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,
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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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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
of
the Members.
Ownership, and Share of Profits and Losses
------------------------------------------
23. The Project is
being built on lands occupied by Allan J. Wolfleg. A4, with
its
Joint Venture partners, shall be responsible for the construction
and
operation of the barns, as well as the purchase of all cattle, and
for any
financing required by the Project. Upon completion of construction,
Allan
J.
Wolfleg shall be the owner of the barns and any other improvements
made
upon
his lands.
24. HFC shall be
responsible for providing the proprietary technology required
including the Hybrid System.
25. A separate
agreement or amendment to this Agreement shall be entered into
as
between the Members to set out the methodology and structure of
dividing
profits and losses between the Members.
Books of Account
----------------
26. Accurate and
complete books of account of the transactions of the V
