exv10w2



 






Exhibit 10.2




LETTER OF INTENT






	 	 	 
	Date:

	 	July 22, 2005
	 
	 	 
	Parties:

	 	Fagen, Inc., a Minnesota Corporation, of Granite Falls, MN (“Fagen”) and
	 

	 	Mitchell County Research Group, LLC, a Georgia limited liability
	 

	 	company of Camilla, Georgia (“Owner”)





WHEREAS, Owner is an entity organized to facilitate the development and building of a locally-owned
100 MGY gas-fired fuel ethanol plant near Camilla, Georgia (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.



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:





     1.          Fagen 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 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 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 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
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 Fagen under this Letter of
Intent shall be preliminary and may not be suitable for construction and





	 	 	 
	Mitchell
County Research Group LLC LOI (7-25-05)
	 	Page 1 of 3















 







agrees that any use of such technical data without Fagen’s involvement shall be at Owner’s
sole risk.




     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.          Fagen agrees to Design-Build the Facility, utilizing ICM, Inc. technology in the
plant process, for a lump sum price of $101,920,000. This lump sum price shall remain firm
by Fagen to Owner until December 31, 2005, and may be subject to revision and/or escalation
by Fagen after such date. In addition, if the Board of Directors requests any additional
grain handling or storage capacity to receive or unload train units of corn, such cost(s)
will be in addition to the lump sum price above. The lump sum price assumes the
use of non-union labor. If Fagen is required to employ union labor, excluding union labor
for the grain system and energy center, an additional amount of $5,000,000 will be added to
the lump sum price. If Fagen is required to employ union labor for the entire Project, an
additional amount of $10,000,000 will be added to the lump sum price.




     4.          Fagen is requiring representation of 10 counties located within Georgia on the
Board of Directors, and Owner shall provide to Fagen a list of the names, addresses
(residential), and phone numbers of such Directors.




     5.          Once seed money has been raised, Fagen requires that the accounting firm of
Christianson & Associates, PLLP of Willmar, Minnesota prepare a pro forma projection to
confirm the feasibility of the project. Such projection shall be paid by Owner.




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




     7.          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. In addition,




	 	 	 
	Mitchell
County Research Group LLC LOI (7-25-05)
	 	Page 2 of 3
















 







pro forma projections shall be
greater than 20% ROI by year five.




     8.          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, and Owner shall not disclose any
information related to this Letter of Intent to a competitor or prospective competitor of
Fagen.




     9.          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.




     10.          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.




     11.          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.




     12.          The Parties agree that this Letter of Intent may be modified only by written
agreement by the Parties.




     13.          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.



	 	 	 	 	 	 	 
	Mitchell County Research Group, LLC
	 	Fagen, Inc.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Illegible Signature
	 	By:
	 	/s/ Illegible Signature
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Its:

	 	President
	 	Its:
	 	[Handwritten: Illegible]
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	July 28, 2005
	 	Date:
	 	8/02/25
	 

	 	 
	 	 	 	 







	 	 	 
	Mitchell
County Research Group LLC LOI (7-25-05)
	 	Page 3 of 3