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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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2
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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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3
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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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4
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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5
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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 President/CEO
of the Co
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