EXHIBIT 10(kkkk)
177
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TIREX AMERICA INC.
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EQUIPMENT LEASE AND PURCHASE AGREEMENT
Equipment Lease and Purchase Agreement, made, as of the 29th day of May
1997, between:
Oceans Tire Recycling & Processing
Co., Inc., a New Jersey Corporation
0000 Xxxxxxxx Xxxx
Toms River, N.J. 08755
(the "Operator")
and
Tirex America Inc.
3767 Thimens, Suite 000
Xxxxx Xx. Xxxxxxx
Xxxxxx, Xxxxxx X0X 0X0
(the "Manufacturer")
1. DEFINITIONS
1.1 "Acceptance Date" shall mean the first day following the completion
of the Test Period.
1.2 "Anticipated Delivery Date" shall mean September 15, 1997 or such
other date as the parties hereto shall mutually agree.
1.3 "Leased Proprietary Equipment" shall mean all of the following
constituent, integral parts of the TCS-1 System and all substitutions,
replacements, and improvements, and all repair and renewal parts installed
therein, as specified in the plans and specifications therefor, attached as
Schedule 1.3 hereto:
(a) the disintegration system including but not limited to all
grinders contained therein, and
(b) the separation systems, including but not limited to:
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(i) a magnetic separator;
(ii) a fiber/crumb separator;
(iii) fiber collector
(iv) crumb rubber sizing system; and
(v) all integrated conveyance and exit belts, chutes, and
other components
1.4 "Maintenance Agreement" shall mean the maintenance agreement of
even date herewith between the Manufacturer and the Operator respecting the
maintenance of the TCS-1 System.
1.5 "Manufacturer" shall mean Tirex America Inc. and Tirex-Canada Inc.,
and all other corporations, partnerships, or other entities, now or in the
future controlled by, under common control with, or in control of, Tirex America
Inc., jointly and severally.
1.6 "Non Proprietary Equipment" shall mean all of the following
constituent, integral parts of the TCS-1 System:
(a) all bailing systems contained in the TCS-1 System, including all
associated ancillary equipment and conveyance and exit belts,
chutes and/or other components combined or integrated therewith,
as specified in the pertinent plans and specifications therefore;
and
(b) freezing xxxxxxxx and cryogenic systems and all substitutions,
replacements, and improvements, and all repair and renewal parts
installed therein, as specified in the plans and specifications
therefore, attached as Schedule 1.6 (b).
1.7 "Operator" shall mean Oceans Tire Recycling & Processing Co., Inc.,
a New Jersey Corporation owned 87.5% by Ocean Utility Contracting, Inc. and
12.5% by Bentley Environmental Engineering Sources, Inc., and all other
corporations, partnerships, or other entities, now or in the future controlled
by, under common control with, or in control of, Ocean Utility Contracting Inc.
or Bentley Environmental Engineering Sources, Inc., or either one of them,
jointly and severally.
1.8 "Proprietary Front-End System" shall mean the manufacturer's
proprietary front-end tire preparation system, all substitutions, replacements,
and improvements, and all repair and renewal parts installed therein, as
specified in the plans and specifications therefor, attached as Schedule 1.8
hereto.
1.9 "Purchased Equipment" shall mean the Proprietary Front-End System
and the NonLeased Proprietary Equipment, as those terms are defined in Sections
1.8 and 1.6 (b), collectively.
1.10 "Site" shall mean the Operator's premises at 0000 Xxxxxxxx Xxxx,
Xxx'x Xxxxx, XX 00000.
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1.11 "TCS-1 System" shall mean the Manufacturer's proprietary cryogenic
tire disintegration system, patent pending, consisting of the Proprietary
Front-End System, the Nonproprietary Equipment and the Leased Proprietary
Equipment, as specified in the plans and specifications attached as Schedule
1.3, 1.6 (b), and 1.8 hereto and all substitutions, replacements, and
improvements, and all repair and renewal parts installed therein.
1.12 "Test Period" shall mean a three (3) day period which shall
commence within ten (10) business days after completion of the installation of
the TCS-1 System, during which Test Period, the TCS-1 System shall be operated
continually for up to 12 hours per day exclusive of any time devoted to
adjustments and acclamation.
2. RECITALS
Whereas:
2.1 The Manufacturer has invented, built, and patented (patent
pending), and is the sole and exclusive owner, directly or indirectly, through
one or more subsidiaries, of all right title and interest in the TCS-1 System.
2.2 The Operator is a New Jersey Corporation, 87.5% of which is owned
by Ocean Utility Contracting, Inc. and 12.5% of which is owned by Bentley
Environmental Engineering Sources, Inc; The Operator was organized by its
shareholders for the principal purpose of commercially exploiting, directly or
indirectly, through one or more subsidiaries, the TCS-1 System by purchasing the
Purchased Equipment, leasing the Leased Proprietary Equipment, and operating the
TCS-1 System.
2.3 The Manufacturer and the Operator's affiliate Ocean Venture III,
Inc. are parties to a certain Letter Agreement, dated October 5, 1995, between
them (the "Letter Agreement") respecting the purchase and/or lease by the
Operator of a TCS-1 System from the Manufacturer.
2.4 The parties hereto wish to terminate the Letter Agreement and
restate the terms and conditions of the transactions contemplated therein this
Equipment purchase and Lease Agreement in accordance with Section 20 of this
agreement.
3. AGREEMENT FOR PURCHASE AND SALE OF PROPRIETARY FRONT-END
AND NON PROPRIETARY EQUIPMENT
3.1 Purchase and Sale
The Operator agrees to purchase, and the Manufacturer agrees to sell,
the Proprietary Front-End System and the Non Proprietary Equipment, as defined
in Sections 1.6 and 1.8, above (collectively, the "Purchased Equipment"), above,
in accordance with the terms and conditions
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of this Agreement. The Operator may at its election take title to the Purchased
Equipment in a wholly owned subsidiary corporation to be formed by it for such
purpose. Such election by the Operator shall nowise modify, diminish, or
otherwise affect the Operator's liability hereunder to the Manufacturer. The
purchase and payment for the Purchased Equipment by the Operator, and the sale,
assignment, transfer, and delivery thereof by the Manufacturer, shall take place
subject to the fulfillment of the conditions hereinafter provided.
3.2 Purchase Price
The purchase price for the Purchased Equipment (the "Purchase Price"),
installed and set in operation pursuant to Section 7 and 8 hereof, shall be the
sum of one million, two hundred twenty-five thousand United States dollars (US
$1,225,000), FOB Montreal, which shall be deemed allocated as follows:
(a) Freezing Chamber and
Cryogenic Systems US $ 810,000
(b) Front End Tire
Preparation and
Bailing Systems 415,000
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Total US $1,225,000
3.3 Payment Terms
The Purchase Price shall be paid by the Operator to the Manufacturer
through financing arrangements which Ocean Utility Contracting, Inc. and Bentley
Environmental Engineering Sources, Inc. have entered into with Blockwell Funding
Corp., which provide for Blockwell's advancement of purchase financing to the
Operator, as construction and delivery milestones are met, and the Operator's
paying over to the Manufacturer all funds released by Blockwell, immediately
upon release.
4. AGREEMENT FOR OPERATING LEASE OF LEASED PROPRIETARY
EQUIPMENT
4.1 Agreement to Lease Equipment
The Manufacturer, as lessor, and the Operator, as lessee, hereby enter
into an operating lease (the "Lease") for the Leased Proprietary Equipment, as
defined in Section 1.3 above, subject to the following terms and conditions:
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4.2 Term of the Lease
4.2.1 The term of the Lease shall be sixty (60) months commencing on
the Acceptance date.
4.2.2 At the expiration of the full original term hereof, if this Lease
has remained in effect and the Operator has duly performed all its obligations
thereunder during the entire such term, then the Operator shall have the option
to either:
(a) Obtain a new lease agreement in the form then being generally
offered by the Operator to the trade with renewal terms, as agreed
by the parties;
(b) Continue to use the same equipment installed hereunder and thereby
extend the term of this Lease at a reduced rental rate of US
$8,770 per month for a period of one year with further successive
automatic one-year extensions subject to either party's right to
terminate this Lease at the end of any extension year by at least
90 days prior written notice of termination of the other; or
(c) Request that the Manufacturer exercise its right of first refusal
to repurchase the Purchased Equipment pursuant to Section 13.1 of
this Agreement, in which event the Manufacturer shall have thirty
(30) days to either: (i) notify the Operator of its intent to
repurchase the Purchased Equipment and, within sixty (60) days of
such notice, effectuate such repurchase and thereupon enter upon
the premises where the said TCS-1 System is located and remove the
entire TCS-1 System from the Operator's premises at the
Manufacturer's expense, or (ii) notify the Operator that it does
not intend to repurchase the Purchased Equipment and, within
thirty (30) days of such notice, enter upon the premises where the
TCS-1 System is located, take possession of the Leased Proprietary
Equipment without previous demand or notice and without legal
process, retrieve the Leased Proprietary Equipment from the TCS-1
System and remove the Leased Proprietary Equipment from the
Operator's premises at the Manufacturer's expense.
4.3 Rent Payments
4.3.1 The Operator shall pay to the Manufacturer monthly rental
payments (the "Rent Payments") for the Leased Proprietary Equipment at the rate
of eight thousand seven hundred and seventy United States dollars (US $8,770)
per month, payable in advance, as follows:
(a) the Rent Payment for the first 30-day period (the "Set-Off
Period") following the Acceptance Date shall be paid by way of a
set-off in the amount of US $8,770 against the deposit heretofore
paid by the Operator;
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(b) the Rent Payment for the period (the "Partial-Month Period") which
commences on the first day following the Set-Off Period and ends
on the last day of the calendar month in which such Partial-Month
Period falls, will be payable in cash on the first day of such
Partial-Month Period, on a pro rata basis.
(c) Normal monthly Rent Payments of US $8,770 will commence and be
payable on the first day of the first full calendar month
following the Partial-Month Period.
EXAMPLE:
Acceptance Date: September 15th
Set-Off Period: September 16th through October 15th.
Partial-Month
Period: October 15th through October 31st,
with Rent Payment in the amount of
$4,385 due and payable on October 15th.
Commencement of Regular November 1st, with normal monthly
Monthly Rental Payments Rent Payment of $8,770 due and payable
on such date.
4.3.2 In the event of that payment of any Rent Payment is made by the
Operator more than ten (10) days after the date when such payment shall have
been due, the Operator shall pay a late charge of one and a half percent (1.5 %)
of the entire amount of such Rent Payment for every month in which such
delinquency occurs or continues.
5. TITLE TO EQUIPMENT
5.1 Title to Purchased Equipment
5.1.1 Title to the Purchased Equipment shall pass to the Operator upon
payment in full of the balance of the Purchase Price, due on the Acceptance
Date.
5.1.2 No rights to any plans or designs respecting the TCS-1 System
shall pass to the Operator and the Operator shall not copy, reproduce, design,
or build, or cause, assist, or suffer to be copied, reproduced, designed, or
built by any other person, firm, or corporation any equipment in any way similar
to, or based upon, the design or structure of the TCS-1 System.
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5.2 Title to Leased Proprietary Equipment
5.2.1 The Leased Proprietary Equipment shall at all times remain the
sole and exclusive property of the Manufacturer (which reserves the right to
assign or encumber the Leased Proprietary Equipment) and the Operator shall have
no right, title, or interest to the Leased Proprietary Equipment but only the
right to use such Equipment under this Lease. The Leased Proprietary Equipment
shall not be transferred or sublet by the Operator to any other person, firm or
corporation, the Operator shall not permit any other person, firm, or
corporation to use the Leased Proprietary Equipment, and this agreement may not
be assigned by the Operator either by its own act or by operation of law.
5.2.2 The Leased Proprietary Equipment shall remain personal property
and shall not be deemed otherwise by reason of becoming attached to the
premises.
5.2.3 The Manufacturer shall have the right at any time or from time to
time to modify the Leased Proprietary Equipment in a manner which will not
lessen the utility of the Leased Proprietary Equipment;
5.2.4 The Operator shall not enter into, remove, tamper with, or breach
the security of, the Leased Proprietary Equipment. The Operator shall not copy,
reproduce, design, or build, or cause, assist, or suffer to be copied,
reproduced, designed, or built by any other person, firm, or corporation any
equipment in any way similar to, or based upon, the design or structure of the
Leased Proprietary Equipment, or of any part thereof. The Operator shall not
permit any Leased Proprietary Equipment to be abused, not permit the removal of
any descriptions, instructions, warnings plate or markings, or other writings of
any kind whatsoever put on the Leased Proprietary Equipment by the Manufacturer,
nor attach anything to or remove anything from the Leased Proprietary Equipment.
5.2.5 In accordance with the terms of the Maintenance Agreement, the
Operator will not allow any repairs to the TCS-1 or replacement of parts to be
done by any person or persons except technicians authorized by the Manufacturer.
5.2.6 The Operator agrees that, in consideration of the Manufacturer
entering into this Lease, it will not move the TCS-1 System, of which the Leased
Proprietary Equipment forms a part, to any location outside of the state in
which the Site is located or outside of a fifty (50) mile radius of the Site,
without the prior written consent of the Manufacturer.
6. SITE PREPARATION
6.1 Site Plan Specifications
Within thirty (30) days of execution of this Agreement, the
Manufacturer will furnish to the Operator "Site Plan Specifications" respecting
the electrical, ventilation, water supply and
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disposal, and any other specifications required at the site for the installation
and operation of the TCS-1 System.
6.2 Preparation of Site
6.2.1 Prior to the Delivery and installation of the TCS-1 System, the
Operator shall make, at its own expense, all alterations to and changes in its
premises and equipment required to bring the site into complete conformance with
the above referenced Site Plan Specifications, with respect to which the
Operator shall obtain all necessary permissions and inspections, and which shall
include but not be limited to making any required structural changes and the
installation of:
(a) electrical equipment and power lines up to the electrical inputs
or control boxes attached to the TCS-1 System, as designated on
the Site Plan Specifications;
(b) water supply sources and equipment up to the water inflow points
designated on the Site Plan Specifications;
(c) water drainage and disposal sites and equipment from the water
outflow points designated on the Site Plan Specifications;
(d) air ventilation sources and equipment as designated on the Site
Plan Specifications
6.3 Notice to Inspect
6.3.1 The Operator shall, not later than one month prior to the
anticipated Delivery Date, give written notice to the Manufacturer (the "Notice
to Inspect") that: (i ) preparation of the site for the installation and
operation of the TCS-1 has been completed in accordance with the Site Plan
Specifications and (ii) all applicable governmental regulations have been
complied with and all required permits, licenses, and standards have been
obtained or met (together with copies of all documentary evidence thereof) and
request that the Manufacturer inspect the site in order to confirm the
foregoing.
6.4 Manufacturer's Right to Inspect Site
6.4.1The Manufacturer shall have the right, at any time within two
weeks of its receipt of the Notice to Inspect, to inspect the site and notify
the Operator in writing (the "Notice of Approval") that the Site is in
conformance with the Site Plan Specifications and that all legal requirements
have been met.
6.4.2 In the event that, after inspecting the Site, the Manufacturer
determines that the Site is not in conformance with the Site Plan Specifications
or that any legal requirements have not
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been met, then the Manufacturer shall have the right to require that the
Operator make any and all changes or additions required to bring the Site into
such conformance, at the sole expense of the Operator prior to the Delivery Date
and to reschedule the Delivery Date after all such changes or additions are
completed and/or all legal requirements are complied with. In such event, the
Operator shall, upon completion of the required changes or additions, give
written notice to the Manufacturer ("Notice to Re-inspect") that such changes or
additions have been made in accordance with the Manufacturer's instructions or
governmental regulations and that the Site is in complete conformance with the
Site Plan Specifications and all applicable regulations. The Manufacturer shall
have the right, within two weeks of its receipt of such Notice to reinspect the
Site. Such procedures may be repeated, and the Manufacturer shall have no
obligation to deliver the TCS-1 System, until the Manufacturer confirms upon
inspection that the Site is in conformance with the Site Plan Specifications,
all governmental regulations are complied with, and the Delivery Date is
rescheduled in accordance with this Paragraph 6.4.2.
7. DELIVERY AND INSTALLATION
7.1 Delivery
7.1.1 If, by a date not later than fifteen business days prior to the
Anticipated Delivery Date, the Site is in conformance with the Site Plan
Specifications and all legal requirements have been met in accordance with
Section 6.4, above, then the Manufacturer shall deliver the TCS-1 System to the
Site on or before the Anticipated Delivery Date set forth in Paragraph 1.2,
above.
7.1.2 In the event that the Operator shall not meet the requirements of
Paragraph 7.1.1, above, for delivery not later than the Anticipated Delivery
Date, then, within ten business days of the date when the Site Plan
Specifications and all legal requirements have been met, the Manufacturer shall
reschedule a new delivery date, which new delivery date shall not be later than
fourteen months from the date of such rescheduling.
7.1.3 Delivery shall be made F.O.B. Montreal, Canada. The equipment
comprising the TCS-1 System shall be placed in suitably protected containers the
nature of which shall be determined by the Manufacturer. The Operator shall pay
all costs of transportation and delivery of the TCS-1 System from the
Manufacturer's plant in Montreal to the Site.
7.1.4 In the event that delivery of the TCS-1 System, or any part
thereof, for a period not exceeding sixty (60) days, shall be prevented by
causes beyond the control of the Seller, including but not limited to acts of
God, labor troubles, failure of essential means of transportation, or changes in
policy with respect to exports or otherwise by the government of the
jurisdiction in which the Operator is located, the Delivery Date shall be
rescheduled after all of such causes have been eliminated. In the event,
however, that such nondelivery continues after such extended period, the
Operator and the Manufacturer shall each have the right to cancel this agreement
by written notice, and in such case there shall be no obligation or liability on
the part of either party with respect to such undelivered equipment.
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7.2 Installation
7.2.1 Within 5 days of the delivery of the TCS-1 System to the Site,
the Manufacturer shall, at its own expense, install the TCS-1 System at the
Site.
7.2.2 Upon installation, the TCS-1 System shall be in complete working
order and shall consist of the Nonproprietary Equipment and the Leased
Proprietary Equipment, as specified in the plans and specifications set forth in
Schedules 1.3,1.6 (b, and 1.8 hereto.
8. EQUIPMENT TESTING AND OPERATOR'S ACCEPTANCE
8.1 Notice of Availability for Testing
Upon completion of the installation of the TCS-1 System at the Site,
the Manufacturer shall give the Operator written notice that the TCS-1 System is
available for testing operations.
8.2 Test Period
8.2.1 Immediately upon giving notice to the Operator that the TCS-1
System is available for testing operations, the Manufacturer shall, within ten
business days, at its own expense, provide a technical representative to
supervise the operation of the TCS-1 for a period of three (3) days (the "Test
Period"). During the Test Period, the TCS-1 System shall operate in accordance
with the specifications set forth in Schedule 8.2 hereto, continually for up to
12 hours per day.
8.2.2 All power, fuel, light, water, oil, or other necessary supplies
and all necessary personnel (other than the engineering technician furnished by
the Manufacturer) for the successful operation of the TCS-1 System, shall be
provided by the Operator.
8.2.3 The Manufacturer shall furnish to the Operator all data regarding
the TCS-1 System in order to enable the Operator to operate such System and, in
addition to the training to be provided pursuant to the Maintenance Agreement,
the Manufacturer shall, during the Test Period, instruct at least 2 of the
Operator's employees with respect to the operation, and operating maintenance of
the TCS-1 System, and use reasonable care in training such employee, provided
that if in the Manufacturer's sole opinion any employee is not adequately
qualified, the Operator shall designate another of its employees to receive such
instruction.
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8.3 Acceptance
8.3.1 Unless the TCS-1, or any part of it, fails to operate in
accordance with the specifications set forth in Schedule 8.2 hereto, the
Manufacturer's offer to sell the NonLeased Proprietary Equipment and to lease
the Leased Proprietary Equipment to the Operator shall automatically be deemed
to have been accepted by the Operator as of the Acceptance Date, which shall
occur on the first day following the completion of the Test Period and the
Operator shall have no right to revoke such acceptance for any reason.
8.3.2 If the TCS-1, or any part of it, fails to operate in accordance
with the specifications set forth in Schedule 8.2 hereto, the Manufacturer shall
have 30 days in which to cure the problems responsible for such failure. Costs
of all parts and labor required to bring the TCS-1 into full working condition
shall be borne by the Manufacture unless the failure to operate in accordance
with the specifications set forth in Schedule 8.2. shall have been caused by any
act or failure to act on the part of the Operator or its personnel, including
but not limited to the failure of the Operator to have brought the Site into
conformance with the Site Plan Specifications.
8.3.3 Upon written notice to the Operator that the problems which
caused the TCS-1 System to fail to operate as required during the Test Period
have been cured, the Manufacturer shall, at the request of the Operator,
commence a second Test Period for up to three (3) days, in which case the
acceptance criteria of Paragraph 8.2.1 shall pertain to such second Test Period
(or any subsequent Test Period) with the same force and effect as to the initial
Test Period.
9. RISK OF LOSS
9.1 The risk of loss, injury, or destruction of the Leased Proprietary
Equipment from any cause whatsoever, except negligence or willful destruction by
the Operator shall be borne by the Manufacturer during the term of the Lease
therefor provided hereunder.
9.2 The risk of loss, injury, or destruction of the NonLeased
Proprietary Equipment from any cause whatsoever, except negligence or willful
destruction by the Operator shall be borne by the Manufacturer only until title
passes to the Operator.
9.3 Any loss, injury, or destruction to the TCS-1, or any part of it,
after title to the Nonproprietary Equipment passes to the Operator, shall not
serve in any manner to release the Operator from the obligation to pay the Rent
Payments provided for Section 4.3, above.
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10. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE
MANUFACTURER
The Manufacturer hereby represents, warrants, and covenants to the
Operator, as follows:
10.1 Corporate Status
Tirex America Inc. is (i) duly organized corporation, validly existing
and in good standing under the laws of the State of Delaware; (ii) has full
power to own all of its properties and carry on its business; and (iii) is
qualified to do business as a foreign entity in each of the jurisdictions in
which it operates, if any, unless the character of the properties owned by it or
the nature of the business transacted by it, does not make qualification
necessary in any other jurisdiction or jurisdictions.
10.2 Corporate Action
Prior to the date hereof, the board of directors of the Manufacturer
has duly adopted resolutions approving the execution and delivery to the
Manufacturer of this Agreement and authorizing and consenting to each and every
one of the terms, warranties, representations, covenants and conditions herein
contained.
10.3 Patents
10.3.1 The Manufacturer has applied for a patent in the United States
and Canada for the Disintegration System forming part of the Leased Proprietary
Equipment. The Manufacturer is the sole owner of such patent application and,
upon the granting of a patent in respect thereof, the Manufacturer shall be the
sole owner of such patent and of all rights thereunder.
10.3.2 The Manufacturer shall defend, to the best of its ability and at
its own expense, all actions, suits, or proceedings instituted against the
Operator insofar as the same are based on any claims that the said Leased
Proprietary Equipment, or any part thereof, constitutes an infringement of any
patent of the United States or Canada and shall indemnify the Operator against
all damages, costs, and expenses which the Operator may incur as a result of any
action which may be brought or threatened against the Operator with respect to
the equipment covered by such patent, provided that:
(a) The Manufacturer shall have the right at any time or from time to
time to modify the TCS-1 System in a manner which will not lessen
the utility thereof;
(b) The Operator gives the Manufacturer immediate notice in writing of
the institution of the action, suit, or proceeding and permits the
Manufacturer, through its
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counsel, to defend same, and gives the Manufacturer all
information, assistance, and authority to enable the Manufacturer
to do; and
(c) The Operator has made no change of any kind in the TCS-1 System
without obtaining the prior written permission of the
Manufacturer.
10.3.3 When information is brought to the attention of the Manufacturer
or the Operator that others are unlawfully infringing on the patents covering
the machine, the Manufacturer shall prosecute diligently any infringer at the
Manufacturer's own expense.
10.4 Warranties
Subject to any default on the part of the Operator under the
Maintenance Agreement, the Manufacturer warrants that the TCS-1 will conform to
the descriptions contained in Schedules 1.3, 1.6 (b), and 1.8. The Manufacturer
further warrants the TCS-1 System against defects in workmanship and materials
or failure to perform in accordance with the specifications set forth in
Schedule 8.2 for one year after the Acceptance Date. No other representations or
warranties have been made by the Manufacturer or relied upon by the Buyer. If
any defects in the Manufacturer's work or materials are discovered within one
year of delivery the Operator shall give notice within seven (7) days of such
discovery. THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY AND ALL OTHER WARRANTIES.
11. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE OPERATOR
The Operator hereby represents, warrants, and covenants to the
Manufacturer, as follows:
11.1 Corporate Status of Ocean Utility Contracting Inc.
Ocean Utility Contracting Inc. is (i) a duly organized Corporation,
validly existing and in good standing under the laws of the State of New Jersey;
(ii) has full power to own all of its properties and carry on its business; and
(iii) is qualified to do business as a foreign entity in each of the
jurisdictions in which it operates, if any, unless the character of the
properties owned by it or the nature of the business transacted by it, does not
make qualification necessary in any other jurisdiction or jurisdictions.
11.2 Corporate Status of Bentley Environmental Engineering Sources Inc.
Bentley Environmental Engineering Sources Inc. is (i) a duly organized
Corporation, validly existing and in good standing under the laws of the State
of Oklahoma; (ii) has full power to own all of its properties and carry on its
business; and (iii) is qualified to do business as a
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foreign entity in each of the jurisdictions in which it operates, if any, unless
the character of the properties owned by it or the nature of the business
transacted by it, does not make qualification necessary in any other
jurisdiction or jurisdictions.
11.3 Financial Condition of the Operator
The books and records of the Operator are complete and accurate and
fairly present the financial condition and the results of operations of the
Operator as of the date hereof. There are no material liabilities, either fixed
or contingent, not reflected in such books and records other than contracts or
obligations in the ordinary and usual course of business; and no such contracts
or obligations in the usual course of business constitute liens or other
liabilities which, if disclosed, would alter substantially the financial
condition of the Operator as reflected in such books and records.
11.4 Defaults and Conflicts
There are no defaults on the part of the Operator under any contract,
lease, mortgage, pledge, credit agreement, title retention agreement, security
agreement, lien, encumbrance or any other commitment, contract, agreement or
undertaking to which the Operator is a party. The execution of this Agreement
will not violate or breach any material agreement, contract, or commitment to
which the Operator is a party.
11.5 Corporate Action
Prior to the date hereof, the boards of directors of the Operator has
duly adopted resolutions approving the execution and delivery to the
Manufacturer of this Agreement and authorizing and consenting to each and every
one of the terms, warranties, representations, covenants and conditions herein
contained.
11.6 Insurance and Damage to Equipment
11.6.1 The Operator, at its own cost and expense, shall insure the
Leased Proprietary Equipment against burglary, theft, fire, and vandalism in the
amount of $500,000, or such other amount that the parties shall agree is
required for replacement costs, and obtain public liability insurance with
minimum limits of $500,000 per occurrence and $1,000,000 collectively, for
bodily injury and for property damage in such form and with such insurance
companies as shall be satisfactory to the Manufacturer. All insurance policies
shall name both the Operator and the Manufacturer as insured parties and copies
of the policies and the receipts for the payment of
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premiums shall be furnished to the Manufacturer. Each damage policy shall
provide for payment of all losses directly to the Manufacturer. Each liability
policy shall provide that all losses be paid on behalf of the Operator and the
Manufacturer, as their respective interests appear.
11.6.2 In the event that the Operator shall fail to comply with the
provisions of Paragraph 11.6.1, above, then the Operator shall pay to the
Manufacturer an adequate premium in advance per annum to enable the Manufacturer
to insure the Leased Proprietary Equipment and all such insurance policies shall
be held in the custody of the Manufacturer.
11.6.3 In the event that all or any part of the TCS-1 System is
damaged, due to any cause whatsoever, to the extent that the TCS-1 System is not
useable, notwithstanding that the Manufacturer may have been partially or fully
compensated for the Leased Proprietary Equipment forming part of such damaged
TCS-1 System by way of insurance or otherwise, the Manufacturer shall
immediately have possession of the said Leased Proprietary Equipment and the
Manufacturer may enter upon the premises where the TCS-1 System is located,
remove the Leased Proprietary Equipment from the damaged TCS-1 System and take
possession of the said Leased Proprietary Equipment without previous demand or
notice and without legal process, and remove it from the Operator's premises at
the Manufacturer's expense.
11.7 Access
The Operator shall insure that the Manufacturer, and its agents and
employees, shall at all times have free access to the Operator's premises for
the purpose of inspecting the Leased Proprietary Equipment and observing its use
and operation, and making alterations, improvements, or additions thereto; and
the Operator shall afford all reasonable facilities therefor, and shall allow
the Manufacturer to make such reasonable alterations, improvements, or additions
as the Manufacturer shall deem necessary, at the expense of the Manufacturer.
11.8 Taxes
The Operator shall pay all taxes, assessments, penalties, and fees
which may be levied or assessed on or with respect to the installation of the
TCS-1 System and, at all times during the term of the Lease of the Leased
Proprietary Equipment, the Operator shall pay all taxes and assessments which
may be levied upon or in respect of the TCS-1 System or its operation, and shall
pay any other liability of any character which may be imposed or incurred as an
incident to the physical possession or operation of such System.
11.9 Compliance with Applicable Law
The Operator shall provide, at its own expense, all requisite permits
and licenses necessary for the installation and operation of the TCS-1 System at
the Site and shall exercise its best
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efforts to maintain its compliance with all applicable federal, state, and local
laws, statutes, rules, and regulations and, in the event of any non-compliance
which renders impossible the operation of the Site as a tire recycling facility,
the Operator shall exercise its best efforts to cure such non-compliance
promptly.
11.10 Subordination
Not less than three (3) months prior to the anticipated Delivery Date,
the Operator shall procure from every owner, landlord, mortgagee, or other
secured party having any interest in the real property on which the TCS-1 System
is to be installed or in the Operator's place of business or the equipment
therein, and deliver to the Manufacturer, a written consent to such installation
and a writing to the effect that the lien of any such mortgage or other interest
is subordinate to the rights of the Manufacturer with respect to the Leased
Proprietary Equipment.
11.11 Ancillary Agreements
11.11.1 The Operator will, simultaneously with the execution of this
Agreement, and in consideration of the premises and the mutual promises and
agreements made herein, enter into the following agreements with the
Manufacturer or such person, corporation, firm, partnership, or other entity as
the Manufacturer shall appoint in its stead:
(a) The Royalty Agreement, of even date herewith, between the
Manufacturer and the Operator providing for the Operator to
pay to the Manufacturer a royalty of three percent (3%) of the
gross proceeds from the sale by the Operator of rubber crumb
fiber and steel from scrap tires disintegrated by the Operator
through the utilization of the TCS-1 System, a copy of which
Royalty Agreement is attached as Schedule 11.10(b) hereto; and
(b) The Maintenance Agreement, of even date herewith, between the
Operator and the Manufacturer, respecting the maintenance of
the TCS-1 System, a copy of which Maintenance Agreement is
attached as Schedule 11.10(b) hereto.
11.11.2 In addition, the Operator will, at such time during the term of
the Lease as the Manufacturer shall request, in further consideration of the
premises and the mutual promises and agreements made herein, enter into an
agreement with the Manufacturer or such person, corporation, firm, partnership,
or other entity as the manufacturer shall appoint in its stead, pursuant to
which the Operator shall agree to sell up to forty percent (40%) of the rubber
crumb to the Manufacturer or such person as the Manufacturer shall appoint in
its stead:
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12. DEFAULTS
12.1 Default by Manufacturer
12.1.1 Each of the following events shall be deemed to constitute
breach of this Agreement and, unless cured within ninety (90) days, shall
constitute a default hereunder by the Manufacturer:
(a) If at any time prior to the delivery of the TCS-1 System to
the Site:
(i) The Manufacturer makes an assignment for the benefit
of creditors;
(ii) A voluntary or involuntary petition is filed by or
against the Manufacturer under any law having for its
purpose and adjudication of the Manufacturer a
bankrupt or the extension of the time of payment of,
adjustment of, or other arrangement affecting the
liabilities of the Manufacturer, or the
reorganization of the Manufacturer and such petition
is not discharged or dismissed within one hundred
twenty (120) days after such petition is filed;
(iii) A Receiver is appointed for the property of the
Manufacturer and is not discharged or dismissed
within one hundred twenty (120) days after such
appointment;
or
(iv) Any distress, execution, or attachment is levied upon
the Manufacturer's property to the extent that the
Manufacturer is not able to fulfill its obligations
to deliver the TCS-1 within ninety (90) of the
anticipated Deliver Date.
(b) The Manufacturer fails to deliver the TCS-1 System in
accordance with the terms and provisions of Section 7, above,
within ninety (90) days of the Delivery Date unless prior
thereto, the Operator has failed to meet the payment
provisions set forth above in Section 3.3 of this Agreement;
(c) The TCS-1 System fails to operate for a full Test (or re-test)
Period, in accordance with Section 8.2 hereof, as specified
Schedule 8.2 hereto , within ninety (90) days from the date
the TCS-1 System is actually delivered to the Site.
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12.2 Default by Operator
Each of the following events shall be deemed to constitute breach of
this Agreement and, unless cured within ninety (90) days, shall constitute a
default hereunder by the Operator:
(a) The Operator fails to make any payment required to be made
pursuant to Sections 3.3 or 4.3 of this Agreement or any
payment required to be made by the Operator under the
Maintenance Agreement and such failure to make payment shall
have continued for a period of ten (10) days after written
notice from the Manufacturer;
(b) The Operator refuses to accept or allow the Manufacturer to
install or test the TCS-1 System in accordance with Sections
7.2, 8.2, and 8.3 of this Agreement, notwithstanding that such
System has been: (i) delivered to the Operator's Site on a
timely basis or (ii) delivered to the Site and has performed
in accordance with the specifications set forth in Schedule
8.2 hereof for the prescribed Test Period;
(c) The Operator makes an assignment for the benefit of creditors;
(d) A voluntary or involuntary petition is filed by or against the
Operator under any law having for its purpose and adjudication
of the Operator a bankrupt or the extension of the time of
payment of, adjustment of, or other arrangement affecting the
liabilities of the Operator, or the reorganization of the
Operator and such petition is not discharged or dismissed
within one hundred twenty (120) days after such petition is
filed;
(e) A Receiver is appointed for the property of the Operator;
(f) Any distress, execution, or attachment is levied upon the
machines or the Operator's property; or
(g) The Operator fails to faithfully and fully comply with the
terms and provisions of Section 5.2 of this Agreement, with
any such failure deemed to be an irremediable material breach
of this Agreement immediately upon its occurrence.
(h) The Operator fails to faithfully and fully perform each of its
obligations under the Maintenance Agreement and fails to cure
such breach within the time period specified therein with
respect to such failure.
12.3 Remedies Available to the Operator upon Default by Manufacturer
If the Manufacture shall be in default pursuant to Paragraphs 12.1.1
(a), (b), or (c) of this Agreement, unless such default shall have been caused
by any act or failure to act on the part of the Operator or its personnel,
including but not limited to the failure of the Operator to have
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brought the Site into conformance with the Site Plan Specifications, the
Operator shall have the right to rescind this agreement by serving written
notice ("Notice of Rescission") upon the Manufacturer. In such event, the
Manufacturer shall, at its own expense, remove the TCS-1 System not later than
forty-five (45) days following its receipt of such Notice of Rescission and all
monies theretofore paid by the Operator to the Manufacturer pursuant to Section
4.3, above, shall be returned by the Manufacturer to the Operator.
12.4 Remedies Available to the Manufacturer upon Default by the Operator
12.4.1 The Operator acknowledges and agrees that its breach of any
provision contained in Section 5.2 of this Agreement will cause irreparable harm
to the Manufacturer. The Operator therefore agrees that, if it is alleged by the
Manufacturer that the Operator or any of the Operator's affiliates, agents,
employees, or associates has breached, or is attempting or threatening to
breach, any provision contained hereinabove in the said Section 5.2, then the
Manufacturer shall have the right to obtain from any court or arbitrator having
jurisdiction, such equitable relief as may be appropriate, including a decree
enjoining the Operator from any further such breach of such provisions, and
enjoining the Operator from engaging in the tire recycling business, either
directly or indirectly through or in association with any other person, firm,
corporation, or organization during the term of this Agreement.
12.4.2 In the event of any default by the Operator under this
Agreement, the Manufacturer may at its option, at any time thereafter terminate
this Agreement by written notice ("Notice of Termination"), given in Accordance
with Section 16 hereof. such termination may be made effective, at the option of
the Manufacturer, simultaneously with or at any time after the happening of any
such default.
12.4.3 Upon any termination of this Agreement prior to payment in full
of the entire Purchase Price of US $2,250,000 for Purchased Equipment, in
accordance with the terms of Section 3.3 of this Agreement, the Manufacturer
shall immediately have possession of the entire TCS-1 System, and the
Manufacturer may enter upon the premises where the said TCS-1 System is located,
take possession of it without previous demand or notice and without legal
process, and remove it from the Operator's premises at the Operator's expense.
12.4.4 Upon any termination of this Agreement after payment in full of
the entire Purchase Price of US $ 2,250,000 for the Purchased Equipment has been
made by the Operator, the Manufacturer shall immediately have possession of the
Leased Proprietary Equipment and the Manufacturer may enter upon the premises
where the TCS-1 System is located, remove the Leased Proprietary Equipment from
the said TCS-1 System and take possession of the Leased Proprietary Equipment
without previous demand or notice and without legal process, and remove it from
the Operator's premises at the Operator's expense.
12.4.5 The Operator acknowledges and agrees that any refusal on its
part to permit the Manufacturer to enter its premises and remove either the
TCS-1 System or the Leased Proprietary
196
Equipment in accordance with Paragraph 12.4.3 or 12.4.4 of this Agreement will
cause irreparable harm to the Manufacturer. The Operator therefore agrees that
in the event of any such refusal on its part, the Manufacturer shall have the
right to obtain from any court or arbitrator having jurisdiction, such equitable
relief as may be appropriate, including a decree enjoining the Operator from any
further such refusal of entry and removal.
12.4.6 In the event of any default by the Operator prior to the
Acceptance Date, the Manufacturer shall be entitled to damages including but not
limited to retention of the full deposit paid by the Operator and all costs of
delivering and removing and re-delivering the TCS- 1 System.
12.4.7 In the event of any default by the Operator after the Acceptance
Date or pursuant to Paragraph 12.2(b) of this Agreement, the Manufacturer shall
be entitled to damages including but not limited to retention of the full
deposit paid by the Operator, all costs of delivering and removing and
re-delivering the TCS-1 System, and damages for the Operator's failure to
perform for the full term of the Lease provided in Section 4.2 of this
Agreement, including but not limited to immediate payment of the balance of all
Rent Payments due under the full term of the Lease,
12.4.8 In the event of any default on the part of the Operator pursuant
to Paragraphs 12.2(a) or 12.2(b) of this Agreement, the Manufacturer shall have
the right to allow the Operator, for a period of sixty (60) days, to obtain a
buyer for the TCS-1 System, satisfactory to the Manufacture, provided however
that, unless specifically waived in writing by the Manufacturer, the Operator
shall continue liable under this Agreement lease for the full term of the Lease
provided for in Section 4.2 of this Agreement.
12.4.9 In the event of any default on the part of the Operator, the
Manufacturer shall not be deemed to have waived any of its rights hereunder by
reason of its failure to assert its rights or its failure to take cognizance of
such breach.
12.4.10 The foregoing remedies provided herein for the benefit of the
Manufacturer shall not be exclusive but in addition to any other remedies the
Manufacturer may have by virtue of the breach by the Operator, in law or in
equity, from any court or arbitration proceeding having jurisdiction over such
matter.
13. OPERATOR'S SALE OF NONLEASED PROPRIETARY EQUIPMENT
13.1 Manufacturer's Right to Retrieve Leased Proprietary Equipment Prior to Sale
In the event that, during or after the term of the Lease provided in
Section 4.2 of this Agreement, the Operator wishes to divest itself of the TCS-1
System, pursuant to the discontinuance of its business, or otherwise, the
Operator will give to the Manufacturer written notice to that effect and the
Manufacturer shall have all rights of entry and removal provided
197
above in Paragraphs 12.4.4 and 12.4.5 of this Agreement, provided however that
in addition to such rights, if such event shall occur during the term of the
said Lease, the Manufacturer shall also have the rights provided to it in
Paragraph 12.4.7 of this Agreement.
13.2 Manufacturer's Right of First Refusal
In the event that, during or after the term of the Lease provided in
Section 4.2 of this Agreement, the Operator wishes to divest itself of the TCS-1
System, pursuant to the discontinuance of its business, or otherwise, the
Operator will give to the Manufacturer written notice to that effect and the
Manufacturer will have a right of first refusal to repurchase the TCS- 1 System,
at its fair market value, within a thirty-day period following the
Manufacturer's receipt of such notice;
14. ASSIGNMENT
The Operator shall not transfer, deliver, sublease, or encumber the
Leased Proprietary Equipment to any person, corporation, or firm, and the Lease
provided in Section 4.2 of this Agreement may not be assigned by the Operator
except with the Manufacturer's express prior written consent.
15. FAILURE OF PERFORMANCE
Delays in or failure of performance occasioned by war, fire, flood,
embargo, car shortage, accident, explosion, expropriation of plant or product by
federal or state authority, or other like cause beyond the control of the
Manufacturer, or Act of God, or by strike, lockout, or other labor trouble, or
inability to obtain sufficient labor interfering with the production or
transportation of the TCS-1 System, or any part thereof, or any replacement
therefor, whether because of governmental action affecting the Manufacturer or
its suppliers, or by any action or proceeding at law or in equity, or otherwise,
shall not subject the Manufacturer to any liability.
16. NOTICES
All notices required or permitted to be given hereunder shall be mailed
by certified mail, or delivered by hand or by recognized overnight courier to
the party to whom such notice is required or permitted to be given hereunder at
the address set forth above for such party, in all cases with written proof of
receipt required. Any such notice shall be deemed to have been given when
received by the party to whom notice is given, as evidenced by written and dated
receipt of the receiving party. Either party may change the address to which
notice to it is to be addressed, by written notice to the other party, as
provided herein.
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17. CONDITIONS PRECEDENT TO MANUFACTURER'S OBLIGATION
The obligations of the Manufacturer hereunder are subject to
fulfillment, prior to the Deliver Date, of the following conditions:
17.1 Truth of Representation
The representations and warranties by or on behalf of Operator
contained in this Agreement or in any document delivered to the Manufacturer
pursuant to the provisions hereof shall be true in all material respects at and
as of the Delivery Date as though such representations and warranties were made
at and as of such time.
17.2 Compliance with Covenants
The Operator shall have performed and complied with all covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by or prior to the Delivery Date.
17.3 Collateral Agreements
Simultaneously with the execution of this Agreement, the Operator will:
(a) enter into the following agreements with the Manufacturer or
any joint venture to which the Manufacturer is a party:
(i) the Maintenance Agreement, attached as Schedule
19.1(a) to this Agreement;
(ii) the Royalty Agreement, attached as Schedule 19.1(b)
to this Agreement; and
(iii) the Rubber Crumb Purchase Agreement, attached as
Schedule 19.1(c) to this Agreement.
(b) furnish the Manufacturer with a copy of the resolutions of the
board of directors of the Operator authorizing the Operator to
purchase the NonLeased Proprietary Equipment and lease the
Leased Proprietary Equipment pursuant to the terms and
conditions of this Agreement;
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17.4 Financing Arrangements
The Operator will deliver to the Manufacturer, not less than one
hundred (100) days prior to the anticipated Delivery Date, to confirm the
Delivery Date, an irrevocable commitment for lease or letter of credit
financing, which commitment shall be:
(a) for the full amount of the Purchase Price of the
Nonproprietary Equipment then outstanding;
(b) subject only to the conditions that the TCS-1 will consist of
Equipment specified in, and will operate in conformance with,
Schedules 1.3, 1.6 (b), and 1.8, and respectively.
18. ARBITRATION
All controversies arising out of or relating to this Agreement, or any
modification thereof, shall be settled by arbitration in New York City, pursuant
to the rules then obtaining of the American Arbitration Association.
19. BINDING EFFECT.
19.1 This agreement shall bind and inure to the benefit of the parties
hereto and their respective legal representatives, successors and assigns,
provided, however, that this Agreement cannot be assigned by the Operator except
in accordance with Section 14 of this Agreement. Nothing herein expressed or
implied is intended or shall be construed to confer upon or to give any person,
firm or corporation other than the parties hereto and their respective legal
representatives, successors and assigns any rights or benefits under or by
reason of this Agreement.
19.2 All the right, title, and interest of the Manufacturer under the
Lease may be enforced by the Manufacturer, its successors, and assigns. The
Lease shall continue in full force and effect notwithstanding the death,
incapacity, or dissolution of the Operator or the increase, decrease, or change
in the personnel of or members of the Operator, and shall be binding upon the
Operator and the Operator's estate, legal representatives, heirs, and
successors.
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20. TERMINATION OF LETTER AGREEMENT BETWEEN THE MANUFACTURER
AND OPERATOR'S AFFILIATE
The parties agree that their mutual execution of this Agreement, shall
automatically cause the Letter Agreement, dated October 5, 1995, a copy of which
is attached as Schedule 3 hereto, to be canceled, terminated, void and of no
further force or effect to the end that the parties hereto shall have no further
obligations or liabilities under the said Letter Agreement, one against the
other, and in consideration of the agreement of each of the parties hereto ,
each of the parties does hereby remise, release, discharge, indemnify and hold
harmless the other party, and each shareholder, officer, director, affiliate,
associate, agent, and employee of such other party of and from manner of actions
and cause of action, suits, debts, dues, accounts, bonds, wages, benefits,
covenants, contracts, agreements, judgments, claims and demands whatsoever in
law or in equity, an including without limitation all such actions, claims and
demands, etc. arising out of, being based upon, or being in any way connected
with or related to the Letter Agreement.
21. GENERAL
21.1 Further Assurances
At any time, and from time to time, after the execution of this
Agreement, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
21.2 Waiver
Any failure on the part of any party hereto to comply with any of its
obligations, agreements or conditions hereunder may be waived in writing by the
party to whom such compliance is owed.
21.3 Brokers
Neither party has employed any brokers or finders with regard to this
Agreement, unless otherwise described in writing to all parties hereto.
21.4 Headings
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
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21.5 Governing Law
This Agreement shall be governed by the laws of the State of Delaware.
21.6 Entire Agreement
This Agreement is the entire agreement of the parties covering
everything agreed upon or understood in the transaction. There are no oral
promises, conditions, representations, understandings, interpretations or terms
of any kind as conditions or inducements to the execution hereof.
21.7 Severability
If any part of this Agreement is deemed to be unenforceable the balance
of this Agreement shall remain in full force and effect.
21.8 Publicity
All notices to third parties and all other publicity concerning the
transactions contemplated by this Agreement shall be subject to the prior
approval of counsel to the Manufacturer.
21.9 Counterparts
This Agreement may be executed in any number of counterparts and by
each party on a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
Agreement.
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In Witness Whereof, the parties hereto have caused this Amendment to be
executed the day and year first above written.
TIREX AMERICA INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxx, President
OCEANS TIRE RECYCLING & PROCESSING CO., INC.
By /s/ Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx, President
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SCHEDULE 1.8
The proprietary front-end system will consist of:
(i) electronic passive measuring and tire counting devices;
(ii) one automated steel bead cutter;
(iii) one automated vertical debeader;
(iv) one automated sidewall/tread separator-cutter;
(v) one automated tread size-reduction cutter
(vi) one automated sidewall size-reduction cutter
(vii) one optional accumulation xxxxxx;
(viii) one coalating table
(ix) all associated ancillary equipment and conveyance and exit
belts, chutes, and/or other components combined or integrated
with the foregoing, all tire cleaning equipment
204
(Exhibit to Equipment Lease and Purchase Agreement with Oceans Tire Recycling &
Processing Co., Inc.)
Tirex America Inc.
----------
RUBBER CRUMB PURCHASE OPTION AGREEMENT
----------
Rubber Crumb Purchase Option Agreement, made this 29th day of May 1997,
between:
Oceans Tire Recycling & Processing
Co., Inc., a New Jersey Corporation
0000 Xxxxxxxx Xxxx
Xxxx Xxxxx, X.X. 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
(the "Operator")
and
Tirex America Inc.
3767 Thimens, Suite 000
Xxxxx Xx. Xxxxxxx
Xxxxxx, Xxxxxx X0X 0X0
(the "Manufacturer")
Whereas, the Manufacturer and the Operator are parties to a certain
equipment lease and purchase agreement, of even date herewith (the "Equipment
Lease and Purchase Agreement"), between the Manufacturer and the Operator
respecting the sale by the Manufacturer and the Purchase by the Operator of the
"Nonproprietary Equipment" and the operating lease, between the Manufacturer, as
lessor, and the Operator, as lessee, respecting the "Proprietary Equipment", as
those terms are defined in the said Equipment Lease and Purchase Agreement.
Whereas, in consideration for the premises and the mutual promises made
therein, the Operator has agreed, pursuant to the Equipment Lease and Purchase
Agreement, to enter into this Option Agreement with the Manufacturer pursuant to
which the Operator hereby grants to the
205
Manufacturer the option to purchase up to forty percent (40%) of the rubber
crumb yielded by the disintegration of scrap tires in the TCS-1 System which is
the subject of the said Equipment Lease and Purchase Agreement (the "Subject
TCS-1 System").
Now, Therefore, it is agreed as follows:
1. Definitions
1.2 "Manufacturer" shall mean Tirex America Inc. and its successors and
assigns.
1.3 "Operator" shall mean Ocean Utility Contracting, Inc. and Bentley
Environmental Engineering Sources, Inc., jointly and severally, and its
successors and assigns.
1.4 All other Capitalized terms used herein and not otherwise defined shall
have the respective meanings attributed thereto in the Equipment Lease and
Purchase Agreement.
2. Grant of Option
The Operator hereby grants to the Manufacturer an option (the "Option") to
purchase up to forty percent (40%) of the rubber crumb yielded by the
disintegration of scrap tires in the Subject TCS-1 System (the "Rubber Crumb
Output").
3. Term of Option
The term of the Option shall be coextensive with the life of the Subject
TCS-1 System and shall commence as of the Acceptance Date.
4. Conditions of Option
The Manufacturer's rights to purchase the Rubber Crumb Output pursuant to
this Option shall be subject to fulfillment of the following condition:
(a) the Manufacturer shall furnish to the Operator, in writing,
within ninety days of the Acceptance Date and every six months
thereafter, the Manufacturer's anticipated purchase projections
(the "Six-Month Projected Purchase Order") specifying the grades,
types, and quantities of Rubber Crumb Output which the
Manufacturer commits to purchase within the six-month period
following the date of such Projected Purchase Order;
206
(b) the price specified in the Projected Purchase Order will be
negotiated every six months for a period of six months.
5. Inspection of Books
Upon written request, the Manufacturer or his designated agent may examine
the books and records of the Operator insofar as they relate to this Option
Agreement. Such examination shall take place at the offices of the Operator at
_________________________________________.
6. Assignment
6.1 This Option Agreement may not be assigned by the Operator except as
part of the assignment of the Equipment Lease and Purchase Agreement, which may
only be assigned pursuant to the express written consent of the Manufacturer,
and any such assignment shall not relieve the Operator of its obligations
hereunder unless expressly waived in writing by the Manufacturer.
6.2 This Option Agreement may be transferred, assigned, pledged, or
hypothecated by the Manufacture as part of the sale of its business or
otherwise.
7. Notices
All notices required or permitted to be given hereunder shall be mailed by
certified mail, or delivered by hand or by recognized overnight courier to the
party to whom such notice is required or permitted to be given hereunder at the
address set forth above for such party, in all cases with written proof of
receipt required. Any such notice shall be deemed to have been given when
received by the party to whom notice is given, as evidenced by written and dated
receipt of the receiving party. Either party may change the address to which
notice to it is to be addressed, by written notice to the other party, as
provided herein.
8. Binding Effect.
8.1 This Option Agreement shall bind and inure to the benefit of the
parties hereto and their respective legal representatives, successors and
assigns, provided, however, that this Option Agreement cannot be assigned by the
Operator except in accordance with Section 6.1 hereof. Nothing herein expressed
or implied is intended or shall be construed to confer upon or to give any
person, firm or corporation other than the parties hereto and their respective
legal
207
representatives, successors and assigns any rights or benefits under or by
reason of this Option Agreement.
8.2 All the right, title, and interest of the Manufacturer under this
Option Agreement may be enforced by the Manufacturer, its successors, and
assigns. This Option Agreement shall continue in full force and effect
notwithstanding the death, incapacity, or dissolution of the Operator or the
increase, decrease, or change in the personnel of or members of the Operator,
and shall be binding upon the Operator and the Operator's estate, legal
representatives, heirs, and successors.
9. Further Assurances
At any time, and from time to time, after the execution of this Agreement,
each party will execute such additional instruments and take such action as may
be reasonably requested by the other party to confirm or perfect title to any
property transferred hereunder or otherwise to carry out the intent and purposes
of this Agreement.
10. Waiver
Any failure on the part of any party hereto to comply with any of its
obligations, agreements or conditions hereunder may be waived in writing by the
party to whom such compliance is owed.
11. Brokers
Neither party has employed any brokers or finders with regard to this
Agreement, unless otherwise described in writing to all parties hereto.
12. Headings
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
13. Governing Law
This Agreement shall be governed by the laws of the State of Delaware.
14. Entire Agreement
This Agreement and the premises and mutual promises in the Equipment Lease
and Purchase Agreement constitute the entire agreement of the parties covering
everything agreed upon or understood with respect to the Option. There are no
oral promises, conditions,
208
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof.
15. Severability
If any part of this Agreement is deemed to be unenforceable the balance of
this Agreement shall remain in full force and effect.
16. Publicity
All notices to third parties and all other publicity concerning the
transactions contemplated by this Agreement shall be subject to the prior
approval of counsel to the Manufacturer.
17. Counterparts
This Agreement may be executed in any number of counterparts and by each
party on a separate counterpart, each of which when so executed and delivered
shall be an original, but all of which together shall constitute one Agreement.
In Witness Whereof, the parties hereto have caused this Option Agreement to
be executed the day and year first above written.
TIREX AMERICA INC.
By /s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx, President
OCEANS TIRE RECYCLING & PROCESSING CO., INC.
By /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
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(Exhibit to Equipment Lease and Purchase Agreement with Oceans Tire Recycling &
Processing)
TIREX AMERICA INC.
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ROYALTY AGREEMENT
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Royalty Agreement, made this 29th day of May 1997, between:
Oceans Tire Recycling & Processing
Co., Inc., a New Jersey Corporation
0000 Xxxxxxxx Xxxx
Xxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
(the "Operator")
and
Tirex America Inc.
3767 Thimens, Suite 000
Xxxxx Xx. Xxxxxxx
Xxxxxx, Xxxxxx X0X 0X0
(the "Manufacturer")
Whereas, the Manufacturer and the Operator are parties to a certain
equipment lease and purchase agreement, of even date herewith (the "Equipment
Lease and Purchase Agreement"), between the Manufacturer and the Operator
respecting the sale by the Manufacturer and the Purchase by the Operator of the
"Proprietary Front-End System", the "Nonproprietary Equipment"(collectively, the
"Purchased Equipment") and the operating lease, between the Manufacturer, as
lessor, and the Operator, as lessee, respecting the "Leased Proprietary
Equipment", as those terms are defined in the said Equipment Lease and Purchase
Agreement.
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Whereas, in consideration for the premises and the mutual promises made
therein, the Operator has agreed, pursuant to the Equipment Lease and Purchase
Agreement, to enter into this Royalty Agreement with the Manufacturer whereby
the Operator will pay to the Manufacturer certain royalties calculated upon the
gross proceeds from all sales of rubber crumb, fiber and steel from scrap tires
disintegrated by the TCS-1 System which is the subject of the said Equipment
Lease and Purchase Agreement (the "Subject TCS-1 System"). Now, Therefore, it is
agreed as follows:
1. Definitions
1.2 "Manufacturer" shall mean Tirex America Inc. and its successors and
assigns.
1.3 "Operator" shall mean Ocean Utility Contracting, Inc. and Bentley
Environmental Engineering Sources Inc., jointly and severally and its successors
and assigns.
1.4 All other Capitalized terms used herein and not otherwise defined shall
have the respective meanings attributed thereto in the Equipment Lease and
Purchase Agreement.
2. Royalty Fee
2.1 The Operator shall pay to the Manufacturer, not more than fifteen (15)
days after the end of each month, a royalty fee equal to three percent (3%) of
the gross proceeds from all sales of rubber crumb, fiber, and steel from scrap
tires disintegrated by the Subject TCS-1 System (the "Royalty Fee").
2.2 For purposes of this Royalty Agreement, the term "gross proceeds" shall
mean all revenues from the sale of rubber crumb, fiber and steel from scrap
tires disintegrated by the Subject TCS-1 System.
3. Payment Periods
Royalty Fees shall be reported and paid by the Operator to the Manufacturer
every month from the Acceptance Date throughout the life of the Subject TCS-1
System.
4. Royalty Reports
The Operator shall prepare royalty reports ("Royalty Reports"), to be
delivered by the Operator to the Manufacturer, together with the Royalty Fee due
thereunder, covering the immediately preceding month (the"Reporting Periods"),
in the following manner:
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The initial Reporting Period shall be the Reporting Period in which the
Acceptance Date falls. For example, if the Acceptance Date is September 15,
1997, the initial Reporting Period is the two-week period which commenced on
September 15, 1997 and ended on September 30, 1997, and the Royalty Report and
Royalty Fee for such "Reporting Period" is due on October 15, 1997.
(b) Each Royalty Report shall disclose the gross revenues from all sales
of steel, fiber, and rubber crumb produced by the operation of the
Subject TCS-1 System and the amount of the Royalty Fee calculated upon
the gross proceeds therefrom.
5. Inspection of Books
Upon written request, the Manufacturer or his designated agent may examine
the books and records of the Operator insofar as they relate to this Royalty
Agreement. Such examination shall take place at the offices of the Operator at
__________________________________.
6. Assignment
6.1 This Royalty Agreement may not be assigned by the Operator except as
part of the assignment of the Equipment Lease and Purchase Agreement, which may
only be assigned pursuant to the express written consent of the Manufacturer,
and any such assignment shall not relieve the Operator of its liabilities
hereunder unless expressly waived in writing by the Manufacturer.
6.2 This Royalty Agreement may be transferred, assigned, pledged, or
hypothecated by the Manufacture as part of the sale of its business or
otherwise.
7. Notices
All notices required or permitted to be given hereunder shall be mailed by
certified mail, or delivered by hand or by recognized overnight courier to the
party to whom such notice is required or permitted to be given hereunder at the
address set forth above for such party, in all cases with written proof of
receipt required. Any such notice shall be deemed to have been given when
received by the party to whom notice is given, as evidenced by written and dated
receipt of the receiving party. Either party may change the address to which
notice to it is to be addressed, by written notice to the other party, as
provided herein.
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8. Binding Effect.
8.1 This Royalty Agreement shall bind and inure to the benefit of the
parties hereto and their respective legal representatives, successors and
assigns, provided, however, that this Royalty Agreement cannot be assigned by
the Operator except in accordance with Section 6.1 hereof. Nothing herein
expressed or implied is intended or shall be construed to confer upon or to give
any person, firm or corporation other than the parties hereto and their
respective legal representatives, successors and assigns any rights or benefits
under or by reason of this Royalty Agreement.
8.2 All the right, title, and interest of the Manufacturer under this
Royalty Agreement may be enforced by the Manufacturer, its successors, and
assigns. This Royalty Agreement shall continue in full force and effect
notwithstanding the death, incapacity, or dissolution of the Operator or the
increase, decrease, or change in the personnel of or members of the Operator,
and shall be binding upon the Operator and the Operator's estate, legal
representatives, heirs, and successors.
9. Further Assurances
At any time, and from time to time, after the execution of this Agreement,
each party will execute such additional instruments and take such action as may
be reasonably requested by the other party to confirm or perfect title to any
property transferred hereunder or otherwise to carry out the intent and purposes
of this Agreement.
10. Waiver
Any failure on the part of any party hereto to comply with any of its
obligations, agreements or conditions hereunder may be waived in writing by the
party to whom such compliance is owed.
11. Brokers
Neither party has employed any brokers or finders with regard to this
Agreement, unless otherwise described in writing to all parties hereto.
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12. Headings
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
13. Governing Law
This Agreement shall be governed by the laws of the State of Delaware.
14. Entire Agreement
This Agreement and the premises and mutual promises in the Equipment Lease
and Purchase Agreement constitute the entire agreement of the parties covering
everything agreed upon or understood with respect to the Royalty Fees. There are
no oral promises, conditions, representations, understandings, interpretations
or terms of any kind as conditions or inducements to the execution hereof.
15. Severability
If any part of this Agreement is deemed to be unenforceable the balance of
this Agreement shall remain in full force and effect.
16. Publicity
All notices to third parties and all other publicity concerning the
transactions contemplated by this Agreement shall be subject to the prior
approval of counsel to the Manufacturer.
17. Counterparts
This Agreement may be executed in any number of counterparts and by each
party on a separate counterpart, each of which when so executed and delivered
shall be an original, but all of which together shall constitute one Agreement.
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In Witness Whereof, the parties hereto have caused this Royalty
Agreement to be executed the day and year first above written.
TIREX AMERICA INC.
By /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, President
OCEANS TIRE RECYCLING & PROCESSING CO., INC.
By /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
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