Made today July 16th, 2004, in Cologna Veneta between the following companies:
- ECOIDEA S.R.L., an Italian Corporation, with principal office in Cologna
Veneta (VR), via S. Xxxxxxx x. 41, Capital Stock of 10,400.00 Euros, Tax ID and
Verona Chamber of Commerce Business Registration Number 02903190235, through its
duly authorized Sole Director and legal representative, Ing. Xxxxxxx Xxxxxxxxx,
invested with the necessary powers, hereinafter referred to as "ECOIDEA".
And
- ELECTRONIC SOLAR S.R.L., an Italian Corporation, with principal office in
Cappelletta di Noale (VE), xxx Xxxxxxxx X'Xxxx 00, Xxxxxxx Stock of 103,480.00
Euros, Tax ID and Treviso Chamber of Commerce Business Registration Number
00633600267, through its duly authorized legal representative Xxxxxxxx
Xxxxxxxxx, invested with the necessary powers, hereinafter referred to as "ES".
And
- EUROPEAN WASTE SOLUTION INC., a Delaware (U.S.A.) Corporation, with principal
office in Dover, DE (USA), through its duly authorized legal representative
Xxxxxxxxxx Xxxxxxx, invested with the necessary powers, hereinafter referred to
as "EWS".
And
- L&R ENERGY COMPANY LLC, a New York (USA) Corporation, with principal office in
Denver, CO (USA), through its duly authorized legal representative Xxxxxxx
Xxxxxx, invested with the necessary powers, hereinafter referred to as "L&R".
And
- XXXXXXXXX ENERGY CORP., a Delaware (USA) Corporation, with principal office in
Englewood, CO (USA), Capital Stock of 30,000,000.00 U.S. Dollars, through its
duly authorized legal representative Xxxxx Xxxxxxxx, invested with the necessary
powers, hereinafter referred to as "XXXXXXXXX".
Hereinafter referred to collectively as the "PARTIES"
RECITALS:
A. On January 15th, 2003 ECOIDEA and ES signed an agreement, which is attached
hereto as Sub. 1, for the design, supply, installation (at the ECOIDEA
establishment in Cologna Veneta, via S. Xxxxxxx 41) start-up, operation,
management, ordinary and extraordinary maintenance of a waste-to-energy
plant (hereinafter referred to as the "PLANT") producing electrical power
for the production of electrical energy and steam, through the combustion
of fuels derived from waste (RDF) using technologies provided by the
Xxxxxxxxx gasification system (hereinafter referred to as "GASIFICATION
SYSTEM") consisting of two Modified Model 1800 gasifiers manufactured by
XXXXXXXXX (hereinafter referred to as "GASIFIERS"), boiler, computer
management system, and engineering designs.
B. The consideration due to ES for the design, supply, installation, and
start-up of the PLANT, as established by the above-referenced Agreement,
was to be 11,000,000 U.S. dollars ("USD") in addition to VAT as determined
by law, plus 6,100,000.00 Euros in addition to VAT, as determined by law,
of which 1,800,000.00 Euros have already been paid by ECOIDEA.
C. To guarantee payment of the entire above-indicated amount, ECOIDEA has
provided ES irrevocable and divisible letters of credit, issued by a major
bank, which expired on June 30, 2004.
D. On July 1st, 2003 ES and EWS signed an Agreement whereby EWS is committed
to providing the design, supply, installation, and start-up of the PLANT,
which is the subject of the Agreement signed between ECOIDEA and ES, as
well as the directions, user guides, spare-parts lists with costs, and
quantities of materials required for planned ordinary and extraordinary
maintenance; all of which for the consideration of USD 11,000,000.00 plus
VAT as determined by law.
E. To guarantee payment of the above-indicated amount, ES provided EWS an
irrevocable and divisible letter of credit for the same amount it received
from ECOIDEA upon execution of the Agreement it signed with ECOIDEA.
F. On July 10th 2003, EWS signed an Agreement with L&R for the supply and
start-up of the GASIFICATION SYSTEM to be used in the PLANT, for a
consideration of USD 6,275,000.00 guaranteed by L&R with a letter of credit
for the same amount it received from EWS upon execution of the Agreement
detailed above.
G. In signing an Addendum Agreement on July 13, 2004, EWS and L&R agreed to
increase the above-stated amount from 6,275,000.00 USD to 6,925,000.00 USD.
H. On October 28, 2003, L&R signed an Agreement with XXXXXXXXX for the design,
supply, and start-up of the GASIFIERS to be used in the GASIFICATION
SYSTEM, for a consideration of 2,100,000.00 USD in addition to any expenses
incurred by XXXXXXXXX personnel for start-up at the ECOIDEA plant; this
consideration was guaranteed by a letter of credit, in the above amount,
given to XXXXXXXXX by L&R who had received it in execution of the
above-mentioned Agreement. The termination notice of the Agreement
mentioned in this paragraph has been revoked and said Agreement is hereby
modified on this day.
I. The PLANT works are almost complete, with start-up and acceptance testing
to follow.
J. NATHANIEL notified L&R on July 2, 2004 of its intention to terminate its
October 28, 2003 Agreement with L&R due to the expiration of the above
mentioned letters of credit and other deficiencies on the part of L&R,
among which changes made by L&R to the GASIFIERS without previous
authorization from XXXXXXXXX and without regard for safety. As indicated in
paragraph H above, this termination has been revoked and a new Agreement
hereby signed on this day.
K. On July 15, 2004, also in view of the PARTIES having expressed their desire
to sign this Agreement, XXXXXXXXX revoked its notice to terminate the
October 28, 2003 Agreement with L&R and agreed with L&R to reaffirm the
validity of said Agreement and continue with its execution.
L. With this Agreement (hereinafter referred to as the "AGREEMENT") the
PARTIES intend to undertake actions and behaviors to ensure a start-up of
the PLANT by, and no later than, the July 31, 2004 deadline, as required by
the Veneto Regional Council with its deliberation No. 2926 dated October 3,
2003, without prejudice to any party's right to undertake any action
whatsoever to safeguard its rights and interests.
Now, therefore, the PARTIES hereto agree as follows:
Article I
Recitals and Attachments
The Recitals and Attachments of this AGREEMENT are deemed to form a substantial
and integral part thereof. The PARTIES mutually agree that this AGREEMENT was
negotiated at length and agreed to in every detail, including the Recitals and
Attachments thereto.
Article II
AGREEMENT Nature and Effects
The stipulations of this AGREEMENT integrate and modify, within each of the
PARTIES' respective sphere of responsibility, the provisions of the Agreements
mentioned in recitals A., D., F., G., and H. that remain in effect without
change except as explicitly integrated, modified or eliminated herein.
The PARTIES hereto explicitly state that this AGREEMENT is not to be deemed a
settlement of the issues contained herein and agree to exclude any settlement
effect from the AGREEMENT itself, without prejudice to any notice served by any
of the PARTIES who reserve the broadest right to undertake appropriate legal
action to safeguard their respective rights and interests.
Article III
Common Objective
The PARTIES hereto have agreed to sign this AGREEMENT in order to pursue the
common objective of completing and starting up the plant, each party within its
own sphere of responsibility, within the deadline of July 31, 2004 as required
by the Veneto Regional Council through its deliberation No. 2926 dated October
3, 2003.
Article IV
Subject
4.01 Assignment of ES Credit to EWS
-----------------------------------
ES hereby assigns to EWS a portion of its credit due from ECOIDEA as agreed-to
compensation for the Agreement under Recital A. This portion amounts to USD
6,925,000.00 (six million nine hundred twenty five thousand) and carries the
same terms and conditions as said Agreement under Recital A. Said amount will be
collectible upon a positive PLANT acceptance test, as stipulated in the
aforementioned Agreement.
The assignment detailed in the preceding sub-paragraph is in compliance with
Art. 1198 of the Italian Civil Code, in fulfillment of ES' obligation to
compensate EWS in the amount of USD 6,925,000.00 (six million nine hundred
twenty five thousand) as part of the compensation stipulated in the Agreement
under Recital D.
With reference to the assigned credit, ES undertakes to send EWS any
documentation that pertains to the credit and is required for its collection, as
well as any correspondence or payment that it may receive with respect to the
assigned credit.
By affixing its signature hereto, ECOIDEA hereby confirms its acceptance of the
assignment as detailed above.
4.02 Assignment of EWS Credit to L&R
------------------------------------
EWS hereby assigns to L&R its credit due from ECOIDEA, acquired as per the above
Paragraph 4.01, in the amount of USD 6,925,000.00 (six million nine hundred
twenty five thousand) at the same terms and conditions as the Agreement under
Recital A. Said amount will be collectible upon a positive PLANT acceptance
test, as stipulated in the aforementioned Agreement.
The assignment detailed in the preceding sub-paragraph is made in compliance
with Art. 1198 of the Italian Civil Code, in fulfillment of EWS' obligation to
compensate L&R in the amount of USD 6,925,000.00 (six million nine hundred
twenty five thousand) which is due to L&R as part of the compensation stipulated
in the Agreement under Recital F., as modified by the additional Agreement under
Recital G.
With reference to the assigned credit, EWS undertakes to send L&R any
documentation that pertains to the credit and is required for its collection, as
well as any correspondence or payment that it may receive with respect to the
assigned credit. By affixing their signature hereto, ECOIDEA and ES hereby
confirm their acceptance of the assignment as detailed above, each for its own
part.
4.03 Assignment of L&R Credit to XXXXXXXXX
------------------------------------------
L&R hereby assigns to XXXXXXXXX a portion of its credit due from ECOIDEA that it
acquired by virtue of the preceding Paragraph 4.02, in the amount of USD
3,000,000.00 (three million) at the same terms and conditions as the Agreement
under Recital A. Said amount will be collectible upon a positive PLANT
acceptance test, as stipulated in the aforementioned Agreement.
The assignment detailed in the preceding sub-paragraph is made in compliance
with Art. 1198 of the Italian Civil Code, in fulfillment of L&R's obligation to
compensate XXXXXXXXX in the amount of USD 3,000,000.00 (three million) which is
the agreed-upon compensation stipulated in the Agreement under Recital H, and
consisting in the cost of the GASIFIER, in addition to certain other costs
(these "other costs" are analogous to the term "Additional Charges" contained in
the Agreement under Recital H).
With reference to the assigned credit, L&R undertakes to send XXXXXXXXX any
documentation that pertains to the credit and is required for its collection, as
well as any correspondence or payment that it may receive with respect to the
assigned credit. By affixing their signature hereto, ECOIDEA, ES, and EWS hereby
confirm their acceptance of the assignment as detailed above, each for its own
part.
Article V
Statement By Ecoidea
To prove that it has sufficient funds available to satisfy the claims against
it, as assigned under the above Article IV, ECOIDEA hereby submits attachment
Sub 2 to this AGREEMENT consisting in the letter dated July 6, 2004 from MPS
BANCAVERDE spa bank which states that: "RE: Funding N. 1004516. With this notice
we confirm that the "Ecoidea S.r.l." company has in place with this Bank a
financing operation for the purpose of constructing a building and installing an
RDF combustion plant for the production of electrical energy and steam. Said
financing will be disbursed through staged payments based on milestone
completion (some payments have already been made) with payment of the final
balance upon the positive outcome of acceptance testing. Sincerely, signed
GENERAL MANAGEMENT"
Article VI
Additional Agreement
In addition to the stipulations contained in this AGREEMENT, the Parties hereto
agree to take on the obligations under Attachment #3, each for its own part.
Article VII
Governing Law
This AGREEMENT shall be governed by Italian law.
Article VIII
Disputes
Any dispute that should arise concerning the validity, effectiveness,
interpretation, execution, failure to perform, or termination of this AGREEMENT
will be the exclusive jurisdiction of Italian Courts.
Article IX
Text of Agreement
This AGREEMENT, which has been prepared in five original copies, one for each of
the PARTIES, is composed of 7 (seven) pages, 9 articles, including the present
one, and of 3 (three) attachments, identified by numbers 1 through 3. Each
original copy of this AGREEMENT contains the Italian language version of the
text and its English language translation. The PARTIES hereto agree that the
Italian language version of this Agreement shall govern and control in case of
any differences or disagreement.
Attachments:
#1 Agreement Between Ecoidea And E.S.
#2 Letter from MPS BANCAVERDE S.p.a.
#3 Additional Agreement Between the Parties
ECOIDEA S.R.L. [/s/ Signature illegible]
[Printed Name: Xxxxxxx Xxxxxxx: Representative]
ELECTRONIC SOLAR S.R.L. [/s/ Signature illegible]
[Printed Name: Xxxxxxx Xxxxxxx: Representative]
EUROPEAN WASTE
SOLUTION INC. [/s/ Signature illegible]
L&R ENERGY COMPANY LLC [/s/ Signature illegible]
XXXXXXXXX ENERGY CORP [/s/ Signature illegible]
[Printed Name: Xxxxxx Xxxxxxxxx: Xxxxxxxxx VP OPS]
AGREEMENT PERTAINING TO THE DEFINITION OF PLANT START-UP
This document was prepared with the intent of clarifying among the parties the
expression "completing and starting up the plant" contained in Article 3 of the
Agreement made on July 16, 2004 (the "Agreement") between ECOIDEA SRL,
ELECTRONIC SOLAR SRL, EUROPEAN WASTE SOLUTIONS INC., L&R ENERGY COMPANY LLC, and
XXXXXXXXX ENERGY CORPORATION.
The following meaning should be given to the expression "completing and starting
up the plant" contained in Article 3 of the Agreement:
Initial Start-Up Phase
----------------------
(a) A (1) gasifier must be placed in service with natural gas by July 29, 2004.
(b) By the same date - July 29, 2004 - the Plant must produce at least 1
Kilowatt of electricity.
(c) After fulfilling the obligations under the preceding paragraphs (a) and (b),
and without prejudice to the obligation to comply with the Veneto Regional
Council deliberation # 2926 dated October 3, 2003, the Plant must be immediately
shut down and work resumed in order to proceed with testing.
Dated: July 16, 2004
Ecoidea S.r.l. Electronic Solar S.r.l.
By: [/s/ Signature Illegible] By: [/s/ Signature Illegible]
Name: Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx
Title: Representative Title: Representative
European Waste Solutions, Inc. L&R Energy Company, LLC
By: [/s/ Signature Illegible] By: [/s/ Signature Illegible]
Name: X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Managing Director Title: Manager
Xxxxxxxxx Energy Corporation
By: [/s/ Signature Illegible]
Name: Xxxxxx X. Xxxxxxxxx
Title: VP OPS
ATTACHMENT #2
MPS BANCAVERDE
BANK FOR NATURE
First ISO 14001 Certified AND EMS Registered Italian Bank
To: Spett. ECOIDEA S.r.l.
Xxx Xxx Xxxxxxx 00
00000 Xxxxxxx Xxxxxx (XX)
Xxxxxxxx July 6, 2004
RE: Funding N. 1004516
With this notice we confirm that the "Ecoidea S.r.l." company has in
place with this Bank a financing operation for the purpose of constructing a
building and installing an RDF combustion plant for the production of electrical
energy and steam. Said financing will be disbursed through staged payments based
on milestone completion (some payments have already been made) with payment of
the final balance upon the positive outcome of acceptance testing.
Sincerely,
GENERAL MANAGEMENT
[/s/ Signature Illegible]
MPS BANCAVERDE SPA General Management: Xxxxxx X'Xxxxxxx, 00 - 00000 Xxxxxxxx
- Xxxxxxx Xxxxx 50,000,000 Euros paid
in full - Business Registration # and VAT Tax ID # 00658040480
Bank Code # 10004.0 Group Code #1030.6 - C.P. 1478 - Phone: 000 00 000 -
Fax 000 000 000 - Toll Free # 800 267
241 - xxx.xxxxxxxxxx.xx - e-mail: xxxxxxxxxxxxx@xxxxxxxxxx.xx
Adheres to the Code of Ethics of the Financial and Banking sector - Adheres to
the Safety Deposit Interbank Fund - Adheres to UNEP
MPS GROUP
ATTACHMENT 3
ADDITIONAL AGREEMENT BETWEEN XXXXXXXXX - L&R - EWS - ECOIDEA - ELECTRONIC SOLAR
1 - Xxxxxxxxx is committed to an initial start-up of the plant by July 31, 2004
and to completing the plant by September 30, 2004 and guarantees the following
performance: 57,600,000 BTU/hour, capable of producing 19,240 Kg/h of steam.
2 - Upon successful completion of testing, Ecoidea is committed to paying $
3,000,000 to Xxxxxxxxx, through the assignment of credit as per the Agreement
signed today, to which this document is an attachment.
3 - Xxxxxxxxx will bear all costs for its own personnel and any missing
equipment up to the time of acceptance testing, besides the costs it has already
incurred.
4 - Ecoidea will bear all the extra costs incurred to complete the GASIFIER
(labor and materials)
5 - Upon successful completion of acceptance testing, Ecoidea is committed to
paying $3,925,000 to L&R, through the assignment of credit as per the Agreement
signed today, to which this document is an attachment.
6 - EWS will not be able to claim any additional costs from L&R.
7 - L&R will not be able to claim any additional costs from Xxxxxxxxx.
8 - EWS, Electronic Solar, and Ecoidea defer the final definition of
responsibilities pertaining to all additional costs until acceptance testing of
the PLANT has been completed. In any case, no further claims will be made of L&R
and Xxxxxxxxx for these additional costs.
Dated: July 16, 2004
Ecoidea S.r.l. Electronic Solar S.r.l.
By: [/s/ Signature Illegible] By:[/s/ Signature Illegible]
Name: Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx
Title: Representative Title: Representative
European Waste Solutions, Inc. L&R Energy Company, LLC
By: [/s/ Signature Illegible] By:[/s/ Signature Illegible]
Name: X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Managing Director Title: Manager
Xxxxxxxxx Energy Corporation
By: [/s/ Signature Illegible]
Name: Xxxxxx X. Xxxxxxxxx
Title: VP OPS
