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EXHIBIT 2.1
JOINT
VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (the "Agreement") made and entered into
this 16th
day of December, 2006 (the "Execution Date")
BETWEEN
A4 BAR CATTLE
COMPANY LTD.,
a company incorporated
under with the laws of Alberta
OF THE FIRST PART
and
HYBRID FUELS
(CANADA) INC.,
a company incorporated under
the laws of British Columbia
OF THE SECOND PART
(individually the
"Member" and collectively the "Members").
WHEREAS:
A. WHEREAS Agokan Developments
Incorporated ("Agokan"), a company incorporated
pursuant to the laws of the Province
of Alberta, has been negotiating on
behalf of the A4 Bar Cattle Company
Ltd. ("A4") and Hybrid Fuels (Canada)
Inc. ("HFC") towards
establishing a Joint Venture between the two above
named Companies and it is recognized
and accepted that Agokan will continue
to act in professional and technical
support.
B. WHEREAS it is understood that all
contractual arrangements, negotiations
and agreements in all future First
Nations dealings are the responsibility
of Agokan/A4.
C. WHEREAS Agokan and A4 agree to
negotiating the financing of development and
establishment of the Siksika A4 Bar
Farm Operations Project pilot
facilities (the "Project")
for the Joint Venture between A4 Bar and HFC.
D. WHEREAS Agokan and A4 agree to
undertake negotiations for the financing of
construction, allocation, and
operation of properties on other First Nation
lands in Canada and the United
States of America.
E. WHEREAS HFC have developed and hold
proprietary rights, Trade Marks and/or
Patents on various mechanical
devices, techniques and procedures which form
and become an essential part of the
Joint Venture for commercial
development on First Nation Lands to
the benefit of the Joint Venture.
F. WHEREAS A4, a multi-disciplinary
team of professionals with solid corporate
expertise combined with years of
hands-on technical and management
experience with various First
Nations, Canadian and American companies,
<PAGE>
2
will assume the responsibility that
the Joint Venture will be operated at
all times in full compliance with
all applicable laws of the First Nation,
and will provide or arrange for
rights of ingress and egress at all times
to the Joint Venture properties by
anyone legally entitled to such rights.
G. WHEREAS it is understood by both
parties that One Unit will be comprised of
twenty complete farm operations with
barn capacity of 400 head per bar and
one packing plant. It is also
understood and agreed that out of necessity
A4 will be the designee/operator for
purposes of implementing the Joint
Venture agreement as a Siksika Pilot
Project. It is also understood that
the Siksika Pilot Project will lead
to the establishment of other Farm
Operations on other First Nations
Lands with local designee/operators and
that A4 alone holds the right of
choice and selection for all such
operations.
H. WHEREAS it is understood and agreed
First Nations may open and operate
retail butcher shops where desired
and will be owned exclusively by First
Nations, and these butcher shops
will be guaranteed rights of "first
supply" should there be
shortages.
I. WHEREAS it is one of the intentions
of the Joint Venture that provisions
will be made for a human resources
strategy for the training and employment
of skilled persons. The only caveat
being that all A4 employees must be
aptly qualified for such employment
under A4 Farm Operations. A4 Bar will
coordinate education and training
programs with educational establishments,
or any other post-secondary
educational institution, so as to ensure that
those employees wanting to be
educated and trained in the fields relating
to Projects mentioned can do so;
J. WHEREAS the Parties wish to enter
into an association of mutual benefit and
agree to jointly invest and set up a
joint venture enterprise;
IN CONSIDERATION OF and as a condition of the Members entering into this
Agreement and other valuable consideration, the receipt and sufficiency of
which
consideration is acknowledged, the parties to this Agreement agree as follows:
Formation
---------
1. By this Agreement the Members enter
into a joint venture (the "Venture") in
accordance with the laws of the
Province of Alberta. The rights and
obligations of the Members will be
as stated in the applicable legislation
of the Province of Alberta except as
otherwise provided here.
Name
----
2. The business name of the Venture
will be Siksika A4 Bar Farm Operations
Project.
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3
Purpose
-------
3. The purpose of the Venture is to
provide for the construction and operation
of two barns to be built on lands
within the Siksika Nation occupied by
Allan Wolfleg, a member of the Siksika
Nation, and which shall house a
cattle operation operated by A4 Bar
Farm Operations. The Venture will see
the construction of the two barns to
demonstrate and prove the practicality
of both the "EcoSolve
System" and the "Hybrid System" and their worth as an
Indian reserve-based operation.
The proposed operations are designed
and expected to produce weight gains
of approximately 4 pounds daily per
animal, each bar is to produce
approximately 1650 litres of wet
ethanol per day and operate turbine
generators having an approximate 1
megawatt yield. Each barn will hold
approximately 400 head and have an
internal hydroponic green barley grass
growing system designed to produce a
ration of approximately 12 pounds
daily per head.
A4 will finish 400 head in each barn
every cycle of approximately 4 months
and will be housed in atmospheric
controlled barns equipped with fly
control devices and fed a diet of
distillers dried grains and brewers mash.
A packing house is planned to be
built less than 25 miles from the barns to
prevent any shipping stress.
The proposed Siksika A4 Bar Farm
Operations will provide innovative
alternative approaches to economic
and community development on First
Nation lands. If the proposed
operations prove to be profitable, the
Members plans to expand future
operations with other First Nations shall be
governed by this Agreement. It is
intended to facilitate and assist First
Nations to achieve economic
self-sufficiency and independence and
accommodate First Nation realities
within a framework of First Nation
philosophies and principles.
Term
----
4. The Venture will begin on December
16th, 2006 and will continue to be in
full force until terminated as
provided by this Agreement.
Place of Business
-----------------
5. The principal office and legal
address of the business of the Venture will
be located at SW 1/420-22-23 W4M,
P.O. Box 1459, Siksika, Alberta, TOJ 3W0
or such other place as the Members
may from time to time designate.
Business Management
-------------------
6. The Venture will be directed,
controlled and managed by a management
committee (the "Management
Committee"). Within the limits of the Purpose of
the Venture and the terms of this
Agreement, the Management Committee will
have full authority to bind the
Members in all matters relating to the
direction, control and management of
the Venture.
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Authority to bind the Venture in
contract or in any third party business
relationship lies exclusively with
the Management Committee, or its
delegate.
7. Each Member will have a vote in the
Management Committee as defined in the
Voting section of this Agreement.
The Management Committee will consist of
two representatives (the
"Representatives") on behalf of A4, and one
representative on behalf of HFC.
Each Representative will have the
authority to bind their respective Member in
decisions relating to the
Venture. Each Member may replace a
Representative or appoint a temporary
alternate at its own discretion on
reasonable notice to the remaining
Members.
8. All actions and decisions respecting
the appointment of an accounting firm
for the Venture require the consent
and agreement of a majority of the
Management Committee.
9. A General Manager may be appointed
where necessary or desirable. Duties of
the General Manager will be
determined by the Management Committee.
Capital Contributions
---------------------
10. Each of the Members has contributed
to the capital of the Venture, in cash
or property in agreed upon value, as
follows (the "Capital Contribution"):
Member Contribution Description Agreed Value
--------------------------------------------------------------------------------
A4 Bar Cattle Company Ltd Land,
cattle, construction and $9,000,000.00
CAD
operation
of facility
--------------------------------------------------------------------------------
Hybrid Fuels (Canada) Inc. Proprietary
Technology $9,000,000.00 CAD
--------------------------------------------------------------------------------
11. Each Member will contribute its
respective capital contributions fully and
on time according to the following
schedule:
Member Contribution
Schedule
--------------------------------------------------------------------------------
A4 Bar Cattle Company Ltd The
construction of two barns on land
occupied by A4 shall be started in the spring
of 2007.
A4 will use its best efforts to have
the
barns populated by cattle by the summer
of
2007.
--------------------------------------------------------------------------------
Hybrid Fuels (Canada) Inc. HFC
shall deliver to A4 an agreement to
provide proprietary technology by the spring
of
2007.
--------------------------------------------------------------------------------
Duties of Members
-----------------
12. Each Member will be responsible for
its respective duties as follows:
Member Duties
Description
--------------------------------------------------------------------------------
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A4 Bar Cattle Company Ltd A4
shall be obligated to finance, and build
two
barns on the Siksika Nation, and to
populate the barns with cattle.
A4 shall
operate the project on a day to day basis,
including use of the EcoSolve Systems
--------------------------------------------------------------------------------
Hybrid Fuels (Canada) Inc. HFC
shall provide proprietary technology,
including the Hybrid System.
--------------------------------------------------------------------------------
13. Duties of Members may be amended,
from time to time, by decision of the
Management Committee, provided that
the Members' interests are not affected
except with the unanimous consent of
the Members.
Excise Canada
-------------
14. It is understood and agreed by all
parties that HFC's participation is
constrained always by regulations
made from time to time by Excise Canada
(which controls all aspects of
rights of distillation and ownership of
equipment and paraphernalia pertaining
to alcohol production) and/or its'
equivalent Agency in the United
States.
15. No changes to ownership and
operation of any individual plant may be made
absent compliance with regulations
of Excise Canada affecting alcohol
production.
Proprietary Technology
----------------------
16. The parties agree that the
proprietary technology is pivotal to the success
of the entire integrated operation
and that the physical assets are
incidental to the proprietary
technology.
Withdrawal of Capital
---------------------
17. No Member will have the right to
demand or withdraw any portion of their
capital contribution without the
express written consent of the remaining
Members.
18. The Members will not be personally
liable for the return of all or part of
the capital contributions of a
Member, except as otherwise provided in this
Agreement.
Additional Capital
------------------
19. Capital Contributions may be amended
from time to time, according to the
requirements of the Joint Venture,
by decision of the Management Committee,
provided that the Members' Interests
are not affected, except with the
unanimous consent of the Members.
20. Any advance of money to the Venture
by any Member in excess of the amounts
provided for in this Agreement or
subsequently agreed to as an Additional
Capital Contribution will be deemed
a debt due from the Venture rather than
an increase in Capital Contribution
of the Member. This liability will be
repaid with interest at such rates
and times to be determined by a majority
of the Members. This liability will
not entitle the lending Member to a
greater voting power. Such debts may
have preference or priority over any
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other payments to Members as may be
determined by a majority of the
Members.
Capital Accounts
----------------
21. An individual capital account will
be maintained for each Member and their
initial Capital Contribution will be
credited to this account. Any
additional, approved contributions
to the Venture's capital made by a
Member will be credited to that
Member's individual Capital Account.
Interest on Capital
-------------------
22. No borrowing charge or loan interest
will be due or payable to any Member
on any Capital Contribution or on
their Capital Account despite any
disproportion that may from time to
time arise among the Capital Accounts






