EXHIBIT 10 (pp)
322
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THE TIREX CORPORATION
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ROYALTY AGREEMENT
Royalty Agreement, made this day of August 1998 between:
ENERCON America Distribution Limited
000 Xxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000
(the "Operator")
and
The Tirex Corporation
000 Xx. Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
(the "Manufacturer")
Whereas, the Manufacturer and the Operator are parties to certain
equipment lease and purchase agreements, of even date herewith (the "Equipment
Lease and Purchase Agreements"), between the Manufacturer and the Operator
respecting the sale by the Manufacturer and the Purchase by the Operator of the
"Purchased Equipment" and the operating lease, between the Manufacturer, as
lessor, and the Operator, as lessee, respecting the "Leased Equipment", as those
terms are defined in the said Equipment Lease and Purchase Agreements.
Whereas, in consideration for the premises and the mutual promises made
therein, the Operator has agreed, pursuant to the Equipment Lease and Purchase
Agreements, 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 and the TCTS-1 System which are the respective
subjects of the said Equipment Lease and Purchase Agreements (the "Subject
Systems").
Now, Therefore, it is agreed as follows:
1. Definitions
1.2 "Manufacturer" shall mean The Tirex Corporation and its successors and
assigns.
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1.3 "Operator" shall mean ENERCON America Distribution Limited and all
other corporations, partnerships, or other entities, now or in the future
controlled by, under common control with, or in control of, ENERCON America
Distribution Limited, jointly and severally.
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 net proceeds from all sales of rubber crumb, fiber, and steel from scrap
tires disintegrated by the Subject Systems (the "Royalty Fee").
2.2 For purposes of this Royalty Agreement, the term "net proceeds" shall
mean all revenues from the sale, other than to the Manufacturer pursuant to the
Crumb Rubber Purchase Option Agreement, of rubber crumb, fiber and steel from
scrap tires disintegrated by the Subject Systems less any uncollected accounts
actually written off as bad debts by the Operator.
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 Systems.
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 "Reporting Periods", in the
following manner:
(a) The initial Reporting Period shall be the Reporting Period in which
the Acceptance Date falls. For example, if the Acceptance Date is
September 15, 1998, the initial Reporting Period is the two-week
period which commenced on September 15, 1998 and ended on September
30, 1998, and the Royalty Report and Royalty Fee for such "Reporting
Period" is due on October 15, 1998.
(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 Systems 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 only insofar as they relate to this
Royalty Agreement and are reasonably required to verify the Operator's revenues
from sales of steel, fiber, and rubber crumb produced
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by the operation of the Subject Systems. Such examination shall take place at
the offices of the Operator only during normal business office operating hours.
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.
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
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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 Agreements 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.
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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 Royalty Agreement
to be executed the day and year first above written whatsoever.
ENERCON AMERICA DISTRIBUTION LIMITED
By /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx, President
THE TIREX CORPORATION
By/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx, President
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