Exhibit 10.11


 


CONSULTING AGREEMENT


 


This
Consulting Agreement (the “Agreement”) is made this 29th day of March, 2005
(the “Effective Date”), by and between BioEnergy
Capital Consultants, LLC, a South Dakota limited liability company,
with an address of 44095 212th  Street, Lake Preston, South Dakota
57249 (“BioEnergy”), and Ethanol Grain Processors, LLC,, a Tennessee limited liability
company, with an address of PO Box 95, Obion, Tennessee 38240 (“Client”).


 


RECITALS:


 


A.            Client
intends to develop, finance and construct an ethanol plant in or near Obion,
Tennessee (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
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 though 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 foregoing, 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. BioEnergy shall perform all services in compliance
with applicable federal and state laws.


 


3.             Payment.


 


a.             Client
shall pay to BioEnergy a one-time commitment fee of Twenty Five Thousand
Dollars ($25,000.00) on the Effective Date.


 


b.             Client
shall pay to BioEnergy One Thousand Five Hundred Dollars ($1,500.00) per week as
payment for services commencing upon the Effective Date and continuing through
the first date alter Client’s equity drive for the Project has been closed aid
the parties 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 3b may be interrupted during “seasonal events” such as planting,
harvesting and major holiday periods to include Thanksgiving week and the
Christmas and New Year’s holidays (December 20 through January 5) and
other agreed upon events or time periods. 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, and for the bonus payment or portion thereof described in subsection 3d
of this Agreement.


 


d.             Client
shall pay to BioEnergy a one-time conditional bonus of One Hundred Twenty Five
Thousand Dollars ($125,000.00) 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
Client terminates this Agreement for Cause prior to the Equity Drive Closing
Date, Client shall pay to BioEnergy a percentage of the Bonus equal to the
percentage of the equity goal that has been subscribed to as of the date of
termination. Such partial Bonus shall be payable on the Loan Closing Date.


 


(ii)           If
the Client terminates this Agreement for Cause after the Equity Drive Closing
Date, but prior to the Loan Closing Date, Client shall pay to BioEnergy 100% of
the Bonus on the Loan Closing Date.


 


(iii)          If
BioEnergy terminates this Agreement prior to the Equity Drive Closing Date
Client shall not owe BioEnergy any portion of the Bonus.


 


(iv)          If,
at any time, Client terminates this Agreement in bad faith or without Cause,
Client shall immediately pay BioEnergy 100% of the Bonus.


 


Notwithstanding the foregoing, Client shall
have sole discretion in determining whether to accept a loan commitment or
close a loan, and Client shall not become liable to pay the Bonus, or any
portion thereto 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
($2,500.00) average per person per week averaged over three consecutive weeks.


 


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. Paul Casper and Jack Porter shall provide the majority of
BioEnergy’s services under this Agreement. Jack Porter’s duties shall include
assisting in the development of the Project and the organization of investor
meetings. Paul Casper’s 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.


 


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).


 


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 involves a material breach of this Agreement or 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 commiting an act or
omission that involves a material breach of this Agreement or gross negligence,
intentional misconduct or a
known violation of the law,


 


10.           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.


 


11.           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.


 


12.           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 Paul Casper
or Jack Porter, or any entity in which either Paul Casper, Jack Porter or
BioEnergy own a majority ownership interest.


 


13.           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.


 


14.           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:  Paul Casper


44095 212th
Street


Lake Preston,
SD 57249


 


To Client:                            Ethanol
Grain Processors, LLC


PO Box 95


Obion,
Tennessee 38240


Attn: Alvin
Escue


 

















 


15.           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 Tennessee, and the parties hereby consent that
the District Court situated in Obion County, Tennessee, shall be the exclusive
jurisdiction and venue of any disputes relating to this Agreement.


 


16.           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 rights under the terms and conditions of this Agreement
including terminating this Agreement, which termination shall be deemed
termination for cause. The parties agree that the remedies set forth in this section 16
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.


 


17.           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 frilly severable, and shall be construed and enforced as if such
invalid term, condition or provision had never been inserted in this Agreement
initially.


 


18.           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.


 


19.           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)


 

















 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the Effective Date.


 


 


	
  BIOENERGY CAPITAL

  	
  ETHANOL GRAIN 

  
	
  CONSULTANTS, LLC

  	
  PROCESSORS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
    /s/ Paul Casper

  	
   

  	
  By 

  	
  /s/ Alvin D.
  Escue

  	
   

  
	
   

  	
  Paul Casper,
  Member

  	
  Its 

  	
  General
  Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  And

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
      /s/ John T. Porter

  	
   

  	
   

  
	
   

  	
  John T.
  Porter, Member