Document:

exv10w3

 

 

Exhibit 10.3

	 	 	 	 	 
	

ELLEN M. LEE

	 	ECKARDT & LEE

ATTORNEYS AT LAW

308 North Sangamon Avenue

P.O. Box 229

Gibson City, Illinois 60936-0229

Telephone (217) 784-8216

Fax (217) 784-8526
	 	Successors to:

Benz & Eckhardt

Benz Law Office

Arthur R. Benz

Retired

Terry E. Eckhardt

Retired

	 	 	 
	DATE:

	 	April 30, 2007
	 
	 	 
	SELLER:

	 	EDWARD E. TUCKER
	BUYER:

	 	ONE EARTH ENERGY, LLC
	 
	 	 
	ADDRESS OF PROPERTY: 1300 E. 8th St., Gibson City, IL 60936

	 	 	 	 	 	 	 	 
	AMOUNT DUE SELLER:
	 	 	 	 	 	 	 
	Contract Price – Real Estate
	 	 	 	 	 	$	100,200.00
	 
	 	 	 	 	 	 
	Contract Price – Personal Property
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Other
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	GROSS AMOUNT DUE SELLER
	 	 	 	 	 	$	100,200.00
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	CREDITS DUE BUYER
	 	 	 	 	 	 	 
	Downpayment
	 	$	10,000.00	 	 	 	 
	Payoff of Seller’s Mortgage
	 	 	-0-  	 	 	 	 
	 
	 	 	 	 	 	 	 
	Real Estate Taxes:
	 	 	 	 	 	 	 
	2006 ($249.10)
	 	POC	 	BUYER’S COST

	 
	 	 	 	 	 	 
	2007 ($249.10x120 /365)
	 	 	81.90	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Title          $50.00

	 
	 	 	 	 	 	Recording $32.00

	Recording
	 	 	-0-  	 	 	 	0   
	 
	 	 	 	 	 	 	 
	Real Estate Transfer Tax
	 	 	15.00	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Title Evidence (Abstract/Policy)

	 	 	 	 	 	 	 
	(Total $)
	 	 	403.00	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Seller’s Attorney’s Fees
	 	 	400.00	 	 	 	 
	 
	 	 	 	 	 	 
	Termite Inspection Report
	 	 	-0-  	 	 	 	 
	Seller’s Realtor Commission
	 	 	-0-  	 	 	 	 
	 
	 	 	 	 	 	 	 
	TOTAL CREDITS DUE BUYER
	 	 	 	 	 	$	10,899.90
	 
	 	 	 	 	 	 
	BALANCE DUE SELLER ON REAL ESTATE CONTRACT
	 	 	 	 	 	$	89,300.10
	 
	 	 	 	 	 	 

     We hereby accept the foregoing settlement in full satisfaction of the original contract unless
otherwise herein noted.

	 	 	 	 	 	 	 
	/s/ Edward E. Tucker
 

EDWARD E. TUCKER, Seller

	 	 
	 	/s/ Joseph R. Thompson
 

ONE EARTH ENERGY, LLC, Buyer
	 	 

 

 

WARRANTY DEED

     THIS INDENTURE WITNESSETH, that the Grantor, EDWARD E. TUCKER, a married person, for and in
consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, in hand
paid, CONVEYS and WARRANTS unto the Grantee, ONE EARTH ENERGY, LLC, the following described real
estate to-wit:

All that part of the West 250 feet of the Northeast Quarter (NE1/4) of Section Ten (10),
Township Twenty-three (23) North, Range Seven (7) East of the Third Principal Meridian,
situated in the City of Gibson, County of Ford and State of Illinois, lying North of the
North line of a tract of land conveyed to Alliance Grain Company by Warranty Deed recorded
October 2, 2000, as Document No. 216478 in the Ford County Recorder’s Office.

Tax I. D. No. 09-11-10-201-005

The said property not being the homestead of Grantor or his Spouse.

     This conveyance is subject to the real estate taxes for the year 2006 and all subsequent
years; covenants, conditions, restrictions and easements apparent or of record; and all applicable
zoning laws and ordinances.

Dated this
30th
day of April, 2007.

	 	 	 	 	 
	 

	 	/s/ Edward E. Tucker
 

EDWARD E. TUCKER
	 	 

 

 

	 	 	 
	STATE OF ILLINOIS

	 	)
	 

	 	)   SS.
	COUNTY OF FORD

	 	)

     I, the undersigned, a Notary Public in and for said County, in the State aforesaid, do hereby
certify that, EDWARD E. TUCKER, a married person, personally known to me to be the same person
whose name is subscribed to the foregoing instrument, appeared before me this day in person and
acknowledged that he signed, sealed and delivered the said instrument as his free and voluntary act
for the uses and purposes therein set forth, including the release and waiver of the right of
homestead.

     Given
under my hand and Notarial Seal this
30th
day of April, 2007.

	 	 	 	 	 
	 

	 	/s/ Ellen M. Lee
 

    NOTARY PUBLIC
	 	 
	 
	 	 	 	 
	 

	 	[Notary Seal]	 	 
	 

	 	OFFICIAL SEAL	 	 
	 

	 	ELLEN M LEE	 	 
	 

	 	NOTARY PUBLIC — STATE OF ILLINOIS	 	 
	 

	 	MY COMMISSION EXPIRES: 09/13/09	 	 

	 
	Send Tax Statement and Return to:

	     One Earth Energy, LLC

	     1306 W. 18th St.

	     Gibson City, IL 60936

	 

	Prepared by:

	     Ellen M. Lee

	     Echardt & Lee

	     308 N. Sangamon Ave.

	     P. O. Box 229

	     Gibson City, IL 60936-0229

	     (217) 784-8216exv10w4

 

 

Exhibit 10.4

Fagen, Inc.

Attn: Becky Dahl

P.O. Box 159

501 West Highway 212

Granite Falls, MN 56241

     Re: One Earth Energy, LLC Rescission Offer

Dear Ms. Dahl:

This letter is being delivered pursuant to the attached proposed Terms Sheet (Exhibit A) executed
by One Earth Energy, LLC and Farmers Energy One Earth, LLC. Pursuant to the Terms Sheet, One Earth
Energy, LLC, will be conducting a rescission offer, which means that investors, including Fagen,
Inc., will have the opportunity to have their investments returned to them.

Pursuant to Section 2 of the Terms Sheet, Farmers Energy One Earth, LLC, conditioned its
subscription on the understanding that Fagen, Inc. will not accept the rescission offer. In
consideration of (i) One Earth Energy, LLC entering into an EPC contract with Fagen, Inc. for the
construction of the ethanol facility in Gibson City, Illinois; and (ii) One Earth Energy, LLC’s
efforts to procure financing to construct such facility, please countersign this letter below to
confirm that Fagen, Inc. will not accept the proposed rescission offer by One Earth Energy, LLC
when it is made pursuant to the Terms Sheet.

Please call me with any questions or concerns. Thank you.

	 	 	 
	 

	 	Very truly yours,
	 
	 	 
	 

	 	/s/ Steven Kelly
	 

	 	Steve Kelly

President
	 

	 	One Earth Energy, LLC

Fagen, Inc. herby confirms the

above understanding as of the

24th day of May, 2007:

Fagen, Inc.

	 	 	 	 	 
	By:

	 	/s/ Ron Fagen
 

	 	 
	 
	 	 	 	 
	Its:

	 	President and CEO
 

	 	 

Telephone: 217-784-5321 • www.oneearthenergy.com

 

 

TERMS SHEET

     THIS TERMS SHEET (the “Terms Sheet”) is executed as of the 15 day of May, 2007, by and
between ONE EARTH ENERGY, LLC, an Illinois limited liability company (“One Earth”), and FARMERS
ENERGY ONE EARTH, LLC, an Ohio limited liability company (“Farmers Energy”). It is not intended as
a comprehensive statement of all of the parties’ rights, duties and obligations or to constitute a
legally binding commitment, but is intended to summarize the general terms and conditions to which
the parties have agreed. Upon the execution of this Terms Sheet by both parties, One Earth’s legal
counsel shall commence preparation of more detailed definitive documents (including, without
limitation, an amendment to the One Earth Registration Statement on file with the Securities and
Exchange Commission and various state securities regulators, an amendment to One Earth’s Amended
And Restated Operating Agreement, a subscription agreement evidencing Farmers Energy’s additional
equity commitment, and appropriate documentation evidencing Farmers Energy’s secured debt financing
commitment, all as described below, hereafter collectively referred to as the “Definitive
Documents”) setting forth in more detail the terms of this Terms Sheet. Such Definitive Documents
shall be subject to the review and approval of both parties, and the parties will only be bound to
consummate the transactions contemplated hereby upon the execution and delivery of the Definitive
Documents which shall be satisfactory to both parties in their sole discretion.

     1. Background.

     a. One Earth Energy is currently conducting a federally registered offering (the
“Registered Offering”) of Class B Limited Liability Company Membership Units (“Units”)
pursuant to a Registration Statement dated November 7, 2006, and currently has subscriptions
for approximately $24,610,000.00 in the Registered Offering.

     b. The parties to this Terms Sheet are parties to a certain letter agreement dated May
26, 2006 (the “Letter Agreement”), pursuant to which Farmers Energy, subject to the terms
and conditions set forth therein, has agreed to contribute $24,900,000 to One Earth in a
private placement transaction separate from the Registered Offering in consideration of the
issuance of 4,980 Class B Limited Liability Company Membership Units.

     c. In addition to the contribution to be made by Farmers Energy in the private
placement described in paragraph 1.b above, Farmers Energy has agreed, subject to the same
terms and conditions as set forth in the Letter Agreement, to subscribe for up to an
additional 7,911 Units ($39,555,000) in the Registered Offering, depending on the number and
amount of rescissions resulting from the transactions described herein, thereby increasing
its total possible contribution to One Earth (including the private placement) to
$64,455,000 (12,891 Units), subject to certain terms, conditions and requirements as set
forth herein. Alternatively, the parties may agree to terminate the Letter Agreement and
the private placement contemplated thereunder, and in lieu thereof, to restructure the
transactions contemplated hereunder and under the Letter Agreement so that Farmers Energy’s
entire investment comes in the form of a single purchase of registered Units in the
Registered Offering.

     d. It is understood that, after the sale of Units pursuant to the Registered Offering,
the Letter Agreement and this Terms Sheet, Farmers Energy will own, on a fully diluted
basis, not less than a majority of the issued and outstanding Units of One Earth.

     e. In consideration for Farmers Energy’s willingness to (i) subscribe for additional
Units as described in paragraph 1.c above and (ii) to provide secured interim debt financing
to One Earth as described below in paragraph 3, One Earth has agreed to amend its Amended
And Restated Operating Agreement and its Registration Statement on file with the Securities
and Exchange Commission, and to offer rescission to its current subscribers as set forth
hererin.

 

Page 2

     2. Equity Commitment. Subject to One Earth’s satisfaction of its obligations
described herein, Farmers Energy shall agree, subject to the same terms and conditions as set forth
in the Letter Agreement, to subscribe for up to an additional 7,911 Units ($39,555,000) in the
Registered Offering, depending on the number and amount of rescissions resulting from the
rescission offer described in paragraph 6 below, it being understood that Fagen, Inc. or any party
related thereto will not accept the rescission offer. Once the rescission offer has expired, One
Earth will accept Farmers Energy’s subscription in the Registered Offering for an amount of Units
equal to 7,911 less the number of Units actually subscribed and paid for by other investors in the
Registered Offering, it being understood that, after giving effect to the Units issued and sold
pursuant to the Registered Offering, the Letter Agreement and this Terms Sheet, Farmers Energy
will own not less than a majority of the issued and outstanding Units of One Earth on a fully
diluted basis. Upon One Earth’s receipt of the full subscription amount from Farmers Energy, One
Earth will terminate its offering. Farmers Energy shall execute a subscription agreement in such
form as One Earth and Farmers Energy may reasonably agree confirming Farmers Energy’s subscription
as provided herein.

     3. Interim Debt Financing Commitment. From and after the filing of the amendment to
One Earth’s Registration Statement as described in paragraph 6 below through and including the
later to occur of (a) One Earth breaking escrow in its Registered Offering, or (b) One Earth
closing on its debt financing, Farmers Energy agrees to provide, subject to the conditions set
forth in the Definitive Documents, interim, secured debt financing, in an aggregate principal
amount not to exceed $6,000,000, to One Earth on commercially reasonable terms at an interest rate
of 9% per annum, such interim financing to enable One Earth to proceed with the project in
accordance with its development and construction schedule, a copy of which has been provided to
Farmers Energy. Such debt financing will be secured by all of the assets of One Earth, including,
without limitation, all contracts of One Earth, including the EPC contract with Fagen, Inc..

     4. Amendments to Amended And Restated Operating Agreement. One Earth shall amend its
Amended And Restated Operating Agreement as soon as commercially reasonable following the execution
of this Terms Sheet, to provide as follows (with all such provisions being contingent upon Farmers
Energy actually fulfilling its equity and debt commitments described in paragraphs 2 and 3 above):

	 	•	 	Separate Class A and Class B Units, Separate Class A and Class B
Members, and separate Class A and Class B Directors will be
eliminated. All Units will be of a single class with identical
rights, except as to the appointment of Directors.
	 
	 	•	 	The business and affairs of One Earth shall continue to be managed
by and under the direction of the Board of Directors. So long as
Farmers Energy is the owner of a majority of One Earth’s issued
and outstanding Units, Farmers Energy will be granted the right to
appoint the majority of the members of the Board of Directors.
Farmers Energy acknowledges that each of the 5 current Class A
members of One Earth will have the right to appoint 1 Director to the Board. Farmers
Energy’s designees to the Board shall initially be appointed immediately upon
the filing of the amendment to One Earth’s Registration Statement as described
in paragraph 6 below.
	 
	 	•	 	Any inconsistent terms in the Amended And Restated
Operating Agreement relating to the rights, duties or
obligations of Farmers Energy shall be stricken.
	 
	 	•	 	So long as Farmers Energy is the owner of a majority
of One Earth’s issued and outstanding Units, Farmers
Energy will have the right to approve by written
consent certain significant transactions involving
One Earth (including any merger, consolidation or
other business combination involving One Earth, any
sale of significant assets other than in the ordinary
course of business, any offering or sale of any
additional Units in One Earth, any amendment to One
Earth’s Operating Agreement or any other fundamental
change).

     5. Conditions. Farmers Energy’s obligation to consummate the transactions
contemplated herein are subject to the following additional conditions (unless waived by Farmers
Energy in its sole discretion):

 

Page 3

	 	•	 	Farmers Energy shall have obtained the approval of the Board of Directors of REX
Stores Corporation for the consummation of the transactions contemplated hereby.
	 
	 	•	 	One Earth shall have obtained and provided evidence to Farmers Energy of the
approval by One Earth Energy’s Board of Directors to consummate the transactions
contemplated hereby, together with the unanimous approval and the written
affirmation of the current Class A Members to the consummation of such transactions
and their agreement to take all reasonable actions to support the furtherance of
such transactions.
	 
	 	•	 	One Earth shall have obtained all necessary air permits to construct and operate
One Earth’s proposed ethanol facility in Gibson City, Illinois (the
“Facility”)(other than any operating permits that are required to be obtained after
completion of construction, which shall be obtained when appropriate).
	 
	 	•	 	One Earth shall have entered into a binding EPC contract with Fagen, Inc for the
construction of the Facility with a construction commencement date no later than
October 19, 2007.
	 
	 	•	 	One Earth shall have provided Farmers Energy with the names and addresses of the
current subscribers in One Earth and evidence of the funds currently held in escrow
which were submitted by the current subscribers with their subscription agreements.
	 
	 	•	 	One Earth shall have provided all documents and other information which Farmers
Energy may reasonably request in connection with the transactions contemplated
hereby, including all documents and information relating to the purchase of real
property upon which the Facility will be constructed.
	 
	 	•	 	Within 5 days following the execution of this Terms Sheet, One Earth shall
deliver to Farmers Energy a written re-affirmation from Fagen, Inc. which states
that Fagen, Inc. will not accept the rescission offer described in paragraph 6 and
otherwise supports the actions set forth in this Terms Sheet.

     In addition, the obligation of Farmers Energy to provide the secured interim debt financing
generally described herein shall be subject to the execution and delivery by One Earth of a binding
construction/permanent loan commitment with a commercial bank or other lender of recognized
standing which loan commitment shall provide for the construction/permanent financing of the
Facility and shall be otherwise satisfactory to Farmers Energy. Additionally, for the avoidance of doubt, Farmers
Energy shall only be obligated to purchase the Units as contemplated in paragraph 2 after One Earth
has entered into a committed credit facility pursuant to which a lender(s) of recognized standing
has made a binding commitment, subject only to customary and reasonable conditions for
disbursement, to provide construction/permanent debt financing in an amount which, along with the
net proceeds from the sale of Units in accordance with the Registered Offering, the Letter
Agreement and this Terms Sheet, will be sufficient to complete construction of the Facility, as
well as to provide necessary working capital.

     6. Post-Effective Amendment of Registration Statement; Rescission Offer. One Earth
shall amend its Registration Statement on file with the Securities and Exchange Commission (the
“SEC”) and with various state securities regulators no later than 20 days following the execution
of this Terms Sheet, to disclose the terms set forth herein and to offer rescission to its current
subscribers. One Earth shall take all commercially reasonable steps to expedite the review process
with the SEC and the state securities regulators, with the objective of becoming effective as soon
as reasonably practicable.

     7. Rex Guaranty. Upon execution and delivery of the Definitive Documents, REX Stores
Corporation shall guarantee the obligations of Farmers Energy described herein and therein.

     8 Letter Agreement Amendment. Upon execution and delivery of the Definitive
Documents, in the event One Earth so requests, Farmers Energy will agree to amend the Letter Agreement to provide that the

 

Page 4

expiration date of June 30, 2007 provided for in the second paragraph
of the Letter Agreement shall be changed to August 1, 2007.

     9. Single Purchase of Units in Registered Offering. Notwithstanding any other
provision of this Terms Sheet, the parties acknowledge and agree that they may agree to terminate
the Letter Agreement and the private placement contemplated thereunder, and in lieu thereof, to
restructure the transactions contemplated hereunder and under the Letter Agreement so that Farmers
Energy’s entire investment comes in the form of a single purchase of registered Units in the
Registered Offering. In such event, the overall economics of the transactions and the amendments
to One Earth’s Amended And Restated Operating Agreement shall remain as stated herein, but any
inconsistent terms herein relating to the private placement shall be modified accordingly when the
Definitive Documents are drafted.

     10. Timing. The parties shall use commercially reasonable efforts to reach agreement
on the specific terms of the Definitive Documents and to execute and/or file such Definitive
Documents (as appropriate) within 10 days of the date of this Terms Sheet, but in any event not
later than 20 days of the date of this Terms Sheet. The parties hereto will only be bound to
consummate the transactions contemplated hereby upon the execution and delivery of the Definitive
Documents, which Definitive Documents shall be in form and substance satisfactory to the parties in
their sole discretion

     IN WITNESS WHEREOF, the parties have duly executed this TERMS SHEET as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 	 	 
	One Earth Energy, LLC	 	 	 	Farmers Energy One Earth, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steve Kelly
 

Steve Kelly
	 	 
	 	By:
	 	/s/ Zafar Rizvi
 

	 	 
	Its:

	 	President
 

	 	 
	 	Its:
	 	President
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Scott B. Docherty
 

Scott Docherty
	 	 	 	 	 	 	 	 
	Its:

	 	Vice President
 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jack Murray
 

Jack Murray
	 	 	 	 	 	 	 	 
	Its:

	 	Secretary

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