Exhibit 10.1


 


AMENDED AND RESTATED


TRADING SERVICE AGREEMENT


 


THIS AGREEMENT, is made and
entered into this 2nd day of February, 2004 by and between Northern Growers,
LLC (formerly, Whetstone Ethanol, LLC), a South Dakota limited liability
company with its principal offices located at 1303 East 4th Avenue,
Suite 2, Milbank, South Dakota 57252 (hereinafter “Northern Growers”), and
Alerus Securities Corporation, with its principal offices located at 2300
Columbia Road South, Grand Forks, North Dakota 58201 (hereinafter “Alerus”).


 


WITNESSETH:


 


WHEREAS, Northern Growers
desires to establish a service to facilitate the trading of capital units among
members and non-members of Northern Growers; and


 


WHEREAS, to provide an
orderly trading market for its securities, Northern Growers desires that its
members and non-members purchase, sell and transfer their capital units in
Northern Growers through an “alternative trading system” (ATS) as defined by
Rule 300(a) of Regulation ATS established pursuant to the Securities Exchange
Act of 1934 (the “Exchange Act”); and


 


WHEREAS, Alerus is a
broker-dealer registered with the Securities and Exchange Commission (SEC), the
National Association of Securities Dealers (NASD), and the State of South
Dakota, among others, and has established an ATS to trade certain securities;
and


 


WHEREAS, Alerus has offered
to trade the capital units of Northern Growers on its ATS (the “Trading
Service”) which Alerus represents will comply with all applicable state and
federal securities laws; and


 


WHEREAS, Northern Growers
has agreed to engage the services of Alerus to provide the Trading Service and
Alerus desires to provide such services under the terms and conditions
hereinafter described;


 


WHEREAS, it is the intent of
the parties that this Amended and Restated Trading Service Agreement amend and
supercede the parties’ existing Trading Service Agreement entered into on
December 15, 2002.


 


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


 


1)                                      Appointment and Acceptance. 
Northern Growers appoints Alerus as its sole and exclusive agent for the
operation and administration of the Trading Service and Alerus accepts such
appointment.


 


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2)                                      Operation of the Trading Service. 
Alerus shall operate the Trading Service in accordance with the terms
and conditions set forth in the Operational Manual attached hereto as Exhibit
“A”, and shall at all times comply with all applicable requirements for
registered broker-dealers and alternative trading systems under the Exchange
Act and state securities laws.


 


3)                                      Reserved.


 


4)                                      Escrow Account. Alerus shall establish an escrow account
(the “Escrow Account”) with a reputable bank (the “Escrow Agent”) where all
funds contributed toward the purchase of Northern Growers’ capital units will
be deposited by the buyer of capital units. 
Alerus shall provide Northern Growers with all relevant information
describing the Escrow Account so that Northern Growers may coordinate and, if
necessary, contract with the Escrow Agent the completion of all transactions in
a timely and efficient manner.


 


5)                                      Transfer Agent. 
Northern Growers shall designate a transfer agent (the “Transfer Agent”)
for the transfer of the capital unit certificates and other necessary documents
of Northern Growers.   Northern Growers
shall provide Alerus and the Escrow Agent with all relevant information
required to complete the transfer of capital units on Northern Growers’ books
and records, including, but not limited to, the authorized contact person and
the mailing and e-mail address of the Transfer Agent, so that the Escrow Agent
may obtain from the Transfer Agent all information and authorizations necessary
to complete sales transactions and specifically to inform the Escrow Agent when
and to whom payment is to be made.


 


6)                                      Fees Payable to Alerus.  For
its operation of the Trading Service, Alerus shall be compensated as follows:


 


a)                                      Initial Set-up Fee.  Upon
execution of the parties’ original Trading Service Agreement, Northern Growers
paid to Alerus an initial set-up fee of Two Thousand Five Hundred and
No/Dollars ($2,500.00).


 


b)                                     Annual
Maintenance Fees.  During the term
of this Agreement, Northern Growers shall pay to Alerus, an annual maintenance
fee of One Thousand and no/100 Dollars ($1,000.00), the total sum to be due on
or before January 1st of each year.


 


c)                                      Transaction
Fee.  The seller of capital units
will be assessed a fee of three percent (3.0%) of the sale price for each
transaction of capital units, the minimum fee per listing being Two Hundred
Fifty and no/100 Dollars ($250.00).


 


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7)                                      Term of Agreement.  This
Agreement shall become effective immediately and the initial term shall expire
on December 31, 2005.  Thereafter, it
shall renew automatically for one year terms unless and until terminated in
accordance with Section 8 below.


 


8)                                      Termination.  Northern Growers and Alerus
expressly agree that this Agreement may be terminated by either party (i) 
at the end of the initial term or any renewal term, with or without cause, upon
written notice given to the other party not less than four months (one
trimester) prior to the end of such term, or (ii) upon the material breach of
this Agreement by the other party provided that the non-breaching party has
given the breaching party not less than thirty (30) days written notice
describing the breach and its intent to terminate, and such breach is not cured
prior to the noticed termination date. 
If, however, the Trading Service becomes inoperable for an unreasonable
period of time, or is suspended for any period of time by a state or federal
securities regulator or other government agency, Northern Growers and Alerus
expressly agree that this Agreement may be terminated at any time upon five (5)
days written notice of termination from Northern Growers to Alerus.


 


9)                                      Trading Service Operating Expenses.  All
operating costs and expenses arising out of the operation of the Trading
Service shall be borne by Alerus.  All
services of Alerus’ officers, directors, or all persons employed by Alerus
shall be provided at Alerus’ own expense and not charged to Northern Growers.


 


10)                                Representations of Alerus. 
Alerus represents, warrants, and agrees that:


 


a)                                      Alerus
is a member in good standing with the NASD.


 


b)                                     Alerus,
and its officers, directors, control persons, and all persons associated with
Alerus who will be operating the Trading Service, have the necessary
registrations, licenses and permissions to allow Alerus and such persons to
operate the Trading Service in accordance with all applicable state and federal
securities laws and regulations and the rules of the NASD.


 


c)                                      Alerus
shall maintain its registration with the SEC as an alternative trading system
at all times during the term of this Agreement.


 


d)                                     Alerus
shall comply at all times with all legal requirements for an alternative
trading system, as set forth under the Exchange Act, at all times during the
term of this Agreement.


 


e)                                      Alerus
shall comply with all federal and state securities laws for purposes of
maintaining its registration as a broker-dealer with the SEC, NASD and
applicable states.


 


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f)                                        Alerus
agrees to become registered as a broker-dealer in any state requested by
Northern Growers, provided the registration is mutually agreed to between
Alerus and Northern Growers and cost effective for both parties.


 


g)                                     Alerus
shall promptly notify Northern Growers in writing of any inquiry by any
securities regulator regarding any aspect of the Trading Service.


 


h)                                     In
the event Alerus’s Trading Service becomes temporarily inoperable, Alerus will
make every effort to the best of its ability to correct the problem associated
with the Trading Service and make every effort to the best of its ability to
facilitate the trading of capital units among members and non-members of
Northern Growers.


 


i)                                         Alerus
shall, in good faith, comply with all terms and conditions of this Agreement.


 


11)                                Representations of Northern Growers. 
Northern Growers represents, warrants, and agrees that:


 


a)                                      Northern
Growers is duly organized, validly existing and in good standing under the laws
of the State of South Dakota:


 


b)                                     All
outstanding capital units will be validly issued and fully paid.


 


c)                                      Northern
Growers shall, in good faith, comply with the terms and conditions of this
Agreement.


 


12)                                Alerus’s Interaction with Service Users. 
Alerus’s interaction with members of Northern Growers, other persons and
other entities using the Trading Service (“Service Users”) shall be to provide
a medium by which Northern Growers’ members and non-members may sell, purchase
and transfer capital units of Northern Growers.  Alerus, however, shall not engage in any of the following
activities associated with the operation of the Trading Service:


 


a)                                      Alerus
shall not directly or indirectly provide to Service Users investment, tax,
accounting or other advice regarding transactions conducted through the Trading
Service unless the Service User is an actual client of Alerus as evidenced by
the execution of a new account form;


 


b)                                     Alerus
shall not arrange financing for any Service Users for the purchase of capital
units through the Trading Service unless the Service User is an actual client
of Alerus as evidenced by the execution of a new account form;


 


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c)                                      Alerus
shall not receive, transfer, hold or handle any funds paid by or due to Service
Users as a result of a sale or exchange of capital units through the Trading Service.


 


13)                                Confidentiality.  The
parties acknowledge that each shall come into possession of  information that comprises valuable trade
secrets and other confidential information (“Confidential Information”) which
is exclusively owned by the conveying party. 
Both parties expressly recognize that Confidential Information is being
conveyed to them under conditions of confidentiality, and agree that they shall
not disclose Confidential Information to any third party during the term of the
Agreement, and for a period of two (2) years following the termination or
expiration of this Agreement.  The
parties may, however, disclose Confidential Information to their employees when
it is necessary to assure compliance with other terms and conditions of this
Agreement, and nothing herein shall prevent either party from complying with
any applicable law, regulation, or court order when required.


 


14)                                Limitation of Liability.  Each
party shall be independently and severally liable for each and every liability,
loss, claim, demand, expense and damage including, without limitation,
reasonable attorney’s fees, which may arise out of the use, administration and
operation of the Trading Service hereunder, resulting from such party’s failure
to exercise the proper degree of care to whom it owes the duty of such care.


 


15)                                Limitation of Responsibilities.  The
parties specifically acknowledge and agree that the responsibilities of Alerus
are set forth solely in this Agreement Operational Manual and Regulation ATS
and that Alerus is not responsible in any way for enforcing the provisions of
Northern Growers’ Capital Units Transfer System.  In addition, nothing in this Agreement or the Operational Manual
shall be construed to prevent a subscriber (as such term is defined in Regulation
ATS) from trading outside the ATS.


 


16)                                Miscellaneous Provisions.


 


a)                                      Benefit.  This Agreement shall bind the parties hereto
and shall inure to and be binding upon the respective legal representatives,
successors, heirs and assigns.


 


b)                                     Entire
Agreement; Waiver.  This instrument
contains the entire agreement of the parties. 
It may not be changed orally but only by an agreement in writing signed
by both parties.  A waiver of any term
or provision shall not be construed as a waiver of any other term or provision
or as a waiver of subsequent performance of the same provision in this
Agreement.


 


c)                                      Severability.  The parties agree that if any part, term,
paragraph or provision of this Agreement is in any manner held to be invalid,
illegal,


 


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void or in any
manner unenforceable, or to be in conflict with any law of the State of South
Dakota, then the validity of the remaining portions or provisions of this
Agreement shall not be affected, and such part, term, paragraph or provision
shall be construed and enforced in a manner designed to effectuate the intent
expressed in this Agreement to the maximum extent permitted by law.


 


d)                                     Assignment.  Except as otherwise provided
in this Agreement, this Agreement is made for the personal benefit of the
parties hereto, and neither party may assign this Agreement, or any part
thereof, or delegate any duty or obligation imposed by this Agreement without
the express written consent of the other party hereto.


 


e)                                      Captions.  The captions and titles utilized in this
Agreement are for convenience of reference only, and shall not be deemed to
define or limit any of the terms, conditions, or provisions of this Agreement.


 


f)                                        Governing Law; Forum. 
This Agreement and all obligations created hereunder or required to be
created hereby shall be governed by and construed and enforced in accordance
with the laws of the State of South Dakota, and the parties hereby consent that
the State Circuit Court situated in Minnehaha County, South Dakota, shall be
the exclusive jurisdiction and venue of any disputes relating to the Agreement.


 


g)                                     Notices.  Any notice, statement or
demand required or permitted to be given under this Agreement shall be in
writing, sent by first class mail or hand delivered, addressed, as the case may
be to Northern Growers or Alerus at their respective addressees set forth
above, or to such other address as Northern Growers or Alerus shall designate
and, unless earlier received, shall be deemed to have been received on the date
five (5) days after it shall have been mailed, as aforesaid, in any post office
or branch post office regularly maintained by the United States Government.


 


IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.


 


	
   

  	
  NORTHERN GROWERS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Peterson

  	
   

  
	
   

  	
  Its: President

  
	
   

  	
   

  
	
   

  	
  ALERUS SECURITIES
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Kraft

  	
   

  
	
   

  	
  Its:
  President

  
						



 


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