PROJECT DEVELOPMENT FEE AGREEMENT
THIS PROJECT
DEVELOPMENT FEE AGREEMENT (“Agreement”) is entered into
as of this 13 th day of December , 2006 (“Effective
Date”), by and between Spiceland Wood Products, Inc., a
corporation (“SWP”), and Cardinal Ethanol, LLC
(“Company”), an Indiana limited liability
company.
WHEREAS, the
Company was organized for the purpose of developing, owning and
operating a 100 million gallon dry mill ethanol plant in east
central Indiana (the “Project” or “Ethanol
Plant”);
WHEREAS, SWP
through its principal, Rob Davis, 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 SWP in exchange for
its efforts to organize the Company and 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 SWP for the purpose of
providing organizational and developmental services with respect to
the Project (“Development Services”). Development
Services shall include all services performed on behalf of the
Company by SWP to date and all services performed on behalf of and
at the reasonable request of the Company through the termination of
this Agreement. SWP’s duties shall include, but not be
limited to, supervision of site planning and preparation for
construction of the Project. SWP shall apprise the Board of the
status of the Project and of any material events, and shall perform
its duties at the direction of the Board. However, SWP shall retain
the sole right to control and direct the manner in which the
Developmental Services are to be performed. 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 SWP a
development fee equal to $26,000 (“Development Fee”).
One-half ($13,000) of the Development Fee shall be payable to SWP
on December 20, 2006 and the remaining half ($13,000) shall be
payable to SWP on March 1, 2007.
3.
EXPENSES. Company shall reimburse SWP for all reasonable,
ordinary and necessary expenses incurred by SWP in performance of
its 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.
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
1
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) Rob
Davis’ voluntary relinquishment of his Board seat;
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 SWP 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 SWP 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 SWP or its agents for its act or omission that
involves gross negligence, intentional misconduct or a known
violation of the law. SWP shall indemnify and defend Company and
its e
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