Exhibit
10.1


 


Debt Service Guarantee


 


THIS GUARANTEE
(the “Guarantee”) is made as of the 23rd day of September, 2003, by Dakota
Ethanol, LLC, whose address is PO Box 100, Wentworth, SD 57075 (the
“Guarantor”), for the benefit of the First National Bank in Brookings, 5th
Street & 5th Avenue, Brookings, South Dakota 57006-5057 (the
“Bond Holder”).


 


1.                   Recitals


 


A.                                   Contemporaneously
with the execution of this Guarantee, the County of Lake (the “Issuer”),
pursuant to a Resolution duly adopted and in force is issuing Taxable Tax
Increment Revenue Bonds, Series 2003 (the “Bonds”) in the principal face amount
of One Million Three Hundred Twenty-Three Thousand Twenty-Four Dollars and No
Cents ($1,323,024.00).


 


B.                                     As
a condition to purchase of the Bonds by the Bond Holder, the Bond Holder has
required the Guarantor to guarantee said Bonds.


 


C.                                     These
Recitals shall be construed as part of this Guarantee.


 


NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor agrees as follows:


 


2.                   Unconditional Guarantee


 


To induce the Bond Holder to purchase the Bonds, the
Guarantor hereby unconditionally guarantees to the Bond Holder that all payment
obligations of the Issuer, including, without limitation, all principal and
interest will be paid in the amounts, at the times and in the manner set forth
in the Bonds, subject, however, that such payment obligations shall be limited
to such amounts which are not covered by tax increment revenue pledged for the
payment of the Bonds.  The payment and
performance obligations set forth in this paragraph are collectively referred
to as the “Guaranteed Obligations.”


 


This Guarantee is irrevocable, absolute and
unconditional, and is one of payment and not just collection.  The Guarantor’s Guarantee of the Guaranteed
Obligations is subject only to the occurrence of a Default under the Bonds.


 


The Guarantor shall pay to the Bond Holder all amounts
due by the Guarantor hereunder, and shall not exercise against the Bond Holder
any rights of setoff, recoupment, or counterclaim that the Guarantor might
otherwise have against the Issuer or any other guarantor, and the Guarantor
shall pay and perform their obligations hereunder free of any deductions and
without abatement, diminution, or setoff as the Guarantor may have against the
Issuer or against any other guarantor.


 


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Any modification, limitation or discharge of any of
the liabilities or obligations of the Issuer or any other guarantor, arising
out of, or by virtue of, any bankruptcy or similar proceeding for relief of
debtors under federal or state law initiated by or against the Issuer or any
other guarantor shall not modify, limit, reduce, impair, discharge, or
otherwise affect the liability of the Guarantor in any manner whatsoever, and
this Guarantee shall continue in full force and effect, notwithstanding any
such proceeding.


 


3.                   Waivers by Guarantor


 


The Guarantor waives any right to require the Bond
Holder to: (i) proceed against the Issuer or any other guarantor, (ii) pursue
any other remedy in the Bond Holder’s power whatsoever, or (iii) notify
the Guarantor of any default by the Issuer in the payment of any amounts due
under the Bonds or in the performance of any agreement of the Issuer under the
bond documents.


 


The Guarantor waives any defense arising by reason of
any of the following: (i) any disability or any counterclaim or right of
set-off or other defense of the Issuer, (ii) any lack of authority of the
Issuer with respect to the Bonds, (iii) the invalidity, illegality or lack
of enforceability of the Bonds or any provision thereof from any cause
whatsoever, including any action or inaction by the Bond Holder, (iv) the
failure of the Bond Holder to perfect or maintain perfection of any security
interest in any collateral, (v) the cessation from any cause whatsoever of
the liability of the Issuer, (vi) that the Bonds shall be void or voidable
as against the Issuer or any of the Issuer’s creditors, including a trustee in
bankruptcy of the Issuer, by reason of any fact or circumstance, (vii) the
delay or failure of the Bond Holder to exercise any of its rights and remedies
against the Issuer or any collateral or security for the Bonds or this
Guarantee, (viii) any event or circumstance that might otherwise
constitute a legal or equitable discharge of the Guarantor’s obligations
hereunder; provided, however, that
the Guarantor does not waive any defense arising from the due performance by
the Issuer of the terms and conditions of the Bonds, (ix) all errors and
omissions in connection with the Bond Holder’s administration of all
indebtedness guaranteed by this Guarantee, except errors and omissions
resulting from the Bond Holder’s acts of bad faith, (x) any right or claim
of right to cause a marshaling of the assets of the Issuer or any other
guarantor, (xi) any act or omission of the Bond Holder (except acts or
omissions in bad faith) that changes the scope of the Guarantor’s risk hereunder,
and (xii) all other notices and demands otherwise required by law which
the Guarantor may lawfully waive.


 


Until the payment of all amounts due under the Bonds
and the performance of all of the terms, covenants and conditions therein
required to be kept, observed or performed by the Issuer, the Guarantor waives
(i) any right to enforce any remedy that the Bond Holder now has or may
hereafter have against the Issuer, and (ii) any benefit of, and any right
to participate in, any security now or hereafter held by the Bond Holder.


 


The Guarantor waives all rights of subrogation against
the Issuer, for the express purpose that the Guarantor shall not be deemed a
“creditor” of the Issuer under applicable bankruptcy law with respect to the
Issuer’s obligations to the Bond Holder.


 


The Guarantor waives all presentments, demands for
performance, notices of nonperformance, protests, notices of dishonor, and
notices of acceptances of this Guarantee.


 


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The Guarantor waives the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof.


 


4.                   No Conditions Precedent


 


The Guarantor acknowledges that no unsatisfied
conditions precedent to the effectiveness and enforceability of this Guarantee
exist as of the date of its execution and that the effectiveness and
enforceability of this Guarantee is not in any way conditioned or contingent
upon any event, occurrence, or happening, or upon any condition existing or
coming into existence either before or after the execution of this Guarantee,
including but not limited to the Guarantee of the Issuer’s obligations by any
other Person.


 


5.                   Discharge of Guarantee


 


This Guarantee shall not be discharged and the
Guarantor shall not be released from liability until all Guaranteed Obligations
have been satisfied in full.  If all or
any portion of the Guaranteed Obligations are satisfied and the Bond Holder is
required for any reason to pay to any Person all or any part of the sums used
to satisfy the Guaranteed Obligations, the Guaranteed Obligations shall remain
in effect and enforceable to the extent thereof.


 


6.                   Remedies


 


Upon the Issuer failing to pay principal or interest
when due, the Bond Holder may, at its option and without notice or demand,
declare an amount equal to the remainder of the Issuer’s obligations under the
Bonds (the “Unpaid Balance”) to be immediately due and payable by the
Guarantor, whether or not the same are due and payable by the Issuer at that
time.  The books and records of the Bond
Holder showing the amount due by the Issuer shall be binding upon the Guarantor
for the purpose of establishing such items and shall be prima facie proof
thereof.


 


The Guarantor agrees to pay the Bond Holder’s
reasonable attorneys’ fees and all other costs and expenses (collectively the
“Collection Expenses”) which may be incurred by the Bond Holder in the
enforcement of this Guarantee, whether or not suit is filed.


 


All of the Bond Holder’s rights and remedies shall be
cumulative, and any failure of the Bond Holder to exercise any right hereunder
shall not be construed as a waiver of the right to exercise the same or any
other right at any time, and from time to time, thereafter.


 


7.                   Invalidity of Any Part


 


If any provision or part of any provision of this
Guarantee shall for any reason be held invalid, illegal, or unenforceable in
any respect, such invalidity, illegality, or unenforceability shall not affect
any other provisions or the remaining part of any effective provisions of this
Guarantee, and this Guarantee shall be construed as if such invalid, illegal,
or unenforceable provision or part thereof had never been contained herein, but
only to the extent of its invalidity, illegality, or unenforceability.


 


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8.                   Amendment or Waiver


 


This Guarantee may be amended only by a writing duly
executed by the Guarantor and the Bond Holder. 
No waiver by the Bond Holder of any of the provisions of this Guarantee
or any of the rights or remedies of the Bond Holder with respect hereto shall
be considered effective or enforceable unless in writing, duly executed by the
Bond Holder.  Such waiver or consent
shall be effective only in the specific instance and for the purpose for which
it was given.


 


9.                   Notices


 


In order for any demand, consent, approval or other
communication to be effective under the terms of this Agreement, “Notice” must
be provided under the terms of this Subsection.  All Notices must be in writing. 
Notices may be (a) delivered by hand, (b) transmitted by fax (with a
duplicate copy sent by first class mail, postage prepaid), (c) sent by
certified or registered mail, postage prepaid, return receipt requested, or (d)
sent by reputable overnight courier service, delivery charges prepaid.  Notices shall be addressed as set forth
below:


 


If to Bond Holder:


 


First National Bank in Brookings


5th Street and 5th Avenue


Brookings, South Dakota 57006-5057


 


If to Guarantor:


 


Jim Wiederrich


300 South Phillips Avenue


Suite 300


Sioux Falls, SD 57117-5027


 


If to Issuer:


 


County of Lake


200 East Center


Madison, SD 
57042


 


Notices delivered by hand or by overnight courier
shall be deemed given when actually received or when refused by their intended
recipient.  Faxed Notices will be deemed
delivered when a legible copy has been received (provided receipt has been
verified by telephone confirmation or one of the other permitted means of
giving Notices under this Subsection). 
Mailed Notices shall be deemed given on the date of the first attempted
delivery (whether or not actually received). 
Either the Bond Holder or the Guarantor may change the address for
Notice by giving at least fifteen Business Days’ prior Notice of such change to
the other party or parties.


 


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10.            Binding Nature


 


This Guarantee shall inure to the benefit of and be
enforceable by the Bond Holder and the Bond Holder’s successors and assigns and
any other Person to whom the Bond Holder may grant an interest in the
obligations of the Issuer to the Bond Holder, and shall be binding upon and
enforceable against the Guarantor and the Guarantor’s successors and assigns.


 


11.            Final Agreement


 


This Guarantee contains the final and entire agreement
between the Bond Holder and the Guarantor with respect to the Guarantee by the
Guarantor of the Guaranteed Obligations to the Bond Holder.  There is no separate oral or written
understanding between the Bond Holder and the Guarantor with respect thereto.


 


12.            No Third Party Benefit


 


The terms and provisions of this Guarantee are for the
benefit of the Bond Holder and no other Person shall have any right or cause of
action on account thereof.  The Bond
Holder has no obligation to make any advance for the benefit of the Guarantor.


 


13.            Interpretation


 


13.1                           HEADINGS
AND GENERAL APPLICATION


 


The section and subsection headings of this Guarantee
are provided for convenience of reference only and shall in no way affect,
modify or define, or be used in construing, the text of the sections,
subsections, paragraphs or subparagraphs.


 


13.2                           REFERENCE
TO PARTICULARS


 


The scope of a general statement made in this
Guarantee shall not be construed as having been reduced through the inclusion
of references to particular items that would be included within the statement’s
scope.  Therefore, absent specific
language to the contrary, the term “include” shall mean “include, but shall not
be limited to” and the term “including” shall mean “including, without
limitation.”


 


THE REMAINDER OF
THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK


 


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IN WITNESS WHEREOF,
the Guarantor has executed or caused this instrument to be duly executed.


 


	
   

  	
  DAKOTA ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Doug Van
  Duyn

  	
   

  
	
   

  	
   

  
	
   

  	
  Its President

  
					



 


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