LETTER OF INTENT Date: June 21, 2002 Parties: Fagen, Inc. of Granite Falls, MN (Fagen) and Golden Grain Energy, LLC of New Hampton, IA (Owner) Owner is an Iowa limited liability company organized by farmers and business people to facilitate the...
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LETTER OF INTENT |
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June 21, 2002 | |
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| Parties: |
Xxxxx, Inc. of Granite Falls, MN (Xxxxx) and Golden Grain Energy, LLC of New Hampton, IA (Owner) | |
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Owner is an Iowa limited liability company organized by farmers and business people to facilitate the development and building of a locally-owned 30 or 40 MGY ethanol plant in Iowa (the Facility). |
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Xxxxx is an engineering and construction firm capable of providing development assistance, as well as designing and constructing the Facility being considered by Owner. |
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Owner and Xxxxx agree to using best efforts in jointly developing this project under the following terms: |
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1. Owner agrees that Xxxxx will Design/Build the Facility if determined by Owner to be feasible and if adequate financing is obtained. Xxxxx agrees that Owner will not be liable to Xxxxx for any costs or expenses Xxxxx may incur or services that Xxxxx may provide in connection with the Facility, unless agreed to by Owner in a separate writing. |
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2. Xxxxx will provide Owner with assistance in evaluating, from both a technical and business perspective: |
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3. Xxxxx agrees to Design/Built the Facility at a capital cost as shown on the attached Exhibits 1 and 2. Exhibits 1 and 2 assume ICM technology is used in the plant process, and Xxxxx has contracted with ICM to furnish the process engineering services to enable Xxxxx to Design/Built the Facility. |
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4. Xxxxx shall assist Owner in locating appropriate management for the Facility. |
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5. Xxxxx will assist Owner in presenting information to potential investors, potential lenders, and various entities or agencies that may provide project development assistance. |
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6. During the term of this Letter of Intent the Owner agrees that Xxxxx will be the exclusive Developer for the Owner in connection with matters covered by this Letter of Intent. During the term of this Letter of Intent, Xxxxx agrees that it will not develop or construct another ethanol project or facility within 75 miles of New Hampton, Iowa. |
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7. Within thirty (30) days of the date of this Letter of Intent, Xxxxx and Owner will cooperate fully with each other and proceed on the bassi fo trust and good faith to enter into either (a) a Design/Built agreement to design and construct the Facility at a capital cost as shown on the attached Exhibits 1 and 2; or (b) a preliminary agreement to design and construct the Facility at a capital cost as shown on the attached Exhibits 1 and 2 that includes agreement on the project scope and specifications, the performance criteria and guarantees, and the guaranteed construction time to both substantial completion and project compliance with performance guarantees. If the parties do not enter into either agreement with one hundred eight (180) days of the date of this Letter of Intent, then Owner may terminate this Letter of Intent upon written notice to Xxxxx notwithstanding the provisions of paragraph 8 below. |
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8. This Letter of Intent shall terminate on December 31, 2003 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, 2004 unless financing for the Facility has been secured. Either of the aforementioned dates may be extended upon mutual agreement of the parties. |
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Golden Grain Energy, LLC |
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By: /s/ Xxxxxx Xxxxxxxx |
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Its: Vice-President |
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Date: 6-21-2002 |
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Xxxxx, Inc. |
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By: /s/ Xxx Xxxxx |
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Its: President/CEO |
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Date: 6/21/02 |
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Exhibit 1 |
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Golden Grain Energy, LLC |
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30 MGY Dry Grind Ethanol Plant |
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Xxxxx, Inc. |
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May 23, 2002 |
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Estimated Sources and Uses of Funds Statement* |
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| Sources of Funds | ||||||||||
| Equity | 40 | % | ||||||||
| Cash & Equity Equivalents | $ | 17,732,000 | ||||||||
| Long-Term Debt | 26,598,000 | |||||||||
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| Total Sources of Funds | $ | 44,330,000 | ||||||||
| Uses of Funds | ||||||||||
| Design Construction & Startup | ||||||||||
| Plant Construction (GMP, includes thermal oxidizer**) | $ | 37,180,000 | ||||||||
| Land & Site - Developmental Cost (Est.) | 1,450,000 | |||||||||
| Administration Building & Furnishing | 200,000 | |||||||||
| Rail | 550,000 | |||||||||
| Startup Costs: | ||||||||||
| Corn (10 days @ $2.25) | $ | 700,000 | ||||||||
| Enzymes, Chemicals and other | 250,000 | |||||||||
| Spare Parts | 400,000 | |||||||||
| Other Startup Costs | 700,000 | |||||||||
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| 2,050,000 | ||||||||||
| Organizational & Financing | ||||||||||
| Financing Costs | $ | 1,300,000 | ||||||||
| Organizational Costs | 350,000 | |||||||||
| Miscellaneous Costs | 250,000 | |||||||||
| Owners Contingency | 1,000,000 | |||||||||
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| 2,900,000 | ||||||||||
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| Total Uses of Funds | $ | 44,330,000 | ||||||||
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* General Assumptions: Land & site development, startup, and organizational & financing costs are estimated. Owner provides all plant and access roads, rails systems, substation if required, electrical distribution/transformers, gas line(s), process and fire water supply/pretreatment to & waste water systems (septic) from the designated areas within the plant site. Assumes non-winter conditions for earthwork, concrete & building erection. Other conditions may apply in the definitive construction agreement. |
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** Thermal Oxidizer will be required to meet PCA emission standards. The Thermal Oxidizer installation also results in lower plant air emissions, much reduced dryer odor, and allows the plant to expand beyond the 20MGY production rate without triggering the EPA PSD permitting process. |
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Exhibit 2 |
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Golden Grain Energy, LLC |
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40 MGY Dry Grind Ethanol Plant |
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Xxxxx, Inc. |
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May 23, 2002 |
| Estimated Sources and Uses of Funds Statement* |
| Sources of Funds | ||||||||||
| Equity | 40 | % | ||||||||
| Cash & Equity Equivalents | $ | 22,004,000 | ||||||||
| Long-Term Debt | 33,006,000 | |||||||||
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| Total Sources of Funds | $ | 55,010,000 | ||||||||
| Uses of Funds | ||||||||||
| Design Construction & Startup | ||||||||||
| Plant Construction (GMP, includes thermal oxidizer**) | $ | 45,300,000 | ||||||||
| Land & Site - Developmental Cost (Est.) | 2,000,000 | |||||||||
| Administration Building & Furnishing | 200,000 | |||||||||
| Rail | 750,000 | |||||||||
| Startup Costs: | ||||||||||
| Corn (10 days @ $2.25) | $ | 910,000 | ||||||||
| Enzymes, Chemicals and other | 250,000 | |||||||||
| Spare Parts | 500,000 | |||||||||
| Other Startup Costs | 750,000 | |||||||||
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| Subtotal | 2,410,000 | |||||||||
| Organizational & Financing | ||||||||||
| Financing Costs | $ | 2,500,000 | ||||||||
| Organizational Costs | 350,000 | |||||||||
| Miscellaneous Costs | 500,000 | |||||||||
| Owners Contingency | 1,000,000 | |||||||||
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| 4,350,000 | ||||||||||
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| Total Uses of Funds | $ | 55,010,000 | ||||||||
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* General Assumptions: Land & site development, startup, and organizational & financing costs are estimated. Owner provides all plant and access roads, rails systems, substation if required, electrical distribution/transformers, gas line(s), process and fire water supply/pretreatment to & waste water systems (septic) from the designated areas within the plant site. Assumes non-winter conditions for earthwork, concrete & building erection. Other conditions may apply in the definitive construction agreement. |
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** Thermal Oxidizer will be required to meet PCA emission standards. The Thermal Oxidizer installation also results in lower plant air emissions, much reduced dryer odor, and allows the plant to expand beyond the 20MGY production rate without triggering the EPA PSD permitting process. |
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