exv10w2



 





Exhibit 10.2




BBI

INTERNATIONAL

CONSULTING

Adding Value to the Biofuels Industry




Agreement for Project Development Services




          This Agreement for Project Development Services (the “Agreement”) is made and entered
into on this 14th day of April, 2006, between Barton County Ethanol Project Steering Team,
hereafter known as “Client,” and BBI International, hereafter known as “Contractor.”




          Client is identified as:



Barton County Ethanol Project Steering Team

P.O. Box 69

Liberal, MO 64762-0069

Attn: Jim McClendon




          Contractor is identified as:



BBI International

228 North F Street, Suite 1

P.O. Box 1146

Salida, CO 81201

(719) 539-0300




          Whereas, Client desires assistance in carrying out project development and project financing
activities required to build an ethanol plant in the Barton County area of Missouri, and Contractor
is willing to complete said tasks.




          Now, therefore, it is mutually agreed that,




          Client retains the services of Contractor to conduct the tasks outlined in “Attachment A,”
under the following conditions and tenets:





	 	1.	 	CONTRACT TASKS. Contractor shall complete the tasks specified in “Attachment
A.” Changes to the Agreement tasks cannot be made, after contract signing, without the
express written consent of both Client and Contractor.
	 
	 	2.	 	BEST INTERESTS. Contractor shall represent the best interest of Client at all
times.
	 
	 	3.	 	PROJECT DEVELOPMENT RETAINER, EXPENSES, SUCCESS FEE. Contractor shall carry
out the project development activities specified in Attachment A. Client shall




 









 






	 	 	 	pay Contractor a monthly retainer of $10,000 per month plus travel expenses and other
approved expenses. In no event shall Client be obligated to pay Contractor a total retainer
hereunder in excess of $120,000 without written modification of this Agreement. All travel
will be completed as economically as possible.
	 
	 	 	 	Contractor will invoice Client at the beginning of each month for the current month’s
retainer and for travel expenses from the prior month. The first monthly payment shall be
due upon execution by all parties of this Agreement. Subsequent invoices shall be paid net
20-days after receipt and approval of invoices by Client. Contractor shall itemize each
invoice to detail the work performed and all travel or other expenses, including design,
printing, advertising and rentals related to project financing tasks. Any expense in excess
of $500.00 must be pre-approved by Client.
	 
	 	 	 	In addition, Contractor will collect a success fee upon Successful Financial Closing for the
project. Successful Financial Closing is defined as actual closing (execution and delivery
of all documents) by the Client with its project lender(s) providing for all financing,
including senior and subordinated debt, and any other project financing characterized by
debt obligations as required by the project’s Senior Debt lender.
	 
	 	 	 	The success fee shall be one and one-quarter percent (1.25%) of the total capitalized cost
of the project, less the total amount of monthly retainers paid to contractor. The success
fee (less monthly retainer payments) is payable to Contractor upon Successful Financial
Closing and is not payable if the project does not close.
	 
	 	4.	 	CONFIDENTIALITY. Contractor agrees to maintain as confidential all information
obtained in the process of completing the project. This obligation of confidentiality shall
survive the termination of this Agreement and remain if effect until such time Client
releases Contractor from the confidentiality obligation.
	 
	 	5.	 	DURATION. The duration of this Agreement shall be the time necessary to
achieve Successful Financial Closing. Client’s and Contractor’s goal is to achieve
Successful Financial Closing in twelve (12) months or less from the date this Agreement is
signed by all parties. Client agrees that this goal is non-binding and is aware that it may
take longer to reach Successful Financial Closing.
	 
	 	6.	 	TERMINATION. Client may initiate the termination of this Agreement should
Contractor fail to fulfill its obligations under this Agreement. However, Client will allow
for consultation and provide Contractor the opportunity to cure the cause for termination.
Client may also terminate this Agreement if, in the sole discretion of Client, the
completion of the ethanol project becomes infeasible for any reason. Termination of the
contract must be in writing.
	 
	 	7.	 	DISPUTE RESOLUTION. If a dispute arises out of or relating to this Agreement
or the breach of this Agreement, and if the dispute cannot be settled through direct
discussions, the parties agree to first endeavor to settle the dispute in an amicable
manner by mediation. Mediation shall consist of an informal, nonbinding conference or
conferences




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	 	 	 	between the parties and the mediator jointly, and at the discretion of the mediator, then in
separate caucuses in which the mediator will seek to guide the parties to a resolution of
the case. The parties shall attempt to select a mutually acceptable mediator. If the parties
cannot agree upon a mediator, the parties shall seek assistance in the appointment of a
mediator from the District Judge in the County of Barton, State of Missouri.
	 
	 	8.	 	CHOICE OF LAW, JURISDICTION AND VENUE. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Missouri. Any and all
actions, suits, or judicial proceedings upon any claim arising from or relating to this
Agreement, subject to Paragraph 7 herein, shall be instituted and maintained in the County
of Barton, State of Missouri. Each party waives the right to change of venue, or to file
any action, suit or judicial proceeding in federal court. Notwithstanding this provision,
if it is judicially determined that either party may file an action, suit or judicial
proceeding in federal court, such action, suit or judicial proceeding shall be in the
Federal District Court for the District of Missouri.
	 
	 	9.	 	ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the
Parties regarding the subject matter hereof and wholly cancels, terminates and supersedes
all prior written and oral agreements, understandings and representations, collateral or
otherwise between them. The Parties may amend this Agreement only in writing signed by both
Parties.
	 
	 	10.	 	NON-CIRCUMVENT. Client agrees that it will not in any manner attempt to
circumvent Contractor with respect to Contractor’s responsibilities and compensation set
forth herein.
	 
	 	11.	 	ENUREMENT AND ASSIGNMENT. This Agreement shall enure to the benefit of, and be
binding upon, the successors and permitted assigns of the Parties. Except as specifically
provided in this Agreement, the provisions of this Agreement are for the exclusive benefit
of the Parties hereto and no other person or entity shall be a third party beneficiary or
have any rights by virtue of this Agreement. Neither party shall sell, assign or in any
manner transfer its interests herein, in whole or in part, without the written consent of
the other party.
	 
	 	12.	 	PROPERTY. Contractor retains all intellectual property in its work product and
hereby provides Client with an exclusive, non-transferable license to use such work product
for the purposes intended, provided that all amounts due and owing by Client under this
Agreement have been paid to Contractor.
	 
	 	13.	 	HEADINGS AND SEVERABILITY. All headings appearing in this Agreement are for
convenience of reference only and shall not be considered in any interpretation hereof. The
provisions of this Agreement shall be deemed to be severable, and any illegality,
invalidity or unenforceability of any provision or part thereof in this Agreement shall not
affect the legality, validity or enforceability of the remaining provisions or part thereof
of this Agreement.




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IN WITNESS WHEREOF, CLIENT AND CONTRACTOR, by and through its proper officers duly authorized to
execute this Agreement, have hereunto set their hands.




	 	 	 	 	 
	BARTON COUNTY ETHANOL PROJECT STEERING TEAM	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jim McClendon	 	 
	 

	 	 

	 	 
	Printed Name:

	 	Jim McClendon	 	 
	 
	 	 	 	 
	Title:

	 	Chairman	 	 
	 
	 	 	 	 
	Date:

	 	4-14-06	 	 
	 
	 	 	 	 
	BBI INTERNATIONAL	 	 
	 
	 	 	 	 
	By:

	 	/s/ Mark Yancy	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Printed Name:

	 	Mark Yancy	 	 
	 
	 	 	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	Date:

	 	4-17-06	 	 






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ATTACHMENT A




Ethanol Project Development and Project Financing

Scope of Work



Contractor shall provide the project development and project financing services required to develop
an ethanol project through Successful Financial Closing and groundbreaking. Contractor and Client
will work closely together to complete the following project development and project financing
activities.



Contractor will assign specific individuals, with the required skills, to complete the required
tasks for the project. Contractor will assign a Project Manager to the project who will be
responsible for all aspects of managing Contractor’s work and coordinating communications with
Client. When necessary, Contractor will assist in the selection of and negotiations with
appropriate subcontractors.



The Project Development tasks are subdivided into two major activities: Project Management and
Project Financing.




Project Management




	 	 	 
	Task 1.

	 	A strategic planning meeting will be held to reach full
agreement on the path forward and to introduce the BBI Project
Development Team to the Client. At this meeting we will review
the scope of work and project development strategy, and finalize
responsibilities and assignments. BBI will develop along with
Client, a realistic timeline for the project’s development.
	 
	 	 
	Task 2.

	 	If Client has not done so, BBI will work with Client in
selecting appropriate legal counsel for business formation and
determination of the tax and liability implications for the
project directors, owners and investors. Legal counsel will also
be required for the development of offering documents. BBI
recommends that Client have local representation for issues such
as purchasing the site, as well as council that is experienced
in ethanol project development issues.
	 
	 	 
	Task 3.

	 	BBI will analyze various project options as needed throughout
the development of the project including the project site,
technology options, energy production options and the
appropriate plant capacity. BBI will complete a feasibility
study for the project once these issues have been satisfactorily
resolved. BBI will update the feasibility study as needed to
secure project financing.
	 
	 	 
	Task 4.

	 	BBI will complete a Business Plan for the project and update it
regularly as the project is developed and specific issues are
resolved.






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	Task 5.

	 	BBI will assist and make recommendations in the initial
screening of qualified ethanol process design/build and
engineering firms. BBI will develop a Request for Proposal to be
sent to the selected finalists for the design and construction
of the ethanol plant. BBI’s team of experts will prepare a
detailed technical and financial analysis of the proposals.
Client will interview and make the final selection of the
process design/build company and general contractor for the
project.
	 
	 	 
	Task 6.

	 	BBI will assess and advise Client of capital and equity
requirements, and will develop a projection of the timing of
expenditures throughout the project development phase.
	 
	 	 
	Task 7.

	 	BBI and Client will jointly develop and implement a strategy for
raising seed capital to advance the project through the Project
Development and Financing phases of the project.
	 
	 	 
	Task 8.

	 	Client and BBI will jointly develop a political strategy that
will help move the project forward. BBI will also develop a
media strategy and media package for the project.
	 
	 	 
	Task 9.

	 	Client and BBI will meet with local government officials to
advise them of the project and garner their support for the
project.
	 
	 	 
	Task 10.

	 	BBI will work with Client to organize a tour of several ethanol
facilities for Client, government officials, lenders and
possible investors in the project.
	 
	 	 
	Task 11.

	 	BBI will work with Client to select and provide oversight of
subcontractor(s) to secure all necessary permits. BBI will
participate with subcontractors in all necessary meetings with
permitting agencies and local government agencies as necessary
to secure all required permits
	 
	 	 
	Task 12.

	 	BBI will assist Client in the negotiation of rail, water, sewer
and other utility services as required.
	 
	 	 
	Task 13.

	 	BBI will identify and recommend appropriate marketing firms to
Client and assist in negotiating marketing and off-take
agreements for ethanol, distillers grains and possibly
CO2.
	 
	 	 
	Task 14.

	 	BBI will interview and recommend to Client a risk management
company. The risk management company will work with Client to
manage variances in corn, natural gas, and ethanol prices.
	 
	 	 
	Task 15.

	 	Through the BBI Biofuels Recruiting Servicesâ, BBI will
work with Client to select and hire a General Manager, owner’s
construction manager and other key personnel as needed for the
project. BBI will recruit and screen candidates based on
Client’s specifications. BBI will deliver resumes of individuals
that have been screened to meet Client’s qualifications and are
seriously interested in the position and the location of the
project.






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Project Financing




	 	 	 
	Task 16.

	 	BBI will work with Client to raise equity via a private
placement, SEC registered offering or other equity partnering
arrangements. BBI will educate potential investors regarding the
project that Client identifies. In addition to BBI’s experience
in facilitating and organizing equity raising efforts, BBI’s
contacts within the ethanol industry provide access to a
significant number of potential investors and partners in the
industry. BBI will introduce Client to potential investors and
partners for the project and will direct efforts to raise the
equity for the project.
	 
	 	 
	 

	 	It should be noted that all work performed within the equity raising portion of the
scope of work will be under the guidance and limitations of both state and federal
securities regulations.
	 
	 	 
	Task 17.

	 	BBI will develop a list of recommended lenders for the project,
solicit loan term sheets and arrange meetings with these
prospective lenders for project debt financing. BBI will assist
in the preparation for and attend all meetings with prospective
lenders. BBI will assist in the preparation and review of
presentation materials, review term sheets, and assist in
negotiating construction and permanent financing for the project.
BBI will prepare certified Sources and Uses Statements and a
certified Operating Budget for the project and other
documentation as required by the project’s lender. Printing and
graphic design charges, if any, will be the responsibility of
Client.
	 
	 	 
	Task 18.

	 	BBI will make available its proprietary Financial Model to banks
and prospective lenders (with an appropriate non-disclosure
agreement in place) and assist lenders in using the BBI Financial
Model as needed.







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