Document:

Exhibit
        10.1

      

      OMNIBUS
        AMENDMENT TO JOINT VENTURE AGREEMENT AND ADDITIONAL
        AGREEMENTS

       

      THIS
        OMNIBUS AMENDMENT TO JOINT VENTURE AGREEMENT AND ADDITIONAL AGREEMENTS (this
        “Amendment”)
        is
        entered into as of June 9, 2008
        by and
        among Manhattan Pharmaceuticals, Inc., a Delaware corporation (“MHA”),
        Hedrin Pharmaceuticals K/S,
        a
        Danish limited liability partnership (“Newco”),
        Hedrin
        Pharmaceuticals General Partner ApS, a Danish private limited company
        (“Hedrin
        GP”)
        and
        Nordic
        Biotech Venture Fund II K/S, a Danish limited liability partnership
        (“Nordic”).

       

      WITNESSETH:

       

      WHEREAS,
        MHA and Nordic previously entered into that certain Joint Venture Agreement
        dated as of January 31, 2008 (as previously amended, the “Joint
        Venture Agreement”).
        Capitalized terms not otherwise defined herein shall have the meanings assigned
        to them in the Joint Venture Agreement;

      

      WHEREAS,
        pursuant
        to the Joint Venture Agreement, (i) MHA agreed to assign certain assets to
        Newco
        in accordance with the terms of that certain Assignment and Contribution
        Agreement dated as of February 21, 2008 (as amended from time to time, the
        “Contribution
        Agreement”),
        (ii)
        MHA, Nordic and Hedrin GP entered into a Limited Partnership Agreement dated
        as
        of February 21, 2008 (as amended from time to time, the “Partnership
        Agreement”),
        and
        (iii) MHA and Nordic entered into a Shareholders Agreement dated as of February
        21, 2008 (as amended from time to time, the “Shareholders
        Agreement”)
        with
        respect to Hedrin GP; and

      

      MHA,
        Newco, Hedrin GP and Nordic wish to recognize that substantial progress has
        been
        made toward achieving the Payment Milestone so as to justify a current partial
        Milestone Payment and that more specificity is appropriate in the definition
        of
        the Payment Milestone that will result in the payment of the remaining Milestone
        Payment, all in accordance with the terms hereof, and that the Joint Venture
        Agreement, Contribution Agreement, Partnership Agreement and Shareholders
        Agreement should be appropriately modified, in each case on the terms and
        conditions set forth in this Amendment. 

      

      NOW,
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which is hereby acknowledged, the parties hereto hereby agree as
        follows:

      

      1. Amendments
        to Joint Venture Agreement.
        

       

      (a) Section
        1
        of the Joint Venture Agreement is hereby amended by deleting the defined
        term
“Milestone Payment” in its entirety and adding the following two new defined
        terms in alphabetical sequence in Section 1:

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Initial
        Milestone Payment” means the payment by Nordic of an additional $1,250,000 to
        Newco after the satisfaction of the Initial Payment Milestone (as defined
        in the
        Contribution Agreement).

       

      “Second
        Milestone Payment” means the payment by Nordic of an additional $1,250,000 to
        Newco after the satisfaction of the Second Payment Milestone (as defined
        in the
        Contribution Agreement).

       

      (b) Section
        1
        of the Joint Venture Agreement is hereby amended by deleting the defined
        term
“Investment Amount” in its entirety and replacing it with the following:

       

      “Investment
        Amount”
means
        (i) $2,500,000 if neither the Initial Milestone Payment nor the Second Milestone
        Payment has occurred, (ii) $3,750,000 if, prior to June 30, 2009, the Initial
        Milestone Payment has occurred but the Second Milestone Payment has not
        occurred, (iii) $3,500,000 if (A) on or after June 30, 2009, the Initial
        Milestone Payment has occurred but the Second Milestone Payment has not
        occurred, or (B) if
        prior
        to June 30, 2009, the U.S.
        Food
        and Drug Administration (“FDA”)
        formally designates the Licensed Products (as defined in the Contribution
        Agreement) as a drug and refers regulation thereof to the FDA Center for
        Drug
        Evaluation and Research, and (iv) $5,000,000 if both the Initial Milestone
        Payment and the Second Milestone Payment have occurred.

       

      2. Amendments
        to Contribution Agreement.

       

      (a) Section
        5.3 of the Contribution Agreement is hereby deleted in its entirety and replaced
        with the following:

       

      “5.3 Definition
        of Initial Payment Milestone and Second Payment Milestone

      

      For
        purposes of this Agreement, (i) the term “Initial
        Payment Milestone”
shall
        mean a preliminary determination from the U.S. Food and Drug Administration
        received prior to September 30, 2008 that the Licensed Products will be
        regulated as a medical device, and (ii) the term “Second
        Payment Milestone”
shall
        mean (A) a determination by the U.S. Food and Drug Administration (“FDA”)
        that a
        Licensed Product is substantially equivalent to a predicate device in accordance
        with Section 513(f)(1) or 510(k) of the Federal Food, Drug, and Cosmetic
        Act (as
        amended, the “FDC
        Act”)
        or any
        other marketing authorization of a Licensed Product by the FDA as a medical
        device, (B) the issuance of a “Classification Decision” as such term is used in
        Attachment 1 of the FDA Guidance for Industry and CDRH Staff titled “New Section
        513(f)(2) - Evaluation of Automatic Class III Designation” issued by the FDA on
        February 19, 1998, with respect to a Licensed Product, or (C) the receipt
        of a
        formal response to a “Request for Designation” from the Office of Combination
        Products that designates a Licensed Product as a device, in each of cases
        (A)
        through (C) prior to June 30, 2009.”

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (b) Section
        5.1(a)(ii) of the Contribution Agreement is hereby deleted in its entirety
        and
        replaced with two new subsections as follows:

      

      “(ii) within
        21
        days after the achievement of the Initial Payment Milestone (as defined below):
        (A) pay to MHA an additional US$1,000,000.00 in cash (the “Second
        Cash Payment”)
        and
        (B) if necessary to maintain MHA’s 50% ownership of outstanding Partnership
        Shares, issue to MHA, and deliver a certificate representing, a number of
        additional Partnership Shares of Newco that will constitute, together with
        the
        Initial Equity Issuance, 50% of all outstanding Partnership Shares (the
“Second
        Equity Issuance”).

      

      (iii) within
        30
        days after the achievement of the Second Payment Milestone (as defined below):
        (A) pay to MHA an additional US$500,000.00 in cash (the “Third
        Cash Payment”
and
        together with the First Cash Payment and the Second Cash Payment, the
“Cash
        Payments”)
        and
        (B) if necessary to maintain MHA’s 50% ownership of outstanding Partnership
        Shares, issue to MHA, and deliver a certificate representing, a number of
        additional Partnership Shares of Newco that will constitute, together with
        the
        Initial Equity Issuance and Second Equity Issuance, 50% of all outstanding
        Partnership Shares (the “Third
        Equity Issuance”)
        and,
        together with the Initial Equity Issuance and Second Equity Issuance, the
        “Equity
        Issuances”).”

      

      (c) Section
        5.1(c) of the Contribution Agreement is hereby deleted in its entirety and
        replaced with the following:

      

      “Upon
        the
        Initial Equity Issuance, MHA shall own 50% of the outstanding Partnership
        Shares
        of Newco. Upon the Second Equity Issuance, MHA shall own 50% of the outstanding
        Partnership Shares of Newco (after giving effect to the issuance of additional
        Partnership Shares, if any, to Nordic pursuant to the Partnership Agreement).
        Upon the Third Equity Issuance, if any, MHA shall own 50% of the outstanding
        Partnership Shares of Newco (after giving effect to the issuance of additional
        Partnership Shares, if any, to Nordic pursuant to the Partnership
        Agreement).”

      

      (d) Section
        5.2(b) of the Contribution Agreement is hereby deleted in its entirety and
        replaced with the following:

      

      “(b) (i)
        The
        authorized capital of Newco, immediately after the Second Equity Issuance,
        if
        any, consists of 2,000 Partnership Shares, 700 of which are owned, beneficially
        and of record, by Nordic, and 700 of which are owned, beneficially and of
        record
        by MHA, and (ii) the authorized capital of Newco, immediately after the Third
        Equity Issuance, if any, consists of 2,000 Partnership Shares, 1,000 of which
        are owned, beneficially and of record, by Nordic, and 1,000 of which are
        owned,
        beneficially and of record by MHA.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      3. Amendments
        to Partnership Agreement.
        

       

      (a) Section
        1.1 of the Partnership Agreement is hereby amended by deleting the defined
        term
“Payment Milestone” in its entirety and adding the following two new defined
        terms in alphabetical sequence in Section 1.1:

       

      “Initial
        Payment Milestone” means such term as defined in the Contribution Agreement.

       

      “Second
        Payment Milestone” means such term as defined in the Contribution Agreement.

       

      (b) Section
        3.6 of the Partnership Agreement is hereby deleted in its entirety and replaced
        with the following:

       

      “(a)
        Not
        later than 21 days after satisfaction, if any, of the Initial Payment Milestone,
        Nordic shall pay to the Partnership an additional $1,250,000 by wire transfer
        to
        a bank account designated by the Partnership as payment for an additional
        200
        Partnership Shares. The satisfaction of the Initial Payment Milestone shall
        constitute payment by MHA for an additional 200 Partnership Shares, subject
        to
        subsection (c) below. Accordingly, after satisfaction of the Initial Payment
        Milestone, the Partnership Shares shall be distributed among the Parties
        as
        follows (all amounts in DKK):

       

      
        	 	 	
                Number of Partnership Shares

              	 
	
                Nordic 

              	 	 	
                700

              	 
	
                MHA

              	 	 	
                700

              	 
	
                General Partner

              	 	 	
                0

              	 
	
                Total

              	 	 	
                1,400

              	 

      

      

      (b)
        Not
        later than 30 days after satisfaction, if any, of the Second Payment Milestone,
        Nordic shall pay to the Partnership an additional $1,250,000 by wire transfer
        to
        a bank account designated by the Partnership as payment for an additional
        300
        Partnership Shares. The satisfaction of the Second Payment Milestone shall
        constitute payment by MHA for an additional 300 Partnership Shares. Accordingly,
        after satisfaction of the Second Payment Milestone, the Partnership Shares
        shall
        be distributed among the Parties as follows (all amounts in DKK):

       

      
        	 	 	
                Number of Partnership Shares

              	 
	
                Nordic 

              	 	 	
                1,000

              	 
	
                MHA

              	 	 	
                1,000

              	 
	
                General
                  Partner

              	 	 	
                0

              	 
	
                Total

              	 	 	
                2,000

              	 

      

      

      (c)
        If
        the Second Payment Milestone is not achieved by June 30, 2009, or if prior
        to
        June 30, 2009, the U.S.
        Food
        and Drug Administration (“FDA”)
        formally designates the Licensed Products (as defined in the Contribution
        Agreement) as a drug and refers regulation thereof to the FDA Center for
        Drug
        Evaluation and Research,
        (i)
        Nordic shall not be obliged to make any payment to the Partnership pursuant
        to
clause
        3.6(b), (ii) MHA shall forfeit to the Partnership 400 Partnership Shares,
        and
        (iii) Nordic shall be entitled to, and the Partnership shall make, a return
        of
        capital of $250,000, with no corresponding reduction in Nordic’s Partnership
        Shares. Accordingly,
        after June 30, 2009, if the Second Payment Milestone has not been achieved,
        or
        if
        prior to June 30, 2009, the FDA
        formally designates the Licensed Products as a drug and refers regulation
        thereof to the FDA Center for Drug Evaluation and Research, the Partnership
        Shares shall be distributed among the Parties as follows (all amounts in
        DKK):

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                Number of Partnership Shares

              	 
	
                Nordic 

              	 	 	
                700

              	 
	
                MHA

              	 	 	
                300

              	 
	
                General
                  Partner

              	 	 	
                0

              	 
	
                Total

              	 	 	
                1,000

              	 

      

      

      (c) Section
        11.1(ii) of the Partnership Agreement is hereby deleted in its entirety and
        replaced with the following:

      

      From
        any
        amount available for distribution in excess of the amount referred to under
        sub-clause 11.1(i) the holder(s) of the MHA Partnership Shares shall before
        any
        distribution is made to other Limited Partners be entitled to receive an
        amount
        equal to the proceeds distributed to the holders of the Nordic Partnership
        Shares under sub-clause 11.1(i) multiplied by a fraction the numerator of
        which
        is MHA’s number of Partnership Shares at the time of such distribution, and the
        denominator of which is the total number of outstanding Partnership Shares
        at
        the time of such distribution.

      

      4. Amendments
        to Shareholders Agreement.
        

       

      (a) Section
        1.1 of the Shareholders Agreement is hereby amended by deleting the defined
        term
“Payment Milestone” in its entirety and adding the following two new defined
        terms in alphabetical sequence in Section 1.1:

       

      “Initial
        Payment Milestone” means such term as defined in the Contribution Agreement.

       

      “Second
        Payment Milestone” means such term as defined in the Contribution Agreement.

       

      (b) Section
        4.3 of the Shareholders Agreement is hereby deleted in its entirety and replaced
        with the following: 

       

      “Irrespective
        of clause 4.2, if the Second Payment Milestone has not been achieved by 30
        March
        2009, Nordic shall – in addition to any board members appointed by Nordic
        pursuant to clause 4.2 and as long as Nordic is the owner of the Nordic
        Partnership Shares – immediately be entitled to appoint one additional
        board member, in which case the board of directors may consist of up to five
        members elected at the general meeting.”

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      5. Satisfaction
        of Initial Payment Milestone.
        The
        parties hereto acknowledge and agree that the Initial Payment Milestone is
        deemed to be achieved as of the date of this Amendment and that payment of
        the
        Nordic capital contribution to Newco pursuant to Section 3.6(a) of the
        Partnership Agreement, as amended hereby, and payment by Newco of the Second
        Cash Payment pursuant to Section 5.1(a)(ii) of the Contribution Agreement,
        as
        amended hereby, will each occur on or before the twenty-first day after the
        date
        of this Amendment.

       

      6. Representations
        and Warranties; Ratification.
        

       

      (a) Each
        of
        MHA, Nordic, Newco and Hedrin GP represents and warrants to the other parties
        hereto that this Amendment has been duly executed and delivered by such party
        and constitutes a legal, valid and binding obligation of such party enforceable
        against it in accordance with its terms, subject to laws of general application
        relating to bankruptcy, insolvency and the relief of debtors and rules of
        law
        governing specific performance, injunctive relief or other equitable remedies,
        and to limitations of public policy. 

       

      (b) Each
        of
        Nordic, MHA, Newco and Hedrin GP represents and warrants to the others that
        each
        of the representations and warranties of such party in each of the Joint
        Venture
        Agreement and the Additional Agreements to which such company is a party
        is true
        and correct in all material respects on the effective date of this Amendment
        (except as set forth on Schedule
        A
        hereto
        and except for representations and warranties limited as to time or with
        respect
        to a specific event, which representations and warranties shall continue
        to be
        limited to such time or event).

      

      (c) Except
        as
        hereby amended, the Joint Venture Agreement and each provision thereof, and
        each
        Additional Agreement (as the same may be amended in connection with this
        Amendment) and each provision thereof, are hereby ratified and confirmed
        in
        every respect and shall continue in full force and effect. 

       

      7. Conditions
        Precedent.
        The
        agreements set forth in this Amendment are conditional and this Amendment
        shall
        not be effective until receipt by each party of a fully-executed counterpart
        of
        this Amendment (which may be a facsimile or .pdf copy thereof).

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      8. Miscellaneous.

      

      (a) Entire
        Agreement.
        This
        Amendment, the Joint Venture Agreement and the Additional Agreements, as
        amended
        hereby, contain the entire understanding of the parties hereto and supercedes
        all prior or contemporaneous negotiations, promises, covenants, agreements
        and
        representations of every nature whatsoever with respect to the matters referred
        to in this Amendment, the Joint Venture Agreement and the Additional Agreements.
        

      (b) Headings.
        The
        headings herein are for convenience only, do not constitute a part of this
        Agreement and shall not be deemed to limit or affect any of the provisions
        hereof. The language used in this Agreement will be deemed to be the language
        chosen by the parties to express their mutual intent, and no rules of strict
        construction will be applied against any party.

      (c) Successors
        and Assigns.
        This
        Amendment shall be binding upon and inure to the benefit of the parties and
        their successors and permitted assigns.

      (d) Expenses.
        Notwithstanding any provision to the contrary in the Agreement or the Additional
        Agreements, MHA will reimburse Nordic for all legal, due diligence and advisory
        fees and expenses incurred by Nordic or its advisors in connection with this
        Amendment and the transactions contemplated by this Amendment, the Agreement
        and
        the Additional Agreements. MHA has made on or before the date of this Amendment,
        or shall make within five (5) days of the date of this Amendment, a payment
        to
        Nordic of $30,000, and thereafter shall make additional advances and payments
        to
        Nordic necessary to reimburse Nordic for its fees and expenses in excess
        of
        amounts previously advanced under this Section 8(d). 

      (e) Governing
        Law.
        

      (i) All
        questions concerning the construction, validity, enforcement and interpretation
        of this Amendment, as it relates to the amendments to the Joint Venture
        Agreement and Contribution Agreement, shall be governed by and construed
        and
        enforced in accordance with the internal laws of the State of New York, without
        regard to the principles of conflicts of law thereof, except to the extent
        that
        the application of the General Corporation Law of the State of Delaware is
        mandatorily applicable. 

      (ii) All
        questions concerning the construction, validity, enforcement and interpretation
        of this Amendment, as it relates to the amendments to the Partnership Agreement
        and Shareholders Agreement, shall be governed by and construed and enforced
        in
        accordance with Danish law. 

      (iii) Each
        Party hereby irrevocably submits to the exclusive jurisdiction of the federal
        and state courts sitting in the state of New York in any action or proceeding
        arising out of or relating to this Amendment. Each Party hereby irrevocably
        agrees, on behalf of itself and on behalf of such Party’s successors and
        permitted assigns, that all claims in respect of such action or proceeding
        shall
        be heard and determined in any such court and irrevocably waives any objection
        such person may now or hereafter have as to the venue of any such suit, action
        or proceeding brought in such a court or that such court is an inconvenient
        forum. If either party shall commence an action or proceeding to enforce
        any
        provision of this Amendment, then the prevailing party in such action or
        proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
        and prosecution of such action or proceeding. 

      (f) Counterparts.
        This
        Amendment may be executed in two or more counterparts, all of which when
        taken
        together shall be considered one and the same agreement and shall become
        effective when counterparts have been signed by each party and delivered
        to the
        other party, it being understood that both parties need not sign the same
        counterpart. In the event that any signature is delivered by facsimile
        transmission, such signature shall create a valid and binding obligation
        of the
        party executing (or on whose behalf such signature is executed) with the
        same
        force and effect as if such facsimile signature page were an original
        thereof.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (g) Severability.
        If any
        provision of this Amendment is held to be invalid or unenforceable in any
        respect, the validity and enforceability of the remaining terms and provisions
        of this Amendment shall not in any way be affected or impaired thereby and
        the
        parties will attempt to agree upon a valid and enforceable provision that
        is a
        reasonable substitute therefore, and upon so agreeing, shall incorporate
        such
        substitute provision in this Amendment.

       

      [Signature
        page follows]

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Amendment under seal
        as
        of the day and year first above written.

       

      
        	
                MHA:

              
	  
	
                MANHATTAN
                  PHARMACEUTICALS, INC.

              
	 	 
	
                By:

              	
                /s/
                  Douglas Abel

              
	
                Name:
                  

              	
                Douglas
                  Abel

              
	
                Title:

              	
                President
                  and Chief Executive Officer

              
	 	 
	
                NORDIC:

              
	  
	
                NORDIC
                  BIOTECH VENTURE FUND II K/S

              
	 
	
                By:

              	
                /s/
                  Florian Schonharting

              
	 	
                Florian
                  Schonharting, Partner

              
	 	 
	
                By:

              	
                /s/
                  Christian Hansen

              
	 	
                Christian
                  Hansen, Partner

              

      

       

      HEDRIN
        PHARMACEUTICALS K/S:

      

      BY: HEDRIN
        PHARMACEUTICALS GENERAL PARTNER APS

      

      
        	
                By:

              	
                /s/
                  Florian Schonharting

              	 	
                By:

              	
                /s/
                  Douglas Abel 

              
	 	
                Florian
                  Schonharting, Director

              	 	 	
                Douglas
                  Abel, Director

              

      

       

      HEDRIN
        PHARMACEUTICALS GENERAL PARTNER APS:

      

      
        	
                By:

              	
                /s/
                  Florian Schonharting 

              	 	
                By:

              	
                /s/
                  Douglas Abel 

              
	 	
                Florian
                  Schonharting, Director

              	 	 	
                Douglas
                  Abel, Director

              

      

       

      
        
          
          

        

        
          8JOINT
      DEVELOPMENT AGREEMENT

    

    By
      and
      Among

     

    AE
      BIOFUELS AMERICAS, INC.

     

    And

     

    DS
      DEVELOPMENT, S.A.

     

    Dated
      as
      of June
      9,
      2008

     

    
      
        
        

      

      
        -
          i
          -

        
          

        

      

      
        
        

      

    

    
      

      TABLE
        OF CONTENTS

       

      
        	 	 	
                Page

              
	 	 
	
                ARTICLE
                  1 CERTAIN DEFINED TERMS; INTERPRETATION

              	
                2

              
	
                1.1

              	
                Certain
                  Defined Terms

              	
                2

              
	
                1.2

              	
                Interpretation

              	
                8

              
	 	 
	
                ARTICLE
                  2 UTE AGREEMENT; CONSULTING AGREEMENT; HIRING OF
                  EMPLOYMENT

              	
                9

              
	
                2.1

              	
                UTE
                  Agreement

              	
                9

              
	
                2.2

              	
                DSD
                  Consulting Agreement

              	
                9

              
	
                2.3

              	
                Hiring
                  of Employees

              	
                10

              
	 	 	 
	
                ARTICLE
                  3

              	 	
                10

              
	 	 
	
                ARTICLE
                  4 PROJECT COMPANY

              	
                11

              
	
                4.1

              	
                Project
                  Company/Developers,

              	
                11

              
	
                4.2

              	
                Project
                  Assets

              	
                11

              
	
                4.3

              	
                Management
                  of Project Company

              	
                11

              
	 	 
	
                ARTICLE
                  5 DEVELOPMENT AND CONSTRUCTION ACTIVITIES

              	
                13

              
	
                5.1

              	
                Project
                  Proposal

              	
                13

              
	
                5.2

              	
                Project
                  Development

              	
                13

              
	
                5.3

              	
                Performance
                  of Project Activities

              	
                15

              
	 	 
	
                ARTICLE
                  6 PROJECT BUDGET; COSTS; COMPENSATION

              	
                15

              
	
                6.1

              	
                Development
                  Costs

              	
                15

              
	 	 
	
                ARTICLE
                  7 TERM; EVENTS OF DEFAULT; RIGHTS AND REMEDIES; FORCE MAJEURE;
                  SURVIVAL

              	
                16

              
	
                7.1

              	
                Term

              	
                16

              
	
                7.2

              	
                Events
                  of Default

              	
                16

              
	
                7.3

              	
                Rights
                  and Remedies

              	
                17

              
	
                7.4

              	
                Force
                  Majeure

              	
                17

              
	
                7.5

              	
                Survival

              	
                17

              
	 	 
	
                ARTICLE
                  8 LIMITATION OF LIABILITY

              	
                18

              
	
                8.1

              	
                CONSEQUENTIAL
                  AND INDIRECT DAMAGES

              	
                18

              
	
                8.2

              	
                
                  EXCLUSIVITY
                    OF WARRANTIES

                

              	
                18

              
	 	 
	
                ARTICLE
                  9 CONFIDENTIALITY

              	
                18

              
	
                9.1

              	
                Confidentiality

              	
                18

              
	
                9.2

              	
                Tax
                  Treatment and Structure

              	
                19

              
	
                9.3

              	
                Return
                  of Confidential Information

              	
                19

              
	
                9.4

              	
                Survival

              	
                19

              
	 	 
	
                ARTICLE
                  10 DEVELOPER REPRESENTATIONS AND WARRANTIES

              	
                20

              

      

       

      
        
          
          

        

        
          -
            ii
            -

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  11 SETTLEMENT OF DISPUTES

              	
                20

              
	
                11.1

              	
                Procedure

              	
                20

              
	
                11.2

              	
                Arbitration

              	
                20

              
	
                11.3

              	
                Continuation
                  of Work

              	
                21

              
	 	 
	
                ARTICLE
                  12 MISCELLANEOUS

              	
                21

              
	
                12.1

              	
                Indemnity

              	
                21

              
	
                12.2

              	
                Governing
                  Law

              	
                21

              
	
                12.3

              	
                Assignment

              	
                21

              
	
                12.4

              	
                Binding
                  Effect

              	
                21

              
	
                12.5

              	
                Entire
                  Agreement and Modifications

              	
                21

              
	
                12.6

              	
                No
                  Waiver of Rights

              	
                22

              
	
                12.7

              	
                Relationship
                  of Parties

              	
                22

              
	
                12.8

              	
                Notices

              	
                22

              
	
                12.9

              	
                Counterparts

              	
                23

              
	
                12.10

              	
                Third
                  Party Beneficiaries

              	
                23

              
	
                12.11

              	
                Severability

              	
                23

              
	
                12.12

              	
                Illicit
                  Payments/FCPA

              	
                23

              
	
                12.13

              	
                Further
                  Assurances

              	
                23

              
	
                12.14

              	
                Press
                  Release

              	
                23

              

      

      

      
        	
                Exhibits

              	 	 
	 	 	 
	
                Exhibit
                  A

              	 	
                Description
                  of Project

              
	
                Exhibit
                  B

              	 	
                Project
                  Schedule

              
	
                Exhibit
                  C

              	 	
                Project
                  Company Organizational Documents

              
	
                Exhibit
                  D-1

              	 	
                Project
                  Documents

              
	
                Exhibit
                  D-2

              	 	
                Permits

              
	
                Exhibit
                  D-3

              	 	
                Studies,
                  Reports and other Project Assets

              
	
                Exhibit
                  E

              	 	
                Project
                  Site

              
	
                Exhibit
                  F

              	 	
                Project
                  Budget

              
	
                Exhibit
                  G

              	 	
                Preliminary
                  Engineering Contract

              
	
                Exhibit
                  H

              	 	
                DSD
                  Contracts

              

      

       

      
        
          
          

        

        
          -
            iii
            -

          
            

          

        

        
          
          

      

       

      JOINT
        DEVELOPMENT AGREEMENT

       

      This
        JOINT DEVELOPMENT AGREEMENT (this “Agreement”)
        is
        made and entered into effective as of this 9th
        day of
        June, 2008 (the “Effective
        Date”),
        by
        and among AE
        BIOFUELS AMERICAS, INC., a
        US
        corporation incorporated under the laws of Nevada (“AEBA”);
        and
DS
        DEVELOPMENT S.A.,
        a
        private corporation validly incorporated and existing under the laws of
        Argentina (“DSD”)
        formerly named Q4B S.A., and a wholly owned subsidiary of DS
        GROUP S.A.
        and
INTERPRISE
        BRUSSELS S.A.,
        two
        private corporations validly incorporated and existing under the laws of
        Belgium. DSD and together with AEBA, are referred to as the “Developers”.
        This
        Agreement shall supersede the Memorandum of Understanding (as defined below)
        entered into by and between the Parties. 

       

      RECITALS

       

      A. AEBA
        and
        DSD entered into a Memorandum of Understanding, dated April 10, 2008 (the
        “Memorandum
        of Understanding”),
        which
        set forth certain preliminary understandings and agreements between AEBA
        and DSD
        to
        enter
        into a joint development agreement to
        build,
        own, manage and operate biodiesel production facilities in San Lorenzo,
        Argentina for the refining, sale, export and marketing of biodiesel (the
        “Project”).
        The
        Project shall also mean any amendments, modifications, expansions,
        diversifications or other changes to the scope of the Project detailed on
        Exhibit
        A
        attached
        hereto.

      

      B. A.E.
        BIOFUELS, INC.,
        a
        Nevada corporation (“AE
        BIOFUELS”)
        is a
        builder, owner and operator of biodiesel and ethanol manufacturing facilities
        and biofuel technology in the US and India and AEBA is wholly owned by AE
        BIOFUELS. 

      

      C. AEBA
        currently intends to incorporate a limited liability company organized under
        the
        Indian Companies Act (1956) named “UNIVERSAL
        BIOFUELS ARGENTINA PRIVATE LIMITED”
        (“UBAPL”)
        as a
        subsidiary of AE BIOFUELS through a series of affiliated
        corporations.

       

      D. UBAPL
        and
        DSD shall then register a joint venture company (“Unión
        Transitoria de Empresas”
or
        “UTE”)
        in
        Argentina to serve as the project company for the Project (the “Project
        Company”).
        The
        Project Company shall serve as the joint venture special purpose vehicle
        that
        will
        carry out the development, financing, design, construction and operation
        of the
        Project with the support of UBAPL and DSD.

      

      E. In
        accordance with the terms of the Memorandum of Understanding and this Agreement,
        the Developers shall, pursuant to the terms of a mutually acceptable UTE
        agreement to be negotiated by the parties (the “UTE
        Agreement”),
        receive (i) in the case of UBAPL, a 90% ownership in the Project in exchange
        for
        the assignment of the Preliminary Engineering Contract (as defined below)
        and
        the contribution to the Project Company of the debt capital required for
        the
        execution of the Buyatti Real Estate Contract; and (ii) in the case of DSD
        a 10%
        ownership in the Project in exchange for the assignment of all right, title
        and
        interest to the DSD Contracts (as defined below), the services described
        herein,
        and the execution of the Consulting
        Agreement (as defined below) with the Project Company. The
        assignment of the DSD Contract shall be in favor of the Project Company and
        shall occur upon the execution of the Buyatti Real Estate Contract by all
        parties.

       

      
        Confidential

      

      
        
          
          

        

        
          -
            1
            -

          
            

          

        

        
          
          

        

      

       

      F. Concurrent
        with the execution of this Agreement, AEBA has entered into a preliminary
        engineering contract with DS Engineers and Contractors, incorporated in Belgium
        (“DSEC”)
        in
        order to enable DSEC to commence design of the engineering for the manufacturing
        of the equipment and construction of the Project (the “Preliminary
        Engineering Contract”),
        attached hereto as Exhibit
        G.
        

       

      G. DSD
        entered into (1) an oil purchase agreement with Cargill guaranteeing 250,000
        TPY
        of supply of crude soybean oil for ten years, attached hereto as Exhibit
        H-1
        (the
“Cargill
        Supply Contract”);
        (2) a
        memorandum of understanding for the purchase 5.5 hectares for $180,000 US
        per
        hectare (the “Land”)
        from
BUYATTI
        S.A.I.C.A.,
        an
        Argentine corporation (“Buyatti”)
        and
        for the execution of a service and supply contract for the use and operation
        of
        various facilities owned by Buyatti, attached hereto as Exhibit
        H-2
        (the
“Buyatti
        Memorandum of Understanding”);
        and
        (3) various Permits related to the creation of the Project by DSD enumerated
        on
Exhibit
        H-3
        attached
        hereto (the “Assigned Permits”) (collectively the Cargill Supply Contract, the
        Buyatti Memorandum of Understanding and the Assigned Permits shall be referred
        to as the “DSD
        Contracts”).
        As
        referred in paragraph (E) above, DSD shall be granted ownership in the Project
        as detailed in the UTE Agreement in exchange for the assignment of the DSD
        Contracts to the Project Company. 

       

      H. As
        provided in the Memorandum of Understanding, the Parties desire to enter
        into
        this Agreement to set forth the rights and obligations of each Party in the
        development and operation of the Project.

       

      NOW,
        THEREFORE, in consideration of the mutual covenants herein contained herein
        and
        other good and valuable consideration, the receipt and sufficiency of which
        are
        hereby acknowledged by DSD and AEBA, the Parties hereby agree as
        follows:

       

      ARTICLE
        1

      CERTAIN
        DEFINED TERMS; INTERPRETATION

       

      1.1 Certain
        Defined Terms

       

      .
        The
        following terms, when used in this Agreement, have the meanings set forth
        below.
        The meanings specified for any defined term in this Agreement are applicable
        both to the plural and the singular. 

       

      “Advisors”
is
        defined in Section 9.1 hereto.

       

      “Affiliate”
        (including
        the terms “Affiliated” and “Affiliated with”) means, with respect to any Person,
        (a) any other Person, directly or indirectly, through one or more
        intermediaries, controlling, controlled by, or under common control with
        such
        Person, (b) any other Person with respect to which such Person possesses
        the
        right to exercise, directly or indirectly, through one or more intermediaries,
        twenty percent (20%) or more of the voting rights attributable to the ownership
        interests of such other Person, or (c) any other Person with respect to which
        such Person is entitled to receive, directly or indirectly, through one or
        more
        intermediaries, twenty (20%) or more of all dividends or distributions, as
        applicable, paid by such Person. As used in the preceding sentence, the term
        “control” (including the terms “controlling”, “controlled by” or “under common
        control with”) means the possession, directly or indirectly, through one or more
        intermediaries, of the power to direct or cause the direction of the management
        or policies of a Person, whether through the ownership of voting securities,
        by
        contract or otherwise.

       

      
        
          
          

        

        
          -
            2
            -

          
            

          

        

        
          
          

        

      

       

      “Agreement”
        has
        the
        meaning given to such term in the preamble to this Agreement.

       

      “AE
        Biofuels”
has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “AEBA”
has
        the
        meaning given to such term in the preamble to this Agreement.

       

      “AEBA
        Advance” has
        the
        meaning given to such term in Section
        3.1(b)

       

      “AEBA
        Development and Construction Activities”
has
        the
        meaning given to such term in Section
        5.2(b).

       

      “Approved
        Development Costs”
has
        the
        meaning given to such term in Section
        6.1(c).

       

      “Belgium”
means
        that sovereign nation encompassed within the territorial boundaries of
        Belgium.

       

      “Buyatti”
has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “Buyatti
        Memorandum of Understanding”
has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “Buyatti
        Real Estate Contract”
has
        the
        meaning given to such term in Section
        3(1)(c).

       

      “Buyatti
        Services Contract”
has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “Cargill
        Supply Contract”
has
        the
        meaning given to such term in the recitals to this Agreement.

       

       “Commercial
        Operation”
means
        that the Project
        reaches nameplate capacity to treat soybean oil to produce 250.000 TPY of
        biodiesel, equivalent to 750 TPD, operating 8,000 hours per year, and such
        facilities are installed, fully and successfully tested, and capable of
        producing biodiesel in the guaranteed quantities
        at 80%
        capacity on a continuous 30 day basis.

       

      “Confidential
        Information”
is
        defined in Section 9.1 herein.

       

      “Closing”
is
        defined in Section 3.1 (a) herein.

       

       “DSEC”
        has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “Developers”
has
        the
        meaning given to such term in the preamble to this Agreement.

       

      “Development
        Activities”
shall
        mean the AEBA Development and Construction Activities and the DSD Development
        and Construction Activities.

       

      
        
          
          

        

        
          -
            3
            -

          
            

          

        

        
          
          

        

      

       

      “Development
        Costs”
means
        third party costs and expenses incurred by or on behalf of the Project Company
        in the development of the Project on and after the Effective Date.

       

      “Dispute”
has
        the
        meaning given to such term in Section
        11.1.

       

      “DSD”
        is
        defined
        in the preamble of this Agreement.

       

      “DSD
        Consulting Agreement”
has
        the
        meaning given to such term in Section
        2.2.

       

      “DSD
        Contracts”
        has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “DSD
        Fee”
has
        the
        meaning given to such in Section
        2.2(b).

       

      “Effective
        Date”
has
        the
        meaning given to such term in the preamble to this Agreement.

       

      “Environmental
        Laws”
means
        all Laws relating to the protection of the environment, health or safety
        or the
        use, generation, release, treatment, storage, disposal or exposure to Hazardous
        Materials, including the Environment Protection Act, 1986, Hazardous Wastes
        (Management and Handling) Rules 1989, Air (Prevention and Control of Pollution)
        Act, 1981, Water (Prevention and Control of Pollution) Act, 1974, Municipal
        Solid Wastes (Management and Handling Rules), 2000, Noise Pollution (Regulation
        and Control) Rules, 2000 and any other Argentine environmental laws as
        applicable. 

       

      “EPC
        Contractor”
shall
        mean DSEC with whom the Project Company enters into an EPC Contract for the
        turnkey engineering, procurement and construction of the Project. 

       

      “EPC
        Contract”
is
        the
        engineering, procurement and construction contract with DSEC for the
        engineering, procurement and construction of a pretreatment facility and
        a
        biodiesel production plant in San Lorenzo, Argentina with the capacity treat
        soybean oil to produce 250.000 TPY of biodiesel, equivalent to 750 TPD,
        operating 8,000 hours per year. 

       

      “Event
        of Default”
shall
        have the meaning given such term in Section
        7.2.

       

      “FCPA”
has
        the
        meaning given to such term in Section
        12.12.

       

      “GAAP”
means
        generally accepted accounting principles in the United States of America,
        Belgium or the Republic of Argentina (consistently applied), as
        applicable.

       

      “Governmental
        Authority”
means
        any central, federal, state, county, municipal or other local governmental
        unit,
        agency, instrumentality or court with jurisdiction over (a) all or a
        portion of the Project or this Agreement; (b) the design, engineering,
        construction, ownership, testing, use, operation or maintenance of the Project;
        (c) any Party; (d) the Project Documents; or (e) any of the
        transactions contemplated thereby.

       

      “Hazardous
        Materials”
means
        any substance, material, chemical, or waste, the exposure to which or the
        discharge, emission, disposal, or release of which is prohibited, limited,
        or
        otherwise regulated, under applicable Environmental Laws, including gasoline,
        diesel fuel, methanol or other petroleum hydrocarbons, polychlorinated
        biphenyls, asbestos, “hazardous substances” listed under the Comprehensive
        Environmental Response, Compensation and Liability Act, and “solid wastes” under
        the Resource, Conservation and Recovery Act of 1976.

       

      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      

       

      “Internal
        Cost”
means
        any cost that is not a Development Cost incurred by any Party prior to
        Commercial Operation.

       

      “Land”
has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “Law”
means
        any law (including Environmental Laws), statute, code, building code, ordinance,
        rule, regulation, order, judgment that is binding on a Party, decree,
        injunction, legally binding directive, or requirement or any similar form
        of
        legally binding decision, or determination or administration of any of the
        foregoing by any Governmental Authority.

       

      “Liens”
means
        all mortgages, deeds of trust, liens, debentures, security interests, pledges,
        conditional sale contracts, litigation, rights of first refusal, options,
        charges, agreements, easements, rights-of-way, limitations, reservations,
        restrictions, community property interests, equitable interests, building-use
        restrictions, exceptions, variances, and other encumbrances or restrictions
        of
        any kind, whether recorded or unrecorded, including restrictions on use,
        transfer, receipt of income, or exercise of any other attribute of
        ownership.

       

      “Losses”
has
        the
        meaning given to such term in Section 12.1.

       

       “Material
        Change”
means
        (a) any conditions, changes in circumstances, or events occur that
        individually or in the aggregate are reasonably likely to prevent the Project
        from achieving Commercial Operation (b) any reduction in the nameplate
        capacity of the Project to less than 5% (c) any change in the general
        location of the Project (d) any material defects in the real property
        rights relating to the Project Site; (e) any environmental condition not
        documented in the above-referenced environmental site assessment, and which
        condition could be reasonably expected to have a material adverse effect
        on the
        development and construction of the Project; and (f) the Development Cost
        necessary to fund development of the Project to the Closing (other than any
        Development Costs that were approved by the Board of Directors) and reasonably
        expected to exceed the Project Budget by US$50,000.

       

      “Memorandum
        of Understanding”
has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “New
        York Convention”
has
        the
        meaning given to such term in Section
        11.2.
        

       

      “O&M
        Agreement”
        means the operation and maintenance agreement, to be executed upon
        Commercial Production, between Project Company and Buyatti, whereby the Buyatti
        will provide operation and maintenance services to the Project Company for
        a
        three year term. 

       

      “Party”
or
        “Parties”
shall
        mean any party or parties to this Agreement.

       

      “Permits”
means
        the permits, licenses, concessions, clearances, approvals, authorizations
        and
        other permissions required or desirable to be obtained from a Governmental
        Authority, to own, develop, construct, test, operate or maintain the Project
        in
        compliance with all applicable Law, including, those set forth on Exhibit
        D-2.

       

      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

      

    

    
       

      “Permitted
        Liens”
        means:

       

      (i) pledges
        or deposits by the Project Company under workmen's compensation laws,
        unemployment insurance laws or similar legislation;

       

      (ii) Liens
        imposed by law, including carriers’, warehousemen's and mechanics’ liens, in
        each case for sums not yet due;

       

      (iii) Liens
        for
        taxes, assessments or other governmental charges not yet subject to penalties
        for non-payment;

       

      (iv) Liens
        in
        favor of issuers of surety or performance bonds or letters of credit or bankers’
acceptances issued pursuant to the request of and for the account of the
        Project
        Company in the ordinary course of its business and reasonably acceptable
        to the
        Project Company Board of Directors;

       

      (v) encumbrances,
        easements or reservations of, or rights of others for, licenses, rights of
        way,
        sewers, electric lines, telegraph and telephone lines and other similar
        purposes, or zoning or other restrictions as to the use of real properties,
        provided, however, such
        Liens in the aggregate do not materially impair the use of the assets of
        Project
        Company or the value of such assets for the purposes of the development,
        construction, ownership, operation and maintenance of the Project;

       

      (vi) judgment
        liens, so long as such Lien is adequately bonded in accordance with GAAP
        and any
        appropriate legal proceedings that may have been duly initiated for the review
        of such judgment have not been finally terminated or the period within which
        such proceedings may be initiated has not expired; and

       

      
        
          (vii)
            Liens
            arising under the Project Documents.

        

      

       

      “Person”
means
        any individual or company (including any limited liability company or joint
        stock company), corporation (including any non-profit corporation), estate,
        trust, or Governmental Authority.

       

      “Preliminary
        Engineering Contract”
has
        the
        meaning given to such term in recitals to this Agreement.

       

      “Project”
has
        the
        meaning given to such term in recitals to this Agreement. 

       

      “Project
        Activities”
means
        any activity performed or to be performed by any Party in relation to the
        Project.

       

      “Project
        Assets”
        means
        all rights, tangible and intangible property, and other assets relating to
        the
        Project or required or desirable for the development, construction, operation
        or
        maintenance of the Project, including Project Documents, Permits, leases,
        easements, right of ways and other land rights, surveys, maps, landowner
        data,
        insurance, the Project's interconnection queue position, all meteorological
        data, wind data, transmission studies, market studies, interconnection
        (feasibility, system impact, facilities and other) studies, environmental
        studies, avian studies, wetland/habitat studies, archeological studies, property
        tax, franchise tax and other tax studies, and any other studies or reports
        commissioned for the Project.

       

      
        
          
          

        

        
          -
            6
            -

          
            

          

        

        
          
          

        

      

       

      “Project
        Budget”
has
        the
        meaning given to such term in Section 6.1(a).

       

      “Project
        Company”
has
        the
        meaning given to such term in the preamble to this Agreement.

       

      “Project
        Development and Construction Activities”
has
        the
        meaning given to such term in Section
        5.2(a).

       

      “Project
        Documents”
means
        this Agreement, the Cargill Supply Contract, the UTE Agreement, the Buyatti
        Memorandum of Understanding, the Buyatti Real Estate Contract, the O&M
        Agreement, the EPC Contract, the T6 Fobbing Contract, the Buyatti Services
        Agreement, the agreements to lease pipelines and storage relating with third
        party service providers for transportation of refined soybean oil to the
        Project
        Site and biodiesel from the Project Site to external locations of buyers,
        lease
        of external storage tanks from third party lessors, the project financing
        agreements, the environment-related agreements, the tax abatement or payment
        in
        lieu of taxes agreements and any other material agreements entered into by
        the
        Project Company or otherwise related to the Project.

       

      “Project
        Schedule”
has
        the
        meaning given to such term in Section
        2.1.

       

      “Project
        Site”
means
        the site of the Project, which is located on a 5.5 hectare site adjacent
        to the
        Buyatti plant in the San Lorenzo region of Argentina and is more particularly
        described in metes and bounds on Exhibit E.

       

      “Prudent
        Industry Practices”
means
        those practices, methods and standards, that: (a) when engaged in, are commonly
        used by experienced and prudent developers in the U.S., Belgium and/or Republic
        of Argentina when performing services of the type as the Project Activities,
        lawfully and with safety, reliability, efficiency and economy; and (b) in
        the
        exercise of reasonable judgment, considering the facts known when engaged
        in,
        could have been expected to achieve the desired result consistent with
        applicable Law, safety, reliability, efficiency and economy.

       

      “Republic
        of Argentina”
means
        that sovereign nation encompassed within the territorial boundaries of
        Argentina.

       

      “Representatives”
has
        the
        meaning given to such term in Section 4.4(b).

       

      “Rules”
has
        the
        meaning given to such term in Section
        11.2.

       

      “Senior
        Officer”
means
        with respect to a Party, any officer with the authority to make binding
        decisions on behalf of that Party.

       

      “UTE
        Agreement”
        has
        the
        meaning given to such term in the recitals to this Agreement.

       

      “Term”
shall
        have the meaning given such term in Section
        7.1.

       

      
        
          
          

        

        
          -
            7
            -

          
            

          

        

        
          
          

        

      

       

      “T6
        Fobbing Contract”
shall
        mean the contract for the transfer of the biodiesel through the port of Terminal
        6 that includes the storage and the loading of the vessels to be entered
        with T6
        S.A.

       

      “U.S.”
means
        that sovereign nation encompassed within the territorial boundaries of the
        United States of America.

       

      1.2 Interpretation.

       

      (a) Headings.
        Titles,
        captions and headings in this Agreement are inserted for convenience only
        and
        will not be used for the purposes of construing or interpreting this
        Agreement.

       

      (b) References
        in this Agreement.
        In this
        Agreement, unless a clear, contrary intention appears: (i) the singular
        includes the plural and vice versa; (ii) reference to any Person includes
        such Person’s successors and assigns but, in the case of a Party, only if such
        successors and assigns are permitted by this Agreement, and reference to
        a
        Person in a particular capacity excludes such Person in any other capacity;
        (iii) reference to any gender includes each other gender;
        (iv) reference to any agreement (including this Agreement), document or
        instrument means such agreement, document or instrument as amended or modified
        and in effect from time to time in accordance with the terms thereof and,
        if
        applicable, the terms of this Agreement; (v) reference to any Law means
        such Law as amended, modified, codified or reenacted, in whole or in part,
        and
        in effect from time to time, including, if applicable, rules and regulations
        promulgated thereunder; (vi) reference to any Section means such Section of
        this Agreement, and references in any Section or definition to any clause
        means
        such clause of such Section or definition; (vii) “hereunder,” “hereof,”
“hereto” and words of similar import will be deemed references to this Agreement
        as a whole and not to any particular Section or other provision of this
        Agreement; (viii) “including” (and with correlative meaning “include”)
        means including without limiting the generality of any description preceding
        such term; and (ix) relative to the determination of any period of time,
“from” means “from and including”, “to” means “to but excluding” and “through”
means “through and including”.

       

      (c) Industry
        Meanings.
        Words
        and abbreviations not defined in this Agreement that have well-known technical
        or industry meanings in the U.S., Belgium and/or the Republic of Argentina
        are
        used in this Agreement in accordance with those recognized
        meanings.

       

      
        
          
          

        

        
          -
            8
            -

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        2

      UTE
        AGREEMENT; CONSULTING AGREEMENT; HIRING OF EMPLOYMENT

       

      2.1 UTE
        Agreement.

       

      AEBA
        and
        DSD covenant and agree to cause UBAPL and DSD to enter into a mutually agreeable
        UTE Agreement in connection with the incorporation of the Project Company
        and
        assignment of the contracts referenced herein, which grants (i) UBAPL a 90%
        ownership in the Project and Project Company in exchange for the assignment
        of
        the Preliminary Engineering Contract, the contribution to the Project Company
        of
        the debt capital required for the execution of the Buyatti Real Estate Contract
        and for causing the Project Company to enter into the DSD Consulting Agreement;
        and (ii) DSD a 10% ownership in the Project and Project Company in exchange
        for
        the assignment of all right title and interest to the DSD Contracts, the
        services detailed herein and the entering into the
        DSD
        Consulting Agreement. The parties shall use their best efforts to ensure
        that
        the UTE Agreement shall be entered not later than 120 days of the execution
        of
        this Agreement. The
        assignment of the DSD Contract shall be in favor of the Project Company and
        shall occur upon the execution of the Buyatti Real Estate Contract by all
        parties. It
        is
        agreed that the UTE Agreement shall not grant DSD any rights to the management
        or control of the Project Company. It is further agreed, as stated herein,
        that
        the UTE Trust Agreement shall provide for an immediate re-assignment and
        transfer of all right, title and interest to the DSD Contracts and
        the
        remaining Project Documents, including the Preliminary Engineering
        Agreement
        held by
        the Project Company to DSD in the event that this Agreement is terminated
        as
        described in Section 3.1(d) below.

      

      2.2 DSD
        Consulting Agreement.

       

      (a) DSD
        Consulting Agreement.
        The
        Project Company shall enter into a five (5) year Consulting Agreement with
        DSD
        (the “DSD
        Consulting Agreement”).
        The
        parties shall use their best efforts to ensure that the DSD Consulting
        Agreements is executed no later than 120 days after the execution of this
        Agreement. The Parties acknowledge and the DSD Consulting Agreement shall
        set
        forth that all or almost all of the services provided in the DSD Consulting
        Agreement shall have been provided at the time the Project Company executes
        the
        DSD Consulting Agreement, and that payment is deferred only for tax reasons.
        Under the DSD Consulting Agreement, upon execution of the UTE Agreement,
        the
        Project Company shall pay DSD a total of US$10,000 per month until the end
        of
        the first three months of Commercial Operation, and thereafter, the Project
        Company shall pay DSD a total of US$20,000 per month until the total payment
        of
        US$1.1 million is achieved (minus the DSD Fee if paid as provided below).
        The
        DSD Consulting Agreement may not be terminated by the Project Company for
        any
        reason. The parties hereto acknowledge and agree that (i) the DSG Consulting
        Agreement is solely an agreement between the Project Company and DSD, and
        that
        neither AEBA, AE BIOFUELS, nor its Affiliates (other than the Project Company),
        shall incur or be subject to any liability, damages, costs or obligations
        in
        connection with the DSD Consulting Agreement; and (ii) DSD shall not incur
        or be
        subject to any liability, damages, costs or obligations in connection with
        the
        DSD Consulting Agreement. 

      

      (b) DSD
        Fee.
        In
        consideration for this Agreement, AEBA agrees to pay DSD $20,000 per month
        after
        the Effective Date, payable in arrears, for four (4) months (for a total
        of
        US$80,000) (the “DSD
        Fee”).
        Any
        amounts paid by AEBA to DSD under this Section shall reduce the aggregate
        amount
        payable to DSD under the DSD Consulting Agreement referenced above. In no
        event
        shall AEBA’s maximum payment liability under this Section 2.2 exceed
        $80,000.

       

      
        
          
          

        

        
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      2.3 Hiring
        of Employees.

       

      Prior
        to
        the commencement of Commercial Operation, DSD shall use its best efforts
        to find
        suitable management to be hired by the Project Company for the Project;
provided,
        however,
        the
        Parties acknowledge that the directors and officers of the Project Company
        shall
        have sole and exclusive hiring authority. 

       

      ARTICLE
        3 

      FINANCING
        OF THE PROJECT; CONTRIBUTION BY DEVELOPERS

       

      3.1.
        Financing
        of the Project.

      

      (a)
        Other
        than the AEBA Advance, all of the funding for the Project (land, facilities,
        working capital, etc) will be obtained from independent sources using debt
        financing of not less than US$35,000,000 as necessary to reach financial
        closing
        of the Project (the “Closing”).
        AEBA
        shall use reasonable commercial efforts to accomplish the Closing. None of
        the
        funding will be provided by DSD (or by AEBA, other than the AEBA Advance,
        if
        applicable), and no capital contributions by UBAPL or its Affiliates shall
        dilute DSD ́s 10% ownership in the Project or UTE.

      

      (b)
        Subject to available funding and approval by the Board of Directors of the
        Project Company and the Board of Directors of AEBA, AEBA or its Affiliates
        agrees to advance the Project Company funding for the development of the
        Project
        under an interest-bearing secured debt agreement of not less than US$16,000,000
        (the “AEBA
        Advance”).
        The
        AEBA Advance shall be repaid from bank financing or from the free cash flow
        of
        the Project Company. 

      

      (c)
        The
        Project Company shall use the AEBA Advance and obtain additional debt finance
        if
        required for the execution of an option or purchase agreement by the Project
        Company (or, if not possible, by the Developers according to the following
        percentages: 90% UBAPL and 10% DSD) of the Land (the “Buyatti
        Real Estate Contract”).

      

      (d)
        Notwithstanding anything to the contrary, the Parties acknowledge and agree
        that
        nothing contained in this Agreement shall constitute a commitment by AEBA
        or its
        Affiliates to underwrite or fund the AEBA Advance or provide or guarantee
        any
        financing for the Project, or any commitment by AEBA to guarantee any
        obligations or liabilities of the Project Company, other than the costs
        associated with the Preliminary Engineering Contract and the DSD Fee. If
        (i) the
        Buyatti Real Estate Contract is not executed within 120 days after Effective
        Date, or (ii) a firm commitment (subject to typical contingencies) for the
        funding necessary for the Closing is not achieved within 180 days after
        Effective Date, or (iii) a Closing has not occurred within 240 days after
        the
        Effective Date, this Agreement may be terminated by DSD without further
        obligation or liability of any Party (other than amounts payable under the
        DSD
        Fee), and the DSD Contracts and the remaining Project Documents, including
        the
        Preliminary Engineering Agreement, shall be reassigned to DSD free of charge
        and
        additional costs.  If
        the Buyatti Real Estate Contract has been executed during such 180 day or
        240
        day period and this Agreement is terminated, DSD shall have the right to
        buy the
        Land from the Project Company for the same price paid by the Project Company.
        

       

      
        
          
          

        

        
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      ARTICLE
        4

      PROJECT
        COMPANY 

       

      4.1 Project
        Company/Developers. Purpose
        of Project Company.
        The
        Parties acknowledge that the Project Company’s sole purpose will be to develop,
        construct, own, operate and maintain the Project, including any amendments,
        modifications, expansions, diversifications or other changes to the scope
        of the
        Project.

       

      4.2 Project
        Assets. Representations
        and Warranties.
        Each of
        the Developers represent and warrant that this Agreement is in force and
        effect
        as of the Effective Date. 

       

      (b) DSD
        represents and warrants that (i) true, correct and complete copies
        of the
        DSD
        Contracts in force and effect as of the Effective Date are attached
        to
        Exhibit D-2
        and no
        default exists under such DSD Contracts; (ii) Exhibit
        D3
        lists
        Permits required or desirable to be obtained for the Project, the Government
        Authority that issues such Permits, and the current status of obtaining such
        Permits for the Project; (iii) it reasonably believes that any Permit not
        already obtained by the Project Company will be obtained before the Permit
        is
        required by Law to be obtained; (iv) it currently is not, nor has it in the
        past been in violation of any Environmental Law, (v) it has not used,
        released, discharged, generated, manufactured, produced, stored, or disposed
        of
        in, on, under, or about the Project Site, or transported thereto or therefrom,
        any Hazardous Substances, except in compliance with Environmental Laws.

       

      4.3 Management
        of Project Company.

       

      (a) Management.
        DSD
        shall use its best efforts to find suitable management to be hired by the
        Project Company for the Project; provided,
        however,
        the
        Parties acknowledge that the directors and officers of the Project Company
        shall
        have sole and exclusive hiring authority. Each of AEBA and DSD covenants
        and
        agrees, notwithstanding any other provision of this Agreement to the contrary,
        that it will not cause the Project Company to take, or permit that the Project
        Company takes (and Project Company will not take) any material action related
        to
        the Project, unless at the direction or with the approval of the Board of
        Directors (“Consejo
        Directivo”)
        of the
        Project Company. DSD shall have no right to appoint any member of the Board
        of
        Directors (“Consejo
        Directivo”)
        of the
        Project Company; however DSD may appoint a board
        observer,
        as it
        shall from time to time determine. Such board
        observer
        appointed by DSD shall hold office for the term for which he is elected or
        until
        his earlier death, resignation, retirement, or removal by the board of
        directors. The board
        observer
        may
        attend and be present at the meetings of the board of directors, although
        the
        board
        observer shall
        not
        be considered in determining whether a quorum of the board of directors is
        present. The board of directors will, however, keep the board observer fully
        informed of any resolutions taken when the observer is not present. The
board
        observer
        may
        advise and counsel the board of directors on the business and operations
        of the
        Project Company; provided, however, the board
        observers shall
        not
        be entitled to vote on any matter presented to the board of
        directors.

       

      
        
          
          

        

        
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      (b) Covenants
        by Developers.
        Each of
        the Developers covenants and agrees: (i) to keep the Board of Directors of
        the Project Company informed of all material events relating to the Project
        known by it, including defaults or violations by Project Company or its members
        under any applicable Project Documents, Permits or Laws, any litigation relating
        to Project Company or the Project, receipt of any material notices or reports
        relating to the Project, termination, suspension or impairment of any applicable
        Permit relating to the Project or Material Changes that could adversely affect
        the development and construction of the Project or Commercial Operation of
        the
        Project; (ii) to timely transfer to the other Developer such information
        regarding Project Company and the Project given to it, including the revisions
        to the Project Schedule and Project Budget, including but not limited to
        monthly
        progress and budgetary reports of the Project, in all cases as provided by
        the
        Project Company; (iii) use best commercial endeavors to assist the Project
        Company so that as soon as available and in any event within ten days (10)
        days
        after the end of each quarterly fiscal period of each fiscal year of Project
        Company, the Project Company delivers to each Developer unaudited (and if
        available, audited) statements of income, members’ equity and cash flows of
        Project Company for such period and for the period from the beginning of
        the
        respective fiscal year to the end of such period, and the related balance
        sheet
        and profit and loss account statement as at the end of each such period,
        setting
        forth (to the extent applicable) in each case in comparative form the
        corresponding figures for the corresponding period in the preceding fiscal
        year,
        accompanied by a certificate of an authorized officer of Project Company,
        which
        certificate shall state that such financial statements fairly present in
        all
        material respects the financial condition and (to the extent applicable)
        results
        of operations of Project Company in accordance with GAAP, consistently applied,
        as at the end of, and for, such period (subject to normal year-end audit
        adjustments); (iv) assist the Project Company so that it preserves,
        protects and defends all of its material rights and remedies under the Project
        Documents and complies with its obligations under the Project Documents;
        (v) promptly
        notify the Board of Directors of the Project Company of all known defects
        in the
        Project, and if requested by the Board of Directors of the Project Company,
        liaise with the EPC Contractor to ensure that all such defects appearing
        during
        the applicable defect correction period or other warranty period are corrected
        to the reasonable satisfaction of Project Company, but shall not agree to
        any
        course of action without the consent of Project Company;
        (vi)
        that Project Company will keep and maintain its books of account and financial
        records at its address identified in Section
        12.8
        and that
        each Developer, on notice to the Project Company, at all reasonable times,
        may
        audit, examine and make copies of the books of account and other records
        of the
        Project Company, and for this purpose, the Project Company will provide access
        to their premises to the authorized representatives of each Developer and
        furnish such records, documents and information as may be reasonably required
        by
        such representative; (vii) that Project Company preserves, protects and defends
        all of its material rights and remedies under the Project Documents and uses
        its
        best efforts to complies with its obligations under the Project Documents,
        and
        that Project Company will not terminate, cancel or amend any Project Document,
        or waive any obligation under a Project Document, without the consent of
        the
        Board of Directors of the Project Company;
        (viii) that Project Company will use best efforts to obtain and maintain
        insurance policies in accordance with Prudent Industry Practice and the
        requirements of the Project Documents or any Permits, (ix) that Project
        Company use best efforts to comply with all applicable Laws and Permits;
        (x) that the Project Company will not directly or indirectly create, incur,
        assume, suffer to exist or otherwise be or become liable with respect to
        any
        material indebtedness or guarantees, without the consent of the Board of
        Directors of the Project Company, (xi)  that Project Company will not
        convey, sell, lease, assign, transfer or otherwise dispose of, in one
        transaction or a series of transactions, any material assets, including its
        rights under any Project Document, without the approval of the Board of
        Directors of the Project Company; (xii) that Project Company will not
        purchase or acquire any material assets or enter into any material agreement
        (i.e., assets or agreements which have a value of U.S.$50,000 or less will
        not
        be deemed material for purposes of this Agreement), without the consent of
        the
        Board of Directors of the Project Company; and (ix) that Project Company
        will not create, incur, assume or suffer to exist any Liens on any of its
        assets
        except Permitted Liens without the consent of Board of Directors of the Project
        Company.

       

      
        
          
          

        

        
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      ARTICLE
        5

      DEVELOPMENT
        AND CONSTRUCTION ACTIVITIES

       

      5.1 Project
        Proposal.On
        a best
        efforts and non-recourse basis, DSD has prepared the technical, commercial
        and
        financial components of the Project (“Project
        Proposal”),
        attached collectively hereto as Exhibits A, B, C, D E and F, and in connection
        therewith, DSD has provided to AEBA the Project Budget detailed in Section
        6
        hereof.

       

      5.2 Project
        Development. Subject
        to the terms and conditions detailed herein, DSD will be the lead developer
        of
        the Project until Commercial Operation and shall assist and/or support the
        Project Company in the performance of all services, activities and other
        actions
        required for the development of the Project, and in accordance with the
        directions of the Board of Directors of the Project Company, including but
        not
        limited to assistance and or support in the following activities to be performed
        by the Project Company (collectively, the “Project
        Development and Construction Activities”):

       

      (i) Management
        of all aspects of the development of the Project in a manner consistent with
        the
        Project Proposal, the Project Budget and the Project Documents.

       

      (ii) Ensuring
        that an adequate number of experienced, competent and properly licensed
        personnel are hired as employees or independent contractors to implement
        the
        Project.

       

      (iii) Arrangement,
        procurement and maintenance, of all necessary insurance during the development
        and construction phase of the Project.

       

      (iv) Negotiation
        and completion of any remaining Project Documents required for the Project
        not
        already executed on the Effective Date in joint consultation with AEBA including
        but not limited to any additional agreements with the Cargill Supply Contractor,
        the Buyatti Services Contract, the T6 Fobbing Contract, or the EPC
        Contractor.

       

      (v) 
        (1) Preparation and submission of all required regulatory filings for the
        development and construction of the Project, (2) Procurement and
        maintenance of all Permits necessary or otherwise appropriate for the
        development and construction of the Project, (3)  Preparation and
        submission of all filings of any nature that are required to be made under
        any
        governmental approval or filing, (4)  Preparation and submission of all
        other filings of any nature that are required to be made by Project Company
        under any Laws, applicable to it or the Project and (5) Procurement of all
        necessary real estate rights for the development, construction and financing
        of
        the Project, including all leases, easements, access, egress, crossings and
        other rights of way and all title commitments, surveys, Permits, consents
        and
        approvals of all relevant Governmental Authorities or non-governmental
        Persons.

       

      
        
          
          

        

        
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      (vi) Obtaining
        any additional reports, surveys or studies required for the Project, including
        transmission studies, market studies, interconnection (feasibility, system
        impact, facilities and other) studies, environmental studies, avian studies,
        wetland/habitat studies, archeological studies, and property tax, franchise
        tax
        and other tax studies, in each case as reasonably directed by the Project
        Company.

       

      (vii) Obtaining
        and management of all aspects of the environmental assessments to be prepared
        by
        the Project’s environment consultant in connection with the development and
        construction of the Project, including obtaining all necessary Permits required
        for such environmental assessment

       

      (viii) Resolving
        any property tax issues for the Project.

       

      (ix) Creation
        and maintenance of good landowner, community and government relations for
        the
        Project, and generate and implement community relations strategies and plans
        with respect to the Project.

       

      (x) Selection
        and hiring, at the cost of the Project Company and in consultation and agreement
        with the Board of Directors of the Project Company (at the Board’s sole
        discretion) and pursuant to the Project Budget, of employees, independent
        contractors and third party consultant(s) to provide on-site management and
        administration of the construction phase of the Project.

       

      (xi) Maintaining
        good relationships with lenders, contractors and other Project
        participants.

       

      (xii) Implementation
        and maintenance of adequate safety, health, and environmental management
        systems
        to comply with Prudent Industry Practices and applicable Laws and the safety,
        health, and Environmental Law, standards, and guidelines of Project
        Company.

       

      (xiii) Negotiation
        of contracts with domestic soybean producers and crushers to secure long
        term
        feedstock, storage, and shipping contracts;

       

      (xiv) Provision
        of information to vendors, lenders, consultants, accountants and attorneys
        of
        the Project Company;

       

      (xv) Maintenance
        of all insurances reasonable and necessary according to Prudent Industry
        Practices. 

       

      (xvi) Performance
        of all the services provided herein according Prudent Industry Practices
        and in
        accordance with
        all
        applicable Laws and
        the
        terms of this
        Agreement.

       

      AEBA
        acknowledges and agrees that DSD will only, assist and support the Project
        Company in the performance of the Project Development and Construction
        Activities, but that the actual performance of such activities will depend
        of
        the Project Company itself. The Performance of all services provided herein
        according to Prudent Industry Practices and in accordance with all applicable
        Laws and in terms of this Agreement. DSD shall perform its duties under this
        Agreement on a best efforts basis and should DSD be in material breach of
        these
        duties by reason of willful negligence or willful misconduct, the sole recourse
        against DSD will be in the form of a claim on DSD's ownership in the UTE.
        The
        Parties acknowledge that there are no other warranties than the above in
        respect
        of DSD's duties under the Agreement.

       

      
        
          
          

        

        
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      5.3 Performance
        of Project Activities. Project
        Assets; Authority of Parties.
        From
        and after the Effective Date, the Parties will endeavor to have all Project
        Assets entered into or owned directly by Project Company. No Party will be
        entitled to act for, or have any power or authority to assume any obligation
        or
        responsibility on behalf of any other Party, or will otherwise be deemed
        an
        agent, representative, employee or servant of any such other Party.

       

      (b) Cooperation;
        Right to Participate in Project Activities.
        The
        Parties agree to cooperate with one another in the performance of their
        obligations under this Agreement. For those Project Activities under this
        Agreement that a Developer has responsibility for, the other Developer may
        participate fully in all aspects of that Project Activity, including the
        opportunity to attend any meetings or discussions with third parties, and
        will
        be reasonably available to assist the Developer in performing that Project
        Activity.

       

      (c) Standard
        of Performance.
        Each of
        the Parties will use commercially reasonable efforts to meet the milestones
        set
        forth in the Project Schedule in the performance of its respective obligations
        under this Agreement. The Developers will each use such diligence, care and
        prudence in the performance of its duties set forth in this Agreement (including
        in supervising and enforcing any rights) and will devote such time, effort
        and
        skills of its employees as required by Prudent Industry Practices. 

       

      ARTICLE
        6

      PROJECT
        BUDGET; COSTS;
        COMPENSATION

       

      6.1 Development
        Costs. Project
        Budget.
        Attached as Exhibit
        F
        is the
        initial and fixed budget, prepared by DSD and agreed to by AEBA, for the
        Project
        (the “Project
        Budget”).
        The
        Project Budget sets forth DSD’s best estimate of the Development Costs for the
        Project anticipated to be incurred, and the dates when those Development
        Costs
        are expected to be incurred, and may not be modified or amended except in
        a
        writing and agreed to by the Board of Directors of the Project Company.

       

      (b) Prior
        Development Costs.
        Any
        Developer who has incurred any Development Cost, prior to execution of this
        Agreement, relating to the Project Company paid by such Developer directly
        to a
        third party owed such Development Cost, shall within a period of fifteen
        (15)
        days from the Effective Date, submit proof of such payment to the Board of
        Directors of the Project Company and request its decision on whether such
        Development Cost must be included in the Approved Development Cost. The Board
        of
        Directors of the Project Company will make its determination as to such
        Development Cost and decide whether to acknowledge that same is an Approved
        Development Cost by delivering a mutually agreeable form to the Developer
        within
        fifteen (15) days after receiving proof of such payment.
        Developer
        shall be reimbursed for such Approved Development Cost in the manner provided
        herein, provided that, no Developer will be obligated to be reimbursed any
        costs
        or expenses that are not Approved Development Cost.

       

      
        
          
          

        

        
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      (c) Approved
        Development Costs.
        The
        amount allocated for each Development Cost category in the Project Budget
        (and
        the timing for incurrence of such Development Cost) is an estimate and may
        exceed the budgeted amount for such category (or vary from the time scheduled
        for the incurrence of the Development Cost) to the extent approved by the
        Board
        of Directors of the Project Company. All Development Costs must be calculated
        and agreed to by the Board of Directors of the Project Company in an open
        book
        manner. Within sixty (60) days from receipt of a written request for approval
        to
        incur a Development Cost, the Board of Directors of the Project Company will
        determine, based both on the type of Development Cost and the time for the
        incurrence of such Development Cost, whether the Development Cost is eligible
        for reimbursement in accordance with the Project Budget and this Agreement,
        and
        if so eligible, the Board of Directors of the Project Company will provide
        a
        written authorization for the Project Company to incur such Development Cost
        (such Development Cost so authorized to be incurred by the Project Company,
        an
“Approved
        Development Cost”).

       

      (d) Internal
        Costs.
        Except
        as otherwise specifically provided in this Agreement, Internal Costs for
        the
        Project are not reimbursable.

       

      (e) Books
        and Records.
        Each of
        the Parties will maintain bank statements and other books and records (including
        supporting documentation), in accordance with standard accounting practices
        and
        GAAP, with respect to costs claimed by such Party to be Development Costs.
        Any
        of the Parties shall have the right, at its own expense upon reasonable notice
        and during regular business hours, to review and receive copies of such time
        sheets, invoices, indicia of payment, bank statements and other books and
        records (including supporting documentation) relating to any costs claimed
        to be
        Development Costs.

       

      ARTICLE
        7

      TERM;
        EVENTS OF DEFAULT; RIGHTS AND REMEDIES; FORCE MAJEURE;
        SURVIVAL

       

      7.1 Term.
        Subject
        to early termination under Section 3(d), and Section
        7.2
        and
Section
        7.3,
        this
        Agreement will commence on the Effective Date and remain in full force and
        effect until the date of first Commercial Operation (the “Term”).

       

      7.2 Events
        of Default.
        The
        occurrence and continuation of any of the following events at any time during
        the term of this Agreement, except to the extent caused by, or resulting
        from,
        an act or omission of the other Party in breach of this Agreement, will
        constitute an event of default of a Party (an “Event
        of Default”):

       

      (a) Bankruptcy.
        If the
        Party is adjudicated as bankrupt, becomes insolvent, enters into an arrangement
        or composition with the Party’s creditors, suffers permanent or temporary
        court-appointed receivership of substantially all of the Party’s property, makes
        a general assignment for the benefit of creditors, files a voluntary bankruptcy
        petition or suffers the filing of an involuntary bankruptcy petition that
        is not
        dismissed within
        thirty
        (30) days after filing.

       

      (b) Default.
        If the
        Party fails in any material respect to perform or comply with any obligation
        in
        this Agreement, which failure materially and adversely affects the other
        Party,
        and such failure is not remedied within thirty (30) days after the date the
        other Party has given written notice to the defaulting Party of such
        failure.

       

      
        
          
          

        

        
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      7.3 Rights
        and Remedies.
        Notwithstanding anything to the contrary, the Parties acknowledge and agree
        that
        nothing contained in this Agreement shall constitute a commitment by AEBA
        or its
        Affiliates to underwrite or fund the AEBA Advance or provide or guarantee
        any
        financing for the Project, or any commitment by AEBA to guarantee any
        obligations or liabilities of the Project Company, other than the costs
        associated with the Preliminary Engineering Contract and the DSD Fee. If
        (i) the
        Buyatti Real Estate Contract is not executed within 120 days after Effective
        Date, or (ii) a firm commitment (subject to typical contingencies) for the
        funding necessary for the Closing is not achieved within 180 days after
        Effective Date, or (iii) a Closing has not occurred within 240 days after
        the
        Effective Date, this Agreement may be terminated by DSD without further
        obligation or liability of any Party (other than amounts payable under the
        DSD
        Fee), and the DSD Contracts and the remaining Project Documents, including
        the
        Preliminary Engineering Agreement, shall be reassigned to DSD free of charge
        and
        additional costs. If the Buyatti Real Estate Contract has been executed during
        such 180 day or 240 day period and this Agreement is terminated, DSD shall
        have
        the right to buy the Land from the Project Company for the same price paid
        by
        the Project Company.

       

      7.4 Force
        Majeure. No
        Party
        shall be liable for any delay, failure or non-performance of its obligations
        under this Agreement to the extent that such performance is prevented by
        an act
        of god, storm, strike, war, armed conflict, civil disturbance, act of terrorism,
        embargo or any other act or circumstance beyond such Party’s reasonable control
        that was not reasonably foreseeable and that could not have been prevented
        with
        due diligence, provided that (a) written notice of the occurrence of such
        event
        shall be given to each of the other Parties without delay, (b) the affected
        Party shall use diligent efforts at all times to overcome the effects of
        the
        event and to resume full performance under this Agreement and (iii) no such
        event shall excuse an obligation to make a payment of money, except that
        if such
        payment would be illegal, such obligation shall be deferred until payment
        becomes legally permissible, and the amount owning shall bear interest at
        the
        prevailing bank rate set forth from time to time by the State Bank of
        Argentina.

       

      7.5 Survival.
        This
Section
        7.5
        (Survival), Section 2.2(b) (DSD Fee), Section 3.1(d), Section 12.1 (Indemnity),
        Section 12.2 (Governing Law), Section 12.8 (Notices), Section 7.4 (Rights
        and
        Remedies) Article 8 (Limitation on Liability), Article 9 (Confidential
        Information), and Article 11 (Dispute Resolution), will survive the termination
        or expiration of this Agreement. In addition, those provisions of this Agreement
        that relate to the enforcement of rights and obligations accruing before
        termination or expiration will survive the termination or expiration of this
        Agreement to the extent necessary to enforce such rights and
        obligations.

       

      
        
          
          

        

        
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      ARTICLE
        8

      LIMITATION
        OF LIABILITY

       

      8.1 CONSEQUENTIAL
        AND INDIRECT DAMAGES.
        EXCEPT
        FOR DAMAGES ARISING FROM A BREACH OF ARTICLE
        9 (Confidentiality)
        AND
        OTHERWISE NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO
        PARTY
        OR ITS AFFILIATES, NOR ITS OR THEIR DIRECTORS, MEMBERS, OFFICERS, MANAGERS,
        EMPLOYEES, AGENTS OR REPRESENTATIVES, WILL BE LIABLE TO ANY OTHER PARTY,
        FOR
        CLAIMS OF PUNITIVE, SPECIAL, EXEMPLARY, TREBLE, INCIDENTAL, INDIRECT OR
        CONSEQUENTIAL DAMAGES, INCLUDING DAMAGES FOR LOSS OF PROFITS, LOSS OF USE
        OR
        REVENUE, OR LOSSES BY REASON OF COST OF CAPITAL, CONNECTED WITH OR RESULTING
        FROM ANY PERFORMANCE OR LACK OF PERFORMANCE UNDER THIS AGREEMENT, REGARDLESS
        OF
        WHETHER A CLAIM IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE),
        STRICT LIABILITY, VIOLATION OF ANY APPLICABLE DECEPTIVE TRADE PRACTICES ACT
        OR
        ANY OTHER LEGAL OR EQUITABLE PRINCIPLE.

       

      8.2 EXCLUSIVITY
        OF WARRANTIES.
        THE
        WARRANTIES PROVIDED IN THIS AGREEMENT ARE EXCLUSIVE AND NO OTHER WARRANTIES
        OF
        ANY KIND, WHETHER STATUTORY, EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES
        OF
        MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) WILL APPLY.

       

      ARTICLE
        9

      CONFIDENTIALITY

       

      9.1 Confidentiality.
        With
        respect to each Party and their respective Affiliates, except to the extent
        necessary for the exercise of its rights and remedies and the performance
        of its
        obligations under this Agreement, such Party will not itself use or disclose
        (and will not permit the use or disclosure by any of its Affiliates or its
        advisors, counsel and public accountants (collectively, “Advisors”)),
        directly or indirectly, any of the Project Documents or this Agreement or
        information furnished thereunder (the “Confidential
        Information”),
        and
        will use all reasonable efforts to have all such Confidential Information
        kept
        confidential (consistent with its own practices) and not used in any way
        known
        to such Party to be detrimental to any of the other Parties; provided, that
        (i) any such Party, its Affiliates and its advisors may use, retain and
        disclose any such information to its special counsel and public accountants
        or
        any Governmental Authority, including but not limited to filings with the
        US
        Securities and Exchange Commission, (ii) any such Party, its Affiliates and
        its advisors may use, retain and disclose any such Confidential Information
        that
        has been publicly disclosed (other than by such Party, its Affiliates or
        any of
        its advisors in breach of this Section) or has rightfully come into the
        possession of such Party thereof or any of its Affiliates or advisors other
        than
        from another Party or a Person acting on such other Party’s behalf,
        (iii) to the extent that any such Party, its Affiliates or its advisors may
        have received a subpoena or other written demand under color of legal right
        for
        such information, such Party, its Affiliates or advisors may disclose such
        information, but such Party will first, as soon as practicable upon receipt
        of
        such demand and unless otherwise prohibited by applicable Law, furnish a
        copy
        thereof to the other Parties and, if practicable so long as such Party, its
        Affiliates or advisors will not be in violation of such subpoena or demand
        or
        likely to become liable to any penalty or sanctions thereunder, afford the
        other
        Parties reasonable opportunity, at such other Parties’ cost and expense, to
        obtain a protective order or other reasonably satisfactory assurance of
        confidential treatment for the information required to be disclosed,
        (iv) disclosures to lenders, potential lenders or other Persons providing
        financing to the Project Company, if such Persons have agreed to abide by
        the
        terms of this Section; and (v) any such Party, its Affiliates and its
        advisors may disclose any such information, and make such filings, as may
        be
        required by this Agreement or the Project Documents. Notwithstanding anything
        herein to the contrary, a Party may disclose information to its Affiliates
        and
        other advisors in accordance with this Agreement if such Persons have agreed
        to
        the terms of this Section.

       

      
        
          
          

        

        
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      9.2 Tax
        Treatment and Structure.
        The
        foregoing obligations will not apply to the tax treatment or tax structure
        of
        the Project Company and the anticipated UTE Agreement and each Party (and
        any
        employee, representative, or agent of any Party) may disclose to any and
        all
        Governmental Authority, at the latter’s written request, the tax treatment and
        tax structure of this Project and all other materials of any kind (including
        opinions or other tax analysis) that are provided to any Party hereto relating
        to such tax treatment and tax structure. However, any such information relating
        to such tax treatment and tax structure is required to be kept confidential
        to
        the extent necessary to comply with any applicable securities laws. [The
        preceding sentences are intended to cause the transaction not to be treated
        as
        having been offered under conditions of confidentiality for purposes of Sections
        1.6011-4(b)(3) and 301.6111-2(a)(2)(ii) (or any successor provision) of the
        U.S.
        Treasury Regulations issued under the U.S. Internal Revenue Code of 1986,
        as
        amended, and will be construed in a manner consistent with such
        purpose.]

       

      9.3 Return
        of Confidential Information.The
        receiving Party shall immediately destroy or return all tangible and, to
        the
        extent practicable, intangible material in its possession or control embodying
        the disclosing Party’s Confidential Information (in any form and including,
        without limitation, all summaries, copies and excerpts of Confidential
        Information) upon the earlier of (a) the completion or termination of the
        dealings between the Parties or (b) such time as the disclosing Party may
        so
        request and shall not thereafter be retained in any form by receiving Party,
        except that notwithstanding the above, one copy may be retained by receiving
        Party to show compliance with the terms of this Agreement or for regulatory
        compliance purposes.

       

      9.4 Survival.
        The
        restrictions contained in this Article
        9
        will
        survive the termination or expiration of this Agreement for a period of two
        (2)
        years from the date of such termination or expiration. 

       

      
        
          
          

        

        
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      ARTICLE
        10

      DEVELOPER
        REPRESENTATIONS AND WARRANTIES

       

      Each
        Developer represents and warrants to the other Developer that: (a) such
        Developer is a corporation or limited liability company, as applicable, duly
        formed, validly existing and in good standing under the laws of the state
        of its
        incorporation or formation, as applicable, and has full power and authority
        to
        own its own properties and to carry on its business as it is now being
        conducted, (b) such Developer has the full power and authority to execute,
        deliver and perform this Agreement and to carry out the transactions
        contemplated by this Agreement; (c) the execution and delivery of this
        Agreement by such Developer and the carrying out by such Party of the
        transactions contemplated by this Agreement have been duly authorized by
        all
        requisite corporate or limited liability company action, as applicable, and
        this
        Agreement has been duly executed and delivered by such Developer and constitutes
        the legal, valid and binding obligation of such Party, enforceable against
        the
        Party in accordance with the terms of this Agreement, subject to applicable
        bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
        and
        other similar laws now or hereafter in effect affecting creditors’ rights and
        remedies generally and subject, as to enforceability, to general principles
        of
        equity, including principles of commercial reasonableness, good faith and
        fair
        dealing (regardless of whether enforcement is sought in a proceeding at law
        or
        in equity); (d) all third party consent(s) and approval(s) including
        banks/creditors approval(s) required for the execution, delivery and performance
        of this Agreement have been obtained to the satisfaction of each other and
        no
        other authorization, consent, notice to or registration or filing with any
        Governmental Authority or banks/creditors is required for the execution,
        delivery and performance by such Developer of this Agreement; (e) none of
        the execution, delivery and performance by such Developer of this Agreement
        conflicts with or will result in a breach or violation of any Law, contract
        or
        instrument to which such Developer is a party or is bound; and (f) there
        are no legal or arbitral proceedings by or before any Governmental Authority,
        now pending or (to the knowledge of such Developer) threatened, that if
        adversely determined could have a material adverse effect on such Developer’s
        ability to perform the Developer’s obligations under this
        Agreement.

       

      ARTICLE
        11

      SETTLEMENT
        OF DISPUTES

       

      11.1 Procedure.
        The
        Parties will attempt, in good faith, to resolve or cure all disputes and
        claims
        (including any claimed breaches of this Agreement) (each a “Dispute”))
        through the Project Company Board of Directors before initiating any legal
        action or attempting to enforce any rights or remedies under this Agreement
        (including termination), at law or in equity (regardless of whether this
        Article
        is referenced in the provision of this Agreement which is the basis for any
        such
        dispute). If any Party believes that a Dispute under this Agreement has arisen,
        such Party will give written notice thereof to the other Parties and to the
        Project Company Board of Directors which notice will describe in reasonable
        detail the basis and specifics of the Dispute. Within five (5) days after
        delivery of such notice, the Project Company Board of Directors will meet
        to
        discuss and attempt to resolve or cure such Dispute. If the Project Company
        Board of Directors is unable to resolve the Dispute within fifteen (15) days
        after delivery of such notice, the matter will be referred to a “Senior Officer”
of each Party for resolution or cure. If such Senior Officers are unable
        to
        agree on an appropriate cure or resolution within ten (10) days after the
        matter
        has been referred to them, the Parties may have recourse to arbitration.
        

       

      11.2 Arbitration.Where
        any
        Dispute is not resolved as provided for in Section 11.1, then, at the request
        of
        either Party, the Dispute shall be submitted to arbitration in accordance
        with
        the provisions of the Rules of Arbitration of the International Chamber of
        Commerce or any successor thereto (the “Rules”),
        except as modified herein and, in matters where the Rules are silent, the
        procedural law of England. The place of the arbitration shall be London,
        England. The arbitration shall be conducted in the English language. The
        award
        rendered in any arbitration commenced hereunder, shall be final and conclusive
        and judgment thereon may be entered in any court having jurisdiction of its
        enforcement. The award under any such arbitration will be paid in the currency
        designated by the arbitral award.

       

      
        
          
          

        

        
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      11.3 Continuation
        of Work.
        Pending
        final resolution of any Dispute, the Parties will continue to fulfill their
        respective obligations under this Agreement; provided that the applicable
        Party
        may withhold any amount that is the subject of Dispute from any payment
        otherwise due under this Agreement during the pendency of any dispute resolution
        proceeding. Upon resolution of the Dispute, the Party owing such amount shall
        promptly pay to the relevant Party any amount determined to be due, together
        with interest at the Late Payment Rate on the unpaid balance from the date
        the
        amount was originally owed until the date paid in full.

       

      ARTICLE
        12

      MISCELLANEOUS

       

      12.1 Indemnity.
        Each
        Party agrees to defend, indemnify (on an after-tax basis) and hold harmless
        the
        other Parties and their Affiliates and their respective officers, directors,
        employees, servants, owners, agents and representatives (each, an “Indemnified
        Person”)
        from
        and against any and all claims, losses, liabilities, suits, judgments, damages,
        costs, charges, penalties, fines, fees and expenses (including reasonable
        legal
        fees and expenses) of whatever kind and nature (“Losses”)
        arising out of third party injury, death or property damage caused by the
        Party’s negligence or willful misconduct, including claims based on strict
        liability in tort, provided that the foregoing indemnities will not apply
        to the
        extent such Losses have resulted from (i) the willful misconduct or
        negligence of the Indemnified Person seeking indemnity under this Agreement,
        or
        (ii) any breach of any obligation or representation or warranty of such
        Indemnified Person under this Agreement or any Project Document to which
        such
        Indemnified Person is a party.

       

      12.2 Governing
        Law. This
        Agreement shall be governed by, and construed in accordance with, the laws
        of
        England without
        regard to conflicts of law principles.

       

      12.3 Assignment.
        None of
        the Parties may assign this Agreement without the prior written consent of
        the
        other Parties, which
        shall not be unreasonably withheld, provided that any assignee must agree
        to be
        bound in writing by all the terms and conditions of this Agreement.
        It is
        contemplated hereunder that AEBA shall assign its rights and obligations
        hereunder (other than the payment of the DSD Fee) to an off shore subsidiary
        domiciled in India (UBAPL) or the British Virgin Islands.

       

      12.4 Binding
        Effect.
        The
        terms of this Agreement will be binding upon, and inure to the benefit of,
        the
        Parties and their successors and permitted assigns.

       

      12.5 Entire
        Agreement and Modifications.
        This
        Agreement along with the Preliminary Engineering Agreement, will constitute
        the
        entire agreement among the Parties relating to the subject matter hereof,
        and
        all previous agreements, discussions, communications, and correspondence
        with
        respect to the subject matter hereof, including the Memorandum of Understanding,
        will be superseded by the execution of this Agreement. This Agreement may
        not be
        modified or amended except in writing signed on behalf of each Party by its
        duly
        authorized representative. Any such modification or amendment shall form
        part of
        this Agreement and shall be read co-terminus with this Agreement. The Parties
        agree and acknowledge that this Agreement creates legal rights and obligations
        between them even though it contemplates their entry into additional
        agreements.

       

      
        
          
          

        

        
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      12.6 No
        Waiver of Rights.
        No right
        under this Agreement may be waived by a Party, except pursuant to a writing
        signed by the Party against which enforcement of the waiver is sought. Without
        limitation, no failure or delay on the part of any Party in exercising any
        of
        its rights under this Agreement, no partial exercise by any Party of any
        of its
        rights under this Agreement, and no course of dealing among the Parties,
        will
        constitute a waiver of the rights of a Party.

       

      12.7 Relationship
        of Parties.
        The
        rights, duties, obligations and liabilities of the Parties under this Agreement
        will be individual and not joint or collective. It is not the intention of
        the
        Parties to create, nor shall this Agreement be deemed to create, any
        partnership, agency, joint venture or trust, or to authorize any Party to
        act as
        an agent, servant or employee for any other Party. Except to the extent a
        Party
        is holding an asset in trust for another Party, no Party will be considered
        a
        fiduciary of any other Party.

       

      12.8 Notices.
        Any
        notice given under this Agreement will be in writing and delivered by personal
        service, or by certified or registered first class mail, or nationally
        recognized overnight courier, or by facsimile or email with a copy, in the
        case
        of facsimile or email, by first class mail, to the addresses specified
        below:

       

      
        	
                If
                  to AEBA:

              	
                AE
                  Biofuels Americas, Inc.

              
	 	
                20400
                  Stevens Creek Blvd.

              
	 	
                Suite
                  700

              
	 	
                Cupertino,
                  CA  95014

              
	 	
                Attn:
                  Legal Counsel

              
	 	 
	
                With
                  a copy to:

              	
                Greenberg
                  Traurig, P.A. 

              
	 	
                1221
                  Brickell Ave 

              
	 	
                Miami,
                  Florida 33131 

              
	 	
                T:
                  305 579 0655

              
	 	
                Attn:
                  Juan Pablo Cappello

              
	 	 
	
                If
                  to DSD:

              	
                DS
                  Development S.A.

              
	 	
                Olleros
                  1806 Cod. Postal (1426)

              
	 	
                Ciudad
                  de Buenos Aires

              
	 	
                Argentina

              
	 	
                Attn.:
                  Ivan Stocker

              

      

      

      Any
        Party
        may change the addresses provided above by notifying the other Parties in
        the
        manner provided above. In the case of personal delivery, certified or registered
        first class mail, or nationally recognized overnight courier, such transmittal
        will be deemed to have been received by the recipient party on the date of
        such
        delivery. In the case of delivery via facsimile or email, the transmittal
        shall
        be deemed to have been received on the day following the date of communication
        by facsimile or email.

       

      
        
          
          

        

        
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      12.9 Counterparts.
        This
        Agreement may be executed in any number of counterparts (including by fascimile)
        and by the Parties in separate counterparts (including by fascimile), each
        of
        which shall be deemed an original, but all of such counterparts shall together
        constitute one and the same agreement and shall be read and interpreted in
        terms
        of this Agreement.

       

      12.10 Third
        Party Beneficiaries.
        Nothing
        expressed or implied in this Agreement is intended or will be construed to
        confer upon or give to any party other than the Parties any rights or remedies
        by virtue of this Agreement, except as provided in Section 12.1.

       

      12.11 Severability.
        If at
        any time subsequent to the Effective Date, any provisions of this Agreement
        will
        be held by any court of competent jurisdiction to be illegal, void or
        unenforceable, such provision will be of no force and effect, but the illegality
        or unenforceability of such provision will have no effect upon and will not
        impair the enforceability of any other provision of this Agreement.

       

      12.12 Illicit
        Payments/FCPA.
        Each
        Party represents and warrants that it and its employees (i) are familiar
        with
        the provisions and requirements of the United States Foreign Corrupt Practices
        Act (“FCPA”),
        including the record keeping requirements thereof, and (ii) recognize that
        full
        compliance with the letter and spirit of the FCPA is the corporate policy
        of
        AEBA. In all matters relating to this Agreement and the Project, each Party
        will
        conduct itself in full compliance with the FCPA and the antibribery laws
        of the
        Republic of Argentina. Consequently, each Party specifically agrees as
        follows:

       

      (a) In
        carrying out its responsibility under this Agreement, neither Party shall
        pay or
        agree to pay, directly or indirectly, any funds or anything of value to any
        public official for the purpose of influencing such official’s official acts or
        decisions. Each Party represents and warrants, without prior notice, that
        no
        owner, partner, officer, director of the Party is or will become an official
        of
        any national, regional or local government of the Republic of Argentina or
        any
        political subdivision thereof, or of a political party of the Republic of
        Argentina or any political subdivision thereof, during the term of this
        Agreement.

       

      (b) Each
        Party shall immediately notify the other Party of any request that such Party
        receives to take any action that might constitute a violation of the FCPA,
        the
        antibribery laws of the Republic of Argentina or of this section.

       

      12.13 Further
        Assurances. From
        time
        to time, the Parties shall take all appropriate actions and execute and deliver,
        or caused to be executed or delivered, such documents, agreements or instruments
        which may be reasonably necessary or advisable to carry out any of the
        provisions of this Agreement.

       

      12.14 Press
        Release. Neither
        Party shall make any press release or other announcement respecting the subject
        matter covered under this Agreement containing information (other than
        information already available to the public) with respect to the Project
        without
        the prior written consent of the other Party; provided, however, that any
        such
        press release or other announcement may be made without consent, if so required
        under any applicable statue, law or regulation and notice of any such press
        release or other announcement is provided immediately to the other
        Party.

       

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      IN
        WITNESS WHEREOF,
        the
        Parties have caused this Agreement to be executed by their respective duly
        authorized representatives as of the day and year first above
        written.

      

      
        	
                AE
                  BIOFUELS AMERICAS, INC.

              
	 	 
	
                By:

              	
                /s/
                  Eric A. McAfee

              
	Name:	
                Eric
                  A. McAfee

              
	Title:	
                Chief
                  Executive Officer and President

              
	 	 
	
                DS
                  DEVELOPMENT S.A.

              
	 	 
	
                By:

              	
                /s/
                  Ivan Stocker

              
	Name:	
                Ivan
                  Stocker

              
	Title:	
                Director

              

      

    

     

    
      
        
        

      

      
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