* Isn't this date incorrect?
5-Jul-2007
Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement
On August 31, 2006, Earth Ethanol, Inc., ("Earth Ethanol"), a Delaware corporation and a wholly owned subsidiary of Earth Biofuels, Inc., executed a Contribution and Purchase Agreement by and between Earth Ethanol, HPS Development, L.L.C., a Louisiana limited liability company ("HPS"), and South Louisiana Ethanol, L.L.C., a Louisiana limited liability company ("SLE"). SLE owns a former ethanol production facility located on a site in Plaquemines Parish, Louisiana.
On December 15, 2006, the Company filed an action arising from a claim for breach of contract and default by SLE under the terms of the agreement. On June 15, 2007, the parties entered into a Consent Judgment and Settlement Agreement ("Settlement Agreement") to resolve the disputes. Under the Settlement Agreement, HPS must pay Earth Ethanol $3 million by
June 18, 2006*
as an initial payment, and then on or before 30 days from the initial payment, HPS must pay Earth Ethanol an additional $1 million as a second payment. Additionally, HPS delivered a promissory note payable to Earth Ethanol in the principal amount of $18 million, to be paid out of the cash flows of the SLE ethanol production facility in Plaquemines Parish, Louisiana, repayments beginning no later than August 31, 2008.
Any breach of HPS' obligations will entitle Earth Ethanol to equitable relief or other remedies for such breach including recovery of damages.
For further information in accordance with Item 1.01, please reference exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is being filed herewith:
99.1 Consent Judgment and Settlement Agreement, dated June 15, 2007
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