This NonCompetition Agreement involves
Title: FORM OF NON-COMPETE AGREEMENT
Governing Law: Minnesota Date: 9/15/2006
Law Firm: Moore VanAllen PLLC: Patton Boggs LLP
E XECUTION C OPY
FORM OF NON-COMPETE AGREEMENT
This Non-Compete Agreement (this “ Agreement ”) is made effective this day of , 2006 (the “ Effective Date ”) by and between CARGILL, INCORPORATED, a Delaware corporation (“ Cargill ”), ASALLIANCES BIOFUELS, LLC, a Delaware limited liability company (“ ASA ”), AMERICAN CAPITAL STRATEGIES, LTD., a Delaware corporation (“ American Capital ”), LAMINAR DIRECT CAPITAL L.P., a Delaware limited partnership (“ Laminar Direct ”), and USRG ASA, LLC, a Delaware limited liability company (“ USRG ”), collectively referred to hereinafter as “Parties” or individually as a “Party.”
A. ASA, acting through its first tier subsidiary, ASA OpCo Holdings, LLC (“ ASA Holdings ”), and its second tier subsidiaries, ASA Albion, LLC (“ ASA Albion ”), ASA Bloomingburg, LLC (“ ASA Bloomingburg ”), and ASA Linden, LLC (“ ASA Linden ”) (which second tier subsidiaries are referred to herein, together with ASA Holdings and ASA, as the “ ASA Affiliated Group ”), intends to construct, own and operate commercial facilities at Albion, Nebraska, Bloomingburg, Ohio, and Linden, Indiana that will produce denatured fuel-grade ethanol (as such plants may be expanded or upgraded according to the terms of the Corn Supply Agreement, individually, an “ Ethanol Facility ” and, collectively, the “ Ethanol Facilities ”), which Ethanol Facilities are each anticipated to produce approximately 100 million gallons per year.
B. Certain members of the ASA Affiliated Group and Cargill (and certain subsidiaries) (collectively, the “ Cargill Affiliated Group ”) have entered into a separate Master Agreement with respect to each Ethanol Facility (each, a “ Master Agreement ”), together with certain Goods and Services Agreements as defined therein (collectively, the “ Goods and Services Agreements ”) with respect to each Ethanol Facility, under which the member of the ASA Affiliated Group which owns and operates the related Ethanol Facility will procure certain goods and services from Cargill in connection with its ownership and operation of the Ethanol Facility.
NOW THEREFORE, in consideration of the foregoing, the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows.
1. Definitions and Interpretation .
(a) Definitions . As used in this Agreement and in the Goods and Services Agreements, the following capitalized terms have the meanings indicated:
“ Affiliate ” means, with respect to any Person, (i) each Person that directly or indirectly, controls or is controlled by or is under common control with such designated Person, (ii) any Person that beneficially owns or holds 50% or more of
the voting securities of such designated Person or 50% or more of the equity interest in such designated Person, and (iii) any Person of which such designated Person beneficially owns or holds 50% or more of the voting securities or in which such designated Person beneficially owns or holds 50% or more of the equity interest. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.
“ Corn Supply Agreement ” means, for any Ethanol Facility, the Corn Supply Agreement as defined in the Master Agreement for that Ethanol Facility.
“ Ethanol Facilities ” has the meaning specified in the Recitals.
“ Facility Specific Termination ” means the earlier of (i) the date that all (but not less than all) of the Principal Documents are terminated with respect to an Ethanol Facility, and (ii) the date that one of the Principal Documents is terminated with respect to an Ethanol Facility due to its rejection in a bankruptcy of the owner or Affiliate of the owner of such Ethanol Facility and Cargill attempts to terminate all the remaining Principal Documents and the Grain Facility Lease with respect to such Ethanol Facility, but is prohibited by the court having jurisdiction over such bankruptcy proceeding from terminating the remaining Principal Documents and the Grain Facility Lease with respect to such Ethanol Facility.
“ Financing Documents ” means any and all loan agreements, notes, indentures, security agreements, subordination agreements, mortgages, deeds of trust, participation agreements and other documents relating to the construction, interim, working capital and long-term financing of the Ethanol Facility and any refinancing thereof provided by the Financing Parties, including any and all modifications, extensions, renewals and replacements of any such financing or refinancing.
“ Financing Parties ” means any and all lenders, and any trustee or agent acting on their behalf, providing senior or subordinated construction, interim, working capital or long-term debt financing or refinancing to ASA or a member of the ASA Affiliated Group, the proceeds of which are applied in whole or in part to the financing of any Ethanol Facility.
“ Goods and Services Agreements ” with respect to an Ethanol Facility, has the meaning specified in Recitals.
“ Grain Facility Lease ” means, for any Ethanol Facility, the Grain Facility Lease as defined in the Master Agreement for that Ethanol Facility.
“ Master Agreement ” with respect to an Ethanol Facility, has the meaning specified in the Recitals.
“ Person ” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority, limited liability company or any other entity of whatever nature.
“ Principal Documents ” means for an Ethanol Facility, collectively, the Master Agreement, the Corn Supply Agreement, the Ethanol Agreement and the DG Agreement for the Ethanol Facility, each as defined in the Master Agreement for the Ethanol Facility.
(b) Rules of Interpretation . Unless otherwise required by the context in which any term appears, in this Agreement: (i) capitalized terms used shall have the meanings specified in this Section 1; (ii) the singular shall include the plural and vice versa; (iii) references to “Sections,” “Schedules,” “Annexes,” “Appendices” or “Exhibits” (if any) shall be to sections, schedules, annexes, appendices or exhibits hereof, unless otherwise specified; (iv) all references to a particular Person in any capacity shall be deemed to refer also to such Person’s authorized agents, successors and permitted assigns in such capacity; (v) the words “herein,” “hereof” and “hereunder” shall refer to this Agreement as a whole and not to any particular section or subsection hereof; (f) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation” and shall not be construed to mean that the examples given are an exclusive list of the topics covered; (vi) all accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States of America consistently applied; (vii) references to this Agreement shall include a reference to all appendices, annexes, schedules and exhibits hereto, as the same may be amended, modified, supplemented or replaced from time to time; (viii) references to any agreement, document or instrument shall be construed at a particular time to refer to such agreement, document or instrument as the same may be amended, modified, supplemented or replaced as of such time; (ix) the masculine shall include the feminine and neuter and vice versa; and (x) references to an applicable law or to legal requirements in general shall mean a reference to such applicable law or legal requirement as the same may be amended, modified, supplemented or restated and be in effect from time to time.
2. Cargill Non-Compete . During the period beginning on the Effective Date and ending on the Facility Specific Termination (except as otherwise limited below), Cargill covenants that neither Cargill, nor any Affiliate of Cargill, shall (i) own, directly or indirectly, any part of any other ethanol facility or ethanol producer (other than another subsidiary of ASA Holdings) located within a 50-mile radius of that Ethanol Facility, or (ii) enter into any agreement with any other ethanol producer (other than the ASA Affiliated Group or another subsidiary of ASA Holdings) under which a Cargill controlled, owned and operated stand alone commercial grain elevator would be physically co-located with such other ethanol producer within a 50-mile radius of that Ethanol Facility, in each case, except as limited by the following:
(a) ORD, NEBRASKA – Upon the earlier to occur of (i) the fifth anniversary of the date when Cargill and ASA Albion execute the first Sales Confirmation pursuant to the Corn Supply Agreement relating to the Albion, Nebraska Ethanol Facility, or (ii) the seventh anniversary of the Effective Date (such date, the “ Ord Non-Compete Termination Date ”), Cargill’s non-competition obligations under clauses (i) and (ii) of Section 2 with respect to development of an ethanol facility co-located with Cargill’s grain elevator in Ord, Nebraska shall expire, provided, that (unless a Facility Specific Termination with respect to the Albion, Nebraska Ethanol Facility has occurred):
i. following the Ord Non-Compete Termination Date, if Cargill elects to develop an ethanol facility co-located with Cargill’s grain elevator in Ord, Nebraska, Cargill shall offer ASA Albion a right of first refusal with respect to the development of such ethanol project (the “ Ord Right of First Refusal ”) and ASA Albion shall have thirty (30) days after receipt of such offer to exercise the Ord Right of First Refusal; and
ii. if a member of ASA Albion elects not to exercise the Ord Right of First Refusal, Cargill may proceed with the development of such Ethanol Facility on substantially the same basis as offered to ASA Albion;
(b) DANA, INDIANA –Upon the earlier to occur of (i) the fifth anniversary of the date when Cargill and ASA Linden execute the first Sales Confirmation pursuant to the Corn Supply Agreement relating to the Linden, Indiana Ethanol Facility, or (ii) the end of the seventh anniversary of the Effective Date (such date, the “ Dana Non-Compete Termination Date ”), Cargill’s non-competition obligations under clauses (i) and (ii) of Section 2 with respect to development of an ethanol facility co-located with Cargill’s grain elevator in Dana, Indiana shall expire, provided, that (unless a Facility Specific Termination with respect to the Linden, Indiana Ethanol Facility has occurred):
i. following the Dana Non-Compete Termination Date, if Cargill elects to develop an ethanol facility co-located with Cargill’s grain elevator in Dana, Indiana, Cargill shall offer ASA Linden a right of first refusal with resp