JAM S ARBITRATION PROCEEDING STREAMLINED ARBITRATION RULES AND PROCEDURES NEW YORK, NEW YORK
EXHIBIT
99.1
JAM S ARBITRATION PROCEEDING
STREAMLINED ARBITRATION RULES AND PROCEDURES
NEW YORK, NEW YORK
STREAMLINED ARBITRATION RULES AND PROCEDURES
NEW YORK, NEW YORK
EARTH ETHANOL, INC.
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CLAIMANT,
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v.
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HPS DEVELOPMENT, L.L.C..,
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SOUTH LOUISIANA ETHANOL, L.L.C.
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RESPONDENTS,
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This Consent Judgment and Settlement Agreement (the “Agreement” or this “Agreement’)
is entered into as of the last date set forth below, by and among Xxxxxxx Xxxxxxx (“Xx.
Xxxxxxx”), Xxxx Xxxx (“Mr. Pau1”’) Xxxxxxx X. Xxxxx (“Xx. Xxxxx, and together with Xx.
Xxxxxxx and Xx. Xxxx, the “HPS Individuals”), HPS Development, L.L.C. “HPS”) and South
Louisiana Ethanol, L.L.C. (“SLE,” and together with the HPS Individuals and HPS, the “HPS
Parties”), on one hand, and Earth Biofuels, Inc. (“Earth Biofuels”), Earth Ethanol, Inc.
(“Earth Ethanol”), and Xxxxxx X. XxXxxxxxxx, XX (“Xx. XxXxxxxxxx, and together with Earth
Biofuels and Earth Ethanol, the “Earth Parties”), on the other hand. Collectively, the
parties referenced above are referred to as the “Parties.”
The Arbitrator, having considered the Agreement and stipulations as being consented to
by all of the Parties and their respective counsel, enters’ a final judgment as follows:
RECITALS
A. On June 17, 2005, HPS became the owner of an idle ethanol production facility in
Myrtle Grove, Louisiana (“the Ethanol Plant”).
B. In the spring of 2006, HPS and Earth Biofuels entered into negotiations (the
“Negotiations”) to jointly upgrade, retrofit, and operate the Ethanol Plant.
C. In early June, 2006, HPS engaged the services of EnGlobal Engineering, Inc., a Texas
Corporation headquartered in Houston, Texas, to provide preliminary engineering services and
a Schedule A Package for the retrofit of the Ethanol Plant.
D. On or about August 31, 2006, HPS, SLE, and Earth Ethanol, a wholly-owned subsidiary
of Earth Biofuels, entered into a certain Contribution and Purchase Agreement (the “C&P
Agreement”). Pursuant to the C&P Agreement, HPS agreed to sell the Ethanol Plant to SLE,
which would own and operate the Ethanol Plant. In turn, Earth Ethanol agreed to purchase 50
percent of the membership interest in SLE. Specifically, Earth Ethanol agreed to purchase 31
percent of the membership interest in SLE from HPS for the purchase price of $50 million
(the “Cash Consideration”) plus certain Earth Biofuels stock (the “Stock Consideration”).
It also agreed to purchase 19 percent of the membership interest in SLE directly from SLE
for the purchase price of $40 million.
E. Before the C&P Agreement was executed, Earth Ethanol had paid HPS the sum of $22
million of the Cash Consideration, pursuant to various prior letters of intent and
agreements.
F. The C&P Agreement contained deadlines for Earth Ethanol to make the remaining
installments of the $50 million cash consideration to I-P S, including a $5 million payment
(the “$5 million payment”’). on August 31, 2006, and a $4 million payment (the “$4 million
payment”) on September 15, 2006.
G. On or around August 31, 2006, Earth Ethanol made the $5 million payment to HPS,
bringing the total payments made toward the Cash Consideration to $27 million paid (the “$27
million paid”). However, Earth Ethanol did not make the $4 million payment on September 15,
2006.
H. When HPS did not receive the $4 million payment, it sent notice to Earth Ethanol
that was terminating the C&P Agreement, retaining a sum of $5 million as a termination fee
(the “Termination Fee”), and tendering a certain promissory note (the “Termination
Promissory Note”) for subsequent repayment of the $22 million balance (the “$22 million
balance”) of the $27 million paid. The HPS Parties contended that their conduct was in
accordance with the C&P Agreement.
I. The HPS Parties contend that on or about October 24, 2006, SLE contracted with
Southridge Ethanol, L.L.C. (“Southridge”) to sell certain equipment (the “Certain
Equipment”) of the Ethanol Plant to Southridge for the sum of $6 million. The HPS Parties
contend that the Certain Equipment was not necessary to bring the ethanol plant online and
that Earth Ethanol did not own an interest in the Certain Equipment or in SLE.
J. Upon
learning of the possible sale of the Certain Equipment, Earth Ethanol advised Southridge,
including in
letters dated November 10, 2006, and November 14, 2006 (the “November Letters”), that
it did not consent to the transaction to sell the Certain Equipment.
K. Southridge and SLE did
not complete the sale of the Certain Equipment.
The Arbitration
L. In response to
the notice from HPS purporting to terminate the C&P Agreement, Earth Ethanol commenced an
arbitration proceeding (the “Arbitration”) in New York, New York. The Arbitration, which is
styled as Earth Ethanol, Inc. v. HPS Development, L .L .C., et al., Cause No. 1310016448, is
being administered by JAMS, pursuant to its streamlined arbitration rules and procedures.
M. Earth Ethanol has asserted claims in the Arbitration of fraud and fraudulent inducement,
Declaratory judgment, breach of contract, breach of duty of good faith and fair dealing,
detrimental reliance, and unjust enrichment (the ‘Arbitration Claims”).
N. HPS and SLE have
asserted counterclaims in the Arbitration arising out a certain .
transaction with
Southridge Ethanol, Inc. (“Southridge”). HPS and SLE allege that Earth Ethanol took certain
actions that constituted tortious interference with a contract or prospective business
relations, deceptive or unfair trade practices, defamation, and a breach of the C&P ‘
Agreement’s confidentiality provision (the “Arbitration Counterclaims”).
O. Although Earth
Ethanol named. all the HPS Parties as respondents in the Arbitration, the arbitrator
dismissed the HPS Individuals without prejudice pursuant to a motion to dismiss.
P. The HPS
Parties have denied any liability to Earth Ethanol related to the Arbitration Claims, and
Earth Ethanol has denied any liability to the HPS Parties related to the Arbitration
Counterclaims.
The EnGlobal Lawsuit
Q. On or about May 3, 2007, Earth Ethanol filed
a lawsuit (the “EnGlobal Lawsuit”) against the HPS Individuals and EnGlobal, asserting
common law fraud, conspiracy, and negligent misrepresentation arising out of SLE’S dealings
with Southridge and the EPC Contract.
R. The EnGlobal Lawsuit, entitled “Earth Ethanol, Inc.
vs. Xxxxxxx Xxxxxxx, Xxxx Xxxx, and Xxxxxxx X. Xxxxx, individuals, and EnGlobal Engineering,
Inc.,” was originally filed in the 000Xx Xxxxxxxx Xxxxxxxx Xxxxx xx Xxxxxx Xxxxxx, Xxxxx as
Cause No. 07-04013, but has been removed to the United States District Court for th8
Northern District of Texas and assigned Case No. 3:01-CV-01006-P.
S. The HPS Parties have
denied any liability to Earth Ethanol related to the Arbitration Claims, and Earth Ethanol
has denied any liability to the I’P S Parties related to the
EnGlobal Lawsuit.
The XxXxxxxxxx Lawsuit
T. On May 30, 2007, HPS filed a lawsuit (the :“XxXxxxxxxx Lawsuit”)
against Earth Biofuels and Xx XxXxxxxxxx in the 25th Judicial District Court for
the Parish of Plaquemines, State of Louisiana.
U. The XxXxxxxxxx Lawsuit, which is entitled
“HPS Development, L .L .C. v. Earth Biofuels, et al.,” Case No. 54-756(A), asserts claims
for tortious interference with a contract, violation of the Louisiana Unfair Trade Practices
and Consumer Protection Act, intentional interference with prospective business relations,
business disparagement, and seeks injunctive relief.
V. The HPS Parties have denied any
liability to Earth Ethanol related to the Arbitration Claims, and Earth Ethanol has denied
any liability to the HPS Parties related to the XxXxxxxxxx Lawsuit.
The Southridge Lawsuit
W. On December 22,.2006, Southridge filed a lawsuit (the “Southridge Lawsuit”)
against SLE, Xx. Xxxx, and Xx. Xxxxx, asserting fraud, conspiracy, and negligent
misrepresentation in connection with the failed sale of the Certain Equipment. The
lawsuit is pending in the United States District Court for the Northern District of Texas,
Dallas Division, and is styled as “Southridge Ethanol, Inc. v. South Louisiana Ethanol,
L.L.C., et al.,” Cause No. 7175, Case No. 3-06CV2362-G.
X. In the Southridge Lawsuit, SLE,
Xx. Xxxx, and Xx. Xxxxx have filed a motion to dismiss for lack of personal jurisdiction.
Relevant Events Transpiring After Termination of C&P Agreement
Y. On or about
November 14, 2006, SLE engaged the investment banking firm of Pontchartrain Capital, L.L.C. .to seek financing on behalf of SLE. SLE identified
Wachovia Capital Markets, L.L.C.
(Wachovia) as a potential lender and syndicator.
Z. On or about January 15, 2007, SLE
engaged the firm of Xxxxxx Xxxxxx to seek financing on behalf of SLE. Although M organ
Xxxxxx diligently sought financing and identified several potential lenders/syndicators, SLE
ultimately concluded that Wachovia offered the best terms and conditions to serve as an
arranger and lender for the renovation and start up of the Ethanol Plant.
AA. On or about
February 13, 2007, Whitney National Bank entered into a loan agreement with SLE to provide a
bridge loan for renovation and start up of the Ethanol Plant.
The Wachovia Financing
BB. On May 31, 2007, Wachovia Capital Markets, L.L.C. (Wachovia) and HPS and SLE entered
into a Commitment Agreement, a Fee Agreement, and a Term Sheet wherein Wachovia has agreed
to serve as a participating lender and to arrange a syndication for a construction term
loan, working capital facilities, and various letters of credit for the renovation and start
up of the Ethanol Plant on a reasonable efforts basis. The above financing arrangements
shall be referred to as the “Wachovia Financing”. The parties hereto agree and acknowledge
that the Wachovia Financing has not yet been underwritten or finalized.
CC. As currently
drafted, and subject to market requirements through the completion of formal loan
syndications, the term sheet contains a cash flow provision wherein the final loan documents
are anticipated to require a minimum of 60% and up to 100% of the Excess Cash Flow of SLE
(defined in the term sheet as EBITDA (earnings before interest, taxes, depreciation, and
amortization) less scheduled senior Debt Service, Capital Expenditures and a tax
distribution of up to 40% of the pre-tax profit — subject to
certain conditions) be applied
to the principal payment of each of the term loan and possible sinking fund contributions
related to the new market tax credits loan. The amount distributed to Wachovia (and its
syndicated lenders) shall be referred to as the “Cash Flow Sweep.” The Excess Cash Flow
distributable to HPS in accordance with the Wachovia financing shall be referred to as
“Distributable Cash Flow”. The Wachovia Financing will require (1) HPS interpose an
intermediate holding company to hold 100% of the interest in SLE ; and (2) certain hedging
contracts and risk management programs to reduce ‘the risk of volatility in the price of
certain commodities integral to SLE’s business, including, but not limited to, corn, DDGS,
ethanol and natural gas, and that the intermediate holding company be established to engage
in such programs and contracts to avoid potential liability under the New Markets Tax Credit
law.
NOW , THEREFORE, in the interest of amicably resolving their differences and in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the Parties hereby enter in this Agreement.
AGREEMENT
1. Settlement Pavments.
a. By June 18, 2007 (but no earlier than the execution
of this Agreement and delivery of the Escrow Documents to Xxxxxxx & Xxxxxxx, L.L.C.), HPS
shall pay Earth Ethanol the sum of $3 million dollars (the “Initial Payment”). HPS will wire
the Initial Payment to Earth Biofuels, lnc., as follows:
REDACTED PORTION
b. Prior to
payment of the Initial Payment, the parties shall deliver to Xxxxxxx & Xxxxxxx, L.L.C.,
counsel for the HPS Parties, the following documentation (the “Escrow Documents”) to be
held in trust pending confirmation of receipt of the Initial Payment by Earth Ethanol:
i.
Fully executed copies’ of the Agreement (faxed or scanned and e-mailed copies are
sufficient, to be followed by original signatures of all parties), confirmed as a Consent
Judgment in the Arbitration;
ii. The executed Note (as defined in Section 1(e) below) and a
lost note affidavit executed by Earth Ethanol, renouncing its rights as holder of the
Termination Promissory Note; and
iii. Signed Originals of Agreed Motions to Dismiss, with
prejudice, of the EnGlobal Lawsuit and the XxXxxxxxxx suit.
iv. Fully executed copies of the
Memorandum of Consent Judgment and Settlement Agreement (faxed or scanned and e-mailed
copies are sufficient, to be followed by original signatures of all parties). Upon
confirmation of the receipt of the Initial Payment by Earth Ethanol, Xxxxxxx & Xxxxxxx,
L.L.C. shall file the Agreed Motions to Dismiss, with prejudice, of the EnGlobal Lawsuit and
the XxXxxxxxxx Lawsuit. Xxxxxxx & Xxxxxxx, L.L.C. shall further release the Agreement, the
Note, and the Memorandum of Consent Judgment and Settlement Agreement to the appropriate
Parties.
c. Oh or before thirty (30) days from the Initial Payment, HPS shall pay the sum of
$1 million by Wire transfer to Earth Ethanol (the “Second Payment”).
d. Contemporaneous with
the execution of this Agreement, HPS, as maker, has delivered to Xxxxxxx & Xxxxxxx, L.L.C.
an unsecured. promissory note (Note)
made payable to Earth Ethanol in the principal amount of $18 million, bearing no
interest, with substantive repayment terms and conditions as follows:
i. Beginning the earlier
of August 31 1008 or the date of the first Cash Flow Sweep, HPS will pay to Earth Ethanol
50% of Distributable Cash Flow on. a quarterly basis, to be paid within ten (10) days of
final determination of the Cash Flow Sweep by HPS. HPS will provide documentation verified
by SLE’S Certified Public Accountant establishing the Cash Flow Sweep and Distributable Cash
‘Flow, as such term shall be defined in the yet to be executed credit agreement. The parties
hereto agree and acknowledge that any defined terms herein relating to the Wachovia
Financing are subject to final documentation.
ii. If HPS pays an aggregate sum of Sixteen
Million Dollars ($16 million) pursuant to the Note on or prior to December 31, 2015, then
the Note shall be deemed paid in 111, with a full waiver and forgiveness by Earth Ethanol
(or the holder) of $2 million of principal. In the event HPS does not pay an aggregate sum
of $16 million on or prior to December 31, 2015, then the principal balance of $1 million
shall be paid in twenty (20) equal installments of $100,000.00 on the first day of each
quarter beginning on January 1, 2016, and October 2020. Any balance due on the $16 million
portion of the Note beyond December 31, 2015 shall be paid in accordance with Section
(1)(c)(i), above.
iii. In the event the Note is not paid prior to repayment of the Wachovia
Financing or subsequent refinancing, if any, upon full repayment of the Wachovia Financing,
or subsequent refinancing, if any, repayment of the Note by HPS shall be made in quarterly
installments, and in amounts equal to 50% of SLE’S EBITDA. EBI’IMDA on a quarterly basis
shall be determined by SLE’S regularly employed Certified Public Accountant. Except as
modified by this Section
1(c)(iii), the terms and conditions of the Note shall remain the
same.
iv. In the event that HPS sells more than 50% of its direct or indirect membership
interest in SLE or SLE sells more than 50% undivided interest in the Ethanol Plant, HPS
shall pay Earth Ethanol up to 100% of the proceeds received by HPS that result from such
sale towards the Note. Earth Ethanol acknowledges that Wachovia and other lenders will hold
superior mortgages and security interests in. the Ethanol Plant and the membership interests
of SLE, IIPS and intermediate holding companies that secure debts which must be satisfied
prior to any distribution to I-P S from such sale.
2. The Earth Parties’ Release of the HPS Parties. Except for their right to enforce
this Settlement Agreement, the Initial Payment the Second Payment, and the Note, the Earth Parties,
their members, partners; contractors, officers, directors, shareholders, agents, employees,
affiliates, joint venturers, parents, subsidiaries, predecessors, successors, heirs, executors,
attorneys, insurers, and assigns (the “Earth Parties Releasors’’) hereby release, acquit, and
forever discharge the HPS Parties and their members, partners, contractors, officers, directors,
lenders, consultants, investment bankers, shareholders, agents, employees, affiliates, joint
venturers, parents, subsidiaries, predecessors, successors, heirs, executors, attorneys, insurers,
and assigns (the “HPS Parties Releasees’’), from any and all claims, counterclaims, rights,
demands, actions, suits, requests, proceedings or causes of action, known or unknown, asserted or
unasserted, of whatsoever kind or nature that the Earth Parties Releasors have in tort, contract,
equity, and/or otherwise against the HPS Parties Releasees, from the beginning of time up to the
date of this Agreement, in any way related to the Ethanol Plant, the Negotiations, the C&P
Agreement, the Cash Consideration, the Stock Consideration, Benchmark, EnGlobal, M organ Xxxxxx,
the EPC Contract, the $27 million paid; the $5 million payment, the $4 million payment, the
Termination Fee, the $22 million balance, Southridge, the Certain Equipment, the November Letters,
the Arbitration, the Southridge Lawsuit, the EnGlobal Lawsuit, and the XxXxxxxxxx Lawsuit. Further,
the Earth Parties Releasors agree and acknowledge that neither Wachovia, or its respective members,
partners, contractors, officers, directors, shareholders, agents, employees, affiliates, joint
venturers, parents, subsidiaries, predecessor’s, successors,. heirs, executors, attorneys,
insurers, and assigns shall have any obligation or duty to the Earth Parties Releasors, and that,
regardless of when definitive agreements relating thereto are executed and such financing, if any,
is closed and funded, the Wachovia Financing shall be superior in right
and priority to any obligation to or claim of the Earth Parties Releasors arising under or
related to this Agreement. The Earth Parties agree to execute additional agreements or similar
releases or verifications as requested by the HPS Parties and their Agents.
3. The HPS Parties’ Release of the Earth Parties. The HPS Parties, their members, partners,
officers, directors, shareholders, agents, employees, affiliates, joint venturers, parents,
subsidiaries, predecessors, successors, heirs, executors, attorneys, insurers, and assigns (the
“HPS Releasors”) hereby release, acquit, and forever discharge the Earth Parties and their members,
partners, contractors, officers, directors, shareholders, agents, employees, affiliates, joint
venturers, parents, subsidiaries, predecessors, successors, heirs, executors, attorneys, insurers,
and assigns (the “Earth Parties Releasees”), from any and all claims, counterclaims, rights,
demands, actions, suits, requests, proceedings or causes of action, known or unknown, asserted or
unasserted, of whatsoever kind or nature that the HPS Parties have in tort, contract, and/or equity
against the Earth Parties Releasees, from the beginning of time up to the date’ of this Agreement
in any way related to the Ethanol Plant, the Negotiations, the C&P Agreement, the Cash
Consideration, the Stock Consideration, Benchmark, EnGlobal, Xxxxxx Xxxxxx, the EPC Contract, the
$27 million paid, the $5 million payment, the $4 million payment, the Termination Fee, the $22
million balance, Southridge, the Certain Equipment, the November Letters, the Arbitration, the
Southridge Lawsuit, the EnGlobal Lawsuit, and the XxXxxxxxxx Lawsuit. The HPS Parties agree to
execute additional agreements or similar releases or verifications as requested by the the Earth
Parties and their Agents.
4. Covenant Not to Xxx. The Earth Parties agree, promise, and forever covenant not to file,
prosecute, or directly or indirectly encourage or otherwise participate in provide assistance
related to a lawsuit, arbitration, legal proceeding, or other dispute resolution procedure against
EnGlobal, Xxxxxx Xxxxxx, Wachovia, Pontchartrain Capital, L.L.C., and. Whitney National Bank and
their respective members, partners, contractors, officers, directors, shareholders, agents,
employees,
affiliates, joint venturers, parents, subsidiaries, predecessors, successors, heirs, executors,
attorneys, insurers, and assigns on any and al1 claims, counterclaims, rights, demands, actions,
suits, requests, proceedings or causes of action, known or unknown, asserted or unasserted, of
whatsoever kind or nature that the Earth Parties have in tort, contract, .equity and/or otherwise
in any way related to the Ethanol Plant, the Negotiations, the C&P Agreement, the Cash
Consideration, the Stock Consideration, Benchmark, the EPC Contract, the $27 million paid, the $5
million payment, the $4 million payment, the Termination Fee; the $22 million balance, Southridge,
the Certain Equipment, the November Letters, the Arbitration, the Southridge Lawsuit, the EnGlobal
Lawsuit, and the XxXxxxxxxx Lawsuit; provided; however, that if EnGlobal, Xxxxxx Xxxxxx,
Wachovia, Pontchartrain Capital, LLC, or Whitney National Bank bring any claims, counterclaims,
demands, actions, suits, requests, proceedings or causes of any kind whatsoever against any of the
Earth Parties, then the Earth Parties expressly reserve the right to assert all claims, defenses,
counterclaims, rights, demands, actions, suits, requests, and proceedings that may be available to
the Earth Parties.
5. Dismissal of Claims and Mutual Indemnification. With the execution of this Agreement,
the Parties shall execute Agreed Motions to Dismiss with Prejudice, and dismiss their respective
claims in the EnGlobal Lawsuit and the XxXxxxxxxx Lawsuit. Upon confirmation of receipt of the
Initial Payment by Earth Ethanol, Xxxxxxx & Xxxxxxx, L.L.C. shall file the Dismissals in the
applicable venues and obtain an order of dismissal. The Parties shall also take whatever other
action may be necessary to cause the EnGlobal Lawsuit and the XxXxxxxxxx Lawsuit to be dismissed
with prejudice. With the exception of this Agreement, the Arbitration shall be concluded in its
entirety. The Parties agree to save, indemnify, defend, and hold harmless each other from any
claims or actions arising out. of their respective breach of the terms of this Agreement.
6. Reservation of Rights and Defenses Against Southridge. The HPS Parties Releasors
expressly reserve any and all defenses and claims they may have against Southridge,
including without limitation any claims or defensesrelated to the Certain Equipment and the
Southridge Lawsuit. No provision herein shall diminish or otherwise limit the HPS Parties
from defending the Southridge Lawsuit and/or asserting any claims that the HPS Parties may
have against Southridge.
7. No Admission of Liability or Wrongdoing. Nothing in this Agreement shall be construed as
an admission of a wrongdoing or liability on the part of any of the Parties.
8. Covenant Not To Compete. The Parties acknowledge that a consideration and inducement for the Earth Parties to enter into this Agreement is the agreement of the HPS
Parties not to compete with the Earth Parties in the ownership of an ethanol or biodiesel
Plant in the State of Texas. Accordingly, the HPS Parties agree that for as long as the Note is
outstanding, the HPS Parties shall not own an interest (whether directly or indirectly) in an
ethanol or biodiesel plant in the State of Texas. This Section 8 shall not be construed or
interpreted in any way to prohibit or restrict the HPS Parties from transacting any other business
(other than the ownership of an ethanol plant or a biodiesel, plant) in the State of Texas,
including, but not limited to, selling, marketing, transporting, or trading ethanol or biodiesel.
a. The HPS Parties acknowledge that any breach of the obligations stated in this Section will
result in damages to the Earth Parties that are not reasonably susceptible to valuation.
Accordingly, in the event that the HPS Parties breach any of the provisions of this Section,’ then
the Earth Parties shall be xxxxxxxx.xx obtain a temporary restraining order, an injunction or other
appropriate equitable relief restraining the I-P S Parties from continued violation of these
provisions. Nothing in this Agreement shall be construed to prohibit the Earth Parties, their
subsidiaries, affiliates or related pr connected corporations from pursuing any other available
remedies for such breach or threatened breach, including the recovery of damages therefore.
b. Exceptions. Ownership of less than 5% of the outstanding stock of any publicly traded
corporation shall not be deemed constitute competition as proscribed by this Section.
c. In the final judgment of a court of competent jurisdiction declares that any term or
provision of this Section 8 is invalid or unenforceable, the Parties agree that the court making
the determination of invalidity or unenforciability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to expressing the intention
of the invalid or unenforceable term or provision, and this Agreement shall ‘ be enforceable as so
modified after the expiration of the time within which the judgment may be appealed.
d. The Earth Parties value the Covenant Not To Compete (Covenant) established in this Section 8 at $5 million. It is the HPS Parties’ position that the
termination fee of $5 million as set forth in the C&P Agreement is a valid and enforceable
provision and that the termination fee has been earned; however, the HPS Parties agree to
the Covenant as set forth in this Section 8 in exchange for the consideration provided in
this Agreement and do not object to the value assigned to the Covenant by the Earth Parties.
9. Consultation with Counsel. The Parties have consulted with counsel and they have entered
into this Agreement with full knowledge and understanding of their legal rights and obligations.
10. Merger and Integration. This Agreement, the Note, the Agreed Motions to Dismiss, and
any other ancillary agreements, supersedes any and al1 prior and existing agreements, whether
oral or in writing, between the Parties or their counsel with respect to the subject matter of
this Agreement and constitutes the entire agreement between the parties, containing all of the
covenants and agreement between the parties with respect to the subject matter of this
Agreement. Each of the Parties covenants that it/he has made no representations, inducements,
promises or agreements, orally or otherwise, relating to the subject of this Agreement that
are not embodied herein.
11. Modifications. This Agreement may not be modified except by a writing signed by the
Parties.
12. Severability Clause. Should any part, term, or provision of this Agreement be
declared or determined by any Court to be illegal or invalid, the validity of the remaining parts,
terms, and provisions shall not be affected thereby, and said illegal or invalid part, term
or provision shall be deemed not to be part of this Agreement.
13. Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed a duplicate original hereof and shall be effective when a1l counterparts hereof taken
together, bear the original, faxed, or photocopied signatures of all of the parties set forth
below.
14. Applicable Law and Venue. This Agreement shall be interpreted in accordance with the
laws of the State of Louisiana. An action to enforce or interpret this Agreement shall be brought
in the United States District Court for the Eastern District of Louisiana or the 25 Judicial
District for the Parish of Plaquemines, State of Louisiana, and 1he Parties consent to venue and
jurisdiction therein.
15. Attornev Fees: Costs; Expenses. In the event litigation is commenced to enforce one or
more of the provisions of this Agreement, the prevailing party is entitled to recover its
reasonable attorney fees, costs, and expenses in said litigation.
16. Waiver. The failure or omission of any party to enforce any of its rights or remedies
upon any breach of any covenants, terms, or conditions of this Agreement shall not bar or abridge
any of its rights or remedies upon any subsequent default.
17. Representation and Warranty of Signatories. Each of the signatories to this Agreement
represents and warrants that he or she is authorized to execute and sign on behalf of the party for
whom they are purporting to execute the Agreement, and that each of the Parties is bound to the
terms and provisions of the Agreement as a result of his or her signature below. Each of the
signatories also acknowledges that each of the other Parties is relying, in entering into the
agreement, on this representation and warranty by the signatories of their authority to execute and
bind the respective Parties whom they represent.
18. Confidentiality. The terms of this Agreement are confidential. Although the Parties and
their counsel may disclose that the disputes described herein have been amicably resolved, they may
not disclose the actual terms of this Agreement in any press release or to any third parties,
except to the extent necessary to report the sum paid to appropriate taxing authorities, in
response to a subpoena or court order, or to persons in the regular course of their affairs such as
to brokers, lenders, accountants, financial planners, and attorneys. In the event of a breach of
this Agreement, the breaching party is liable to any other party for a1l damages sustained as a
result of the breach. Any press release or filing with the Securities and Exchange Commission
referencing the Agreement shall be approved in advance by the Parties: The Parties agree to execute
a Memorandum of Consent Judgment and Settlement Agreement which may be released to any third party
without the prior consent of any of the Parties.
Dated: June ___, 0000
Xxx Xxxx, Xxx Xxxx
Xxx Xxxx, Xxx Xxxx
Respectfully submitted this ___day of June, 2007.
MDES P. CLENIENTS (LA //4184)
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K. XXXX XXXXXXX (TX # 2400276) | |
M ICI’XXXX X. XXXXXXXXX (LA # 25212)
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XXXXX X. XXXX (TX # 24003169) | |
XXXXX X. XXXXXX (MS # 102092)
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J. XXXX XXXXXXX (TX # 24027443) | |
Frilot Xxxxxxxxx, X.X.
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XXXXXXX X. XXXXXX (TX # 24013165) | |
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
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000 Xxxxx Xxxxx, Xxxxx 0000 | |
Xxx Xxxxxxx, XX 00000
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Xxxxxx, Xxxxx 00000 | |
Telephone: 000-000-0000
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Telephone: 000-000-0000 | |
Facsimile: 000-000-0000
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Facsimile: 2l4 - 692- 6255 | |
and
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Attorneys for the Earth Parties | |
XXXXX X. XXXXX |
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Weil, Gotshal & Xxxxxx LLP |
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000 Xxxxx Xxxxxx |
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Xxx Xxxx, Xxx Xxxx 00000 |
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Attorneys for the HPS Parties |
WHEREFORE, the duly authorized representatives of the Parties have executed this Agreement
effective the date last written below. Done and signed at
, , this ___ day of June, 2007.
WITNESS |
||||
Done and
signed at , , this ___ day of June, 2007.
WITNESS |
||||
Done and
signed at , , this ___ day of June, 2007.
WITNESS |
||||
Done and
signed at , , this ___ day of June, 2007.
| WITNESS | HPS DEVELOPMENT, L.L.C. | |||||||
| By: | ||||||||
| Names: | ||||||||
| Title: | ||||||||
Done and
signed at , , this ___ day of June, 2007.
| WITNESS | SOUTH LOUISIANA ETHANOL, L.L.C. | |||||||
| By: | ||||||||
| Names: | ||||||||
| Title: | ||||||||
Done and
signed at , , this ___ day of June, 2007.
| WITNESS | EARTH BIOFUELS, INC. | |||||||
| By: | ||||||||
| Names: | ||||||||
| Title: | ||||||||
Done and
signed at , , this ___ day of June, 2007.
| WITNESS | EARTH ETHANOL, INC. | |||||||
| By: | ||||||||
| Names: | ||||||||
| Title: | ||||||||
Done and
signed at , , this ___ day of June, 2007.
| WITNESS | ||||||||
