Exhibit 10.11


EXCHANGE AND LOAN AGREEMENT


          THIS
EXCHANGE AND LOAN AGREEMENT (this “Agreement”) is
entered into effective as of November 1, 2011 between
                  
(“Lender”) and Dakota
Plains, Inc., a Minnesota corporation (the “Company”).


RECITALS


	
  

 	
  

 	
  

 
	
  

 	
 A.

 	
 Lender is
 the record and actual holder of certain promissory notes payable by the
 Company identified on Exhibit A (the “Old Notes”).

 
	
  

 	
  

 	
  

 
	
  

 	
 B.

 	
 The Company
 and Lender intend to extend the maturity of the Old Notes by Lender
 exchanging such Old Notes for a new promissory note payable by the Company to
 Lender.

 
	
  

 	
  

 	
  

 
	
  

 	
 C.

 	
 The Company
 and Lender desire to establish terms of a supplemental credit arrangement
 through which the Company may elect to borrow an additional amount from
 Lender.

 
	
  

 	
  

 	
  

 
	
  

 	
 NOW, THEREFORE, in consideration of the
 mutual covenants herein contained, the parties agree as follows:

 






	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 EXCHANGE.

 






	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 a.

 	
 Promissory Notes.
 Upon the terms and subject to the conditions of this Agreement and in
 reliance upon the representations, warranties and agreements contained in
 this Agreement, as of November 1, 2011, the Company will issue to Lender, and
 Lender will surrender the Old Notes to the Company for a promissory note in
 substantially the form set forth on Exhibit B (the “New Note”)
 in a principal amount equal to the aggregate principal amount of the Old
 Notes as set forth on Exhibit A.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 b.

 	
 Extension Fee. In
 connection with the issuance of the New Note, Lender will receive from the
 Company, at Lender’s election (as indicated by checking the appropriate box),
 either 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 o

 	
 (i)

 	
 a cash
 payment equal to 2.0% of the aggregate principal amount of Old Notes
 exchanged by such holder (the “Cash Extension Fee”); or 

 
	
  

 
	
  

 	
  

 	
  

 	
  

 	
 o

 	
 (ii)

 	
 a number of
 shares of the Company’s common stock, par value $0.01 per share, equal to the
 Cash Extension Fee divided by $4.00.

 
	
  

 
	
  

 	
 2.

 	
 EFFECTIVENESS OF EXCHANGE. Upon acceptance of this Agreement
 by the Company, all of the Old Notes will be deemed to be exchanged for the
 New Note as of the date first set forth above and the Old Notes will
 thereupon be deemed null and void. Except for obligations created under this
 Agreement, by accepting this Agreement, Lender forever releases relieves and
 discharges the Company and its affiliates, subsidiaries, predecessors,
 successors, assigns, attorneys, partners, employees, directors, officers,
 shareholders, agents, representatives and related entities (collectively, the
 “Released
 Parties”), from any and all claims, demands, actions, cause or
 causes of action, suits debts, sums of money, controversies, damages,
 obligations, breaches and liabilities of every kind and nature, whether known
 or unknown, in law, equity or otherwise, that have existed or may exist as of
 the date of this Agreement relating to the Old Notes and all matters and
 agreements in connection therewith and related thereto.

 













	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 STANDBY CREDIT ARRANGEMENT. If Lender exchanges any Old Notes
 consisting of promissory notes due October 14, 2012 (“Junior
 Notes”) for the New Note, then Lender agrees to make available to
 the Company additional funds in exchange for an additional promissory note
 (the “Supplemental Note”),
 upon receipt of a request from the Company.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 a.

 	
 Period of Availability.
 The Company’s right to require that Lender lend funds to the Company in
 exchange for the Supplemental Note may be exercised on a single occasion at
 any time on or before November 1, 2012, after which date Lender’s obligation
 to provide additional funds under this Section 3 will cease.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 b.

 	
 Single Company Request.
 In order to be timely, the Company’s request must be delivered to Lender at
 least ten (10) calendar days before the date the Company intends to borrow
 the additional funds pursuant to the Supplemental Note (the “Draw Date”), and
 such request must specify (i) the aggregate amount of funds to be borrowed by
 the Company from Lender, (ii) the aggregate amount of funds to be borrowed by
 the Company from all persons who held Junior Notes on November 1, 2011
 (collectively, “Participating Holders”), and (iii) the exact date that
 will be the Draw Date. The Lender hereby agrees to deliver funds to the
 Company on the Draw Date in and amount determined in accordance with Section
 3.c. of this Agreement.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 c.

 	
 Allocation. The
 principal amount that the Company may request of Lender under this Section 3
 may not exceed the lesser of (i) $5,500,000 multiplied by the quotient
 of the aggregate principal amount of any Junior Notes exchanged by Lender for
 the New Note divided by $5,500,000, and (ii) the aggregate principal
 amount to be borrowed from all Participating Holders multiplied by the
 quotient of the aggregate principal amount of any Junior Notes exchanged by
 Lender for the New Note divided by $5,500,000.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 d.

 	
 Terms. All
 interest on the Supplemental Note will be paid monthly in arrears based upon
 eighteen (18.0%) simple annual interest. All principal amounts and accrued
 but unpaid interest under the Supplemental Note will be due and payable on
 the one-year anniversary of the Draw Date. The Company, in its sole
 discretion, may settle the Supplemental Note at any time after the Draw Date
 by payment to the holders of the Supplemental Note all principal and accrued
 but unpaid interest through the date of settlement.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 e.

 	
 Warrant Coverage. Not
 more than five (5) business days after the Draw Date (if any), the Company
 will deliver to Lender a warrant (the “Supplemental Warrant”) to purchase at the Strike Price
 (defined below) a number of shares of the Company’s common stock equal to the
 quotient of (x) 50% of the principal amount of the Supplemental Note divided
 by (y) $1.00. The Supplemental Warrant will be exercisable at any time during
 the period that is ten (10) years after the Draw Date. For purposes of this
 Section 3(d) “Strike Price” means (i) the volume-weighted average
 closing price of the Company’s common stock over the twenty (20) trading days
 after the date the Supplemental Notes are issued; or (ii) if a Public Listing
 has not occurred before the date the Supplemental Notes are issued, fair market
 value of a share of the Company’s common stock as determined in good faith by
 the Board of Directors of the Company.

 


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 4.

 	
 REPRESENTATIONS AND WARRANTIES OF LENDER.
 Lender hereby represents and warrants to the Company as of the date of this
 Agreement and as of the Draw Date (if any) as follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 a.

 	
 Lender is
 acquiring the New Note and any shares of the Company’s common stock issuable
 pursuant to the New Note, including but not limited to any shares received
 pursuant to Section 1.b. of this Agreement, and will acquire the Supplemental
 Note, the Supplemental Warrant, and any shares of common stock issuable
 pursuant to the Supplemental Warrant (collectively, the “Securities”), for Lender’s
 own account (and not for the account of others) for investment and not with a
 view to the distribution or resale thereof.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 b.

 	
 Lender has
 had an opportunity to ask questions of, and receive answers from, the Company
 concerning the business, management and financial affairs of the Company and
 the terms and conditions of the Exchange. Lender has had an opportunity to
 obtain any information requested by Lender regarding the Company, including
 information regarding the current financial condition of the Company, as well
 as any information requested to verify this information, to the extent
 reasonably available.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 c.

 	
 Lender has
 been advised to seek financial, legal and tax counsel concerning the
 transactions contemplated by this Agreement.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 d.

 	
 Lender is a
 sophisticated investor and an “accredited investor”, as such term is defined
 in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
 amended (the “Securities Act”).

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 e.

 	
 Lender
 recognizes that (i) there are, or will be when issued, substantial
 restrictions on the transfer of the Securities; (ii) there is not currently a
 public market for the Securities; and (iii) accordingly, for the above and
 other reasons, Lender may not be able to liquidate an investment in the
 Securities for an indefinite period. Lender realizes that the Securities have
 not been, and may not be, registered for sale under the Securities Act or
 applicable state securities laws, and, therefore, may be sold only pursuant
 to registration under the Securities Act and state laws, or an opinion of
 counsel acceptable to the Company that such registration is not required. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 f.

 	
 Lender
 understands that the certificates representing the Securities (if any) shall
 contain a legend to the effect of (e) above.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 g.

 	
 Lender is
 the sole record and beneficial owner of the Old Notes, free and clear of any
 and all liens or restrictions on transfer.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 h.

 	
 There are no
 legal proceedings pending or, to Lender’s knowledge, threatened in writing,
 against or affecting Lender or Lender’s respective assets, at law or in
 equity, by or before any governmental authority, or by or on behalf of any
 third party, which, if adversely determined, would impair your ability to
 enter into this Agreement or consummate the transactions contemplated by this
 Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 MISCELLANEOUS.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 a.

 	
 .No
 Assignment or Revocation; Binding Effect. Neither this Agreement,
 nor any interest herein, shall be assignable by Lender without prior written
 consent of the Company, which consent shall not be unreasonably withheld.
 Lender hereby 

 


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 acknowledges
 and agrees that Lender is not entitled to cancel, terminate or revoke this
 Agreement and that it shall survive the death, incapacity or bankruptcy of
 Lender. The provisions of this Agreement shall be binding upon and inure to
 the benefit of the parties hereto, and their respective heirs, legal
 representatives, successors and assigns.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 b.

 	
 Remedies. The
 Lender acknowledges that the Company may not have an adequate remedy at law
 in the event of any breach of this Agreement by the Lender and, therefore,
 the Company may be entitled, in addition to any other available remedies, to
 injunctive and/or other equitable relief to prevent or remedy a breach of
 this Agreement upon showing of sufficient proof to a court of competent
 jurisdiction properly seated to hear such matter.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 c.

 	
 Modifications.
 This Agreement may not be changed, modified, released, discharged, abandoned
 or otherwise amended, in whole or in part, except by an instrument in writing,
 signed by the Lender and the Company. No delay or failure of the Company in
 exercising any right under this Agreement will be deemed to constitute a
 waiver of such right or of any other rights. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 d.

 	
 Entire Agreement.
 This Agreement and the exhibits hereto are the entire agreement between the
 parties with respect to the subject matter hereto and thereto. This
 Agreement, including the exhibits, supersedes any previous oral or written
 communications, representations, understandings or agreements between the
 parties. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 e.

 	
 Severability. In
 the event that any paragraph or provision of this Agreement shall be held to
 be illegal or unenforceable in any jurisdiction, such paragraph or provision
 shall, as to that jurisdiction, be adjusted and reformed, if possible, in
 order to achieve the intent of the parties, and if such paragraph or
 provision cannot be adjusted and reformed, such paragraph or provision shall,
 for the purposes of that jurisdiction, be voided and severed from this
 Agreement, and the entire Agreement shall not fail on account thereof but
 shall otherwise remain in full force and effect.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 f.

 	
 Governing Law.
 This Agreement shall be governed by, subject to, and construed in accordance
 with the laws of the State of Minnesota without regard to conflict of law
 principles.

 


[Signature Page Follows]


4





          IN
WITNESS WHEREOF, the undersigned Lender has executed this Exchange and Loan
Agreement as of the date first set forth above.


	
  

 	
  

 
	
  

 	
  



 
	
  

 	
 By

 
	
  

 	
 Its

 



          IN
WITNESS WHEREOF, the Company hereby accepts this Exchange and Loan Agreement as
of the date first set forth above.


	
  

 	
  

 
	
  

 	
 DAKOTA PLAINS,
INC.

 
	
  

 	
  

 
	
  

 	
  



 
	
  

 	
 By

 
	
  

 	
 Its

 


[Signature
Page to Exchange and Loan Agreement]





Exhibit A


LENDER PROMISSORY NOTES


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Principal Amount



 	
  

 
	
 Promissory Note(s) to be Exchanged – Old Notes:

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
 Promissory Note due January 31, 2012 –
 Senior Note

 	
  

 	
  

 	
 $



 	
  



 	
  

 	
  

 
	
  

 
	
 Promissory Note due October 14, 2012 –
 Junior Note

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
 Promissory Note to be Issued:

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Promissory Note due March 1, 2013 – New Note

 	
  

 	
  

 	
 $