Unassociated Document


    


     

    


     

    


    


    EARLY
      WORKS AGREEMENT

    


    


    


    


    This
      agreement, entered into as of the 21st day of
      September
      2007, in Cardiff, United Kingdom / Frankfurt am Main, Germany by
      and

     

    


     

     

    between

     

     

    Flex
      Fuels Energy Limited

    30
      St
      Mary Axe

    London
      EC3A 8EP

    United
      Kingdom

    -
      hereinafter called „FLEX“ -

     

     

    and

     

     

    Lurgi
      Aktiengesellschaft

    Lurgiallee
      5

    D-60295
      Frankfurt am Main

    Germany

    -
      hereinafter called „LURGI“ -

     

     

    


    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

     

    PREAMBLE

     

    Whereas,
      FLEX intends to install an integrated biodiesel production facility with an
      annual capacity of 200,000 tons biodiesel to be located within Cardiff, United
      Kingdom (hereinafter called “Plant”), and

     

    Whereas,
      LURGI has developed and owns a proprietary process for the production of
      biodiesel (hereinafter called “Process”), and

     

    Whereas,
      LURGI has special experience and competence in the design, installation,
      start-up and operation of integrated biodiesel plants applying LURGI’s process,
      and

     

    Whereas,
      FLEX is desirous to adapt LURGI’s process for the installation of its integrated
      biodiesel plant and has therefore requested LURGI to provide the related early
      works services (hereinafter also called „Work“) in such respect,
      and

     

    Whereas,
      LURGI is willing to render such Work.

     

    Now,
      therefore, FLEX and LURGI enter into the following agreement:

     

     

    
      	
              1

            	
              Basis
                and Scope of Work

            


    

     

    
      	
              1.1  

            	
              LURGI
                shall execute the Work as defined in Annex I. LURGI shall base the
                Work
                upon the outline functional specification as per Annex
                II.

            


    

     

    
      	
              1.2  

            	
              LURGI
                shall render additional services at FLEX’s plant site upon request of FLEX
                related to process consultation, supervision of engineering and plant
                construction, start-up assistance, proof of performance guarantees,
                etc.
                subject to terms and conditions as stipulated in Article
                2.2..

            


    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
              2

            	
              Contract
                Price, Daily Rates and Price
                Basis

            


    

     

    
      	
              2.1  

            	
              Agreement
                Price

            


    

     

    
      	
              2.1.1  

            	
              The
                price for the early works services as defined under Article 1.1 above
                amounts to:

            


    

     

     

    EUR
      360,000.00

     

     (in
      words: three hundred and sixty thousand Euro only)

     

    
      	
              2.2  

            	
              Daily
                Rates for Additional Services

            


    

     

    Section
      removed for reasons of commercial confidentially.

     

    
      	
              2.3  

            	
              Price
                Basis

            


    

     

    Section
      removed for reasons of commercial confidentially.

     

    
      	
              2.4

            	
              Taxes,
                Levies

            


    

     

    Section
      removed for reasons of commercial confidentially.

     

    
      	
              2.5

            	
              For
                the avoidance of doubt the liability of FLEX howsoever and wheresoever
                arising under or out of this agreement shall in no circumstances
                exceed
                the said sum of EUR 360,000.00 unless both FLEX and LURGI have agreed
                to
                any new price in writing.

            


    

     

    
      	
              3

            	
              Terms
                of Payment

            


    

     

    Section
      removed for reasons of commercial confidentially.

     

    
      	
              4

            	
              Execution
                Period

            


    

     

    Section
      removed for reasons of commercial confidentially.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              5

            	
              Change
                of Work

            


    

     

    
      	
              5.1  

            	
              Should
                FLEX require engineering work over and above the Work as defined
                in Annex
                I, FLEX shall have the right at any time to order changes in the
                Work.
                Upon FLEX’s respective written request LURGI shall furnish FLEX with a
                written statement specifying:

            


    

     

    
      	
              -  

            	
              LURGI’s
                estimate of the increase in the total cost
                involved;

            


    

     

    
      	
              -  

            	
              any
                effect such changes in LURGI’s work may have on any other provision of
                this agreement;

            


    

     

    
      	
              -  

            	
              such
                other detail as FLEX may require.

            


    

     

     

    
      	
              5.2  

            	
              If
                FLEX agrees to the statement referred to in the change of work
                notification from LURGI, FLEX shall notify LURGI thereof in writing
                within
                7 (seven) working days from receipt of LURGI’s notification whereupon the
                change of work shall be deemed to be incorporated into LURGI’s scope of
                work.

            


    

     

    
      	
              5.3  

            	
              LURGI
                shall not start work that may effect a change in the work and involve
                an
                increase in cost before FLEX has agreed to the aforesaid
                statement.

            


    

     

    
      	
              5.4  

            	
              Payments
                for authorised changes in work shall be made by FLEX within 10 (ten)
                days
                after receipt of corresponding invoice to LURGI’s bank account as stated
                in the invoice.

            


    

     

    
      	
              6

            	
              Warranty
                – Limitation of Liability

            


    

     

    
      	
              6.1  

            	
              Warranty
                for Engineering

            


    

     

    LURGI
      shall perform the early works services in accordance with internationally
      recognised practices and standards.

     

    If,
      nevertheless, LURGI’s work proves to be wholly or partially incorrect, defect or
      incomplete for reasons attributable to LURGI, LURGI’s liability shall be
      limited, to the exclusion of any further rights and remedies of FLEX, to the
      cost-free correction of any defective work. Any action or proceeding based
      on
      LURGI’s failure to perform its obligations hereunder must be brought or
      instituted immediately by FLEX after discovery, at the latest 12 (twelve) months
      from submission of the Work or 18 (eighteen) months after the effective date
      of
      this agreement, in case of delays not attributable to LURGI.

     

    LURGI
      shall perform the early works services with the reasonable skill and care to
      be
      expected of an experienced design and build contractor of works of a similar
      size and nature to the Plant and in accordance with internationally recognized
      practices and standards.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
              6.2  

            	
              Limitation
                of Liability

            


    

     

     

    
      	
              6.2.1  

            	
              LURGI’s
                overall total liability under or in connection with this agreement
                shall
                be limited to a maximum amount of 5 (five) percent of the agreement
                price
                as per Article 2.1.

            


    

     

     

    
      	
              6.2.2  

            	
              LURGI
                shall not be liable under any theory of law whatsoever, whether based
                on
                breach of agreement, strict liability, tort or otherwise, for any
                special,
                incidental, for indirect and/or consequential damage or losses such
                as,
                but not limited to, loss of business opportunities, loss of profit,
                increased cost of construction investment, interest, financing or
                other
                increased or additional cost, no matter what statutory basis such
                claims
                for reimbursement may have.

            


    

     

    
      	
              7

            	
              Force
                Majeure

            


    

     

    Neither
      party hereto shall be held responsible for any delay or failure to perform
      any
      or all of the obligations imposed upon such party caused by occurrences beyond
      the control of the party concerned, including but not limited to acts of God,
      Government regulations, strikes, lockouts or other acts of workmen, fires,
      floods, explosions, riots, war, rebellion and sabotage. The time for
      implementing this agreement shall be extended by a period equivalent to the
      time
      Force Majeure lasts.

     

    The
      party
      affected by the circumstances of Force Majeure shall notify the other party
      of
      the beginning and of the end of Force Majeure immediately by telefax e-mail
      or
      and confirm the e-mail or telefax message by a letter within 15 (fifteen) days.
      In case of non-observance of such notification by the party so affected, the
      party so affected shall not be entitled to make reference to Force
      Majeure.

     

    Should
      such circumstances of Force Majeure last over a period of more than 6 (six)
      months, the parties shall meet and discuss the best way to proceed with the
      execution of this agreement. If an agreement cannot be reached the case then
      shall be submitted to arbitration for final settlement in accordance with the
      stipulations of Article 8.

     

    Payments
      due for services which have already been executed shall not be affected by
      Force
      Majeure.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
              8

            	
              Applicable
                Law and Arbitration

            


    

     

    
      	
              8.1  

            	
              The
                legal relations between the parties shall in all respects be governed
                by
                the English law of England and Wales without regard to the principles
                of
                conflicts of laws.

            


    

     

    
      	
              8.2  

            	
              The
                parties will try to settle any disputes amicably. In case they fail
                to
                succeed, the controversies will be finally settled by three arbitrators
                in
                accordance with the Rules of the International Chamber of Commerce,
                Paris/France.

            


    

     

    The
      venue
      of the arbitration shall be Zurich, Switzerland.

     

    Judgement
      upon the award may be entered in any court having jurisdiction, or application
      may be made to such court for a judicial acceptance of the award, as the case
      may be.

     

    The
      arbitration shall be held in the English language.

     

    
      	
              9

            	
              Secrecy

            


    

     

    
      	
              9.1  

            	
              FLEX
                undertakes to keep secret all know-how, experience and information
                concerning LURGI’s process of which it became or becomes aware in
                connection with the installation of the plant or which it develops
                jointly
                with LURGI for a period of 15 (fifteen) years after this agreement
                has
                come into force, and to use them only for the purposes of this agreement
                and not to disclose them to third
                parties.

            


    

     

     

    
      	
              9.2  

            	
              LURGI
                undertakes the same obligation with respect to the secret know-how,
                experience and information of which it became or becomes aware through
                FLEX in connection with the installation of the
                plant.

            


    

     

     

    
      	
              9.3  

            	
              LURGI
                and FLEX agree that they will impose the same secrecy obligation
                on their
                employees to the extent that is legally possible - even for the time
                after
                they have left the company.

            


    

     

     

    
      	
              9.4  

            	
              The
                obligations as per Articles 9.1 and 9.2 shall not apply to such know-how,
                experience and information

            


    

     

    
      	
              -  

            	
              which
                had been known to LURGI or FLEX or were evident before they began
                their
                co-operation; or

            


    

     

    
      	
              -  

            	
              which
                LURGI or FLEX legally received from third parties without any secrecy
                obligation, provided that the third party did not receive this know-how,
                experience and information either directly or indirectly from FLEX
                or
                LURGI; or

            


    

     

    
      	
              -  

            	
              which
                become evident without any action by LURGI or FLEX after they have
                begun
                their co-operation, the necessary evidence shall in this case be
                provided
                by the party having recourse of this clause;
                or

            


    

     

    
      	
              -  

            	
              which
                become generally available in the public domain through technical
                literature, magazines, trade publications,
                etc.

            


    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

     

    
      	
              9.5  

            	
              LURGI
                and FLEX shall be entitled to pass on any know-how, experience and
                information that they have received from the other party under this
                agreement to third parties to the extent that this is necessary for
                LURGI
                or FLEX to install and operate the biodiesel plant and to provide
                their
                supplies and services for the plant. This shall apply also to repairs,
                improvements and modifications that become necessary after the guarantee
                period has expired. LURGI or FLEX shall bind such third parties to
                the
                same extent of secrecy and restricted use of the know-how, experience
                and
                information that they are themselves required to
                observe.

            


    

     

    
      	
              9.6

            	
              Further,
                and without prejudice to the foregoing LURGI agrees that FLEX may
                pass on
                any work (including information which LURGI regard as confidential)
                produced pursuant to the terms of this agreement for the purpose
                of
                getting all necessary planning and environmental permits for the
                Plant and
                for raising finance to construct and operate the
                Plant.

            


    

     

    
      	
              10

            	
              General
                Provisions

            


    

     

    
      	
              10.1  

            	
              This
                agreement constitutes the entire agreement and understanding between
                the
                authorised representatives of the parties and supersede any and all
                written or oral prior agreements and undertakings. No modification,
                amendment or waiver of any of its provisions shall be valid unless
                in
                writing and signed by the parties.

            


    

     

    However
      in signing this agreement the Parties acknowledge that it is the wish of both
      FLEX and LURGI to reach a future agreement for LURGI to provide a full contract
      for the design, procurement, construction and commissioning of the Plant ("the
      Future Contract"). If such a Future Contract does prove to be possible then
      the
      rights and obligations of both Parties under this agreement shall be subsumed
      into the terms of the said Future Contract.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
              10.2  

            	
              All
                documents, notices and other communications should be forwarded to
                the
                following addresses:

            


    

     

    
      	
               

            	
              for
                FLEX:

            	
              Flex
                Fuels Energy Limited

               

              Regus
                House

               

              Falcon
                Drive

               

              Cardiff
                CF10 4RU

               

              United
                Kingdom

            


    

     

     

    
      	
               

            	
              for
                LURGI:

            	
              Lurgi
                Aktiengesellschaft

               

              Lurgiallee
                5

               

              D-60295
                Frankfurt am Main

               

              Germany

            


    

     

     

    
      	
              10.3  

            	
              This
                agreement shall become effective
                upon

            


    

     

    
      	
              -  

            	
              execution
                thereof by both parties, and

            


    

     

    
      	
              -  

            	
              receipt
                of the down payment to be made by FLEX to LURGI as per Article 3.1.1
                above, and

            


    

     

     

    
      	
              10.4  

            	
              If
                any term or provision of this agreement proves to be illegal, invalid
                or
                unenforceable the other terms or provisions shall not be affected
                thereby.
                FLEX and LURGI hereto shall endeavour to replace retroactively such
                illegal, invalid or unenforceable terms or provisions by legal, valid
                or
                enforceable terms or provisions which best correspond to their original
                intentions.

            


    

     

    
      	
              10.5  

            	
              FLEX
                shall not assign its contractual rights to any third party, except
                with
                prior written agreement from LURGI.

            


    

     

    
      	
              10.6  

            	
              Except
                for the rights explicitly granted under this agreement, FLEX shall
                have no
                further rights or remedies under this
                agreement.

            


    

     

    
      	
              10.7  

            	
              The
                following Annexes form an integral part to this
                agreement:

            


    

     

    
      	
               

            	
              Annex
                I

            	
              Scope
                of Work

            


    

     

    
      	
               

            	
              Annex
                II

            	
              Outline
                Functional Specification

            


    

     

    
      	
               

            	
              Annex
                III

            	
              LAPPC
                & IPPC

            


    

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     

    
      	
              10.8  

            	
              The
                agreement shall be read as a whole. In case of discrepancy or
                inconsistency between the body of the agreement and the Annex, the
                body of
                the agreement shall prevail.

            


    

     

    
      	
              10.9  

            	
              All
                correspondence and documents shall be made in the English
                language.

            


    

     

    
      	
              10.10  

            	
              This
                agreement is signed in two (2) identical
                copies.

            


    

    
 

     

    In
      witness thereof, FLEX and LURGI hereto have caused this document to be executed
      and signed as follows on the day and date first above written.

     

     

    
      	For
              and on behalf of   	For
              and on behalf of
	 	 
	Flex
              Fuels Energy Limited 	Lurgi
              Aktiengesellschaft
	 	 
	By: 	By:
	 	 
	____________________________	____________________________
	 Iestyn
              Morgan 	Jan-Marc
              Raitz
	 Director 	Area
              Sales Director
	 	 
	____________________________  	 
	Chris
              Gould	____________________________
	Project
              Manager  	Dirk
              Steinigen
	 	Director
              Operations & Engineering
	 	 


    

    


     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

                                                                                         

     

    


     

     

    Annex
      I – Scope of Work

     

     

    Section
      removed for reasons of commercial confidentially.

     

     

    


     

     

    Annex
      II – Outline Functional Specification

     

     

    Section
      removed for reasons of commercial confidentially.

     

     

    


     

     

    Annex
      III – LAPPC & IPPC

     

     

    Section
      removed for reasons of commercial confidentially.