Exhibit 10.9
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made this 22nd day of March,
2005 (the "Effective Date"), by and between BioEnergy Capital Consultants, LLC,
a South Dakota limited liability company, with an address of 00000 000xx Xxxxxx,
Xxxx Xxxxxxx, Xxxxx Xxxxxx 00000 ("BioEnergy"), and Advanced BioEnergy, LLC, a
Delaware limited liability company, with an address of 0000 Xxxxx 000xx Xxxxxx,
Xxxxx, Xxxxxxxx 00000 ("Client"). 179th /s/jp
RECITALS
A. Client intends to develop, finance and construct an ethanol plant in
or near Fairmont, Nebraska, with a capacity to produce 100 million gallons of
ethanol per year (the "Project").
B. BioEnergy has a background in the development of value-added
agriculture projects and is willing to provide services to Client based on this
background.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, Client engages BioEnergy, and BioEnergy accepts engagement,
upon the terms and conditions hereinafter set forth.
1. TERM. BioEnergy's engagement with Client shall commence as of the
Effective Date and shall continue at least through the first day after the Loan
Closing Date (as defined in section 3), unless properly terminated as provided
herein. BioEnergy may terminate its services upon fourteen (14) days prior
written notice to Client. Client may only terminate BioEnergy's services for
"Cause". For purposes of this Agreement, "Cause" means BioEnergy's gross
negligence or intentional misconduct in the performance of its duties under this
Agreement, a known violation of the law, or a material xxxxxx of this Agreement
by BioEnergy.
2. SERVICES. BioEnergy shall serve as Client's Project consultant.
BioEnergy's service providers (described in section 8 of this Agreement) shall
perform the following duties incident to that service subject to Client's
approval:
a. Assist negotiations of contracts with various service and product
providers;
b. Assist the planning of the Client's equity marketing effort,
including, without limitation, preparation of written and visual equity
marketing materials (including, but not limited to, a power point
presentation), and training Client's officers and directors to conduct
Client's equity marketing effort;
c. Assist the securing of debt financing for and commencement of
construction of the Project;
d. Assist the education of local lenders including, without
limitation, the preparation of a "banker's book" tailored to the Project;
and
/s/RLS
/s/JP
/s/PWC
e. Perform such other reasonably necessary duties as Client may
request for the timely and successful securing of debt financing and
commencement of construction or the Project, including without limitation,
cooperating with the Client's personnel similarly engaged. Notwithstanding
the forgoing, neither BioEnergy, its members, managers, officers,
employees, nor agents shall itself or themselves be asked to, or actually,
solicit an offer to buy, or accept an offer to sell, any equity security to
be issued by Client.
Subject to Client's approval, BioEnergy shall determine the manner in which
the services are to be performed and the specific hours to be worked by
BioEnergy. Client shall rely on BioEnergy to work as many hours as may be
reasonably necessary to fulfill BioEnergy's commitments under this
Agreement.
3. SUBSEQUENT EQUITY OFFERINGS. If Client successfully reaches financial
close of the equity and debt financing necessary to build the Project and this
Agreement has not been terminated by Client pursuant to Section 1, Client agrees
that BioEnergy shall then have the right to perform for Client the services set
forth in Section 2 in the event that Client decides within the next FIVE (5)
years from the date of this Agreement to raise a substantial amount of
additional equity from individual investors living in or around the geographical
area surrounding the Project. In that event, BioEnergy's fees for these
additional services shall be negotiated by the parties but shall be commensurate
with the fees set forth in this Agreement.
4. PAYMENT.
a. Client shall transfer to BioEnergy without payment therefore,
Twenty-five Hundred (2,500) unrestricted membership units in Advanced
BioEnergy, LLC (the "Unrestricted Units"), no later than ten (10) days
following the Effective Date. Subsequent to the transfer of the
Unrestricted Units, Client expects to perform a membership unit dividend
wherein additional membership units shall be distributed for every one (1)
membership unit issued and outstanding (the "Unit Dividend"). The terms of
the Unit Dividend ore expected to be two (2) Units for every one (1) Unit
issued and outstanding. However, BioEnergy acknowledges that the terms of
the Unit Dividend are subject to change and shall not be finally determined
by the Client's Board of Directors until alter the close of the seed
capital offering. The Unrestricted Units shall be eligible to participate
in the Unit Dividend on the same terms and conditions as all other
memberships units issued and outstanding on the date of the Unit Dividend.
No later than ten (10) days following the date of the Unit Dividend, Client
shall transfer an additional Forty Two Thousand Five Hundred (42,500)
membership units (the "Restricted Units") in Advanced BioEnergy, LLC to
BioEnergy without payment therefore. If Client does not begin construction
of the Project on or before December 31, 2007, and Client is no longer
actively pursuing the Project, or if the Client files Articles of
Dissolution before beginning construction of the Project, then BioEnergy
shall return to Client the Restricted Units, without payment of
consideration by Client. In this event, BioEnergy shall be entitled to
receive any and all distributions made by the Client to all members with
/s/RLS
/s/JP
/s/PWC
-2-
respect to the remaining membership units, including the Unrestricted Units
and any additional membership units received as a result of the Unit
Dividend, in proportion to all outstanding membership units. This
restriction shall be noted on the certificates or other instruments
evidencing ownership of the Restricted Units. Notwithstanding anything in
this Agreement to the contrary, the Restricted Units shall not be
transferred until after the date of the Unit Dividend and shall not be
entitled to participate in the Unit Dividend.
b. Client shall pay to BioEnergy One Thousand Five Hundred Dollars
($1,500.00) per week as payment for services commencing upon the Effective
Date and continuing through the first date after Client's equity drive for
the Project has been closed and the patties mutually agree that all
administrative details related thereto have been concluded (the "Equity
Drive Closing Date"). The Equity Drive Closing Date shall be at least two
full weeks following the end of the week in which Client receives the
subscription agreement that achieves the equity goal necessary for the
successful completion of the Project. Fees required to be paid under this
paragraph 4(b) may be interrupted during "seasonal events" such as
planting, harvesting and major holiday periods to include Thanksgiving week
and the Christmas and New Years' holidays (December 20 through January 5).
The planting season is generally identified as April 17 through June 10,
and the harvesting season is generally identified as September 20 through
October 31. "Seasonal events" shall also occur at such other times as the
parties may mutually agree. During these periods, Client shall pay to
BioEnergy Three Hundred Seventy Five Dollars ($375.00) per day for the days
that services are rendered, not to exceed One Thousand Five Hundred Dollars
($1,500.00) per week (Sunday through Saturday) even though BioEnergy may
perform services for more than four days during such weeks.
c. After the Equity Drive Closing Date and continuing through the first
date after Client closes a loan transaction to finance construction of the
Project (the "Loan Closing Date"), Client shall pay BioEnergy Three Hundred
Seventy Five Dollars ($375.00) per day for specifically identified services
rendered on certain days. Payments shall be payable within fourteen (14)
days of Client's receipt of a detailed invoice from BioEnergy which
outlines the services provided during the pay period. Upon termination of
this Agreement, payments under this subsection shall cease; provided,
however, that BioEnergy shall be entitled to payments for periods or
partial periods that occurred prior to the date of termination for which
BioEnergy has not been paid.
5. EXPENSES. Client shall reimburse BioEnergy for all reasonable,
ordinary and necessary expenses incurred by BioEnergy in performance of its
duties hereunder, including without limitation, reimbursement for automobile
mileage at the rate periodically set by the Internal Revenue Service. However,
in no case shall any such expense reimbursements exceed Seven Hundred Fifty
Dollars ($750.00) in any single week.
6. SUPPORT SERVICES. Client shall provide the following support services
for the benefit of BioEnergy, as approved by Client: office space, secretarial
support, and office supplies.
/s/RLS
/s/JP
/s/PWC
-3-
7. RELATIONSHIP OF THE PARTIES. The parties understand that BioEnergy is
an independent contractor with respect to Client, and not an employee of Client.
Client will not provide fringe benefits, including health insurance benefits,
paid vacation, or any other employee benefits for the benefit of BioEnergy.
8. SERVICE PROVIDERS. Xxxx Xxxxxx and Xxxx X. Xxxxxx shall provide the
majority of BioEnergy's services under this Agreement. Xxxx X. Xxxxxx'x duties
shall include assisting in the development of the Project and the organization
of investor meetings. Xxxx Xxxxxx'x duties shall include assisting in the
organization of investor meetings. Notwithstanding the foregoing, BioEnergy may
substitute its other personnel to provide BioEnergy's services under this
Agreement on a limited basis as needed, with Client's consent. BioEnergy's
employees, members, or agents who perform services for Client under this
Agreement shall be bound by the terms of this Agreement,
9. INSURANCE. BioEnergy and .Client shall each obtain, maintain and keep
in full force and effect during the term of this Agreement the following
insurance coverages:
a. Commercial general liability insurance with policy limits that
have a combined single limit of One Million Dollars ($1,000,000.00); and
b. Business automobile liability insurance, covering owned,
non-owned and hired vehicles with a combined single limit of One Million
Dollars ($1,000,000.00).
All insurance provided for in this section 9 shall be effective under
valid and enforceable policies issued by insurers of recognized
responsibility, licensed to do business in states where the respective
parties currently conduct business. Each party shall name the other as an
additional insured with respect to each policy. Each party shall furnish
the other with proof of the payment of all premiums due on said policies of
insurance and that the policies of insurance are in full force and effect.
Each policy or certificate of insurance shall contain an agreement by the
insurer that coverages shall not be cancelled for any reason without at
least 30 days prior written notice to the other party.
10. INDEMNIFICATION. Client shall indemnify and defend BioEnergy and its
employees, members, managers, officers, and agents against expenses actually and
reasonably incurred in connection with the defense of any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative (a "Proceeding"), in which BioEnergy and/or its
employees, members, managers, officers or agents are made a party by reason of
performing services for Client or acting in any manner pursuant to this
Agreement, except that Client shall have no obligation to indemnify and defend
BioEnergy and/or its employees, members or agents for its and/or their act or
omission that involve gross negligence, intentional misconduct or a known
violation of the law. BioEnergy shall indemnify and defend Client and its
employees, members, directors, officers and agents against expenses actually and
reasonably incurred in connection with the defense of any Proceeding in which
Client and/or its employees, members, directors, officers or agents arc made a
party by reason of BioEnergy
/s/RLS
/s/JP
/s/PWC
-4-
and/or its employees, members, managers, officers or agents commit an act or
omission that involves gross negligence, intentional misconduct or a known
violation of the law.
11. TAXES. Client shall be solely responsible for payment of all taxes and
charges, now or hereafter imposed (whether by federal, state, municipal or other
public authority), by reason of this Agreement or its performance, including but
not limited to, sales or use taxes, but excluding any income tax imposed upon
the net profits of BioEnergy.
12. COPYRIGHT LICENSE. BioEnergy will author written and visual equity
marketing materials, Power Point presentations, advertisements, a "banker's
book", training materials and other literary works and audio visual works (the
"Proprietary Information") in fulfillment of its duties hereunder. BioEnergy
hereby grants Client a non-exclusive right and license to use the Proprietary
Information for its business and operations only. Client shall not have or
acquire any proprietary or other right whatsoever in the Proprietary
Information, except as provided herein, all of which rights belong exclusively
to BioEnergy. Client shall not sell, assign, gift, sublicense or otherwise
transfer to any third party any rights in the Proprietary Information without
the prior written consent of BioEnergy, with the granting of said consent to be
in BioEnergy's sole discretion.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon Client
and BioEnergy, their respective heirs, executors, administrators, successors in
interest or assigns, including without limitation, any partnership, corporation
or other entity into which Client may be merged or by which it may be acquired
(whether directly, indirectly or by operation of law), or to which it may assign
its rights under this Agreement. Notwithstanding the foregoing, any assignment
by BioEnergy of this Agreement or of any interest herein, or of any money due to
or to become due by reason of the terms hereof without the prior written consent
of Client shall be void, unless such engagement is made to Xxxx Xxxxxx or Xxxx
X. Xxxxxx, or any entity in which either Xxxx Xxxxxx, Xxxx X. Xxxxxx or
BioEnergy own a majority ownership interest.
14. WAIVER. The waiver by either party of its rights under this Agreement
or the failure of a party to promptly enforce any provision hereof shall not be
construed as a waiver of any subsequent breach of the same or any other
covenant, term or provision.
15, NOTICES. Any notice required to be given hereunder shall be in writing
and shall be deemed to be sufficiently served by either party on the other party
if such notice is delivered personally or is sent by certified or first class
mail addressed as follows, or such substitute street addresses as the parties
may provide to writing:
To BioEnergy: BioEnergy Capital Consultants, LLC
Attn: Xxxx Xxxxxx
00000 000xx Xxxxxx
Xxxx Xxxxxxx, XX 00000
/s/RLS
/s/JP
/s/PWC
-5-
To Client: Advanced BioEnergy, LLC
Attn: Xxxxx X. Xxxxxxxxxx, III
0000 Xxx Xxxxx Xxxx
Xxxxx, XX 00000
16. APPLICABLE LAW. This Agreement and all obligations created hereunder
or required to be created hereby shall be governed by and construed and enforced
in accordance with the laws of the State of Nebraska, and the parties hereby
consent that the District Court situated in Fillmore County, Nebraska, shall be
the exclusive jurisdiction and venue of any disputes relating to this Agreement.
17. DEFAULTS. In the event of the failure of either of the parties to
comply with any or the terms and provisions of this Agreement, or in the event
either party has violated any of the warranties and representations made herein
by that party, then such party shall be deemed to be in default hereunder and
the other party shall be given written notice of such noncompliance and shall
give the defaulting party seven (7) days from the date of such notice within
which to correct such noncompliance. If such default has not been corrected, or
an arrangement satisfactory to the complaining party has not been made by the
end of the notice period, then the complaining party may take whatever action is
necessary, and exercise all remedies available in order to protect the
complaining party's rights under the terms and conditions of this Agreement. The
parties agree that the remedies set forth in this section 17 shall not be
exclusive, but they shall be cumulative with all other rights and remedies
available, at law or in equity, to the parties. In the event of any dispute
between the parties resulting from this Agreement or any provisions hereunder,
the prevailing party in any such dispute shall be entitled to recover reasonable
attorneys' fees and such other costs incurred therewith.
18. SEVERABILITY. In the event that any term, condition, or provision of
this Agreement is held to be invalid by any court of competent jurisdiction,
such holding or holdings shall not invalidate or make unenforceable any other
term, condition or provision of this Agreement. The remaining terms, conditions
and provisions shall be flatly severable, and shall be construed and enforced as
if such invalid term, condition or provision had never been inserted in this
Agreement initially.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the parties hereto with regard to the subject matter hereof, and there
are no agreements, understandings, specific restrictions, warranties or
representations relating to said subject matter between the parties other than
those set forth herein or herein provides for. No amendment or modification of
this Agreement shall be valid or binding unless in writing and signed by the
party against whom such amendment or modification is to enforced.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original document, but all of
which shall be considered one and the same agreement and shall become binding
when one or more counterparts have been signed by each of the parties.
/s/RLS
/s/JP
/s/PWC
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
Effective Date.
BIOENERGY CAPITAL ADVANCED BIOENERGY, LLC
CONSULTANTS, LLC
By /s/ Xxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxxxxxxx, III
--------------------------------- ------------------------------------
Xxxx Xxxxxx, Member Xxxxx X. Xxxxxxxxxx III, Chairman
and
By /s/Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx, Member
3/22/05
/s/RLS
/s/JP
/s/PWC
-7-
