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CONSULTING AGREEMENT
This Agreement is made effective as of June 27, 2001, by and between Heartland
Ethanol, LLC, of 745 Main Street, Hoxie, Kansas 67740, and Val-Add Service
Corporation of Box 220 306 4th Street, Chester, South Dakota 57016.
In this Agreement, the party who is contracting to receive services shall be
referred to as "Heartland", and the party who will be providing the services
shall be referred to as "Val-Add".
Val-Add has a background in development of ethanol projects and is willing to
provide services to Heartland based on this background. The attached list are
some but not all of the actions and objectives to be accomplished.
Heartland desires to have services provided by Val-Add.
Therefore, the parties agree as follows:
1. DESCRIPTION OF SERVICES. Beginning on May 01, 2001, Val-Add will provide
the following services (collectively, the "Services"): Assistance with the
Development of an Ethanol Plant.
2. PAYMENT. Heartland will pay a fee to Val-Add for the Services based on
$5,000.00 per month. This fee shall be payable monthly, no later than the tenth
day of the month following the period during which the Services were performed.
Upon termination of this Agreement, payments under the paragraph shall cease;
provided, however, that Val-Add shall be entitled to payments for periods or
partial periods that occurred prior to the date of termination and for which
Val-Add has not yet been paid. In addition three bonuses shall be paid as
follows, $20,000 upon completion of the corporate formation and SEC approval of
the filing, $20,000 upon the completion and closing of investor meetings and
$20,000 upon approval and signing of a loan commitment letter, for a total of
$60,000.
3. EXPENSE REIMBURSEMENT. Val-Add shall be entitled to reimbursement from
Heartland for the following "out-of-pocket" expenses:
- travel expenses at a flat rate of $450 per trip
- postage
- copying
4. TERM/TERMINATION. This Agreement may be terminated by either party upon
ten days written notice to the other party.
5. RELATIONSHIP OF PARTIES. It is understood by the parties that Val-Add is
an independent contractor with respect to Heartland, and not an employee of
Heartland. Heartland will not provide fringe benefits, including health
insurance benefits, paid vacation, or any other employee benefit, for the
benefit of Val-Add.
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6. CONFIDENTIALITY. Val-Add recognizes that Heartland has and will have the
following information:
- process information
- customer lists
- product design information
and other proprietary information (collectively, "Information")
which are valuable, special and unique assets of Heartland and need to be
protected from improper disclosure. In consideration for the disclosure of the
Information, Val-Add agrees that Val-Add will not at any time or in any manner,
either directly or indirectly, use any Information for Val-Add's own benefit, or
divulge, disclose, or communicate in any manner any Information to any third
party without the prior written consent of Heartland. Val-Add will protect the
Information and treat it as strictly confidential. A violation of this paragraph
shall be a material violation of this Agreement.
7. NON-COMPETE AGREEMENT. Recognizing that the various items of Information
are special and unique assets of Heartland that need to be protected from
disclosure, and in consideration of the disclosure of the Information, Val-Add
agrees and covenants that for period of one Year following the termination of
this Agreement, whether such termination is voluntary or involuntary, Val-Add
will not directly or indirectly engage in any business competitive with
Heartland. This covenant shall apply to the geographical area that includes the
area within a 100 miles radius of the plant. Directly or indirectly engaging in
any competitive business includes, but is not limited to, (i) engaging in a
business as owner, partner, or agent, (ii) becoming an employee of any third
party that is engaged in such business, or (iii) becoming interested directly or
indirectly in any such business, or (iv) soliciting any customer of Heartland
for the benefit of a third party that is engaged in such business. Val-Add
agrees that this non-compete provision will not adversely affect the livelihood
of Val-Add.
8. NOTICES. All notices required or permitted under this Agreement shall be
in writing and shall be deemed delivered when delivered in person or deposited
in the United States mail, postage prepaid, addressed as follows:
If for Heartland:
Heartland Ethanol, LLC
Jeff Torluemke
President
745 Main St
Hoxie, Kansas 67740
If for Val-Add:
Val-Add Service Corporation
Steve Sershen
President
Box 220 306 4th Street
Chester, South Dakota 57016
Such address may be changed from time to time by either party by providing
written notice to the other in the manner set forth above.
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9. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
10. AMENDMENT. This Agreement may be modified or amended if the amendment is
made in writing and is signed by both parties.
11. SEVERABILITY. If any provision of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall continue
to be valid and enforceable. If a court finds that any provision of this
Agreement is invalid or unenforceable, but that by limiting such provision it
would become valid and enforceable, then such provision shall be deemed to be
written, construed, and enforced as so limited.
12. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or limitation of
that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
13. APPLICABLE LAW. This Agreement shall be governed by the laws of the State
of Kansas. Heartland understands that Val-Add does not engage in the practice of
law or tax issues and will seek expert advice on such matters.
Party receiving services:
Heartland Ethanol LLC
By: /s/ Jeff Torluemke
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Heartland Ethanol, LLC
President
By: /s/ Steve Sershen
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Val-Add Service Corporation
President
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