Exhibit 10.9
AGREEMENT BETWEEN OWNER AND HDR ENGINEERING, INC. FOR
PROFESSIONAL SERVICES
THIS AGREEMENT is made as of this 17th day of December, 2004, between
SIOUXLAND ETHANOL, LLC, JACKSON, NEBRASKA ("OWNER") and HDR ENGINEERING, INC.,
("ENGINEER") a Nebraska corporation, with principal offices at 0000 Xxxxxx Xxxxx
Xxxxx, Xxxxx, Xxxxxxxx, 00000 for services in connection with the project known
as NPDES DISCHARGE AND WELL PERMITTING ASSISTANCE AND OTHER ON-CALL SERVICES
("PROJECT");
WHEREAS, OWNER desires to engage ENGINEER to provide professional
engineering, consulting and related services ("Services") in connection with the
Project; and
WHEREAS, ENGINEER desires to render these Services as described in SECTION
I, Scope of Services.
NOW, THEREFORE, OWNER and ENGINEER in consideration of the mutual covenants
contained herein, agree as follows:
SECTION I. SCOPE OF SERVICES
ENGINEER will provide Services for the Project, which consist of the Scope of
Services as outlined on the attached Exhibit A.
SECTION II. TERMS AND CONDITIONS OF ENGINEERING SERVICES
The "HDR" Engineering, Inc. Terms and Conditions for Professional Services,"
which are attached hereto in Exhibit B, are incorporated into this Agreement by
this reference as if fully set forth herein.
SECTION III. RESPONSIBILITIES OF OWNER
The OWNER shall provide the information set forth in paragraph 6 of the attached
"HDR "HDR Engineering, Inc. Terms and Conditions for Professional Services" and
shall designate an authorized representative that shall have the authority to
transmit instructions, receive information, and render decisions on behalf of
the OWNER.
SECTION IV. COMPENSATION
Compensation for ENGINEER'S services under this Agreement shall be on the basis
of fixed hourly labor rates by employee classification plus reimbursable
expenses, as detailed in Exhibit C. Reimbursable expense shall mean the actual
expenses incurred directly or indirectly in connection with the Project for
transportation, travel, meals, expendable supplies, subconsultants,
subcontractors, technology charges (computer usage), telephone, shipping and
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express, printing and electronic reproduction, and other incurred expense.
ENGINEER will add ten percent (10%) to all reimbursable expense to cover
administrative, supervision, and insurance expenses.
The amount of any sales tax, excise tax, value added tax (VAT), or gross
receipts tax that may be imposed on this Agreement shall be added to the
ENGINEER'S compensation as Reimbursable Expenses.
Due to the uncertain nature of this PROJECT, the OWNER intends to utilize the
services of the ENGINEER on an indefinite retainer type basis, rather than
establishing a ceiling price for services. That is, the OWNER shall determine
the extent of services desired on a monthly or more often basis, and the
ENGINEER shall provide monthly invoices for work completed through the billing
cycle. Accordingly, the OWNER, at its own discretion, may elect to terminate
services at any time through a written notice to the ENGINEER, and the
compensation shall be calculated accordingly and due payable up to that point in
time.
If the OWNER elects to have ENGINEER engage in any litigation, arbitration, or
other legal or administrative proceeding, due to the disruptive nature of the
work involved, all associated labor costs shall be multiplied by a factor of 1.5
times the rates set forth in Exhibit C or the most current rates that may have
established beyond the original Period of Service, as discussed in Section V
below and Exhibit A. Such labor shall include, but not be limited to:
participation in meeting with legal counsel; participation in depositions;
providing courtroom or other administrative testimony; preparation of supporting
exhibits; and all other time associated with preparation, travel, and follow-up.
SECTION V. PERIOD OF SERVICE
Upon receipt of written authorization to proceed, ENGINEER shall perform the
services within the time period(s) described in Exhibit A.
Unless otherwise stated in this Agreement, the rates of compensation for
ENGINEER'S services have been agreed to in anticipation of the orderly and
continuous progress of the project through completion. If any specified dates
for the completion of ENGINEER' services are exceeded through no fault of the
ENGINEER, the time for performance of those services shall be automatically
extended for a period which may be reasonably required for their completion and
all rates, measures and amounts of ENGINEER'S compensation shall be equitably
adjusted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above.
SIOUXLAND ETHANOL, LLC
"OWNER"
BY: /s/ Xxx Xxxxx
------------------------------------
NAME:
----------------------------------
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TITLE: President
ADDRESS: XX Xxx 000
Xxxxxxx, Xx. 00000
HDR ENGINEERING, INC.
"ENGINEER"
BY: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
NAME: Xxxxxxx X. Xxxxxxxx, P.E.
TITLE: Senior Vice President
ADDRESS: 0000 Xxxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
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EXHIBIT A
SCOPE OF SERVICES
NPDES DISCHARGE AND WELL PERMITTING ASSISTANCE AND OTHER ON-CALL SERVICES
FOR SIOUXLAND ETHANOL, LLC
ENGINEERING PROPOSAL
BACKGROUND AND BASIS OF PROPOSAL
The purpose of this Proposal is to describe the scope of professional
engineering services for SIOUXLAND ETHANOL, LLC, JACKSON, NEBRASKA ("OWNER") and
HDR ENGINEERING, INC., ("ENGINEER") a Nebraska corporation, with principal
offices at 0000 Xxxxxx Xxxxx Xxxxx, Xxxxx, Xxxxxxxx, 00000 for services in
connection with the project known as NPDES DISCHARGE AND WELL PERMITTING
ASSISTANCE AND ON-CALL SERVICES ("PROJECT"). The OWNER desires certain services
from the ENGINEER to assist the OWNER IN SECURING a National Pollution Discharge
Permit System (NPDES) discharge permit(s) for cooling tower blowdown water and
other waste streams, a construction permit for a new well(s) or other related
professional engineering services as may be desired by the OWNER.
PERIOD OF SERVICE
The timing and duration for the scope of services described herein shall be the
same as that set forth by the OWNER; except, however, that the ENGINEER'S rates
set forth in Exhibit C shall only be applicable for work completed through 2005.
If work extends beyond 2005, then such rates shall be equitably adjusted.
SCOPE OF SERVICES
- If desired by the OWNER, the ENGINEER is prepared to offer waste
management options screening.
- Preliminary Evaluations. Consider various treatment/disposal
options for handling the combined non-process waste streams
involving cooling tower blowdown water, reverse osmosis reject
water, softer regenerate and/or other waste streams. The intended
purpose shall be, on a draft basis, to furnish to the OWNER a
list of candidate waste management options for further
evaluation. A "decision matrix" can be prepared that summarizes
monetary and non-monetary factors with due considerations for
technical soundness, economics, potential regulatory issues with
the Nebraska Department of Environmental Quality (NDEQ) or other
agencies, and compatibility with overall timing for the OWNER's
other related activities associated with the construction of a
new ethanol production facility.
- Field Investigations. If necessary, and as directed by the Owner,
perform certain cursory field investigations that may be of
assistance in formulating waste
Exhibit A - Agreement for Professional Services
Page 1
management options on a preliminary basis. No subconsultant or
subcontractor work will be undertaken in this regard without
express, written consent from the OWNER.
- Facilitation/Communications. As directed by the OWNER, attend
coordination meetings with NDEQ, the Papio-Missouri River NRD,
the State Dept. of Natural Resources, or other agencies; meet
separately with the OWNER; make technical presentations as may be
desired; and provide written and oral communications as may be
necessary for PROJECT coordination
- Follow-up Waste Management Options Screening. Through the
above-described processes, assist the OWNER in progressively
narrowing the range of waste management options to a point of
consensus with the OWNER as to what courses of action should be
pursued for securing necessary construction and NPDES discharge
permit(s) with NDEQ or clearances with other applicable agencies.
This process may include the preparation of written technical
memoranda that the OWNER can use for attachments to permit
applications and/or assist in permit negotiations and related
discussions.
- Permit Applications. Assemble the permitting documents necessary and
submit the same to the agencies having jurisdiction. This includes any
meetings and correspondences necessary for reviewing the technical and
regulatory aspects of the permit applications and negotiating permit
limits, where applicable. Permit applications will be prepared for:
- Raw water supply well(s).
- Construction permit for any wastewater-related pump
stations, pipelines, storage ponds, etc. not already
included in the permitting process handling by the
design-build firm.
- NPDES wastewater discharge permit.
- Other On-Call Services. Assist the OWNER to the extent desired, and
only as expressly authorized by the OWNER, for other on-call services
that may be desired, including stormwater permitting; design and
construction phase services for supply well(s), water/wastewater
treatment facilities, stormwater facilities, access roads, rail
services spur tracks; etc.
KEY UNDERSTANDINGS AND ASSUMPTIONS
It is assumed by the ENGINEER that the OWNER already possesses or will otherwise
interact with its design-build firm for construction the ethanol production
facilities to acquire all necessary process and other supporting technical
information that may be needed for the ENGINEER to assist the OWNER for this
PROJECT.
Accordingly, the OWNER shall provide the following to the ENGINEER on an
"as-needed" basis:
- NPDES Discharge Permitting Basic Information Needs.
- Contact information for "cognizant official" (corporate principal
officer at a level of vice president or above), the "authorized
representative" who can sign discharge monitoring reports, and
operations manager directly in charge of wastewater discharges.
Exhibit A - Agreement for Professional Services
Page 2
- Project site legal description and process SIC number.
- General description of intended plant operations and production
levels.
- Intended employment level.
- Vicinity map and site layout drawings, including the site
utilities.
- Locations of adjacent dwellings, potable water supply xxxxx, and
wetlands.
- Process flow diagrams, water flow and chemical balances for raw
water supply and discharge waste streams.
- MSDS information for biocides and anti-scalants proposed to be
used.
- Locations of adjacent dwellings, potable water supply xxxxx, and
wetlands.
- Copy of stormwater management plan or description of how site
runoff will be handled.
- Raw Water Supply Well Permitting Basic Information Needs.
- Copies of drillers logs
- Copies of all laboratory testing results for water quality.
- Site map showing proposed location(s) of well(s).
- Copy of design technical specifications and drawings for the
well, pump, and related appurtenances.
- Right-of-entry to any properties involved in field visits and
investigations.
The OWNER may elect to have the ENGINEER secure portions of the above
information or certain other supporting information to the extent that the same
may be available or as may be otherwise reasonably acquired, subject to
compensation to the ENGINEER under the applicable terms of this AGREEMENT.
Exhibit A - Agreement for Professional Services
Page 3
EXHIBIT B
HDR ENGINEERING, INC.
TERMS AND CONDITIONS FOR PROFESSIONAL SERVICES
1. STANDARD OF PERFORMANCE
The standard of care for all professional engineering, consulting and related
services performed or furnished by ENGINEER and its employees under this
Agreement will be the care and skill ordinarily used by members of ENGINEER's
profession practicing under the same or similar circumstances at the same time
and in the same locality. ENGINEER makes no warranties, express or implied,
under this Agreement or otherwise, in connection with ENGINEER's services.
2. INSURANCE
ENGINEER agrees to procure and maintain, at its expense, Workers' Compensation
insurance as required by statute; Employer's Liability of $250,000; Automobile
Liability insurance of $1,000,000 combined single limit for bodily injury and
property damage covering all vehicles, including hired vehicles, owned and
non-owned vehicles; Commercial General Liability insurance of $1,000,000
combined single limit for personal injury and property damage; and Professional
Liability insurance of $1,000,000 per claim for protection against claims
arising out of the performance of services under this Agreement caused by
negligent acts, errors, or omissions for which ENGINEER is legally liable. Upon
request, OWNER shall be made an additional insured on Commercial General and
Automobile Liability insurance policies and certificates of insurance will be
furnished to the OWNER. ENGINEER agrees to indemnify OWNER for the claims
covered by ENGINEER's insurance.
3. OPINIONS OF PROBABLE COST (COST ESTIMATES)
Any opinions of probable project cost or probable construction cost provided by
ENGINEER are made on the basis of information available to ENGINEER and on the
basis of ENGINEER's experience and qualifications, and represents its judgment
as an experienced and qualified professional engineer. However, since ENGINEER
has no control over the cost of labor, materials, equipment or services
furnished by others, or over the contractor(s') methods of determining prices,
or over competitive bidding or market conditions, ENGINEER does not guarantee
that proposals, bids or actual project or construction cost will not vary from
opinions of probable cost ENGINEER prepares.
4. CONSTRUCTION PROCEDURES
ENGINEER's observation or monitoring portions of the work performed under
construction contracts shall not relieve the contractor from its responsibility
for performing work in accordance with applicable contract documents. ENGINEER
shall not control or have charge of, and shall not be responsible for,
construction means, methods, techniques, sequences, procedures of construction,
health or safety programs or precautions connected with the work and shall not
manage, supervise, control or have charge of construction. ENGINEER shall not be
responsible for the acts or omissions of the contractor or other parties on the
project. ENGINEER shall be entitled to review all construction contract
documents and to require that no provision extend the duties or liabilities of
ENGINEER beyond those set forth in this Agreement. OWNER agrees to include
ENGINEER as an indemnified party in OWNER's construction contracts for the work,
which shall protect ENGINEER to the same degree as OWNER. Further, OWNER agrees
that ENGINEER
Exhibit B - Terms and Conditions for Professional Services
Page 1 [HDR logo]
shall be listed as an additional insured under the construction contractor's
liability insurance policies.
5. CONTROLLING LAW
This Agreement is to be governed by the law of the state where ENGINEER's
services are performed.
6. SERVICES AND INFORMATION
OWNER will provide all criteria and information pertaining to OWNER's
requirements for the project, including design objectives and constraints,
space, capacity and performance requirements, flexibility and expandability, and
any budgetary limitations. OWNER will also provide copies of any OWNER-furnished
Standard Details, Standard Specifications, or Standard Bidding Documents which
are to be incorporated into the project. OWNER will furnish the services of
soils/geotechnical engineers or other consultants that include reports and
appropriate professional recommendations when such services are deemed necessary
by ENGINEER. The OWNER agrees to bear full responsibility for the technical
accuracy and content of OWNER-furnished documents and services. In performing
professional engineering and related services hereunder, it is understood by
OWNER that ENGINEER is not engaged in rendering any type of legal, insurance or
accounting services, opinions or advice. Further, it is the OWNER's sole
responsibility to obtain the advice of an attorney, insurance counselor or
accountant to protect the OWNER's legal and financial interests. To that end,
the OWNER agrees that OWNER or the OWNER's representative will examine all
studies, reports, sketches, drawings, specifications, proposals and other
documents. Opinions or advice prepared or provided by ENGINEER, and will obtain
the advice of an attorney, insurance counselor or other consultant as the OWNER
deems necessary to protect the OWNER's interest before OWNER takes action or
forebears to take action based upon or relying upon the services provided by
ENGINEER.
7. SUCCESSORS AND ASSIGNS
OWNER and ENGINEER, respectively, bind themselves, their partners, successors,
assigns, and legal representatives to the covenants of this Agreement. Neither
OWNER nor ENGINEER will assign, sublet, or transfer any interest in this
Agreement or claims arising therefrom without the written consent of the other.
8. RE-USE OF DOCUMENTS.
All documents, including all reports, drawings, specifications, computer
software or other items prepared or furnished by ENGINEER pursuant to this
Agreement, are instruments of service with respect to the project. ENGINEER
retains ownership of all such documents. OWNER may retain copies of the
documents for its information and reference in connection the project; however,
none of the documents are intended or represented to be suitable for reuse by
OWNER or others on extensions of the project or on any other project. Any reuse
without written verification or adaptation by ENGINEER for the specific purpose
intended will be at OWNER's sole risk and without liability or legal exposure to
ENGINEER, and OWNER will defend, indemnify and hold harmless ENGINEER from all
claims, damages, losses and expenses, including attorney's fees, arising or
resulting therefrom. Any such verification or adaptation will entitle ENGINEER
to further compensation at rates to be agreed upon by OWNER and ENGINEER.
9. TERMINATION OF AGREEMENT
Exhibit B - Terms and Conditions for Professional Services
Page 2 [HDR logo]
OWNER or ENGINEER may terminate the Agreement, in whole or in part, by giving
seven (7) days written notice, if the other party substantially fails to fulfill
its obligations under the Agreement through no fault of the terminating party.
Where the method of payment is "lump sum," or cost reimbursement, the final
invoice will include all services and expenses associated with the project up to
the effective date of termination. An equitable adjustment shall also be made to
provide for termination settlement costs ENGINEER incurs as a result of
commitments that had become firm before termination, and for a reasonable profit
for services performed.
10. SEVERABILITY
If any provision of this agreement is held invalid or unenforceable, the
remaining provision shall be valid and binding upon the parties. One or more
waivers by either party of any provision, term or condition shall not be
construed by the other party as a waiver of any subsequent breach of the same
provision, term or condition.
11. INVOICES
ENGINEER will submit monthly invoices for services rendered and OWNER will make
prompt payments in response to ENGINEER's invoices. ENGINEER will retain
receipts for reimbursable expenses in general accordance with Internal Revenue
Service rules pertaining to the support of expenditures for income tax purposes.
Receipts will be available for inspection by OWNER's auditors upon request. If
OWNER disputes any items in ENGINEER's invoice for any reason, including the
lack of supporting documentation, OWNER may temporarily delete the disputed item
and pay the remaining amount of the invoice. OWNER will promptly notify ENGINEER
of the dispute and request clarification and/or correction. After any dispute
has been settled, ENGINEER will include the disputed item on a subsequent,
regularly scheduled invoice, or on a special invoice for the disputed item only.
OWNER recognizes that late payment of invoices results in extra expense for
ENGINEER. ENGINEER retains the right to assess OWNER interest at the rate of one
percent (1%) per month, but not to exceed the maximum rate allowed bylaw, on
invoices which are not paid within forty-five (45) days from the date of the
invoice. In the event undisputed portions of ENGINEER's invoices are not paid
when due, ENGINEER also reserves the right, after seven (7) days prior written
notice, to suspend the performance of its services under this Agreement until
all past due amounts have been paid in full.
12. CHANGES
The parties agree that no change or modification to this Agreement, or any
attachments hereto, shall have any force or effect unless the change is reduced
to writing, dated, and made part of this Agreement. The execution of the change
shall be authorized and signed in the same manner as this Agreement. Adjustments
in the period of services and in compensation shall be in accordance with
applicable paragraphs and sections of this Agreement. Any proposed fees by
ENGINEER are estimates to perform the services required to complete the project
as ENGINEER understands it to be defined. For those projects involving
conceptual or process development services, activities often are not fully
definable in the initial planning. In any event, as the project progresses, the
facts developed may dictate a change in the services to be performed, which may
alter the scope. ENGINEER will inform OWNER of such situations so that changes
in scope and adjustments to the time of
Exhibit B - Terms and Conditions for Professional Services
Page 3 [HDR logo]
performance and compensation can be made as required. If such change, additional
services, or suspension of services result in an increase or decrease in the
cost of or time required for performance of the services, an equitable
adjustment shall be made, and the Agreement modified accordingly.
13. CONTROLLING AGREEMENT
These Terms and Conditions shall take precedence over any inconsistent or
contradictory provisions contained in any proposal, contract, purchase order,
requisition, notice-to-proceed, or like document.
14. EQUAL EMPLOYMENT AND NONDISCRIMINATION
In connection with the services under this Agreement, ENGINEER agrees to comply
with the applicable provision of federal and state Equal Employment Opportunity,
and other employment statutes and regulations.
15. HAZARDOUS MATERIALS
OWNER represents to ENGINEER that, to the best of its knowledge, no hazardous
materials are present at the project site. However, in the event hazardous
materials are known to be present, OWNER represents that to the best of its
knowledge it has disclosed to ENGINEER the existence of all such hazardous
materials, including but not limited to asbestos, PCB's, petroleum, hazardous
waste, or radioactive material located at or near the project site, including
type, quantity and location of such hazardous materials. It is acknowledge by
both parties that ENGINEER's scope of services do not include services related
in any way to hazardous materials. In the event ENGINEER or any other party
encounters undisclosed hazardous materials, ENGINEER shall have the obligation
to notify OWNER and, to the extent required by law or regulation, the
appropriate governmental officials, and ENGINEER may, at its option and without
liability for delay, consequential or any other damages to OWNER, suspend
performance of services on that portion of the project affected by hazardous
materials until OWNER: (i) retains appropriate specialist consultant(s) or
contractor(s) to identify and, as appropriate, xxxxx, remediate, or remove the
hazardous materials; and (ii) warrants that the project site is in full
compliance with all applicable laws and regulations. OWNER acknowledges that
ENGINEER is performing professional services for OWNER and that ENGINEER is not
and shall not be required to become an "arranger," "operator," "generator," or
"transporter" of hazardous materials, as defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1990 (CERCLA), which
are or may be encountered at or near the project site in connection with
ENGINEER's services under this Agreement. If ENGINEER's services hereunder
cannot be performed because of the existence of hazardous materials, ENGINEER
shall be entitled to terminate this Agreement for cause on 30 days written
notice. To the fullest extent permitted by law, OWNER shall indemnify and hold
harmless ENGINEER, its officers, directors, partners, employees, and
subconsultants from and against all costs, losses, and damages (including but
not limited to all fees and charges of engineers, architects, attorneys, and
other professional, and all court or arbitration or other dispute resolution
costs) caused by, arising out of or resulting from hazardous materials, provided
that (i) any such cost, loss, or damage is attributable to bodily injury,
sickness, disease, or death, or injury to or destruction of tangible property
(other than completed Work), including the loss of use resulting therefrom, and
(ii) nothing in this paragraph
Exhibit B - Terms and Conditions for Professional Services
Page 4 [HDR logo]
shall obligate OWNER to indemnify any individual or entity from and against the
consequences of that individual's or entity's sole negligence or willful
misconduct.
16. EXECUTION
This Agreement, including the exhibits and schedules made part hereof,
constitute the entire Agreement between ENGINEER and OWNER, supersedes and
controls over all prior written or oral understandings. This Agreement may be
amended, supplemented or modified only by a written instrument duly executed by
the parties.
17. LIMITATION OF LIABILITY
ENGINEER's and its employees' total liability to OWNER for any loss or damage,
including but not limited to special and consequential damages arising out of or
in connection with the performance of services or any other cause, including
ENGINEER's and its employees' professional negligent acts, errors, or omissions,
shall not exceed the greater of $50,000 or the total compensation received by
ENGINEER hereunder, except as otherwise provided under this Agreement, and OWNER
hereby releases and holds harmless ENGINEER and its employees from any liability
above such amount.
18. LITIGATION SUPPORT
In the event ENGINEER is required to respond to a subpoena, government inquiry
or other legal process related to the services in connection with a legal or
dispute resolution proceeding to which ENGINEER is not a party, OWNER shall
reimburse ENGINEER for reasonable costs in responding and compensate ENGINEER at
its then standard rates for reasonable time incurred in gathering information
and documents and attending depositions, hearings, and trial.
Exhibit B - Terms and Conditions for Professional Services
Page 5 [HDR logo]
EXHIBIT C
SCHEDULE OF PROFESSIONAL LABOR RATES
NPDES DISCHARGE AND WELL PERMITTING ASSISTANCE AND OTHER ON-CALL SERVICES
FOR SIOUXLAND ETHANOL, LLC
ENGINEERING PROPOSAL
The following billable labor rates shall be applicable through calendar year
2005, subject to the provisions in SECTION IV and SECTION V of this AGREEMENT:
BILLABLE RATE
EMPLOYEE CLASSIFICATION PER HOUR
----------------------- -------------
Project Principal $220.00
Project Manager $150.00
Senior Engineering/Senior Technical $170.00
Senior Project Engineer $140.00
Project Engineer $115.00
Engineer/Scientist $100.00
Engineer Technician $ 95.00
Junior Engineer/Scientist $ 85.00
CAD Designer $ 90.00
CAD Technician $ 75.00
Word Processing $ 55.00
Accounting $100.00
Technology charges (computer usage), as a part of reimbursable expenses, shall
be billed at the rate of $4.10 per labor hour for each of the employee
classifications listed above for each monthly payment cycle. Personal vehicle
mileage expenses shall be charged at $0.405 per mile in accordance with IRS
allowances for 2005.
Exhibit C - Schedule of Professional Labor Rates
Page 1 [HDR logo]
II. INTRODUCTION
A. COMPANY MISSION STATEMENT AND STRATEGIC VISION
Siouxland Ethanol, LLC officially organized as a Nebraska based Limited
Liability Company in August, 2004, with the intention of planning, constructing
and operating a 50 million gallon dry mill corn-processing plant in Nebraska
that benefits local investors, farmers and the community.
MISSION STATEMENT:
To successfully add value to locally grown grains which will profit our investor
owners and area grain and livestock producers, while benefiting our local
Siouxland communities through economic growth.
We intend to add value to locally grown grains by providing a local outlet to
process the corn grown in the area, and at the same time, increase the total
demand for corn in the Siouxland region. To meet this mission, we will need to
provide a processing facility that will allow members to invest in a growing
industry.
Goals of Forming a Company
1. Construct a corn processing facility whose size meets the needs
of its member investors, the community, and best utilizes the
area's resources.
2. Produce bio-fuel ethanol focusing on the local, regional and
national markets.
3. Produce a high-protein feed source for the local, regional and
national livestock market.
4. Return maximum profits to member investors.
5. Strengthen the local economy by creating new jobs and adding
additional tax base for Dakota County.
Goals of the SE, LLC Board
1. Hire and empower high quality personnel to execute the goals of
the company.
2. Be a low cost ethanol producer
3. Have a risk management plan that will control the majority of
input price risk.
4. Produce environmentally friendly products through environmentally
friendly processes.
5. Operate efficiently and profitably without compromising the
health or safety of our employees.
6. Investigate the opportunities for new technologies or expansion,
and encourage continuing education for all employees.
7. Cultivate a positive, long-term relationship in Dakota County
area and the surrounding Siouxland region.
8. Be a good neighbor by utilizing 'clean technology' and courteous
procedures.
3
Local Community Benefits
1. SE, LLC intends to use local products and services whenever
possible, both during and after plant construction.
2. Excellent employment opportunity: SE, LLC will offer over 35 high
quality jobs to area residents.
3. The plant will generate additional taxes for the county and
school district every year.
4. Large quantity of high quality feed for local livestock -
Distillers Grains
5. The plant will offer an additional market for local farmers, feed
users, local feed companies, and elevators.
United States and Environmental Benefits
1. Decreased dependence on foreign oil
2. Cleaner burning fossil fuel
3. Safer replacement for the gasoline additive, Methyl Tert-Butyl
Ether (MTBE), which is required by the Clean Air Act in the
metropolitan areas.
4. Ethanol governmental costs are much less than we are spending on
protecting our foreign oil interest.
5. Annually renewable energy source
6. Positive energy conversion rate (+34 percent per) U.S. Department
of Agriculture
B. PROJECT DESCRIPTION
The project will involve the construction and operation of a corn
processing facility, which produces 50 million gallons per year (mgy) of
denatured fuel grad ethanol, and two other co-products. The plan will
produce ethanol from approximately 18.5 million bushels of corn. The
co-products are Dried Distillers Grain with Soluble (DDGS) and carbon
dioxide (CO2). The following table projects the average quantities and
revenues produced by a typical Dry Mill Ethanol Plant annually by the third
year.
Product Amount Unit $/Unit Total Revenue %
------- ---------- ------- ------ ------------- ----
Ethanol (denatured) 50,000,000 Gallons $ 1.23 $61,500,000 80.6%
DDGS 160,000 Tons $92.00 $14,785,710 19.4%
-----------
$76,285,710
C. PROJECT SCHEDULE
The project schedule is summarized below. The public offering is planned to
take 30-45 days. The design and construction will begin immediately after
the close of financing.
1. Present initial concept and first SE,
LLC organizational meeting August, 2004
2. Site Selection November, 2004
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3. Air and water discharge permits sent to DNR December, 2004
4. Public Offering Begins May, 2005
5. Public Offering Ends June, 2005
6. Debt Financing July, 2005
7. Design and Construction (16 months) August, 2005 - October, 2006
5
