LETTER OF INTENT
Date:
|
April 19, 2005 | |
Parties:
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Xxxxx, Inc., a Minnesota Corporation, of Granite Falls, MN (“Fagen”) and E Energy Xxxxx, LLC, a Nebraska limited liability company of Adams, Nebraska (“Owner”) |
WHEREAS, Owner is an entity organized to facilitate the development and building of a locally-owned
50 MGY gas-fired fuel ethanol plant in Xxxxx, Nebraska (the “Facility” or “Project”);
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; and
WHEREAS, this Letter of Intent supercedes and replaces the Letter of Intent dated December 7, 2004,
between Xxxxx and Owner relating to the Project.
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. 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
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. |
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 $56,619,000.00. This lump sum price 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, so long as the Project has 5% or less dilution.
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 March 31, 2006 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 March 31, 2007 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 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.
| E Energy Xxxxx, LLC | Xxxxx, Inc. | |||||||||
By:
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/s/ Xxxx X. Xxxxxxxx
|
By: | /s/ X. Xxxxx Xxxxxxxx
|
|||||||
Its:
|
Its: | Senior Vice President | ||||||||
Date:
|
4/20/05 | Date: | 4/25/05 | |||||||
