EX-10 2 jointventureagrmt.htm MASTER JOINT VENTURE AGREEMENT MASTER JOINT VENTURE AGREEMENT
MASTER JOINT VENTURE AGREEMENT
THIS MASTER JOINT VENTURE AGREEMENT (“Agreement”) is made by and between Geotec, Inc. (“Geotec”), a Florida corporation maintaining its principal business address at 000 X. Xxxxxxxx Xxx., Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxx 00000 and GreenCoal, LLC (“GreenCoal”), an Illinois limited liability company that maintains its principal place of business at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and is effective as of the last date of execution set forth below. Geotec and GreenCoal may hereinafter be referred to collectively as the “Parties.”
WHEREAS, Geotec anticipates further development of the Process by commercial producers of Product, whether by Geotec, Green Energy Management, LLC, a Florida limited liability company (“GEM”) or GEM controlled limited liability companies, Ecotec Coal, LLC, a Florida limited liability company (“Ecotec”), or through joint venture or a sale or supply arrangement, or otherwise, with other Persons, as defined herein, or otherwise (each such user, a “Project Company”);
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a.
As used herein, the terms “Agreement”, “Facility”, “Geotec”, “GreenCoal” “Parties”, “Party”, “Process”, “Product”, “Project Company”, and “Technology” shall have the meanings ascribed to such terms above, and the following terms shall have the following meanings:
“Affiliate” means with respect to a particular Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.
“Business Day” means a day on which commercial banks are open for normal business in New York.
“Claims” has the meaning specified in Section 14 hereof.
“Code” means the Internal Revenue Code of 1986, as amended, or any successor law, and regulations issued by the IRS pursuant to the Code, or any successor law.
“Confidential Information” has the meaning specified in Section 10 hereof.
“Control” (including, with correlative meanings, the terms, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“Dispute” has the meaning specified in Section 14 hereof.
“Expenses” means, for any period, all accounts payable and liabilities accrued as of the end of such period and all disbursements of cash by or on behalf of a Party, GEM or Ecotec during such period, in respect to the costs and expenses incurred during such period in managing, permitting, insuring, siting, owning, operating, enhancing, maintaining and repairing a Facility, including without limitation the fees and disbursements paid by or on behalf of the Project Company under the Project Contracts, the general and administrative expenses of the Project Company, including franchise or similar taxes payable to any Governmental Body and fees for qualifying as a foreign entity in any other jurisdiction, and costs of Quarterly and Year-end reviews and audits of the operations of the Facility and the financial statements of the Project Company and the preparation of income tax returns of same, all as computed and determined in accordance with GAAP. Expenses for a period shall not include (a) payments of or in respect to the purchase price for Project assets, (b) any uninsured damages, costs or expenses arising from a breach by the Project Company of any of the Project Contracts, unless such a breach is caused by the wrongful acts or omissions of Operator, (c) principal and interest as they become due and payable on indebtedness of the Project Company that has been incurred for purposes other than the installation, operation, maintenance or repair of the Facility or the ownership of other Project assets, and (d) any costs or expenses incurred which are expressly excluded from this category by the Operating Agreement.
“Feedstock” means gob, culm, lignite, or other lower grade or dirty coals, or high carbon fly ash, any other substance recovered from a Site that creates Revenue or otherwise generates cash, or cash equivalents from sale or assignment and is processed by the Facility in order to make Product.
“Feedstock Supply Agreement” means any agreements or arrangements for the supply of Feedstock to a Facility.
“Fuel Sales Agreement” means any agreements or arrangements for the sale of Product produced at a Facility during the Term.
“GAAP” means generally accepted accounting principles.
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“Governmental Body” means any of the following: (a) nation, state, county, city, town, village, district, or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (d) multi-national organization or body; or (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.
“IRS” means the Internal Revenue Service or its successor.
“Legal Requirement” means any applicable administrative (or quasi-administrative) order, constitution, law, ordinance, principle of common law, regulation, statute or treaty of any Governmental Body.
“Monetizer” means a Person other than the Parties or their Affiliates who purchases a Facility or an interest in the entity owning or operating a Facility with the agreement that Section 45 Tax Credits arising from the operation of a Facility will be allocated to such Person.
“Month” means a calendar month and “Monthly” means each calendar month.
“Net Profits” means, in respect to a Project, Revenues less Project Operating Expenses of the Project.
“Operating Agreement” means, as to each Project the standard form operating and management agreement in substantially the same form as set forth on Exhibit “A” attached hereto, to be entered into between each Project Company and the Operator for management and operating services for the Project, and any amendments thereto and any successor or replacement agreements thereof.
“Operator” means, as to each Project, Ecotec, or such subcontractor as designated by Ecotec, as the Operator under an Operating Agreement.
“Payment Date” means the 20th day of the following Month; provided that if such day is not a Business Day, then the next Business Day occurring after such 20th day.
“Person” means a natural person, partnership (whether general or limited and whether domestic or foreign), limited liability company, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity.
“Project” means the business of operation of one or more Facilities by a Project Company for the production of up to 20 million tons of Product utilizing the Process.
“Project Contracts” means any Fuel Sales Agreement, any Feedstock Supply Agreement, any Services Agreement and any Site Lease for a Project.
“Project Operating Expenses” means, in respect to a Project, all Expenses incurred in the operation of the Project.
“Quarterly” means each calendar quarter.
“Refined Coal” means solid synthetic fuel produced by utilization of the Process.
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“Revenues” means, for any period, all cash received by or on behalf of a Project Company or its Affiliates due to operation of the Project or the sale of Refined Fuel and any associated Product during such period, and all accounts receivable as of the end of such period in respect to the operation of the Project or the sale of Refined Fuel and any associated Product from the Facility during such period, including without limitation sale proceeds for Product, whether received by or due to the Project Company or affiliated marketing agents or principals, and capital contributions due to the Project Company or affiliated principals incident to the generation of Section 45 Tax Credits (excluding benefits to Monetizers) or emissions credits.
“Section 45 Tax Credits” means the tax credits provided by Section 45 of the Code for solid synthetic fuel produced from Feedstock and constituting Refined Coal.
“Services Agreement” means any agreement or arrangement, other than an Operating Agreement or this Agreement, for the provision of services with relation to operations of a Facility, and any amendments thereto and any successor or replacement agreements thereof.
“Site” means the premises owned, leased or licensed by a Project Company for the location and operation of one or more Projects.
“Site Lease” means any lease or license for a Site.
“Supply Agreement” means, as to each Project, the standard form agreement as set forth on Exhibit “B” attached hereto, to be entered into between Ecotec and Geotec for the supply by Geotec of its proprietary enzyme/protein materials constituting the Technology to such Project.
“Term” has the meaning specified in Section 2.04 hereof.
“Year” means a calendar year.
b.
§ 2. PURPOSE OF THE JOINT VENTURE
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that this Agreement shall be applicable to the various Sites and Facilities as they mutually agree upon from time to time during the term of this Agreement.
§ 2.01(b). Structure of Transaction and Role of Entities. The Parties contemplate that various other Persons will be involved in the transactions necessary to generate Revenue and Net Profits for the Joint Venture and that the Parties will enter into other Project Contracts with other Persons to facilitate the goals of the Joint Venture. Various elements of the contemplated structure include the following items that may also be identified elsewhere in this Agreement under specific headings:
1.
The Parties agree that GreenCoal, Geotec or a third party may provide all initial funding/operating capital for acquisition of the Sites, Feedstock, the equipment necessary for the construction of each Facility and operation of each Facility by a Project Company, as well as funding for the acquisition of all necessary equipment and working capital for the Joint Venture (the “Initial Operating Capital”). In the alternative,
2.
The Parties agree that the Initial Operating Capital shall be recovered by GreenCoal, Geotec or a third party through its receipt of seventy-five percent (75%) of the Net Profits from Joint Venture. Upon recovery by GreenCoal, Geotec or a third party of the Initial Operating Capital relative to a Site, Net Profits from Joint Venture operations at such Site shall be equally divided between GreenCoal, Geotec and/or a third party. Net Profits shall be payable to each Party hereto on the Payment Date. The funding and repayment terms set forth in this paragraph and paragraph 2.01(b)1 above shall apply regarding each Site, the acquisition of Feedstock and construction and operation of each Facility, unless otherwise agreed upon in writing by the Parties.
3.
Geotec agrees to provide its Technology to the Joint Venture to facilitate processing of Feedstock and the generation of Revenue and Net Profits upon resale of the Refined Coal and Products generated from operations of the Facility.
4.
The Parties further agree that they both will be vendors of Ecotec, which must own the Facility in order to generate the Tax Credits.
5.
As a vendor of Ecotec, the Parties contemplate that unless otherwise agreed to the contrary, GreenCoal or a third party will operate the initial Facility and may also possibly operate other Facilities elsewhere as agreed upon by the Parties pursuant to an Operating Agreement in a form substantially the same as Exhibit A attached hereto.
6.
The Refined Coal and Product will be sold by Ecotec for a fixed price to Geotec, which will sell the Refined Coal and Product to end users.
7.
All Expenses incurred by a Project Company, including GreenCoal, Ecotec, GEM, Geotec and any third party will be paid from Revenue. The Parties agree that the Joint Venture shall maintain operational cash balances in Ecotec in an amount of no less than $1,000,000.00 to facilitate continued operation of the Joint Venture.
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8.
Administrative. The Operator will provide such office space, equipment, facilities and supplies, and the services of such secretarial, clerical and other personnel of the Operator at its headquarters, as may be required for the reasonable conduct of the business of the Project by Operator personnel.
9.
10.
11.
Accounting. The Operator will maintain in good order the books of account, ledgers, and records of the Project Company and shall perform all day-to-day accounting functions of the Project necessary for the conduct of its business including, without limitation, matters related to paying and receiving, billing, reserve estimates, payroll and tax return preparation, contract coordination and administration of employee benefit plans. Without limiting the generality of the foregoing, the Operator shall prepare all requisite accounting reports and interim financial statements of the Project Company, including balance sheets, income statements and statements of cash flows, and shall assist the Project Company in selecting an independent public accounting firm for the purpose of conducting annual financial audit reviews of the Project Company and shall aid in coordinating such audits. All books and records shall be available upon demand to Geotec, GEM, Ecotec, GreenCoal and any third parties to this agreement.
12.
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§ 3. GEOTEC CONTRIBUTION TO JOINT VENTURE.
§ 3.02.
§ 4. GreenCoal CONTRIBUTION TO JOINT VENTURE.
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§ 5. ESTIMATED USE OF INITIAL OPERATING CAPITAL AND REPAYMENT.
§ 5.02.
§ 6. CONSIDERATION FOR THE AGREEMENT.
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§ 7.01. Organization of Geotec; Authority. Geotec is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida. Geotec has all requisite power and authority to carry on its business and to own or lease and operate its properties as such business is now conducted and such properties are now owned, leased or operated, to execute and deliver this Agreement and to carry out all actions required of it pursuant to the terms of this Agreement.
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constitute a violation of, or be in conflict with, constitute or create a default under, or result in the creation or imposition of any liens upon any property of GreenCoal pursuant to (a) any agreement or commitment to which GreenCoal is a party or by which GreenCoal or any of its properties is bound or to which GreenCoal or any of its properties is subject; or (c) any statute or any judgment, decree, order, regulation or rule of any court or governmental authority relating to GreenCoal.
§ 9.01. Termination Events. a. The Parties may terminate this Agreement as provided below:
(i) The Parties may terminate this Agreement by mutual written consent at any time;
(ii) Geotec may terminate this Agreement by giving written notice to GreenCoal at any time in the event GreenCoal has breached any representation, warranty or covenant contained in this Agreement.
(iii) GreenCoal may terminate this Agreement by giving written notice to Geotec at any time in the event the Geotec has breached any representation, warranty or covenant contained in this Agreement.
b.
§ 10. CONFIDENTIAL INFORMATION.
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suppliers, lenders, vendors, consultants, independent contractors and consultants (all such information being hereinafter collectively referred to as “Confidential Information”), and the Parties further acknowledges that such Confidential Information is of great value to them and their affiliates and, in and by reason and as a result of this Joint Venture, the Parties will be making use of, acquiring and/or adding to such Confidential Information. Therefore, the Parties understand that it is reasonably necessary to protect their respective trade secrets, good will and business interests. The Parties agree that they will not directly or indirectly (except where expressly authorized by the Party owning the Confidential Information) at any time hereafter divulge or disclose for any purpose whatsoever to any persons, firms, corporations or other entities other than Geotec or its affiliates (hereinafter referred to collectively as “Third Parties”), or use or cause or authorize any Third Parties to use, any such Confidential Information, except as otherwise required by law. Geotec shall retain exclusive rights to all of its proprietary formulas, processes, equipment designs and all intellectual property owned now and hereinafter acquired.
§ 10.02. Company Materials. In accordance with the foregoing, GreenCoal furthermore agrees that (i) GreenCoal will at no time retain or remove from the premises of Geotec or its affiliates any research and development materials, drawings, notebooks, notes, reports, formulae, software programs or discs or other containers of software, manuals, data books, records, materials or documents of any kind or description for any purpose unconnected with the strict performance of GreenCoal’s activities under this Joint Venture Agreement and (ii) upon cessation or termination of this Agreement for any reason, GreenCoal shall forthwith deliver or cause to be delivered up to Geotec any and all research and development materials, drawings, notebooks, notes, reports, formulae, software programs or discs or other containers of software, manuals, data, books, records, materials and other documents and materials in GreenCoal’s possession or under GreenCoal’s control relating to any Confidential Information or any property or information which is otherwise the property of Geotec and/or its affiliates.
§ 11. COVENANT NOT TO COMPETE.
In view of the Confidential Information to be obtained by or disclosed to GreenCoal, because of the know-how acquired and to be acquired by GreenCoal, and as a material inducement to Geotec to enter into this Agreement, GreenCoal covenants and agrees that, so long as this Agreement is in existence and for a period of two (2) years after termination of this Agreement for any reason, GreenCoal shall not, directly or indirectly (i) divert business from, (ii) solicit or transact any coal washing business competitive with Geotec or its affiliates with, or (iii) sell any coal washing products or services sold or offered by Geotec or its affiliates to, any
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customer, identified prospective customer or former customer of Geotec or its affiliates. In addition, GreenCoal covenants and agrees that, so long as this Agreement is in existence and for a period of two (2) years after termination of this Agreement for any reason, GreenCoal hereby agrees to refrain from, anywhere in the world, (the “Geographical Area”), directly or indirectly owning, managing, operating, controlling or financing, or participating in the ownership, management, control or financing of, or being connected with or having an interest, in, or otherwise taking any part as a stockholder, director, officer, consultant, agent, consultant, partner or otherwise, in, any coal washing business competitive with that engaged in or being developed by Geotec or its affiliates during the term of this Agreement. Without limitation of the foregoing, the business of Geotec is acknowledged to include the development, manufacture and sale of coal technology and recombinant protein technology and related technology. GreenCoal acknowledges that Geotec’s business is anticipated to be international in scope, that a similar business could effectively compete with Geotec’s and its respective affiliates’ businesses from any location in the world, and that, therefore, the restricted Geographical Area is reasonable in scope to protect Geotec’s and its affiliates’ trade secrets and legitimate business interests.
§ 12. REMEDIES FOR BREACH OF SECTIONS 10 & 11.
The Parties covenant and agree that if there shall be a violation or breach any of the covenants or agreements provided for in Sections 10 and 11 hereof, the non-breaching Party and/or its affiliates shall be entitled to an accounting and repayment of all profits, compensation, commissions, remunerations, or benefits which the breaching Party directly or indirectly has realized or realizes as a result of, growing out of or in connection with any such violation or breach. In addition, in the event of a breach or violation or threatened or imminent breach or violation of any provisions of Sections 10 or 11 hereof, the non-breaching Party and/or its affiliates shall be entitled to a temporary or permanent injunction or any other appropriate decree of specific performance or equitable relief, without posting of bond, from a court of competent jurisdiction in order to prevent, prohibit or restrain any such breach or violation or threatened or imminent breach or violation by the breaching Party, its partners, agents, representatives, servants, and/or by any third parties subject to the control of the breaching Party. The non-breaching Party shall be entitled to such injunctive or other equitable relief in addition to any damages which are suffered, and the prevailing Party shall be entitled to reasonable attorney’s and paralegals’ fees and costs and other costs incurred in connection with any such litigation, both before and at trial and at all tribunal levels. Resort by any Party and/or its affiliates to such injunctive or other equitable relief shall not be deemed to waive or to limit in any respect any other rights or remedies which the non-breaching Party or its affiliates may have with respect to such breach or violation.
§ 13. REASONABLENESS OF RESTRICTIONS.
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not limited to, the time period, geographical and types of restrictions imposed) are fair and reasonable and are reasonably required for the protection of the business, trade secrets, interests and good will of Geotec and its affiliates.
§ 14.01. Indemnification to Geotec, Ecotec and GEM. GreenCoal agrees to indemnify and hold Geotec, Ecotec and GEM free and harmless from any loss, liability or cost (including reasonable attorney's fees) which is not covered by insurance proceeds and which Geotec, Ecotec and GEM may sustain, incur or assume (each, a “Loss”) as a result of, or relative to, any allegation, claim, civil or criminal action, proceeding, charge or prosecution (collectively “Claims”) which may be alleged, made, instituted or maintained against GreenCoal, Geotec, Ecotec or GEM jointly or severally, including any injury to Person(s) or damage to property or business arising from the operation of a Facility in and about any Project; provided, notwithstanding the foregoing, GeenCoal shall not be liable to indemnify and hold Geotec, Ecotec or GEM harmless from any such Loss which results from the gross negligence, fraud or willful misconduct of Geotec, Ecotec or GEM. The provisions of this Section shall not apply to any Claims arising from performance by the Operator under an Operating Agreement nor constitute a release of any other rights of GreenCoal arising as a result of any breach or default by Geotec of a provision of this Agreement. This indemnity provision relates only to Claims that in the aggregate exceed the amount of $50,000.00.
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GreenCoal harmless from any such Loss which results from the gross negligence, fraud or willful misconduct of GreenCoal. The provisions of this Section shall not constitute a release of any other rights of Geotec arising as a result of any breach or default by GreenCoal of a provision of this Agreement. This indemnity provision relates only to Claims that in the aggregate exceed the amount of $50,000.00.
If to Geotec, to:
Geotec, Inc.
000 Xxxx Xxxxxxxx Xxx., Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxx, CEO
With a copy to:
Xxxxxxxx X. Xxxx, Esquire
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
If to GreenCoal, to:
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GreenCoal, LLC
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Manager
With a copy to:
Xxxxxx X. Xxxxxxxx, Esquire
Xxxxxxxx & Etcheson, LLC
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
§ 15.03. Governing Law. This Agreement shall be governed by and construed solely and exclusively in accordance with the laws of state of Florida without regard to any statutory or common-law provision pertaining to conflicts of laws. The Parties agree that courts of competent jurisdiction in Palm Beach County, Florida and the United States District Court for the Southern District of Florida, shall have concurrent jurisdiction with the arbitration tribunals of the American Arbitration Association for purposes of entering temporary, preliminary and permanent injunctive relief with regard to any action arising out of any breach or alleged breach of this Agreement. The Parties agree to submit to the personal jurisdiction of such courts and any other applicable court within the state of Florida. The Parties further agree that the mailing of any process shall constitute valid and lawful process against such Party. The Parties waive any claim that they may have that any of the foregoing courts is an inconvenient forum.
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relative to the Loan transaction, the business of Geotec, as well as the business activities of GreenCoal and their respective principals.
§ 15.13. Termination of Joint Venture. Notwithstanding any other provision of this Agreement, this Joint Venture Agreement shall terminate upon completion of the business activities of the Joint Venture and distribution of all profits derived therefrom.
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[Signatures On Next Page]
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Date: June 6, 2008
GEOTEC, INC.
/s/: Xxxxxxx X. Xxx
Xxxxxxx X. Xxx, CEO
Date: June 6, 2008
GREENCOAL, LLC
/s/: Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, Manager
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ADDENDUM
These groups and sites that will utilize the Geotec Bio-refining process to develop these reserves. These potential sites are located in Illinois, Indiana and Kentucky. They are listed below.
Site | Permit | Waste Coal | Tonnage |
S. Illinois | current | gob/fines | 4m +/- |
S. Illinois | current | gob/slurry | 2m +/- |
S. Illinois | current | gob/slurry/fines | 6m +/- |
S. Illinois | current | gob/fines | 3m +/- |
S. Illinois | 6/08 approval | gob/slurry | 8m +/- |
Indiana | 9/09 approval | gob/fines | 5m +/- |
Kentucky |
| gob/slurry/fines | 90m +/- |
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