AMENDED AND RESTATED MODEL 2000 AGREEMENT
THIS AMENDED AND RESTATED MODEL 2000 AGREEMENT made and entered into as
of this 12th day of September, 1996 by and between RESOURCE TECHNOLOGY, INC., an
Iowa corporation, ("RTI") and MERCURY WASTE SOLUTIONS, INC., a Minnesota
corporation ("MWS").
RECITALS
A. RTI and U.S. Environmental, Incorporated ("USE") are parties to a
certain Agreement dated June 27, 1994 (the "Model 2000 Agreement") pursuant to
which RTI and USE jointly owned the design rights of the Model 2000 Machines
(defined below) (the "Design Rights"), USE exclusively owned the rights to
purchase, sell and distribute the Model 2000 Machines (the "Distribution
Rights") and RTI exclusively owned the manufacturing rights for the Model 2000
Machines (the "Manufacturing Rights").
B. Pursuant to the terms of a Distribution Rights Xxxx of Sale
Agreement dated as of January 4, 1996, USE assigned and transferred to MWS its
rights under the Model 2000 Agreement, including without limitation, its Design
Rights and the Distribution Rights; provided, however that the assignment was
subject to the consent of RTI.
C. To resolve outstanding issues between RTI and USE, and as a
condition to RTI's consent to the assignment from USE to MWS, the parties hereto
(and USE and Xxxx Xxxxxx) executed a certain letter of intent dated July 8, 1996
(the "Letter of Intent"), which provided, among other things, that RTI consents
to the assignment to MWS of USE's rights under the Model 2000 Agreement, and
that RTI and MWS would amend and restate the terms of the Model 2000 Agreement
upon the terms and conditions outlined in the Letter of Intent.
D. RTI has represented and warranted to MWS, USE and Xxxxxx in the
Letter of Intent, that (i) RTI has not accepted any orders for Model 2000
Machines other than through USE, (ii) RTI has not been actively marketing sales
of the Model 2000 Machines independently, whether in the United States market or
internationally, and (iii) RTI has not interfered with prospective sales of the
Model 2000 Machines by offering to such prospective customers a different model
of machine in lieu of the Model 2000, except that RTI has disclosed to MWS, USE,
and Xxxxxx discussions that RTI has had with an interested potential buyer in
Missouri, and RTI has referred said parties to said potential buyer.
E. RTI and MWS hereby desire to amend and restate the Model 2000
Agreement upon the terms and conditions set forth herein.
AGREEMENTS
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein and for one dollar and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Model 2000 Machines. As used in this Agreement, the "Model
2000 Machine" is defined as a fluorescent lamp processing
machine for recovering mercury, which includes, among other
things, the following components and their descriptions
(herein referred to as the "Model 2000 Technology"):
a. Pre-breaker bar which shears small sections of lamp
from whole lamps;
b. Crushing drums which finish crushing small sections
of lamps from pre-breaker so that glass is smaller
than end caps;
c. Cleated incline belt conveyor to transport glass from
crusher to trommel; and
d. Trommel with double screening.
2. Ownership Rights. RTI and MWS hereby agree and acknowledge
that with respect to the Model 2000 Machine (i) RTI shall be
the exclusive owner of the Manufacturing Rights; (ii) MWS
shall be the exclusive owner of the Distribution Rights; and
(iii) RTI and MWS shall jointly and equally own the Design
Rights.
3. Purchase Price/Terms of Payment.
a. For each Model 2000 Machine that MWS purchases
pursuant to this Agreement, MWS will pay a purchase price
determined as follows (the "Purchase Price"):
(i) if one or two Model 2000 Machines are ordered at
one time, the lesser of: (A) $92,500, (B) the lowest
price paid to RTI for a Recycling Machine (defined
below) within the previous 180 days by a third-party
distributor or any other person or entity that
resells to an end-user customer, or (C) as long as
the price at which MWS sells the Model 2000 Machine
or a Recycling Machine during the previous 180 days
is greater than or equal to the price at which RTI
sells a Recycling Machine to an end-user customer
during the same 180 day period, a sum equal to 56% of
the lowest price at which RTI (or an RTI affiliate,
agent or independent contractor acting at the
direction or request of RTI) directly sold a
Recycling Machine to an end-user customer within such
180 day period, or
(ii) if three or more Model 2000 Machines are ordered
at one time, the lesser of (A) $84,000, (B) the
lowest price paid to RTI for a Recycling Machine
within the previous 180 days by a third-party
distributor or any other person or entity that
resells to an end-user customer, or (C) as long as
the price at which MWS sells the Model 2000 Machines
or a Recycling Machine during the previous 180 days
is greater than or equal to the price at which RTI
sells a Recycling Machine to an end-user customer
during the same 180 day period, a sum equal to 51% of
the lowest price at which RTI (or an RTI affiliate,
agent or independent contractor acting at the
direction or request of RTI) directly sold a
Recycling Machine to an end-user customer within such
180 day period.
b. The prices described in subparagraphs (i)(A) and
(ii)(A) above will be guaranteed by RTI not to change through
January 1, 1998 (except in the event of unforeseeable
increases of more than 20% in the costs of manufacturing the
Model 2000 Machines), and annual increases of such prices
after January 1, 1998 will not exceed 10% of the previous
year's sale prices in subparagraphs (i)(A) and (ii)(A) above.
Notwithstanding anything to the contrary, MWS agrees that for
the first four Model 2000 Machines ordered after the closing
of this transaction (excluding orders for machines for any of
21st Century Environmental, Total Reclaim or Environmental
Light Recyclers which had been prospective sales of USE prior
to the date of this Agreement), MWS will pay RTI the Purchase
Price, as determined in subparagraph 3.a.(i) or 3.a.(ii)
whichever is applicable, plus the following additional
amounts: (i) the sum of $9,000 for each of the first two
machines, and (ii) the sum of $5,000 for each of the third and
fourth machines. For determination of the applicable pricing,
each party will provide written notice to the other party
within 10 days of the consummation of any sale of a Recycling
Machine or a Model 2000 Machine, including without limitation
the price at which such machine was sold.
c. The Purchase Price for a Model 2000 Machine will
be paid by MWS to RTI as follows:
(i) MWS will make a deposit of $30,000 for each Model
2000 Machine upon placing an order with RTI;
(ii) MWS will pay another $30,000 upon the shipment
of each Model 2000 Machine, which shipment will be
F.O.B. RTI's facility or RTI's agent's facility;
(iii) the balance of the Purchase Price will be due
30 days after installation (if RTI performs the
installation); provided, however, that if MWS (or its
customer) does not accept delivery of any Model 2000
Machine within 120 days from the order, the
customer/MWS shall pay the balance due together with
any storage costs incurred.
d. RTI agrees to cooperate with MWS to accommodate
any deadlines of a customer purchasing a Model 2000 Machine
from MWS, but in any event, absent unforeseen circumstances
beyond RTI's control, RTI will have a Model 2000 Machine
available for shipment no later than 60 days after the date a
$30,000 deposit is paid to RTI. At the time an order is
placed, MWS and RTI will prepare a tentative schedule for the
manufacture of a Model 2000 Machine, date of anticipated
shipment, and installation (if RTI installs).
4. Shipment/Transfer of Title. Title to a Model 2000 Machine
shall pass to MWS upon loading a machine upon the transporter
for shipment, and RTI will warrant that each such Model 2000
Machine is free and clear of any and all liens, encumbrances
or interests of RTI or any third party at the time title is
transferred to MWS.
5. Installations. Based upon a tentative schedule prepared in
accordance with Section 3 above, RTI will be available to
install a Model 2000 Machine upon receipt of at least two
weeks notice from MWS (or such lesser time as the parties may
agree from time to time). For the installation of a Model 2000
Machine performed by RTI, RTI will be paid a fee determined in
accordance with Schedule I attached hereto, as the same may be
amended by RTI and MWS from time to time. Notwithstanding the
foregoing, RTI acknowledges and agrees that MWS shall not be
obligated to retain RTI's services for any installations. If
RTI's services are not utilized for the installation of a
Model 2000 Machine, RTI shall arrange for shipment at MWS's
request and all balances owing to RTI for such Model 2000
Machine shall be paid upon confirmation of the shipment.
6. RTI's Limited Warranties. As manufacturer of the Model 2000
Machines, RTI provides to MWS the following limited warranties
with respect to each Model 2000 Machine manufactured pursuant
to this Agreement: (i) that the Model 2000 Machine will be
free from any defects in material or workmanship at the time
of shipment and for 90 days thereafter; and (ii) that the
Model 2000 Machine conforms to the specifications set forth on
Schedule II hereto, as well as the components of the Model
2000 Technology, as defined above, or any other drawings or
specifications mutually agreed upon by RTI and MWS. This
warranty shall be exclusive of transportation costs to the
site. In addition, RTI shall provide a manufacturer's warranty
on parts (exclusive of conveyor belts, freight costs, and
transportation costs to the site) of 90 days from the date of
shipment. MWS shall provide written notice to RTI promptly
upon learning of a defect or claim of a breach of RTI's
warranties in a Model 2000 Machine or of a defective part,
prior to the expiration of the applicable warranty period, and
RTI agrees as its sole and exclusive remedy to repair such
defect or replace any such defective parts as soon as is
reasonably possible after receipt of such notification, at no
charge to MWS or the end-user/ customer. If RTI does not
install the Model 2000 Machine, RTI shall not be liable or
responsible for any problems or defects attributable to
installation, and RTI shall be reimbursed for any costs or
expenses incurred by RTI in repairing defects or in consulting
on problems directly related to installation not performed by
RTI, including transportation costs.
OTHER THAN AS SET FORTH IN THIS SECTION 6, SELLER DOES NOT
MAKE ANY REPRESENTATIONS OF ANY KIND AS TO THE CONFORMITY OF
THE MODEL 2000 MACHINE TO ANY REGULATIONS, RULES OR LAWS.
OTHER THAN AS SET FORTH IN THIS SECTION 6, SELLER DISCLAIMS
ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS OF ALL GOODS FOR A
PARTICULAR PURPOSE.
7. Covenant Not To Compete/Non-Solicitation. In light of their
respective interests in the Design Rights, Manufacturing
Rights and Distribution Rights of the Model 2000 Machines, and
to enable MWS and RTI to pool their resources as provided in
this Agreement in order to produce and distribute the Model
2000 Machines and to prevent the parties from engaging in
unfair competition, RTI and MWS hereby agree:
a. that for 36 months after the date hereof (the
"Noncompete Period"), other than the Model 2000
Machines which will be manufactured and distributed
pursuant to the terms of this Agreement, neither
party will manufacture or distribute a model of
fluorescent lamp recycling machine anywhere in North
America, except as expressly permitted in
subparagraph 7b. below; provided, however, that such
restriction does not apply to retort units, conveyors
and lamp and bulb crushers not designed to function
with or be added to the Model 2000 Machines, and
provided, further, that there shall be no restriction
on the research and development of fluorescent lamp
recycling machines;
b. that the parties acknowledge that other
technologies may evolve for recovery of mercury from
fluorescent light fixtures, and accordingly, after
the first six months of the Noncompete Period, the
restrictive covenant set forth in subparagraph 7a.
above will not prohibit either MWS or RTI from
manufacturing, distributing and/or selling
fluorescent lamp recycling devices or systems which:
(i) employ processes and means of operation
which do not include any of the components
of the Model 2000 Technology (as defined
above); or
(ii) employ processes and utilize any of the
components of the Model 2000 Technology,
that:
(A) are less than 30 feet 6 inches or
greater than 70 feet 6 inches of lineal feet
of floor space (whether in a straight line
or other configuration), and (B) the
published/stated technical specifications
for hourly processing capability are less
than 2,000 lamps or more than 3,000 lamps
(hereinafter such a device shall be referred
to as a "Recycling Machine");
provided, however, that any such fluorescent lamp
recycling machine (whether under (i) or (ii) above)
must be in a different color than the Model 2000
Machines, RTI agrees that it will not use or display
the names or marks "USA Lights", "Model 2000", or any
designation that is confusingly similar to either of
those names, and RTI agrees not to sell any such
machine in the state of Minnesota or any area in the
state of Wisconsin that is within a 200 mile radius
from MWS's Roseville, Minnesota plant.
c. that the parties will refrain from soliciting,
interfering with or endeavoring to entice away any
prospective or existing customer of the other party
in connection with sales of any such other
fluorescent lamp recycling machines. An existing
customer shall include any customer with whom an
order for a fluorescent lamp recycling machine has
been placed or for whom equipment has been installed
and which is listed on Schedule III attached hereto,
and a prospective customer shall include any party
with whom MWS or RTI has commenced discussions
(beyond the initial sales/marketing contact), prior
to any substantive initial contact by the other
party, relating to the sale of a fluorescent lamp
recycling machine and whom MWS or RTI has notified in
writing the other party that such business is being
actively pursued by means of a written or oral
proposal or other ongoing discussions or negotiations
which have a reasonable opportunity for success.
Nothing in this Agreement will prohibit or restrict
either party's ability to respond to or accept
business from identified existing or prospective
customers of the other party, provided that such
business was not directly or indirectly initiated or
affirmatively solicited by such party.
d. that if a party violates the restrictive covenants
set forth in this Section 7, the other party will
suffer immediate and irreparable harm which may not
be adequately compensated or determined by monetary
damages, and as such the parties agree that in the
event of a breach or threatened breach of these
restrictive covenants a party shall be entitled to
equitable relief, including without limitation,
injunctive relief, without necessity of posting bond;
and in connection with a violation of the restrictive
covenants described in paragraphs 7a and b above, the
violating party shall indemnify the other party
against any loss, damage, liability or expense
(including attorneys' fees) arising out of or in
connection with the breach or threatened breach of
such restrictive covenant.
8. Exclusive Territories/Royalties. RTI agrees that for a period
of 36 months, RTI will voluntarily agree to honor any
exclusive territories granted by USE to those buyers of Model
2000 Machines listed on the attached Exhibit A, provided that
at all times RTI receives a payment equal to 30% of any past,
present, or future royalties actually collected, which arise
out of such sales of the Model 2000 Machines and owing
pursuant to the terms of the purchase agreements described on
Exhibit A. MWS/USE shall distribute to RTI its 30% share of
any royalties collected within forty (40) days after the end
of each quarter. RTI shall not be obligated to honor any
exclusive territory with respect to which RTI has not received
its 30% share of royalty payments owing within 60 days after
the end of each quarter. MWS shall provide to RTI a quarterly
accounting for all royalties received from said buyers, and
RTI shall have the right to independently verify the accuracy
of said quarterly reports from MWS. Notwithstanding the
foregoing, RTI does not hereby agree to become bound by the
rights of first refusal granted by USE to certain buyers of
the Model 2000 Machines. RTI recognizes that MWS may grant
exclusive territories and rights of first refusal to
prospective purchasers of Model 2000 Machines pursuant to
which MWS will agree not to sell any other Model 2000 Machines
in an agreed upon territory as long as the purchaser pays a
royalty to MWS. RTI shall not be bound by the terms of any
such future exclusive territories and/or rights of first
refusal granted by MWS, unless RTI expressly consents in
writing to abide by such exclusive territory agreement and/or
rights of first refusal, in return for a royalty payment or
other consideration to be agreed upon by RTI and MWS on a case
by case basis. RTI shall have no claims or right to any
royalties paid to MWS in connection with any such exclusive
territories and/or rights of first refusal unless RTI has
given MWS its written consent to be bound to such exclusive
territory or rights of first refusal agreements.
9. Recitals. The parties hereto hereby confirm and reaffirm the
accuracy of the recitals set forth above.
10. Expiration. This Agreement shall expire upon the earlier of:
(i) mutual agreement of the parties hereto, which agreement
shall be evidenced by a writing signed by both parties, (ii)
either party shall become insolvent or unable to pay its
debts, suspends business, makes a general assignment for the
benefit of creditors, files or has filed against it a petition
in bankruptcy or a petition or answer seeking a
reorganization, arrangement with creditors or other similar
relief under the Federal bankruptcy laws or under any other
applicable law of the United States of America or any state
thereof, or consents to the appointment of a trustee or
receiver for it or for a substantial part of its properties,
or (iii) September 30, 1999. Upon the expiration of this
Agreement pursuant to any of the foregoing, MWS and RTI agree
that this Agreement shall be of no further force and effect
and the parties shall have no further obligations to each
other, the parties shall no longer have their respective
exclusive rights provided in Section 2 hereof, and accordingly
each of MWS and RTI shall have the right to utilize the Design
Rights, and to exercise the Manufacturing Rights and the
Distribution Rights without obligation to or recourse from the
other party. Notwithstanding anything to the contrary herein,
the parties agree that any modifications or changes to the
Design of the Model 2000 Machines developed by RTI or MWS
during the term of this Agreement, which constitutes
technology that is original or new to the existing design of
the Model 2000 Machine that is patented or on which a patent
is pending, shall be the exclusive property of such developing
party (both during and after the term of this Agreement) and
may not be used by the other party without the express written
consent of the developing party.
11. Assignment. Neither party may assign or transfer its rights or
obligations hereunder without the prior written consent of the
other party, which consent shall not be unreasonably withheld.
RTI agrees that MWS may assign its rights and obligations
hereunder to USE, and MWS shall promptly provide notification
to RTI of any such assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their
respective successors and permitted assigns.
12. Notices. Any notices required or contemplated hereunder shall
be effective upon the placing thereof in the United States
mails, certified mail and with return receipt requested,
postage prepaid, or delivered to a nationally recognized
overnight carrier, or by messenger or by facsimile (with hard
copy to follow), and addressed as follows (or at such other
address as may be designated by a party in a written notice to
the other party):
If to RTI: Resource Technology, Inc.
000 Xxxx Xxxxxx
Xxx Xxxxx, XX 00000
Tele/fax: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
With Copy to: Best & Xxxxxxxx, P.L.L.P.
4000 First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
If to MWS: Mercury Waste Solutions, Inc.
000 X. Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx
With Copy to: Xxxxxx and Xxxxxx, P.A.
0000 XXX Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxx, Esq
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
13. Amendment and Waiver. No failure, forbearance, negligence or
delay of any kind or extent on the part of any party hereto in
connection with the enforcement or exercise of any rights
under this Agreement and no course in dealing between RTI and
MWS shall affect, impair or diminish the right to enforce or
take full benefit for any provisions of this Agreement at any
time. No waiver by any party of the performance of any
provision of this Agreement shall constitute or be deemed or
implied as a waiver as to such party's right to enforce any
provisions of this Agreement at any time in the future.
14. Superseding Effect. This Agreement, from and after the date
hereof, supersedes and has merged into it all prior oral and
written agreements on the same subjects by or between the
parties hereto, including without limitation the Letter of
Intent, with the effect that this Agreement shall control.
15. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
and the same instrument and either of the parties may execute
this Agreement by executing any such counterpart.
16. Independent Contractors. MWS and RTI acknowledge and agree
that nothing in this Agreement shall be interpreted to
constitute a partnership, association, joint venture or other
organization or business entity between MWS and RTI, it being
the expressly agreed that each of MWS and RTI is an
independent contractor with respect to the other, and neither
shall be deemed to be an employee or agent of the other party.
17. Governing Law/Consent to Jurisdiction. All actions or
proceedings with respect to this Agreement shall be conducted
in the Courts of the State of Minnesota (State or Federal)
and, by execution and delivery of this Agreement, RTI
irrevocably and unconditionally submits to the jurisdiction
(both subject matter and personal) of such courts, and
irrevocably and unconditionally waives (i) any objection RTI
may have or hereafter have to the laying of venue in such a
court, and (ii) any claim that any action proceeding in such
court has been brought in an inconvenient forum. Service of
process may be effected upon RTI through such service outside
of the State of Minnesota due to its waiver of objection to
such service. This Agreement shall be solely governed by and
interpreted in accordance with the internal laws of the State
of Minnesota, without regard to conflicts of laws provisions.
18. Captions, Headings. Captions and section headings used herein
are for convenience only and are not part of this Agreement,
and shall not be used in construing this Agreement. References
herein to sections and paragraphs shall apply to the sections
and paragraphs of this Agreement.
19. Severability. Every provision of this Agreement is intended to
be severable. In the event any term or provision is declared
to be illegal or invalid by a court of competent jurisdiction,
for any reason whatsoever, such illegality or invalidity shall
not affect the remaining terms and conditions of this
Agreement, which terms and conditions shall remain binding and
enforceable.
20. Savings Clause. RTI and MWS agree that the scope and terms of
this Agreement are reasonable and it is the parties' intent
and desire that this Agreement be enforced to the fullest
extent permissible under the laws and public policies applied
in the jurisdiction in which enforcement is sought. If any
particular provision of the Agreement shall be adjudicated to
be invalid or unenforceable, the parties specifically
authorize the tribunal making such determination to replace
the invalid or unenforceable provision to allow this
Agreement, and the provisions hereof, to be valid and
enforceable to the fullest extent allowed by law and/or public
policy.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Model 2000 Agreement to be duly executed by their authorized
representatives as of the date first above written.
RESOURCE TECHNOLOGY, INC.
By __________________________________
Its _____________________________
MERCURY WASTE SOLUTIONS, INC.
By __________________________________
Its _____________________________
Exhibits
A List of Buyers of Model 2000 Machines
Schedules
1 Installation Fees
2 Six Major Components of the Model 2000
3 List of Existing Customers (Orders/Installed) and Prospective Customers
The Company will provide copies of omitted schedules and exhibits upon request.
