exv10w10



 







EXHIBIT 10.10




CONSULTING AGREEMENT




     This
Consulting Agreement (the “Agreement”) is made this
6th day of March,
2006 (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 NEK-SEN Energy, LLC, a Kansas limited liability company, with an
address of 205 South 8th Street, Sabetha, Kansas 66534 (“Client”).



RECITALS:





	 	A.	 	Client intends to develop, finance and construct an ethanol plant in or near
Sabetha, Kansas (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 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 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. Client shall rely on BioEnergy
to work as many hours as may be 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 rendered while on site at
NEK-SEN Energy Partners 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”). 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. 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 Years’ holidays
(December 20 through January 5). 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
Two Hundred Fifty Thousand Dollars ($250,000) 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 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 ($2,500.00)
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 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.	 	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:
	 	NEK-SEN Energy, LLC
	 

	 	 	 	Attn: Gary Edelman
	 

	 	 	 	205 South 8th Street
	 

	 	 	 	Sabetha, Kansas 66534






 









 







	 	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 Kansas, and the parties hereby consent that
the District Court situated in Nemaha County, Kansas, 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. 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.
	 
	 	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 fully 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.





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



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	BIOENERGY CAPITAL	 	 	 	NEK-SEN ENERGY, LLC	 	 
	 	 	CONSULTANTS, LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Paul Casper
 

  Paul Casper,
Member
	 	 	 	By


	 	/s/ Gary Edelman
 


	 	 
	 
	 	 	 	 	 	 	 	Its 	 	President 	 	 
	 

	 	And	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ John T. Porter
 

	 	 	 	 	 	 	 	 
	 

	 	 	 	  John T. Porter,
Member