Exhibit 1
FINANCING REPRESENTATION AGREEMENT
This Financing Representation Agreement ("Agreement") is entered into as of
February __, 1997 between Swiss American Capital Management, Inc., a Florida
corporation ("Representative") and (DE) U.S. Environmental, Inc., a Delaware
corporation and any of its assigns or joint venture partners ("Company").
WHEREAS, the Company has certain rights to the technology for the development
and construction of recycling virtritication plants and desires to retain the
Representative to assist it in securing the financing necessary for the
development and construction of virtrification plants using the Company's
technology; and
WHEREAS, the Representative has facilitated equity financings of the Company and
this Financing Representation Agreement is a material and fundamental condition
of such equity financings of the Company; and
WHEREAS, the Representative is agreeable to and financially capable of providing
financial services on the terms and conditions set forth below; and
WHEREAS, the parties desire to set forth their understandings in writing.
NOW, THEREFORE, consideration of the mutual agreements and covenants set forth
in this Agreement, the sum of Ten Dollars ($10.00) and other good and valuable
consideration, the parties agree as follows:
1. Engagement of Representative. The Company engages the Representative as its
non- exclusive representative worldwide, with the rights described in Section 2
below, to arrange for and provide financing for virtrification plants including
but not limited to equipment cost, site preparation, construction costs,
permitting, utility hook-up, legal costs, land acquisition or site lease and
other project related costs. These costs shall constitute the project
development contract amount as referred to hereinafter. The Company understands
the Representative intends to utilize Special Purpose Vehicles ("SPV") to
facilitate the financing for such projects. The Company is agreeable to
assigning its rights to its interests in the assets, service and other contracts
relating to such virtrification plant development, operation and construction to
the SPV so that the SPV may collateralize and secure its fund raising efforts
with the property, plant, equipment, service contracts and other assets relating
to specific virtrification plant projects financed through the SPV.
2. Right of First Refusal. The Company hereby grants the Representative the
primary and initial notification for a right of first refusal for any
vitrification plant projects requiring financing. Prior to the Company
submitting a bid, Request for Proposal (RFP) response or other offer for
development of a vitrification plant and the relating service agreement, the
Company will provide the Representative with the relevant documentation setting
forth the pricing structure for the bid. The Representative shall have, whenever
possible, a 90-day period to evaluate the schedules of construction costs,
operating expenses and their respective budgets to determine whether, at that
pricing, it is willing to undertake the related project financing. If the
Representative accepts the pricing structure set forth in the RFP bid or tender
and so notifies the Company in writing within said (whenever possible) 90-day
right of first refusal period, then the Representative shall have the right and
obligation to facilitate the financing for the respective project. In turn, the
Company agrees to assign the assets relating to that project and the related
service and other contracts to the Representative or its SPV in order to
facilitate the financing.
During the 90-day evaluation period (whenever possible) by the Representative,
the Company shall have the right to explore alternative financing options,
should the Representative not accept the bid.
3. Role of the SPV. The Representative through its SPV's (operating under a
trust indenture), will be responsible for the necessary funding for the entire
project including: the disbursement of all funds relating to the construction
(payment schedules to be agreed between the Company and the Representative for
each individual project, which include and incorporate the interests of the
Company described in Paragraph 4 below), which include but are not limited to
operating expenses, maintenance expenses, plant management, transportation
(where applicable) and other related expenses. The SPV will have ninety (90)
days from the date of executing a final project award contract to secure a
funding commitment for the project. Any extension shall require the mutual
consent of all parties to this agreement.
4. Interest of Company. The parties understand that the SPV will only have
rights to the project and related service and other contracts to the extent the
SPV is able to facilitate funding as outlined herein for a specific project. The
SPV will use its best efforts and endeavor, subject to economic feasibility and
the consent of the other parties necessary to consummate the funding structured
by the SPV, including but not limited to the trustee, letter of credit or other
credit enhancement provider, bonding company or rating agency to provide the
Company with the following rights as it relates to a specific project funding:
The Company will receive 40% of the project development contract amount upon
closing of the funding arranged by the SPV for that project. Thereafter, 10% of
the project contract amount shall be paid to the Company every 60 days.
The Company will receive a management fee. This fee will be solely for the
purpose of reimbursing the Company for its expertise in the overall management
of the facility. it will not include operation, maintenance or any other
expenses associated with the facility. During the first year of operation, the
Company will receive a management fee as follows. The fee paid shall not exceed
$100,000 per month for a standard 60OTPD plant as contemplated in the Town of
Hempstead RFP. The monthly fee will be a minimum of $80,000 per month for a
standard 600 TPD plant as contemplated in the Hempstead RFP. After the first
year of operation, the Company will receive a management fee based on a
percentage of actual operating costs and include an incentive for meeting or
coming in under budget projections. The specific project management fee will be
outlined and attached hereto as an addenda. The specific project management fee
addenda will be negotiated prior to final commitment of the parties to the
project.
5. Term. This Agreement is non-cancelable unless mutually agreed upon in writing
by both parties. The proposed Town of Hempstead project is part of this
Agreement.
6. Confidentiality. The parties will hold, and will cause their respective
officers, directors, employees, agents, consultants, to hold, in strict
confidence, unless compelled to disclose by judicial or administrative process,
other requirements of law, all confidential documents and confidential
information concerning the other party furnished to it by the other party or
such parties, officers, directors, employees, agents, consultants, or
representatives in connection with this agreement or the transactions
contemplated herein. To the extent a party marks any information, documents, or
schedules as "Confidential" it will be treated as confidential for purposes of
this Agreement. It is understood and should be noted that a portion of this
information has been drawn from research sources clearly in the public domain. A
portion of other information remain "common reasoning". Such previous public
knowledge on the part of the parties shall not be allowed as a reason to excuse
the parties from honoring this agreement.
7. Amendment. No amendment to this Agreement shall be valid unless such
amendment is in writing and is signed by authorized representatives of all
parties to this Agreement.
8. Waiver. Any of the terms and conditions of this Agreement may be waived at
any time and from time to time in writing by the party entitled to the benefit
thereof, but a waiver in one instance shall not be deemed to constitute a waiver
in any other instance. A failure to enforce any provision of this Agreement
shall not operate as a waiver of the provision or of any other provision hereof.
9. Severability. In the event that any provision of this Agreement shall be held
to be invalid, illegal or unenforceable in any circumstances, the remaining
provisions shall nevertheless remain in full force and effect and shall be
construed as if the unenforceable portion or portions were deleted.
10. Governing Law/Dispute Resolution. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.
Disputes shall be resolved through AAA arbitration proceedings.
Venue for any arbitration shall be Bermuda.
11. Notices. All notices, requests, payments, instructions, claims or other
communications hereunder shall be in writing and shall be deemed to be given or
made when delivered by first-class, registered or certified mail to the
following address or addresses or such other address or addresses as the parties
may designate in writing in accordance with this Section:
If to Company: U.S. Environmental, Inc.
000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, XX 00000
If to Representative: Swiss American Capital Management, Inc.
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, XX 00000
12. Publicity. All press release or public announcements regarding this
Agreement or future project financings shall be in a form that is mutually
agreeable.
13. Assignment. Except for the Representatives rights to assign rights to the
SPV's this agreement is not assignable by either party without the prior written
consent of the other party which shall not be unreasonably withheld.
14. Execution in Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement. This Financing Representation Agreement supersedes
and restates the previous agreement entered into between the parties on or about
November 20, 1996.
DATED as of Xxxxxxxx 00, 0000
(XX) U.S. ENVIRONMENTAL, INC.
/s/ Xxxxxxx Xxxxx
By: Xxxxxxx Xxxxx
Its: President
SWISS AMERICAN CAPITAL MANAGEMENT, INC.
/s/ Xxxxxx X. Xxxxx
By: Xxxxxx X. Xxxxx
Its: President
