CONSULTING AGREEMENT
EXHIBIT
10.12
THIS CONSULTING AGREEMENT (the “Agreement’) is made the 23rd day of February,
2004 (the “Effective Date”), by and between Xxxx Xxxxxx of Xxxxxx, Iowa (“Xxxxxx”) and Lincolnway
Energy Cooperative, of Nevada, Iowa, an Iowa cooperative (“Client”).
WHEREAS, Client intends to develop, finance and construct an ethanol plant in or near Nevada,
Iowa (the “Project’); and
WHEREAS, Xxxxxx has a background in developing and financing ethanol plants 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 Xxxxxx, and Xxxxxx hereby accepts engagement, upon the terms and conditions
hereinafter set forth.
1. Term The Xxxxxx engagement with Client shall commence as of the Effective Date and
may be terminated at any time by either party upon thirty (30) days prior written notice of its
intent to terminate this Agreement. Upon termination, neither Client nor Xxxxxx shall have any
further rights or obligations under the terms of this Agreement other than delivery of payments for
services to which Xxxxxx may be entitled through the date of termination.
2. Services. Xxxxxx shall serve as the Client’s consultant and shall perform the
following duties incident to that service subject to Client’s approval:
a. Consult with the officers and employees of the Client concerning matters relating
to the planning and development of a 40 MGY fuel ethanol plant;
b. Provide Project Coordination services, providing management and oversight in the
Clients directive to establish a separate ethanol company that will develop, own and
operate the production facility; and
c. 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 Clients personnel
similarly engaged.
It is anticipated Xxxxxx will spend approximately 10 to 50 hours per week in fulfilling his
obligations under this Agreement The particular time may vary from day to day or week to week.
3. Payment Client shall pay to Xxxxxx $1,153.85 per week for service performed
hereunder commencing upon the Effective Date. This base payment shall be due each Monday. Upon
termination of this Agreement, payments hereunder shall cease; provided, however, that Xxxxxx
shall be entitled to payments for periods or partial periods that occurred prior to the date of
termination for which Xxxxxx has not been paid. In addition, if the triggering event has occurred
prior to the effective date of his termination, Client shall pay to Xxxxxx the following:
a. Business Plan Bonus. Client will pay to Xxxxxx a success bonus of
$20,000 (the “Business Plan Bonus”) due immediately upon the Client’s acceptance of
the Business Plan from Xxxxxx as complete.
b. Equity Bonus. Client will pay to Xxxxxx a success bonus of $50,000 (the
“Equity Bonus”) upon the receipt by the Client’s escrow bank of at least $15,000,000
in equity sales
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proceeds on behalf of the Client.
c. Loan Commitment Bonus. Client will pay to Xxxxxx a success bonus of
$50,000 (the “Loan Commitment Bonus”) payable upon receipt of the loan commitment and
all additional equity and/or subordinated debt required by such loan commitment and
Clients acceptance of the loan commitment.
d. Loan Closing Bonus. Client will pay to Xxxxxx a success bonus
of $75,000 (the “Loan Closing Bonus”) at the time of execution of the definitive
documents defining the Clients senior loan. Notwithstanding the foregoing, the
Client shall have sole discretion in determining whether to accept a loan commitment
or close a loan, and the Client shall not become liable to pay the amount discussed
in this Section 3d if it elects to not accept a loan commitment or close a loan.
4. Expenses. Client shall reimburse Xxxxxx for all reasonable, ordinary and
necessary expenses incurred by Xxxxxx in performance of its duties hereunder, including without
limitation, reimbursement for automobile mileage at a rate of 37 1 /2 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. Payment for expenses will be paid 14 days after
receipt by Client from Xxxxxx of expenses due.
5. Support Services. Client will provide the following support services for
the benefit of Xxxxxx as approved by Client: office space, secretarial support, and office
supplies.
6. Successors and Assigns Bound. This Agreement shall be binding upon the
Client and Xxxxxx, 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 Xxxxxx 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.
7. Relationship of the Parties. The parties understand that Xxxxxx 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 Xxxxxx.
8. Injuries. Xxxxxx acknowledges Xxxxxx’x obligation to obtain appropriate insurance
coverage for the benefit of Xxxxxx and his agents. Xxxxxx waives any rights to recover from Client
for any injuries that Xxxxxx or his agents, may sustain while performing services under this
Agreement resulting from the negligence of Xxxxxx or his agents.
9. Return of Records. Upon termination of this Agreement, Xxxxxx shall deliver all
records, notes, data, memoranda, models, and equipment of any nature
that are in Xxxxxx’x
possession or under Xxxxxx’x control and that are Clients property or relate to Clients
business.
10. 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.
11. 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.
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12. 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 Xxxxxx: | Xxxx Xxxxxx | |||
| 0000 00xx Xxxxxx | ||||
| Xxxxxx, XX 00000 | ||||
| To Client | Lincolnway Energy Cooperative | |||
| Attention: Xxxx Xxxxxx | ||||
| 00000 000xx Xxxxxx | ||||
| Xxxxxx, Xxxx 00000 |
13. Governing Law. This Agreement is entered into pursuant to and shall be
governed by and in accordance with the laws of the State of Iowa.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the Effective Date.
| XXXX XXXXXX | LINCOLNWAY ENERGY COOPERATIVE | |||||
/s/ Xxxx Xxxxxx
|
By: | /s/ Xxxx Xxxxxx | ||||
Xxxx Xxxxxx |
||||||
| Its: | [Handwritten: 3/24/04] | |||||
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