Exhibit 10.4
LETTER OF INTENT
DATE: October 29, 2004
PARTIES: XXXXX, INC., a Minnesota Corporation, of Granite Falls, MN ("Fagen")
and SIOUXLAND ETHANOL, LLC of Jackson, Nebraska ("Owner")
Owner is an entity organized to facilitate the development and building of a
locally-owned 50 MGY gas-fired fuel ethanol plant in the vicinity of Xxxxxxx,
Nebraska (the "Facility" or "Project").
Xxxxx is an engineering and construction firm capable of providing development
assistance, as well as designing and constructing the Facility being considered
by Owner.
Owner and Xxxxx agree to use best efforts in jointly developing this Project
under the following terms:
1. 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
cost, 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 have the limited license to use the
above described technical data, excluding proprietary process related
information, for construction, operation, repair and maintenance of the
Project.
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.
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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 responsibility
and liability.
3. Xxxxx agrees to Design/Build the Facility, utilizing ICM, Inc.
technology in the plant process, for a lump sum price as follows:
a. $56,619,000.00 for the 50 MGY gas-fired Facility
These lump sum prices shall remain firm by Xxxxx to Owner until December
31, 2005, and may be subject to revision by Xxxxx after such date.
4. Xxxxx will assist Owner in locating appropriate management for the
Facility.
5. Xxxxx will assist Owner in presenting information to potential
investors, potential lenders, and various entities or agencies that may
provide project development assistance.
6. 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.
7. This Letter of Intent shall terminate on December 31, 2005 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, 2006
unless financing for the Facility has been secured. Either of the
aforementioned dates may be extended upon mutual written agreement of the
Parties.
8. 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, Upon execution of such agreement, this Letter of
Intent becomes null and void.
9. The Parties agree that this Letter of Intent may be modified only
by written agreement by the Parties.
10. 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.
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SIOUXLAND ETHANOL, LLC XXXXX, INC.
By: /s/ Xxx Xxxxx By: /s/ X. Xxxxx Xxxxxxxx
--------------------------------- ------------------------------------
Its: President Its: Sr. V.P.
Date: 11-5-04 Date: 11/4/04
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