LETTER OF INTENT
Exhibit 10.2
Date:
|
July 22, 2005 | |
Parties:
|
Xxxxx, Inc., a Minnesota Corporation, of Granite Falls, MN (“Fagen”) and | |
| Xxxxxxxx County Research Group, LLC, a Georgia limited liability | ||
| company of Camilla, Georgia (“Owner”) |
WHEREAS, Owner is an entity organized to facilitate the development and building of a locally-owned
100 MGY gas-fired fuel ethanol plant near Camilla, Georgia (the “Facility” or “Project”); and
WHEREAS, Xxxxx is an engineering and construction firm capable of providing development
assistance, as well as designing and constructing the Facility being considered by Owner.
NOW, THEREFORE, in consideration of the promises and mutual covenants set forth herein, Owner and
Xxxxx agree to use best efforts in jointly developing this Project under the following terms:
1. Xxxxx agrees to provide Owner with preliminary Design-Build services as described
in this Letter of Intent as necessary to establish a contract price for designing and
constructing the Facility and to define the Facility in adequate detail to determine if
the Project is feasible and to obtain financing.
Owner agrees that Xxxxx will Design-Build the Facility if determined by Owner to be
feasible and if adequate financing is obtained. Should Owner choose to develop or pursue a
relationship with a company other than Xxxxx to provide the preliminary engineering or
design-build services for the project, then Owner shall reimburse Xxxxx for all expenses
Xxxxx has incurred in connection with the Project based upon Xxxxx’x standard rate
schedule plus all third party costs incurred from the date of this Letter of Intent. Such
expenses include, but are not limited to, labor rates and reimbursable expenses such as
legal charges for document review and preparation, travel expenses, reproduction costs,
long distance phone costs, and postage. In the event Xxxxx’x services are terminated by
Owner, title to the technical data, which may include preliminary engineering drawings and
layouts and proprietary process related information, shall remain with Xxxxx; however,
Owner shall, upon payment of the foregoing expenses, have the limited license to use the
above described technical data, excluding proprietary process related information, for
completing documentation required for construction, operation, repair and maintenance of
the Project, at Owner’s sole risk.
Owner acknowledges that the technical data provided by Xxxxx under this Letter of
Intent shall be preliminary and may not be suitable for construction and
Xxxxxxxx
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agrees that any use of such technical data without Xxxxx’x involvement shall be at Owner’s
sole risk.
If Xxxxx intentionally or by gross negligence fails or refuses to comply with its
commitments contained in this Letter of Intent, Xxxxx shall absorb all of its own
expenses, and Owner shall have the right to terminate the Letter of Intent immediately
upon written notice to Xxxxx, and Owner shall be released from its obligations to pay or
reimburse Xxxxx as described above.
2. Xxxxx will provide Owner with assistance in evaluating, from both a technical and
business perspective:
| • | Owner organizational options; | ||
| • | The appropriate location of the proposed Facility; and | ||
| • | Business plan development. |
Xxxxx assumes no risk or liability of representation or advice to Owner by assisting in
evaluating the above. All decisions made regarding feasibility, financing, and business
risks are the Owner’s sole responsibility and liability.
3. Xxxxx agrees to Design-Build the Facility, utilizing ICM, Inc. technology in the
plant process, for a lump sum price of $101,920,000. This lump sum price shall remain firm
by Xxxxx to Owner until December 31, 2005, and may be subject to revision and/or escalation
by Xxxxx after such date. In addition, if the Board of Directors requests any additional
grain handling or storage capacity to receive or unload train units of corn, such cost(s)
will be in addition to the lump sum price above. The lump sum price assumes the
use of non-union labor. If Xxxxx is required to employ union labor, excluding union labor
for the grain system and energy center, an additional amount of $5,000,000 will be added to
the lump sum price. If Xxxxx is required to employ union labor for the entire Project, an
additional amount of $10,000,000 will be added to the lump sum price.
4. Xxxxx is requiring representation of 10 counties located within Georgia on the
Board of Directors, and Owner shall provide to Xxxxx a list of the names, addresses
(residential), and phone numbers of such Directors.
5. Once seed money has been raised, Xxxxx requires that the accounting firm of
Xxxxxxxxxxxx & Associates, PLLP of Willmar, Minnesota prepare a pro forma projection to
confirm the feasibility of the project. Such projection shall be paid by Owner.
6. Xxxxx will assist Owner in locating appropriate management for the Facility.
7. Xxxxx will assist Owner in presenting information to potential investors, potential
lenders, and various entities or agencies that may provide project development assistance,
so long as the Project has 5% or less dilution. In addition,
Xxxxxxxx
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pro forma projections shall be
greater than 20% ROI by year five.
8. During the term of this Letter of Intent the Owner agrees that
Xxxxx will be the exclusive Developer and Design-Builder for the Owner in connection with matters covered by this Letter of Intent, and Owner shall not disclose any
information related to this Letter of Intent to a competitor or prospective competitor of
Xxxxx.
9. This Letter of Intent shall terminate on December 31, 2007 unless the basic size
and design of the Facility have been determined and mutually agreed upon, and a specific
site or sites have been determined and mutually agreed upon, and at least 10% of the
necessary equity has been raised. Furthermore, this Letter of Intent shall terminate on
December 31, 2008 unless financing for the Facility has been secured. Either of the
aforementioned dates may be extended upon mutual written agreement of the Parties.
10. Xxxxx and Owner agree to negotiate in good faith and enter into a definitive lump
sum design-build agreement, including Exhibits thereto, acceptable to the Parties.
11. The Parties will jointly agree on the timing and content of any public
disclosure, including, but not limited to, press releases, relating to Xxxxx’x involvement
in Owner’s Project, and no such disclosure shall be made without mutual consent and
approval, except as may be required by applicable law.
12. The Parties agree that this Letter of Intent may be modified only by written
agreement by the Parties.
13. This Letter of Intent may be executed in one or more counterparts, each of which
when so executed and delivered shall be deemed an original, but all of which taken
together constitute one and the same instrument. Signatures which have been affixed and
transmitted by facsimile shall be binding to the same extent as an original signature,
although the Parties contemplate that a fully executed counterpart with original
signatures will be delivered to each Party.
| Xxxxxxxx County Research Group, LLC | Xxxxx, Inc. | |||||
By:
|
/s/ Illegible Signature | By: | /s/ Illegible Signature | |||
Its:
|
President | Its: | [Handwritten: Illegible] | |||
Date:
|
July 28, 2005 | Date: | 8/02/25 | |||
Xxxxxxxx
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