UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 4 to FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of
The Securities Exchange Act of 1934
CEVA INTERNATIONAL, INC.
(Name of Small Business Issuer in its charter)
Nevada ________22-3113236__________
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation or Organization)
75-77 North Bridge Street, Somerville, New Jersey 08876
(Address of principal executive offices) (Zip Code)
(908) 429-0030
(Issuer's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
--------------- ----------------------
None None
----- -----
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
(Title of Class)
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ITEM 15. EXHIBITS.
(a) (i)Audited Financial Statements of CEVA International, Inc.
and Subsidiary for the Fiscal Years Ended December 31, 1999
and December 31, 1998.
(ii)Audited Financial Statements of CEVA International, Inc.
and Subsidiary for the Fiscal Years Ended December 31,
1998 (Restated) and December 31, 1997.
(b) Other Exhibits
Exhibit No. Document Description
*2.1 Agreement and Plan of Merger, dated March 29, 1999
*2.2 Articles of Merger, dated April 23, 1999
*2.3 Certificate of Merger, dated April 26,
1999
*3.1 Articles of Incorporation of Oro Bueno, Inc., dated January 30,
1994
*3.2 Certificate of Amendment of Articles of Incorporation of Oro Bueno,
Inc., dated July 10, 1997
*3.3 Amended and Restated Articles of Incorporation of Oro Bueno, Inc.,
dated April 24, 1999.
*3.4 Bylaws of CEVA International, Inc., a Nevada corporation
*10.1 Loan and Master LTTD Services Agreement with Green Globe LLC,
dated December 6, 1997
*10.2 Lease Agreement between Green Globe LLC and CEVA Hungary,
dated June 5, 1998
*10.3 "The Unified Deed of Association of CEVA Hungary Ltd." dated
November 23, 1998
**10.4 Service Agreement, dated September 1, 1997, by and between
Hungarian Oil and Gas ("MOL") and the Company.
**10.5 Waste Fuel Agreement, dated August 1, 1998, by and between
S.C.Cimus S.A. and CEVA International, Inc.
**10.6 Joint Venture Agreement, dated May 19/24, 2000, by and between
Breitenburger Auslandbeteiligungs GmbH ("Holderbank
Cement") and CEVA International, Inc.
**10.7 Amendment of Entrepreneurial Contract, dated July 25, 2000, by
and between Hungarian Oil and Gas ("MOL") and CEVA
International, Inc.
**10.8 Waste Materials Processing Agreement, dated August 1, 2000, by
and between Rompetrol Rafinare Vega S.A. ("VEGA") and
CEVA International, Inc.
*10.9 Employment Agreement, dated September 1, 2000 by and between the
Company and Stephen Soley
*23.1 Consent of Independent Auditors
*27 Financial Data Schedules
---------------
*Previously filed
**These exhibits contain deleted text which is the subject of a Confidential
Treatment Application pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, as
amended, the Registrant caused this Amendment No. 4 to its registration
statement on Form 10-SB to be signed on its behalf by the undersigned, thereunto
duly authorized.
CEVA International, Inc.
Date: January 2, 2001 By: /s/ Herbert G. Case, Jr.
---------------------------
Herbert G. Case, Jr.
Its: President and Chief Executive Officer
Acting Chief Financial Officer
Signature Title Date
/s/ Herbert G. Case, Jr. President,
Herbert G. Case, Jr. Chief Executive Officer January 2, 2001
Acting Chief Financial Officer
Director
/s/ Joseph J. Tomasek Vice President and
Joseph J. Tomasek Director January 2, 2001
/s/ Robert Van Pelt Treasurer and January 2, 2001
---------------------------
Robert Van Pelt Director
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ceva10-sb - Amend. No. 4 01-02-01
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Exhibit 10.4
SERVICE AGREEMENT
Which was entered into between the Hungarian Oil and Gas Industrial Company
limited by Shares with an address at H-1117 Budapest, Oktober huszonharmadika u.
18. as Customer and CEVA Hungary Kft. with an address at H-1097 Budapest,
Illatos ut 7. and CEVA International Inc. with an address at 1967 Highway 27,
Suite-32B, Edison, New Jersey, 08817 USA as the Contractors of this Agreement
(hereinafter together: CEVA) with the following terms and conditions:
INTRODUCTION
A. On the Nyirbogdany site of MOL approximately 30,000 tonnes acid tar
have been accumulated which is listed under Aoil refinery waste
material@ in point 5.4.8 of Appendix 2 of the Government Decree No.
102/1996. (VII.12.) (the >Decree@) and classified as Category II.
hazardous material.
B. According to a technical estimate approximately 20,000 tonnes is
suitable to produce a liquid alternative waste fuel material called
AAF@ from the accumulated acid tar with the procedure of CEVA
International Inc. and with the procedure elaborated by the local
experts which can be used at Cement Factory and other industrial
establishments in a closed system in accordance with the Decree.
C. The removal of the acid tar and the production of the AAF@ shall take
place in the Nyirbogdany plant of MOL, however the use shall occur
according to Section 7. The first 2 months period of the use is
experimental. Based on this, the users shall apply for a 2 months
permit and the maximum quantity belonging to it. Based on the
information obtained during this experimental use the proportion and
the quantity of the ingredients may change. The contracting parties
shall mutually accept and acknowledge this change based on the permit
of the authorities. This permits issued by the relevant authorities are
attached as Attachment 1/a., b., and c. of this Agreement.
D. MOL shall enter into an agreement with the users of the alternative
fuels and CEVA acknowledges the agreements regarding the production of
AAF@ or the schedule of the users and acts according to MOL=s order at
all times regarding the producible quantities. The minutes regarding
the needs of the users and the agreements are attached as Appendix
2/a., b., and c.
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E. MOL owns the acid tar and the AAF@ alternative waste fuel material made
of it during the entire period of the production and sale.
1. CONTRACTING PARTIES
1.1 CEVA Hungary Kft. established in accordance with Act VI of 1988 which
is registered under No. 13-09-07-1199/02. with the
Metropolitan Court of Registration.
1.2 CEVA International Inc. registered under the laws of the United States
which partly owns CEVA Hungary Kft.
1.3 The Hungarian Oil and Gas Industrial Company Limited by Shares which is
registered under no. 01-10-041683 with the Metropolitan Court of
Registration.
1.4 The following persons are entitled to act on behalf of the contracting
parties:
MOL Rt. Dr. Lengyel Jeno
Dr. Janos Gergely
CEVA Hungary Kft. Janos Soos
Regarding the site agreements Tamas Henyusz
Laszlo Jozsef
2. THE SUBJECT OF THE AGREEMENT
CEVA shall produce AAF@ based on the governmental permits on the site
of MOL in Nyirbogdany from the acid tar as determined in Section B and
it shall use acid tar based on the process description and recipe
attached as Appendix 4 to this Agreement, thereby it meets the
quantity-requirements of the users.
3. THE CONDITIONS OF THE PERFORMANCE OF THIS AGREEMENT
3.1 Governmental permits
CEVA shall start the performance of this Agreement only after obtaining
the relevant environmental and other governmental permits. It shall
participate in obtaining the relevant permits in order to ensure the
aforementioned.
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MOL shall ensure that nothing interrupts the performance of the work
including obtaining of the relevant permits. The relevant permits shall
be attached to this Agreement and constitute the appendix to it (as
Appendix 1/a., b., and c.) issued by local authorities at the site.
4 CEVA'S RIGHTS AND OBLIGATIONS
4.1 CEVA's obligations before the recovery of acid tar:
4.1.1 CEVA shall comply with the rules of government Decree No.
102/1996. (VIII.12.) regarding the treatment and
transportation of the materials subject of this Agreement.
4.1.2 CEVA shall bring the equipments, materials and the
machinery to the site according to the preliminary
discussions with MOL=s site manager.
4.1.3 CEVA shall provide its demands in writing regarding the site
until the execution of agreement with the site
but the latest until September 15, 1997.
4.2 CEVA=s obligations following commencing the performance:
4.2.1 CEVA shall measure the materials shipped to the
recovery and processing location at the Nyirbogdany
factory of MOL. CEVA shall measure materials to be
shipped in accordance with the quality requirements
agreed upon by the user. MOL shall certify the AAF@
with a certificate of quality according to the
standard analysis of the MOL laboratory.
4.2.2 CEVA shall comply with the relevant environmental,
safety, labour safety and accident prevention rules
and orders of the site and it shall also ensure that
its subcontractors observe the above mentioned rules
as well. CEVA shall inform MOL about any requested
data of its subcontractors.
4.2.3 CEVA shall keep a log-book during the performance of
the work under this Agreement. The following
information shall be included in the log-book:
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(i) the date of handing over the work area;
(ii) the quality and quantity of the
materials transported in accordance
with the relevant parameters;
(iii) the quality and quantity of the materials
transported out according to the relevant
parameters;
(iv) any extraordinary events occurred during the
performance of the work;
(v) any circumstances preventing the performance
of the work;
(vi) the time of starting and finishing the work daily;
(vii) names of the workers; and
(viii) the performed activity.
4.2.4 The parties will enter into a separate agreement in
respect of compensations with the site at the
handing-over of the work-site. CEVA shall pay for the
services ordered by it and performed by MOL in
accordance with the site (Appendix 5).
4.2.5 CEVA shall surround the work area with a visible
warning-ribbon. CEVA shall place warning signs on the
work area and it shall arrange guarding the work area
within the designated area. CEVA shall remove any
contamination of the road caused by it immediately.
4.2.6 CEVA shall neutralize the waste water produced during
the removal of acid tar (pH 5-8) and drain it
according to the waste water capacity of the site
following the gravitational separation.
4.3 CEVA's rights:
4.3.1 CEVA is entitled to review and make copies of all
relevant authority and other data regarding the
disposal of the acid tar and other data, description,
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information and other documents relevant to the
performance of this Agreement in accordance with the
relevant rules of MOL.
4.3.2 CEVA shall obtain all reasonable assistance from MOL
to perform its obligations under this Agreement.
5. MOL'S RIGHTS AND OBLIGATIONS
5.1 Mol's obligations before the commencing of CEVA's activities:
5.1.1 MOL shall designate the necessary area - where the
removal of acid tar and the production of the
alternative fuel shall occur - for the performance of
the work and hand it over to CEVA in proper condition
within 30 days from the date determined by CEVA
according to Section 4.1.3. MOL shall hand over the
work area with a Handover Protocol to CEVA. (Appendix
6).
5.1.2 MOL shall create a waste water channel or receiver at
the border of the work area which is suitable for
receiving the removed and decontaminated waste water.
MOL shall provide two containers with the
satisfactory measurements to the decontamination of
the acidic water to CEVA.
5.1.3 MOL shall ensure the necessary electric energy with
proper connector at the border of the work area as
designated by CEVA. CEVA shall pay for the electric
energy according to the agreement with the site.
(Appendix 5).
5.1.4 MOL shall inform CEVA, its subcontractors and its
employees regarding the rules in connection with
safety, labour protection and environmental
protection and deliver it in writing. The written
rules are attached as Appendix 7.
5.1.5 MOL shall permanently ensure the use of proper social
areas to the employees of CEVA.
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5.2 MOL's obligations after the commencing of CEVA's activities:
5.2.1 MOL shall ensure that all employees of CEVA that had
been reported previously to MOL have access to the
work area 24 hours a day including weekends and
holidays in accordance with the preliminary report of
CEVA regarding the number of employee.
5.2.2 Exclusively authorized employees of MOL shall be
allowed to enter into the work area following the
handing-over of the work area.
5.3 MOL's rights following the handing over of the work area:
5.3.1 MOL is entitled to monitor CEVA's activity
permanently and is entitled to write any remarks in
CEVA' log book through its appointed representative.
5.3.2 MOL is entitled to temporarily limit CEVA=s activity
if there is any safety, personnel or property
protection or environmental protection reason for
such limitation.
5.3.3 MOL is entitled to measure the received, recovered
and dispatched materials after each shipping, to
remove a sample from the materials in order to
establish its quality and to review CEVA=s
certificate of quality.
6. DEFINITION AND STORING OF FOREIGN MATERIALS
The parties agree that they consider all materials that are not derived
from acid tar (construction debris, metal. barrel, packing materials or
such materials which were not created during refinery technologies)
using treatment material. CEVA shall separately store the above
determined foreign material on the work area in accordance with the
agreement with the site manager in a container provided by MOL.
7. TIME AND PLACE OF PERFORMANCE
The alternative fuel called "AF" - made of acid tar shall be produced
in MOL.s factory in Nyirbogdany.
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In accordance with Section B CEVA shall commence the production of the
alternative fuel from acid tar at the latest by October 30, 1997 on the
place of performance stipulated in this Agreement and shall finish it
by June 30, 2000 if the governmental permits are available within this
time period. CEVA agrees that it shall produce the above mentioned
alternative fuel continuously - according to the needs of the users -
in accordance with the permits as listed in Appendix 1 or the
Introduction.
Anticipated users:
- * 8,000 tonnes/year
- * 8,000 tonnes/year
- * 5,000 tonnes/year
8. SERVICE FEE
The service fee is established based on the quantity of the removed
acid tar according to the measuring at designated the site. The fee for
the processing of the measured removed acid tar and the AF is *
USD/tonne + VAT, additional expenses cannot be charged to MOL regarding
the establishing and operating the service.
The service fee shall not include the shipping costs and the costs of
the type of supplemental hydrocarbon based materials used to the
processing of the alternative fuel and the shipping costs of the "AF"
these shall be stipulated in a separate agreement (MOL and the users).
The fee for the decontamination of the acidic waste water originated
during the removal of acid tar is * .
The service fee is charged in USD and the issuance of the bill will
reflect this. MOL shall pay the bill plus VAT based on the Hungarian
forint equivalent of the service fee calculated the working mid-rate of
the Hungarian National Bank on the last working day of the previous
month.
9. CONDITION OF PAYMENT
9.1 The basis for the issuance of the service bill is the quantity of the
removed acid tar as established in Section 8. The condition of the
acceptance of the bill is that the designated site manager of MOL
certifies the fulfillment of
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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the performance and the user accepts the "AF".
9.2 MOL shall transfer the payment within fifteen (15) days from the date
of the receipt of CEVA's bill to bank account
no.10103104-39563222-00000000 at Budapest Bank Rt. MOL is obliged to
pay late payment fee in case of delay in payment. The amount of the
late payment charge is equal to the base interest rate of the Hungarian
National Bank* %.
9.3 Parties agree that the service is indivisible, however CEVA is
entitled to submit bills on a weekly basis based on the
quantity of the removed acid tar.
9.4 The financial arrangement regarding any intellectual property rights
arising during the production of acid tar as indicted in Section B is
included in the service fees of CEVA (Point 8) or CEVA shall arrange
it. Payment is due quarterly.
9.5 CEVA acknowledges, that its contracts regarding its intellectual
property rights are not confidential and it shall disclose the content
of such rights in case of any legal dispute with MOL or with third
parties. AThird parties@ shall mean the entities with whom CEVA
contracted regarding the payment concerning intellectual property
right.
10. BREACH OF CONTRACT
10.1 The parties shall stipulate the conditions of the performance after
obtaining the governmental permits, which conditions shall be
determined based on the needs of the users.
10.2 If one of the parties is in breach of this Agreement it shall pay
compensation and penalty to the other party with the limitations set
forth by this Agreement except if it proves that it has performed the
obligations expected from an Economic Association in a given similar
situation.
10.3 The acceptance of the performance not in full compliance of this
Agreement shall not be interpreted as a waiver of any
rights arising out of the breach of contract.
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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10.4 In case CEVA breaches Sections 4.1.1, 4.2.3 or prevent the performance
under Section 5.3.3, or if the acid tar as determined in Section B
shall not be processed due to CEVA=s fault within 30 days from the
deadline, MOL is entitled to terminate this Agreement as a result of
which it will cease to be in force on the tenth (10.) day following the
termination notice. In case of termination the parties shall settle any
outstanding debts owed towards each other.
10.5 In case CEVA shall not perform its obligations due to MOL's fault, CEVA
is entitled to cancel the Agreement after November 1, 1997. In case of
cancellation by CEVA the Agreement ceases to be in force from the date
of the receipt of the cancellation. In case of cancellation the parties
shall settle any outstanding debts owed towards each other.
11. PENALTY
11.1 The defaulting party shall pay a penalty if any of the following
occurs:
11.1.1 Delay in performance
In case CEVA is in delay, it shall penalty if the
performance does not occur within 10 days from the
receipt of the notice requesting performance and in
case of MOL it shall pay penalty from the following
day of the last day of the payment deadline.
11.1.2 Faulty performance
Faulty performance occurs if CEVA deviates from the
procedure which is permitted by the authorities
during the removal and processing of acid tar and as
a result MOL shall be obliged to pay environmental
fine due to CEVA=s fault. the faulty performance
occurs if the resolution imposing the fine shall
become final following exercising all available
defense;
11.1.3 Cancellation
In case any of the parties cancel the Agreement
under 10.4 or 10.5
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11.2 The basis of the penalty
The penalty is based on the stipulated compensation hereof. The basis
of the calculation of the penalty is the amount established by
multiplying the service fee per tonnes with the quantity of the acid
tar effected by the delay in performance or faulty performance.
11.3 The amount of penalty
In case of delay in performance the amount of the penalty is 1% of the
service fee monthly calculated based on the amount of the quantity of
acid tar not processed during the time period of the delay.
In case of faulty fulfilment the amount of penalty is equal to the fine
imposed against MOL and it shall be due when the resolution becomes
final.
In case of cancellation * % of the entire service fee taking into
consideration the quantity as determined in Section B.
12. FORCE MAJEURE
12.1 Force Majeure
In the case of the non-performance of the obligations originating from
this Agreement, the parties shall only be exempted from liability to
the extent and up to the period until fulfilment is considerably
prevented or made impossible by war, civil revolt, natural catastrophe
or other emergency. The scheduled interruptions or the regular winter
break or the limits set forth in the agreements mentioned in Section D.
shall not fall under this provision.
12.2 Liability for damages caused by explosives
In case any war explosive shall be found on the work area handed over
by MOL any costs and damages in any property and/or in human life
related to it shall be borne by MOL. CEVA shall bear all responsibility
regarding and direct and indirect damages exclusively for the U.S.
citizens employed by it.
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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13. OTHER MISCELLANEOUS
The contracting parties shall have separate negotiations regarding the
plant prior the demolishing at the end of the production of AAF@.
14. GOVERNING LAW
This Agreement will be governed by the laws of Hungary.
15. DISPUTES
Parties agree that they will first try to settle their legal disputes
arising out of this Agreement in a peaceful manner. If a mutually
acceptable agreement cannot be reached within a reasonable period of
time in such manner, the parties will submit themselves to the
exclusive competence of Metropolitan Court of Budapest with respect to
all legal disputes falling on the jurisdiction of county court under
the then prevailing Code for Civil Proceedings, while in all matters
the then prevailing Code for Civil Proceedings refers to the
jurisdiction of the local court, the parties submit themselves to the
exclusive competence of the Pest Central District Court.
16. LANGUAGES
This Agreement and any amendments or other modifications hereof shall
be executed both in English and in Hungarian language and in case of
any dispute the Hungarian version shall prevail.
17. entire agreement
This Agreement, its attachments and the agreements with the sites
contain the entire agreement.
This Agreement is valid only together with its attachments.
18. CONFIDENTIALITY AND GOODWILL CLAUSE
The terms and conditions of this Agreement are confidential and neither
party may publish any details of this Agreement to the press, to the
radio or to television without the prior written approval of the other
party.
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The parties shall not disclose any information regarding the technology
or the nature of the materials to a third party regarding this
Agreement.
CEVA shall keep the information indicated in Section 4.3.1.
confidential and shall use such information only with the consent of
MOL on other work sites during a technological operation.
This Agreement was executed by the parties after reading and understanding all
of its provision, as in harmony with their will.
Budapest, September 1, 1997
MOL
By:
----------------------------
Name:
Title:
CEVA
By: /s/ Herbert G. Case, Jr.
----------------------------
Name: Herbert G. Case, Jr.
Title: President and Chief
Executive Officer
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EXHIBIT 10.5
WASTE FUEL AGREEMENT
This Agreement dated the 1st day of August, 1998 is entered into
between S. C. CIMUS S.A. ("CIMUS"), a company established under the laws of
Romania, and CEVA INTERNATIONAL, INC. and/or its subsidiary that may be
formed under the laws of the Country of Romania at any time during the term
of this Agreement (collectively, "CEVA"), a company established under the
laws of the State of New Jersey, U.S.A.
The purpose of the contractual relationship set out in this Agreement
is to (1) acknowledge the completion of the design, construction and
installation by CEVA of a full processing plant at CIMUS' cement plant at
Campulung Muscel, Romania; (2) establish a CIMUS payment schedule, providing
certain monthly payments to CEVA for its design, construction and installation
of the fuel processing plant (3) provide for the mutual cooperation between
CIMUS and CEVA to identify sources of supply for the materials that shall be
used to formulate the "CPD" (defined below); (4) provide for the commitment by
CIMUS to utilize and pay CEVA for a minimum amount of tonnage of the "CPD"
processed by CEVA; (5) provide certain assurances and protections to CEVA in the
form of damages in the event this Agreement or the use of CEVA's "CPD" is
suspended or terminated, and; (6) establish fair and equitable terms that shall
govern the relationship between CIMUS and CEVA.
In consideration of the premises and the respective agreements
hereinafter set forth, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement, the following defined
terms have the respective meanings described below:
"CEVA CPD Base Price" defined in Section 5.2 and subject to adjustment
under the conditions described in Section 5.2.
"CEVA CPD Facility Charge" means the monthly payment due from CIMUS to
CEVA throughout the term of this Agreement in the amount of *$ U.S. per
month identified in Section 5.2, representing payment for the design and
installation of CEVA processing equipment comprising the CPD Facility at the
Plant and for the operation and maintenance of the CEVA CPD Facility;
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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"CEVA CPD Technology Charge" means the monthly payment due from CIMUS to CEVA
throughout the term of this Agreement in the amount of * U.S. per month
identified in Section 5.2, representing payment for the application and use of
the CEVA Technology in connection with the CEVA CPD Facility;
"CEVA Equipment" shall mean all of CEVA's processing equipment, whether
now or at any time during the term of this Agreement, located on the portions of
the Plant and subject to the "CPD Facility Lease" (defined in Section 2.4) and
dedicated to the receipt, processing and delivery of the CPD to the kilns at the
Plant;
"CEVA Services" as defined in Section 3;
"CEVA Technology" is defined in Section 7;
"CIMUS Base Fuel Price" means the average monthly cost paid by CIMUS
for one metric ton of fuel oil, including transportation, as well as all
applicable sales and use taxes;
"Confidential Information" is defined in Section 7.1;
"Minimum CPD Quantity" shall mean 1,500 metric tons of "CPD" on a
monthly basis, that CIMUS shall accept delivery of and pay for, during the term
of this Agreement;
"Plant" shall mean CIMUS's cement plant at Campulung, Muscel, Romania;
"CPD" shall mean a product, obtained by processing various wastes and
other materials, including but not limited to refinery derived waste, capable of
being burned as fuel at CIMUS and meeting the specifications described in
Section 2.2;
"CPD Facility" or "Facility" shall mean that portion of the Plant,
constituting approximately 2000 square meters referenced in the "CPD Facility
Lease", upon which CEVA's equipment is located and which is dedicated to the
receipt, processing and delivery of the CPD to the kilns; and
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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"CPD Facility Lease" is defined in Section 2.4.
"Test Period" is the period of time starting at the execution of the
contract and lasting through the end of the calendar year 1999 at the latest.
2. CPD SUPPLY AND UTILIZATION
2.1 Quantity. For each month during the term of this Agreement, CIMUS is
obligated to purchase the entire quantity of CPD made available by CEVA up to
the Minimum CPD Quantity of * metric tons; CIMUS shall use its best efforts to
use all quantities of CPD in excess of the Minimum CPD Quantity as supplied by
CEVA at its CPD Facility; all CPD shall meet the specifications set forth in
Attachment 1. CEVA and CIMUS acknowledge that CIMUS's obligation to pay for the
Minimum CPD Quantity shall be suspended during those periods of maintenance
shutdown of the Plant that occur annually as is customary in the cement industry
which periods and such suspension shall not exceed an aggregate of 12 weeks per
year throughout the term of this Agreement.
2.2 Supply, Use and Specifications of CPD. The supply and use of CPD shall be in
compliance with all applicable national and local laws, rules, regulations and
decrees, including without limitation, the permits referred to in Section 9.4.
The specifications for all CPD supplied under this Agreement will be
established, promptly after the date of this Agreement, by mutual agreement of
the parties, and will be reflected in Attachment 1 and made a part of this
Agreement; provided that the parties understand and agree that all CPD shall
meet the quality and other specifications set forth in applicable permits, and
except as agreed to by the parties, CIMUS shall have no obligation to accept or
store any CPD not meeting such specifications. CIMUS reserves the right to
sample and test at any time at its own expense any CPD supplied hereunder to
determine conformity with the specifications, including but not limited to
determination of the energy content of such CPD.
2.3 Sources of CPD Materials. During the term of this Agreement, CIMUS and CEVA
shall utilize their respective best efforts to identify potential sources of the
materials that shall constitute the CPD, including, without limitation, waste
fuel sources and
*Confidential portion omitted pursuant to a request for Confidential
Treatment and filed separately with the Commission.
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supply as well as compounds and materials required as additives to formulate
the CPD. In addition, CIMUS and CEVA shall further utilize their respective
best efforts to make arrangements for the regular and consistent availability
of supply to the CPD Facility of these components thatshall constitute the CPD.
2.4 CPD Facility Lease. In consideration of Ten ($10.00) Dollars U.S. and other
good and valuable consideration paid by CEVA, the receipt and legal adequacy of
which is hereby acknowledged by CIMUS, CIMUS hereby leases to CEVA approximately
2000 square meters situate on the property of the Plant in the vicinity of the
cement kilns, designated and set forth on Attachment 2 to this Agreement, for
the term of this Agreement. CEVA shall pay an annual rental for the designated
square meters in the amount of * Dollars U.S. As a material part of these lease
provisions, CIMUS hereby agrees that CEVA, its agents, contractors,
subcontractors and the like shall have ingress and egress over, through and on
the property of the Plant at all times during the term of this Agreement (24
hours/7 days a week), providing general access to the Leased Premises as well as
access to CEVA's laboratory and access to the railroad transportation facilities
located at the Plant; in addition, CIMUS shall provide to CEVA throughout the
term of this Agreement all required utilities which shall include water,
electricity and steam; CEVA shall pay to CIMUS its cost for these utilities on a
quarterly basis.
All CEVA Equipment, installed on Leased Premises or in laboratory, or used to
serve the project contemplated herein is and remains CEVA's property. Such
equipment is shown in Attachment no 3.
3. CEVA SERVICES. During the term of this Agreement, CEVA shall provide the
following services (the "CEVA Services") relating to the use of CPD at the
Plant:
3.1 qualifying and certifying waste sources for CPD to be utilized at
the Plant;
3.2 process analysis of the Plant including (i) jointly determining
feed rate of CPD; (ii) jointly
determining * (subject to Section 2.2); and
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
4
<PAGE>
(iii) description of air pollution control systems;
3.3 reasonable assistance to CIMUS in documentation,
recordkeeping and reporting as may be required
by applicable regulations;
3.4 assistance in modeling of the impact of the air emissions
on air quality;
3.5 exclusive supply of CPD to the Plant
3.6 reasonable assistance to CIMUS in preparation and submittal
of necessary permit applications or
revisions;
3.7 provision of personnel to manage the CPD Facility
3.8 technical assistance and training for selected CIMUS
personnel;
3.9 assistance in developing process monitoring;
3.10 contracting with independent laboratory for analysis for CPD;
3.11 public and community relations activities as needed.
4. CIMUS SERVICES. During the term of this Agreement CIMUS
shall provide the following services at the Plant;
4.1 commit to utilize and pay for the Minimum CPD Quantity and use
its best efforts to utilize all quantities of CPD supplied by
CEVA to the Plant in excess of the Minimum CPD Quantity on a
monthly and annual basis during the term of this Agreement,
subject to Section 2.1;
4.2 obtain and maintain all permits, licenses and approvals
required to utilize CPD at the Plant;
4.3 maintenance and repair of the kilns at the Plant so that CPD
may be burned;
5
<PAGE>
4.4 documentation, recordkeeping and reporting as required
by all applicable regulations and permits;
4.5 *
4.6 *
4.7 provide personnel to jointly operate the CPD Facility.
5. COMPENSATION
5.1 General. The parties intend that CIMUS shall make payments under this
Agreement for CEVA services for both (1) CEVA's expenditures in designing,
constructing and installing the CPD Facility at the Plant, including payments
for the equipment, technology and "know-how" provided by CEVA to CIMUS, and for
(2) the CPD per ton processing fee at the CPD Facility at the Plant and provided
to CIMUS, pursuant to Section 2.1.
5.2 Provision of Statements. CIMUS shall provide CEVA documents evidencing
its determination and calculation of the CIMUS Base Fuel Price for each previous
month during the term of this Agreement as soon as practicable following the
first day of each month. Also, at the same moment and for the same period of
time, CUMUS shall provide CEVA statement of utilities, oil and services
delivered to CEVA. For the Test Period, utilities, oil and services provided,
will not be invoiced to CEVA and shall constitute CIMUS contribution to the
test. Thereafter, on or before the 5th business day following the end of each
month throughout the term of this Agreement, the following statements shall be
provided by CEVA to CIMUS:
(a) CEVA shall provide to CIMUS a statement, invoicing the total amount of CPD
provided to CIMUS at the Plant for burning during the immediately preceding
month, calculated as follows:
*
'*Confidential portion omitted pursuant to a request for Confidential
Treatment and filed separately with the Commission.
6
<PAGE>
*
For the Test Period, CEVA will not invoice the amount calculated for CPD
produced, and shall constitute CEVA's contribution to the test.
(b) CEVA shall provide to CIMUS a statement, invoicing (1) a charge of * ,
representing the monthly payment for the CEVA CPD Facility Charge and (2) a
charge of * , representing the monthly payment for the CEVA CPD Technology
Charge.
The CEVA CPD Facility Charge and CEVA CPD Technology Charge will be due and
payable by CIMUS to CEVA for each month that the Minimum Quantity has been
produced, plus an additional one month per year CPD Facility Charge and CPD
Technology Charge regardless of the quantity of CPD produced.
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
7
<PAGE>
For the Test Period, The CEVA CPD Facility Charge and CEVA CPD Technology Charge
will be due and payable by CIMUS to CEVA for each month when processing
activities have taken place regardless the produced quantity of CPD.
5.3 CIMUS Payment Procedures. Upon delivery of the statements identified in
Section 5.2(a) and (b) above, CIMUS shall pay to CEVA the amounts set forth in
such invoices as soon as possible (and in any event by no later than the fifth
business day after such statements and invoices have been delivered), subject,
however, to CIMUS's right to request an adjustment on the statement delivered
pursuant to Section 5.2(a) above in the event that either the calculation of the
amount of the CPD utilized during the immediately preceding month is not
accurate according to the records of CIMUS or that a certain quantity and amount
of the CPD provided to CIMUS during the immediately preceding month did not meet
the CPD specifications. In the event that CIMUS desires to exercise its right to
request such an adjustment, CIMUS shall provide to CEVA its written request for
such an adjustment in writing, setting forth its calculations and the specific
basis upon which such request is made, to be delivered to CEVA no later than the
fifth business day after the statement identified in Section 5.2(a) is received
by CIMUS. Upon receipt of any such request for adjustment, CEVA and CIMUS shall
utilize their best efforts to resolve all such matters as promptly as possible.
The parties agree that all payments to be made under this Agreement shall be
made in U.S. Dollar Amounts.
5.4 Records; Audit. CIMUS and CEVA shall each make and maintain accurate and
complete books and records for the computations contemplated herein during the
term of this Agreement for at least three years after the close of the calendar
year during which payment in respect of same has been made. All such relevant
books and records shall be open to examination at all times, during normal
business hours and upon reasonable notice, by the Accepted Accounting Firm. The
cost of any such examination shall be for the account of the party requesting
such examination, unless an examination reveals a material difference for the
period in question, in which case the cost of such examination shall be for the
account of the party whose books and records or whose calculations resulted in
such material difference.
8
<PAGE>
6. INTELLECTUAL PROPERTY. All data, specifications, drawings, manuals, diagrams,
written materials, know-how and other technology (collectively, "CEVA
Technology") made available directly or indirectly, in writing or otherwise, to
CIMUS pursuant to this Agreement are and shall remain the exclusive property of
CEVA. All inventions, developments, discoveries and improvements, patentable and
unpatentable, and all CEVA Technology made, developed or invented by the parties
and their respective employees, shall be the exclusive property of CEVA. CIMUS
expressly undertakes that it shall procure such assignments or other instruments
from its employees as shall be necessary in order to effect the foregoing. All
proprietary rights (e.g. patent rights, patent applications, trademarks, trade
names, etc.) covering any CEVA Technology shall be owned by CEVA.
7. CONFIDENTIALITY
7.1 Nondisclosure Obligations. During the term of this Agreement, it is
contemplated that each party may disclose to the other proprietary and
confidential information, inventions, technical information, materials and
similar items which are owned or controlled by the party providing such
information or which that party is obligated to maintain in confidence and which
is designated by the party providing such information as confidential
("Confidential Information").
In addition, technology, inventions, technical information, materials and
similar items which are orally, electronically or visually disclosed by a party,
or are disclosed in writing without an appropriate letter, stamp or legend,
shall constitute Confidential Information if (i) it would be apparent to a
reasonable person, familiar with the business of the disclosing party and the
industry in which the disclosing party operates, that such information is of a
confidential or proprietary nature, the maintenance of which is important to the
disclosing party or (ii) the disclosing party, within 30 days after such
disclosure, delivers to the recipient a written document or documents describing
the items disclosed and referencing the place and date of such oral, electronic,
visual or written disclosure.
Subject to the provisions hereof, throughout the term of this Agreement and for
a period of 10 years after the termination hereof, each party agrees to retain
9
<PAGE>
such Confidential Information in confidence and to use such Confidential
Information only for the purposes of this Agreement and not to disclose any such
Confidential Information to a third party without the prior written consent of
the party providing such information.
7.2 Exceptions. The obligations of confidentiality set forth in Section 7.1 will
not apply to Confidential Information which: (a) was known to the receiving
party or generally known to the public prior to its disclosure hereunder; (b)
subsequently becomes known to the public by some means other than a breach of
this Agreement; (c) is subsequently disclosed to the receiving party by a third
party having a lawful right to make such disclosure; or (d) is approved for
release by the disclosing party.
7.3 Terms of this Agreement. Each party agrees not to disclose any terms or
conditions of this Agreement to any third party without the prior written
consent of the other party, except in the case of CEVA only, (a) to any
prospective financing or insurance institution or (b) as required by applicable
law.
8. EXCLUSIVITY-SUSPENSION of USE
8.1 Restrictions on CIMUS. CIMUS agrees for the term of the Agreement that CEVA
will be the exclusive supplier of all CPD to the Plant and CIMUS will not enter
into any other contract or arrangement with respect to the supply or use of CPD
for the Plant.
8.2 Suspension of Use. In the event that the use of CPD is suspended or
terminated at any time during the term of this Agreement for any reason
whatsoever, whether by CIMUS or by any regulatory agency having jurisdiction
over such matters, and such suspension or termination continues for a period of
180 days, or this Agreement is terminated by CEVA for any reason permitted under
Section 12.2 below, or in the event of any violation of the assignment provision
of Section 16.6 by CIMUS, then and in that event, and without the requirement or
necessity of any determination or assessment of liability or fault on its part,
CIMUS shall pay to CEVA damages of one month of CEVA CPD Facility Charge in the
amount of * and one month of CEVA CPD
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
10
<PAGE>
Technology Charge in the amount of * ,
within 30 days of the occurrence of such event. In the event CIMUS resumes the
use of CPD, CEVA shall have the right of first refusal for continuation under
the terms and conditions of the Waste Fuel Agreement at the time of suspension.
8.3 Nature of Exclusive Activities. It is the desire and intent of the parties
that the provisions of Section 8.1 and 8.2 shall be enforced to the fullest
extent permissible under the law and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
portions of either Section 8.1 or 8.2 shall be adjudicated to be invalid or
unenforceable, such Section shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such deletion to apply
only with respect to the operation of such section in the particular
jurisdiction in which such adjudication is made.
9. OTHER AGREEMENTS OF THE PARTIES
9.1 Project Committee. CIMUS and CEVA will establish a four member project
committee (two members from CIMUS and two members from CEVA) to oversee the
development and operation of the CPD Facility at the Plant. The initial members
of this committee shall be: (a) for CEVA: Herbert G. Case, Jr. and Mihai
Maracineanu; and (b) for CIMUS: eng. Valeriu Rotaru and eng. Emil Raicov.
9.2 Corrective Action. The cost of corrective action to remediate any
environmental impairment to the Plant that has resulted as the result of CPD
activities under this Agreement shall be borne by the parties in proportion to
their respective degrees of fault in causing such impairment. CEVA shall bear no
responsibility to or liability to correct environmental conditions that existed
at the Plant prior to the date of this Agreement; and CIMUS shall indemnify and
hold CEVA harmless from and against all claims, demands, liabilities, damages
and expenses (including reasonable attorneys' fees) arising out of any and all
environmental conditions at the Plant which pre-existed the date of this
Agreement. Environmental audits may be conducted at the inception of this
Agreement and its termination or upon the discontinuance of CPD use to determine
the extent of any environmental impairment for purposes of this section.
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
11
<PAGE>
9.3 Spills. Cleanup and remediation of releases, spills and leaks of CPD shall
be the responsibility of the party to this Agreement who maintained possession
and control of the CPD at the time of the release, spill or leak.
9.4 Permits. CIMUS shall use its expertise to manage the permitting process
including any additional permits or amendments to existing permits that may be
needed. CIMUS shall be responsible for obtaining all necessary governmental
approvals, licenses, and permits required to perform its obligation under this
Agreement.
9.5 Safe Work Place. Each of CEVA and CIMUS agrees to maintain a safe work
place, in accordance with applicable laws and regulations.
9.6 Independent Contractors. It is expressly agreed that the parties shall be
independent contractors and that the relationship between the parties shall not
in any way constitute a partnership or agency of any kind. No party shall have
the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on another party, without
the prior written authorization of the party to do so.
10. INDEMNIFICATION. Each party shall indemnify and hold the other party
harmless, and hereby releases and discharges the other party from and against,
all claims, demands, liabilities, damages, and expenses (including reasonable
attorney's fees) arising out of (a) the gross negligence, malfeasance or willful
misconduct of the indemnifying party in connection with the work performed in
connection with this Agreement and (b) any material misrepresentation made by or
breach of warranty by the indemnifying party.
11. REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each party represents and
warrants to the other party that: (i) the first party is duly incorporated under
the jurisdiction of its incorporation; (ii) such party has full corporate power
and authority to enter into this Agreement, and to perform its
12
<PAGE>
obligations hereunder; (iii) this Agreement has been duly authorized and
executed by such party and constitutes a valid and legal binding obligation of
such party, enforceable against such party in accordance with its terms; and
(iv) the making of this Agreement and the compliance by such party with its
terms will not result in any violation of such party's foundation documents, or
any provision contained in any agreement to which it is a party or by which it
is bound, or in any law, rule, regulation, judgment, order or decree applicable
to it.
12. TERM AND TERMINATION
12.1 Term. The initial term of the Agreement will be 20 years from the date set
out in the introductory paragraph (i.e., until July 31, 2018). This Agreement
shall be automatically renewed for a period of five years unless either party
shall provide the other with notice at least 120 days prior to the expiration of
the initial term that the Agreement will not be renewed.
12.2 Early Termination. Either party may terminate this Agreement
immediately upon the occurrence of any of the following:
(a) failure by the other party (the "defaulting party") to remedy
any material breach of this Agreement (i) within 180 days
after receiving written notice of such breach from the first
party or (ii) if such breach cannot reasonably be cured within
said 180-day period and the defaulting party shall have
commenced to cure such breach within said period and shall
thereafter proceed with reasonable diligence and good faith to
cure such breach, within such longer period as shall be
necessary for such party to cure the same with reasonable
diligence;
(b) upon or after the bankruptcy, insolvency, dissolution or
winding up of the other party (other than a dissolution or
winding up for the purposes of reconstruction or amalgamation,
or in the case of CIMUS, in the event the Plant is closed or
the legal existence of the entity having title to the Plant is
terminated for capital or market related purposes,
13
<PAGE>
including but not limited to the capitalization, merger,
consolidation or other form of restructuring by its owners).
12.3 Effect of Termination. Expiration or termination of this Agreement shall
not relieve the parties of any obligation accruing prior to such expiration or
termination. The parties' rights and obligations under Sections 6, 7, 8, 9, 9.2,
9.3, 10 and 14 shall survive any termination hereof. Upon the expiration of this
Agreement or the termination hereof by CEVA on account of any of the reasons set
forth in Sections 8.2 or 12.2 the damages payable by CIMUS under Section 8.2
shall apply.
13. FORCE MAJEURE. Neither party shall be held liable or responsible to any
other party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from any of the following specific
causes: embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, or civil commotions; strikes, lockouts, or other labor
disturbances or acts of God. Whenever a party's performance is affected by an
event or condition specified in this Section 13, such party shall promptly
notify the other party of such event or condition and the affected party shall
use its best efforts to promptly remove or remedy such event or condition. It is
understood that this Section 13 is intended only to suspend and not discharge a
party's obligations under this Agreement and than when the causes of the failure
or delay are removed or alleviated, the affected party shall resume performance
of its obligations hereunder; provided, however, that in the event any event of
force majeure shall continue for a period of twelve consecutive months, either
party may terminate this Agreement upon notice to the other party and the
damages identified in Section 8.2 shall be due and payable by CIMUS to CEVA in
accordance with the terms of such provision.
14. GOVERNING LAW AND DISPUTE RESOLUTION
14.1 Governing Law. This Agreement shall be governed by the
laws of the State of New Jersey, U.S.A., without giving effect to its
conflicts of law principles.
14
<PAGE>
14.2 Dispute Resolution. The parties will use their best efforts to settle
amicably any dispute, disagreement or other question arising out of or in
connection with this Agreement or the interpretation hereof. Any dispute,
disagreement or other question which cannot be settled amicably within 30 days
after receipt by one party or the other party's request to do so may be
submitted by either party to arbitration.
Each dispute submitted to arbitration shall be heard to a single arbitrator if
the parties can agree upon one within 30 days after one party notifies the other
that it wishes to avail itself of this Section 14.2; otherwise, the dispute,
disagreement or other question shall be referred to an arbitration panel
composed of three arbitrators. Each party shall appoint one arbitrator within 15
days after the expiration of the above 30-day period, and these two will, within
15 days after the later of their appointment, appoint the third arbitrator who
shall chair the arbitration panel. In the event that the two arbitrators
appointed by the parties cannot reach agreement on the appointment of the third
arbitrator within said 15-day period, the President of the International
Arbitral Center of the Austrian Federal Economic Chamber, Vienna shall be asked
to appoint an appropriate person to act as the third arbitrator. The decision of
this body shall be final and binding on the parties.
Arbitration proceedings shall be conducted in Vienna, in accordance with the
rules of procedure for arbitration of the United Nations Commission on
International Trade Law (UNCITRAL) as in force at the date of the commencement
of the arbitration. Arbitration shall be conducted in the English language. The
arbitrator(s) shall conduct the arbitration so as to render an award within 60
days of the date on which the sole arbitrator or the third arbitrator, as the
case may be, was appointed. Judgment upon any aware rendered by the
arbitrator(s) may be enforced in any court of competent jurisdiction, and any
award so rendered shall be final and binding. The costs and expenses of the sole
or the third arbitrator shall be shared equally by the parties, and each party
shall pay the costs and expenses of any arbitrator, which it appoints.
15
<PAGE>
15. NOTICES. Any notice or report required or permitted to be given or made
under this Agreement by one of the parties shall be in writing, (a) delivered
personally or (b) sent by facsimile (and promptly confirmed by personal
delivery, by registered mail, postage prepaid and return receipt requested, or
by courier) or (c) sent by courier, postage prepaid, addressed to such other
party at its address indicated below (or to such other address as the addressee
shall have last furnished in writing to the addresser):
(a) if to CIMUS:
S.C. CIMUS S.A.
0425 Campulung Arges
Str. Brasovalui, 1
ROMANIA
Attention: Eng. Valeriu Rotaru
General Manager
Fax: [40-48-822704]
(b) if to CEVA:
CEVA International, Inc.
380 Foothill Rd.
Bridgewater, New Jersey
U.S.A.
Attention: Herbert G. Case, Jr.
Director
Fax: [908-429-0040]
Any notice given in accordance with this Section 16 shall be deemed delivered
upon the earliest of (a) receipt at the respective address set forth above; (b)
the 5th business day when sent by courier, postage prepaid and properly
addressed, with return receipt requested; or (c) when sent to the proper
facsimile number, if sent by facsimile, as confirmed by registered mail as
provided above.
16
<PAGE>
16. GENERAL
16.1 Further Assurances. The parties undertake generally to execute all such
agreements and other instruments and to do all such other acts as are necessary
or appropriate to give full effect to the terms and conditions of this
Agreement, and to make them binding upon the parties. In addition, the parties
acknowledge that further agreements will be required in connection with the
implementation of the project contemplated by this Agreement, and undertake to
negotiate in good faith the provisions of such additional agreements.
16.2 Languages. This Agreement is prepared in English and in Romanian, with the
English version being the controlling version; in the event of any discrepancy
between the English language version and the Romanian language version, the
English version shall prevail.
16.3 Waiver. None of the terms of this Agreement shall be deemed to have been
waived by either party, unless such waiver is in writing and signed by that
party. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other provisions
of this Agreement.
16.4 Entire Agreement. This Agreement (including the Attachments) contains the
entire agreement and supersedes all prior agreements and understandings and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof.
16.5 Amendments and Modifications. This Agreement may not be modified, amended
or changed in any respect except in writing duly signed by the parties.
16.6 Benefit/Assignment. This Agreement, as well as all of the rights, duties,
obligations and benefits herein shall inure to the benefit of CIMUS and CEVA,
their respective successors and permitted assigns. Neither party shall assign
this Agreement, in whole or in part, without the prior written consent of the
other party, except, however, CEVA shall have the right to assign all of its
right, title and interest in this Agreement to a subsidiary
17
<PAGE>
that may be formed under the laws of the Country of Romania at any time
throughout the term of this Agreement. For all purposes under this Agreement,
any proposed transfer of more than fifty (50%) percent of the equity ownership
interests of a party shall be deemed an assignment requiring the prior written
consent of the other party.
16.7 Severability. Should any provision of this Agreement be rendered invalid or
no longer applicable, the remaining provisions of this Agreement shall remain in
full force and effect. In such an event that any provisions of this Agreement
have been rendered invalid or inapplicable it shall be deemed amended in such a
manner that facilitates the achievement of the parties' intentions and the
economic and legal objectives that the parties desired to accomplish by the
invalid or inapplicable provision.
16.8 Controlling Document. This Agreement supercedes any other preceding
contracts, agreements or understandings, whether written or oral between the
parties and is to be considered the Controlling Document for the services
described herein.
16.9 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
S.C. CIMUS S.A.
By: /s/ Eng. Valeriu Rotaru
----------------------------
Name: Eng. Valeriu Rotaru
Title: General Manager
18
<PAGE>
By: /s/ Eng. Emil Raicov
---------------------------
Name: Eng. Emil Raicov
Title: Technical Manager
CEVA INTERNATIONAL, INC.
By:/s/ Herbert G. Case, Jr.
---------------------------
Name: Herbert G. Case, Jr.
Title: President
Exhibits:
Attachment 1: CPD Specifications
Attachment 2: Designated 2000 Square Meters Leased to CEVA as per Section 2.4
19
<PAGE>
Attachment 1
CPD Specifications
<TABLE>
<CAPTION>
======================================== ---------------------------------------------------- ==============================
ANALYTICAL METHOD WDF
ANALYTE UNITED STATES | ROMANIA BURNING
| SPECIFICATIONS
======================================== ---------------------------------------------------- ==============================
<S> <C> <C>
* * | *
|
======================================== ---------------------------------------------------- ==============================
* * | *
======================================== ---------------------------------------------------- ==============================
* * | *
======================================== ---------------------------------------------------- ==============================
* * | *
============================================================================================================================
*
======================================== ---------------------------------------------------- ==============================
* | *
======================================== ---------------------------------------------------- ==============================
* * | *
======================================== ---------------------------------------------------- ==============================
* * | *
======================================== ==================================================== ==============================
* * | *
======================================== ==================================================== ==============================
</TABLE>
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
20
<PAGE>
Attachment 2
Designated 2000 Square Meters Leased to CEVA as per Section 2.4
21
<PAGE>
Attachment 3
CEVA EQUIPMENT LIST AT CIMUS CEMENT PLANT IN ROMANIA
Processing equipment
*
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
22
<PAGE>
EXHIBIT 10.6
JOINT VENTURE AGREEMENT
by and among
Breitenburger Auslandbeteiligungs GmbH
Ost-West-Stra(beta)e 69
D-20422 Hamburg
Germany
and
CEVA International Inc.
75-77 North Bridge Street
Somerville 08876 New Jersey
USA
dated as of 19/24 May 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
1. DEFINITIONS AND REFERENCES....................................................................................2
1.1. DEFINITIONS................................................................................................2
1.2. REFERENCES.................................................................................................4
2. FORMATION OF THE companies....................................................................................4
2.1. OBJECTIVE..................................................................................................4
2.2. BUSINESS PURPOSE...........................................................................................4
2.3. INCORPORATION..............................................................................................5
2.4. AUTHORIZED CAPITAL.........................................................................................5
2.5. SUBSCRIPTION OF CAPITAL -- BAB.............................................................................6
2.6. SUBSCRIPTION OF CAPITAL -- CEVA............................................................................6
2.7. SUBSCRIPTION OF CAPITAL -- DUTCH COMPANY...................................................................6
2.8. FUTURE SUBSCRIPTIONS OF VENTURE'S CAPITAL..................................................................6
2.9. DURATION OF THE VENTURE....................................................................................7
2.10. TRANSFER OF SHARES.......................................................................................7
2.11. COMPANIES' RELATIONS WITH PARTIES........................................................................7
3. MANAGEMENT OF THE DUTCH COMPANY...............................................................................8
3.1. BOARD OF DIRECTORS.........................................................................................8
3.2. COOPERATION................................................................................................9
4. MANAGEMENT OF THE VENTURE....................................................................................10
4.1. GENERAL MANAGER...........................................................................................10
4.2. ANNUAL DEVELOPMENT PLAN...................................................................................11
4.3. CONSULTING COMMITTEE......................................................................................11
5. SHAREHOLDERS MEETING of the Dutch Company....................................................................12
5.1. ANNUAL MEETING............................................................................................12
5.2. VOTING AND ACTIONS BY THE SHAREHOLDERS....................................................................12
6. DIVIDENDS AND FINANCE........................................................................................13
6.1. DIVIDENDS.................................................................................................13
6.2. SUBORDINATED AND UNSECURED LOAN...........................................................................13
6.3. FUNDING OF THE VENTURE....................................................................................13
6.4. ADDITIONAL WORKING CAPITAL................................................................................14
6.5. FAILURE TO MAKE CAPITAL SUBSCRIPTIONS.....................................................................14
</TABLE>
I
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
7. ACCOUNTING...................................................................................................14
7.1. MAINTENANCE OF RECORDS....................................................................................14
7.2. EXAMINATION...............................................................................................14
7.3. INDEPENDENT AUDIT.........................................................................................15
7.4. REGULAR REPORTS...........................................................................................15
7.5. ANNUAL REPORTS AND FINANCIAL STATEMENTS...................................................................15
8. SIGNING FEE..................................................................................................15
9. REPRESENTATIONS AND WARRANTIES...............................................................................16
9.1. BAB.......................................................................................................16
9.2. CEVA......................................................................................................16
10. FORCE MAJEURE................................................................................................16
11. CONFIDENTIAL INFORMATION.....................................................................................17
11.1. CONFIDENTIALITY.........................................................................................17
11.2. CONFIDENTIAL INFORMATION................................................................................17
11.3. SURVIVAL................................................................................................17
12. GOVERNING LAW AND ARBITRATION................................................................................18
12.1. GOVERNING LAW...........................................................................................18
12.2. CONSULTATIONS AND DISPUTES..............................................................................18
12.3. ARBITRATION.............................................................................................18
13. DURATION AND TERMINATION.....................................................................................19
13.1. DURATION................................................................................................19
13.2. TERMINATION.............................................................................................19
13.3. NOTICE OF TERMINATION...................................................................................19
13.4. EFFECT OF TERMINATION...................................................................................20
14. MISCELLANEOUS................................................................................................21
14.1. AMENDMENTS OR SUPPLEMENTS...............................................................................21
14.2. NO WAIVER...............................................................................................21
14.3. SEVERABILITY............................................................................................21
14.4. CUSTOMS, DUTIES, OR TAXES...............................................................................21
14.5. ANNOUNCEMENTS...........................................................................................21
14.6. NO PARTNERSHIP OR AGENCY................................................................................22
14.7. CONFLICT WITH ARTICLES OF ASSOCIATION...................................................................22
14.8. NO ASSIGNMENT...........................................................................................22
</TABLE>
II
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<TABLE>
<CAPTION>
<S> <C>
14.9. FURTHER ASSURANCES......................................................................................22
14.10. RATE OF EXCHANGE........................................................................................22
14.11. NOTICES.................................................................................................23
14.12. COSTS...................................................................................................23
LIST OF SCHEDULES..................................................................................................24
</TABLE>
III
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JOINT VENTURE AGREEMENT
This Joint Venture Agreement dated as of 19/24 May 2000 by and among
(i) Breitenburger Auslandbeteiligungs GmbH, a corporation with its principal
place of business in Hamburg and the business address at
Ost-West-Stra(beta)e 69, 20422 Hamburg, Germany, registered in the
commercial register of Amtsgericht Hamburg under the registration number
HRB 15985, here represented by Mr. Kurt Habersatter pursuant to a power
of attorney ("BAB") on the one hand, and
(ii) CEVA International Inc., a corporation with its corporate seat in Nevada,
USA, and the business address at 75-77 North Bridge Street, Somerville
08876 New Jersey, USA, registered in the commercial register of Nevada
under the registration number 841423807, here represented by Mr. Herbert
G. Case pursuant to a resolution of the board of directors of CEVA
International Inc. as of 24 April 2000 ("CEVA") on the other hand.
RECITALS:
WHEREAS,
(i) BAB is (directly or indirectly) engaged in the operation of several
cement production facilities in Romania;
(ii) CEVA is experienced in the field of management and disposal of industrial
residuals and has developed know-how to recycle such industrial residuals
into alternative fuels and raw materials;
(iii) BAB and CEVA desire to enter into a joint venture for the purpose of
providing alternative fuels and raw materials for the cement plants of
BAB and BAB's Affiliates in Romania; and
(iv) BAB and CEVA desire to organize a jointly owned Dutch company which shall
be the sole shareholder of a corporation in Romania having the purpose
described above. BAB and CEVA will make contributions (in cash and in
kind) to the Dutch company which in turn shall make such contributions to
its Romanian subsidiary;
NOW, THEREFORE, for and in consideration of the premises and the covenants
hereinafter recited and to be faithfully performed, it is mutually agreed and
understood as follows:
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1. DEFINITIONS AND REFERENCES
1.1. DEFINITIONS
1.1.1. "Affiliate" means in respect of any person, any company or
entity controlling, controlled by or under joint control of
such person whereas "control" means the ownership, whether
direct or indirect, of more than fifty percent of the voting
rights of a person.
1.1.2. "AFR" means alternative fuels and raw materials to be used
in the manufacture of cement.
1.1.3. "Agreement" means this Joint Venture Agreement between BAB
and CEVA and the Schedules hereto, in the form in which
executed by the Parties, as from time to time amended or
supplemented by action of the Parties.
1.1.4. "Assigned Contracts" has the meaning assigned to such term
in Article 2.6(ii),
1.1.5. "BAB" means Breitenburger Auslandbeteiligung GmbH, as such
company is further defined in Clause (i) above.
1.1.6. "Board of Directors" means the board of directors of the
Dutch Company.
1.1.7. "Business" means the activities of the Venture as defined by
Article 2.2.
1.1.8. "Buying Party" has the meaning assigned to such term in
Article 13.4.4.
1.1.9. "CEVA" means CEVA International, Inc., as such company is
further defined in. Clause (ii) above.
1.1.10. "Chairman" has the meaning assigned to such term in
Article 3.1.2.
1.1.11. "Cimus" means Cimus S.A., a Romanian corporation,
registered under no. J3/97/1991 with the Register of
Commerce of Arges County, with its registered
headquarters at Str. Calea Brasovului 1,
Campulung Muscel, Agres County, Romania;
1.1.12. "Companies" means the Dutch Company and the Venture
collectively.
1.1.13. "Confidential Information" has the meaning assigned to such
term in Article 11.2.
1.1.14. "Consultant" has the meaning assigned to such term in
Article 4.3.1.
1.1.15. "Consulting Committee" has the meaning assigned to such term
in Article 4.3.1
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1.1.16. "Director(s)" means any member(s) of the Board of Directors.
1.1.17. "Dutch Company" has the meaning assigned to such term in Article 2.1.
1.1.18. "Dutch Company's Articles of Association" means the articles
of incorporation of the Dutch Company as set forth in
Schedule 2.3.1, as from time to time amended or supplemented
by action of the Parties.
1.1.19. "General Manager" means the person closer described in Article 4.1.
1.1.20. "Government Approval" means the approval, consent, license,
authorization, or validation, if any, required by the
Government of Romania or any instrumentality of any
government, to validate or effectuate the Agreement or to
permit interest, dividends, return of capital and other
payments to BAB and/or to CEVA to be made in foreign
currency on terms at least as favorable as those normally
granted for agreements validated in accordance with Romanian
law as of the date of execution of this Agreement.
1.1.21. "Offer" has the meaning assigned to such term in Article 13.4.2.
1.1.22. "Parties" means BAB or CEVA acting collectively as the context
requires.
1.1.23. "Party" means BAB or CEVA acting individually as the context requires.
1.1.24. "Processing" means treatment, analytical control and
conversion of industrial residuals into AFR and raw
materials for utilization in the manufacture of cement.
1.1.25. "Proprietary Information" has the meaning assigned to such term in
Article 11.1.
1.1.26. "Selling Party" has the meaning assigned to such term in
Article 13.4.4.
1.1.27. "Shareholder(s)" means any shareholder(s) of the Dutch Company.
1.1.28. "Shares" means the shares in the Dutch Company.
1.1.29. "Term" has the meaning assigned to such term in Article 13.1.
1.1.30. "Termination Day" means the day on which the last Party has received
the Termination Notice.
1.1.31. "Termination Notice" has the meaning assigned to such term in
Article 13.3.
1.1.32. "Venture" has the meaning assigned to such term in Article 2.1.
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1.1.33. "Venture's Articles of Association" means the constitutive
act of the Venture as set forth in Schedule 2.3.2, as from
time to time amended or supplemented by action of the
Parties.
1.2. REFERENCES
References to "Articles" and "Schedules" are to articles in and schedules
to this Agreement unless the context requires otherwise and the Schedules
shall be deemed to form a part of this Agreement.
2. FORMATION OF THE companies
2.1. OBJECTIVE
BAB and CEVA enter into this Agreement in order to establish a Dutch
company ("Dutch Company") which in turn shall be the sole shareholder of
a company ("Venture") to be organized and located in Bucharest, Romania.
The Parties, directly or through the Dutch Company, will provide for the
promotion, capitalization, and operation of the Venture. The Business
shall be conducted on a proper commercial basis in order to generate
profits and bona fide for the Venture. The Parties agree that the
Business shall be pursued in accordance with the basic strategies set
forth in Schedule 2.1.
2.2. BUSINESS PURPOSE
2.2.1. BUSINESS PURPOSE OF THE DUTCH COMPANY. The Dutch Company shall pursue
the following business purposes:
2.2.1.1. administration of its 100% participation in the Venture; and
2.2.1.2. serving as a vehicle for the fulfillment of the Parties'
obligations (vis-a-vis each other and the Venture) under
this Agreement.
2.2.2. BUSINESS PURPOSE OF THE VENTURE.The Venture shall pursue the following
business purposes:
2.2.2.1. sourcing, treatment and processing of hydrocarbon-based and
other industrial residuals into alternative fuels and raw
materials for utilization in the manufacture of cement in
the cement industry;
2.2.2.2. the supply of the Romanian cement production plants of BAB and BAB's
Affiliates with AFR;
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2.2.2.3. organize and effect the logistics and transportation of
materials (including industrial residuals, alternative
fuels, raw materials and other process ingredients) between
locations involved in the Business (sites of sources of
residuals, any place of Processing, and any place of final
use); and
2.2.2.4. such other activities as may be deemed appropriate by the
Parties to be mutually beneficial in implementing and
achieving the business purposes set forth above.
2.2.3. NEW BUSINESSES. In case the Parties discover new
opportunities for the development, treatment and sourcing of
industrial residuals for AFR which are not already covered
by the business purpose of the Venture they shall inform
each other and decide whether or not to extend the scope of
Business and to amend the Venture's Articles of Association
accordingly. If the Board of Directors decides not to amend
the Venture's Articles of Association accordingly, each
Party shall be free to develop such new opportunities on its
own (outside the Companies).
2.3. INCORPORATION
2.3.1. INCORPORATION OF THE DUTCH COMPANY. The Parties agree to form the
Dutch Company as a limited liability company ("B.V.") under the laws
of the Netherlands, which shall have Articles of Association
identical to the document entitled "Articles of Association of the
Dutch Company" attached hereto as Schedule 2.3.1. The Parties
are aware of the fact that due to certain time restraints it has
not been checked yet if the draft Dutch Company's Articles of
Association are in compliance with mandatory provisions of Dutch
corporate law and therefore may have to be changed to reflect the
provisions of this Agreement in another way as proposed now. Upon
signing of this Agreement the Parties shall take all corporate
actions necessary for the incorporation of the Dutch Company.
2.3.2. INCORPORATION OF THE VENTURE. The Parties agree to form the
Venture as a limited liability company ("S.R.L.") under the
laws of Romania, which shall have Articles of Association
identical to the document entitled "Articles of Association
of the Venture" attached hereto as Schedule 2.3.2. As soon
as the incorporation process of the Dutch Company is
finished, the Parties shall cause the Dutch Company to take
all corporate actions necessary for the incorporation of the
Venture.
2.4. AUTHORIZED CAPITAL
2.4.1. AUTHORIZED CAPITAL OF THE DUTCH COMPANY. The initial authorized
capital of the Dutch Company shall be the equivalent of * .
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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2.4.2. AUTHORIZED CAPITAL OF THE VENTURE. The initial authorized capital of
the Venture shall be the equivalent of * .
2.5. SUBSCRIPTION OF CAPITAL -- BAB
BAB shall subscribe to and own fifty-one percent (51%) of the ordinary
voting shares of the Dutch Company by contributing capital in cash in an
amount equal to * .
2.6. SUBSCRIPTION OF CAPITAL -- CEVA
CEVA shall subscribe to and own forty-nine percent (49%) of the ordinary
voting shares of the Dutch Company by contributing
(i) the proprietary production facility located at the premises of
Cimus in Campulung described in Schedule 2.6(i) hereto and
(ii) making available to the Dutch Company its know-how in the field of
Processing (thereby allowing the Dutch Company to provide such
know-how to the Venture);
all together with a mutually agreed value of * .
In addition, CEVA undertakes to assign the contracts listed in Schedule
2.6(ii) hereto (the "Assigned Contracts") directly to the Venture.
2.7. SUBSCRIPTION OF CAPITAL -- DUTCH COMPANY
The Dutch Company shall subscribe to and own 100 % of the shares in the
Venture by making contributions in cash and in kind analogous to the
contributions of the Parties in the Dutch Company (as described in
Articles 2.5 and 2.6). However, the Dutch Company may decide, with the
unanimous consent of all Directors, to lease (part of) the proprietary
production facility located at the premises of Cimus in Campulung
described in Schedule 2.6(i) hereto to the Venture instead of making a
contribution in kind if it deems such structure more advisable.
2.8. FUTURE SUBSCRIPTIONS OF VENTURE'S CAPITAL
BAB and CEVA agree that future subscriptions of the Dutch Company's
capital may be required either to fund working capital requirements of
the Venture or to fund the approved Annual Development Plan.
*Confidential portion omitted pursuant to a request for Confidential
Treatment and filed separately with the Commission.
6
2.9. DURATION OF THE VENTURE
The Parties intend that the Venture be of unlimited duration,
notwithstanding any Party's right to terminate this Agreement in
accordance with the provisions contained herein. Upon mutual agreement
both Parties shall cause the Dutch Company to take such corporate action
and vote in favor of such resolutions as are necessary to place the
Venture in voluntary liquidation and the Venture shall be dissolved in
accordance with the Venture's Articles of Association and applicable law.
Upon dissolution, the Venture's assets and/or liabilities shall be
allocated to the Dutch Company. Following such dissolution of the
Venture, the Parties shall take all necessary corporate actions to place
the Dutch Company in voluntary liquidation and the Dutch Company shall be
dissolved in accordance with the Dutch Company's Articles of Association
and applicable law. Upon dissolution of the Dutch Company, its (tangible
and intangible) assets and/or liabilities shall be allocated to each
Party according to its proportional ownership interest, which ownership
interest shall include any shares owned by any Affiliates of the Parties
respectively.
2.10. TRANSFER OF SHARES
BAB and CEVA agree not to assign or transfer (e.g. in the course of a
corporate reorganization) their Shares, or a part thereof, without the
prior written approval of the other Party. Such approval may not be
withheld by a Party if (i) the other Party intends to transfer all, but
not less than all, of its Shares, (ii) the transferee is an Affiliate of
the transferring Party and (iii) such Affiliate by co-signing this
Agreement accepts the transferring Party's obligations under this
Agreement to become its own obligations. The transferring Party and the
transferee shall be jointly and severally liable for their obligations
under this Agreement.
2.11. COMPANIES' RELATIONS WITH PARTIES
2.11.1. BAB herewith declares that as long as it and/or any of its Affiliates
hold(s) the majority of the Shares and the products of the Venture
are economically favorable to other fuels for BAB and its Romanian
Affiliates, BAB or its Romanian Affiliates will purchase the
Venture's whole production of AFR and the quantities of AFR which the
Venture might acquire from third parties to the extent such production
does not exceed the needs of BAB's Romanian Affiliates. In the event
that AFR is produced by the Venture in amounts less than that required
by BAB and its Romanian Affiliates, BAB or its Romanian Affiliates
may acquire from the Venture only, AFR produced by other parties. The
Venture may sell quantities of AFR exceeding needs of BAB and its
Romanian Affiliates to third parties.
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2.11.2. The Parties agree that, as a general principle, the
Companies will enter into agreements with the Parties and
their Affiliates on an arm's length basis only. However, the
prices invoiced by the Venture to a Party or a Party's
Affiliate shall not be higher than the prices for the same
type(s) of product(s) invoiced by the Venture to its most
preferred customer.
3. MANAGEMENT OF THE DUTCH COMPANY
3.1. BOARD OF DIRECTORS
3.1.1. COMPOSITION. The Dutch Company shall be managed by a Board
of Directors composed of five members. BAB shall nominate
three of the Directors. Ceva shall nominate two of the
Directors. The Parties commit to vote for the Directors thus
nominated by BAB and CEVA, meaning that BAB shall vote for
the Directors nominated by CEVA and CEVA shall vote for the
Directors nominated by BAB.
3.1.2. CHAIRMAN OF THE BOARD. The Directors shall, by simple
majority, elect a Chairman of the Board of Directors (the
"Chairman") who shall preside over conduct of the Board of
Directors. The Chairman shall be a BAB nominee. The
directors shall, by simple majority, elect a Vice-Chairman
who shall substitute for the Chairman at Board Meetings in
the absence of the Chairman. The Vice-Chairman shall be a
CEVA nominee. The responsibilities and authority of the
Chairman and Vice-Chairman shall be further defined in the
Dutch Company's Articles of Association.
3.1.3. MEETINGS AND QUORUM. The Board of Directors may act by written consent
in accordance with applicable law and as detailed more fully in the
Dutch Company's Articles of Association. At all meetings of the
Board of Directors, the quorum shall be not fewer than four members
present in person or by proxy or alternate. The Board of Directors
shall meet at least once annually. For meetings of the Board of
Directors twenty one days written notice shall be given to the
Directors. If a presence quorum of at least four Directors is
not met, another meeting of the Board of Directors without any
presence quorum shall take place one week later automatically (i.e.
without any further written notice). All Directors shall pay their
own expenses for attending such meetings. Directors shall not
receive any remuneration for their services. The Directors
will be elected for a term of two years by the Shareholders.
Any member of the Board of Directors may be re-elected, pursuant
to the terms of Article 3.1. If a Director resigns or
otherwise ceases to be a Director during his term, his replacement
shall be nominated by the Party who originally nominated the
resigning Director, and a shareholders meeting of the Dutch
Company may be called by such Party for election of such replacement.
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3.1.4. ACTIONS BY THE BOARD OF DIRECTORS. The following actions may
be taken only by majority vote of the Board of Directors, in
accordance with the voting stipulations set forth above and
in the Dutch Company's Articles of Association:
3.1.4.1. approval of an annual development plan of the Venture, including an
annual marketing plan, technology development plan, and budget of
the Venture;
3.1.4.2. new capital investment of the Venture incurring not budgeted
costs to create or replace new manufacturing capacity in excess
of USD 10,000.00 per calendar quarter;
3.1.4.3. incurring or creating of debt or guarantee of debt of the
Venture or otherwise causing the Venture to become liable to
any indebtedness for borrowed money except as set forth in
the approved budget;
3.1.4.4. sale, transfer, or other disposal of any asset of the
Venture having a value, of any assets in any transaction or
in any series of related transactions having an aggregate
value, in excess of the equivalent of USD 10,000,000, except
for commercial products of the Venture and except as set
forth in the approved budget;
3.1.4.5. contracts between the Companies and the Parties, Affiliates or
officers of the Parties; and
3.1.4.6. determination of the organizational structure of the Venture and
signing authorizations on behalf of the Venture.
3.2. COOPERATION
The Parties shall cooperate with each other in the highest degree in the
performance of all such acts and the passing of all such resolutions as
are required for the purpose of achieving the term, purposes, and intent
of this Agreement. The Parties shall in particular exercise their
respective voting and other rights and power of control over the Dutch
Company (and therefore indirectly over the Venture) so as to give effect
to the rights conferred upon the respective Parties by the terms of this
Agreement.
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4. MANAGEMENT OF THE VENTURE
4.1. GENERAL MANAGER
The Dutch Company in its capacity as the sole shareholder of the Venture
(and based on decisions of its Board of Directors) shall appoint a
General Manager of the Venture whose qualifications for the position
shall have been presented to the Parties and the Board of Directors. The
first nominee to be appointed General Manager for a period of one year
shall be Mihai Maracineanu. Any prolongation of this period must be
approved by the Dutch Company in its capacity as the sole shareholder of
the Venture. For the purpose of clarification, the Parties note that this
provision shall not constitute a third party benefit for Mihai
Maracineanu. The General Manager shall be the chief operating and
executive officer of the Venture. All changes in the position of the
General Manager shall be pursuant to nominations of the Dutch Company
(based on resolutions adopted by shareholders of the Dutch Company with
simple majority) with the unanimous approval of the Board of Directors
and completed in accordance with this provision.
4.1.1. DUTIES. The General Manager shall manage the day-to-day
operations of the Venture, which shall include, but not be
limited to, the following duties and authorities, in a
manner consistent with the policies adopted by the
Shareholders and the Board of Directors:
4.1.1.1. manage the Venture's offices and facilities;
4.1.1.2. make payment to suppliers, contractors, subcontractors and others who
have supplied products or services to the Venture;
4.1.1.3. manage the financial affairs of the Venture pursuant to
instructions of the Dutch Company acting as the sole
shareholder of the Venture, and maintain its books and
records and bank accounts;
4.1.1.4. employ and discharge employees and workers of the Venture;
4.1.1.5. approve the terms of offers made to customers;
4.1.1.6. make operating decisions concerning use of resources, funds,
equipment, personnel or production capacity, provided such
decisions are not inconsistent with this Agreement, the
Venture's Articles of Association, or any applicable
marketing plan, technology development plan, budget, or any
other instruction of the Dutch Company acting as the sole
shareholder of the Venture (and based on decisions of the
Board of Directors);
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4.1.1.7. prepare the proposed annual development plan (including the
annual marketing plan, annual technology development plan,
annual maintenance plan, a draw down scheme for the loan to
be granted in accordance with Clause 6.2 and annual budget),
periodic performance reports, and such other documents as
may be required by the Dutch Company acting as the sole
shareholder of the Venture ;
4.1.1.8. prepare investment recommendations for the Dutch Company
acting as the sole shareholder of the Venture which shall be
based on detailed feasibility studies; and
4.1.1.9. implement procedures for risk management, health, safety and
environmental compliance.
4.2. ANNUAL DEVELOPMENT PLAN
The General Manager shall prepare an annual development plan in
accordance with Article 4.1.1 and present the plan to the Dutch Company
(by submitting a copy for the attention of each of the Directors). The
Venture shall be managed in a manner consistent with such annual
development plan as expressly approved by the Dutch Company as the sole
shareholder of the Venture (and based on decisions of its Board of
Directors).
4.3. CONSULTING COMMITTEE
4.3.1. The Dutch Company shall establish as additional organ a
board of supervisory directors which shall act as consulting
committee (the "Consulting Committee"). Each Shareholder
shall appoint a person (a "Consultant") to represent the
respective shareholder's interest in the committee to be
formed by the two Consultants. The first Consultant to be
appointed by BAB will be Mr. Kurt Habersatter. The first
Consultant to be appointed by CEVA will be Mr. Herbert G.
Case.
4.3.2. A Consultant may only be revoked by the Shareholder by whom
he was appointed. In the event a Shareholder revokes a
Consultant and appoints a new Consultant, such Shareholder
shall give notice thereof to the other Shareholder and the
Venture as soon as practicable.
4.3.3. Each Consultant shall have one vote. The Consulting
Committee shall make recommendations in accordance with
Article 4.3.5 only on the basis of written resolutions
adopted by all Consultants. The Consulting Committee shall
determine its internal rules and procedures. The place, time
and frequency of meetings of the Consulting Committee shall
be determined from time to time by the Consultants.
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4.3.4. Unless agreed otherwise between the Shareholders, no
Consultant shall be entitled to any remuneration or other
benefit from the Dutch Company. Any expenses incurred by a
Consultant in connection with the performance of his duties
hereunder (including attendance at meetings of the
Consulting Committee) shall be borne by the Shareholder who
has appointed such Consultant.
4.3.5. Neither the Consulting Committee nor any individual
Consultant shall have any right to represent the Dutch
Company vis-a-vis third parties, otherwise act on behalf of
the Dutch Company or be involved in the internal affairs of
the Dutch Company. The task of the Consulting Committee
shall be to consider affairs and make recommendations to the
Board of Directors with respect to any matter relating to
the strategy, policies, business, operations or affairs of
the Venture which is referred to it either by the General
Manager or any Shareholder.
5. SHAREHOLDERS MEETING of the Dutch Company
5.1. ANNUAL MEETING
Shareholders meetings of the Dutch Company shall be convened no less
frequently than annually, within three months of the close of the Dutch
Company's fiscal year, in accordance with the Dutch Company's Articles of
Association and applicable law. For the annual shareholders meeting,
twenty-one days' written notice shall be given to the Shareholders. For
any other meeting, fourteen days' written notice shall be given to the
Shareholders.
5.2. VOTING AND ACTIONS BY THE SHAREHOLDERS
Except as set forth below or as may be required by applicable law, any
actions by the Parties in their capacity as Shareholders be determined by
simple majority voting. Resolutions of the Dutch Company whereby the
Directors and/or the General Manager is instructed to take the following
actions of the Venture shall require unanimous consent of the
Shareholders:
5.2.1. increase or decrease the capital of the Venture; authorization of
any securities which can affect the capital of the Venture
(e.g. convertible debt);
5.2.2. dissolve, liquidate or otherwise wind up the Venture; or
5.2.3. merge into or consolidate with any other company or permit any
other company to merge into or consolidate with the Venture;
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5.2.4. increase of the obligations of the Dutch Company as shareholder
defined in the Agreement and/or in the Venture's Articles of
Association; imposition of a new obligations;
5.2.5. decision on any investment made by the Venture where the value of
the investment exceeds twenty-five percent (25 %) of the share
capital of the Venture;
5.2.6. termination or any modification of any one of the Assigned Contracts;
5.2.7. any extension of the business purpose of the Venture as defined in
Article 2.2; and
5.2.8. approval of the annual budget of the Companies.
6. DIVIDENDS AND FINANCE
6.1. DIVIDENDS
After the allocation of such funds from revenues of the Venture as shall
be needed for ongoing operations and required repayment of borrowings of
the Venture and any reserve or other special funds agreed to by the
Shareholders or required by applicable law, it shall be the Venture's
policy to pay out the remainder as dividends to the Dutch Company and the
Dutch Company shall pay dividends to the Shareholders according to their
proportional ownership of shares.
6.2. SUBORDINATED AND UNSECURED LOAN
Immediately after the incorporation of the Venture BAB or an entity
designated by BAB shall grant a subordinated and unsecured loan in EURO
equivalent to the amount of USD 2,500,000.00 to the Venture in accordance
with the terms and conditions of the draft loan agreement attached hereto
as Schedule 6.2.
6.3. FUNDING OF THE VENTURE
The Parties hereto shall use reasonable endeavours to procure that any
borrowings or loan facilities for the benefit of the Companies from banks
and other similar sources shall be obtained on the most favorable terms
reasonably obtainable as to interest, repayment and security, but without
allowing any prospective lender a right to participate in the equity
share capital of the Companies as a condition of any loan. No Party,
except as stipulated in Article 6.2, shall be required to guarantee or
provide any security or accept any other liability with respect to any
borrowings by or loan facilities made available to the Companies.
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Save as set out in this and the following Article, there shall be no
obligation of a Party to provide additional capital to the Companies, or
to provide, or procure to be provided, to the Companies loans or loan
facilities.
6.4. ADDITIONAL WORKING CAPITAL
In the event that (i) the Venture's financial resources are at any stage
insufficient to satisfy its working capital requirements (as determined
by the Board within the Annual Development Plan accepted) and (ii) no
reasonable debt financing is available, the Parties shall make best
effort to either (a) provide the Dutch Company with sufficient funds to
subscribe to additional shares in the Venture (in proportion to their
equity holdings in the Dutch Company) or (b) provide advance
interest-free loans to the Venture in proportion to their equity holdings
in the Dutch Company, such funding or interest free loans of each Party
in no event exceeding 10% of the registered share capital of the Venture.
6.5. FAILURE TO MAKE CAPITAL SUBSCRIPTIONS
If either Party shall (without the consent of the other) fail to comply
with the foregoing provision within a period of 30 days from the Board of
Directors' call therefore, then the other Party shall have the right at
its option: either (i) to subscribe (at par) for additional shares in the
Venture in an amount equal to the amount to have been subscribed or
advanced by the defaulting Party, and the Parties shall ensure that the
necessary authorizations are given and steps taken for such shares to be
allotted and issued to such Party or (b) to terminate this Agreement in
accordance with the provisions of this Agreement.
7. ACCOUNTING
7.1. MAINTENANCE OF RECORDS
The Companies shall keep accurate books of account covering all
activities carried on by it in accordance with applicable laws, standard
accounting practices in the respective countries of incorporation, and in
a manner consistent with internationally accepted accounting standards
("IAS"). The certified public accountants and auditors of the Companies
shall be specified by the Board of Directors respectively the General
Manager following instruction of the Dutch Company.
7.2. EXAMINATION
The books of account of the Companies shall be available for examination
by duly authorized representatives of the Parties during normal business
hours at the premises of the Companies.
14
<PAGE>
7.3. INDEPENDENT AUDIT
The Parties shall cause the Companies to grant the representatives of the
Parties (including representatives of a firm of international certified
public accountants acceptable to the Parties) access to their books,
buildings, movable and immovable property, and other data and information
as may enable the Parties to make such investigations as shall be
reasonably necessary to determine compliance with the terms and
conditions hereof by the Companies. No Party will unreasonably refrain
from accepting a firm of certified public accountants thus designated and
will cooperate fully with such auditors. The cost of such audit or
investigation shall be paid by the Party requesting the investigation.
7.4. REGULAR REPORTS
The Venture shall prepare and distribute on the seventh working day of
each month to the Dutch Company with a copy for the attention of each
Director monthly reports in English on the operations and financial
condition (including profit and loss statements) of the Venture, as well
as reports on business developments and sales of the Venture.
7.5. ANNUAL REPORTS AND FINANCIAL STATEMENTS
As soon as available but not later than sixty days after the end of its
fiscal year, the Venture shall deliver its annual report to the Dutch
Company with a copy for the attention of each Director, financial
statements, and notes thereto in English as of and for the year then
ended, certified by independent auditors selected by the Venture. Any
additional information requested by the Parties shall be provided at the
expense of the Party requesting such information.
8. SIGNING FEE
In consideration of CEVA's * in the Dutch Company BAB agrees to make a
one-time payment in the amount of USD 620,000.00 to CEVA's bank account
with United National Bank (1130 Route 22 East, Bridgewater, NJ, USA
08807-0010, ABA - * , credit checking account , N/O CEVA International,
Inc.) which shall be due 15 days after signing of this Agreement by both
Parties.
*Confidential portion omitted pursuant to a request for Confidential
Treatment and filed separately with the Commission.
15
<PAGE>
9. REPRESENTATIONS AND WARRANTIES
9.1. BAB
BAB represents and warrants that it is a corporation duly incorporated
and in good standing under the laws of Germany, with its corporate seat
in Hamburg and the business address at Ost-West-Stra(beta)e 69, 20422
Hamburg, Germany; that it has full legal power and authority to execute
this Agreement and to form and subscribe to the Venture under the terms
of this Agreement and the Articles of Association of the Venture; and
that performance of and compliance with the terms, provisions, and
conditions of this Agreement do not conflict with or will not result in
any violation of any applicable by-law, mortgage, indenture, contract,
agreement, instrument, franchise, permit, judgment, decree, order,
statute, rule, Government Approval or regulation.
9.2. CEVA
CEVA represents and warrants that it is a corporation duly incorporated
and in good standing under the laws of the state of Nevada, with its
corporate seat in Nevada and the business address at 75-77 North Bridge
Street, Somerville 08876 New Jersey, USA; that it has full legal power
and authority to execute this Agreement and to form and subscribe to the
Venture under the terms of this Agreement and the Articles of Association
of the Venture; and that performance of and compliance with the terms,
provisions, and conditions of this Agreement do not conflict with or will
not result in any violation of any applicable by-law, mortgage,
indenture, contract, agreement, instrument, franchise, permit, judgment,
decree, order, statute, rule, Government Approval or regulation.
10. FORCE MAJEURE
No Party shall be held liable by or responsible to the other Party for
failure or delay in fulfilling or performing any obligation of this
Agreement if such delay or failure is caused by actions or events which
are beyond the reasonable control of the affected Party, the effect of
which is to prevent or interfere with that Party's performance hereunder,
including, without limitation, any act of god or public enemy, fire,
explosion, accident, embargo, strikes, or other labor strife or
governmental action from whatever cause arising or any other
circumstances of like or different character. Each Party agrees to give
the other Party prompt written notice of the occurrence of any such
condition, the nature thereof and the extent to which the affected Party
will be unable to fully perform its obligations hereunder. Each Party
further agrees to use all reasonable efforts to correct such conditions
as quickly as possible and to give the other Party prompt written notice
when it is again fully able to perform such obligations.
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<PAGE>
11. CONFIDENTIAL INFORMATION
11.1. CONFIDENTIALITY
During the formation and operation of the Companies, it will be necessary
for each Party to disclose to the Companies and/or the other Party
information which it regards as proprietary and/or confidential
("Proprietary Information"). Each Party agrees to maintain Proprietary
Information received from the other Party or indirectly through the
either of the Companies, and identified by the disclosing Party as such,
in confidence, employ adequate and appropriate measures to prevent its
unauthorized publication and/or disclosure, and not use it for any
purpose other than the performance of this Agreement and operations of
the Companies.
11.2. CONFIDENTIAL INFORMATION
No Party shall disclose to any other person or entity or use or exploit
for any other purpose whatsoever any of the information contained in the
budget, financial and operating plans of the Venture, and related
materials, any information contributed by a Shareholder and/or any other
information which they obtain or had previously obtained in relation to
the transactions contemplated by this Agreement or the proposed business
activities of the Companies ("Confidential Information"), except as may
be required by law (and then only to the extent such announcement is
required in order to comply with applicable law) and to the extent
expressly permitted by this Agreement. For the purposes of this Article
11, Confidential Information shall not include any information which:
(i) is available to the general public at the time of use or
disclosure through no action of the disclosing party;
(ii) becomes available to the general public, other than by manner of
unauthorized disclosure or use; or
(iii) is provided by a third party who is lawfully in possession of such
information and has the lawful right to disclose or use it.
The Parties shall cause their Affiliated Companies, advisors, employees,
agents, representatives and contractors not to disclose to any person or
use or exploit for any purpose whatsoever the Confidential Information
except as expressly permitted in this Article 11.
11.3. SURVIVAL
The obligations under this Article 11 shall survive any termination or
expiration of this Agreement.
17
<PAGE>
12. GOVERNING LAW AND ARBITRATION
12.1. GOVERNING LAW
This Agreement is governed by and shall be construed and interpreted in
accordance with the laws of Switzerland, without reference or application
of any laws on the conflict of laws.
12.2. CONSULTATIONS AND DISPUTES
In the event of any dispute or difference arising out of or relating to
this Agreement or the breach thereof, the Parties shall first of all use
their best endeavors to settle such disputes or differences amicably. To
this effect, they shall consult and negotiate with each other, in good
faith and understanding of their mutual interests, to reach a just and
equitable solution satisfactory to the parties and the Consulting
Committee shall be convened and such dispute be discussed. Consultations
shall commence when either Party provides a written request for
consultations to the other Party.
12.3. ARBITRATION
12.3.1. ARBITRAL TRIBUNAL. If within ninety (90) days after either Party
requests consultations, the Parties do not reach a mutually
acceptable solution, then unless otherwise agreed, any dispute
arising from this Agreement or relating to its violation, termination
or nullity shall be submitted to an arbitration tribunal comprised
of three arbitrators appointed and deciding in accordance
with the rules of the Chamber of Industry and Commerce for
Munich and Upper Bavaria ("Industrie- und Handelskammer fur
Munchen und Oberbayern - IHK Munchen"). The arbitral award
shall be final and binding upon the parties and may be enforced
by any court of competent jurisdiction.
12.3.2. PLACE. The place of arbitration shall be Munich. The
arbitral tribunal is nevertheless authorized to carry out
certain portions of the proceedings, for example meetings,
hearing of witnesses, out-of-court viewing and the like,
outside of the agreed upon place of arbitration if the
arbitrators so determine.
12.3.3. LANGUAGE. The language of the arbitration shall be English.
The parties are nevertheless entitled to submit documents in
another language if it is the original language of the
document; otherwise the arbitrators may order the submitting
party to provide a certified English translation for any
such documents submitted.
12.3.4. COSTS. The losing party in the proceeding shall compensate
the prevailing party for the costs of arbitration. The
arbitrators may determine the amount of said costs without
taking any guidelines for fees or disbursements into
consideration. In the event a party prevails only partially,
the arbitrators are authorized to award a proportionate
amount of the costs of arbitration to such party.
18
<PAGE>
13. DURATION AND TERMINATION
13.1. DURATION
This Agreement shall come into force on the date first written above and
shall be concluded for the whole duration of the participation of both
Parties and/or their respective Affiliates in the Dutch Company (the
"Term").
13.2. TERMINATION
13.2.1. EXTRAORDINARY TERMINATION. This Agreement may be terminated
with immediate effect prior to the Term by either Party in case
13.2.1.1. of an event of Force Majeure which definitely prevents one
Party from performing its bligations under this Agreement for a
period of more than 90 days;
13.2.1.2. of a material breach by the other Party of its obligations
hereunder (e.g. failure to make due payments) and such Party
fails (i) to remedy such breach within a period of 90 days
as of the receipt of a written notice specifying the
breached obligation and indicating the Party's intention to
terminate this Agreement failing remedy within the aforesaid
timeframe or (ii) to promptly commence and to thereafter
continue to undertake good faith efforts to cure the breach
that cannot reasonably be expected to be cured within 90
days as of the receipt of a written notice specifying the
breached obligation;
13.2.1.3. the other Party becomes insolvent or if bankruptcy, liquidation or
other proceedings affecting the enforcement of creditor's rights
generally are opened against the other party; or
13.2.2. ORDINARY TERMINATION. After the 5th anniversary of this
Agreement either Party may terminate this Agreement at the
end of each calendar month upon prior written notice of six
months.
13.3. NOTICE OF TERMINATION
In any event the Party intending to terminate this Agreement must give
notice thereof to the other Party in accordance with Article 14.11 (the
"Termination Notice").
19
<PAGE>
13.4. EFFECT OF TERMINATION
Upon Termination of this Agreement one Party shall withdraw from the
Dutch Company and transfer all, but not less than all, of its shares in
the Dutch Company to the other Party or any entity designated by the
other Party. Such transfer shall be performed in accordance with the
following procedure:
13.4.1. The Parties shall first of all try to reach an amicable
agreement on which Party shall take over the Shares of the
other Party at which price.
13.4.2. If such agreement cannot be found within 14 days after the Termination
Day, each Party shall deposit an offer to acquire all Shares
(the "Offer") at the offices of Holland van Gijzen, notaries
public, Drentestraat 20, 1083 HK Amsterdam, Postbus 7925, 1008 AC
Amsterdam, within 28 days after the Termination Day. The notaries
public must refuse all Offers which are not submitted within s after
the Termination Day. The Offer must be submitted in a sealed
envelope and must state only the price per share in the Dutch
Company at which the Party intends to take over all, but not less
than all, of the other Party's Shares . Any conditions which
may be stipulated in a Party's Offer will be deemed to be of no effect.
13.4.3. As soon as both Parties have submitted their Offers or at
the earliest practicable Dutch business day following the
28th day after the Termination Day at the latest the
notaries public shall (i) open the Offers in the presence of
the Parties, if possible, (ii) issue certified copies
thereof to the Parties and (iii) keep in safe custody the
originals thereof.
13.4.4. The Party (the "Buying Party") that has offered the higher
price per share in the Dutch Company shall be entitled and
obliged to acquire all, but not less than all, of the other
Party's (the "Selling Party's") Shares at such price. Within
42 days after the Termination Day the Parties shall take all
necessary corporate actions to transfer the Shares of the
Selling Party to the Buying Party or any entity designated
by the Buying Party against payment by the Buying Party.
13.4.5. In case the Buying Party cannot make payment in accordance
with the foregoing provisions it shall no longer be entitled
and obliged to take over the Selling Party's Shares and,
provided the Selling Party has made a valid and timely
Offer, the Selling Party may demand that the Buying Party
transfers its Shares in the Dutch Company to the Selling
Party against payment of the price set forth in the Selling
Party's Offer within 56 days after the Termination Day.
20
<PAGE>
13.4.6. In case neither Party makes a valid and timely Offer or can
make payment in accordance with the foregoing provisions the
Companies shall be dissolved as set forth in Article 2.9.
14. MISCELLANEOUS
14.1. AMENDMENTS OR SUPPLEMENTS
This Agreement supersedes and replaces any and all prior negotiations,
arrangements and understandings, whether or not in writing, between the
Parties with respect to the subject matter of this Agreement. No
variation of this Agreement is valid unless it is in writing and signed
by or on behalf of each Party.
14.2. NO WAIVER
A failure by any of the Parties to this Agreement to assert its rights
for or upon any breach of this Agreement or any such other agreement
shall not be deemed a waiver of such rights nor shall any waiver be
implied from any act. No waiver in writing by a Party with respect to any
right shall extend its effect to any subsequent breach either of like or
different kind.
14.3. SEVERABILITY
In the event that any part or parts of this Agreement shall be held
illegal or null and void by any court or administrative body of competent
jurisdiction, such determination shall not affect the remaining parts of
this or such agreement and they shall remain in full force and effect as
if such part or parts determined illegal or void had not been included
herein; provided, however, that nothing in this paragraph shall relieve
any party of any liability for breach of covenant, warranty, or
representation.
14.4. CUSTOMS, DUTIES, OR TAXES
Any and all customs, duties, or taxes (except income tax) in any form
which may be triggered by the execution of this Agreement and/or charged
on the importation into Romania of any information or other material
furnished by a Party to the Venture under any agreement entered into
pursuant to this Agreement shall be paid by the Venture.
14.5. ANNOUNCEMENTS
No announcement, advertisement, circular or other publication concerning
the subject matter of this Agreement or the joint venture shall be made
by any party without the prior written approval of each Party as to the
contents, form and timing thereof.
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<PAGE>
14.6. NO PARTNERSHIP OR AGENCY
Save as expressly provided herein, nothing in this Agreement shall
constitute or be deemed to constitute a partnership between the Parties
or constitute or be deemed to constitute one Party as agent of the other
Party for any purpose whatever, and no Party shall have the authority or
power to bind the other Party or to contract in the name of and create a
liability against the other Party in any way or for any purpose.
14.7. CONFLICT WITH ARTICLES OF ASSOCIATION
Where the provisions of the Dutch Company's Articles of Association or
the Venture's Articles of Association conflict with the provisions
hereof, the Parties agree that between them the provisions of this
Agreement shall prevail. In such circumstances the Parties shall, if
necessary, in any case procure, to the extent possible, the amendment of
the Dutch Company's Articles of Association or the Venture's Articles of
Association to the extent required to enable each of the Companies and
its affairs to be administered as provided herein.
14.8. NO ASSIGNMENT
Without the prior written consent of the other Party no Party may assign
any rights, benefits or obligations conferred upon it by this Agreement
to a third person not being an Affiliate of the transferring Party. In
any event, the transferring Party and the transferee shall be jointly and
severally liable for their obligations under this Agreement.
14.9. FURTHER ASSURANCES
The Shareholders undertake to execute all such agreements and other
instruments and to take all such other actions (including, but not
limited to, voting in the shareholders meetings of the Venture) as are
necessary or appropriate to give full effect to the terms, conditions and
provisions of this Agreement and the articles of association of each of
the Companies, to achieve the accomplishment of the legal and/or economic
objectives thereof and to make them binding and enforceable on the
Parties and, if appropriate, the each of the Companies.
14.10. RATE OF EXCHANGE
For the purposes of this Agreement, the rate of exchange between the
Romanian Leu and foreign currencies shall be the official exchange rate
published by Romanian National Bank upon the date such exchange is made.
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<PAGE>
14.11. NOTICES
All notices to be made in writing under this Agreement shall be given in
the English language by registered mail, express courier service or
telefax (confirmed by registered mail or express courier service) to the
following addresses or such other addresses as the parties may have
designated to each other by notice given in accordance with this Clause:
o if to BAB, to Breitenburger Auslandbeteiligung GmbH,
Ost-West-Stra(beta)e 69, 20422 Hamburg, Germany, with a copy to
Gunther Horvath, Bruckhaus Westrick Heller Lober; Seilergasse 16,
1010 Vienna, Austria, telephone + 43 1 515 15 205, telefax + 43 1 512
63 94;
o if to CEVA, to CEVA International, INC., 75-77 North Bridge Street,
Somerville 08876 New Jersey, USA, telephone/telefax 1 908 735 7988,
with a copy to Andras Volgyesi, Ribary 8, H-1022 Budapest, Hungary,
telephone + 36 1 315 04 85, telefax: + 36 1 316 50 89.
14.12. COSTS
Each Party hereto shall pay its own costs and expenses related to
negotiation, drafting, and signing of this Agreement.
IN WITNESS WHEREOF, the Parties have signed this Agreement on 19/24 May 2000, in
two originals, each Party acknowledging receipt of one such original.
For BAB: For CEVA:
/s/ Kurt Habersatter
----------------------------------- --------------------------------
By: Kurt Habersatter By: Herbert G. Case
Title: attorney-in-fact Title: President
23
<PAGE>
LIST OF SCHEDULES
Schedule 2.1 - Basic Strategies of the Venture
Schedule 2.3.1 - Articles of Association of the Dutch Company
Schedule 2.3.2 - Articles of Association of the Venture
Schedule 2.6(i) - Proprietary Production Facility
Schedule 2.6(ii) - Assigned Contracts
Schedule 6.2 - Loan Agreement
24
<PAGE>
Schedule 2.1: Basic Strategies of the Venture
Background
CEVA and Holderbank will form a joint venture ("JV") which will be the sole
supplier to Holderbank of alternative fuel and raw materials ("AFR") for
utilization in cement kilns owned or controlled by Holderbank in Romania.
CEVA is a NASDAQ listed waste management and alternative fuels group registered
in Nevada and with activities in Romania, Hungary, and the Czech Republic.
CEVA's core business is the reprocessing of hydrocarbon and industrial residues
for conversion into AFR.
Holderbank is one of the world's largest cement companies with three cement
plants in Romania, at Campulung, Alesd (in process of acquisition), and Turda.
CEVA is contracted with Holderbank's Campulung cement plant, CIMUS, for
production of AFR (as illustrated in flow chart below). JV aims to develop this
business further from the activity at CIMUS and establish a regional AFR
processing facility, Regional Processing Plant, capable of accepting and
processing a range of petrochemical residues for conversion to AFR which would
be used at Holderbank's Romanian cement plants.
Profile of JV
As a majority owned subsidiary of Holderbank JV has a clear and specific
objective to ensure reliable and quality supply of AFR. While its objectives
include the sourcing and identification of appropriate industrial residues for
AFR production, JV is not constituted as a waste management or environmental
services company. The JV's business will be to arrange with generators and other
providers of prequalified industrial residues to be processed at the JV's
facilities into AFR (see diagrams below). The JV will work closely with
Holderbank's cement kiln management to assure the conditioned AFR meets quality
guidelines jointly agreed to between the cement plant operator and not to have a
negative effect on clinker quality and the environment. Further the JV will
co-ordinate all logistics and transportation from suppliers of industrial
residues, processing and delivery of finished AFR to the cement plant. Both
parties will co-operate to obtain and maintain permits at all rested operations
to process, transport and utilize AFR at the cement plants.
Supply side
CEVA has developed strong relationships with a number of petroleum refineries,
petrochemical companies and other suppliers of industrial residues in and around
Ploiesti as well as elsewhere in Romania. These companies have substantial
problems with hydrocarbon-based industrial residues arising from their past and
present production processes. CEVA is in the process of contracting with several
of these companies to take industrial residues from their sites to use as source
material for AFR production. Several hundred thousand tonnes of residual
material have been identified which can be used for such production.
25
<PAGE>
Outlet side
Use of AFR is a considered strategically important to enhance the competitive
operation of cement kilns. CIMUS is currently contracted for the supply of AFR
by CEVA, and as this operation builds up it is expected that CIMUS will begin to
enjoy cost savings as a result of using AFR compared to conventional fuels. As
and when Holderbank completes the purchase of the plant at Alesd, it is planned
that Alesd will also develop an AFR programme similar to that of CIMUS. J/V will
work together with Alesd and potentially Turda jointly to develop such
programmes on similar terms to that of CIMUS.
This development will necessitate the establishment of a centrally located RPP,
which is budgeted for in the business plan. In the event that the output of the
RPP exceeds the take up of Holderbank's cement plants, JV will seek other
markets for output. These markets may include other cement plants, iron and
steel plants, power stations, or other intensive energy users.
Logistics
CEVA has developed a logistics plan (see below) for the logistical operation of
the proposed joint venture. Only if necessary will the joint venture use own
transportation means; otherwise third party contractors will be used.
Quality Control
The joint venture will implement a quality system aimed to ensure that nothing
will occur that could jeopardise or compromise the environmental standards and
the clinker quality of the outlets using the AFR. The joint venture makes a
priority to implement ISO 14001 and ISO 9002.
Environmental Safety and Health and Safety
The joint venture will apply internationally accepted standards in matters of
environmental safety and health and safety and at least at a level required by
local regulations. The joint venture will ensure that employees of the joint
venture are appropriately trained in these matters. The joint venture will
ensure that appropriate insurance protection is obtained for all operations.
It is expected that the parties will be able to achieve regional synergies
including know-how transfer, logistical benefits, and other economies of scale.
26
<PAGE>
Schedule 2.3.1
Articles of Association of the Dutch Company
27
<PAGE>
Schedule 2.3.2
Articles of Association of the Venture
28
<PAGE>
Schedule 2.6(i): List of equipment owned by CEVA at the CIMUS cement plant
Processing equipment
1) *
2) *
3) *
4) *
5) *
6) *
7) *
8) *
9) *
10)*
11)*
12)*
13)*
14)*
15)*
16)*
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
29
<PAGE>
17) *
18) *
19) *
20) *
21) *
22) *
23) *
24) *
25) *
26) *
27) *
28) *
29) *
30) *
Laboratory Equipment
1) *
2) *
3) *
4) *
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
30
<PAGE>
5) *
6) Heater
7) *
15. MISCELLANEOUS
1) Customs fees
2) Engineering fees
3) Mobilization and transportation
a. US
b. Romania
c. Transoceanic
4) Know how
5) Insurance
6) New seals for grinder and liquifier
7) Miscellaneous tools
8) Spare parts, etc.
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
31
<PAGE>
Schedule 2.6(ii) List of contracts to be assigned by
CEVA International Inc to Dutch Company
Contract partner Date Comments Purpose
------------------ ----------------- ---------------------- ----------------
CIMUS 1st August 1998 Provision of
AFR to CIMUS
VEGA 17th January Confirmation letter Recovery of
1997 from Rompetrol, industrial
owners of VEGA, residues
dated 22nd March
2000
County of 11th January Recovery of
Prahova County 2000 industrial
residue
32
<PAGE>
Schedule 6.2
Loan Agreement
entered into between
Breitenburger Auslandbeteiligung GmbH
Ost-West-Stra(beta)e 69
D-20422 Hamburg, Germany
(hereinafter referred to as the ,,Creditor")
and
[Venture]
(hereinafter referred to as the ,,Borrower")
today under the conditions as follows.
1. The Creditor lends the Borrower an amount in EURO equal to the amount of
USD 2,500,000.00 (in words: two million five hundred thousand US Dollars).
The Borrower commits itself to use this loan as stipulated in this Loan
Agreement and to repay the borrowed amount and its interests to the
Creditor.
2. The Borrower shall use this loan only for the business purpose as defined
in Article 2.2.2 of the Joint Venture Agreement entered into between the
Creditor and CEVA International Inc. on [o].
3. The Creditor shall transfer the loan to the Borrower's bank account no.
[o] held at [o] in accordance with the draw down scheme to be presented to
the Creditor by the Borrower.
4. The contractual Parties define that the term of loan is five years.
5. The contractual Parties agree that the interest to be paid by the Borrower
shall be calculated as follows: the base rate is the EUR 6 months EURO
LIBOR on the last day of any interest period. To this base rate the
Creditor adds 400 basis points. The thus calculated interest rate will be
applied for the interest period to follow. The interest period is always 6
(six) months and interest payment is to be made within 10 (ten) banking
days after the end of the respective interest period. The first interest
period is running from the date of signature of this Loan Agreement until
30 June 2000.
6. The repayment commences on 30 June 2002 and the Borrower is obliged to
repay EUR 500,000.00 (half yearly on the fifteenth day after the end of any
interest period). Early repayment is possible at the end of each interest
period in amounts of min. EUR 100,000.00 or multiples thereof.
7. The Parties shall fulfil the liabilities due in accordance with this
Agreement on a bank working day. If the day of fulfilment is no banking
day, the fulfilment on the following banking day qualifies as contractual
fulfilment.
8. The contractual Parties agree that, if the Borrower does not fulfil the due
repayment two times running or if the Borrower fulfils with more than a
five-day delay, the Creditor is entitled to ask the Borrower for a security
to the extent of the existing loan. If the Borrower does not offer the
security within 30 (thirty) days and the Parties cannot agree on the nature
of the security within 30 (thirty) days, the Creditor is entitled to
terminate this Agreement with the effect of the last day of month when this
event occurs and declare all the existing debt as overdue.
Should the Creditor not exercise this right, this does by no means result
in or be regarded as a waiver of the Creditor.
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9. If any of the provisions of this Agreement violates an obligatory legal
rule and, as a result, it becomes null and void, this severability does not
affect the validity of the remaining provisions of this Agreement. The
Parties will agree on a new provision by common consent, which is the
closest to the economic objective of the null and void provision.
10. This Agreement is prepared in 2 (two) counterparts in English, all of which
is original. This Agreement is subject to German law. The parties will
attempt to settle legal disputes in the course of negotiations. However, in
lack of consent the Parties agree on the authority and competence of the
Court of Arbitration operating permanently at the German Chamber of Trade
in Hamburg.
The Parties signed this two-page Agreement via their authorised representatives,
which is in full compliance with their intention.
Place date
------------------------------------------- --------------------------
Creditor Borrower
34
<PAGE>
EXHIBIT 10.7
<TABLE>
<CAPTION>
<S> <C> <C>
NIVO STUDIO Szakfordito iroda Megrendeles szerint - As ordered - Wie bestellt:
Office for Translations - Fachubersetzungsburo Forditas - Translation - Ubersetzung
Budapest, 1136 Pannonia u. 22. Lektoralt forditas - Proof-read translation - Geprufte Ubersetzung
Tel.: (+ 361) 452-10-10 Fax: (+ 361) 452-10-11 Nr.: NF358A
==========================================================================================================================
</TABLE>
Amendment of Entrepreneurial Contract
entered into by and between Magyar Olaj- es Gazipari Reszvenytarsasag (1117
Budapest, Oktober huszonharmadika utca 18.) (hereinafter referred to as `MOL'),
on the one hand, and CEVA Magyarorszag Kft. (1097 Budapest, Illatos ut 7.) and
CEVA International Inc. (75-70 North Bridge St., Somervile, NI 08876 USA), on
the other hand, as the contractors under the Contract, jointly and severally
contractors, (hereinafter referred to as `CEVA') at the date specified below, on
the subject of the amendment of a contract made between them on September 1,
1997.
Reasons for the Amendment of Contract:
1. The deadline for the performance of the contract, executed on September 1,
1997 and effective until June 30, 2000, has expired without being
performed. The Parties have considered the contents of the contract as
being in force ever since, in the preparatory phase of the Amendment of
Contract. The failure of the performance of the contents thereof is not
imputable to either of the Parties hereto.
2. The data on the quality and quantity of the acid resin hazardous waste
available at the site of the Nyirbogdany Plant have been reassessed.
3. Demand has arisen for the manufacture of alternative fuel oil from the
acid resin stored at another site of the Principal (Csepel); in the
interest thereof, the Principal has been granted a permit to receive and
pretreat 500 metric tons of acid resin from Csepel at Nyirbogdany
(Schedule 1). The environmental authority has held out the prospect of a
permit for the receipt of additional lots of 500 to 1,000 metric tons.
4. The reason hindering the performance of the previous contract, that is,
the lack of a disposal permit, has been averted by the fact that Duna
Drava Cement es Meszmuvek Kft. has been granted a trial burn permit,
including the receipt of 4,320 metric tons of alternative fuel oil
(Schedule 2).
A Contract for Delivery and Disposal and a Cooperation Framework Agreement
have been signed between MOL Rt. and DDC Kft. (Schedule 3). On the basis
of the foregoing, the Parties hereto amend the contract as follows.
5. At the time of the execution of the Amendment of Contract, only CEVA has a
technology that may be immediately used for the production of alternative
fuel oil from liquid acid resin; therefore, no other contractors may be
involved.
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PREAMBLE
A) About 30,000 metric tons of acid resin has accumulated at the site of the
Nyirbogdany Plant owned by MOL, which is a material included under Hazard
Category II under the heading of "Wastes of Mineral Oil Refining" in
Section 5.4.8 of Schedule 2 to Government Decree No. 102/1996 (VII.12.)
(hereinafter referred to as `D'). Some of the waste was processed in 1999
and 2000.
B) Point B has become superseded.
C) Point C has become superseded.
D) According to the Amendment of Contract, the schedules referred to in Point
D mean the trial permit attached as Schedule 2 and the Cooperation
Framework Agreement attached as Schedule 3.
1. Contracting Parties:
1.1.4 The following persons shall be entitled to proceed on behalf of
the Parties concerning the subject-matter of the Contract:
On behalf of MOL Rt.: Miklos BODOLA or his proxy holding a written
power of attorney
On behalf of CEVA: Herbert G. CASE, Janos SOOS, Jozsef LASZLO
2. Subject-matter of the Contract:
Production of 4,000 metric tons of F60/130 S alternative fuel oil in
accordance with the amended technological description attached in Schedule
4 to the Amendment of Contract, by the transfer of the acid resin stored
at the Nyirbogdany Plant and the 500 metric tons of acid resin stored at
the Csepel Base Site of MOL Rt., using about 3,000 metric tons of acid
resin from Nyirbogdany and 500 metric tons from Csepel (sic orig.!). An
amount of acid resin coming from Nyirbogdany that allows the production of
4,000 metric tons of alternative fuel oil in total is to be removed and
pretreated in addition to the 500 metric tons of acid resin coming from
Csepel.
MOL Rt. shall decide on the solution of how to dispose of the acid resin
of Csepel in liquid phase (about 10,000 to 15,000 metric tons) on the
basis of its experiences gained during the pretreatment and processing of
the 500 metric tons of Csepel. If it deems its disposal as alternative
fuel oil to be the most desirable from the aspects of economy,
environmental scheduling and other factors, MOL Rt. shall reach the
quantity limit (20,000 metric tons) as defined in the original contract
subsequently. MOL Rt. shall make its relevant decision by May 31, 2001.
3.1 The last sentence shall be changed:
The permits related to the Amendment of Contract shall be
attached to the Amendment of Contract and shall constitute a
schedule to the amendment.
4.1.3 The site agreements are contained in Schedules 5 and 6.
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4. To be supplemented by:
The removal, transport and pretreatment tasks related to the acid resin of
Csepel are contained in Schedule 5 to the Amendment of Contract.
7. Date and Place of Performance:
The alternative fuel oil designated as F60/130 S shall be produced from
acid resin at the Nyirbogdany Plant of MOL. CEVA shall commence the
removal of about 3,500 metric tons of acid resin and the production of
alternative fuel oil at Nyirbogdany by not later than July 30, 2000 and
the removal and transfer of the acid resin at Csepel by September 1, 2000
and shall complete them at both sites by not later than March 30, 2001 in
such a way that the production of 4,000 metric tons of alternative fuel
oil may be completed by not later than April 15, 2001, adjusted to the
installation site set forth in this Amendment of Contact, as stipulated in
the permits of the authorities. The date for completion may be changed in
line with the permits of the authorities concerning further use. CEVA
agrees to carry out the production of the above alternative fuel oil on a
continuous basis, in accordance with the provisions of the permits of the
authorities and the Preamble, according to the user's demand.
User: Vac Plant of the Duna-Drava Cement es Meszmuvek Kft.
4,320 metric tons (approved quantity)
8. Entrepreneurial Fee:
The amount of the Contractor's bill shall be established with
consideration to the quantity of acid resin removed, by designated
measurements at the site. Fee charged for the removal of acid resin and
its processing to alternative fuel oil: * / metric tons + VAT. Fee charged
for the transport of the acid resin of Csepel to Nyirbogdany: * / round
trip + VAT (500 metric tons of acid resin is equal to about 25 round
trips) Fee charged for the transfer of acid water abstracted as part of
the preparation of the pit and pumped into another pit at Csepel: * / m3 +
VAT Fee charged for the possibly necessary neutralization of water and its
transfer to the sewage treatment plant at Csepel: * /m3 Fee charged for
the abstraction and neutralization of waste water produced during the
removal of acid resin at Nyirbogdany: * /m3 + VAT The fee charged for the
removal of acid resin and its processing to alternative fuel oil does not
include the transport and material cost of the hydrocarbon-based additives
used for the production of alternative fuel oil and the cost of the
transport of F60/130S to the site where it will be used. Such costs shall
be borne by MOL Rt. The entrepreneurial fee shall be settled in USD. The
bill shall be made out on the basis thereof, which shall be paid in a HUF
amount + VAT calculated at the medium exchange rate quoted by the National
Bank of Hungary, valid on the last business day of the previous month.
*Confidential portion omitted pursuant to a request for Confidential
Treatment and filed separately with the Commission.
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9.3 During its performance, CEVA shall be entitled to render a
preliminary bill concerning its monthly performance, on the
pretreated and processed acid resin and the volume of
neutralized and transferred water
9.4 Payment shall be due on the basis of biannual settlement.
10.4 b) replaced by Clause 2
10.5 September 1, 2000 instead of November 1, 1997.
11.3 b) replaced by Clause 2
7. Entire Contract:
The contract executed on September 1, 1997 and the schedules thereto, this
Amendment of Contract and the schedules thereto, and the site agreements
shall constitute the entire agreement between the Parties. The issues not
mentioned in the Amendment of Contract shall remain in force as stated in
the original contract.
The Amendment of Contract shall only be valid with the schedules thereto.
Schedules to the Amendment of Contract:
Schedule 1 Permit for Receipt by Nyirbogdany
Schedule 2 Trial Permit for DDC
Schedule 3 Cooperation Framework Agreement
Schedule 4 Amended Technological Description
Schedule 5 Tasks Related to the Pretreatment of the Acid Resin of Csepel
and Csepel Site Agreement
Schedule 6 Nyirbogdany Site Agreement
Dated in Budapest, July 25, 2000.
<Two illegible signatures> <Illegible signature>
MOL Rt. CEVA Magyarorszag Kft.
<Illegible signature>
CEVA
<Two illegible signatures>
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EXHIBIT 10.8
WASTE MATERIALS PROCESSING AGREEMENT
This Agreement is made and entered into this 1st day of August, 2000, by and
between Rompetrol Rafinare "Rafinaria VEGA" SA, located at str. Valeni Nr.146,
Ploiesti, Prahova, Romania ("VEGA"), legally represented by eng. Dumitru Manoiu,
General Director and John H. Works, Chief Executive Officer of S.C. ROMPETROL
S.A. and CEVA International, Inc., located at 75-77 North Bridge Street,
Somerville, NJ 08876 USA, and/or its affiliates (collectively, "CEVA"), legally
represented by Herbert G. Case, President.
WITNESSETH
WHEREAS, VEGA is in the business of manufacturing and distributing various
petroleum and petrochemical products from it's facilities located in Ploiesti,
Prahova, Romania; and
WHEREAS, CEVA is in the business of providing on-site environmental management
at refineries, cement kilns and other industrial plants in various locations;
and
WHEREAS, VEGA desires to process certain WASTE MATERIALS to dispose off in an
environmental friendly manner; and
WHEREAS, CEVA has entered into an agreement with S.C. CIMUS S.A. to produce CPD
from certain petroleum by products and has installed processing equipment at the
CIMUS cement plant site in Campulung Muscel; and
WHEREAS, CEVA and VEGA desire to utilize the services of the other to their
mutual benefit;
WHEREAS, CEVA and VEGA entered into a WASTE MATERIALS PROCESSING AGREEMENT on
17th of January, 1997 which shall be replaced by this agreement by mutual
consent and benefit of the parties, especially taking into account of the change
of the circumstances, as of the date hereof;
NOW, THEREFORE, in consideration of the covenants contained herein and for other
good and valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I - DEFINITIONS
1.0 DEFINITIONS. As used in this Agreement, the following defined terms have the
respective meanings described below:
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" VEGA Services" is defined in Article II.
"CEVA Services" is defined in Article III.
"WASTE MATERIALS" are non-biological petroleum wastes and
residues currently being generated and stored in lagoons, tanks, basins at
VEGA's refinery, and capable of being processed in the CEVA Equipment, and other
wastes that may be identified during the period covered by this Agreement.
"Third Party Materials" are WASTE MATERIALS that are not
generated or stored at the VEGA Site, and that are not specifically required to
enhance the processing of VEGA's WASTE MATERIALS.
"CPD" shall mean a product or semi-product, obtained by
processing various wastes and other materials, including but not limited to
refinery derived waste, capable of being utilized as supplemental fuel and/or
raw materials off site.
"CWM" means CONDITIONED WASTE MATERIALS to be prepared at
the VEGA refinery from WASTE MATERIALS.
"CEVA Equipment" means that Equipment described in
Attachment 1, supplied by CEVA for the processing of WASTE MATERIALS into CWM at
the VEGA Site that is acceptable for the production of CPD.
"The VEGA Site" means the area where the CEVA Equipment is
located at the oil refinery operated by VEGA in Ploiesti, Prahova, Romania.
" The CEVA Site" means the CWM processing facility located at
the CIMUS site, or elsewhere.
ARTICLE II - VEGA SERVICES
2.0 VEGA Services. During the term of this Agreement and any extensions or
renewals thereto, and any amendment by the law and/or amendments by this
contract VEGA shall provide the following services at and under conditions as
the parties may determine:
2.1 Supply. VEGA shall provide the exclusive right to CEVA for processing
all WASTE MATERIALS as defined above into CWM, for removal and off-Site
disposal and processing into CPD. VEGA is obligated to supply
sufficient quantities of WASTE MATERIALS to meet the expected capacity
of the CEVA Equipment on a daily basis of 200 (two hundred) tons per
day (plus or minus 20%), 24 (twenty-four) hours/7 (seven) days a week,
until the whole quantity of sludge in the lagoons at the Vega site is
processed and removed by CEVA from the VEGA site.
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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VEGA will be responsible to deliver all WASTE MATERIALS to the raw sludge
storage tanks located at the VEGA Site, according to Appendix 2. CEVA shall have
the right to introduce and/or process WASTE MATERIALS from other generators or
third parties ("Third Party Materials"). No third party materials will be
received without the prior consent of VEGA. VEGA and CEVA will perform services
as set out in Articles II and III of this Agreement for the processing of third
party materials. The parties will recover their reasonable and properly
documented direct costs from the disposal fees charged for Third Party
Materials. Furthermore, the parties will * . This will not apply to outside
materials, which are specifically required to enhance the processing of VEGA
WASTE MATERIALS.
2.2 Mobilization and De-mobilization. As defined in Appendix 2, VEGA shall act
with good faith to provide the required and necessary assistance to mobilize the
CEVA Equipment for operation at the VEGA Site. This Equipment is described in
Appendix 1. At such time as the CEVA Equipment may be de-mobilized, VEGA shall
provide the necessary and required assistance to demobilize the CEVA Equipment,
as defined in Appendix 2.
2.3 Utilities and Storage . VEGA shall provide electric, water, free access and
facilities to locate the process Equipment at the refinery. Parameters of
utilities to be provided are shown in Attachment 1 * . In addition and according
to Appendix 2, VEGA will provide * the WASTE MATERIALS with a minimum capacity
of * , and * with a capacity of *
tons (with heating capability, if required) for the * .
VEGA shall further provide a
protected area to store * tons of * , as well as
* as defined in Appendix 2.
2.4 Wastewater Treatment. Wastewater resulting from activities performed under
this Agreement will be treated by VEGA at their facilities. Monitoring the
parameters of wastewater shall be done by VEGA.
2.5 Labor. VEGA shall provide personnel for training and operation of CEVA
Equipment with reasonable prior notice, according to the requirements listed in
Attachment 1 and its and CEVA's proposed works. All such personnel shall have
had the appropriate safety and hazardous materials training prior to entering
the location and shall observe all safety rules and regulations regarding work
done at the refinery.
2.6 CWM Transportation. VEGA shall contribute with * % to the cost of
transportation service to convey the CWM to the CEVA Site in CIMUS. In addition
VEGA will provide assistance with documentation and logistics.
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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2.7 CEVA Equipment Access. VEGA will provide CEVA, its agents, contractors, and
sub-contractors ingress and egress over, through and on the VEGA Site at all
times during the term of this Agreement (24 hours/7 days a week). Such
permission is given subject to strict compliance with VEGA's safety regulations.
2.8 Permitting. VEGA shall obtain, maintain and renew, with CEVA's assistance,
applicable governmental and/or all permits, licenses and other approvals
required for the installation and operation of CEVA Equipment at the VEGA Site,
and offer reasonable assistance to obtain applicable governmental and/or all
permits, licenses and other approval for the transportation of CWM for and to
the name of CEVA, unless otherwise required by the law. In the event that
presentations are necessary or advantageous, VEGA shall devote such reasonable
effort to provide the same to selected government officials or in some other
events.
2.9 Performance. VEGA shall expeditiously perform the services and use its
technical expertise according to Appendix 2, so that the CEVA Equipment is
supplied at the full rate with the suitable WASTE MATERIALS.
ARTICLE III CEVA SERVICES
3.0 CEVA Services. During the term of this Agreement and any extensions or
renewals thereto, and any amendment by the law and/or amendments by this
contract CEVA shall provide the following services at and under conditions as
the parties may determine:
3.1 Process and use of WASTE MATERIALS. CEVA shall use its reasonable best
efforts to process WASTE MATERIALS meeting the requirements of CEVA Equipment as
described in Appendixes 1 and 2 and/or the technology installed at the CEVA
Site.
*
3.1.1 review of the findings * analyze all technical solutions
available (e.g., if any bottoms and walls of lagoons that can not be
processed into CPD in the CEVA Equipment, as
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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described in Appendix 1, these can be treated together with the
contaminated soil in the Low Temperature Thermal Desorption ("LTTD")
equipment and/or processed into solid alternative fuel.)
3.1.3 decision on the applicable solution
3.1.4 amendment of this agreement, through adding an appropriate appendix
that describes the new situation and its remedies, and/or
3.1.5 new agreement
Excluded from processing are materials containing Polychlorinated Biphenyls
("PCB's) or any materials that are restricted by any applicable government
regulation.
3.2 Equipment. CEVA shall provide its Equipment, including but not
limited to all necessary * , so that the Equipment is operational
at its expected capacities. Such equipment is described in Appendix 1.
For lagoon material removal, CEVA shall provide a * , as well as all
items mentioned in the "Equipment Required" chapter as CEVA's contribution,
as described in Appendix 2.
3.3 Mobilization and De-mobilization. CEVA shall provide all required and
necessary personnel to mobilize the process Equipment for operation. All such
personnel shall have had the appropriate safety and hazardous materials training
prior to entering the location and shall observe all safety rules and
regulations regarding work done at the refinery. At such time as the Equipment
may be de-mobilized, CEVA shall provide the necessary and required personnel to
demobilize and remove the same.
3.4 Maintenance, Parts and Design Changes. CEVA shall be responsible for
maintenance, replacement parts and other services necessary to keep the process
Equipment operational at levels required by this Agreement. In the event that
CEVA shall make design or Equipment modifications that improve the efficiency,
capacity or production of the process Equipment, CEVA shall offer to incorporate
same into the Equipment at the VEGA Site as the parties may determine.
3.5 Personnel. CEVA shall provide all the necessary personnel to train local
labor to operate the Equipment on a daily basis.
3.6 Permitting Assistance. CEVA shall use their reasonable best efforts to
assist VEGA to obtain, maintain and renew applicable governmental all permits,
licenses and other approvals required for the installation and operation of the
CEVA Equipment located at the VEGA Site. CEVA shall obtain, maintain, and renew
applicable governmental all permits, licenses and other approvals for
transportation of CWM to CEVA site.
*Confidential portion omitted pursuant to a request for Confidential
Treatment and filed separately with the Commission.
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3.7 Translation Services. CEVA shall provide or arrange for translation
services as may be required to aid the activities of VEGA and CEVA pursuant to
this Agreement.
3.8 Community Relations. CEVA shall provide community relations and activities
as they may be required for specific projects. In the event that presentations
are necessary or advantageous, CEVA shall devote such reasonable effort to
provide the same to selected government officials or in some other events.
3.9 Performance. CEVA shall perform their obligations under this Agreement in a
good and professional manner, they shall expeditiously process WASTE MATERIALS
into CWM. This agreement will cover first:
3.9.1 processing of all WASTE MATERIALS from the lagoons 7, 8, 9, 10, 11,
12, 13, 14, 15 according to Appendix
2 3.9.2 simultaneously and whenever technically feasible, processing of some
quantities of WASTE MATERIALS from the lagoons 16, 17, 18,
19 and their surroundings, with the aim to evaluate their
compatibility and quality
3.9.3 after completion of 3.9.1 and 3.9.2 - as agreed by both parties
-processing of the whole quantity from the lagoons 16, 17, 18, 19 and
their surroundings, provided this agreement is amended according to
paragraph 4.2
3.10 CWM Transportation. CEVA shall contribute with 50% to the cost of
transportation service to convey the CWM to the CEVA Site in CIMUS. In addition,
CEVA will provide * .
ARTICLE IV COMPENSATION
4.0 WASTE MATERIALS Processing Fees. The parties intend that VEGA shall make
payments under this Agreement to CEVA for WASTE MATERIALS treatment consisting
of a specifically designed * . The fee schedule below is based on * tons per day
supply of WASTE MATERIALS, and subject to adjustment if the volumes vary more
than 20% of this capacity:
------------------------------------ ----------------- ----------------------
Fee charged First year Second Year and
thereafter
------------------------------------ ----------------- ----------------------
Net USD per ton of WASTE MATERIALS * *
processed
------------------------------------ ----------------- ----------------------
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed with the Commission.
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The parties agree to review and make the appropriate adjustments to the WASTE
MATERIALS Processing Fees, in the event of:
i) alterations in VEGA's refinery process that would significantly alter
the specifications of WASTE MATERIALS (significantly shall mean more
than * %):
ii) additional services are requested by VEGA to be performed by CEVA or iii)
modifications of government regulations and legislation.
4.1 Payment. The basis of payment will be on tons of WASTE MATERIALS processed,
according to a flow meter installed on the feed line to the CEVA Equipment. CEVA
shall provide an invoice for the amount of WASTE MATERIALS processed for each
previous month during the term of this Agreement as soon as practicable
following the first day of each month. Thereafter, VEGA shall make payment
within fifteen (15) days from the date of the issue of CEVA's invoice by way of
a wire transfer to the bank account designated on the invoice. All payments
shall be made in US Dollars, without any offset or deduction for any taxes,
assessments and charges levied of any kind, including claims for damages or
other claims rendered by the court. Any amounts unpaid after fifteen (15) days
of delivery of an invoice shall accrue interest at the rate of * % per month.
The fees are exclusive of VAT.
The parties may agree on this compensation to be made entirely or partially *
. In such a situation, the parties will negotiate the * to the
US dollar amounts due CEVA.
4.2 Revision of Compensation. After processing all the WASTE MATERIALS from the
lagoons 7, 8, 9, 10, 11, 12, 13, 14, 15 according to Appendix 2) covered under
the terms of this Agreement, the parties agree to reevaluate the economic and
technical feasibility for future work on lagoons 16, 17, 18 and 19.
ARTICLE V CONFIDENTIAL INFORMATION
5.0 Nondisclosure. During the term of this Agreement it is contemplated that
each party may disclose to the other proprietary and confidential information,
inventions, technical information, materials and similar items which are owned
or controlled by the party providing such information or which that party is
obligated to maintain in confidence and which is designated by the party
providing such information as confidential ("Confidential Information").
In addition, technology, inventions, know how of any kind, technical
information, materials and similar items which are orally, electronically or
visually disclosed by a party, or are disclosed in writing without an
appropriate letter, stamp or legend shall constitute Confidential Information
if:
*Confidential portion omitted pursuant to a request for Confidential
Treatment and filed separately with the Commission.
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(i) it would be apparent to reasonable persons, familiar with the
business of the disclosing party and the industry in
which the disclosing party operates, that such information is of a
confidential or proprietary nature the maintenance of which is
important to the disclosing party or;
(ii) the disclosing party within * after such disclosure delivers to the
recipient a written document or documents describing the items
disclosed and referencing the place and date of such oral, electronic,
visual or written disclosureSubject to the provisions hereof, through
the term of this Agreement and for a period of * after the termination
hereof, each party agrees to retain such Confidential Information in
confidence and to use such Confidential Information only for purposes
of this Agreement and not to disclose any such Confidential Information
to a third party without the prior written consent of the party
providing such information.
5.1 Exceptions. The obligations of confidentiality set forth in Section 5.0 will
not apply to Confidential Information which:
(i) was known to the receiving party or generally known to the public
prior to its disclosure hereunder;
(ii) subsequently becomes known to the public by some means other than a
breach of this Agreement or by any other agreement;
(iii) is subsequently disclosed to the receiving party by a third
party having a lawful right to make such disclosure; or
(iv) is approved in writing for release by the disclosing party.
ARTICLE VI EXCLUSIVITY
6.0 Geographic Area. This Agreement shall be applicable to activities in Romania
6.1 VEGA's Obligation. VEGA agrees for the term of this Agreement that it will
not enter into any other contract or arrangement with any other entity in the
Geographic Area for the disposal or processing of WASTE MATERIALS.
6.2 Nature of Exclusive Activities. It is desired and intent of the parties that
the provisions of Article VI shall be enforced to the fullest extent permissible
under the law and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular portions of Section 6.1
and 6.2 shall be adjudicated to be invalid or unenforceable, such Sections shall
be deemed amended to delete there from the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of such Sections in the particular jurisdiction in which such
adjudication is made
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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ARTICLE VII TERM AND TERMINATION
7.0 Term. The initial term of this Agreement shall be five (5) years from the
date of its execution by both parties. This Agreement shall be automatically
renewed for 1 (one) year increments unless either party shall provide the other
notice at least ninety (90) days prior to the expiration of the initial term
that the Agreement will not be renewed.
7.1 Early Termination. Either party may terminate this Agreement
immediately upon the occurrence of any of the following:
(i) Failure of the other party (the "Defaulting Party") to remedy any material
breach of this Agreement
(a) within one hundred twenty (120) days after receiving written notice
of such breach from the non-defaulting party or (b) if such breach
cannot reasonably be cured within said one hundred twenty (120)
day period and the Defaulting Party shall have commenced to cure
such breach within said period and shall thereafter proceed with
reasonable diligence and good faith to cure such breach, within such
longer period as shall be necessary for such party to cure the same
with reasonable diligence
(ii) Upon or after the bankruptcy, insolvency, dissolution or winding up of the
other party (other than dissolution or winding up for the
purposes of reconstruction, consolidation or amalgamation); or
(iii) An event of Force Majeure extending for an uninterrupted period of twelve
(12) months.
7.2 Effect of Termination. Expiration or termination of this Agreement shall not
relieve the parties of any obligation accruing prior such expiration or
termination, The parties' rights and obligations under Articles V, and IX shall
survive any termination hereof.
7.3 Force Majeure. Neither party shall be held liable or responsible to any
other party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party, including but not limited to: fire or floods;
embargoes, war, acts of war (whether declared or not), insurrections, riots, or
civil commotion; strikes, lockouts, or other labor disturbances; acts of God;
acts, omissions or delays in acting by any governmental authority having
jurisdiction over the parties or the Site(s).
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Whenever a party's performance is affected by an event or condition specified in
this Section 7.3, such party shall promptly notify the other party of such event
or condition. It is understood that this Section 7.3 is intended only to suspend
and not discharge a party's obligations under this Agreement and that when the
causes of the failure or delay are removed or alleviated, the affected party
shall resume performance of its obligations hereunder; provided, however, that
in the event an event of Force Majeure shall continue for a period of twelve
(12) consecutive months, the either party may terminate this Agreement upon
notice to the other party.
ARTICLE VIII GOVERNING LAW AND DISPUTE RESOLUTION
8.0 Governing Law. This Agreement shall be governed by the laws of the State of
New York, USA, without giving effect to its conflicts of laws principles.
8.1 Dispute Resolution. The parties shall use their best efforts to settle
amicably any dispute, disagreement or other question arising out of or in
connection with Agreement or the interpretation thereof. Any dispute,
disagreement or other question which cannot be settled amicably within 30 days
after receipt by one party of the other party's request to do so may be
submitted by either party to binding arbitration.
Each dispute submitted to binding arbitration shall be heard by a single
arbitrator if the parties can agree upon one within 30 days after one party
notifies the other that it wishes to avail itself of this Section 8.1;
otherwise, the dispute disagreement or other question shall be referred to an
arbitration panel composed of three arbitrators. Each party shall appoint one
arbitrator within 15 days after the expiration of the above 30 day period, and
these two will within 15 days after the later of their appointments, appoint the
third arbitrator who shall chair the arbitration panel. In the event that the
two arbitrators appointed by the parties cannot reach agreement of the
appointment of the third arbitrator within said 15 - day period, the President
of the International Arbitral Center of the Austrian Federal Economic Chamber,
Vienna shall be asked to appoint an appropriate person to act as the third
arbitrator. The decision of this body shall be final and binding on the parties.
Arbitration proceedings shall be conducted in Vienna, in accordance with the
rules of procedure for arbitration of the United Nations Commission of
International Trade Law (UNCITRAL) as in force at the date of the commencement
of the arbitration. Arbitration shall be conducted in the English Language. The
arbitrator(s) shall conduct the arbitration so as to render an award within 60
days of the date on which the sole arbitrator or third arbitrator was appointed.
Judgment upon any award rendered may be entered in any court of competent
jurisdiction, and any award so rendered shall be final and binding. The costs
and expenses of the sole arbitrator or the third arbitrator shall
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be shared equally by the parties, and each party shall pay the costs and
expenses of any arbitrator, which it appoints.
ARTICLE IX INDEMNIFICATION
9.0 By CEVA. CEVA shall and does hereby indemnify and agree to hold VEGA
harmless from and against all liability, losses, claims, damages, and expenses
(including actual and reasonable attorneys' fees) arising under any statute or
common law, which VEGA incurs;
(i) by reason of or as the result of, or alleged to be due or resulting
from its negligence or breach on CEVA's part of its obligations under
this Agreement; or
(ii) which are attributable to CEVA under any applicable law, regulation or
order. CEVA shall and does hereby indemnify and agree to hold VEGA
harmless from and against all liability, losses, claims, damages, clean
up costs, expenses (including actual and reasonable attorneys' fees),
penalties and fines which VEGA incurs by reason of or as the result of,
or alleged to be due resulting from contamination of or adverse impact
on the environment resulting from or growing out of CEVA's handling or
managing of WASTE MATERIALS at the Site.
9.1 By VEGA. VEGA shall and does hereby indemnify and agree to hold CEVA
harmless from and against all liability, losses, claims, damages and expenses
(including actual and reasonable attorneys' fees) arising under any statute or
common law, which CEVA incurs;
(i) by reason of or as the result of, or alleged to be due or resulting
from its negligence or breach on VEGA's part of its obligations under
this Agreement; or
(ii) which are attributable to VEGA under any law, regulation or order. VEGA
shall and does hereby indemnify and agree to hold CEVA harmless from
and against all liability, losses, claims, damages, clean up costs,
expenses (including actual and reasonable attorneys' fees), penalties
and fines which CEVA incur by reason of or as the result of, or alleged
to be due or resulting from contamination of or adverse impact on the
environment resulting from or growing out of VEGA's handling, managing,
and/or processing WASTE MATERIALS or utilizing its Equipment at the
Site.
9.2 Apportionment. Should any liability, loss, claim, damage, or expense arise
which both CEVA have indemnified VEGA and VEGA has indemnified CEVA, such
liability, loss, claim, or damage or expense shall be apportioned between CEVA
and VEGA in accordance with their degrees of respective fault or, if fault shall
not be the basis therefor, in such manner as shall fairly reflect their
respective responsibilities in connection therewith.
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9.3 Defense. In all situations not within Section 9.2 above, the party making
the indemnification under this Article (the "Indemnifying Party") shall assume
control of the defense of any suit or claim by any third party against the other
party to this Agreement immediately upon receipt of notice of existence of such
suit or claim, if such suit or claim involves liabilities, losses, claims,
damages or expenses against which the indemnifying Party has indemnified the
other. In carrying out its obligations under this Section, each party agrees to
exercise good faith in assuming such defense and employing appropriate counsel.
9.4 Survival. Unless otherwise expressly agreed herein, the obligations and
remedies of both parties under this Article and with Article V shall survive
termination of this Agreement.
ARTICLE X REPRESENTATIONS AND WARRANTIES
10.0 Organization, Corporate Authority. VEGA is a privately owned company duly
established, validly existing and in good standing under the laws of Romania,
and has full power to enter into this Agreement.
10.1 Authorization; Enforceability. The execution, delivery and performance by
VEGA of this Agreement and the consummation of the transaction contemplated
hereby and thereby, has been duly authorized and approved by all requisite
corporate action on the part of VEGA.
10.2 No Violation. Neither the execution or delivery by the contracting parties
of this Agreement nor the consummation of the transactions contemplated hereby
will: (i) violate any agreement, commitment, judgment or order to which any of
the contracting parties is a party; or (ii) contravene any law or regulation
having applicability to the parties.
10.3 Litigation, etc. There is no claim, action, suit, proceeding, arbitration,
investigation, hearing or other proceeding pending or threatened by or before
any court of governmental or administrative agency or authority or private
arbitration tribunal against the contracting parties involving the transactions
contemplated by this Agreement.
10.4 Capacity, etc. VEGA represents and warrants to CEVA that it has the
necessary infrastructure, licenses and approvals and capacity to perform the
services as described in Article II. CEVA represents and warrants to VEGA that
it has the necessary infrastructure, licenses and approvals and capacity to
perform the services as described in Article III.
10.5 Provision of Information. Both CEVA and VEGA represent and warrant that
they shall inform each other regarding all applicable environmental, technical
and operational criteria required by law or other regulations prior to the
commencement of the performance that CEVA or VEGA are required to comply
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with in connection with the performance of their obligations under this
Agreement.
ARTICLE XI MISCELLANEOUS
11.0 Notice. Any written notice required or permitted to be given under this
Agreement shall be personally delivered or sent by telex, telecopy or telefax or
shall be mailed registered or certified mail, return receipt requested, or first
class mail with postage prepaid, and shall be deemed to have been effectively
given to the recipient party on the date of actual receipt.
The names and addresses of the parties are identified herein below:
TO VEGA:
VEGA S.A.
Str Valeni Nr 146, Ploiesti, Prahova
Romania
Fax: (40 44) 114469
Attn.: Dr. Eng. Dumitru Manoiu
General Director
TO CEVA:
CEVA International, Inc.
75-77 North Bridge Street,
Somerville, NJ 08876 US
Fax: (908) 429 0040
Attn.: Herbert G. Case
The addresses and persons to which notice is to be given may be changed upon
notice as provided in this Section.
11.1 Assignment. Neither party shall assign any of its rights or
obligations hereunder without the prior written consent of the other party,
except;
i) either party may assign the same to any corporation or other business
organization into which it shall be merged, or to which its assets are
transferred in connection with any dissolution, liquefaction, winding
up or similar business event, or with which it shall be consolidated,
or by which it or substantially all of its assets shall be acquired, or
ii) CEVA shall have the right to assign all of its rights, title and
interest in this agreement to a subsidiary or an affiliate entity
without the prior or later approval of VEGA. VEGA hereby gives its
consent to assign all rights, title and interests of CEVA for such a
third party. No such assignment
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shall relieve the assigning party or its general partner(s) or
principle(s) of its/their obligations hereunder, all of which shall be
expressly assumed by the assignee or transferee(s) as a condition of
any such assignment, dissolution, liquidation, winding down, transfer
or similar business event.
11.2 No Waiver. None of the terms of this Agreement shall be deemed to have been
waived by either party, unless such waiver is in writing and signed by that
party. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other provision
of this Agreement.
11.3 Incorporation of Recitals and Exhibit(s). All of the preambles and all of
the recitals set forth in this Agreement are made a part of this Agreement. In
addition, any and all exhibits to this agreement are hereby specifically made a
part of and incorporated into this Agreement.
11.4 Counterparts. This Agreement may be executed simultaneously in three
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
11.5 Compliance with Laws. In the performance of any of its obligations under
this Agreement, neither party shall violate or cause the other party to be in
violation of any applicable federal, state or local laws, regulations or orders
now or hereafter enacted or promulgated.
11.6 Entire Agreement. This Agreement embodies the whole agreement of the
parties with respect to the subject matter hereof and supersedes any and all
prior oral or written negotiations, communications, and agreements by or on
behalf of the parties, including, without limitation, any prior confidentiality
agreement of any kind. This Agreement may not be varied by any purchase order,
acknowledgment, confirmation, invoice, or shipping document issued by either
party. Any amendments or modifications of this Agreement must be in writing and
signed by both parties to be binding.
11.7 Severability. In the event that any provision hereof shall violate any
applicable statute, ordinance, or rule of law in any jurisdiction in which it is
used, such provision shall be ineffective to the extent of such violation
without invalidating any other provisions hereof.
11.8 No Third Party Rights. Nothing expressed or implied in this Agreement is
intended or shall be construed to confer upon or to give any person, firm or
corporation, other than the parties hereto or their successors or assignees in
interest in accordance with the provisions of this Agreement, any rights or
remedies hereunder or by reason hereof.
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11.9 Independent Contractor. Neither party is, and neither party shall be
considered as, a joint venturer, partner or agent of the other; neither party
shall have any power, right or authority, express or implied, to make any
agreement, contract or representation of any kind on behalf of the other; and
neither party shall have any power, right or authority, express or implied, to
create or assume in any manner any obligation of any kind on behalf of the
other. Each party agrees not to represent to anyone that it is an agent of the
other or that it has any authority to act on behalf of the other.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
CEVA International, Inc. S. C. ROMPETROL S.A.
BY: /s/ Herbert Case BY: /s/ John H. Works
--------------- --------------
Herbert Case, Director John H.Works, CEO
VEGA S.A.
BY: /s/ Dr. Eng. Dumitru Manoiu
------------------------------------
Dr. Eng. Dumitru Manoiu,
General Director
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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Appendix 1 - Technical Description of *
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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*Appendix 2 - Sludge Lagoon Extraction and Conditioning Description
1. TECHNICAL APPROACH
The processing of any lagoon waste can be accomplished
*
*Confidential portion omitted pursuant to a request for Confidential Treatment
and filed separately with the Commission.
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