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PROJECT DEVELOPMENT AGREEMENT
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This Agreement is entered into this 6th day of
November, by and between ALL Energy Company, a Delaware corporation
( “Client”), and Delta-T Corporation, a Virginia
corporation ( “Delta-T”), which parties may be referred
to individually as a “Party” or jointly as the
“Parties”, in light of the following facts:
A. In September 2006, Client and B. Swain,
inter alia, entered into a Stock Subscription Agreement (the
“Subscription”) relating to the sale and issuance of
common stock of Client, subject to certain terms and
conditions;
B. One of the terms of the Subscription
was an agreement by B. Swain, as owner of Delta-T, to cause Delta-T
to negotiate, in good faith, a development agreement relating to
the development of five ethanol production facilities and to enter
into such contracts. Client agreed to so negotiate, in good faith,
and to enter into such contract. It is the purpose of this
Agreement to serve as the development agreement referred to in the
Subscription;
C. The Subscription further stated that
B. Swain and R. Swain, as majority owners of Pacesetter Management
Group, LLC (“Pacesetter”), would cause Pacesetter to
negotiate, in good faith, an agreement under which Pacesetter would
manage the operations of the five ethanol production facilities
intended to be developed by Client (the “Pacesetter
Agreement”). This Agreement is not part of an agreement with
Pacesetter;
D. This Agreement was termed the
“Delta-T Agreement” in the Subscription. The
Subscription created a right in certain individuals to purchase an
aggregate of 714,285 shares of the common stock of Client. The
right to purchase common stock of Client, as stated herein, was
made conditional on the mutual execution of both this Agreement
(the Delta-T Agreement therein) and the Pacesetter Agreement. This
Agreement, upon its execution between Client and Delta-T, will
constitute satisfaction of the condition precedent to the right of
R. L. Bibb Swain, Rob Swain, James Broghammer, Scott D. Zabler and
John F. Hopkins, Jr., relating to the execution of this
Agreement;
5. Delta-T is experienced in the
business of developing ethanol production projects, as well as in
the design of ethanol processes using the dry-milling method and in
the supply of commercial technologies and other items related to
the production of fuel ethanol;
6. Client has determined to locate the
first of the five ethanol production facilities contemplated by
this Agreement in the City of Manchester, Iowa;
7. Client intends to develop a plant
capable of producing approximately 100,000,000 gallons per year of
fuel ethanol, utilizing the dry-milling process, together with all
associated commercial by-products;
8. Client desires to engage Delta-T as
an independent contractor to provide products and services as
provided herein. Except as set forth in paragraph VII hereinbelow,
this engagement is not related to any other contract or agreement
with any person, firm or entity not a party hereto; and
9. Client has tentatively determined to
engage Kraus-Anderson Construction Company, Minneapolis, Minnesota,
as its prime contractor for the design and construction of the
proposed Manchester, Iowa, facility, on either a turn-key or
cost-plus basis.
NOW, THEREFORE, in consideration of the
mutual promises contained herein and other valuable consideration,
it is hereby agreed by and between the parties:
The parties acknowledge and agree that
this Agreement relates to the development of five (5) ethanol
plants to be built by Client. This Agreement relates specifically
to the Manchester, Iowa, site selected by Client for its first
facility, but also is applicable to four additional facilities,
each of which will be the subject of a numbered addendum to this
Agreement to identify each new plant location and to republish and
reaffirm this Agreement. Except for the changes in the plant-site
identification, the terms and conditions of this Agreement shall
remain in force and constitute the continuing binding obligations
of the parties for a total of five plant development projects.
It is agreed that the scope of the
engagement of Delta-T in this Agreement is the work required to put
Client in a position to negotiate a definitive design and build
contract with the contractor of Client’s choice.
Kraus-Anderson Construction Company is currently the choice of
Client, but the final selection of a design and build contractor
has not been made.
II. OBLIGATIONS OF DELTA-T
Delta-T agrees to perform the following
tasks in furtherance of the development of the project:
A. Scheduling. Delta-T is to develop and
deliver to Client a Gantt Chart relating specifically to the tasks
undertaken to be accomplished under this Agreement in
sub-paragraphs B. through I. below, as soon as practicable after
execution of this Agreement. The project time line on the Gantt
Chart shall not exceed 120 days;
B. Site Options. Delta-T is to assist
Client or Client’s agent in selection of the most appropriate
technical and site options for site utilization in conformity with
the facility specifications;
C. Site Layout. Delta-T is to develop a
preliminary general arrangement drawing for the plant, utilizing
Client’s site physical and geo-technical data;
D. Plant Specifications. Delta-T is to
create, in cooperation with Client or Client’s agent,
definitive physical plant specifications;
E. Plant Operations. Delta-T is to
develop profitability analyses for plant operation related to
product selection alternatives;
F. Environmental. Provide definitive
estimated plant emissions projections for use of Client or
Client’s agent in pursuing environmental permits,
certifications and/or licenses;
G. Business Plan. Delta-T is to assist
Client in development of a business plan for Client;
H. Project Financing. Delta-T is to
develop professional presentation-quality technical and economic
date for Client’s use in making presentation to investors
and/or lenders; and
I. Process Engineering. Delta-T is to
provide a process engineering package providing sufficient data to
be used as the basis of estimating the construction costs of the
processing aspects of the proposed facility (“Schedule A
Package”).
It is acknowledged by the parties that
Client currently intends to use a representative of Kraus-Anderson
Construction Company as its agent, and references herein to
“Client’s agent” refer to such person.
III. OBLIGATIONS OF CLIENT
Client agrees that, in effectuating this
Agreement, it will take no action adversely affecting the ability
of Delta-T to perform its obligations hereunder.
Client further agrees that:
A. It will cooperate fully with, and
provide to, Delta-T all things to be undertaken and provided under
the provisions of subparagraphs B, C, D and G of paragraph II
above, to the best of its ability; and
B. It will pay to Delta-T the agreed
payments as provided in paragraph IV, in a timely manner in
accordance with the terms of said paragraph IV.
IV. PAYMENT - TIME OF PAYMENT
Project Development Services. Client
agrees to pay to Delta-T for the performance by it of its
obligations hereunder the aggregate amount of $500,000 for each of
five (5) plants. Payment for each shall be made as follows:
A. Payment of $100,000 on the mutual
execution of this Agreement;
B. Payment of $100,000 on the date that
marks one-third of the total project time set forth on the Gantt
Chart prepared by Delta-T and delivered to Client pursuant to
subparagraph A of paragraph II;
