Document:

exv10w7

 

EXHIBIT
10.7

[Barr Engineering Company Logo]

July 19, 2005

Mr. Dan Skolness

Gold Energy LLC

1183 6th street south

Wahpeton, ND 58075

Re: Agreement for Gold Energy LLC

Dear Mr. Skolness:

Thank you for retaining us. This letter, together with our Standard Terms (attached) sets forth
the Agreement between Gold Energy LLC and Barr Engineering Company regarding permitting assistance
for eh proposed Gold Energy ethanol plant.

We understand that we will be working with both Fagen Engineering and ICM and that the exact scope
of professional consulting services we will provide will be defined in the near future. For each
identified general task, we3 will provide you with a scope of work and cost estimate. We
understand that one of our primary roles will include preparing applications and notifications for
water appropriations and NPDES waste water discharges for the new plant.

This Agreement will be effective fore the duration of the services unless earlier terminated by
either you or us. We will commence work upon receipt of a copy of this letter signed by you and
have formalized a scope of work and estimate of cost and schedule. For the services provided, you
will pay us according to the attached Standard Terms. We will bill you on a four week cycle. The
cost of the services will be agreed upon prior to performing any work.

We understand you have the authority to direct us. We will direct communications to you at the
address on this letter unless otherwise specified. Direction should be provided to myself or Mr.
Greg Pattern at Barr Engineering as appears on our letterhead.

During the term of this Agreement, we will maintain the following insurance coverages:

	 	 	 	 	 
	 

	 	Worker Compensation
	 	Statutory
	 

	 	Employer Liability
	 	$500k per claim/$500k aggregate
	 

	 	Comprehensive General Liability
	 	$1m per claim/$2m aggregate, combined single limit
	 

	 	Automobile
	 	$1m combined single limit
	 

	 	Professional Liability
	 	$5m per claim/$10m annual aggregate
	 

	 	Umbrella
	 	$10,000,000 aggregate

 

 

[Except for professional liability, all policies will name you as additional insured for
claims arising out of the services we provide. No policy will be materially changed or
cancelled without giving you 30 days prior notice.]

If this Agreement is satisfactory, please sign the enclosed copy of this letter in the space
provided, and return it to us. This Agreement will be open for acceptance until January 01, 2006
unless earlier withdrawn by us.

Sincerely,

BARR ENGINEERING COMPANY

	 	 	 	 	 
	By

	 	/s/ Joel Trinkle
 

Mr. Joel Trinkle, Its Vice President
	 	 

Accepted this____day of _________,200

Gold Energy LLC

	 	 	 	 	 
	By

	 	/s/ Les Nesvig
 

Its   [Handwritten: Pres]
	 	 

Attachments

Standard Terms—Professional Services

[Fee Schedule]

 

 

Our Agreement with you consists of the accompanying letter or other authorization and these
Standard Terms.

Section 1: Our Responsibilities

	1.1	 	We will provide the professional services described in our written agreement with you in
performing our services, we will use that degree of care and skill ordinarily exercised under
similar circumstances by reputable members of our profession practicing in the same locality.
	 
	1.2	 	We will select means, methods, techniques, sequences, or procedures used in providing our
services. If you direct us to deviate from our chosen protocols, you agree to hold us
harmless form all claims, damages, and expenses arising out of your direction.
	 
	1.3	 	We will acquire all licenses applicable to our professional services and we will comply with
applicable law.
	 
	1.4	 	Our duties do not include supervising you contractors or commenting on, supervising, or
providing the means and methods of their work unless we accept those duties in writing. We
will not be responsible for the failure of you contractors to perform in accordance with their
undertakings, and the providing of our services will not relieve others of their
responsibilities to you or to others.
	 
	1.5	 	WE will provide a health and safety program for our employees, but we will not be responsible
for contractor, job or site health or safety unless we accept that duty in writing.
	 
	1.6	 	Our estimates of construction or other costs will be based on the information available to us
an on our experience and knowledge. Such estimates are an exercise of our professional
judgment and are not guaranteed or warranted.
	 
	1.7	 	Your confidential documents and information provided to us by you will be maintained in
confidence except as required by law.

Section 2: Your Responsibilities

	2.1	 	You will provide access to the project side, and will arrange for access to other property as
required for us to provide our services.

	2.2	 	You agree to provide us with all your information, plans and changes in plans, and new
information that may materially affect the delivery of our services. You agree to hold us
harmless from all claims, damages, losses, and related expenses involving information of which
you had knowledge but did not timely call to our attention or correctly show on plans
furnished to us.

	2.3	 	You agree to provide us with emergency procedure information and to provide information on
hazardous substance/processes we may encounter in the work.

	2.4	 	This Agreement and the services we provide will not cause us to be an owner, operator,
generator, transporter, treater, storer, or a disposal facility within the meaning of the
Resource Conservation Recovery Act, as amended or within the meaning of any other law
governing the handling, treatment, storage, or disposal of hazardous materials. You agree to
hold us harmless and indemnity us from any such claim or loss.

	2.5	 	Site remediation services may involve risk of cross-contamination of previously
uncontaminated air, soil, and water. If you are requesting that we provide services that
include this risk, you agree to hold us harmless and indemnity us from cross-contamination
claims and damages, unless the loss is caused by our negligence.

	2.6	 	You agree to make disclosures required by law. If we are required by law or legal process to
make such disclosures, you agree to hold us harmless and indemnify us from all related claims
and costs. We will give such advance notice of legal compulsion as is practical so that you
may take steps to protect your interests.

Section 3: Reports and Records

	3.1	 	We will retain analytical data for seven years and financial data for three years relating to
the services performed.

	3.2	 	Monitoring wells are you property and you are responsible for their permitting, maintenance
and abandonment unless we accept that duty in writing. All samples remaining after tests are
conducted and field and laboratory equipment that cannot be adequately cleansed of
contaminates are your property. They will be discarded or returned to you, at our
discretion, unless within 15 days of the report date you give written direction to store or
transfer the materials, at your expense.

	3.3	 	Our reports, notes, calculations, and other written or electronic documents are instruments
of our service to you. Our reports may be used only for the purposes disclosed to us. You
may not use or transfer our reports to others for a purpose for which they were not prepared
without our written approval, which will not be unreasonably withheld. You agree to indemnify
us from loss caused by any other use of the documents.

	3.4	 	If you do not pay for our services as agreed, we may retain all reports and work not yet
delivered to you and you agree to return to us all our reports and other work in your
possession or under your control.

 

 

Section 4: Compensation

	4.1	 	You will pay for services as agreed upon or according to our then current fee schedule if
there is not other written agreement as to price. An estimated cost is not a firm figure
unless stated as such.

	4.2	 	You agree to notify us of billing disputes within 15 days and to pay all undisputed portions
of invoices within 30 days of invoice date. For balances not paid under these terms, you
agree to pay interest on unpaid balances beginning 10 days after invoice date at the rate of
1.5% per month, but not to exceed the maximum rate allowed by law.

	4.3	 	If you direct us to invoice another, we will do so, but you agree to be responsible for our
compensation unless you provide us with that person’s written acceptance of all terms of our
agreement and we agree to extend credit to that person.

	4.4	 	You agree to compensate us for our reasonable fees and expenses if we are required to respond
to legal process arising out of a proceeding to which we are not a party.

	4.5	 	If we re delayed by factors beyond our control, or if the project conditions or the scope o
amount of work change, or if the standards or method change, we will give you timely notice
and we will receive and an equitable adjustment of our compensation.

Section 5: Disputes, Damage, and Risk Allocation

	5.1	 	Disputes other than collection matters will be submitted to Alternative Dispute Resolution
(ADR) as a condition precedent to litigation. Each of us will exercise good faith efforts to
resolve disputes through a mutually acceptable ADR procedure. The law of the state in which
the project site is located will govern all disputes.

	5.2	 	We will not be liable for special, incidental, consequential, or punitive damages, including
but not limited to those arising from delay, loss of use, loss of profits or revenue, loss of
financing commitments or fees, or the cost of capital. None of your employees shall be
personally liable to you.

	5.3	 	We will not be liable for damages unless suit is commenced within tow years of the date of
injury or loss or within tow years of the date of the completion of our services, whichever is
earlier. We will not be liable unless you have notified us of the discovery of the claimed
breach of contract, negligent act or omission within 30 days of the date of discovery and
unless you have given us an opportunity to investigate and to recommend ways of mitigating
damages.

	5.4	 	For you to obtain the benefit of a fee which includes a reasonable allowance for risks, you
agree that our aggregate liability will not exceed the fee paid for our services or $50,000,
whichever is greater. IF you are unwilling to accept this allocation of risk, we will
increase our aggregate liability to $100,000 provided that, within 10 days of the date of this
agreement, you provide payment in an amount that will increase our fees by 10% but not less
that $500, to compensate us for the greater risk undertaken. This increase fee is not the
purchase of insurance.

	5.5	 	If you fail to pay us within 60 days following invoice date, we may consider the default a
total breach of our Agreement and, at our option, we may terminate all of our duties without
liability to you or to others.

	5.6	 	If we are involved in legal action to collect our compensation, you agree to pay our
collection expenses, including reasonable attorney fees.

Section 6: Indemnification

	6.1	 	We will indemnify and hold you harmless form and against demands, damages, and expenses
caused your negligent acts and omissions, and breach of contract and those acts, omissions,
and breaches of persons for whom we are legally responsible. You will indemnify and hold us
harmless from and against demands, damages and expenses cause by your negligent acts and
omission or breach of contract and those acts omissions, and breaches of the other parties
contracting with you on the same project and other persons for whom you are legally
responsible.

	6.2	 	To the extent that may be necessary to indemnity either of us under Section 6.1, you and we
expressly waive, in favor of the other only, any immunity or exemption from liability that
exists under any worker compensation law.

Section 7: Miscellaneous Provisions

	7.1	 	We will provide a certificate of insurance to you upon request.

	7.2	 	This Agreement is our entire agreement, and it supersedes all prior agreements. Only a
writing signed by both of us making specific reference to the provision modified may modify
it.

	7.3	 	Neither of us will assign this Agreement without the written approval of the other.

	7.4	 	A writing may terminate this Agreement. We will receive an equitable adjustment of our
compensation if our wok is terminated prior to completion as well as our fees and expenses on the basis agreed upon through
the effective date of termination.

 

 

	7.5	 	We will not discriminate against any employee or applicant for employment because of race,
color, creed, ancestry, national origin sex, religion, age, marital status, affectional
preference, disability, status with regard to public assistance, membership or activity in a
local human-rights commission, or status as a specially disabled, Vietnam-ear, or other
eligible veteran. We will take affirmative action to ensure that applicants are considered,
and employees are treated during their employment, without regard to those factors. Our
actions will include, but are not limited to notifications, hiring, promotion or employment
upgrading, demotion, transfer, recruitment or recruitment advertising, layoffs or
terminations, rates of pay and other forms of compensation, and selection for training or
apprenticeship.

 

 

Schedule—2005

Rev. 01/01/05

	 	 	 	 	 
	 	 	Rate4	 
	Description	 	(dollars)	 
	 
	Principal Engineer/Scientist
	 	$	90-160	 
	Senior Consultants1
	 	$	90-175	 
	Senior Engineer/Scientist1
	 	$	80-115	 
	Engineer/Scientist1
	 	$	55-90	 
	Computer Scientist
	 	$	55-115	 
	Senior Technician2
	 	$	60-100	 
	Technician2
	 	$	40-75	 
	Communication Specialist
	 	$	70-120	 
	Technical Writer
	 	$	55-90	 
	Support Service Manager
	 	$	80-150	 

A three percent (3%) administration fee will be added to invoices to cover support services labor
including information specialists, word processing, report production, project accounting, and
other project clerical services. The three percent fee is calculated abased on the invoice labor
charges and is shown as a separate line on the invoice summary page.

Rates for litigation support services will include a 30% surcharge.

A ten percent (10%) markup will be added to subcontracts for professional support and construction
services to cover overhead and insurance surcharge expenses.

Invoices are payable within 30 days of the date of the invoice. Any amount not paid within 30 days
shall bear interest from the date 10 days after the date of the invoice at a rate equal to the
lesser of 18 percent per annum or the highest rate allowed by applicable law.

Reimbursable expenses including, but not limited to, the actual and reasonable costs of
transportation, meals, lodging, long-distance telephone charges, parking costs, postage, and
shipping charges will be billed at actual cost. Materials and supplies charges, printing charges,
and equipment rental charges will be billed in accordance with Barr’s standard rate schedules.
Mileage will be billed at the IRS-allowable rate.

 

1 Includes engineers, ecologists, biologists, chemists, hydrogeologists, industrial
hygienists, soil scientists, meteorologists, environmental scientists, information technology
specialists, and landscape architects.

2 Includes surveyors, drafters, CADD operators, designers, cost estimators,
construction observers, water, air and waste samplers, safety technicians, interns, and data
management technicians.

3 Rates do not include stales tax on services on services that may be required in some
states.exv10w8

 

EXHIBIT
10.8

INDEPENDENT CONTRACTOR AGREEMENT

     THIS INDEPENDENT CONTRACTOR AGREEMENT (the “Agreement”) is made and entered into effective as
of the                     day of August, 2005 (the “Effective Date”), by and among: GOLD ENERGY, LLC a Minnesota
limited liability company (hereafter referred to as “Company”); and MICHELLE SWENSON, a resident of
the State of Minnesota (hereafter referred to as “Contractor”).

W I T N E S S E T H :

     WHEREAS, the Company intends to develop, finance and construct an ethanol plant; and

     WHEREAS, the Company desires to contract for the services of Contractor as the Project
Coordinator to oversee the completion and development of the proposed ethanol plant; and

     NOW, THEREFORE, in consideration of the mutual promises herein contained and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

     1. Services. The Company hereby engages Contractor, on an independent contractor
basis, to oversee the construction and development of the proposed ethanol plant. Contractor shall
serve as the day-to-day liason between the board of governors of the Company and its committees as
well as with the various contactors hired by the board of governors and shall oversee the
day-to-day activities of such contractors. Contractor shall perform such other duties as the
Company may from time-to time request.

     2. Term/Termination. The term of this Agreement shall commence effective August 15,
2005 and shall continue, unless sooner terminated as provided herein, until 90 days after the
closing of the senior debt financing necessary to construct the plant and start up operations
(the “Financial Closing”). Notwithstanding the foregoing, however, either party shall have
the right to terminate this Agreement at any time, with or without cause, by providing
Fourteen (14) days written or oral notice.

     Upon the expiration or termination of this Agreement, the Company shall pay Contractor any
outstanding amounts calculated and payable under Section 3 below, for any Services provided prior
to the effective date of such termination.

     3. Compensation. Unless terminated in accordance with this Agreement, for services
rendered by Contractor for the Company hereunder, Contractor shall be paid a consulting fee of
$900 per week during the term of this Agreement. In addition, the Company shall reimburse
Contractor for reasonable out-of-pocket expenses incurred by Contractor in performing her
duties hereunder. Contractor shall provide to the board of governors of the Company a monthly
estimate of her expected out-of-pocket expenses and a prior month’s reconciliation of actual
expenses incurred. In addition to the foregoing, the Contractor may be eligible for a bonus
in the sole discretion of the board of governors of the Company in the amount of $10,000 at
Financial Closing for services performed.

     4. Restrictive Covenants. In recognition of the good and valuable consideration
received and hereby acknowledged by Contractor, the parties covenant and agree as follows:

     a. Confidentiality. During the term of this Agreement and at all times
thereafter, Contractor shall treat and keep secret all matters relating directly or
indirectly to the business of the Company, including but not limited to, the content of all
manuals, memoranda, production, marketing, promotional and training materials, financial
statements, sales records, business methods, systems and forms, production records, billing
rates, cost rates, employee salaries and work histories, customer lists, mailing lists,
processes, inventions, information relative to any past, present or
prospective customers,

 

 

as
completely confidential information entrusted to Contractor solely for her use in her
capacity as an independent contractor for and on behalf of the Company. Contractor further
acknowledges and agrees that all information disclosed to her or to which she obtains access,
including information originated by her which results from any work performed for the
Company, or for which equipment, supplies, facilities, or trade secret information of the
Company is used, or which is developed on the Company’s time, during the period of her
engagement, which she has reason to believe to be confidential information or which is
treated by the Company as being confidential information, shall be presumed to be
confidential information and shall remain the property of the Company throughout the term of
this Agreement and thereafter. Contractor further agrees not to keep and/or use any papers,
records, computer files or any information whatsoever relative to any of the matters referred
to in the preceding sentence during or after her engagement with the Company, except as an
independent contractor for and on behalf of the Company, nor to furnish, make available or
otherwise divulge any such information to any person or entity whatsoever. Contractor
further acknowledges and agrees that the Company has developed and established and will
continue to develop and establish a valuable and extensive trade in its products, services
and procedures; and that the Company will suffer great loss and irreparable harm and injury
if Contractor should disclose any of the confidential information of the Company or use it to
compete with the Company.

     b. Non-Competition; Non-Solicitation; Non-Interference. During the term of this
Agreement and for a period of One (1) year thereafter, Contractor shall not, except as an
independent contractor for and on behalf of the Company, directly or indirectly, by or for
herself or through others as her agent, or in a capacity as an owner, governor, officer,
member, employee, manager, advisor, independent contractor or similar capacity of any
business now existing or hereafter created: (i) engage in, contribute to, plan or organize
any activity within the states of Minnesota and North Dakota that is competitive with the
Company’s present or contemplated business; (ii) call upon, solicit, divert, take away or
accept business from any past, current or prospective customer or client of the Company;
(iii) solicit for employment, retain or employ, or become employed by, any past or present
employee or agent of the Company; or (iv) request, induce or advise any employee of the
Company to leave the employ of or cease affiliation with the Company; or (v) interfere with,
or counsel or direct others to interfere with, the Company or its business including its
business relationships, or disparage in any way the good name or reputation of the Company or
its officers, governors, employees, agents and representatives.

     This Section shall survive the expiration or termination of this Agreement.

     5. Injunctive Relief; Cumulative Remedies. The parties acknowledge and agree that any
breach, attempted breach or repudiation by Contractor of the restrictive covenants set forth in
Section 4 above would produce irreparable harm and injury to the Company, and it would be
difficult, if not impossible, to compute the Company’s actual damages. Consequently, and because
no adequate remedy exists at law for any such breach, attempted breach or repudiation by
Contractor, the parties consent to the equity jurisdiction of the courts of the state of Minnesota
and acknowledge and agree that injunctive or other appropriate equitable relief are necessary and
appropriate remedies, and shall be available to the Company to prevent any such breach, attempted
breach or repudiation by Contractor. The provisions set forth in this Section and the remedial
provisions set forth elsewhere in this Agreement, are cumulative and shall not prevent or prohibit
any party hereto from exercising any other rights or remedies available under this Agreement, at
law or in equity.

     6. Indemnification. The Parties shall defend, indemnify and hold one another harmless
from and against any and all claims, suits, judgments, fines, penalties and other liabilities of
any nature whatsoever, including, but not limited to attorneys’ fees and court costs, suffered or
incurred as a result of the negligent or wrongful acts or omissions of the other party hereunder,
or as a result any acts or omissions by such other party outside the scope of this Agreement
(whether or not negligent or wrongful). This Section and the indemnification provisions of Section
8 below shall survive the expiration or termination of this Agreement.

2

 

     7. Relationship of the Parties. The parties’ relationship hereunder shall be that of
independent contracting parties, and this Agreement shall not be interpreted or construed as
creating any other relationship, including, without limitation, that of principal-agent,
employer-employee, partnership or joint venture. Consequently, neither party shall have the right
or authority, express or implied, to assume or create any responsibility, obligation or liability
on behalf or in the
name of the other party hereto, or to bind the other party in any respect. Furthermore, as an
independent contractor, Contractor, at Contractor’s sole expense, shall be responsible for
providing all equipment, materials, supplies and other items necessary or useful in fulfilling her
obligations hereunder; and Contractor shall retain the sole right to control and direct the manner
in which the Services are to be performed.

     8. Taxes; Benefits. Contractor shall be solely liable for, and shall indemnify and
hold the Company harmless from and against, all taxes on any compensation earned as an independent
contractor hereunder, including federal and state income taxes, self-employment taxes, FICA and
FUTA taxes, etc. Contractor shall be solely responsible for all insurance for herself and her
employees, including but not limited to medical, disability, workers compensation, and unemployment
insurance. Contractor shall not be entitled to participate in any benefits maintained by the
Company.

     9. Miscellaneous. This Agreement may be executed in counterparts, and facsimile
signatures shall be binding. This Agreement represents the entire agreement between the parties
relating to the subject matter hereof, and no other representations, promises or agreements
relating hereto and not contained herein are of any force or effect. This Agreement shall not be
modified except in a writing signed by all parties hereto. No waiver of any provision of this
Agreement shall be effective unless agreed to in writing by the party against whom such waiver is
sought to be enforced. No omission or delay by any party in enforcing any right or remedy
hereunder or in requiring performance of any term or provision herein shall constitute a waiver of
such right or remedy, nor shall it affect such party’s right to enforce such provisions thereafter.
If any provision of this Agreement is held to be invalid, unenforceable or contrary to public
policy, the remaining provisions shall not be affected. This Agreement is binding upon and shall
inure to the benefit of the parties and their respective heirs, representatives, successors and
permitted assigns, but shall not be assigned or delegated, in whole or in part, by Contractor,
without the prior written consent of the Company, which may be withheld in the Company’s sole
discretion.

     10. Governing Law. This Agreement and the parties’ rights and obligations hereunder
shall be governed by and construed in accordance with Minnesota law.

     IN WITNESS WHEREOF, the parties hereto have caused this INDEPENDENT CONTRACTOR AGREEMENT to be
executed as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	THE COMPANY:	 	 	 	CONTRACTOR:	 	 
	 
	 	 	 	 	 	 	 	 
	Gold Energy, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Les Nesvig
	 	 	 	/s/ Michelle Swenson	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Michelle Swenson	 	 

3

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