TERRACYCLE ZERO WASTE BAG COLLECTION SERVICES AGREEMENT
Exhibit 6.6
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE OF INFORMATION THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL
TERRACYCLE ZERO WASTE BAG COLLECTION SERVICES AGREEMENT
This TerraCycle Zero Waste Bag Collection Services and Licensing Agreement (“Agreement”) is entered into by and between HBSCO LLC. (hereinafter referred to as “HBS”) and TerraCycle US, LLC (hereinafter referred to as “TerraCycle”) (each herein a “Party” together the “Parties”) this ____12th ____day of __ October ____, 2022 (“Effective Date”).
Whereas, TerraCycle, based in Trenton, New Jersey, works with companies to develop platforms to collect and recycle traditionally hard to recycle or non-recyclable products and packaging, and to provide consultation to companies to effectively communicate such recycling to consumers and
Whereas, HBS is a waste management company based in Firestone, Colorado providing resource management expertise and services to residential, commercial, municipal and industrial customers, as well as homebuilders, in the areas of solid waste collection and disposal, transfer and recycling services, and
Whereas, the Parties wish to work together to integrate a TerraCycle’s Zero Waste Bag (the “ZW Bags”) into and along services being provided by HBS as described in more detail herein.
Now, in consideration of the mutual covenants and obligations set forth herein, the Parties agree as follows:
1. Term. Except as otherwise set forth herein, the term of this Agreement shall be for a period of 1 (one) year from the Effective Date (the “Initial Term”). This Agreement may be renewed for additional one (1) year terms (each a “Renewal Term”) as mutually agreed upon by both Parties in writing at least thirty (30) days prior to the end of the then current Term. The Initial Term together with any Renewal Terms shall be referred to herein as the “Term.”
2. Description of Program. The parties will operate a collection and recycling program (hereinafter “Program”) for hard-to-recycle materials defined in Exhibit 1 (“Accepted Materials”) leveraging TerraCycle ZW Bags and HBS collection, sorting and/or transportation services. The Program details are further described in Exhibit 2.
3. Scope of Services. The Parties shall provide services set forth below in connection with the Program.
a. | HBS Services: |
(i) HBS shall provide collection of all ZW Bags, sorting of ZW Bags from the mixed recycling, and where necessary and agreed upon, the delivery of empty ZW Bags.
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(ii) HBS shall also provide appropriate staging of ZW Bages until transportation of Material has been arranged as further described in Exhibit 2
(iii) PR and marketing support shall be provided as agreed to by the Parties in writing.
b. | TerraCycle Services: |
(i) TerraCycle shall design the collection ZW Bags and any other supplies as may be agreed to by the Parties in writing, and arrange for their manufacturing, in consultation with HBS.
(ii) TerraCycle shall sell ZW Bags directly to consumers and, where required by the Program, deliver ZW Bags to consumers.
(iii) TerraCycle shall also provide additional design, IT and marketing services, in consultation with HBS, as set forth herein or as may be agreed to by the Parties in writing.
4. | Grant of Licensing Rights. |
a. | HBS’s Grant. HBS has the right to license its trademarks, trade dress, trade names, logos, designs or variations thereof (“HBS Trademarks”) and hereby grants TerraCycle a non- exclusive, limited, royalty-free, license to use the HBS Trademarks solely in connection with its marketing and promotional materials for the promotion of the Program and only in the agreed upon Geographies for the Term of this Agreement. Any such use of Customer Trademarks shall be approved in advance by HBS. |
b. | TerraCycle’s Grant. TerraCycle has the right to license and hereby grants a royalty-free, limited, non-exclusive, non-transferable, revocable, license to use the TerraCycle name + Logo, TerraCycle Bag and TerraCycle Home, Zero Waste Bag trademarks (“TerraCycle Trademarks”) to HBS solely in connection with its marketing and promotional materials for the promotion of the Program and only in the agreed upon Geographies for the Term of this Agreement. Any such use of TerraCycle Trademarks shall be approved in advance by TerraCycle. |
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c. | Infringements. If either party learns that a third party may be infringing on the other party’s Trademarks, the party who learned of such infringement, shall promptly tell the other party and give other party any additional details that it knows about the use. The party whose Trademark is being infringed shall decide what action to take and the party who learned of such infringement will cooperate with the other party, at the other party’s expense, in any action it takes to stop all such infringements. |
5. | Advertising. |
a. | TerraCycle’s Advertising Materials. |
i. TerraCycle will send HBS draft copies of all advertising, promotional, press releases, and other materials bearing the HBS Trademarks (“TerraCycle Advertising Materials”) before TerraCycle prints them. TerraCycle will obtain HBS’s approval before producing them.
ii. HBS will use reasonable efforts to approve or disapprove any of TerraCycle’s Advertising Materials within five (5) business days.
iii. TerraCycle is responsible for ensuring that all of its Advertising Materials comply with all applicable laws, regulations, standards and industry practices.
b. | HBS’s Advertising Materials. |
i. HBS will send TerraCycle draft copies of all advertising, promotional, press releases, and other materials bearing TerraCycle’s Trademarks (“HBS Advertising Materials”) and obtain TerraCycle’s approval before distributing them.
ii. TerraCycle will use reasonable efforts to approve or disapprove any of HBS’s Advertising Materials within five (5) business days.
iii. HBS is responsible for ensuring that all of its Advertising Materials comply with all applicable laws, regulations, standards and industry practices.
c. | Marketing/Advertising Costs |
i. The Parties shall [*****] share all marketing costs associated with any and all marketing on which the Parties have agreed to in writing, in an amount not to exceed [*****] per party, for a total of $[*****] for the Term unless agreed otherwise in writing. Payment shall be made within thirty (30) days of presentation of invoice. Parties shall submit documentation (which may be an invoice) which substantiates the marketing costs submitted for allocation between the parties.
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ii. To the extent a Party incurs a cost associated with marketing which has not been mutually agreed to by the parties, the Party incurring that cost shall be solely responsible.
iii. Only directly incurred marketing and advertising costs shall be subject to allocation between the parties. Time spent by respective corporate employees, etc. shall not be charged to either Party (by way of example, an individual hired to hold a sign marketing the service may be included in marketing costs to be allocated).
iv. To support marketing and advertising efforts, and to expand participation, TerraCycle shall make best efforts to deliver three (3) or more brand-sponsored TerraCycle ZW Bag events, in which consumer brands fund the service for select materials, during the course of the Initial Term.
v. The Parties may agree to promotions such as the offer of a free ZW Bag for customers who purchase several ZW Bags at one time. In the event the parties agree to such a promotion, the Base Price of the free ZW Bag shall be absorbed [*****] between the parties. As TerraCycle is purchasing the ZW Bags, HBS’s [*****]% share of any free ZW Bags shall be paid to TerraCycle as provided for in Paragraph 5 below.
vi. The Parties may also agree to additional promotions and marketing such as setting aside agreed upon amounts from ZW Bag sales to be utilized for the construction and installation of benches made from recycled materials. In the event the Parties agree to such a promotion, the amounts to be set aside from ZW Bag sales shall be in [*****] amounts. For example, if the Parties agree to withhold $[*****] from each ZW Bag sale, $[*****] shall come from each Party. TerraCycle shall invoice HBS as provided for in Paragraph 5 below.
5. | Payments and Fees. |
a. Service Fee to HBS. Specific pricing is defined in the Pricing Schedule within Exhibit 2. The parties may elect to change the pricing upon mutual agreement in writing. Changes in pricing shall be reasonable and consent to such change shall not be unreasonably withheld. To the extent new ZW Bags, products or waste streams are added which may impact pricing, the Parties shall consult as to any adjustments in pricing. The amount due HBS, based on the Pricing Schedule set forth in Exhibits 2 shall be paid by TerraCycle to HBS within thirty (30) days after the end of each quarter. For the avoidance of doubt, and by way of example, if within the first quarter upon commencement of the program TerraCycle sells [*****] large ZW Bags for a total of $[*****], HBS would be entitled to $[*****] which shall be paid by TerraCycle to HBS within thirty days after the end of the quarter.
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c. Marketing Costs. TerraCycle shall invoice HBS for HBS’s share of the [*****]% share of agreed upon marketing costs as provided for Paragraph 4(c) and any other agreed upon costs as provided for subparagraphs 4(c)(v) and (vi) above. TerraCycle shall invoice these amounts quarterly and HBS shall make payment on the invoices within thirty (30) days of receipt of invoice.
6. | Exclusivity |
The Parties agree that the exclusivity restrictions shall only apply to B2C programs, and must include the elements of a bag-based (for the avoidance of doubt this shall also mean “bags”) capture of a wide range (For the avoidance of doubt, wide range shall more than 1) of hard to manage materials, all to be recycled, via the usage of sponsored and/or or consumer purchased bags, and not B2B programs operated by HBS.
8. | Warranties. |
a. The Parties hereby represent and warrant that the making of this Agreement: (i) does not violate any agreements, rights or obligations of any person, firm or corporation, (ii) exhibit and conduct behavior in a manner consistent with the high image, reputation and credibility of HBS and HBS activities, and (iii) not engage in any activities that reflect adversely on HBS.
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b. HBS hereby represents that it will use best efforts to maintain those ZW Bags that are stored in its warehouse, in good order and support the Program. So long as the ZW Bags contain Accepted Material, HBS also represents that no ZW Bags (or contents therein) will be incinerated or sent to landfill, except in the event of broken ZW Bags, missed ZW Bags (defined as those either missed by MRF employees, inadvertently not separated out of regular recycling, etc), and/or ZW Bags otherwise known to contain non-compliant Material. During the Initial Term, HBS will keep record of any known broken, missed, or non-compliant ZW Bags.
c. Without limiting the foregoing, the Parties shall: (i) ensure its performance and all Services are provided in a timely and professional manner by appropriately skilled personnel, (ii) conform to reasonable industry standards for quality, and (iii) are free from material errors or defects, and are performed in compliance with (and will not cause or create any violation of) any and all applicable laws and regulations.
9. | Indemnification. |
“Claim” means any claim for an out-of-pocket expense, liability, damage, injury, loss, claim, suit, judgment, and expense (including reasonable legal fees and court costs).
“Indemnifying Party” means the party required to indemnify under this Section. Each party is responsible under this Section for the actions of its directors, officers, employees, agents, and subcontractors.
“Indemnitee” means the party or individual entitled to indemnification (including the party’s affiliates, shareholders, directors, officers, employees, agents, subcontractors, suppliers, and customers).
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The Indemnifying Party may take over the defense of any indemnified Claim upon notice to the Indemnitee, in which case the Indemnitee agrees not to admit liability, settle, compromise, or discharge the Claim. If an Indemnifying Party refuses to take over an indemnified Claim, then it must pay the Indemnitee’s counsel’s fees and expenses.
The Indemnifying Party will pay to an Indemnitee, payments relating to an indemnified Claim within fifteen (15) days after written demand for payment from the Indemnitee.
11. | Insurance. |
a. The Parties will maintain, at their respective cost, commercial general liability insurance (sometimes called public liability insurance) covering its obligations under this Agreement from a carrier with an AM Best rating of at least A-VII (or the equivalent) with combined single limits of at least the equivalent of [*****] per occurrence and in the aggregate of not less than [*****] with respect to products and completed operations liability.
b. The Parties must comply with the applicable workers’ compensation legislation in force in the location where they are doing the work. Each Party shall also carry Employer’s Liability insurance with limits of at least [*****] may use primary plus umbrella coverage to reach the required limits.
c. Automobile Liability Insurance covering hired, owned and non-owned vehicles with coverage of at least [*****] per occurrence, combined single limit for bodily injury and property damage;
d. At any time that either Party may reasonably request it, a Party must provide a certificate of insurance that shows that these required coverages are in place and confirms that the other Party shall receive at least thirty (30) days’ prior written notice of any cancellation, termination, or material change in coverage. Both Parties must maintain all insurance required under this Section for as long as this Agreement is in effect. All required insurance coverages must be on an occurrence basis.
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12. | Term and Termination. |
Termination: Either party may terminate this Agreement by written notice to the other at any time if that other party: (a) commits a breach of this contract and, in the case of a breach capable of remedy, it fails to remedy the breach within fourteen (14) business days of being required to do so in writing (unless otherwise agreed upon by the parties); or (b) becomes insolvent, or has a liquidator, receiver, manager or administrative receiver appointed. Either party may terminate this Agreement for any reason whatsoever, and without any cause necessary, upon ninety (90) days written notice to the other party.
13. | Confidentiality. |
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14. | Resolving Disputes. |
(a) Disputes. If a claim or dispute arises out of this Agreement or its performance, the parties agree to endeavor in good faith to resolve it equitably through negotiation or mediation or, if that fails, through non-binding arbitration under the rules of the American Arbitration Association, before having recourse to the courts. Mediation and arbitration shall take place at a location mutually agreed to by the parties However, prior to or during negotiation or mediation, either party may initiate litigation that would otherwise become barred by a statute of limitations.
15. | General Provisions. |
e. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware and all claims relating to or arising out of this contract, or the breach thereof, whether sounding in contract, tort or otherwise, shall likewise be governed by the laws of the State of Delaware.
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IN WITNESS WHEREOF, XxxxxXxxxx and HBS have executed this Agreement as of the Effective Date.
HBSCO LLC (“HBS”) | TerraCycle US, LLC (“TerraCycle”) | |||
By: | /s/ Xxxxx Xxxxxxxxxx | By: | /s/ Xxxxxx Xxxxx | |
Name: | Xxxxx Xxxxxxxxxx | Name: | Xxxxxx Xxxxx | |
Title: | CEO | Title: | General Counsel | |
Date: | 10/12/2022 | Date: | October 14, 2022 |
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The Company agrees to furnish supplementally a copy of any omitted schedule to the Commission upon request.
EXHIBIT 1
ACCEPTED MATERIALS
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EXHIBIT 2
MODEL 1
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EXHIBIT 3
AGREED UPON GEOGRAPHIES FOR LAUNCH OF PROGRAM
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EXHIBIT 4
GEOGRAPHIES IN WHICH HBS OPERATES
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