CONSULTING AGREEMENT
Exhibit 10.3
[Handwritten: scan # 636]
This Consulting Agreement (the “Agreement") is made this 19 day of
August , 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 Xxxxxxxx County Research Group, LLC, a Georgia
limited liability company, with an address of X.X. Xxx 000, Xxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx 00000
(“Client”).
RECITALS:
| A. | Client intends to develop, finance and construct an ethanol plant in or near [Handwritten: Camilla, GA] (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 this Agreement with or without cause upon fourteen (14) days prior written notice to Client. Client may terminate BioEnergy’s services, with or without “Cause” upon fourteen (14) days prior written notice to BioEnergy. For purposes of this Agreement, “Cause” for termination by BioEnergy means the Client’s failure to timely pay BioEnergy compensation pursuant to the terms of this Agreement. For purposes of this Agreement, “Cause” for termination by Client 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 breach of this Agreement by BioEnergy. |
| Upon termination, neither Client nor BioEnergy shall have any further rights or obligations under the terms of this Agreement other than delivery of payments for services and/or bonus payments to which BioEnergy may be entitled through the date of termination. |
| 2. | Services. BioEnergy shall serve as Client’s Project consultant. BioEnergy’s service providers (described in section 7 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 Clients’ 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 the 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 |
| e. | Perform such other reasonably necessary duties as Client may request for the timely and successful securing of debt financing and commencement of construction of 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. |
For purposes of this Agreement, the parties agree that the figures set forth in Schedule A to this
Agreement represent the equity goal and debt financing goal of Client for the Project. Client may
adjust the equity goal and debt financing goal downward upon notice to BioEnergy. Any increase in
the equity goal and debt financing goal is subject to the mutual written consent of both parties.
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. BioEnergy shall work as many hours as
are reasonably necessary to fulfill BioEnergy’s commitments under this Agreement.
| 3. | Payment. |
| a. | Client shall pay to BioEnergy a one-time commitment fee of Fifty Thousand Dollars ($50,000.00) on the Effective Date. |
| b. | Client shall pay to BioEnergy One Thousand Five Hundred Dollars ($1,500.00) per week as payment for services, during the period commencing upon the Effective Date and continuing through the first date after Client’s equity drive for the Project has been closed and the parties mutually agree that all administrative details related thereto have been concluded (the “Equity Drive Closing Date”), for each week or partial week that Xxxx Xxxxxx or other BioEnergy personnel assist, through personal attendance in Camilla, Georgia and the relevant surrounding |
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| communities with the preparation and facilitation of equity drive meetings conducted in Camilla and the relevant surrounding communities. 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, as set forth in Schedule A. |
| 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, not to exceed One Thousand Five Hundred Dollars ($1,500.00) per week (Sunday through Saturday). 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, and for any bonus payment or portion thereof due to Client pursuant to subsection 3d of this Agreement. |
| d. | Client shall pay to BioEnergy a one-time conditional bonus of Six Hundred Fifty Thousand Dollars ($650,000.00) (the “Bonus”) on the Loan Closing Date. In the event of an early termination of this Agreement, the following shall apply with respect to the Bonus: |
| (i) | If (a) Client terminates this Agreement for Cause at any time, or (b) BioEnergy terminates this Agreement without Cause at any time, Client shall pay to BioEnergy only those fees set forth in Sections 3b and 3c above earned through the date of termination plus that portion of the Bonus calculated by multiplying the Bonus by a percentage equal to the percentage of the Equity Goal that has been subscribed to as of the date of termination. |
| (ii) | If (a) at any time, Client terminates this Agreement without Cause, or (b) BioEnergy terminates this Agreement for Cause, Client shall pay BioEnergy those fees set forth in Sections 3b and 3c above earned through the date of termination and 100% of the Bonus on the Loan Closing Date. |
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Notwithstanding the foregoing, Client shall have sole discretion in determining whether to accept a
loan commitment or close a loan such that a Loan Closing Date would occur, and Client shall not
become liable to pay the Bonus, or any portion thereof, if it elects in good faith to not accept a
loan commitment or close a loan.
| 4. | 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 two thousand five hundred dollars ($2,500) in any single week without the prior written consent of the Client. |
| 5. | 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. |
| 6. | 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 |
| 7. | Service Providers. Xxxx Xxxxxx shall provide the majority of BioEnergy’ s services under this Agreement. Xxxx Xxxxxx’x duties shall include assisting in the development of the Project and 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. |
| 8. | 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). |
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All insurance provided for in this section 8 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.
| 9. | 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 are made a party by reason of BioEnergy 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. | |
| 10. | Licenses. BioEnergy represents and warrants to Client that it has all licenses and qualifications that it may be required to have by applicable law or any governmental entity in order to perform the services hereunder. | |
| 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, “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, perpetual right and license, royalty free, to use the Proprietary Information for the development, financing and construction of the Project 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 use the Proprietary Information for any purpose other than the development, financing and construction of the Project. Client shall not without BioEnergy’s prior written consent use the Proprietary Information for the development, financing and/or construction of additional ethanol plants. 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, |
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| 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 assignment is made to Xxxx Xxxxxx or Xxxx Xxxxxx, or any entity in which either Xxxx Xxxxxx, Xxxx 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 in writing: |
| To BioEnergy: | BioEnergy Capital Consultants, LLC | |||
| Attn: Xxxx Xxxxxx | ||||
| 00000 000xx Xxxxxx | ||||
| Xxxx Xxxxxxx, XX 00000 | ||||
| To Client: | Xxxxxxxx County Research Group, LLC | |||
| X.X. Xxx 000 | ||||
| Xxxxxxxx Xxxxxx | ||||
| Xxxxxxx, 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 Georgia, and the parties hereby consent to and agree that jurisdiction and venue of any disputes relating to this Agreement shall be in a state or federal court with proper jurisdiction in or nearest to Xxxxxxxx County, Georgia. | |
| 17. | Defaults. In the event of the failure of either of the parties to comply with any of 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 |
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| rights under the terms and conditions of this Agreement. The parties agree that the remedies set forth in this section 15 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 fully 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 provided 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 be 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. |
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the Effective Date.
| [Handwritten: Xxxxxxxx County Research Group] | ||||||
| BIOENERGY CAPITAL | ||||||
| CONSULTANTS, LLC | ||||||
| By /s/ Xxxx Xxxxxx | By /s/ Illegible Signature | |||||
| Xxxx Xxxxxx, Member | Its [Illegible] | |||||
| And | ||||||
| By | ||||||
| Xxxx X. Xxxxxx, Member | ||||||
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SCHEDULE A
Equity goal |
$ | 58,950,000.00 | ||
Debt financing goal |
$ | 71,900,790.00 | ||
Total project goal |
$ | 130,850,790.00 |
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