Document:

exv10w7

 

Exhibit 10.7

	 	 	 
	[TERRATEC ENGINEERING, LLC.]
	 	W67 Evergreen Blvd, Suite 205
	 
	 	Cedarburg, Wisconsin 53012
	 
	 	Tel.: 262.377.9905
	 
	 	Fax: 262.375.1958

December 18, 2005

Mr. Troy Prescott

Cardinal Ethanol

2 OMCO Square

Post Office Box 501

Winchester, IN

	 	 	 
	Re:

	 	Ethanol Facility Track Design Proposal
	 

	 	Winchester, Wisconsin
	 

	 	TerraTec File No. P0512003

Dear Mr. Prescott:

As discussed, TerraTec Engineering, LLC (TerraTec) is pleased to submit this proposal to provide
track design services for the above referenced project. The following paragraphs describe our
project understanding, scope of services, general project assumptions, cost estimate and schedule.

PROJECT UNDERSTANDING

It is our understanding that Cardinal Ethanol proposes to build an ethanol plant in/near
Winchester, Indiana. The proposed plant will be served by rail and is anticipated to produce
approximately 100 million gallons of ethanol per year. Cardinal Ethanol has hired Fagen to
design/build the facility. TerraTec has had, and continues to have, a good working relationship
with Fagen. TerraTec personnel have designed numerous ethanol facility track with Fagen. This
relationship will allow TerraTec to seamlessly work with Fagen to achieve an economically,
operationally efficient track layout.

This proposal addresses the track portion of the ethanol facility from site selection through
construction observation.

SCOPE OF SERVICES

TerraTec proposes to perform the following tasks that are described in the paragraphs below:

Task 1 – Site Selection Assistance

Task 2 – Track Engineering

Task 3 – Bidding Assistance

Task 4 – Construction Observation

Task 1 – Site Selection Assistance

TerraTec will evaluate each site from a track construction/operation view. This evaluation will
take the form of a Concept Layout Plan (overlaid onto Fagen’s Ethanol Plant Concept Plant) and an
advantages/disadvantages summary letter for each site. No site visits re anticipated.

Task 2 – Design

TerraTec will develop the design criteria through conversations with the Cardinal Ethanol
operations personnel and the Operating Railroad. Based on these discussions, TerraTec will prepare
and submit the Design Criteria Summary.

 

 

Proposal

December 18, 2003

Page 2 of 4

Once the criteria is established, TerraTec will work with Fagen to develop a design for the rail
yard based on the Concept Plan developed in Task 1 above and on our previous ethanol plant
operational design experience. The design will be developed in accordance with the operating
Railroad’s design specifications and the Design Criteria. TerraTec will submit a draft design to
the Railroad and Cardinal Ethanol for review and preliminary approval. This submittal is to ensure
expedited approvals at final submittal.

Upon completion, TerraTec will submit the drawing set to you. Upon your approval, TerraTec will
submit the drawings to the Railroad. TerraTec will monitor the Railroad’s review/approval process.

Once the drawings are finalized, TerraTec will develop a Bid Form and a Track Spec. Section for
inclusion into Fagen’s bid package. The Bid Form will identify the individual track components and
estimated quantities. The subgrade work is to be performed by others, and not within the scope of
this proposal.

Task 3 – BIDDING ASSISTANCE

TerraTec will assist Cardinal Ethanol and Fagen with the contractor bidding process. We assume
this will involve:

	 	•	 	Provide a list of pre-qualified rail contractors for bidding.
	 
	 	•	 	Attend a pre-bid meeting.
	 
	 	•	 	Conduct up to 3 hours of telephone calls and e-mail correspondence regarding contractor
questions
	 
	 	•	 	Preparation of one bid addendum.
	 
	 	•	 	Evaluate contractor rail-related bids and provide a contractor selection recommendation.

Task 4 – CONSTRUCTION OBSERVATION ASSISTANCE

TerraTec will assist Cardinal Ethanol and Fagen with construction observation. We assume that
Fagen will be monitoring site construction as well as the subgrade of the track. TerraTec
construction observation will involve:

	 	•	 	Attend a pre-construction meeting.
	 
	 	•	 	Conduct up to 10 hours of telephone calls and e-mil correspondence regarding contractor
questions.
	 
	 	•	 	Observe construction prior to ballast installation.
	 
	 	•	 	Preparation of one contract addendum.
	 
	 	•	 	Attend a final walkover and develop a list of items for the contractor to complete.

ESTIMATED PROJECT FEES AND SCHEDULE

TerraTec proposes to perform this work in accordance with the following table. Additional tasks
will be billed on a time and material basis upon your written request. These services will be
performed upon your acceptance of this proposal and as described in the above paragraphs. This fee
will be effective if this proposal is accepted by Cardinal Ethanol within 60 days of the date of
this proposal.

 

 

Proposal

December 18, 2003

Page 3 of 4

	 	 	 	 	 
	 	 	Schedule*	 	 
	 	 	(Weeks after Proposal	 	 
	Task	 	Acceptance)	 	Project Fees
	 
	 	 	 	 
	Task 1 – Concept Plan
	 	Two Weeks	 	$1,950 /per proposed site
	 
	 	 	 	 
	Task 1 – Design
	 	 	 	 
	•      Draft

	 	4 weeks	 	$34,500
	•      Final

	 	1 week upon receipt of comments	 	$9,500
	 
	 	 	 	 
	Task 3 – Bidding Assistance
	 	4 weeks	 	$4,200
	 
	 	 	 	 
	Task 4 – Construction Observation
	 	 	 	$8,000
	 
	 	 	 	 
	TOTAL =
	 	 	 	$56,200 + Task 1

GENERAL PROECT UNDERSTANDING

	1.	 	This proposal does not include environmental, geotechnical evaluation, civil site layout,
stormwater, architectural, electrical, structural, construction services, or
permit/application fees. These services can be provided for additional fees, if requested.
	 
	2.	 	The invoiced fee is due immediately upon receipt of the invoice.
	 
	3.	 	Drawings will be prepared in AutoCAD Release 2005.
	 
	4.	 	TerraTec cannot guarantee approvals of any applications.
	 
	5.	 	TerraTec takes no responsibility for any underground structures or buried materials such as
foundations, wells, septic, holding tanks, utilities, hazardous materials, or any other items
of which no evidence can be found on the surface by a reasonable inspection. TerraTec will
not enter any buildings or utility structures on or off the site.
	 
	6.	 	Any significant modifications (i.e., plant relocation, ethanol loadout relocation, scale
relocation, turnout relocation, etc.) to the Concept Plan once Task 2 commences will be made
(at the request of the Client or regulatory agencies) will be made on a time and material
basis.
	 
	7.	 	Fagen will design the site layout, as well as drainage and subgrade for the track.

	 
	8.	 	The Railroad will develop any signalization design required.
	 
	9.	 	Any additional tasks/visits will be performed on a time/material basis, at Cardinal Ethanol’s
request. If visits can be coordinated with other site visits in the area, the cost will be
split between Cardinal Ethanol and the other site.

TERMS AND CONDITIONS

We have attached to this proposal our General Conditions of Service that are expressly incorporated
into, and are an integral part of, our contract for professional services. Please indicate your
acceptance of the individual tasks of this proposal by having n authorized representatives of your
firm execute one copy, initial those tasks on which you would like us to proceed and return it to
our office.

Your acceptance of our proposal confirms that the terms and conditions are understood, including
payment to TerraTec Engineering, LLC upon receipt of the invoice, unless specifically arranged
otherwise in writing. Of course, should you wish to discuss the terms, conditions, and provisions
of our proposal, we would be pleased to do so at your convenience.

 

 

Proposal

December 18, 2003

Page 4 of 4

CLOSING

We appreciate this opportunity to assist you with this project. If you have any questions
regarding this proposal or if you need additional assistance, please contact us.

	 	 	 	 	 	 	 
	Sincerely,
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	TERRATEC ENGINEERING, LLC.	 	ACCEPTED BY:	 	 
	 
	 	 	 	 	 	 
	/s/ Linda K. Johnson	 	SIGNATURE: 	/s/ Troy Prescott	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 	 
	Linda K. Johnson, P.E.	 	TITLE: President	 	 
	Principal
	 	 	 	 	 	 
	 	 	FIRM: Cardinal Ethanol	 	 
	 
	 	 	 	 	 	 
	Attachments: Fee Schedule
	 	 	 	 	 	 
	                    
 Terms and Conditions	 	DATE: 1/13/06exv10w8

 

Exhibit 10.8

SERVICES AGREEMENT

BETWEEN

RTP ENVIRONMENTAL ASSOCIATES, INC.

AND

CARDINAL ETHANOL, LLC

THIS AGREEMENT is entered into between RTP ENVIRONMENTAL ASSOCIATES, INC. hereinafter called
“Consultant”, and CARDINAL ETHANOL, LLC hereinafter called “Client”. In consideration of the
covenants herein contained and upon subject to the mutual terms and conditions set forth herein,
the parties hereto agree as follows:

	1.	 	SCOPE OF WORK – Consultant shall provide environmental consulting services for CARDINAL
ETHANOL, LLC as outlined in RTP ENVIRONMENTAL ASSOCIATES, INC’s letter proposal to Mr. Troy
Prescott dated December 19, 2005.
	 
	2.	 	PAYMEMT – For performance of the Services provided and as outlined in RTP ENVIRONMENTAL
ASSOCIATES, INC’s letter proposal dated December 19, 2005. Consultant shall invoice the
Client according to the attached Schedule of Charges and Client shall pay Consultant at 400
Post Avenue, Suite 105, Westbury, New York 11590 at the time specified herein. Terms for
payment are not 30 days with 1.5% per month service charge on balances past due 30 days or
more.
	 
	3.	 	RESPONSIBILITY OF CONSULTANT – Consultant shall perform the Services as an independent
contractor in accordance with its own methods, terms of this Agreement, and applicable laws
and regulations Consultant’s liability arising out of or in connection with the Services
shall be limited to performing at its own expense Services which are (1) deficient because of
Consultant’s failure to perform said Services in accordance with normal professional standards
for performing services of a similar nature, and (2) reported in writing to Consultant within
a reasonable time, not to exceed thirty (30) days from the completion of the Services in
accordance with Article 5. Where Client’s project requires public agency approval.
Consultant will attempt to assist in facilitating approval. However, Consultant does not
assume responsibility for securing approval by such agency.
	 
	 	 	Because of the nature of the work involved in this proposal, the Client shall indemnify and
save and hold harmless from and against any damage, liability, loss, cost or claim, whether
occasioned by RTP ENVIRONMENTAL ASSOCIATES, INC., its offices, employees and agents or any
other person or persons arising out of, resulting from or related to, the performance of
the work provided for in this agreement; provided, however, that Client shall not be
obligated hereunder to indemnify, save and hold harmless Consultant, its officers,
employees or agents against any damage, liability, loss, cost, or claim which arises out of
or in connection with the intentional wrongful acts of, or the active negligence of,
Consultant, or its officers, employees or agents.
	 
	4.	 	ASSIGNMENT AND SUBCONTRACTING – This Agreement shall not be assigned by either party without
the prior written approval of the other. Consultant may subcontract potions of the services
to a qualified subcontractor with prior approval of Client. Consultant aggress that Client
will incur no duplication of costs as a result of any such subcontract.

 

 

SERVICES AGREEMENT

BETWEEN

RTP ENVIRONMENTAL ASSOCIATES, INC.

6AND

CARDINAL ETHANOL, LLC

Continued

	5.	 	COMPLETION AND ACCETANCE – Upon completion of the Services by Consultant, Client shall
promptly provide Consultant with a written listing of any Services not completed. Any
Services not listed by Client as incomplete in a listing delivered to Consultant within thirty
(30) days of completion of said Services shall be deemed complete and accepted. With respect
to Services listed by Client as incomplete, Consultant shall complete such Services and the
above acceptance procedure shall be repeated.
	 
	6.	 	TERMINATION – Client may terminate, with or without cause, upon thirty (30) days
written notice in Consultant. Absent Consultant’s breach of this Agreement, Consultant
shall be paid for Services rendered to the date of termination. Consultant may suspend or
terminate this Agreement upon seven days written notice to Client in the event of
substantial failure by Client to perform in accordance with the terms of this Agreement
including, but not limited to, nonpayment of amounts owning to Consultant through no fault
of Consultant or an unreasonable delay caused by Client or its agents.
	 
	7.	 	DELAY; FORCE MAJEURE – Should performance of the Consultant’s services be materially
hampered by causes beyond its reasonable control, a Force Majeure results. Force Majeure
includes, but is not restricted to, acts of contractors (other than Consultant’s
contractors), fires, floods, labor disturbances, and unusually severe weather.
	 
	 	 	If a Force Majeure occurs, Consultant will be granted a time extension based upon the
effect of the Force Majeure upon consultant’s performance. The parties will also agree
upon terms and conditions, including additional compensation, for continuation to
termination of this Agreement. If no agreement is reached, a Force Majeure which
continues for 120 days from the event of Force Majeure gives Consultant the option to
terminate its obligations under this Agreement in accordance with Article 6.
	 
	8.	 	GOVERNING LAW – This Agreement is to be governed by and construed in accordance with
the laws of New York. Any action at law or judicial proceeding instituted for the breach
of this Agreement shall be resolved only in the State or Federal courts of the County of
Nassau, State of New York.
	 
	9.	 	AMENDMENTS – Any amendment to this Agreement shall be in writing and signed by
Consultant and Client. In the event that any of the provisions of this Agreement are held
to be unenforceable or invalid by any court of competent jurisdiction, the parties shall
negotiate an equitable adjustment to the provisions with a view toward affecting the
purpose of this Agreement. In the event that any of the provisions of this Agreement are
held to be unenforceable or invalid by any court of competent jurisdiction, the parties
shall negotiate an Agreement. In such a case, the validity and enforceability of the
remaining provisions, or portions or applications thereof, shall not be affected thereby.

 

 

SERVICES AGREEMENT

BETWEEN

RTP ENVIRONMENTAL ASSOCIATES, INC.

AND

CARDINAL ETHANOL, LLC

Continued

	10.	 	TESTIMONY – Should Consultant, its directors, officers or employees be required to testify or
to submit information to any judicial or administrative hearing concerning matters, this will
be performed in accordance with the cost Schedule then in effect. Should Consultant be
required by a third party to testify at such a hearing, Consultant shall notify client as to
the date and time of such hearing. Client agrees to save and hold harmless Consultant from
and against all costs incurred as a result of a judicial or administrative hearing concerning
the services provided for herein.

	11.	 	TIME TO BAR TO LEGAL ACTION

	 	A.	 	Period: All legal actions, including claims for indemnity,
by either party against the other for failure to perform or to perform properly
under this Agreement or any legal action however denominated or essentially based
upon such breach shall be barred two (2) years from commencement of the period
defined in B.
	 
	 	B.	 	Commencement of Period: The period commences when the
claimant knew or should have known of its claim. But, in any event, the period
commences for:

	 	1.	 	Client claims when Consultant’s performance
is substantially complete; and
	 
	 	2.	 	Consultant claims when final payment by
client has been made.

	12.	 	ENTIRE AGREEMENT – In the event any services provided for herein are authorized by the client
to be performed or caused to be performed by Consultant prior to the effective date of this
Agreement, such Services shall be deemed to have been performed under this Agreement. This
Agreement, including all attachments incorporated herein by reference, constitutes the entire
Agreement between the parties. Any oral agreements, understandings, proposals, purchase
orders or negotiations are intended to be integrated herein and to be superseded by the terms
and conditions of this Agreement.

AUTHORIZATION TO PROCEED:

	 	 	 	 	 	 	 	 	 	 	 
	CARDINAL ETHANOL, LLC	 	 	 	RTP ENVIRONMENTAL ASSOCIATES, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	/s/ Troy Prescott
	 	 	 	By:	/s/ Illegible	 	 	 
	 

	 

	 	 
	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	President
	 	 	 	Title:	 	Principal	 	 
	Date:

	 	1-13-06
	 	 	 	Date:	 	1-17-2006	 	 

3

 

SCHEDULE OF CHARGES – 2005

CARDINAL ETHANOL, LLC

PERSONNEL CHARGES

	 	 	 	 	 	 	 	 	 
	Title	 	 	 	 	 	 	 	Billing Rate
	Principal/Project Manager
	 

	 	 	 	 	 	 	 $160/hr
	Senior Scientist/Engineer
	 

	 	 	 	 	 	 	 $110/hr
	Scientist/Engineer
	 

	 	 	 	 	 	 	$90/hr
	Word Processor/Draftsman
	 

	 	 	 	 	 	 	$60/hr

Expert Testimony rates quoted separately.

OTHER CHARGES

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Reproduction (per sheet)
	 

	 	 	 	 	 	 	$	00.15	 
	Facsimile transmissions (per sheet)
	 

	 	 	 	 	 	 	$	01.00	 
	Automobile (per mile)
	 

	 	 	 	 	 	 	$	00.405	 

Outside services, equipment and facilities no furnished directly by RTP ENVIRONMENTAL ASSOCIATES,
INC., will be billed at cost plus 10%. Services may include, but are not limited to the following:

Rental of equipment and vehicles,

Outside laboratory testing,

Special fees, permits, insurance, etc.,

Transportation on public carries,

Printing and photographic reproduction,

Subcontractors to RTP Environmental Associates, Inc.,

Meals and lodging and

Shipping, telephone and other materials.

Payment terms: Net thirty (30) days. Thereafter, one and one-half percent (1 1/2%) interest per
month on the unpaid balance will be charged.

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