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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,
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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
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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
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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
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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
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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
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A4 Bar Cattle Company Ltd Land, cattle, construction and
$9,000,000.00 CAD
operation of facility
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Hybrid Fuels (Canada) Inc. Proprietary Technology $9,000,000.00
CAD
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11. Each Member will contribute its respective capital
contributions fully and
on time according to the following schedule:
Member Contribution Schedule
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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.
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Hybrid Fuels (Canada) Inc. HFC shall deliver to A4 an agreement
to
provide proprietary technology by the spring
of 2007.
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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.
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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
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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
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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
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26. Accurate and complete books of account of the transactions of
the Venture
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