Exhibit
10.14
JOINT VENTURE
AGREEMENT
THIS JOINT VENTURE AGREEMENT (the “JV
Agreement“) is made and entered into effective as of August
4, 2006, by and between SEMO Milling, LLC , a
Missouri limited liability company (“SEMO”), and
Ethanex Energy North America, Inc. , a Delaware
corporation (“Ethanex”). SEMO and Ethanex shall be
referred to individually as a “Party” and collectively
as the “Parties.”
RECITALS
A. The Parties signed a non-binding letter of
intent dated July 3, 2006, as subsequently amended (the
“LOI”) regarding the establishment of a joint venture
company to develop, commercialize and exploit certain technology of
SEMO in connection with the production, distribution and sale of
ethanol and ethanol-related products and corn and corn-based
products from SEMO’s Cape Girardeau, Missouri
facility.
B. The Parties now desire to formally organize a
limited liability company under the laws of the State of Missouri
(the “Company”) through which they will develop,
manufacture, distribute, use, and sell ethanol and ethanol-based
products and corn and corn-based products.
C. Each Party shall collaborate and lend its
expertise to the successful achievement of the Company’s
commercial objectives.
D. The Parties enter into this JV Agreement to set
out the terms governing the management and operations of the
Company and the Parties’ investment and relationship as
Members in the Company.
NOW, THEREFORE, in consideration of the above
Recitals, which are incorporated herein by this reference, and the
mutual promises, agreements and covenants set forth in this JV
Agreement, SEMO and Ethanex agree as follows:
ARTICLE 1
DEFINITIONS AND
INTERPRETATION
In this JV
Agreement, unless otherwise clearly indicated by the context, the
following terms, whether used in singular or plural forms, shall
have the following meanings:
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1.1
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“Articles
of Organization” means the Articles of Organization to be
filed with the Missouri Secretary of State’s office for
purposes of legally organizing the Company, in the form attached
hereto as Exhibit 1 .
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1.2
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“Assignment Agreement” means the
Assignment Agreement between Ethanex and the Company, in the form
attached hereto as Exhibit 5 , to be executed on the
Effective Date pursuant to Section 8.1 of this JV
Agreement.
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1.3
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“Construction Completion Date” means
December 31, 2007.
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1.4
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“Construction Start Date” means
January 15, 2007.
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1.5
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“Contribution Agreement” means the
Contribution Agreement between SEMO and the Company, in the form
attached hereto as Exhibit 3 , to be executed on the
Effective Date pursuant to Section 8.3 of this JV
Agreement.
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1.6
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“Corn
Mill” means the dry corn mill and custom bagging and
logistics facility owned and operated by SEMO at the Plant
Site.
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1.7
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“Corn
Processing Solutions, LLC” or “CPS” means the
Colorado limited liability company managed by SEMO.
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1.8
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“Deposit” means the sum of
$2,000,000 to be paid by Ethanex to the Company, as more fully
described in Article 3 below.
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1.9
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“Effective Date” means November 20,
2006.
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1.10
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“Governmental Authority” means the
United States of America, any state, commonwealth, territory or
possession thereof and any political subdivision or
quasi-governmental authority of any of the same, including but not
limited to courts, tribunals, departments, commissions, boards,
bureaus, agencies, counties, municipalities, and other
instrumentalities.
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1.11
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“Operating Agreement” means the
Operating Agreement of the Company by and among Ethanex, SEMO and
the Company, in the form attached hereto as Exhibit 2 , to
be executed on the Effective Date.
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1.12
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“Plant” means a 100 million gallon
per year nameplate ethanol production plant to be constructed and
operated by the Company on the Plant Site using the SEMO Technology
licensed by SEMO to the Company.
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1.13
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“Plant
Site” means certain real property located in Cape Girardeau,
Missouri on which the Corn Mill is located.
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1.14
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“Reciprocal Non-Disclosure
Agreement” means the “Reciprocal Confidential
Disclosure Agreement” executed between the Parties and made
effective on June 8, 2006, as amended from time to time.
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1.15
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“Related
Agreements” means the following agreements each to be dated
and deemed effective as of the Effective Date: (i) Operating
Agreement, (ii) Contribution Agreement, (iii) Technology Licensing
Agreement, (iv) Assignment Agreement, and (v) Services
Agreement.
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1.16
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“SEMO
Assets” means the assets of SEMO to be contributed as initial
capital of the Company including all of the assets owned,
controlled by, or licensed to SEMO or its subsidiaries related to
(but not including) the SEMO Technology, and consisting of all
leases, transferable licenses, permits, governmental
authorizations, real property, personal property, equipment,
materials, supplies, prepaid deposits, accounts receivable, claims,
and causes of action, but excluding the SEMO Excluded
Assets.
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1.17
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“SEMO
Excluded Assets” means the SEMO Technology and all of
SEMO’s right, title and interest in CPS.
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1.18
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“SEMO
Technology” means SEMO’s confidential and proprietary
data, processes, information, intellectual property, and know-how
related to corn milling and/or dry milling fractionation
technology, as more particularly defined in the Technology
Licensing Agreement.
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1.19
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“Services
Agreement” means the Services Agreement between Ethanex and
CPS, in the form of attached hereto as Exhibit 6 , to be
executed on the Effective Date pursuant to Section 8.2 of
this JV Agreement.
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1.20
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“Technology Licensing Agreement”
means the Technology Licensing Agreement between SEMO and the
Company, in the form attached hereto as Exhibit 4 , to be
executed on the Effective Date pursuant to Section 8.4 of
this JV Agreement.
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1.21
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“Third
Party” means any person or legal entity other than SEMO,
Ethanex, or the Company.
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1.22
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“Member,” “Membership
Interest,” “Board” and “Manager”
shall have the meanings set forth in the Operating
Agreement.
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1.23
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In this JV
Agreement, except to the extent that the context otherwise requires
(i) whenever the words “include,”
“includes” or “including” are used they are
deemed to be followed by the words “without
limitation,” and (ii) the definitions contained in this JV
Agreement are applicable to the singular as well as the plural of
such terms.
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ARTICLE 2
ORGANIZATIONAL MATTERS OF
COMPANY
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2.1
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On or before
the Effective Date, the Parties shall organize the Company as a
limited liability company under the laws of the State of Missouri
by filing the Articles of Organization, in the form attached hereto
as Exhibit 1 , with the Missouri Secretary of State’s
office.
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2.2
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The name of the
Company shall be Ethanex at SEMO Port, LLC.
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2.3
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Subject to the
terms and conditions of this JV Agreement, on the Effective Date,
the Parties shall adopt and execute the Operating Agreement in the
form attached hereto as Exhibit 2 . The Operating Agreement
shall more fully set forth the rights and obligations of the
Members in the Company and, to the extent permitted by applicable
law, shall be consistent with the terms of this JV
Agreement.
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2.4
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The duration of
the Company shall be perpetual subject to the provisions of this JV
Agreement and the Operating Agreement.
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2.5
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The purpose of
the Company will be to (i) construct and operate the Plant, (ii)
develop, manufacture, distribute, use and sell ethanol and
ethanol-based products and corn and corn-based products, and (iii)
engage in all activities necessary, customary, convenient or
incident to the activities described herein.
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ARTICLE 3
DEPOSIT; DISPOSITION OF
DEPOSIT
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3.1
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Ethanex shall
pay the Deposit to the Company upon (i) the execution of this JV
Agreement by the Parties, or (ii) the filing of the Articles of
Organization of the Company with the Missouri Secretary of State,
whichever occurs later.
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3.2
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The Parties
agree that following receipt of the Deposit, the Company shall use
the Deposit to pay for soil and soil-compaction work at the Plant
Site and analytical testing, permitting, and other administrative
and operating costs as necessary. The Parties further agree that
such work is necessary to facilitate construction of the
Plant.
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3.3
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The Parties
agree that on the Effective Date a sum equivalent to the Deposit
shall be credited towards the Ethanex Cash Contribution to be
contributed by Ethanex to the Company as set forth in Section
4.1 below. In the event this JV Agreement is terminated prior
to the Effective Date (except for a termination caused by
SEMO’s breach or insolvency as described Section 12.2
below), the Deposit shall be deemed a cancellation fee and SEMO
shall have no obligation to return or refund the Deposit to
Ethanex.
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ARTICLE 4
INITIAL CAPITAL
CONTRIBUTIONS
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4.1
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Upon the
Effective Date, and contemporaneously with the execution of the
Related Agreements, Ethanex shall make an initial capital
contribution to the Company in the amount of $30,000,000 (the
“Ethanex Cash Contribution”).
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4.2
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Upon the
Effective Date, and contemporaneously with the execution of the
Related Agreements, SEMO shall make an initial capital contribution
to the Company in the form of the SEMO Assets (but excluding the
SEMO Excluded Assets) having a net asset value, in accordance with
generally accepted accounting principles before depreciation and
amortization, of at least $15,000,000 and an agreed value of
$30,000,000.
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4.3
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The capital
contribution provided by Ethanex pursuant to Section 4.1
above shall be used by the Company, to the extent practical, to
fund the capitalizable assets of the Company including, without
limitation, the design, engineering and construction costs of the
Plant and the purchase of equipment to be used in the operation of
the Plant.
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4.4
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The capital
contribution provided by SEMO pursuant to Section 4.2 above
shall be used by the Company, to the extent practical, to
facilitate the construction and operation of the Plant, and to
serve as security for third party financing to fund the
capitalizable assets of the Company including, without limitation,
the design, engineering and construction costs of the Plant and the
purchase of equipment to be used in the operation of the
Plant.
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ARTICLE 5
OWNERSHIP
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5.1
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Subject to the
satisfaction of each Party’s contribution obligations as set
forth in Article 4 above, the initial Membership Interests
of the Company shall be owned fifty percent (50%) by SEMO and fifty
percent (50%) by Ethanex.
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5.2
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Without the
prior written consent of the other Party, a Party shall not
acquire, by purchase or otherwise, directly or indirectly,
ownership or voting control of Membership Interests of the Company
representing more than the other Party’s Membership Interest
of the Company on a fully diluted basis. Profits and losses of the
Company shall be allocated among the Parties in accordance with
their relative Membership Interests.
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ARTICLE 6
GOVERNANCE
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6.1
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The management
of the Company and the responsibility for preparation and adoption
of the Company’s business plan shall be vested in the Board
of Directors (the “Board) and such executives, officers and
employees as the Board may authorize and designate from time to
time. The Board initially shall be comprised of five (5) persons,
two (2) of whom shall be nominated by SEMO, two (2) to be nominated
by Ethanex, and one (1) to be nominated by the Parties jointly. The
Board shall have authority, on behalf and in the name of the
Company, to perform those acts as provided in the Operating
Agreement, subject to those powers that are reserved to the Members
of the Company, also as provided in the Operating
Agreement.
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6.2
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The Chairperson
of the Board shall initially be appointed by SEMO and shall serve
for a two (2) year term commencing on the Effective Date, after
which Ethanex shall appoint the Chairperson who shall serve for the
following two (2) years. Thereafter, the Parties shall alternate
the appointments accordingly. The Chairperson shall preside over
all Board meetings and, in the event of a deadlock by the Board,
shall cast the deciding vote of the Board. The Chairperson of the
Board also shall serve as the Manager of the Company as set forth
in the Operating Agreement.
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6.3
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The day-to-day
management and operation of the Company shall be performed by a
President/CEO appointed by and serving under the direction of the
Board. The initial Pre
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