Exhibit 10.6

 

 

Stone Phillips, LLC

PO Box 500787

Atlanta GA 31150

 

PRIVATE & CONFIDENTIAL

 

November 7, 2016

 

Dakota Plains Holdings, Inc.
294 Grove Lane East
Wayzata, Minnesota 55391

Attn: Board of Directors

 

Re: Dakota Plains Holdings, Inc.

 

Ladies and Gentlemen:

1.Introduction

 

This letter confirms that Anna Phillips, as a member of Stone Phillips, LLC
(“SP”), has been retained by Dakota Plains Holdings, Inc. (the “Company” or
“You”), to provide services (the “Services”) set out below. This letter of
engagement (the “Engagement”) and the related Standard Terms and Conditions
constitute the engagement contract (the “Engagement Contract”) pursuant to which
the Services will be provided.

2.Scope of Services

The Services, to be performed, are expected to include the following:

·Anna Phillips, member of Stone Phillips, LLC, will serve as an Independent
Director for the Company

·Ms. Phillips will perform all activities commensurate with this position.

SP also may provide Services through its’ agents or independent contractors.
References herein to SP and its employees shall be deemed to apply also, unless
the context shall otherwise indicate, to employees of any such agents or
independent contractors and their employees.

The Services, as outlined above, are subject to change as mutually agreed
between us in writing.

As part of the Services, Ms. Phillips and SP may be requested to assist the
Company (and its legal or other advisors) in negotiating with the Company’s
creditors and equity holders and with other interested parties. In the event
that we participate in such negotiations, the representations made and the
positions advanced will be those of the Company and its management, not SP or
its employees.

 

 

 

3.Fees and Cash on Account

 

Our fees for the Services are $10,000 per month for up to 30 hours of services
provided in the month, with any additional hours over and above the 30 hours
charged to the Company at a rate of $325 per hour for the services of Anna
Phillips or her designee for the above scope.

In the event SP and the Company agree to modify or expand the scope, fees will
be negotiated prior to commencement of work relating to any scope change. Note
that we do not provide any assurance regarding the outcome of our work and our
fees will not be contingent on the results of such work.

In addition to the fees outlined above, SP will bill for reasonable direct
expenses which are likely to be incurred on your behalf during this Engagement.
Direct expenses include but are not limited to reasonable and customary
out-of-pocket expenses which are billed directly to the engagement such as
overnight mail, messenger, travel, meals, accommodations, independent contractor
or agent fees and expenses, and any other expenses specifically related to the
engagement. Further, if SP and/or any of its employees are required to testify
or provide evidence at or in connection with any judicial or administrative
proceeding relating to this matter, SP will be compensated by you at its regular
hourly rates and reimbursed for reasonable allocated and direct expenses
(including counsel fees) with respect thereto.

Initially, the Company will forward to us the amount of $10,000, which funds
will be held "on account" to be applied to our professional fees, charges and
disbursements for the Engagement (the "Initial Cash on Account"). To the extent
that this amount exceeds our fees, charges and disbursements upon the completion
of the Engagement, we will refund any unused portion. The Company agrees to
increase or supplement the Initial Cash on Account from time to time during the
course of the Engagement in such amounts as the Company and we mutually shall
agree are reasonably necessary to increase the Initial Cash on Account to a
level that will be sufficient to fund Engagement fees, charges, and
disbursements to be incurred.

We will send the Company periodic invoices (not less frequently than monthly)
for services rendered and charges and disbursements incurred on the basis
discussed above, and in certain circumstances, an invoice may be for estimated
fees, charges and disbursements through a date certain. Each invoice constitutes
a request for an interim payment against the fee to be determined at the
conclusion of our Services. Upon transmittal of the invoice, we may immediately
draw upon the Initial Cash on Account (as replenished from time to time) in the
amount of the invoice. The Company agrees upon submission of each such invoice
to promptly pay the invoice amount to us, and in any event payment shall be made
within ten (10) business days from the invoice date, as replenishment of the
Initial Cash on Account (together with any supplemental amount to which we and
the Company mutually agree), without prejudice to the Company's right to advise
us of any differences it may have with respect to such invoice. We have the
right to apply to any outstanding invoice (including amounts billed prior to the
date hereof), up to the remaining balance, if any, of the Initial Cash on
Account (as may be supplemented from time to time) at any time subject to (and
without prejudice to) the Company's opportunity to review our statements.

 

-2-

 

 

4.Terms and Conditions

 

The attached Standard Terms and Conditions set forth the duties of each party
with respect to the Services. Further, this letter and the Standard Terms and
Conditions attached comprise the entire Engagement Contract for the provision of
the Services to the exclusion of any other express or implied terms, whether
expressed orally or in writing, including any conditions, warranties and
representations, and shall supersede all previous proposals, letters of
engagement, undertakings, agreements, understandings, correspondence and other
communications, whether written or oral, regarding the Services.

5.Conflicts of Interest

 

We were not made aware of any conflicts of interest or additional relationships
that we believe would preclude us from performing the Services. We will not
knowingly accept an engagement that directly conflicts with this Engagement
without your prior written consent.

6.Acknowledgement and Acceptance

Please acknowledge your acceptance of the terms of this Engagement Contract by
signing both the confirmation below and the attached Standard Terms and
Conditions and returning a copy of each to us at the above address.

 

If you have any questions regarding this letter or the attached Standard Terms
and Conditions, please do not hesitate to contact us.

 

Yours faithfully,

 

 

STONE PHILLIPS, LLC

 

By:   /s/ Anna Phillips     Anna Phillips     Member  

 

Attachment – As stated

 

cc: Jorian L. Rose, Esq.   Baker Hostetler LLP   45 Rockefeller Plaza   New York
NY 10111-0100

 

 

-3-

 

 

Confirmation of Terms of Engagement

 

We agree to engage Stone Phillips, LLC upon the terms set forth herein and in
the attached Standard Terms and Conditions.

 

DAKOTA PLAINS HOLDINGS, INC.

 

By:   /s/ Gabriel G. Claypool     Gabriel G. Claypool     President, Chief
Executive Officer     and Chief Operating Officer  

 

Date:    November 7, 2016

 

 

-4-

 

 

STONE PHILLIPS, LLC

 

STANDARD TERMS AND CONDITIONS

 

The following are the Standard Terms and Conditions on which we will provide the
Services to you set forth within the attached letter of engagement. The
Engagement letter and the Standard Terms and Conditions (collectively the
“Engagement Contract”) form the entire agreement between us relating to the
Services and replace and supersede any previous proposals, letters of
engagement, undertakings, agreements, understandings, correspondence and other
communications, whether written or oral, regarding the Services. The headings
and titles in the Engagement Contract are included to make it easier to read but
do not form part of the Engagement Contract.

 

 

1.Reports and Advice

 

1.1Use and purpose of advice and reports – Any advice given or report issued by
us is provided solely for your use and benefit and only in connection with the
purpose in respect of which the Services are provided. Unless required by law,
you shall not provide any advice given or report issued by us to any third
party, or refer to us or the Services, without our prior written consent. In no
event, regardless of whether consent has been provided, shall we assume any
responsibility to any third party to which any advice or report is disclosed or
otherwise made available.

 

2.Information and Assistance

  

2.1Provision of information and assistance – Our performance of the Services is
dependent upon your providing us with such information and assistance as we may
reasonably require from time to time.

 

2.2Punctual and accurate information – You shall use reasonable skill, care and
attention to ensure that all information we may reasonably require is provided
on a timely basis and is accurate and complete and relevant for the purpose for
which it is required. You shall also notify us if you subsequently learn that
the information provided is incorrect or inaccurate or otherwise should not be
relied upon.

 

2.3No assurance on financial data – While our work may include an analysis of
financial and accounting data, the Services will not include an audit,
compilation or review of any kind of any financial statements or components
thereof. Company management will be responsible for any and all financial
information they provide to us during the course of this Engagement, and we will
not examine or compile or verify any such financial information. Moreover, the
circumstances of the Engagement may cause our advice to be limited in certain
respects based upon, among other matters, the extent of sufficient and available
data and the opportunity for supporting investigations in the time period.
Accordingly, as part of this Engagement, we will not express any opinion or
other form of assurance on financial statements of the Company.

 

2.4Prospective financial information – In the event the Services involve
prospective financial information, our work will not constitute an examination
or compilation, or apply agreed-upon procedures, in accordance with standards
established by the American Institute of Certified Public Accountants or
otherwise, and we will express no assurance of any kind on such information.
There will usually be differences between estimated and actual results, because
events and circumstances frequently do not occur as expected, and those
differences may be material. We will take no responsibility for the
achievability of results or events projected or anticipated by the management of
the Company.

 

 

 

 

 

3.Additional Services

 

3.1Responsibility for other parties – You shall be solely responsible for the
work and fees of any other party engaged by you to provide services in
connection with the Engagement regardless of whether such party was introduced
to you by us. Except as provided in this Engagement Contract, we shall not be
responsible for providing or reviewing the advice or services of any such third
party, including advice as to legal, regulatory, accounting or taxation matters.
Further, we acknowledge that we are not authorized under our Engagement Contract
to engage any third party to provide services or advice to you, other than our
agents or independent contractors engaged to provide Services, without your
written authorization.

 

4. Confidentiality

         

4.1Restrictions on confidential information – Both parties agree that any
confidential information received from the other party shall only be used for
the purposes of providing or receiving Services under this or any other contract
between us. Except as provided below, neither party will disclose the other
party’s confidential information to any third party without the other party’s
consent. Confidential information shall not include information that:

 

4.1.1is or becomes generally available to the public other than as a result of a
breach of an obligation under this Clause 4.1;

 

4.1.2is acquired from a third party who, to the recipient party’s knowledge,
owes no obligation of confidence in respect of the information; or

 

4.1.3is or has been independently developed by the recipient.

 

4.2Disclosing confidential information – Notwithstanding Clause 1.1 or 4.1
above, either party will be entitled to disclose confidential information of the
other to a third party to the extent that this is required by valid legal
process, provided that (and without breaching any legal or regulatory
requirement) where reasonably practicable not less than 2 business days’ notice
in writing is first given to the other party.

 

4.3Citation of engagement – Without prejudice to Clause 4.1 and Clause 4.2
above, to the extent our engagement is or becomes known to the public, we may
cite the performance of the Services to our clients and prospective clients as
an indication of our experience, unless we and you specifically agree otherwise
in writing.

 

4.4Internal quality reviews – Notwithstanding the above, we may disclose any
information referred to in this Clause 4 to any other SP entity or use it for
internal quality reviews.

 

4.5Maintenance of workpapers – Notwithstanding the above, we may keep one
archival set of our working papers from the Engagement, including working papers
containing or reflecting confidential information, in accordance with our
internal policies.

 

5.Termination

 

5.1Termination of Engagement with notice – Either party may terminate the
Engagement Contract for whatever reason upon written notice to the other party.
Upon receipt of such notice, we will stop all work immediately. You will be
responsible for all fees and expenses incurred by us through the date
termination notice is received.

 

-2- 

 

 

5.2Continuation of terms – The terms of the Engagement that by their context are
intended to be performed after termination or expiration of this Engagement
Contract, including but not limited to, Clauses 3 and 4 of the Engagement
letter, and Clauses 1.1, 4, 6 and 7 of the Standard Terms and Conditions, are
intended to survive such termination or expiration and shall continue to bind
all parties.

 

6.

Indemnification and Liability Limitation; Waiver of Jury Trial

 

 

6.1Indemnification – You agree to indemnify and hold harmless SP and any of its
subsidiaries and affiliates, officers, directors, principals, managers, members,
shareholders, agents, independent contactors and employees (collectively
“Indemnified Persons”) from and against any and all claims, liabilities,
damages, obligations, costs and expenses (including reasonable attorneys’ fees
and expenses and costs of investigation) arising out of or relating to your
retention of SP, the execution and delivery of this Engagement Contract, the
provision of Services or other matters relating to or arising from this
Engagement Contract, except to the extent that any such claim, liability,
obligation, damage, cost or expense shall have been determined by final
non-appealable order of a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct of the Indemnified Person or Persons
in respect of whom such liability is asserted.

 

6.2Limitation of liability – You agree that no Indemnified Person shall have any
liability as a result of your retention of SP, the execution and delivery of
this Engagement Contract, the provision of Services or other matters relating to
or arising from this Engagement Contract, other than liabilities that shall have
been determined by final non-appealable order of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Indemnified Person or Persons in respect of whom such liability is asserted.
Without limiting the generality of the foregoing, in no event shall any
Indemnified Person be liable for consequential, indirect or punitive damages,
damages for lost profits or opportunities or other like damages or claims of any
kind.

 

6.3WAIVER OF JURY TRIAL – TO FACILITATE JUDICIAL RESOLUTION AND SAVE TIME AND
EXPENSE, YOU AND SP IRREVOCABLY AND UNCONDITIONALLY AGREE NOT TO DEMAND A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THE SERVICES OR ANY SUCH OTHER MATTER.

 

7.Governing Law and Jurisdiction – The Engagement Contract shall be governed by
and interpreted in accordance with the laws of the State of Georgia, without
giving effect to the choice of law provisions thereof. The United States
District Court for the Northern District of Georgia and the appropriate Courts
of the State of Georgia sitting in the City of Atlanta shall have exclusive
jurisdiction in relation to any claim, dispute or difference concerning the
Engagement Contract and any matter arising from it. The parties submit to the
jurisdiction of such Courts and irrevocably waive any right they may have to
object to any action being brought in these Courts, to claim that the action has
been brought in an inconvenient forum or to claim that those Courts do not have
jurisdiction.

 

 

STONE PHILLIPS, LLC

 

-3- 

 

 

Confirmation of Standard Terms and Conditions

 

We agree to engage Stone Phillips, LLC upon the terms set forth in these
Standard Terms and Conditions as outlined above.

 

DAKOTA PLAINS HOLDINGS, INC.

 

By:   /s/ Gabriel G. Claypool     Gabriel G. Claypool     President, Chief
Executive Officer     and Chief Operating Officer  

 

 

 

Date:    November 7, 2016