PROJECT DEVELOPMENT FEE AGREEMENT
EXHIBIT 10.10
THIS PROJECT DEVELOPMENT FEE AGREEMENT (“Agreement”) is entered into as of this 28
day of June , 2006 (“Effective Date”), by and between Xxx Xxxxx, an individual
(“Xxxxx”), and Homeland Energy Solutions, LLC (“Company”), an Iowa limited liability Company.
WHEREAS, Xxxxx is a member of the Board of Directors of the Company and serves as the Vice
President of Project Development for the Company, which was organized for the purpose of
developing and operating a 100 million gallon dry mill ethanol plant near New Hampton, Iowa (the
“Project” or “Ethanol Plant”);
WHEREAS, Xxxxx has provided project development services to the Company in the past and
intends to provide such services in the future;
WHEREAS, the Company has agreed to pay a development fee to Xxxxx in exchange for his efforts
to assist in development of the Ethanol Plant; and
WHEREAS, the Company’s Board of Directors (the “Board”) desires to memorialize that agreement
and set forth the manner in which the development fee shall be distributed.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereby agree as follows:
1. DEVELOPMENT SERVICES. Company hereby retains Xxxxx for the purpose of providing
developmental services with respect to the Project (“Development Services”). Development Services
shall include all services performed on behalf of the Company by Xxxxx to date and all services
performed on behalf of and at the reasonable request of the Company through the termination of
this Agreement. Xxxxx’x duties shall include, but not be limited to, assumption of responsibility
for public relations, on-site development issues, and timely completion of the Project. Xxxxx
shall apprise the Board of the status of the Project and of any material events, shall assist the
Company’s Board in developing policies regarding construction of the Project, and shall perform
his duties at the direction of the Board. Development Services shall not include effecting or
attempting to effect purchases or sales of the Company’s securities.
2. DEVELOPMENT FEE AND PAYMENT TERMS. In consideration for the Development Services to be
provided to Company, Company shall pay Xxxxx a development fee equal to $40,000 (“Development
Fee”). The first twenty-five percent (25%) of the Development Fee shall be payable to Xxxxx on the
date of Financial Closing, which shall mean the actual closing (execution and delivery of all
required documents) by the Company with its project lender(s) providing for all debt financing
including senior and subordinated debt which is required by the project lender(s) or which is
deemed necessary or prudent in the sole discretion of the Board. The next twenty-five percent
(25%) of the Development Fee shall be payable to Xxxxx on the date on which concrete is first
poured at the plant site, and the final fifty percent (50%) of the Development Fee shall be
payable to Xxxxx on a date that will be mutually agreed upon by the Board and Xxxxx.
3. EXPENSES. Company shall reimburse Xxxxx for all reasonable, ordinary and necessary
expenses incurred by Xxxxx in performance of his duties hereunder, including without limitation,
reimbursement for hotel expenses, business meals, travel expenses, educational expenses, and
automobile mileage at a rate per mile as periodically set by the Internal Revenue Service.
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4. TERM AND TERMINATION OF AGREEMENT. The term of this Agreement shall commence as of the
Effective Date and shall terminate upon the earlier of any of the events enumerated below
(“Termination Event”).
(a) Payment in full of the Development Fee;
(b) Dissolution, bankruptcy or insolvency of the Company, or the inability or failure of the
Company generally to pay debts as they become due, or an assignment by the Company for the
benefit of creditors, or the commencement of any case or proceeding in respect of the
Company under any bankruptcy, insolvency or similar laws;
(c) Xxxxx’x voluntary resignation as a member of the Board; and
(d) Mutual written agreement of the parties.
For purposes of this Agreement, death or disability shall not terminate this Agreement.
5. INDEMNIFICATION. Company shall indemnify, defend against and advance to Xxxxx all
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 Xxxxx is made a party by reason of
performing services for Company or acting in any manner pursuant to this Agreement, except that
Company shall have no obligation to indemnify and defend Xxxxx or his agents for their act or
omission that involves gross negligence, intentional misconduct or a known violation of the law.
Xxxxx shall indemnify and defend Company and its employees, members, directors, officers and
agents against expenses actually and reasonably incurred in connection with the defense of any
Proceeding in which Company and/or its employees, members, directors, officers or agents are made
a party by reason of Xxxxx committing an act or omission that involves gross negligence,
intentional misconduct or a known violation of the law.
6. DEFAULT. 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 thirty (30) 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 7 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 related costs and such other costs incurred therewith.
7. SUCCESSORS AND ASSIGNS BOUND. This Agreement shall be binding upon the Company, Xxxxx,
their respective heirs, executors, administrators, successors in interest or permitted assigns,
including without limitation, any partnership, corporation or other entity into which the Company
may be merged or by which it may be acquired (whether directly, indirectly or by operation of
law), or to which it
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may assign its rights under this Agreement.
8. RELATIONSHIP OF THE PARTIES. The parties understand that Xxxxx is an independent
contractor with respect to Company, and not an employee of the Company. Company will not provide
fringe benefits, including health insurance benefits, paid vacation, or any other employee
benefits for the benefit of Xxxxx. Notwithstanding the above, should the Company’s Board
establish a board of directors’ compensation policy, Xxxxx, as a director of the Company, may
receive reasonable compensation for his services as a director and may be reimbursed for his
expenses in attending Board meetings. However, in no event shall Xxxxx receive compensation for
services he performs as a member on any committee established by the Board.
9. AUTHORITY. Each of the signatories hereto certifies that such party has all necessary
authority to execute this Agreement.
10. AMENDMENTS. This Agreement sets forth the entire understanding of the parties and
supersedes any prior agreements, oral or written, as to the subject matter hereof. This Agreement
may be amended or modified by, and only by, a written instrument executed by the parties hereto.
12. ASSIGNMENT. This Agreement shall not be assigned by any party hereto except as
permitted by its express terms or upon the written consent of the other party. Nothing in this
Agreement, express or implied, its intended to confer upon any other person any rights or remedies
under or by reason of this Agreement.
13. SEVERABILITY. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement, or affecting the validity or enforceability of any of the terms
or provisions of this Agreement in any other jurisdiction.
14. WAIVER. The failure of any party hereto to insist in any one of more instances upon
performance of any term or condition of this Agreement shall not be construed as a waiver of
future performance of any such term, covenant or condition, but the obligation of such party with
respect thereto shall continue in full force and effect.
15. CAPTIONS. The captions herein are inserted for convenience of reference only and shall
be ignored in the construction or interpretation hereof.
16. 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 Xxxxx: | Xxx Xxxxx | |||
| 00000 Xxxx Xxxx | ||||
| Xxxx Xxxxxxx, Xxxx 00000 | ||||
| To Company: | Homeland Energy Solutions, LLC | |||
| Attention: Xxxxx Xxxxxxx | ||||
| 000 Xxxxx Xxxx Xxxxxx | ||||
| Xxx Xxxxxxx, Xxxx 00000 |
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| Copy to: | Brown, Winick, et al. | |||
| Attention: Xxxxxxx X. Xxxxxxxx 000 | ||||
| Xxxxx Xxxxxx, Xxx. 0000 Xxx Xxxxxx, | ||||
| Xxxx 00000 |
17. GOVERNING LAW. This Agreement shall be governed and construed in accordance with the
law of the State of Iowa, without reference to its conflict of law rules. Each of the parties
hereto irrevocably submits to the jurisdiction of any state or federal court sitting in the State
of Iowa in any action or proceeding brought to enforce or otherwise arising out of or relating to
this Agreement.
18. INTERPRETATION. The parties agree that each has had an opportunity to negotiate fully
the terms of this Agreement and that this Agreement shall not be interpreted in favor of or against
the party drafting the Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above
written.
| Homeland Energy Solutions, LLC | ||||||||
/s/ Xxx Xxxxx
|
By: | /s/ Xxxxxxx Xxxxxxx | ||||||
| Its: | President | |||||||
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