Document:

exv10w22

 

Exhibit 10.22

CONSULTING AGREEMENT

     This Consulting Agreement (the “Agreement”) is made this 1st day of February, 2007
(the “Effective Date”), by and between DAK Renewable Energy, a South Dakota entity, with an address
of 304 Splitrock Blvd., Suite 205, Brandon, South Dakota 57005, (DAK Renewable Energy), and
Buffalo Ridge Energy, LLC, (“Client”).

RECITALS:

     WHEREAS, Client intends to develop, finance and construct a 50 million gallon dry mill ethanol
plant in or near Brandon, SD (the “Project”); and

     WHEREAS, Client wishes to engage DAK Renewable Energy to provide certain services related to
the Project.

     NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein,
Client engages DAK Renewable Energy, and DAK Renewable Energy accepts engagement, upon the terms
and conditions hereinafter set forth.

	 	1.	 	Term: Termination. DAK Renewable Energy’s engagement with Client shall
commence as of the Effective Date and shall continue, unless extended by mutual
agreement of the parties or sooner terminated as provided herein, until the actual
dosing (execution and delivery of all required documents) by Client with its project
lender(s) for debt financing, including senior and subordinated debt and any other
Project financing characterized by debt obligations and repayable as debt which is
required by the Project lender(s) or which is deemed necessary or prudent in the sole
discretion of Client’s board of directors (“Financial Close”). Notwithstanding the
foregoing, either party may terminate the Agreement, at anytime with or without cause,
upon thirty (30) days prior written or oral notice to the other party. If Financial
Close does not occur by August 31, 2007, a fee of Five Thousand and no/100 Dollars
($5,000.00) will be added to the amount due pursuant to paragraph 3 hereof until
Financial Close is achieved, with all amounts to be paid at Financial Close.
	 
	 	2.	 	Services. DAK Renewable Energy shall serve as Client’s Project consultant. DAK
Renewable Energy’s service providers (described in section 8 of this Agreement) shall perform the
following duties incident to that service subject to Client’s approval (“Services”):

	 	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 informational video), and training Client’s officers and directors to
conduct Client’s equity marketing effort;
	 
	 	c.	 	Assist in graphic design of the Client’s marketing materials;
	 
	 	d.	 	Assist in placement of print and electronic media;
	 
	 	e.	 	Assist in planning of the Client’s local marketing efforts;
	 
	 	f.	 	Assist in recommendation of equipment needs for presentation.
	 
	 	g.	 	Perform such other services as Client may from time to time
reasonably request and are reasonably within the scope of the services the
parties anticipate will be provided. Notwithstanding the foregoing, neither DAK
Renewable Energy, its members, managers, officers, employees nor agents shall
be asked to, nor will actually solicit an offer to buy, or accept an offer to
sell, and equity security to be issued by Client.

Subject to Client’s approval, and unless otherwise provide by this agreement, DAK Renewable Energy
shall determine the manner in which the Services are to be performed and the specific hours to be
worked by DAK Renewable Energy. DAK Renewable Energy acknowledges and agrees to work as many hours
as may be reasonably necessary to fulfill DAK Renewable Energy’s commitments under this Agreement,
in the sole discretion of Client.

	 	3.	 	Payment.

	 	a.	 	Within 14 days following Closing of the Offering, Client shall
pay to DAK Renewable Energy One Hundred Fifty Thousand ($150,000) for the
completion of Services.

	 	4.	 	Expenses. Upon DAK Renewable Energy providing to Client proper
documentation, Client shall reimburse DAK Renewable Energy for all reasonable,
advertising costs and printing costs. No other expenses shall be reimbursed to DAK
Renewable Energy.
	 
	 	5.	 	Confidentiality. In providing Services hereunder, DAK Renewable Energy
may have access to documents and information relating to Client and its properties and
business operations (hereafter referred to as “Confidential Information”). All such
Confidential Information shall be at times during the term of this Agreement and for a
period of two (2) years thereafter, be treated as confidential and sensitive
proprietary business information. DAK Renewable Energy shall not, unless compelled by
legal process, except in accordance with the express terms of this

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	 	 	 	Agreement or with the prior written consent of Client, disclose or permit the
disclosure of any Confidential Information to any person or entity whatsoever,
unless such information is otherwise readily available in the public domain. This
section shall survive the termination of this Agreement.

	 	6.	 	Support Services. DAK Renewable Energy shall provide the following
support services for the benefit of Client: office space, secretarial support (phone
callers), and office supplies.
	 
	 	7.	 	Relationship of the Parties. The parties understand that DAK Renewable
Energy is an independent contractor with respect to Client, and not an employee of
Client. Except as provide in section 6 above, DAK Renewable Energy, at its sole
expense, shall be responsible for providing all equipment, materials, supplies and
other items necessary or useful in fulfilling its obligations hereunder: and shall
retain the right to control and direct the manner in which Services are to be
performed.
	 
	 	8.	 	Service Providers. David Kolsrud shall provide the majority of DAK
Renewable Energy’s services under this Agreement. Notwithstanding the foregoing, DAK
Renewable Energy shall provide other personnel to provide DAK Renewable Energy’s
services under this Agreement as needed. DAK Renewable Energy’s employees, members, or
agents who perform services for Client under this Agreement shall be bound by the terms
of this Agreement.
	 
	 	9.	 	Taxes: Benefits. DAK Renewable Energy shall be solely liable for, and
shall Indemnify and hold the Client harmless from and against, all taxes on any
compensation earned as an independent contractor hereunder, including federal and state
income taxes, self-employment taxes, FICA and FUTA taxes, etc. However, any sales tax
due because of the payments by Client to DAK Renewable Energy shall be paid by Client.
DAK Renewable Energy shall be solely responsible for all insurance, including but not
limited to medical, disability, workers compensation, and unemployment insurance. DAK
Renewable Energy shall not be entitled to participate in any benefits maintained by
Client. This sections shall survive the termination of this Agreement.
	 
	 	10.	 	Insurance. DAK Renewable Energy and Client shall each obtain, maintain
and keep in full force and effect during the term of this Agreement such insurance
coverages and in such amounts as Client may reasonably require including, without
limitation, 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

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	 	 	 	hired vehicles with a combined single limit of One Million Dollars
($1,000,000.00).

All insurance provided for in this section 10 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 cancelled for any reason without at least 30 days
prior written notice to the other party.

	 	11.	 	Indemnification. Client shall indemnify and defend DAK Renewable
Energy 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 DAK Renewable
Energy 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 DAK
Renewable Energy 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. DAK Renewable Energy 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 DAK
Renewable Energy 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.
	 
	 	12.	 	Copyright License. DAK Renewable Energy 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. DAK Renewable Energy
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 DAK Renewable Energy. 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 DAK
Renewable Energy, with the granting of said consent to be in DAK Renewable

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	 	 	 	Energy’s sole discretion- This section shall survive the termination of this
Agreement.

	 	13.	 	Successors and Assigns. This Agreement shall be binding upon Client and DAK
Renewable Energy, 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.
	 
	 	14.	 	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.
	 
	 	15.	 	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 marl addressed as follows, or such substitute
street addresses as the parties may provide in writing:

	 	 	 	 	 
	 

	 	To DAK Renewable Energy:
	 	DAK Renewable Energy
	 

	 	 	 	Attn: David Kolsrud
	 

	 	 	 	304 Splitrock Blvd., Suite 205
	 

	 	 	 	Brandon, SD 57005
	 
	 	 	 	 
	 

	 	To Client:
	 	Buffalo Ridge Energy, LLC
	 

	 	 	 	304 Splitrock Blvd., Suite 205
	 

	 	 	 	Brandon, SD 57005

	 	16.	 	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 South Dakota, and the parties hereby consent
that the District Court situated in Minnehaha County, South Dakota, shall be the
exclusive jurisdiction and venue of any disputes relating to this Agreement.
	 
	 	17.	 	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
(“Event of Default”), 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.

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	 	 	 	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 17 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.

	 	18.	 	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.
	 
	 	19.	 	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.
	 
	 	20.	 	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.

	 	 	 	 	 	 	 	 	 	 	 
	DAK RENEWABLE ENERGY	 	 	 	BUFFALO RIDGE ENERGY, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David Kolsrud
	 	 	 	By:
	 	/s/ Gregory Van Zanten	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Its: President
	 	 	 	 	 	Its: President	 	 

6exv10w23

 

AMENDMENT NUMBER TWO

to

LETTER OF INTENT (“LOI”)

DATED JULY 21, 2006

And

AMENDMENT NUMBER ONE

DATED AUGUST 21, 2006 (“AMENDMENT NUMBER ONE”)

by and between

FAGEN, INC. (“FAGEN”)

and

BUFFALO RIDGE ENERGY, LLC (“OWNER”)

This Amendment Number Two is entered into this 9th day of October, 2006, by and between
Fagen, Inc., a Minnesota Corporation (“Fagen”) and Buffalo Ridge Energy, LLC, an Iowa
Limited Liability Company (“Owner”).

In consideration of the mutual promises, covenants, and conditions contained in the LOI, Amendment
Number One, and herein, and for other good valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto covenant and agree that this Amendment Number Two
shall amend the LOI and Amendment Number One and that the terms and conditions of this Amendment
Number Two shall supersede and replace the terms of the LOI and Amendment Number One as follows:

	 	1.	 	Paragraph 1(a) of the LOI is amended and replaced as follows:

	 	(a)	 	Fagen agrees to provide Owner with those services as described
in this Letter of Intent which are necessary for Owner to develop a detailed
description of a fifty (50) million gallons per year (“MGY”) natural
gas-fired dry grind ethanol production facility located at Sherman, South
Dakota (the “Plant”) and to establish a price for which Fagen would
provide design, engineering, procurement of equipment and construction services
for the Plant. The description of the Plant will be sufficiently detailed to
permit an analysis of the Owner’s lump-sum cost to develop the Plant and to
develop an economic pro forma sufficient to determine if the Plant can be
financed.

	 	2.	 	Paragraph 2 of the LOI is amended and replaced as follows:

2. Contract Price. Owner shall pay Fagen Seventy-three Million Seven Hundred
Ninety Thousand Six Hundred Sixty-nine Dollars ($73,790,669.00) (the “Contract
Price”) as full consideration to Fagen for full and complete performance of the
services described in the Design-Build Agreement and all costs incurred in
connection therewith.

	 	(a)	 	The Contract Price shall not include any costs related to union
labor or prevailing wage requirements. If any action by Owner, a change in

 

 

	 	 	 	Applicable Law, or a Governmental Authority (as those terms are defined in
the Design-Build Agreement) acting pursuant to a change in Applicable Law,
shall require Fagen to employ union labor or compensate labor at prevailing
wages, the Contract Price shall be adjusted upwards to include any increased
costs associated with such labor or wages. Such adjustment shall include,
but not be limited to, increased labor, subcontractor, and material and
equipment costs resulting from any union or prevailing wage requirement;
provided, however, that if an option is made available to either employ
union labor, or to compensate labor at prevailing wages, such option shall
be at Fagen’s sole discretion and that if such option is executed by Owner
without Fagen’s agreement, Fagen shall have the right to terminate this
Letter of Intent or the Design-Build Agreement, as applicable, and receive
compensation pursuant to Paragraph 4(c) hereof or the terms of the
Design-Build Agreement, whichever is applicable.

	 	(b)	 	If the Construction Cost Index published by Engineering News-Record Magazine
(“CCI”) for the month in which a Notice to Proceed
is given to Fagen is greater than 7882.53 (October 2006), the Contract Price
shall be increased by a percentage amount equal to the percentage increase in
CCI plus four percent (4%). By way of example, if the CCI increases two
percent (2%), the total adjustment to the Contract Price shall be six percent
(6%).

The other provisions of the LOI and Amendment Number One shall remain unchanged and in full force
and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment Number Two on the date set
forth above.

	 	 	 	 	 	 	 
	FAGEN, INC.	 	BUFFALO RIDGE ENERGY, LLC
	 
	 	 	 	 	 	 
	By
	 	/s/ Ron Fagen	 	By	 	/s/ Gregory Van Zanten
	 
	 	 	 	 	 	 
	 
	 	Roland “Ron” Fagen	 	 	 	Gregory Van Zanten
	Title:
	 	President and CEO	 	Title:	 	Chairman

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