Joint Venture Agreement
Exhibit
2.1
THIS
JOINT VENTURE AGREEMENT (the "Agreement"), made and entered into as of this 12th
day of May, 2008 (“Effective Date”), by and between ICE Conversions, Inc.
("ICE"), a California corporation domiciled at 00000 Xxxxxxx Xxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx, XX 00000 and DSE Xxxxxxx, Inc. ("DSE"), a Nevada corporation
domiciled at 000 X. Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, and Xxxxxxxx
Weisdorn (“Weisdorn”), residing at 00000 Xxxxxxxx xx Xxx Xx., Xxxxxx, XX 00000
(ICE and DSE are collectively referred to herein as “Corporate Parties”
).
ARTICLE
I
GENERAL
PROVISIONS
1.01
Business Purpose. The business of the joint venture between the Corporate
Parties (“Joint Venture”) shall be as follows:
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a)
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To
develop and build high performance cars and/or heavy duty class 7 or 8
trucks powered by ICE’s proprietary hydrogen drive train (“Manufacturing
Business”).
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b)
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To
market and sell the products produced by the Manufacturing Business
("Marketing Business”).
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c)
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To
own and operate hydrogen fueling stations in and around the Port of Long
Beach, CA, for the class 7 or 8 trucks (“Hydrogen
Stations”).
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d)
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The
Joint Venture shall be named Force Fuels,
CA.
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e)
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The
Joint Venture shall be formed as a California limited liability company
electing to be taxed as a Joint Venture and governed by an operating
agreement on the terms contemplated
herein.
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1.02 Term
of the Agreement. This Joint Venture shall commence on the Effective Date and
shall continue in existence until terminated, liquidated, or dissolved by law or
as hereinafter provided.
ARTICLE
II
GENERAL
DEFINITIONS
The
following comprise the general definitions of terms utilized in this
Agreement:
2.01
Affiliate. An Affiliate of an entity is a person that, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control of, such entity.
2.02
Capital Contribution(s). The capital contribution to the Joint Venture actually
made by the Corporate Parties, including property, cash and any additional
capital contributions made.
2.03
Profits and Losses. Any income or loss of the Joint Venture for federal income
tax purposes determined by the Joint Venture’s fiscal year, including, without
limitation, each item of Joint Venture income, gain, loss or
deduction.
ARTICLE
III
CONTRIBUTIONS
TO THE JOINT VENTURE
3.01 ICE
shall contribute to the Joint Venture an irrevocable, perpetual, non-exclusive,
royalty-free license to use, manufacture and exploit for purposes of the
business described in Article I all technology, know-how, designs, algorithms
and proprietary information of ICE.
3.02 ICE
shall contribute the Hummer prototype, the Cheetah prototype and the
Freightliner prototype and all related equipment, parts and supplies to the
Joint Venture. The Joint Venture shall reimburse ICE for direct costs
of all such assets transferred.
3.03 DSE
shall provide non-debt funding for the Joint Venture in the minimum following
increments: a minimum of $500,000 within 90 days of the Effective Date of this
Agreement, and an additional minimum of $1,000,000 within 180 days of the
Effective Date of this Agreement, an additional minimum $3,500,000 within 1 year
of the Effective Date of this Agreement.
ARTICLE
IV
ALLOCATIONS
4.01
Profits and Losses. Commencing on the date hereof and ending on the termination
of the business of the Joint Venture, all profits, losses, distributions and
other allocations of the Joint Venture shall be allocated as
follows:
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ICE
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20%
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DSE
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80%
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ARTICLE
V
RIGHTS
AND DUTIES OF THE JOINT VENTURERS
5.01
Business of the Joint Venture as it relates to ICE. ICE shall have full,
exclusive and complete authority and discretion in the management and control of
the Manufacturing Business and/or in the operation of the Hydrogen Stations for
the purposes herein stated and shall make all decisions affecting the
Manufacturing Business and/or the operations of the Hydrogen Stations of the
Joint Venture. As such, any action taken shall constitute the act of, and serve
to bind, the Joint Venture. ICE shall manage and control the affairs of the
Joint Venture to the best of its ability and shall use its best efforts to carry
out the Manufacturing Business and/or operations of the Hydrogen Stations of the
Joint Venture.
5.02 In
consideration for entering in to this Agreement and upon signing of this
Agreement, DSE shall issue to ICE and Weisdorn 4,000,000 shares of DSE's common
stock (of which 1,500,000 will be issued directly to ICE, and 2,500,000 will be
issued directly to Weisdorn pursuant to paragraph 10.01). ICE and Weisdorn
acknowledge that (i) the shares are not registered under the Securities Act of
1933 and are not qualified under any state securities laws, (ii) the shares may
not be resold or distributed absent such registration and qualification or the
availability of an applicable exemption from such requirements. ICE and Weisdorn
represents and warrants that they are acquiring such shares for investment and
not with the intention of reselling or distributing such shares.
5.03 DSE
shall not participate in or have any control over the Manufacturing Business
and/or the operations of the Hydrogen Stations, nor shall it have any authority
or right to act for or bind the Joint Venture for any aspects of the
Manufacturing Business and/or the Hydrogen Stations.
5.04 ICE
hereby irrevocably transfers the ownership of the domain name xxx.xxxxxxxxxx.xxx
and the right to use the name Force Fuels, Inc. to DSE.
5.05
Business of the Joint Venture as it relates to DSE. DSE shall have full,
exclusive and complete authority and discretion in the management and control of
the Marketing Business of the Joint Venture for the purposes herein stated and
shall make all decisions affecting the Marketing Business of the Joint Venture.
As such, any action taken shall constitute the act of, and serve to bind, the
Joint Venture. DSE shall manage and control the affairs of the Joint Venture to
the best of its ability and shall use its best efforts to carry out the
Marketing Business of the Joint Venture.
5.06 ICE
shall not participate in or have any control over the Marketing Business nor
shall it have any authority or right to act for or bind the Joint Venture for
any aspects of the Marketing Business.
5.07 The
Joint Venture shall reasonably compensate the respective Corporate Party
responsible for operations and decisions of the Joint Venture in accordance with
Section 5.01 and 5.05 of this Article V for providing those respective
services.
ARTICLE
VI
AGREEMENTS
WITH THIRD PARTIES AND WITH AFFILIATES OF THE JOINT VENTURERS
6.01
Validity of Transactions. Affiliates, employees and/or officers (collectively,
“Associates”) of the parties to this Agreement may be engaged to perform
services for the Joint Venture, ICE and/or DSE. The validity of any transaction,
agreement or payment involving the Joint Venture and any Associates of the
parties to this Agreement otherwise permitted by the terms of this Agreement
shall not be affected by reason of the relationship between them and such
Associates or the approval of said transaction, agreement or
payment.
6.02
Other Business of the Parties to this Agreement. The parties to this Agreement
and their respective Affiliates may have interests in businesses other than the
Joint Venture business. The Joint Venture shall not have the right to the income
or proceeds derived from such other business interests and, even if they are
competitive with the Joint Venture business, such business interests shall not
be deemed wrongful or improper.
ARTICLE
VII
PAYMENT
OF EXPENSES
All
expenses of the Joint Venture shall be paid by the Joint Venture from the
non-debt funding contributed to the Joint Venture by DSE and operating cash
flows, if any.
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ARTICLE
VIII
INDEMNIFICATION
OF THE JOINT VENTURERS
The
Corporate Parties to this Agreement shall have no liability to the other for any
loss suffered which arises out of any action or inaction if, in good faith, it
is determined that such course of conduct was believed to be in the best
interests of the Joint Venture and such course of conduct did not constitute
willful misconduct. The Corporate Parties to this Agreement shall each be
indemnified by the other against losses, judgments, liabilities, expenses and
amounts paid in settlement of any claims sustained by it in connection with the
Joint Venture. This Article VIII shall survive the dissolution of the
Joint Venture and the termination of this Agreement.
ARTICLE
IX
DISSOLUTION
9.01
Dissolution Events of the Joint Venture. The Joint Venture shall be dissolved
upon the occurrence of any of the following events within five years of the
Effective Date of this agreement, unless it is mutually agreed upon in writing
by the Corporate Parties prior to the occurrence that such occurrence will not
trigger dissolution of the Joint Venture:
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a)
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The
adjudication of bankruptcy, filing of a petition pursuant to a Chapter of
the Federal Bankruptcy Code, withdrawal or insolvency of either of the
parties.
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b)
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The
sale or other disposition of all, or substantially all, of the Joint
Venture's assets.
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c)
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Mutual
agreement of the parties.
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d)
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DSE's
failure to fund all or any of the funding
milestones.
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e)
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The
death, disability, separation or termination of Weisdorn as a director
and/or officer of ICE.
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f)
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Upon
any change in the capital structure or ownership of 15% or more of
ICE.
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g)
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Any
change in management of ICE.
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9.02
Distribution of Joint Venture Property. In the event of dissolution of the Joint
Venture pursuant to Section 9.01, the property of the Joint Venture shall be
distributed as follows:
(a) The
1,500,000 shares of DSE common stock granted to ICE pursuant to Section 5.2 of
this Agreement will immediately be returned by ICE to DSE. In the
event that ICE has distributed, sold, pledged, gifted, hypothecated or otherwise
disposed of any of the 1,500,000 DSE shares granted to ICE pursuant to this
Agreement, then ICE shall immediately purchase a sufficient number of shares to
replace those distributed to other parties.
(b) Any
and all of the Joint Venture’s assets, cash, intellectual property, licenses,
prototypes, business agreements, contracts, realty, and personal property and
the like, developed or acquired by the Joint Venture subsequent to the Effective
Date of this Agreement, shall become the sole property of DSE.
ARTICLE
X
KEY MAN
PROVISIONS
10.01 Compensation:
DSE believes that Weisdorn’s participation in the management of the Joint
Venture is critical to the success of the Joint Venture. Weisdorn agrees to
accept the additional duties and responsibilities of managing the Joint Venture
on the Corporate Parties’ behalf. The Corporate Parties agree that Weisdorn is
hereby granted a $15,000 per month salary, to be paid monthly throughout the
term of this Agreement, directly from the Joint Venture, and Weisdorn shall
immediately receive an irrevocable stock grant comprising 2,500,000 shares of
DSE common stock (“Stock Grant”). The Stock Grant shall be payable to Weisdorn
by DSE as a portion of the grant of the 4,000,000 shares from DSE to ICE and
Weisdorn as contemplated in Paragraph 5.2 above. The terms of Weisdorn’s duties
hereunder shall be formalized in a separate Employment Agreement between the
Joint Venture and Weisdorn, effective the same date as the Effective Date
hereof.
10.02 Fiduciary
Responsibility /Indemnity: The Corporate Parties agree that Weisdorn’s primary
fiduciary duty is to act in the best interests of the Joint Venture, which the
Corporate Parties agree is anticipated to result in mutual benefit to the
Corporate Parties’ respective shareholders. Therefore, DSE, ICE and
the Joint Venture, jointly and severally, shall and do hereby indemnify and hold
harmless Weisdorn and his successors and assigns (hereinafter, the “Indemnified
Party”) from and against any and all losses, claims, demands, costs, damages,
liabilities, joint and several, expenses of any nature (including reasonable
attorneys' fees and disbursements), judgments, fines, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
whether civil, criminal, administrative or investigative, in which the
Indemnified Party was involved or may be involved, or threatened to be involved,
as a party or otherwise, arising out of or incidental to, Weisdorn’s involvement
with, shareholder status in, or performance of duties for ICE, DSE or the Joint
Venture. Said indemnity shall not apply to any final adjudication of
willful misconduct or the criminal conviction of the Indemnified Party. This
Section 10.02 shall survive the dissolution of the Joint Venture and the
termination of this Agreement.
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ARTICLE
XI
MISCELLANEOUS
PROVISIONS
11.01
Books and Records. The Joint Venture shall keep adequate books and records at
its place of business, setting forth a true and accurate account of all business
transactions arising out of and in connection with the conduct of the Joint
Venture.
11.02
Validity. In the event that any provision of this Agreement shall be held to be
invalid, the same shall not affect in any respect whatsoever the validity of the
remainder of this Agreement.
11.03
Integrated Agreement. This Agreement constitutes the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof,
and there are no agreements, understandings, restrictions or warranties among
the parties other than those set forth herein provided for.
11.04
Headings. The headings, titles and subtitles used in this Agreement are for ease
of reference only and shall not control or affect the meaning or construction of
any provision hereof.
11.05
Notices. Except as may be otherwise specifically provided in this Agreement, all
notices required or permitted hereunder shall be in writing and shall be deemed
to be delivered when deposited in the United States mail, postage prepaid,
certified or registered mail, return receipt requested, addressed to the parties
at their respective addresses set forth in this Agreement or at such other
addresses as may be subsequently specified by written notice.
11.06
Applicable Law and Venue. This Agreement shall be construed and enforced under
the laws of the State of California.
11.07
Other Instruments. The parties hereto covenant and agree that they will execute
any and all such other and further instruments and documents as are or may
become reasonably necessary or convenient to effectuate and carry out the
purposes of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Joint Venture Agreement
as of the day and year first above written.
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ICE
CONVERSIONS, INC.
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DSE
XXXXXXX, INC.
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By
/s/ Xxxxxx
Xxxxxxxxxxx
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By
/s/ Xxxxxx
Xxxxxxxxx
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Vice-President of Finance
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President
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XXXXXXXX
WEISDORN
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| /s/ Xxxxxxxx Weisdorn | ||
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Xxxxxxxx
Weisdorn, an individual
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