EX-10.1
2
v117105_ex10-1.htm
JOINT
DEVELOPMENT AGREEMENT
By
and
Among
AE
BIOFUELS AMERICAS, INC.
And
DS
DEVELOPMENT, S.A.
Dated
as
of
June
9,
2008
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i
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TABLE
OF CONTENTS
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Page
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ARTICLE
1 CERTAIN DEFINED TERMS; INTERPRETATION
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2
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1.1
|
Certain
Defined Terms
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2
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1.2
|
Interpretation
|
8
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ARTICLE
2 UTE AGREEMENT; CONSULTING AGREEMENT; HIRING OF
EMPLOYMENT
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9
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2.1
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UTE
Agreement
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9
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2.2
|
DSD
Consulting Agreement
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9
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2.3
|
Hiring
of Employees
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10
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ARTICLE
3
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10
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ARTICLE
4 PROJECT COMPANY
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11
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4.1
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Project
Company/Developers,
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11
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4.2
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Project
Assets
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11
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4.3
|
Management
of Project Company
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11
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ARTICLE
5 DEVELOPMENT AND CONSTRUCTION ACTIVITIES
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13
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5.1
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Project
Proposal
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13
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5.2
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Project
Development
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13
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5.3
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Performance
of Project Activities
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15
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ARTICLE
6 PROJECT BUDGET; COSTS; COMPENSATION
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15
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6.1
|
Development
Costs
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15
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ARTICLE
7 TERM; EVENTS OF DEFAULT; RIGHTS AND REMEDIES; FORCE MAJEURE;
SURVIVAL
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16
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7.1
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Term
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16
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7.2
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Events
of Default
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16
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7.3
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Rights
and Remedies
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17
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7.4
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Force
Majeure
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17
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7.5
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Survival
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17
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ARTICLE
8 LIMITATION OF LIABILITY
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18
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8.1
|
CONSEQUENTIAL
AND INDIRECT DAMAGES
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18
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8.2
|
EXCLUSIVITY
OF WARRANTIES
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18
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ARTICLE
9 CONFIDENTIALITY
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18
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9.1
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Confidentiality
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18
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9.2
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Tax
Treatment and Structure
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19
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9.3
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Return
of Confidential Information
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19
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9.4
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Survival
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19
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ARTICLE
10 DEVELOPER REPRESENTATIONS AND WARRANTIES
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20
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ii
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ARTICLE
11 SETTLEMENT OF DISPUTES
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20
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11.1
|
Procedure
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20
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11.2
|
Arbitration
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20
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11.3
|
Continuation
of Work
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21
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ARTICLE
12 MISCELLANEOUS
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21
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12.1
|
Indemnity
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21
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12.2
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Governing
Law
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21
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12.3
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Assignment
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21
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12.4
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Binding
Effect
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21
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12.5
|
Entire
Agreement and Modifications
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21
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12.6
|
No
Waiver of Rights
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22
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12.7
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Relationship
of Parties
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22
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12.8
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Notices
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22
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12.9
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Counterparts
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23
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12.10
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Third
Party Beneficiaries
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23
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12.11
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Severability
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23
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12.12
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Illicit
Payments/FCPA
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23
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12.13
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Further
Assurances
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23
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12.14
|
Press
Release
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23
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Exhibits
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Exhibit
A
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Description
of Project
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Exhibit
B
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Project
Schedule
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Exhibit
C
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Project
Company Organizational Documents
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Exhibit
D-1
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Project
Documents
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Exhibit
D-2
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Permits
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Exhibit
D-3
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Studies,
Reports and other Project Assets
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Exhibit
E
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Project
Site
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Exhibit
F
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Project
Budget
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Exhibit
G
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Preliminary
Engineering Contract
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Exhibit
H
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DSD
Contracts
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JOINT
DEVELOPMENT AGREEMENT
This
JOINT DEVELOPMENT AGREEMENT (this “Agreement”)
is
made and entered into effective as of this 9th
day of
June, 2008 (the “Effective
Date”),
by
and among AE
BIOFUELS AMERICAS, INC., a
US
corporation incorporated under the laws of Nevada (“AEBA”);
and
DS
DEVELOPMENT S.A.,
a
private corporation validly incorporated and existing under the laws of
Argentina (“DSD”)
formerly named Q4B S.A., and a wholly owned subsidiary of DS
GROUP S.A.
and
INTERPRISE
BRUSSELS S.A.,
two
private corporations validly incorporated and existing under the laws of
Belgium. DSD and together with AEBA, are referred to as the “Developers”.
This
Agreement shall supersede the Memorandum of Understanding (as defined below)
entered into by and between the Parties.
RECITALS
A. AEBA
and
DSD entered into a Memorandum of Understanding, dated April 10, 2008 (the
“Memorandum
of Understanding”),
which
set forth certain preliminary understandings and agreements between AEBA
and DSD
to
enter
into a
joint development agreement to
build,
own, manage and operate biodiesel production facilities in San Xxxxxxx,
Argentina for the refining, sale, export and marketing of biodiesel (the
“Project”).
The
Project shall also mean any amendments, modifications, expansions,
diversifications or other changes to the scope of the Project detailed on
Exhibit
A
attached
hereto.
B. A.E.
BIOFUELS, INC.,
a
Nevada corporation (“AE
BIOFUELS”)
is a
builder, owner and operator of biodiesel and ethanol manufacturing facilities
and biofuel technology in the US and India and AEBA is wholly owned by AE
BIOFUELS.
C. AEBA
currently intends to incorporate a limited liability company organized under
the
Indian Companies Act (1956) named “UNIVERSAL
BIOFUELS ARGENTINA PRIVATE LIMITED”
(“UBAPL”)
as a
subsidiary of AE BIOFUELS through a series of affiliated
corporations.
D. UBAPL
and
DSD shall then register a joint venture company (“Unión
Transitoria de Empresas”
or
“UTE”)
in
Argentina to serve as the project company for the Project (the “Project
Company”).
The
Project Company shall serve as the joint venture special purpose vehicle
that
will
carry out the development, financing, design, construction and operation
of the
Project with the support of UBAPL and DSD.
E. In
accordance with the terms of the Memorandum of Understanding and this Agreement,
the Developers shall, pursuant to the terms of a mutually acceptable UTE
agreement to be negotiated by the parties (the “UTE
Agreement”),
receive (i) in the case of UBAPL, a 90% ownership in the Project in exchange
for
the assignment of the Preliminary Engineering Contract (as defined below)
and
the contribution to the Project Company of the debt capital required for
the
execution of the Buyatti Real Estate Contract; and (ii) in the case of DSD
a 10%
ownership in the Project in exchange for the assignment of all right, title
and
interest to the DSD Contracts (as defined below), the services described
herein,
and the execution of the Consulting
Agreement (as defined below) with the Project Company. The
assignment of the DSD Contract shall be in favor of the Project Company and
shall occur upon the execution of the Buyatti Real Estate Contract by all
parties.
Confidential
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F. Concurrent
with the execution of this Agreement, AEBA has entered into a preliminary
engineering contract with DS Engineers and Contractors, incorporated in Belgium
(“DSEC”)
in
order to enable DSEC to commence design of the engineering for the manufacturing
of the equipment and construction of the Project (the “Preliminary
Engineering Contract”),
attached hereto as Exhibit
G.
G. DSD
entered into (1) an oil purchase agreement with Cargill guaranteeing 250,000
TPY
of supply of crude soybean oil for ten years, attached hereto as Exhibit
H-1
(the
“Cargill
Supply Contract”);
(2) a
memorandum of understanding for the purchase 5.5 hectares for $180,000 US
per
hectare (the “Land”)
from
BUYATTI
S.A.I.C.A.,
an
Argentine corporation (“Buyatti”)
and
for the execution of a service and supply contract for the use and operation
of
various facilities owned by Buyatti, attached hereto as Exhibit
H-2
(the
“Buyatti
Memorandum of Understanding”);
and
(3) various Permits related to the creation of the Project by DSD enumerated
on
Exhibit
H-3
attached
hereto (the “Assigned Permits”) (collectively the Cargill Supply Contract, the
Buyatti Memorandum of Understanding and the Assigned Permits shall be referred
to as the “DSD
Contracts”).
As
referred in paragraph (E) above, DSD shall be granted ownership in the Project
as detailed in the UTE Agreement in exchange for the assignment of the DSD
Contracts to the Project Company.
H. As
provided in the Memorandum of Understanding, the Parties desire to enter
into
this Agreement to set forth the rights and obligations of each Party in the
development and operation of the Project.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained herein
and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged by DSD and AEBA, the Parties hereby agree as
follows:
ARTICLE
1
CERTAIN
DEFINED TERMS; INTERPRETATION
1.1 Certain
Defined Terms
.
The
following terms, when used in this Agreement, have the meanings set forth
below.
The meanings specified for any defined term in this Agreement are applicable
both to the plural and the singular.
“Advisors”
is
defined in Section 9.1 hereto.
“Affiliate”
(including
the terms “Affiliated” and “Affiliated with”) means, with respect to any Person,
(a) any other Person, directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with
such
Person, (b) any other Person with respect to which such Person possesses
the
right to exercise, directly or indirectly, through one or more intermediaries,
twenty percent (20%) or more of the voting rights attributable to the ownership
interests of such other Person, or (c) any other Person with respect to which
such Person is entitled to receive, directly or indirectly, through one or
more
intermediaries, twenty (20%) or more of all dividends or distributions, as
applicable, paid by such Person. As used in the preceding sentence, the term
“control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, directly or indirectly, through one or more
intermediaries, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities,
by
contract or otherwise.
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“Agreement”
has
the
meaning given to such term in the preamble to this Agreement.
“AE
Biofuels”
has
the
meaning given to such term in the recitals to this Agreement.
“AEBA”
has
the
meaning given to such term in the preamble to this Agreement.
“AEBA
Advance” has
the
meaning given to such term in Section
3.1(b)
“AEBA
Development and Construction Activities”
has
the
meaning given to such term in Section
5.2(b).
“Approved
Development Costs”
has
the
meaning given to such term in Section
6.1(c).
“Belgium”
means
that sovereign nation encompassed within the territorial boundaries of
Belgium.
“Buyatti”
has
the
meaning given to such term in the recitals to this Agreement.
“Buyatti
Memorandum of Understanding”
has
the
meaning given to such term in the recitals to this Agreement.
“Buyatti
Real Estate Contract”
has
the
meaning given to such term in Section
3(1)(c).
“Buyatti
Services Contract”
has
the
meaning given to such term in the recitals to this Agreement.
“Cargill
Supply Contract”
has
the
meaning given to such term in the recitals to this Agreement.
“Commercial
Operation”
means
that the Project
reaches nameplate capacity to treat soybean oil to produce 250.000 TPY of
biodiesel, equivalent to 750 TPD, operating 8,000 hours per year, and such
facilities are installed, fully and successfully tested, and capable of
producing biodiesel in the guaranteed quantities
at 80%
capacity on a continuous 30 day basis.
“Confidential
Information”
is
defined in Section 9.1 herein.
“Closing”
is
defined in Section 3.1 (a) herein.
“DSEC”
has
the
meaning given to such term in the recitals to this Agreement.
“Developers”
has
the
meaning given to such term in the preamble to this Agreement.
“Development
Activities”
shall
mean the AEBA Development and Construction Activities and the DSD Development
and Construction Activities.
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“Development
Costs”
means
third party costs and expenses incurred by or on behalf of the Project Company
in the development of the Project on and after the Effective Date.
“Dispute”
has
the
meaning given to such term in Section
11.1.
“DSD”
is
defined
in the preamble of this Agreement.
“DSD
Consulting Agreement”
has
the
meaning given to such term in Section
2.2.
“DSD
Contracts”
has
the
meaning given to such term in the recitals to this Agreement.
“DSD
Fee”
has
the
meaning given to such in Section
2.2(b).
“Effective
Date”
has
the
meaning given to such term in the preamble to this Agreement.
“Environmental
Laws”
means
all Laws relating to the protection of the environment, health or safety
or the
use, generation, release, treatment, storage, disposal or exposure to Hazardous
Materials, including the Environment Protection Act, 1986, Hazardous Wastes
(Management and Handling) Rules 1989, Air (Prevention and Control of Pollution)
Act, 1981, Water (Prevention and Control of Pollution) Act, 1974, Municipal
Solid Wastes (Management and Handling Rules), 2000, Noise Pollution (Regulation
and Control) Rules, 2000 and any other Argentine environmental laws as
applicable.
“EPC
Contractor”
shall
mean DSEC with whom the Project Company enters into an EPC Contract for the
turnkey engineering, procurement and construction of the Project.
“EPC
Contract”
is
the
engineering, procurement and construction contract with DSEC for the
engineering, procurement and construction of a pretreatment facility and
a
biodiesel production plant in San Xxxxxxx, Argentina with the capacity treat
soybean oil to produce 250.000 TPY of biodiesel, equivalent to 750 TPD,
operating 8,000 hours per year.
“Event
of Default”
shall
have the meaning given such term in Section
7.2.
“FCPA”
has
the
meaning given to such term in Section
12.12.
“GAAP”
means
generally accepted accounting principles in the United States of America,
Belgium or the Republic of Argentina (consistently applied), as
applicable.
“Governmental
Authority”
means
any central, federal, state, county, municipal or other local governmental
unit,
agency, instrumentality or court with jurisdiction over (a) all or a
portion of the Project or this Agreement; (b) the design, engineering,
construction, ownership, testing, use, operation or maintenance of the Project;
(c) any Party; (d) the Project Documents; or (e) any of the
transactions contemplated thereby.
“Hazardous
Materials”
means
any substance, material, chemical, or waste, the exposure to which or the
discharge, emission, disposal, or release of which is prohibited, limited,
or
otherwise regulated, under applicable Environmental Laws, including gasoline,
diesel fuel, methanol or other petroleum hydrocarbons, polychlorinated
biphenyls, asbestos, “hazardous substances” listed under the Comprehensive
Environmental Response, Compensation and Liability Act, and “solid wastes” under
the Resource, Conservation and Recovery Act of 1976.
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“Internal
Cost”
means
any cost that is not a Development Cost incurred by any Party prior to
Commercial Operation.
“Land”
has
the
meaning given to such term in the recitals to this Agreement.
“Law”
means
any law (including Environmental Laws), statute, code, building code, ordinance,
rule, regulation, order, judgment that is binding on a Party, decree,
injunction, legally binding directive, or requirement or any similar form
of
legally binding decision, or determination or administration of any of the
foregoing by any Governmental Authority.
“Liens”
means
all mortgages, deeds of trust, liens, debentures, security interests, pledges,
conditional sale contracts, litigation, rights of first refusal, options,
charges, agreements, easements, rights-of-way, limitations, reservations,
restrictions, community property interests, equitable interests, building-use
restrictions, exceptions, variances, and other encumbrances or restrictions
of
any kind, whether recorded or unrecorded, including restrictions on use,
transfer, receipt of income, or exercise of any other attribute of
ownership.
“Losses”
has
the
meaning given to such term in Section 12.1.
“Material
Change”
means
(a) any conditions, changes in circumstances, or events occur that
individually or in the aggregate are reasonably likely to prevent the Project
from achieving Commercial Operation (b) any reduction in the nameplate
capacity of the Project to less than 5% (c) any change in the general
location of the Project (d) any material defects in the real property
rights relating to the Project Site; (e) any environmental condition not
documented in the above-referenced environmental site assessment, and which
condition could be reasonably expected to have a material adverse effect
on the
development and construction of the Project; and (f) the Development Cost
necessary to fund development of the Project to the Closing (other than any
Development Costs that were approved by the Board of Directors) and reasonably
expected to exceed the Project Budget by US$50,000.
“Memorandum
of Understanding”
has
the
meaning given to such term in the recitals to this Agreement.
“New
York Convention”
has
the
meaning given to such term in Section
11.2.
“O&M
Agreement”
means the operation and maintenance agreement, to be executed upon
Commercial Production, between Project Company and Buyatti, whereby the Buyatti
will provide operation and maintenance services to the Project Company for
a
three year term.
“Party”
or
“Parties”
shall
mean any party or parties to this Agreement.
“Permits”
means
the permits, licenses, concessions, clearances, approvals, authorizations
and
other permissions required or desirable to be obtained from a Governmental
Authority, to own, develop, construct, test, operate or maintain the Project
in
compliance with all applicable Law, including, those set forth on Exhibit
D-2.
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5
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“Permitted
Liens”
means:
(i) pledges
or deposits by the Project Company under workmen's compensation laws,
unemployment insurance laws or similar legislation;
(ii) Liens
imposed by law, including carriers’, warehousemen's and mechanics’ liens, in
each case for sums not yet due;
(iii) Liens
for
taxes, assessments or other governmental charges not yet subject to penalties
for non-payment;
(iv) Liens
in
favor of issuers of surety or performance bonds or letters of credit or bankers’
acceptances issued pursuant to the request of and for the account of the
Project
Company in the ordinary course of its business and reasonably acceptable
to the
Project Company Board of Directors;
(v) encumbrances,
easements or reservations of, or rights of others for, licenses, rights of
way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real properties,
provided, however, such
Liens in the aggregate do not materially impair the use of the assets of
Project
Company or the value of such assets for the purposes of the development,
construction, ownership, operation and maintenance of the Project;
(vi) judgment
liens, so long as such Lien is adequately bonded in accordance with GAAP
and any
appropriate legal proceedings that may have been duly initiated for the review
of such judgment have not been finally terminated or the period within which
such proceedings may be initiated has not expired; and
(vii)
Liens
arising under the Project Documents.
“Person”
means
any individual or company (including any limited liability company or joint
stock company), corporation (including any non-profit corporation), estate,
trust, or Governmental Authority.
“Preliminary
Engineering Contract”
has
the
meaning given to such term in recitals to this Agreement.
“Project”
has
the
meaning given to such term in recitals to this Agreement.
“Project
Activities”
means
any activity performed or to be performed by any Party in relation to the
Project.
“Project
Assets”
means
all rights, tangible and intangible property, and other assets relating to
the
Project or required or desirable for the development, construction, operation
or
maintenance of the Project, including Project Documents, Permits, leases,
easements, right of ways and other land rights, surveys, maps, landowner
data,
insurance, the Project's interconnection queue position, all meteorological
data, wind data, transmission studies, market studies, interconnection
(feasibility, system impact, facilities and other) studies, environmental
studies, avian studies, wetland/habitat studies, archeological studies, property
tax, franchise tax and other tax studies, and any other studies or reports
commissioned for the Project.
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“Project
Budget”
has
the
meaning given to such term in Section 6.1(a).
“Project
Company”
has
the
meaning given to such term in the preamble to this Agreement.
“Project
Development and Construction Activities”
has
the
meaning given to such term in Section
5.2(a).
“Project
Documents”
means
this Agreement, the Cargill Supply Contract, the UTE Agreement, the Buyatti
Memorandum of Understanding, the Buyatti Real Estate Contract, the O&M
Agreement, the EPC Contract, the T6 Fobbing Contract, the Buyatti Services
Agreement, the agreements to lease pipelines and storage relating with third
party service providers for transportation of refined soybean oil to the
Project
Site and biodiesel from the Project Site to external locations of buyers,
lease
of external storage tanks from third party lessors, the project financing
agreements, the environment-related agreements, the tax abatement or payment
in
lieu of taxes agreements and any other material agreements entered into by
the
Project Company or otherwise related to the Project.
“Project
Schedule”
has
the
meaning given to such term in Section
2.1.
“Project
Site”
means
the site of the Project, which is located on a 5.5 hectare site adjacent
to the
Buyatti plant in the San Xxxxxxx region of Argentina and is more particularly
described in metes and bounds on Exhibit E.
“Prudent
Industry Practices”
means
those practices, methods and standards, that: (a) when engaged in, are commonly
used by experienced and prudent developers in the U.S., Belgium and/or Republic
of Argentina when performing services of the type as the Project Activities,
lawfully and with safety, reliability, efficiency and economy; and (b) in
the
exercise of reasonable judgment, considering the facts known when engaged
in,
could have been expected to achieve the desired result consistent with
applicable Law, safety, reliability, efficiency and economy.
“Republic
of Argentina”
means
that sovereign nation encompassed within the territorial boundaries of
Argentina.
“Representatives”
has
the
meaning given to such term in Section 4.4(b).
“Rules”
has
the
meaning given to such term in Section
11.2.
“Senior
Officer”
means
with respect to a Party, any officer with the authority to make binding
decisions on behalf of that Party.
“UTE
Agreement”
has
the
meaning given to such term in the recitals to this Agreement.
“Term”
shall
have the meaning given such term in Section
7.1.
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7
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“T6
Fobbing Contract”
shall
mean the contract for the transfer of the biodiesel through the port of Terminal
6 that includes the storage and the loading of the vessels to be entered
with T6
S.A.
“U.S.”
means
that sovereign nation encompassed within the territorial boundaries of the
United States of America.
1.2 Interpretation.
(a) Headings.
Titles,
captions and headings in this Agreement are inserted for convenience only
and
will not be used for the purposes of construing or interpreting this
Agreement.
(b) References
in this Agreement.
In this
Agreement, unless a clear, contrary intention appears: (i) the singular
includes the plural and vice versa; (ii) reference to any Person includes
such Person’s successors and assigns but, in the case of a Party, only if such
successors and assigns are permitted by this Agreement, and reference to
a
Person in a particular capacity excludes such Person in any other capacity;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including this Agreement), document or
instrument means such agreement, document or instrument as amended or modified
and in effect from time to time in accordance with the terms thereof and,
if
applicable, the terms of this Agreement; (v) reference to any Law means
such Law as amended, modified, codified or reenacted, in whole or in part,
and
in effect from time to time, including, if applicable, rules and regulations
promulgated thereunder; (vi) reference to any Section means such Section of
this Agreement, and references in any Section or definition to any clause
means
such clause of such Section or definition; (vii) “hereunder,” “hereof,”
“hereto” and words of similar import will be deemed references to this Agreement
as a whole and not to any particular Section or other provision of this
Agreement; (viii) “including” (and with correlative meaning “include”)
means including without limiting the generality of any description preceding
such term; and (ix) relative to the determination of any period of time,
“from” means “from and including”, “to” means “to but excluding” and “through”
means “through and including”.
(c) Industry
Meanings.
Words
and abbreviations not defined in this Agreement that have well-known technical
or industry meanings in the U.S., Belgium and/or the Republic of Argentina
are
used in this Agreement in accordance with those recognized
meanings.
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8
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ARTICLE
2
UTE
AGREEMENT; CONSULTING AGREEMENT; HIRING OF EMPLOYMENT
2.1 UTE
Agreement.
AEBA
and
DSD covenant and agree to cause UBAPL and DSD to enter into a mutually agreeable
UTE Agreement in connection with the incorporation of the Project Company
and
assignment of the contracts referenced herein, which grants (i) UBAPL a 90%
ownership in the Project and Project Company in exchange for the assignment
of
the Preliminary Engineering Contract, the contribution to the Project Company
of
the debt capital required for the execution of the Buyatti Real Estate Contract
and for causing the Project Company to enter into the DSD Consulting Agreement;
and (ii) DSD a 10% ownership in the Project and Project Company in exchange
for
the assignment of all right title and interest to the DSD Contracts, the
services detailed herein and the entering into the
DSD
Consulting Agreement. The parties shall use their best efforts to ensure
that
the UTE Agreement shall be entered not later than 120 days of the execution
of
this Agreement. The
assignment of the DSD Contract shall be in favor of the Project Company and
shall occur upon the execution of the Buyatti Real Estate Contract by all
parties. It
is
agreed that the UTE Agreement shall not grant DSD any rights to the management
or control of the Project Company. It is further agreed, as stated herein,
that
the UTE Trust Agreement shall provide for an immediate re-assignment and
transfer of all right, title and interest to the DSD Contracts and
the
remaining Project Documents, including the Preliminary Engineering
Agreement
held by
the Project Company to DSD in the event that this Agreement is terminated
as
described in Section 3.1(d) below.
2.2 DSD
Consulting Agreement.
(a) DSD
Consulting Agreement.
The
Project Company shall enter into a five (5) year Consulting Agreement with
DSD
(the “DSD
Consulting Agreement”).
The
parties shall use their best efforts to ensure that the DSD Consulting
Agreements is executed no later than 120 days after the execution of this
Agreement. The Parties acknowledge and the DSD Consulting Agreement shall
set
forth that all or almost all of the services provided in the DSD Consulting
Agreement shall have been provided at the time the Project Company executes
the
DSD Consulting Agreement, and that payment is deferred only for tax reasons.
Under the DSD Consulting Agreement, upon execution of the UTE Agreement,
the
Project Company shall pay DSD a total of US$10,000 per month until the end
of
the first three months of Commercial Operation, and thereafter, the Project
Company shall pay DSD a total of US$20,000 per month until the total payment
of
US$1.1 million is achieved (minus the DSD Fee if paid as provided below).
The
DSD Consulting Agreement may not be terminated by the Project Company for
any
reason. The parties hereto acknowledge and agree that (i) the DSG Consulting
Agreement is solely an agreement between the Project Company and DSD, and
that
neither AEBA, AE BIOFUELS, nor its Affiliates (other than the Project Company),
shall incur or be subject to any liability, damages, costs or obligations
in
connection with the DSD Consulting Agreement; and (ii) DSD shall not incur
or be
subject to any liability, damages, costs or obligations in connection with
the
DSD Consulting Agreement.
(b) DSD
Fee.
In
consideration for this Agreement, AEBA agrees to pay DSD $20,000 per month
after
the Effective Date, payable in arrears, for four (4) months (for a total
of
US$80,000) (the “DSD
Fee”).
Any
amounts paid by AEBA to DSD under this Section shall reduce the aggregate
amount
payable to DSD under the DSD Consulting Agreement referenced above. In no
event
shall AEBA’s maximum payment liability under this Section 2.2 exceed
$80,000.
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2.3 Hiring
of Employees.
Prior
to
the commencement of Commercial Operation, DSD shall use its best efforts
to find
suitable management to be hired by the Project Company for the Project;
provided,
however,
the
Parties acknowledge that the directors and officers of the Project Company
shall
have sole and exclusive hiring authority.
ARTICLE
3
FINANCING
OF THE PROJECT; CONTRIBUTION BY DEVELOPERS
3.1.
Financing
of the Project.
(a)
Other
than the AEBA Advance, all of the funding for the Project (land, facilities,
working capital, etc) will be obtained from independent sources using debt
financing of not less than US$35,000,000 as necessary to reach financial
closing
of the Project (the “Closing”).
AEBA
shall use reasonable commercial efforts to accomplish the Closing. None of
the
funding will be provided by DSD (or by AEBA, other than the AEBA Advance,
if
applicable), and no capital contributions by UBAPL or its Affiliates shall
dilute DSD´s 10% ownership in the Project or UTE.
(b)
Subject to available funding and approval by the Board of Directors of the
Project Company and the Board of Directors of AEBA, AEBA or its Affiliates
agrees to advance the Project Company funding for the development of the
Project
under an interest-bearing secured debt agreement of not less than US$16,000,000
(the “AEBA
Advance”).
The
AEBA Advance shall be repaid from bank financing or from the free cash flow
of
the Project Company.
(c)
The
Project Company shall use the AEBA Advance and obtain additional debt finance
if
required for the execution of an option or purchase agreement by the Project
Company (or, if not possible, by the Developers according to the following
percentages: 90% UBAPL and 10% DSD) of the Land (the “Buyatti
Real Estate Contract”).
(d)
Notwithstanding anything to the contrary, the Parties acknowledge and agree
that
nothing contained in this Agreement shall constitute a commitment by AEBA
or its
Affiliates to underwrite or fund the AEBA Advance or provide or guarantee
any
financing for the Project, or any commitment by AEBA to guarantee any
obligations or liabilities of the Project Company, other than the costs
associated with the Preliminary Engineering Contract and the DSD Fee. If
(i) the
Buyatti Real Estate Contract is not executed within 120 days after Effective
Date, or (ii) a firm commitment (subject to typical contingencies) for the
funding necessary for the Closing is not achieved within 180 days after
Effective Date, or (iii) a Closing has not occurred within 240 days after
the
Effective Date, this Agreement may be terminated by DSD without further
obligation or liability of any Party (other than amounts payable under the
DSD
Fee), and the DSD Contracts and the remaining Project Documents, including
the
Preliminary Engineering Agreement, shall be reassigned to DSD free of charge
and
additional costs. If
the Buyatti Real Estate Contract has been executed during such 180 day or
240
day period and this Agreement is terminated, DSD shall have the right to
buy the
Land from the Project Company for the same price paid by the Project Company.
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ARTICLE
4
PROJECT
COMPANY
4.1 Project
Company/Developers. Purpose
of Project Company.
The
Parties acknowledge that the Project Company’s sole purpose will be to develop,
construct, own, operate and maintain the Project, including any amendments,
modifications, expansions, diversifications or other changes to the scope
of the
Project.
4.2 Project
Assets. Representations
and Warranties.
Each of
the Developers represent and warrant that this Agreement is in force and
effect
as of the Effective Date.
(b) DSD
represents and warrants that (i) true, correct and complete copies
of the
DSD
Contracts in force and effect as of the Effective Date are attached
to
Exhibit D-2
and no
default exists under such DSD Contracts; (ii) Exhibit
D3
lists
Permits required or desirable to be obtained for the Project, the Government
Authority that issues such Permits, and the current status of obtaining such
Permits for the Project; (iii) it reasonably believes that any Permit not
already obtained by the Project Company will be obtained before the Permit
is
required by Law to be obtained; (iv) it currently is not, nor has it in the
past been in violation of any Environmental Law, (v) it has not used,
released, discharged, generated, manufactured, produced, stored, or disposed
of
in, on, under, or about the Project Site, or transported thereto or therefrom,
any Hazardous Substances, except in compliance with Environmental Laws.
4.3 Management
of Project Company.
(a) Management.
DSD
shall use its best efforts to find suitable management to be hired by the
Project Company for the Project; provided,
however,
the
Parties acknowledge that the directors and officers of the Project Company
shall
have sole and exclusive hiring authority. Each of AEBA and DSD covenants
and
agrees, notwithstanding any other provision of this Agreement to the contrary,
that it will not cause the Project Company to take, or permit that the Project
Company takes (and Project Company will not take) any material action related
to
the Project, unless at the direction or with the approval of the Board of
Directors (“Consejo
Directivo”)
of the
Project Company. DSD shall have no right to appoint any member of the Board
of
Directors (“Consejo
Directivo”)
of the
Project Company; however DSD may appoint a board
observer,
as it
shall from time to time determine. Such board
observer
appointed by DSD shall hold office for the term for which he is elected or
until
his earlier death, resignation, retirement, or removal by the board of
directors. The board
observer
may
attend and be present at the meetings of the board of directors, although
the
board
observer shall
not
be considered in determining whether a quorum of the board of directors is
present. The board of directors will, however, keep the board observer fully
informed of any resolutions taken when the observer is not present. The
board
observer
may
advise and counsel the board of directors on the business and operations
of the
Project Company; provided, however, the board
observers shall
not
be entitled to vote on any matter presented to the board of
directors.
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(b) Covenants
by Developers.
Each of
the Developers covenants and agrees: (i) to keep the Board of Directors of
the Project Company informed of all material events relating to the Project
known by it, including defaults or violations by Project Company or its members
under any applicable Project Documents, Permits or Laws, any litigation relating
to Project Company or the Project, receipt of any material notices or reports
relating to the Project, termination, suspension or impairment of any applicable
Permit relating to the Project or Material Changes that could adversely affect
the development and construction of the Project or Commercial Operation of
the
Project; (ii) to timely transfer to the other Developer such information
regarding Project Company and the Project given to it, including the revisions
to the Project Schedule and Project Budget, including but not limited to
monthly
progress and budgetary reports of the Project, in all cases as provided by
the
Project Company; (iii) use best commercial endeavors to assist the Project
Company so that as soon as available and in any event within ten days (10)
days
after the end of each quarterly fiscal period of each fiscal year of Project
Company, the Project Company delivers to each Developer unaudited (and if
available, audited) statements of income, members’ equity and cash flows of
Project Company for such period and for the period from the beginning of
the
respective fiscal year to the end of such period, and the related balance
sheet
and profit and loss account statement as at the end of each such period,
setting
forth (to the extent applicable) in each case in comparative form the
corresponding figures for the corresponding period in the preceding fiscal
year,
accompanied by a certificate of an authorized officer of Project Company,
which
certificate shall state that such financial statements fairly present in
all
material respects the financial condition and (to the extent applicable)
results
of operations of Project Company in accordance with GAAP, consistently applied,
as at the end of, and for, such period (subject to normal year-end audit
adjustments); (iv) assist the Project Company so that it preserves,
protects and defends all of its material rights and remedies under the Project
Documents and complies with its obligations under the Project Documents;
(v) promptly
notify the Board of Directors of the Project Company of all known defects
in the
Project, and if requested by the Board of Directors of the Project Company,
liaise with the EPC Contractor to ensure that all such defects appearing
during
the applicable defect correction period or other warranty period are corrected
to the reasonable satisfaction of Project Company, but shall not agree to
any
course of action without the consent of Project Company;
(vi)
that Project Company will keep and maintain its books of account and financial
records at its address identified in Section
12.8
and that
each Developer, on notice to the Project Company, at all reasonable times,
may
audit, examine and make copies of the books of account and other records
of the
Project Company, and for this purpose, the Project Company will provide access
to their premises to the authorized representatives of each Developer and
furnish such records, documents and information as may be reasonably required
by
such representative; (vii) that Project Company preserves, protects and defends
all of its material rights and remedies under the Project Documents and uses
its
best efforts to complies with its obligations under the Project Documents,
and
that Project Company will not terminate, cancel or amend any Project Document,
or waive any obligation under a Project Document, without the consent of
the
Board of Directors of the Project Company;
(viii) that Project Company will use best efforts to obtain and maintain
insurance policies in accordance with Prudent Industry Practice and the
requirements of the Project Documents or any Permits, (ix) that Project
Company use best efforts to comply with all applicable Laws and Permits;
(x) that the Project Company will not directly or indirectly create, incur,
assume, suffer to exist or otherwise be or become liable with respect to
any
material indebtedness or guarantees, without the consent of the Board of
Directors of the Project Company, (xi) that Project Company will not
convey, sell, lease, assign, transfer or otherwise dispose of, in one
transaction or a series of transactions, any material assets, including its
rights under any Project Document, without the approval of the Board of
Directors of the Project Company; (xii) that Project Company will not
purchase or acquire any material assets or enter into any material agreement
(i.e., assets or agreements which have a value of U.S.$50,000 or less will
not
be deemed material for purposes of this Agreement), without the consent of
the
Board of Directors of the Project Company; and (ix) that Project Company
will not create, incur, assume or suffer to exist any Liens on any of its
assets
except Permitted Liens without the consent of Board of Directors of the Project
Company.
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ARTICLE
5
DEVELOPMENT
AND CONSTRUCTION ACTIVITIES
5.1 Project
Proposal.On
a best
efforts and non-recourse basis, DSD has prepared the technical, commercial
and
financial components of the Project (“Project
Proposal”),
attached collectively hereto as Exhibits A, B, C, D E and F, and in connection
therewith, DSD has provided to AEBA the Project Budget detailed in Section
6
hereof.
5.2 Project
Development. Subject
to the terms and conditions detailed herein, DSD will be the lead developer
of
the Project until Commercial Operation and shall assist and/or support the
Project Company in the performance of all services, activities and other
actions
required for the development of the Project, and in accordance with the
directions of the Board of Directors of the Project Company, including but
not
limited to assistance and or support in the following activities to be performed
by the Project Company (collectively, the “Project
Development and Construction Activities”):
(i) Management
of all aspects of the development of the Project in a manner consistent with
the
Project Proposal, the Project Budget and the Project Documents.
(ii) Ensuring
that an adequate number of experienced, competent and properly licensed
personnel are hired as employees or independent contractors to implement
the
Project.
(iii) Arrangement,
procurement and maintenance, of all necessary insurance during the development
and construction phase of the Project.
(iv) Negotiation
and completion of any remaining Project Documents required for the Project
not
already executed on the Effective Date in joint consultation with AEBA including
but not limited to any additional agreements with the Cargill Supply Contractor,
the Buyatti Services Contract, the T6 Fobbing Contract, or the EPC
Contractor.
(v)
(1) Preparation and submission of all required regulatory filings for the
development and construction of the Project, (2) Procurement and
maintenance of all Permits necessary or otherwise appropriate for the
development and construction of the Project, (3) Preparation and
submission of all filings of any nature that are required to be made under
any
governmental approval or filing, (4) Preparation and submission of all
other filings of any nature that are required to be made by Project Company
under any Laws, applicable to it or the Project and (5) Procurement of all
necessary real estate rights for the development, construction and financing
of
the Project, including all leases, easements, access, egress, crossings and
other rights of way and all title commitments, surveys, Permits, consents
and
approvals of all relevant Governmental Authorities or non-governmental
Persons.
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(vi) Obtaining
any additional reports, surveys or studies required for the Project, including
transmission studies, market studies, interconnection (feasibility, system
impact, facilities and other) studies, environmental studies, avian studies,
wetland/habitat studies, archeological studies, and property tax, franchise
tax
and other tax studies, in each case as reasonably directed by the Project
Company.
(vii) Obtaining
and management of all aspects of the environmental assessments to be prepared
by
the Project’s environment consultant in connection with the development and
construction of the Project, including obtaining all necessary Permits required
for such environmental assessment
(viii) Resolving
any property tax issues for the Project.
(ix) Creation
and maintenance of good landowner, community and government relations for
the
Project, and generate and implement community relations strategies and plans
with respect to the Project.
(x) Selection
and hiring, at the cost of the Project Company and in consultation and agreement
with the Board of Directors of the Project Company (at the Board’s sole
discretion) and pursuant to the Project Budget, of employees, independent
contractors and third party consultant(s) to provide on-site management and
administration of the construction phase of the Project.
(xi) Maintaining
good relationships with lenders, contractors and other Project
participants.
(xii) Implementation
and maintenance of adequate safety, health, and environmental management
systems
to comply with Prudent Industry Practices and applicable Laws and the safety,
health, and Environmental Law, standards, and guidelines of Project
Company.
(xiii) Negotiation
of contracts with domestic soybean producers and crushers to secure long
term
feedstock, storage, and shipping contracts;
(xiv) Provision
of information to vendors, lenders, consultants, accountants and attorneys
of
the Project Company;
(xv) Maintenance
of all insurances reasonable and necessary according to Prudent Industry
Practices.
(xvi) Performance
of all the services provided herein according Prudent Industry Practices
and in
accordance with
all
applicable Laws and
the
terms of this
Agreement.
AEBA
acknowledges and agrees that DSD will only, assist and support the Project
Company in the performance of the Project Development and Construction
Activities, but that the actual performance of such activities will depend
of
the Project Company itself. The Performance of all services provided herein
according to Prudent Industry Practices and in accordance with all applicable
Laws and in terms of this Agreement. DSD shall perform its duties under this
Agreement on a best efforts basis and should DSD be in material breach of
these
duties by reason of willful negligence or willful misconduct, the sole recourse
against DSD will be in the form of a claim on DSD's ownership in the UTE.
The
Parties acknowledge that there are no other warranties than the above in
respect
of DSD's duties under the Agreement.
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5.3 Performance
of Project Activities. Project
Assets; Authority of Parties.
From
and after the Effective Date, the Parties will endeavor to have all Project
Assets entered into or owned directly by Project Company. No Party will be
entitled to act for, or have any power or authority to assume any obligation
or
responsibility on behalf of any other Party, or will otherwise be deemed
an
agent, representative, employee or servant of any such other Party.
(b) Cooperation;
Right to Participate in Project Activities.
The
Parties agree to cooperate with one another in the performance of their
obligations under this Agreement. For those Project Activities under this
Agreement that a Developer has responsibility for, the other Developer may
participate fully in all aspects of that Project Activity, including the
opportunity to attend any meetings or discussions with third parties, and
will
be reasonably available to assist the Developer in performing that Project
Activity.
(c) Standard
of Performance.
Each of
the Parties will use commercially reasonable efforts to meet the milestones
set
forth in the Project Schedule in the performance of its respective obligations
under this Agreement. The Developers will each use such diligence, care and
prudence in the performance of its duties set forth in this Agreement (including
in supervising and enforcing any rights) and will devote such time, effort
and
skills of its employees as required by Prudent Industry Practices.
ARTICLE
6
PROJECT
BUDGET; COSTS;
COMPENSATION
6.1 Development
Costs. Project
Budget.
Attached as Exhibit
F
is the
initial and fixed budget, prepared by DSD and agreed to by AEBA, for the
Project
(the “Project
Budget”).
The
Project Budget sets forth DSD’s best estimate of the Development Costs for the
Project anticipated to be incurred, and the dates when those Development
Costs
are expected to be incurred, and may not be modified or amended except in
a
writing and agreed to by the Board of Directors of the Project Company.
(b) Prior
Development Costs.
Any
Developer who has incurred any Development Cost, prior to execution of this
Agreement, relating to the Project Company paid by such Developer directly
to a
third party owed such Development Cost, shall within a period of fifteen
(15)
days from the Effective Date, submit proof of such payment to the Board of
Directors of the Project Company and request its decision on whether such
Development Cost must be included in the Approved Development Cost. The Board
of
Directors of the Project Company will make its determination as to such
Development Cost and decide whether to acknowledge that same is an Approved
Development Cost by delivering a mutually agreeable form to the Developer
within
fifteen (15) days after receiving proof of such payment.
Developer
shall be reimbursed for such Approved Development Cost in the manner provided
herein, provided that, no Developer will be obligated to be reimbursed any
costs
or expenses that are not Approved Development Cost.
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(c) Approved
Development Costs.
The
amount allocated for each Development Cost category in the Project Budget
(and
the timing for incurrence of such Development Cost) is an estimate and may
exceed the budgeted amount for such category (or vary from the time scheduled
for the incurrence of the Development Cost) to the extent approved by the
Board
of Directors of the Project Company. All Development Costs must be calculated
and agreed to by the Board of Directors of the Project Company in an open
book
manner. Within sixty (60) days from receipt of a written request for approval
to
incur a Development Cost, the Board of Directors of the Project Company will
determine, based both on the type of Development Cost and the time for the
incurrence of such Development Cost, whether the Development Cost is eligible
for reimbursement in accordance with the Project Budget and this Agreement,
and
if so eligible, the Board of Directors of the Project Company will provide
a
written authorization for the Project Company to incur such Development Cost
(such Development Cost so authorized to be incurred by the Project Company,
an
“Approved
Development Cost”).
(d) Internal
Costs.
Except
as otherwise specifically provided in this Agreement, Internal Costs for
the
Project are not reimbursable.
(e) Books
and Records.
Each of
the Parties will maintain bank statements and other books and records (including
supporting documentation), in accordance with standard accounting practices
and
GAAP, with respect to costs claimed by such Party to be Development Costs.
Any
of the Parties shall have the right, at its own expense upon reasonable notice
and during regular business hours, to review and receive copies of such time
sheets, invoices, indicia of payment, bank statements and other books and
records (including supporting documentation) relating to any costs claimed
to be
Development Costs.
ARTICLE
7
TERM;
EVENTS OF DEFAULT; RIGHTS AND REMEDIES; FORCE MAJEURE;
SURVIVAL
7.1 Term.
Subject
to early termination under Section 3(d), and Section
7.2
and
Section
7.3,
this
Agreement will commence on the Effective Date and remain in full force and
effect until the date of first Commercial Operation (the “Term”).
7.2 Events
of Default.
The
occurrence and continuation of any of the following events at any time during
the term of this Agreement, except to the extent caused by, or resulting
from,
an act or omission of the other Party in breach of this Agreement, will
constitute an event of default of a Party (an “Event
of Default”):
(a) Bankruptcy.
If the
Party is adjudicated as bankrupt, becomes insolvent, enters into an arrangement
or composition with the Party’s creditors, suffers permanent or temporary
court-appointed receivership of substantially all of the Party’s property, makes
a general assignment for the benefit of creditors, files a voluntary bankruptcy
petition or suffers the filing of an involuntary bankruptcy petition that
is not
dismissed within
thirty
(30) days after filing.
(b) Default.
If the
Party fails in any material respect to perform or comply with any obligation
in
this Agreement, which failure materially and adversely affects the other
Party,
and such failure is not remedied within thirty (30) days after the date the
other Party has given written notice to the defaulting Party of such
failure.
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7.3 Rights
and Remedies.
Notwithstanding anything to the contrary, the Parties acknowledge and agree
that
nothing contained in this Agreement shall constitute a commitment by AEBA
or its
Affiliates to underwrite or fund the AEBA Advance or provide or guarantee
any
financing for the Project, or any commitment by AEBA to guarantee any
obligations or liabilities of the Project Company, other than the costs
associated with the Preliminary Engineering Contract and the DSD Fee. If
(i) the
Buyatti Real Estate Contract is not executed within 120 days after Effective
Date, or (ii) a firm commitment (subject to typical contingencies) for the
funding necessary for the Closing is not achieved within 180 days after
Effective Date, or (iii) a Closing has not occurred within 240 days after
the
Effective Date, this Agreement may be terminated by DSD without further
obligation or liability of any Party (other than amounts payable under the
DSD
Fee), and the DSD Contracts and the remaining Project Documents, including
the
Preliminary Engineering Agreement, shall be reassigned to DSD free of charge
and
additional costs. If the Buyatti Real Estate Contract has been executed during
such 180 day or 240 day period and this Agreement is terminated, DSD shall
have
the right to buy the Land from the Project Company for the same price paid
by
the Project Company.
7.4 Force
Majeure. No
Party
shall be liable for any delay, failure or non-performance of its obligations
under this Agreement to the extent that such performance is prevented by
an act
of god, storm, strike, war, armed conflict, civil disturbance, act of terrorism,
embargo or any other act or circumstance beyond such Party’s reasonable control
that was not reasonably foreseeable and that could not have been prevented
with
due diligence, provided that (a) written notice of the occurrence of such
event
shall be given to each of the other Parties without delay, (b) the affected
Party shall use diligent efforts at all times to overcome the effects of
the
event and to resume full performance under this Agreement and (iii) no such
event shall excuse an obligation to make a payment of money, except that
if such
payment would be illegal, such obligation shall be deferred until payment
becomes legally permissible, and the amount owning shall bear interest at
the
prevailing bank rate set forth from time to time by the State Bank of
Argentina.
7.5 Survival.
This
Section
7.5
(Survival), Section 2.2(b) (DSD Fee), Section 3.1(d), Section 12.1 (Indemnity),
Section 12.2 (Governing Law), Section 12.8 (Notices), Section 7.4 (Rights
and
Remedies) Article 8 (Limitation on Liability), Article 9 (Confidential
Information), and Article 11 (Dispute Resolution), will survive the termination
or expiration of this Agreement. In addition, those provisions of this Agreement
that relate to the enforcement of rights and obligations accruing before
termination or expiration will survive the termination or expiration of this
Agreement to the extent necessary to enforce such rights and
obligations.
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ARTICLE
8
LIMITATION
OF LIABILITY
8.1 CONSEQUENTIAL
AND INDIRECT DAMAGES.
EXCEPT
FOR DAMAGES ARISING FROM A BREACH OF ARTICLE
9 (Confidentiality)
AND
OTHERWISE NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO
PARTY
OR ITS AFFILIATES, NOR ITS OR THEIR DIRECTORS, MEMBERS, OFFICERS, MANAGERS,
EMPLOYEES, AGENTS OR REPRESENTATIVES, WILL BE LIABLE TO ANY OTHER PARTY,
FOR
CLAIMS OF PUNITIVE, SPECIAL, EXEMPLARY, TREBLE, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, INCLUDING DAMAGES FOR LOSS OF PROFITS, LOSS OF USE
OR
REVENUE, OR LOSSES BY REASON OF COST OF CAPITAL, CONNECTED WITH OR RESULTING
FROM ANY PERFORMANCE OR LACK OF PERFORMANCE UNDER THIS AGREEMENT, REGARDLESS
OF
WHETHER A CLAIM IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE),
STRICT LIABILITY, VIOLATION OF ANY APPLICABLE DECEPTIVE TRADE PRACTICES ACT
OR
ANY OTHER LEGAL OR EQUITABLE PRINCIPLE.
8.2 EXCLUSIVITY
OF WARRANTIES.
THE
WARRANTIES PROVIDED IN THIS AGREEMENT ARE EXCLUSIVE AND NO OTHER WARRANTIES
OF
ANY KIND, WHETHER STATUTORY, EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES
OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) WILL APPLY.
ARTICLE
9
CONFIDENTIALITY
9.1 Confidentiality.
With
respect to each Party and their respective Affiliates, except to the extent
necessary for the exercise of its rights and remedies and the performance
of its
obligations under this Agreement, such Party will not itself use or disclose
(and will not permit the use or disclosure by any of its Affiliates or its
advisors, counsel and public accountants (collectively, “Advisors”)),
directly or indirectly, any of the Project Documents or this Agreement or
information furnished thereunder (the “Confidential
Information”),
and
will use all reasonable efforts to have all such Confidential Information
kept
confidential (consistent with its own practices) and not used in any way
known
to such Party to be detrimental to any of the other Parties; provided, that
(i) any such Party, its Affiliates and its advisors may use, retain and
disclose any such information to its special counsel and public accountants
or
any Governmental Authority, including but not limited to filings with the
US
Securities and Exchange Commission, (ii) any such Party, its Affiliates and
its advisors may use, retain and disclose any such Confidential Information
that
has been publicly disclosed (other than by such Party, its Affiliates or
any of
its advisors in breach of this Section) or has rightfully come into the
possession of such Party thereof or any of its Affiliates or advisors other
than
from another Party or a Person acting on such other Party’s behalf,
(iii) to the extent that any such Party, its Affiliates or its advisors may
have received a subpoena or other written demand under color of legal right
for
such information, such Party, its Affiliates or advisors may disclose such
information, but such Party will first, as soon as practicable upon receipt
of
such demand and unless otherwise prohibited by applicable Law, furnish a
copy
thereof to the other Parties and, if practicable so long as such Party, its
Affiliates or advisors will not be in violation of such subpoena or demand
or
likely to become liable to any penalty or sanctions thereunder, afford the
other
Parties reasonable opportunity, at such other Parties’ cost and expense, to
obtain a protective order or other reasonably satisfactory assurance of
confidential treatment for the information required to be disclosed,
(iv) disclosures to lenders, potential lenders or other Persons providing
financing to the Project Company, if such Persons have agreed to abide by
the
terms of this Section; and (v) any such Party, its Affiliates and its
advisors may disclose any such information, and make such filings, as may
be
required by this Agreement or the Project Documents. Notwithstanding anything
herein to the contrary, a Party may disclose information to its Affiliates
and
other advisors in accordance with this Agreement if such Persons have agreed
to
the terms of this Section.
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9.2 Tax
Treatment and Structure.
The
foregoing obligations will not apply to the tax treatment or tax structure
of
the Project Company and the anticipated UTE Agreement and each Party (and
any
employee, representative, or agent of any Party) may disclose to any and
all
Governmental Authority, at the latter’s written request, the tax treatment and
tax structure of this Project and all other materials of any kind (including
opinions or other tax analysis) that are provided to any Party hereto relating
to such tax treatment and tax structure. However, any such information relating
to such tax treatment and tax structure is required to be kept confidential
to
the extent necessary to comply with any applicable securities laws. [The
preceding sentences are intended to cause the transaction not to be treated
as
having been offered under conditions of confidentiality for purposes of Sections
1.6011-4(b)(3) and 301.6111-2(a)(2)(ii) (or any successor provision) of the
U.S.
Treasury Regulations issued under the U.S. Internal Revenue Code of 1986,
as
amended, and will be construed in a manner consistent with such
purpose.]
9.3 Return
of Confidential Information.The
receiving Party shall immediately destroy or return all tangible and, to
the
extent practicable, intangible material in its possession or control embodying
the disclosing Party’s Confidential Information (in any form and including,
without limitation, all summaries, copies and excerpts of Confidential
Information) upon the earlier of (a) the completion or termination of the
dealings between the Parties or (b) such time as the disclosing Party may
so
request and shall not thereafter be retained in any form by receiving Party,
except that notwithstanding the above, one copy may be retained by receiving
Party to show compliance with the terms of this Agreement or for regulatory
compliance purposes.
9.4 Survival.
The
restrictions contained in this Article
9
will
survive the termination or expiration of this Agreement for a period of two
(2)
years from the date of such termination or expiration.
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ARTICLE
10
DEVELOPER
REPRESENTATIONS AND WARRANTIES
Each
Developer represents and warrants to the other Developer that: (a) such
Developer is a corporation or limited liability company, as applicable, duly
formed, validly existing and in good standing under the laws of the state
of its
incorporation or formation, as applicable, and has full power and authority
to
own its own properties and to carry on its business as it is now being
conducted, (b) such Developer has the full power and authority to execute,
deliver and perform this Agreement and to carry out the transactions
contemplated by this Agreement; (c) the execution and delivery of this
Agreement by such Developer and the carrying out by such Party of the
transactions contemplated by this Agreement have been duly authorized by
all
requisite corporate or limited liability company action, as applicable, and
this
Agreement has been duly executed and delivered by such Developer and constitutes
the legal, valid and binding obligation of such Party, enforceable against
the
Party in accordance with the terms of this Agreement, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
and
other similar laws now or hereafter in effect affecting creditors’ rights and
remedies generally and subject, as to enforceability, to general principles
of
equity, including principles of commercial reasonableness, good faith and
fair
dealing (regardless of whether enforcement is sought in a proceeding at law
or
in equity); (d) all third party consent(s) and approval(s) including
banks/creditors approval(s) required for the execution, delivery and performance
of this Agreement have been obtained to the satisfaction of each other and
no
other authorization, consent, notice to or registration or filing with any
Governmental Authority or banks/creditors is required for the execution,
delivery and performance by such Developer of this Agreement; (e) none of
the execution, delivery and performance by such Developer of this Agreement
conflicts with or will result in a breach or violation of any Law, contract
or
instrument to which such Developer is a party or is bound; and (f) there
are no legal or arbitral proceedings by or before any Governmental Authority,
now pending or (to the knowledge of such Developer) threatened, that if
adversely determined could have a material adverse effect on such Developer’s
ability to perform the Developer’s obligations under this
Agreement.
ARTICLE
11
SETTLEMENT
OF DISPUTES
11.1 Procedure.
The
Parties will attempt, in good faith, to resolve or cure all disputes and
claims
(including any claimed breaches of this Agreement) (each a “Dispute”))
through the Project Company Board of Directors before initiating any legal
action or attempting to enforce any rights or remedies under this Agreement
(including termination), at law or in equity (regardless of whether this
Article
is referenced in the provision of this Agreement which is the basis for any
such
dispute). If any Party believes that a Dispute under this Agreement has arisen,
such Party will give written notice thereof to the other Parties and to the
Project Company Board of Directors which notice will describe in reasonable
detail the basis and specifics of the Dispute. Within five (5) days after
delivery of such notice, the Project Company Board of Directors will meet
to
discuss and attempt to resolve or cure such Dispute. If the Project Company
Board of Directors is unable to resolve the Dispute within fifteen (15) days
after delivery of such notice, the matter will be referred to a “Senior Officer”
of each Party for resolution or cure. If such Senior Officers are unable
to
agree on an appropriate cure or resolution within ten (10) days after the
matter
has been referred to them, the Parties may have recourse to arbitration.
11.2 Arbitration.Where
any
Dispute is not resolved as provided for in Section 11.1, then, at the request
of
either Party, the Dispute shall be submitted to arbitration in accordance
with
the provisions of the Rules of Arbitration of the International Chamber of
Commerce or any successor thereto (the “Rules”),
except as modified herein and, in matters where the Rules are silent, the
procedural law of
England. The place of the arbitration shall be London,
England. The arbitration shall be conducted in the English language. The
award
rendered in any arbitration commenced hereunder, shall be final and conclusive
and judgment thereon may be entered in any court having jurisdiction of its
enforcement. The award under any such arbitration will be paid in the currency
designated by the arbitral award.
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11.3 Continuation
of Work.
Pending
final resolution of any Dispute, the Parties will continue to fulfill their
respective obligations under this Agreement; provided that the applicable
Party
may withhold any amount that is the subject of Dispute from any payment
otherwise due under this Agreement during the pendency of any dispute resolution
proceeding. Upon resolution of the Dispute, the Party owing such amount shall
promptly pay to the relevant Party any amount determined to be due, together
with interest at the Late Payment Rate on the unpaid balance from the date
the
amount was originally owed until the date paid in full.
ARTICLE
12
MISCELLANEOUS
12.1 Indemnity.
Each
Party agrees to defend, indemnify (on an after-tax basis) and hold harmless
the
other Parties and their Affiliates and their respective officers, directors,
employees, servants, owners, agents and representatives (each, an “Indemnified
Person”)
from
and against any and all claims, losses, liabilities, suits, judgments, damages,
costs, charges, penalties, fines, fees and expenses (including reasonable
legal
fees and expenses) of whatever kind and nature (“Losses”)
arising out of third party injury, death or property damage caused by the
Party’s negligence or willful misconduct, including claims based on strict
liability in tort, provided that the foregoing indemnities will not apply
to the
extent such Losses have resulted from (i) the willful misconduct or
negligence of the Indemnified Person seeking indemnity under this Agreement,
or
(ii) any breach of any obligation or representation or warranty of such
Indemnified Person under this Agreement or any Project Document to which
such
Indemnified Person is a party.
12.2 Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the laws
of
England without
regard to conflicts of law principles.
12.3 Assignment.
None of
the Parties may assign this Agreement without the prior written consent of
the
other Parties, which
shall not be unreasonably withheld, provided that any assignee must agree
to be
bound in writing by all the terms and conditions of this Agreement.
It is
contemplated hereunder that AEBA shall assign its rights and obligations
hereunder (other than the payment of the DSD Fee) to an off shore subsidiary
domiciled in India (UBAPL) or the British Virgin Islands.
12.4 Binding
Effect.
The
terms of this Agreement will be binding upon, and inure to the benefit of,
the
Parties and their successors and permitted assigns.
12.5 Entire
Agreement and Modifications.
This
Agreement along with the Preliminary Engineering Agreement, will constitute
the
entire agreement among the Parties relating to the subject matter hereof,
and
all previous agreements, discussions, communications, and correspondence
with
respect to the subject matter hereof, including the Memorandum of Understanding,
will be superseded by the execution of this Agreement. This Agreement may
not be
modified or amended except in writing signed on behalf of each Party by its
duly
authorized representative. Any such modification or amendment shall form
part of
this Agreement and shall be read co-terminus with this Agreement. The Parties
agree and acknowledge that this Agreement creates legal rights and obligations
between them even though it contemplates their entry into additional
agreements.
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12.6 No
Waiver of Rights.
No right
under this Agreement may be waived by a Party, except pursuant to a writing
signed by the Party against which enforcement of the waiver is sought. Without
limitation, no failure or delay on the part of any Party in exercising any
of
its rights under this Agreement, no partial exercise by any Party of any
of its
rights under this Agreement, and no course of dealing among the Parties,
will
constitute a waiver of the rights of a Party.
12.7 Relationship
of Parties.
The
rights, duties, obligations and liabilities of the Parties under this Agreement
will be individual and not joint or collective. It is not the intention of
the
Parties to create, nor shall this Agreement be deemed to create, any
partnership, agency, joint venture or trust, or to authorize any Party to
act as
an agent, servant or employee for any other Party. Except to the extent a
Party
is holding an asset in trust for another Party, no Party will be considered
a
fiduciary of any other Party.
12.8 Notices.
Any
notice given under this Agreement will be in writing and delivered by personal
service, or by certified or registered first class mail, or nationally
recognized overnight courier, or by facsimile or email with a copy, in the
case
of facsimile or email, by first class mail, to the addresses specified
below:
|
If
to AEBA:
|
AE
Biofuels Americas, Inc.
|
| |
00000
Xxxxxxx Xxxxx Xxxx.
|
| |
Xxxxx
000
|
| |
Xxxxxxxxx,
XX 00000
|
| |
Attn:
Legal Counsel
|
| | |
|
With
a copy to:
|
Xxxxxxxxx
Xxxxxxx, P.A.
|
| |
0000
Xxxxxxxx Xxx
|
| |
Xxxxx,
Xxxxxxx 00000
|
| |
T:
000 000 0000
|
| |
Attn:
Xxxx Xxxxx Xxxxxxxx
|
| | |
|
If
to DSD:
|
DS
Development X.X.
|
| |
Xxxxxxx
1806 Cod. Postal (1426)
|
| |
Xxxxxx
xx Xxxxxx Xxxxx
|
| |
Xxxxxxxxx
|
| |
Attn.:
Xxxx Xxxxxxx
|
Any
Party
may change the addresses provided above by notifying the other Parties in
the
manner provided above. In the case of personal delivery, certified or registered
first class mail, or nationally recognized overnight courier, such transmittal
will be deemed to have been received by the recipient party on the date of
such
delivery. In the case of delivery via facsimile or email, the transmittal
shall
be deemed to have been received on the day following the date of communication
by facsimile or email.
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12.9 Counterparts.
This
Agreement may be executed in any number of counterparts (including by fascimile)
and by the Parties in separate counterparts (including by fascimile), each
of
which shall be deemed an original, but all of such counterparts shall together
constitute one and the same agreement and shall be read and interpreted in
terms
of this Agreement.
12.10 Third
Party Beneficiaries.
Nothing
expressed or implied in this Agreement is intended or will be construed to
confer upon or give to any party other than the Parties any rights or remedies
by virtue of this Agreement, except as provided in Section 12.1.
12.11 Severability.
If at
any time subsequent to the Effective Date, any provisions of this Agreement
will
be held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision will be of no force and effect, but the illegality
or unenforceability of such provision will have no effect upon and will not
impair the enforceability of any other provision of this Agreement.
12.12 Illicit
Payments/FCPA.
Each
Party represents and warrants that it and its employees (i) are familiar
with
the provisions and requirements of the United States Foreign Corrupt Practices
Act (“FCPA”),
including the record keeping requirements thereof, and (ii) recognize that
full
compliance with the letter and spirit of the FCPA is the corporate policy
of
AEBA. In all matters relating to this Agreement and the Project, each Party
will
conduct itself in full compliance with the FCPA and the antibribery laws
of the
Republic of Argentina. Consequently, each Party specifically agrees as
follows:
(a) In
carrying out its responsibility under this Agreement, neither Party shall
pay or
agree to pay, directly or indirectly, any funds or anything of value to any
public official for the purpose of influencing such official’s official acts or
decisions. Each Party represents and warrants, without prior notice, that
no
owner, partner, officer, director of the Party is or will become an official
of
any national, regional or local government of the Republic of Argentina or
any
political subdivision thereof, or of a political party of the Republic of
Argentina or any political subdivision thereof, during the term of this
Agreement.
(b) Each
Party shall immediately notify the other Party of any request that such Party
receives to take any action that might constitute a violation of the FCPA,
the
antibribery laws of the Republic of Argentina or of this section.
12.13 Further
Assurances. From
time
to time, the Parties shall take all appropriate actions and execute and deliver,
or caused to be executed or delivered, such documents, agreements or instruments
which may be reasonably necessary or advisable to carry out any of the
provisions of this Agreement.
12.14 Press
Release. Neither
Party shall make any press release or other announcement respecting the subject
matter covered under this Agreement containing information (other than
information already available to the public) with respect to the Project
without
the prior written consent of the other Party; provided, however, that any
such
press release or other announcement may be made without consent, if so required
under any applicable statue, law or regulation and notice of any such press
release or other announcement is provided immediately to the other
Party.
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SIGNATURES ON NEXT PAGE ----
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IN
WITNESS WHEREOF,
the
Parties have caused this Agreement to be executed by their respective duly
authorized representatives as of the day and year first above
written.
|
AE
BIOFUELS AMERICAS, INC.
|
| | |
|
By:
|
/s/
Xxxx X. XxXxxx
|
| Name: |
Xxxx
X. XxXxxx
|
| Title: |
Chief
Executive Officer and President
|
| | |
|
DS
DEVELOPMENT S.A.
|
| | |
|
By:
|
/s/
Xxxx Xxxxxxx
|
| Name: |
Xxxx
Xxxxxxx
|
| Title: |
Director
|
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