Document:

exv10w1

 

Exhibit 10.1

MEMORANDUM OF UNDERSTANDING

THIS MEMORANDUM OF UNDERSTANDING (“MOU”) is made and entered into this 14 day of March,
2005, between MITCHELL COUNTY RESEARCH GROUP, LLC (“Company”), a Georgia limited liability company
having principal offices at  76 E. Broad Street ; and THOMPSON, HOFFMAN & COMPANY
(“Consultant”), a Georgia corporation with principal offices at 2070 Buford Highway, Suite 1E,
Buford, Georgia, 30518.

Statement of Background

     Company is in the process of acquiring certain land in Mitchell County, Georgia with the
intention of constructing and operating a corn-based ethanol fuel facility (the “Facility”).
Company desires to engage Consultant to perform certain consulting services on behalf of Company
and be an independent contractor for Company. Company is willing to engage Consultant and
Consultant is willing to undertake the engagement with Company subject to the terms and conditions
set forth in this MOU.

Statement of Agreement

NOW, THEREFORE, in consideration of the mutual agreements, representations, warranties and
covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Company and Consultant hereby agree as follows:

          1.          Engagement. From the date hereof and until the earlier of: (i) a chief executive officer,
president or similar person is hired by the Company to operate the Facility or (ii) the termination
of this MOU, Consultant agrees to make reasonable commercial efforts to do the following (the
“Services”):

                      (a)          Retain and manage a firm qualified to perform a feasibility study to determine the
likelihood of success of a corn-based ethanol plant in Mitchell County Georgia.;

                      (b)          Locate and introduce to the Company an equity drive firm capable of raising equity from
local sources;

                      (c)          Locate and introduce to the Company an entity (“Equity Partner”) willing to supply capital
not contributed by the Company or its members but needed in order to construct and operate the
Facility;

                      (d)          Locate and introduce to the Company an entity who has ability to construct the Facility;
and

                      (e)          Manage the overall aspects of the acquisition of capital and construction of the Facility.

          2.          Exclusivity. From the date hereof and until the earlier of the following (i) six
months from the date hereof or (ii) termination of this MOU, and within seventy-five (75) miles of
the borders of Mitchell County, Georgia, Consultant agrees that it shall not render services which
are similar to the Services for any other person, corporation, limited liability company,
partnership, city, county or other entity who operates or is planning on constructing a corn-based
ethanol power facility.

1

 

     3.          Compensation.

                   (a)          The Company agrees to pay Consultant the following amounts and in the

following manner:

                                    (i)           $5,000 per month beginning on the date hereof and on the monthly anniversary of this MOU
for eleven consecutive months thereafter;

                                    (ii)          $100 per hour after the date which is twelve months from the date hereof;

                                    (iii)         $25,000 upon the earlier of the following: (a) completion of the equity drive, or (ii)
the beginning of construction of the Facility;

                                    (iv)         $25,000 upon the completion of the Facility’s construction;

                                    (v)          within thirty (30) days after the Facility’s second year of production (month‘s
13 thru 24), an amount equal to one percent (1%) of EBITDA (as defined hereafter); and

                                    (vi)         within thirty (30) days after the third full year (month’s 25 to 36) of the Facility’s
production, an amount equal to two percent (0.5%) of EBITDA generated by the Facility in its third
year of full time operation. EBITDA as used herein shall meaning earnings before income taxes,
depreciation and amortization and shall be calculated in accordance with generally accepted
accounting principles (GAAP).

     4.          Term & Termination.

                    (a)          Term. This MOU shall commence on the date hereof and shall continue until it is
terminated pursuant to the terms hereof.

                    (b)          Termination. This MOU may be terminated by either party in the event:

                                    (i)           of a material breach of the terms of this MOU by the other party and the failure of the
breaching party to cure such material breach within thirty (30) days after receiving written notice
identifying the breach and demanding its cure; or

                                    (ii)          the feasibility study finds that the construction and operation of a corn-based ethanol
plant in Mitchell County, Georgia is not economically viable.

                    (c)          Effect of Termination. Notwithstanding the termination of this MOU, no party shall be
released from any obligation that accrued prior to the date of termination, and each party shall
remain bound by the provisions of this MOU that by their terms impose upon such party obligations
extending beyond the date of termination, including without limitation, Company’s obligation to pay
Consultant pursuant to the terms set forth in Section 3(a)(i) (except in the case of termination
pursuant to Section 4(b)(ii)), Sections 3(a)(iii)-(vi) and the terms set forth in Sections 4(c),
6(b)-(d), 7 and 8.

     5.          Representations and Warranties. Each party represents and warrants to the other:
entered into and will not enter into any agreement (whether oral or written) in conflict with this
MOU.

2

 

     6.          Company’s Obligations.

                 (a) Company agrees that it will not use another consultant to perform the Services or
Services similar to the Services during the term of this Agreement;

                 (b) Company agrees that, subject to Consultant’s performance of the Services and a favorable
feasibility study, it will use commercially reasonable efforts to construct the Facility and
operate the Facility and enter into good faith negotiations with potential construction companies
and Equity Partners;

                 (c) Company agrees that, prior to Consultant receiving all of the compensation described in
Section 2 hereof, it will not assign or convey: (i) the land on which the Facility is constructed;
or (ii) any rights in or to the Facility, including without limitation the right to operate or
receive profits from the Facility;

                 (d) Company hereby indemnifies and agrees to defend and hold harmless the Consultant from and
against any and all claims, demands and actions, and any liabilities, damages or expenses resulting
therefrom, including court costs and reasonable attorneys’ fees, arising out of or relating to: (i)
the Facility, (ii) the operation of the Facility, (iii) any claims made by Equity Partner or the
construction company based on Company’s acts, omissions or breach of contract under its agreements
with those entities.

     7.          Notices. All notices under this MOU shall be in writing and shall be deemed to have been
sufficiently given or served and effective for all purposes when presented personally, or when
transmitted by telex or facsimile telecopier with receipt confirmed on the transmitting machine, or
three (3) days after being deposited in a United States postal receptacle for registered or
certified mail addressed, return receipt requested, postage prepaid, or one (1) business day after
delivery to a small package air courier offering service to the address of the intended recipient
with shipping prepaid, to any person at the address set forth in the first paragraph of this MOU or
at such other address as said person shall subsequently designate in a writing delivered in the
form of notice.

     8.          General. This MOU is the sole agreement between the parties relating to the subject matter
hereof and supersedes all prior understandings, writings, proposals, representations or
communications, oral or written, of either party. This MOU may be amended only by an instrument
executed by the authorized representatives of both parties. The parties are, and will at all times
be and remain, independent contractors with respect to each other. Nothing in this MOU shall be
construed to make either party hereto the agent, representative, partner or joint venturer with any
other party, and neither party shall hold itself out as such, nor shall either party be liable for
or bound by any act or omission of the other party. The Consultant shall be responsible for the
payment of all taxes related to its compensation under this MOU. Neither party may assign or
delegate any of its rights, duties or obligations under this MOU without the other party’s prior
written consent. This MOU and all obligations of the parties hereunder shall be interpreted,
construed, and enforced in accordance with the laws of the State of Georgia; provided, however,
that if Georgia’s conflict or choice of law rules, statutes or constitutional provisions would
choose the law of another state, each party waives such rules, statutes or constitutional
provisions and agrees that Georgia substantive, procedural and constitutional law shall nonetheless
govern. No failure or delay of either party to exercise any right or power given it herein or to
insist upon strict compliance by the other party of any obligation imposed on it herein and no
custom or practice of either party hereto at variance with any item hereto shall constitute a
modification or a waiver of either party’s right to demand strict compliance with the terms of this
MOU. Neither this MOU nor any provision hereof, may be changed, waived, discharged, or terminated
orally, but only by an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is

3

 

sought. Time is of the essence hereof. This MOU may be
executed in any number of counterparts and by different parties hereto, and separate counterparts,
each of which when so executed and delivered shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument. Further, the signature of any
party to any counterpart hereof shall be deemed to be a signature to, or may be appended to, any
other counterpart. If any term, covenant, or condition of this MOU or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this
MOU, or the application of such term, covenant, or condition to persons or circumstances other than
those to which it is held invalid or unenforceable, shall not be affected thereby, and each term,
covenant, or condition of this MOU shall be valid and be enforced to the fullest extent permitted
by law. The headings used herein are for purposes of convenience only and should not be used in
construing the provisions hereof. Should any provision of this MOU require judicial interpretation,
it is agreed that the court interpreting or construing the same shall not apply a presumption that
the terms hereof shall be more strictly construed against one party by reason of the rule of
construction that a document is to be construed more strictly against the party who itself or
through its agent prepared same, it being agreed that the agents of all parties have participated
in the preparation hereof. All of the conditions, representations, and obligations imposed
hereunder are imposed or made solely and exclusively for the benefit of the parties to this MOU. No
other person shall, under any circumstances, be deemed to be a beneficiary hereunder. The parties
hereby agree to execute such other documents, instruments, affidavits, or certificates and to
perform such other acts as may be necessary or desirable, to carry out the purposes of this MOU.
Should either party hereto, or any heir, personal representative, successor or assign of either
party hereto, resort to litigation to enforce this MOU, the party or parties prevailing in such
litigation shall be entitled, in addition to such other relief as may be granted, to recover its or
their reasonable attorneys’ fees and costs in such litigation from the party or parties against
whom enforcement was sought. The parties agree that the terms hereof shall remain confidential
except for: (i) disclosure to a party’s professional advisors; (ii) to the extent required by
judicial or governmental process or (iii) to the extent required in order to enforce the terms
hereof.

     IN WITNESS WHEREOF, the undersigned have executed this MOU as of the date first above written.

	 	 	 	 	 
	 	THE COMPANY:

MITCHELL COUNTY RESEARCH

GROUP, LLC, a Georgia limited liability

company

 	 
	 	By:  	/s/ J. Harris Morgan, Jr.
 	 
	 	Name:  	J.
Harris Morgan, Jr.
	 	Title:	Operating Member
	 	 	 
	 	 	 
	 	 	 
	 	CONSULTANT:

THOMPSON, HOFFMAN & COMPANY, a

Georgia corporation

 	 
	 	By:	/s/ Clint Thompson 	 
	 	 	Clint Thompson, President 	 
	 	 	 	 
	 

4exv10w2

 

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}]]