exv10w16



 







EXHIBIT 10.16




AMENDED LETTER OF INTENT




	 	 	 
	Date:

	 	March 22, 2006
	 
	 	 
	Parties:

	 	Fagen, Inc., a Minnesota
Corporation, (“Fagen”) and
	 

	 	E Energy Adams, LLC, a Nebraska limited liability company (“Owner”)
	 

	 	(Fagen and Owner are referred to herein individually as a “Party” and
	 

	 	collectively as the “Parties”)





WHEREAS, Owner is an entity organized to facilitate the development and building of a
locally-owned 50 MGY gas-fired fuel ethanol plant in Adams, Nebraska (the “Facility”
or “Project”); and



WHEREAS, Fagen 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, Fagen and Owner entered into a letter of intent dated April 19, 2005,
including Amendments dated July 12, 2005 and October 5, 2005, for the Project (the
“Initial Letter of Intent”) and the Parties have agreed to amend and replace the Initial
Letter of Intent between the Parties relating to the Project; and



WHEREAS, Fagen and Owner agree that this letter, upon execution and return by
Owner, will constitute a letter of intent between Fagen and Owner (the “Letter of Intent”)
and shall supersede the Initial Letter of Intent in all respects, except as set forth herein.



NOW, THEREFORE, in consideration of the promises and mutual covenants set forth
herein, Owner and Fagen agree to use best efforts in jointly developing this Project under
the following terms:





     l. Owner agrees that Fagen 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
Fagen to provide the preliminary engineering or design-build services for the
project, then Owner shall reimburse Fagen for all expenses Fagen has incurred in
connection with the Project based upon Fagen’s standard rate schedule plus all
third party costs incurred from the date of the Initial 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 Fagen’s
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 Fagen; 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 Fagen intentionally or by gross negligence fails or refuses to comply
with its commitments contained in this Letter of Intent, Fagen shall absorb all of its own
expenses, and Owner shall have the right to terminate the Letter of Intent immediately upon
written notice to Fagen, and Owner shall be released from its obligations to pay or
reimburse Fagen as described above.




     2. Fagen 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.





Fagen 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. Owner shall pay Fagen Sixty-five Million Five Hundred Twenty-five Thousand Eight
Hundred Forty-eight Dollars ($65,525.848.00) (the “Contract
Price”) as full consideration to Fagen for full and complete performance of the
services described in the Design-Build Agreement and all costs incurred in connection
therewith.




	 	(a)	 	The Contract Price shall not include any costs related to union labor or
	 
	 	 	 	prevailing wage requirements. If any action by Owner, a change in
applicable law, or a governmental authority (as those terms are defined in
the Design-Build Agreement) acting pursuant to a change in applicable
law, shall require Fagen to employ union labor or compensate labor at
prevailing wages, the Contract Price shall be adjusted upwards to include
any increased costs associated with such labor or wages. Such adjustment
shall include, but not be limited to, increased labor, subcontractor, and
material and equipment costs resulting from any union or prevailing wage
requirement; provided, however, that if an option is made available to
either employ union labor, or to compensate labor at prevailing wages,
such option shall be at Fagen’s sole discretion and that if such option is
executed by Owner without Fagen’s agreement, Fagen shall have the right
to terminate this Letter of Intent or the Design-Build Agreement, as
applicable, and receive compensation.
	 
	 	(b)	 	If the Construction Cost Index published by Engineering
News-Record Magazine (“CCI”) for the month in which a Notice to Proceed is given to
Fagen is greater than 7660.29 (January 2006), the Contract Price shall be
adjusted to reflect such increase.




 









 












     4. Fagen will assist Owner in locating appropriate management for
the Facility.




     5. Fagen 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
Fagen will be the exclusive Developer and Design-Builder for the Owner in
connection with matters covered by this Letter of Intent or the Initial Letter of
Intent, and Owner shall not disclose any information related to this Letter of
Intent or the Initial Letter of Intent to a competitor or prospective competitor of
Fagen.




     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 l0% 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. Fagen 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 Fagen’s
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 Adams, LLC	 	 	 	Fagen, Inc.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jack L. Alderman
	 	 	 	By:
	 	/s/ Ron Fagen
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	President
	 	 	 	Its:
	 	CEO & President
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	3/22/2006
	 	 	 	Date:
	 	3/28/2006