EXHIBIT 10.5
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made effective as of the 1st
day of April, 2002, (the "Effective Date") by and between VALUE ADDED VENTURES,
LLC of Volga, South Dakota, a South Dakota limited liability company ("VAV") and
UNITED WISCONSIN GRAIN PRODUCERS, LLC, of Beaver Dam, Wisconsin, a Wisconsin
limited liability company ("Client").
WHEREAS, Client intends to develop, finance and construct an ethanol plant
in or near Arlington, Wisconsin (the "Project"); and
WHEREAS, VAV has a background in value-added agriculture 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 hereby engages VAV, and VAV hereby accepts engagement,
upon the terms and conditions hereinafter set forth.
1. TERM. The VAV engagement with Client shall commence as of the
Effective Date and may be terminated at any time by either party upon fourteen
(14) days prior written notice of its intent to terminate this Agreement. Upon
termination, neither Client nor VAV shall have any further rights or obligations
under the terms of this Agreement other than delivery of payments for services
to which VAV may be entitled through the date of termination.
2. SERVICES. VAV shall serve as the Client's Project Consultant and 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,
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
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 VAV, its members, 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, VAV shall determine the manner in which the
services are to be performed and the specific hours to be worked by VAV. Client
will rely on VAV to work as many hours as may be reasonably necessary to fulfill
VAV's commitments under this Agreement.
3. EMPLOYEES, MEMBERS, AGENTS. VAV's employees, members, or agents, if
any, who perform services for Client under this Agreement shall also be bound by
the terms of this Agreement
4. PAYMENT. VAV shall receive payment for services in the amount of $150
per day, not to exceed $750.00 per week, until the Client is legally authorized
to sell its equity, at which time the payment shall be $1,500.00 per week.
Payments shall be payable twice monthly, no later than the 15th day and last day
of each month during which the services were performed. Upon termination of this
Agreement, payments hereunder shall cease; provided, however, that VAV shall be
entitled to payments for periods or partial periods that occurred prior to the
date of termination for which VAV has not been paid.
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Additionally, Client will pay a one-time bonus of $75,000, if, after the Client
has raised the amount of equity required by a prospective lender to secure a
loan adequate to finance the Client's business plan, the Client receives a
binding commitment from such prospective lender to provide such loan or loans as
a result of the efforts of VAV pursuant to section 2(c) of this Agreement, and
the loan transaction described in such commitment actually closes and is funded.
5. EXPENSES. Client shall reimburse VAV for all reasonable, ordinary and
necessary expenses incurred by VAV in performance of its duties hereunder,
including without limitation, reimbursement for automobile mileage at a rate of
30 cents per mile or such other rate to which the parties hereto may later
agree. However, in no case shall any such expense reimbursements exceed $750 in
any single week.
6. SUPPORT SERVICES. Client will provide the following support services
for the benefit of VAV as approved by Client: office space, secretarial support,
and office supplies.
7. SUCCESSORS AND ASSIGNS BOUND. This Agreement shall be binding upon the
Client and VAV, their respective heirs, executors, administrators, successors in
interest or assigns, including without limitation, any partnership, corporation
or other entity into which the 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 VAV 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.
8. RELATIONSHIP OF THE PARTIES. The parties understand that VAV 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 VAV.
9. INJURIES. VAV acknowledges VAV's obligation to obtain appropriate
insurance coverage for the benefit of VAV and its members, employees, and
agents. VAV waives any rights to recover from Client for any injuries that VAV,
or its members, employees, or agents, may sustain while performing services
under this Agreement resulting from the negligence of VAV, or its members,
employees, or agents.
10. RETURN OF RECORDS. Upon termination of this Agreement, VAV shall
deliver all records, notes, data, memoranda, models, and equipment of any nature
that are in VAV's possession or under VAV's control an that are Client's
property or relate to Client's business.
11. WAIVER. The waiver by the Client of its rights under this Agreement or
the failure of the Client promptly to 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.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the parties hereto with regard to the subject matter hereof, and there
are no agreements, understanding 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.
13. 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:
To VAV: Value Added Ventures, LLC
Attention: Xxxx Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxx, Xxxxx Xxxxxx
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To Client: United Wisconsin Grain Producers, LLC
Attention: Xxxxx Xxxxx
X0000 Xxxxxxx Xxxxx
Xxxxxx Xxx, Xxxxxxxxx 00000
14. GOVERNING LAW. This Agreement is entered into pursuant to and shall be
governed by and in accordance with the laws of the State of Wisconsin.
15. PRIMARY SERVICE PROVIDER. Client acknowledges that VAV will assign
Xxxx Xxxxxx to provide the majority of the service under this Agreement, to be
assisted by Xxxx Xxxxxxxx.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
Effective Date.
VALUE ADDED VENTURES, LLC UNITED WISCONSIN GRAIN PRODUCERS, LLC
By: /s/ Xxxx Xxxxxxxx /s/ Xxxxx Xxxxx
----------------- ---------------
Xxxxx X. Xxxxx, President
Its: Member
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