LETTER OF INTENT
Exhibit 10.1
LETTER OF INTENT
Date:
|
June 13, 2005 | |
Parties:
|
Xxxxx, Inc., a Minnesota Corporation, of Granite Falls, MN (“Fagen”) and Indiana Ethanol, LLC, an Indiana limited liability company of Winchester, Indiana (“Owner”) |
WHEREAS, Owner is an entity organized to facilitate the development and building of a locally-owned
fuel ethanol plant near Winchester, Indiana (the “Facility” or “Project”); and
WHEREAS, Xxxxx is an engineering and contstruction 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 prelmiminary and may not be suitable for construction
and 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 Ltter 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:
| 1 | Owner organizational options; | ||
| 2 | The appropriate location of the proposed Facility; and | ||
| 3 | Business plan development. |
Xxxxx assumes no risk or liability of representation or advise 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. Such price shall be determined upon final scope
definition. Once determined, 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.
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,
so long as the Project has 5% of less dilution. In addition, pro forma projections shall
be greater than 20% ROI by year five.
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, 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.
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.
9. 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.
10. The Parties agree that this Letter of Intent may be modified only by written
agreement by the Parties.
11. 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.
| Indiana Ethanol, LLC | Xxxxx, Inc. | |||||||
By:
|
/s/ Xxxx Xxxxxxxx | By: | /s/ Illegible | |||||
Its:
|
General Manager | Its: | Senior Vice President | |||||
Date:
|
6/22/05 | Date: | 6/30/05 | |||||
