employees at a reasonable rate and competitive salary
or wage to operate tire shredding machine and related tire feeding operation;
parties estimate at this date the number of employees needed is seven; final
determination of number of employees, consistent with reasonable and safe
operation of this process and consistent with applicable safety and labor
practices, shall be made at the discretion of Fairplay; however, Ripe Touch
shall have the right to approve or disapprove such salaries or wages for the
employees, with such approval not to be unreasonably withheld, considering
competitive salaries and wages in the local economy.
c. Perform routine and periodic preventative maintenance on tire shredding
machinery;
d. Fairplay shall provide appropriate training and supervision of employees
for the safe conduct of tire shredding operations, operation of tire shredding
machinery, and periodic and preventative maintenance on tire shredding
machinery;
e. Fairplay shall timely inform Ripe Touch of shredding machine breakage
and the need for repair parts and outside labor for machine repair, in order to
minimize down time of this operation;
f. Fairplay shall have available for inspection, if requested by Ripe
Touch, current documentation to verify costs for outside labor or parts
necessary to maintain and operate tire shredding equipment and machinery;
g. Fairplay shall be responsible for payment of all state, local, federal,
and unemployment taxes for employees as well as any other required xxxxxxx
compensation or other required insurance premiums, subject to reimbursement by
Ripe Touch; Fairplay shall have available for inspection, if requested by Ripe
Touch, timely updated books or documentation showing monthly amounts of wages
and above noted taxes;
h. Fairplay shall be expected to conduct tire shredding operations not more
than six days per week and not more than twelve (12) hours per day, or as
necessary to keep a minimum of 24 hours supply of tire shreddings for use by
Ripe Touch or an adequate supply of shredding for normal and routine operations
for the season, unless the operation of the tire shredding process is
interrupted by acts of God, strikes, operation of law, war time limitations, or
any other event beyond the control of Fairplay.
4. RIPE TOUCH SHALL BE RESPONSIBLE for the following activities:
a. Provide, by either purchase or rent or other methods of their choice, a
tire shredding machine assembled on-site and ready for operation on a day to be
determined by the parties as the start work date;
b. Timely inform Fairplay of time and date of shredder's delivery and
assembly on-site, so that Fairplay and its employees may observe or participate
as necessary preparatory to their learning to operate and maintain the machine;
c. Compensate Fairplay as follows: Effective 25 November, Ripe Touch shall
compensate Fairplay in the amount of Three Thousand dollars ($3,000.00) per
month until such time as power generation begins, and subsequent months
thereafter Ripe Touch shall compensate Fairplay in the amount of Fifty Thousand
dollars ($50,000.00) per year for a period of five years at the rate of Four
Thousand One Hundred Sixty-six dollars and 67/100 ($4,166.67) per month payable
one month in advance, commencing on the lst of the month. These amounts may be
prorated if the start work date for this agreement begins on a day other than
the first day of given month. Ninety days prior to the end of five years (sixty
months) of operation, parties agree to begin negotiations for renewal of this
agreement as to terms concerning compensation and current market and
inflationary changes; and for volume increase, if applicable, of the tire
shredding operation. In the event the parties hereto can not reach an agreement
as to the renewal of this agreement then the parties agree to submit their
dispute to binding arbitration. Such arbitration shall be before three
arbitrators, with each party hereto to select one arbitrator, and those two
arbitrators will then select the third arbitrator, subject to approval of the
parties. In the event that the third arbitrator can not be mutually agreed upon
within 14 days, then Xxx Xxxxxxxxx shall be the third arbitrator. In the event
Xxx Xxxxxxxxx is unavailable for any reason, then the third arbitrator shall be
selected by the Chief Judge for the El Paso County District Court.
d. Compensate Fairplay Ten Thousand dollars and 00/100 ($10,000.00) on the
first of each month for Fairplay's costs, to include wages, Fairplay's
contributions to employee taxes and benefits, taxes, insurance, licenses and
fees, and all other costs required of an employer on behalf of its employees
that are specifically employed for shredding operations at the Ripe Touch
enterprise in El Paso County, Colorado, as well as costs associated with running
the plant. This amount incurred by Fairplay shall be submitted monthly on the
first of each month by Fairplay to Ripe Touch. If the amount of costs incurred
by Fairplay in any given month shall be less than Ten Thousand dollars and
00/100 ($10,000.00), then Ripe Touch shall be entitled to a set-off of that
amount against the Ten Thousand dollars and 00/100 ($10,000.00) payable to
Fairplay the following month.
e. Such Ten Thousand dollars and 00/100 ($10,000.00) paid monthly to
Fairplay by Ripe Touch shall reimburse Fairplay for any invoices submitted for
any parts or supplies Fairplay purchased to maintain or repair tire shredding
machinery. Said invoices should be delivered to Ripe Touch no less than five
days prior to the first of each month. Any amounts expended or incurred by
Fairplay in excess of Ten Thousand dollars and 00/100 ($10,000.00) in any given
month shall be paid by Ripe Touch to Fairplay by the fifth of the month,
following receipt by Ripe Touch of such invoice or xxxx.
f. Ripe Touch shall forthwith pay any invoice directly to Fairplay or the
supplier for any part, supply, or other cost which exceeds Two Thousand dollars
($2,000.00).
g. Ripe Touch has the authority to approve or disapprove of any and all
costs incurred by Fairplay under this Agreement; however, such approval shall
not be unreasonably withheld, particularly if it affects the ability of Xxxxxxx
or Fairplay to perform under this Agreement.
h. TIRE DISPOSAL PRICING: Xxxxxxx, to fulfill the supply of tires
requirement of this agreement, will need to supply Ripe Touch with approximately
2 million tires per year. To reach that supply goal, Ripe Touch will have to
charge a competitive price to induce suppliers of used/discarded tires to
dispose of tires with Ripe Touch or Xxxxxxx. To this end, Ripe Touch agrees to
charge a competitive disposal fee per tire which will not only maximize profits,
but will induce suppliers of used/discarded tires to bring such tires to
Xxxxxxx, one of his businesses, or Ripe Touch for disposal. Any disputes
regarding the price charged by Ripe Touch for tire disposal will be settled
utilizing the binding arbitration procedure contained herein.
5. ACCESS TO AND USE OF REAL PROPERTY owned and used by Ripe Touch for this
enterprise shall be granted to Xxxxx Xxxxxxx d/b/a Tire Broker or Fairplay for
the duration of this agreement; Xxxxx Xxxxxxx d/b/a Tire Broker or Fairplay
shall be granted additional use, rent free, of not more than two acres of land
adjacent to the on-site tire shredding operation owned by Ripe Touch for Xxxxx
Xxxxxxx d/b/a/ Tire Broker or Fairplay's exclusive use for tire sorting,
processing, and storage as Fairplay so chooses.
6. START WORK DATE is the date this agreement becomes effective and is a
date to be determined by the parties; this date should include sufficient time
for Fairplay to familiarize and train employees for tire shredding operations
and machinery, prior to Ripe Touch demands for tire shreddings needed as an
energy supply.
7. DURATION of this agreement is for the lifetime of Ripe Touch's El Paso
County, Colorado enterprise/venture so long as it involves the use of tires.
8. NON-COMPETITION AND AGREEMENT NOT TO CIRCUMVENT: The parties hereto
further agree not to compete in a substantially similar operation or endeavor
involving tire shredding for fuel source along the Colorado front range for a
period of twenty (20) years.
The parties further agree not to take any action, including investment, which
will circumvent this agreement or the Equity Agreement.
9. THIS AGREEMENT IS FURTHER INTEGRATED with and contingent upon the
execution of separate "Equity Agreement" between Fairplay (or Xxxxx Xxxxxxx) and
Ripe Touch contained in a separate document.
10. NOTICES between the parties shall be in writing and sent by certified
mail with return receipt to the following addresses:
a. Ripe Touch: X.X. Xxx 00, Xxxxxx Xxxx, XX 00000
b. Tire Broker: 0000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxx
Xxxxxxx, XX 00000
11. ENFORCEMENT OF AGREEMENT: In the event either party must take steps to
enforce this agreement, the prevailing party shall be entitled to reimbursement
of accrued and actual attorney fees and costs including, but not limited to,
expert witness fees and other litigation costs.
12. INDEMNIFICATION: Ripe Touch agrees to indemnify and hold harmless
Fairplay and/or Xxxxx Xxxxxxx, for any and all attorney fees, costs, fines,
assessments, penalties, or other charges which he may incur or be subject to in
the good faith running of this tire shredding operation, or thereafter.
Additionally, Fairplay agrees to indemnify and hold harmless Ripe Touch for
any and all attorney fees, costs, fines, penalties or other charges that Ripe
Touch may incur as a result of the negligence or intentional torts of Fairplay
or its agents. Such indemnification by Fairplay shall not extend to any EPA or
environmental clean-up actions resulting from the operation of this plant by
Ripe Touch.
13. ACTS OF GOVERNMENT: Ripe Touch agrees to indemnify and hold harmless
Xxxxx Xxxxxxx and/or Fairplay for any local, county, state or federal
governmental action, lawsuit, assessment, fine or penalty relative to the good
faith operation of this tire shredding business.
14. SEVERABILITY: In the event any part or parts of this agreement,
including the "Equity Agreement," are found by a Court or Administrative Law
Judge to be unenforceable, void as against public policy, or unconscionable,
then the offending portions shall be void, with the remainder of such agreement
to remain in full force and effect.
15. CONTROLLING LAW: The laws of the State of Colorado shall govern the
interpretation and enforcement of this agreement, including the "Equity
Agreement." Any and all litigation or arbitration relative to the enforcement or
interpretation of this agreement shall be in the El Paso County Courts, unless
the parties specifically agree otherwise in writing.
/s/ 4/15/97
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For Ripe Touch Greenhouses, Inc/ Date
/s/ 4/15/97
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For Fairplay Shredding, LLC/ Date
