Global Clean Energy Holdings Inc.
08/30/2024 | Press release | Distributed by Public on 08/30/2024 14:44
Management Change/Compensation Form 8 K
Item 1.01. Entry Into a Material Definitive Agreement.
On August 29, 2024, Bakersfield Renewable Fuels, LLC ("BKRF"), an indirect wholly-owned subsidiary of Global Clean Energy Holdings, Inc. ("we," "us," "our" and the "Company") entered into a Management Services Agreement (the "MSA") with Entara LLC ("Entara") for management services pertaining to the Company's Bakersfield Renewable Fuels Facility (the "Facility"). Pursuant to the terms of the MSA, Entara will provide management advice and guidance to BKRF concerning various functions, including commercial, operations, human resources, renewables and asset management at the Facility.
The initial term of the MSA is three years. Upon expiration of the initial term, the MSA will automatically renew for an additional three-year period unless either party provides notice of non-renewal at least 60 days prior to the expiration of the initial term. Either party may terminate the MSA for cause in connection with material defaults under the MSA, and in connection with certain insolvency events. BKRF may also terminate the MSA if certain key performance metrics are not met for three consecutive quarters (or any five quarters during the initial term or renewal term), or for convenience. If BKRF elects not to renew the term of the MSA after the initial term, terminates the MSA during the initial term or renewal term for convenience, or effects a sale of the Facility to a third party that does not expressly assume BKRF's obligations under the MSA, it would pay a one-time fee equal to $8.0 million if the triggering event occurs during the initial term, and $4 million if the triggering event occurs during the renewal term. The MSA also contains customary covenants regarding confidentiality and indemnification, including indemnification for negligence or willful misconduct, personal injury or death, loss or damage to the Facility, and employee related liabilities.
The MSA provides for the payment by BKRF of a fee equal to $3.5 million per year, payable monthly. Entara will also be entitled to certain bonuses payable upon achieving certain agreed upon key performance metrics. The performance bonus for the initial service period through December 31, 2024 has a target of $1.25 million, and the performance bonus for each subsequent calendar year will have a target of $4.0 million, subject to a CPI adjustment.
The foregoing description of the material terms of the MSA is qualified in its entirety by reference to the complete text of the MSA, which the Company intends to file, with confidential terms redacted, with the SEC as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024.