EXHIBIT 10.17
NOTE: THE APPEARANCE OF
“[***]” IN THIS EXHIBIT INDICATES MATERIAL WHICH HAS
BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. A
COPY OF THE EXHIBIT CONTAINING THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
SERVICES
AGREEMENT
THIS SERVICES AGREEMENT (this “
Agreement ”) is made and entered into as of
May 9, 2008 (the “ Effective Date ”) by and
between Blackhawk Biofuels, LLC, a Delaware limited liability
company (“ Producer ”), and Bunge North
America, Inc., a New York corporation (“ Bunge
”) (each of Producer and Bunge, a “ Party
” and collectively, the “ Parties
”).
A.
A biodiesel plant is
currently under construction by Biofuels Company of America, LLC
(“ BCA ”) for which BCA and Bunge have an
existing Services Agreement dated September 6,
2006.
B.
As of the Effective Date,
Producer intends to purchase substantially all of the assets of BCA
and Producer will own the biodiesel plant (the “ Blackhawk
Facility ”) located adjacent to the existing oil
processing facility in Danville, Illinois (the “ Bunge
Facility ”) owned by an Affiliate of Bunge.
C.
The Blackhawk Facility
will be managed and operated by REG Services Group, LLC (“
REG ”).
D.
Producer desires to retain
Bunge to provide certain services to Producer for the Blackhawk
Facility, and Bunge desires to render such services to Producer,
all upon the terms and conditions hereinafter set forth. In
addition, the Parties desire to clarify Producer’s
responsibility in maintaining certain items needed to supply
products for rail loadout.
Therefore, the Parties agree:
1.
Services
. Producer hereby
retains, engages, authorizes and empowers Bunge to render the
third-party services for Producer set forth on
Exhibit A attached hereto (“ Services
”), and Bunge hereby accepts such retention, engagement,
authorization and empowerment, and agrees to provide the
Services. Bunge shall use reasonable commercial efforts to
provide such Services in a manner consistent with generally
accepted industry standards.
2.
Subcontracting . To provide the Services, Bunge may
subcontract with or otherwise retain the services of other Persons,
including, but not limited to, Affiliates of Bunge. Producer
hereby consents to such subcontracting activities, including for
purposes of Section 18 hereof, to the extent that Bunge
subcontracts with or retains Affiliates of Bunge. To the
extent Bunge subcontracts with or retains Persons other than
Affiliates of Bunge, Bunge shall be required to obtain
Producer’s prior written consent, which consent shall not be
unreasonably withheld. For purposes of this Agreement:
(a) the term “ Affiliate ” means a Person
that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the
party specified, with “control” or
“controlled” meaning the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a
Person,
whether through the ownership of voting securities or voting
interests, by contract or otherwise ; and (b) the term “ Person ” shall mean any individual, general partnership,
limited partnership, limited liability company, joint venture,
trust, business trust, cooperative, association or other entity of
whatever nature.
3.
Fee for
Services .
3.1
Services
Fees . In
consideration of Bunge providing the Services, beginning upon the
Effective Date, Producer shall pay Bunge the fee amounts set forth
in Exhibit A .
3.2
Pre-Effective Service
Fee . In
consideration of Bunge having provided Services to BCA prior to the
date of this Agreement and prior to the Effective Date from which
Producer will benefit after the Effective Date, Producer shall pay
to Bunge $240,000 (the “ Pre-Effective Service Fee
”), in monthly payments of $13,333.33 beginning seven months
after the Effective Date and continuing until the Pre-Effective
Service Fee is paid in full. The Pre-Effective Service Fee
shall constitute payment in full for all services performed by
Bunge for BCA prior to the Effective Date and Producer shall have
no liability or obligation for any such services prior to the
Effective Date other than to pay the Pre-Effective Service Fee as
provided herein.
3.3
Hexane
Stripper . In consideration of Bunge having
upgraded its hexane stripper at its existing oil processing
facility in Danville, Illinois in preparation for operations at the
Blackhawk Facility, Producer will pay to Bunge $240,000 (the
“ HS Amount ”), in monthly payments of $5,000
beginning thirteen months after the Effective Date and continuing
until the HS Amount is paid in full. Bunge shall retain all
ownership and other rights in the upgraded hexane stripper at all
times and Producer shall have no rights therein.
3.4
Payment
Terms .
To the extent that Producer is obligated to pay any fees pursuant
to Exhibit A on a monthly basis, Producer will pay such
fees in arrears not later than the tenth day of each month.
Producer will pay the monthly payments of the Pre-Effective Service
Fee and the HS Amount not later than the tenth day of each
month. All payments hereunder shall be made by Automated
Clearing House (ACH) transfer of funds to a bank account to be
designated by Bunge. All amounts not paid when due shall bear
interest at a rate equal to the lesser of (a) 18% per annum,
or (b) the maximum rate allowed by applicable law.
4.
Access to
Information . Producer will provide Bunge and its
duly authorized representatives with reasonable access at
Producer’s offices to such information and records reasonably
necessary to discharge Bunge’s responsibilities
hereunder.
5.
Right to Receive
Advice .
At any time, Bunge may require Producer to provide specific
reasonable direction and/or advice regarding any action to be taken
or omitted by it, and it may request, and shall receive, from
Producer reasonable directions or advice. Bunge shall not be
liable to Producer with respect to any action or inaction which it
takes in reliance on any directions or advice received pursuant to
this Section. However, nothing in this Section shall be
construed as imposing upon Bunge any obligation (a) to seek
such directions or advice, or (b) to act in accordance with
such directions or advice when received.
6.
Compliance with
Laws .
Producer assumes full responsibility for ensuring compliance in all
material respects with all foreign, federal, state and local laws,
rules and regulations applicable to Producer and the Blackhawk
Facility. Bunge reserves the right to take any actions or
omit to take any actions, including, without limitation,
termination of any particular service, that Bunge reasonably
believes to be necessary or appropriate to ensure compliance with
applicable laws, rules and regulations.
Notwithstanding anything
in the Agreement to the
contrary, in
the event the emissions from either the Bunge Facility or the
Blackhawk Facility violate any applicable air quality law,
regulation, license or permit, Bunge with respect to the Bunge
Facility and Producer with respect to the Blackhawk Facility, shall
defend, indemnify and hold the other Party harmless from and
against any liability, claim, loss, damage, fee, fine, penalty or
expense, including, but not limited to, reasonable attorneys’
fees and other costs of defense, arising in connection with such
violation at such facility. Bunge and Producer shall exercise
their respective commercially reasonable efforts and cooperate with
each other in attempting to obtain separate air quality permits for
the Bunge Facility and Blackhawk Facility.
7.
Term and
Termination .
7.1
Term
. The “
Term ” of this Agreement will begin upon the Effective
Date and, unless earlier terminated in accordance with the terms
hereof, will expire upon the sixth anniversary of the Effective
Date; provided that this Agreement shall thereafter
automatically renew for successive two-year terms unless either
Party gives written notice to the other Party of its intention not
to allow renewal no later than one year prior to expiration of the
initial or renewal term, as applicable.
7.2
Termination
Rights .
(a)
Either Party may terminate
this Agreement immediately upon notice to the other Party if such
other Party has (i) materially breached any representation,
warranty, or obligation under this Agreement, and (ii) failed
to remedy such breach within 30 days after the terminating Party
has given notice of such breach, or if such breach cannot
reasonably be cured within such 30-day period, such other Party has
failed to commence and diligently pursue remedy of the breach and
failed to remedy such breach not later than 120 days after the
terminating Party has given notice of such breach.
(b)
Bunge may terminate this
Agreement (i) immediately upon notice to Producer if Producer
fails to pay any amount due under this Agreement within seven days
after Bunge gives Producer notice of such nonpayment; and/or
(ii) immediately upon notice to Producer upon termination of
that certain Oil Feedstock Supply Agreement between Bunge and
Producer.
(c)
Either Party may terminate
this Agreement immediately upon notice to the other Party if
(i) such other Party files a petition for adjudication as a
bankrupt, for reorganization or for an arrangement under any
bankruptcy or insolvency law, (ii) an involuntary petition
under such law is filed against such other Party and is not
dismissed, vacated or stayed within 60 days thereafter, or
(iii) such other Party makes an assignment of all or
substantially all of its assets for the benefit of
creditors.
(d)
Either Party may terminate
this Agreement in accordance with Section 10.3
hereof.
7.3
Survival
. The provisions of
this Agreement which expressly or by their nature survive
expiration or termination of this Agreement will remain in effect
after the expiration or termination of this Agreement.
8.
Limitation of
Liability; General Disclaimer . EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, BUNGE MAKES NO STATUTORY, WRITTEN, ORAL, EXPRESSED OR
IMPLIED WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND
CONCERNING THE SERVICES PROVIDED BY BUNGE, ITS AFFILIATES OR
SUBCONTRACTORS UNDER THIS AGREEMENT. EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, NEITHER BUNGE, ITS AFFILIATES NOR ITS
SUBCONTRACTORS WILL BE LIABLE TO PRODUCER OR ANY OTHER PERSON OR
ENTITY FOR DAMAGES ARISING OUT OF, RELATING TO OR RESULTING FROM
SERVICES PROVIDED UNDER THIS AGREEMENT OR THE FAILURE TO PROVIDE
SERVICES UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT SUCH DAMAGES
ARISE OUT OF OR RESULT FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF BUNGE, ITS AFFILIATES OR SUBCONTRACTORS; PROVIDED,
THAT THE AGGREGATE AMOUNT OF ALL SUCH DAMAGES UNDER THIS AGREEMENT
IN ANY CALENDAR YEAR WILL NOT EXCEED THE AMOUNT OF THE SERVICE FEE
IN SUCH CALENDAR YEAR. THE REMUNERATION TO BE PAID FOR THE
SERVICES TO BE PERFORMED REFLECTS THIS LIMITATION OF
LIABILITY. IN NO EVENT WILL BUNGE (OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, AFFILIATES OR SUBCONTRACTORS) BE
LIABLE TO PRODUCER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT (INCLUDING, BUT
NOT LIMITED TO, DAMAGES FOR LOST PROFITS OR INCOME).
9.
Remedies
.
9.1
Suspension of
Performance . Bunge may suspend its performance under
this Agreement until Producer has paid all amounts due under this
Agreement if Producer fails to pay any amount within seven days
after the date when such amount is due under this
Agreement.
9.2
Non-exclusive
Right .
No right, power or remedy conferred by this Agreement will be
exclusive of any other right, power or remedy now or hereafter
available to Bunge at law, in equity, by statute or
otherwise.
10.
Force
Majeure .
10.1
Definition of Force
Majeure Event . Each Party is excused from performing
its obligations under this Agreement to the extent that such
performance is prevented by an act or event (a “ Force
Majeure Event ”) whether or not foreseen, that:
(i) is beyond the reasonable control of, and is not due to the
fault or negligence of, such Party, and (ii) could not have been avoided by such
Party’s exercise of due diligence, including, but not limited
to, a labor controversy, strike, lockout, boycott, transportation
stoppage, action of a court or public authority, fire, flood,
earthquake, storm, war, civil strife, terrorist action, epidemic,
or act of God; provided that a Force Majeure Event will not
include economic hardship, changes in market conditions, or
insufficiency of funds. Notwithstanding the foregoing
sentence, a Force Majeure Event does not excuse any obligation to
make any payment required by this Agreement (including but not
limited to Sections 3.1, 3.2 and 3.4 ) and will not affect
Bunge’s right to terminate this Agreement pursuant to
Section 7.2(b)(ii) .
10.2
Conditions Regarding Force
Majeure Event . A Party claiming a
Force Majeure Event must: (i) use commercially reasonable
efforts to cure, mitigate, or remedy the effects of its
nonperformance; provided that neither Party will have any
obligation hereunder to settle a strike or labor dispute;
(ii) bear the burden of demonstrating its existence; and
(iii) notify the other Party of the occurrence of the Force
Majeure Event as quickly as reasonably possible, but no later than
five business days after learning of the occurrence of the Force
Majeure Event. Any Party that fails to notify the other Party
of the occurrence of a Force Majeure Event as required by this
Section 10 will forfeit its right to excuse performance
of its obligations due to such Force Majeure Event. When a
Party claiming a Force Majeure Event is able to resume performance
of its obligations under this Agreement, it will immediately give
the other Party notice to that effect and resume
performance.
10.3
Third Parties;
Termination . During any period that a Party claiming
a Force Majeure Event is excused from performance under this
Agreement, the other Party may accept performance from other
parties as it may reasonably determine under the
circumstances. If a Party has not performed under this
Agreement due to a Force Majeure Event for six consecutive months
or more, the other Party may terminate this Agreement immediately
upon notice to the non-performing Party.
11.
Insurance
.
11.1
Workers’
Compensation . Each Party warrants to the other that
all of its employees that provide services under this Agreement
will be covered by workers’ compensation insurance as
required by law and by employer’s liability
insurance.
11.2
Other Required
Coverage .
(a)
Each Party will maintain
automobile liability insurance against claims for bodily injury,
death and property damage, with limits of not less than $1,000,000
per person and not less than $1,000,000 per accident or occurrence;
alternatively, combined singl
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