Exhibit 10.1


 


ETHANOL
MARKETING CONTRACT
TERMINATION


 


THIS
ETHANOL MARKETING CONTRACT
TERMINATION (the “Ethanol Marketing Contract
Termination”) is made and entered into this 4th day of November,
2005 by and between Ethanol Products, LLC, a South Dakota limited liability
company (“Ethanol Products”) and Dakota Ethanol,
L.L.C., a South Dakota limited liability company (“Dakota
Ethanol”).


 


RECITALS:


 


WHEREAS,
Ethanol Products (by assignment from Broin Enterprises, Inc.) and Dakota
Ethanol are parties to a certain Ethanol Marketing Contract, dated as of
October 7, 1999, as amended on June 7, 2001 and as further amended on November
26, 2002 (the “Ethanol Marketing Contract”),
relating to Ethanol Products’ marketing of fuel grade ethanol produced by
Dakota Ethanol at its facility located in Lake County, South Dakota (the “Plant”);


 


WHEREAS,
pursuant to the Ethanol Marketing Contract, Ethanol Products agreed to market
all fuel grade ethanol produced at the Plant, and Dakota Ethanol agreed to pay
Ethanol Products a marketing fee for ethanol sold and administrative services
fee for administrative services performed on behalf of Dakota Ethanol;


 


WHEREAS,
Ethanol Products’ duties under the Ethanol Marketing Contract commenced upon
the start of production of ethanol at the Plant and under the terms of the
Ethanol Marketing Contract expires on September 1, 2006, a date five (5) years
from the start of production of ethanol;


 


WHEREAS,
each of the parties desires to terminate the Ethanol Marketing Contract under
the terms and conditions stated herein;


 


NOW
THEREFORE, in consideration of the mutual
representations, warranties and covenants contained herein and of other good
and valuable consideration, the receipt and sufficiency of which is
acknowledged, the parties agree as follows:


 


1.             Termination
of Ethanol Marketing Contract. 
Effective as of the close of business on December 31, 2005 (the “Termination Date”), the Ethanol Marketing Contract shall be
terminated in accordance with the provisions of this Ethanol Marketing Contract
Termination.


 


A.            Notwithstanding
the foregoing, Dakota Ethanol shall be permitted continued dial up access
through PCAnywhere through January 5, 2006 in order to allow for the orderly
deactivation and removal of the proprietary Ethanol Products systems.  On
January 6, 2006, Ethanol Products shall disable Dakota Ethanol’s access to
PCAnywhere.


 


B.            From
and after the Termination Date, Dakota Ethanol shall assume all rights and
responsibilities arising from the services previously undertaken by Ethanol


 





















 


Products under the Ethanol Marketing Contract and under the outstanding
contracts listed on Exhibit A
attached hereto and incorporated herein by this reference.  Without limiting the foregoing, Dakota
Ethanol shall be responsible for completing any outstanding futures, options,
hedges or other contracts outstanding as of the Termination Date as set forth
on Exhibit A hereto, which Ethanol Products represents and warrants is a
complete list of all such contracts; provided that Ethanol Products shall not enter
into any futures, options, hedges or other contracts on behalf of Dakota
Ethanol after the date hereof without the express written consent of Dakota
Ethanol.  Dakota Ethanol shall further be
responsible for transferring any existing risk management or hedging accounts
established by Ethanol Products for the benefit of Dakota Ethanol to similar
accounts established by Dakota Ethanol, at the sole expense of Dakota
Ethanol.  Without limiting the foregoing,
on or prior to the Termination Date, Dakota Ethanol shall have made
arrangements to transfer the data on the Plant to Excel with respect to bills
of lading, denaturant receipts, certificates of analysis and similar data.


 


C.            Ethanol
Products shall be obligated to make reasonable efforts to collect accounts
receivable outstanding as of the Termination Date and to remit to Dakota
Ethanol payments received therefrom, less any amounts owed to Ethanol
Products.  The list of outstanding
accounts receivable as of the date of this Ethanol Marketing Contract Termination
is attached hereto as Exhibit B, and on January 3, 2006, Ethanol Products shall provide
Dakota Ethanol with an updated list of accounts receivable outstanding as of
the Termination Date.  If the accounts
receivable are not collected after reasonable attempts to do so, Ethanol
Products shall assign such accounts receivable to Dakota Ethanol and Ethanol
Products’ obligations with respect to the collection of such accounts shall be
terminated.


 


D.             Any
and all outstanding invoices, billing statements, and other amounts due and
owing to Dakota Ethanol pursuant to the Ethanol Marketing Contract shall be
paid in full by Ethanol Products as of the Termination Date, except for the
accounts receivable outstanding as of such date but not yet collected.


 


E.             Dakota
Ethanol and Ethanol Products each acknowledge and agree that they will not
directly or indirectly, verbally or in writing, make statements to any third
party which defames the other party, or disparages or reflects adversely on the
reputation or business of the other party.


 


2.             Payments
to Ethanol Products.


 


A.            Dakota Ethanol shall
pay Ethanol Products the amount of Four Hundred Thirty Five Thousand Fifty
Dollars ($435,050.00), as follows: 
Dakota Ethanol will receive a credit of $200,000 for the amount payable
to Dakota Ethanol by Ethanol Products under the terms of the Redemption
Agreement dated of even date herewith (the “Redemption Agreement”), between
Dakota Ethanol and Ethanol Products, and the balance in the amount of Two
Hundred Thirty Five Thousand Fifty Dollars ($235,050.00) shall be payable by
Dakota Ethanol to Ethanol Products on or before December 31, 2005.  Ethanol Products agrees that the amounts
payable to Ethanol Products hereunder


 


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represent fair and sufficient consideration for termination of the
Ethanol Marketing Contract as provided herein.


 


B.            Notwithstanding
anything to the contrary contained herein, subsequent to the Termination Date,
Ethanol Products may receive payment on sales and services performed prior to
the Termination Date.  Upon receipt of
such amounts, Ethanol Products shall calculate the amounts payable to Dakota
Ethanol consistent with the terms of the Ethanol Products Marketing Contract
and related agreements and shall promptly remit the amounts payable to Dakota
Ethanol in accordance with current practices existing among the parties.


 


C.            Dakota
Ethanol agrees that it shall not enter into any financing agreements,
covenants, or restrictions or other agreements or covenants that would prohibit
or restrict Dakota Ethanol from paying the amounts in Section 2(A) above to
Ethanol Products by the required deadline.


 


D.           Dakota
Ethanol shall be responsible for payment of all taxes and charges now or
hereafter imposed (whether by federal, state, municipal or other public
authority), by reason of the Ethanol Marketing Contract or Dakota Ethanol’s
performance of its obligations thereunder, including, but not limited to sales
or use taxes, but excluding any income tax imposed upon the net profits of
Ethanol Products.


 


3.            Mutual Release and
Indemnification.  Solely with
respect to the Ethanol Marketing Contract, the parties hereby agree as follows:


 


A.            Dakota
Ethanol hereby releases Ethanol Products and agrees to indemnify and hold Ethanol
Products and its officers, directors, employees, and agents harmless from any
and all claims, right to contribution or indemnity, suits, damages, injuries,
demands, causes of action, obligations, agreements, debts, and liabilities
whatsoever, both at law and in equity, that Dakota Ethanol may have against
Ethanol Products, except for any claims for breach of this Agreement.


 


B.            Ethanol
Products hereby releases Dakota Ethanol and agrees to indemnify and hold Dakota
Ethanol and its officers, directors, employees, and agents harmless from any
and all claims, right to contribution or indemnity, suits, damages, injuries,
demands, causes of action, obligations, agreements, debts, and liabilities
whatsoever, both at law and in equity, that Ethanol Products may have against
Dakota Ethanol, except for any claims for breach of this Agreement.


 


C.            Notwithstanding
the foregoing, Dakota Ethanol agrees that any and all liability related to or
arising in respect of the product of Dakota Ethanol, including the quantity and
quality thereof, shall remain the sole liability of Dakota Ethanol, and Dakota
Ethanol shall indemnify Ethanol Products and its officers, directors, employees
and agents from and against any and all claims, actions, damages, fines,
penalties, liabilities and expenses, including, but not limited to, attorneys’
and other professional fees, in connection with any such liability related to
or arising in respect of the product of Dakota 


 


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Ethanol.


 


4.            Further Assurances.  Each of the parties hereto agrees to use its
best efforts to take, or cause to be taken, all appropriate action, and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws, statutes, ordinances, codes, rules, and regulations to consummate and
make effective the transactions contemplated by this Ethanol Marketing Contract
Termination in the most expeditious manner practicable, including but not
limited to, the execution and delivery of all additional or ancillary documents
or agreements which are reasonably necessary to consummate the transactions
contemplated herein and therein.


 


5.            Equipment and
Property.  Ethanol Products
represents that the property listed on Exhibit C,
which is incorporated herein by this reference, was purchased with Ethanol
Product’s own funds, and based upon such representation, Dakota Ethanol agrees
that all machinery, equipment, and other property listed on Exhibit C shall remain the sole property of Ethanol
Products, and shall be removed from the Plant by Ethanol Property or its
designated representative within thirty (30) days following the
Termination Date.  Ethanol Products shall
repair, at its sole cost and expense, any damage caused by such removal.  All other property located or used in the
operation of the Plant shall remain the sole and exclusive property of Dakota
Ethanol.


 


6.            Drafting
Presumption.  The parties
acknowledge and agree that they have participated equally in the drafting and
preparation of this Ethanol Marketing Contract Termination, and that in the
event of a dispute having its origins in or relating to the provisions of this
Ethanol Marketing Contract Termination, or any document, instrument or
ancillary agreement delivered pursuant to this Ethanol Marketing Contract
Termination, no presumption shall arise in favor of or against either party by
virtue of their having participated in the drafting of this Ethanol Marketing
Contract Termination.


 


7.            Benefit.  This Ethanol Marketing Contract Termination
shall bind the parties hereto and shall inure to and be binding upon their
respective successors and permitted assigns.


 


8.            Entire Agreement:
Waiver.  This Ethanol Marketing
Contract Termination and any exhibits or schedules attached hereto or
incorporated herein contain the entire agreement of the parties as to the
subject matter contained herein.  The
terms, conditions, and provisions contain in this Ethanol Marketing Contract
Termination supercede any contradicting terms, conditions, and provisions
contained in the Ethanol Marketing Contract.


 


9.            Severability.  The parties agree that if any part, term,
paragraph, or provision of this Ethanol Marketing Contract Termination is in
any manner held to be invalid, illegal, 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 Ethanol Marketing
Contract Termination 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 Ethanol Marketing Contract Termination to the
maximum extent permitted by law.


 


10.          Assignment.  Except as otherwise provided in this Ethanol
Marketing Contract


 


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Termination, this Ethanol Marketing Contract
Termination is made for the personal and individual benefit of the parties
hereto, and no party may assign this Ethanol Marketing Contract Termination, or
any part thereof, or delegate any duty or obligation imposed by this Ethanol
Marketing Contract Termination without the express written consent of the
opposite party or parties hereto.


 


11.          Captions.  The captions and titles utilized in this
Ethanol Marketing Contract Termination are for convenience of reference only,
and shall not be deemed to define or limit any of the terms, conditions, or
provisions of this Ethanol Marketing Contract Termination.


 


12.          Governing Law; Forum.  This Ethanol Marketing Contract Termination
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 agree that the Circuit Court situated
in Lake or Minnehaha Counties in South Dakota, shall
be the exclusive jurisdiction and venue of any disputes relating to this
Ethanol Marketing Contract Termination.


 


13.          Notices.  All notices required to be given by this
Ethanol Marketing Contract Termination shall be made in writing either by (i) personal
delivery to the party requiring notice and securing a written receipt; or (ii)
mailing notice in the United States mail to the address of the party requiring
notice which is set forth below, by certified mail, return receipt requested.  The effective date of the notice shall be the
date of the written receipt or the date of the return receipt, as
applicable.  The refusal of a party to
accept a certified mail letter shall be treated as the delivery of the letter
on the date of refusal.


 


If to Dakota Ethanol:


 


Dakota
Ethanol, LLC


PO Box 100


Wentworth, SD 57075


Telephone:  (605) 483-2676


Facsimile:   (605) 483-2681


 


With a copy to (which shall not constitute
notice):


 


Douglas J.
Hajek


Davenport,
Evans, Hurwitz & Smith, LLP


P.O. Box 1030


Sioux Falls,
SD 57101-1030


Telephone:  (605) 336-2880


Facsimile:   (605) 335-3639


 


If to Ethanol Products:


 


Ethanol
Products, LLC


9530 East 37th
Street North


 


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Wichita, KS
67226


Telephone:  (316) 303-1380


Facsimile:   (316) 267-1071


 


With a copy to (which shall not constitute
notice):


 


Gregg S.
Greenfield


Boyce,
Greenfield, Pashby & Welk, L.L.P.


P.O. Box 5015


Sioux Falls,
SD 57117-5015


Telephone:  (605) 336-2424


Facsimile:   (605) 334-0618


 


or to such other address as the parties may
specify in writing by sending notice thereof to the opposite party.


 


14.          Counterparts.  This Ethanol Marketing Contract Termination
may be executed simultaneously in two or more counterparts, each of when duly
executed and delivered shall be deemed an original and all of which shall
constitute one and the same instrument. 
This Ethanol Marketing Contract Termination may be executed and
delivered by facsimile, which facsimile signature pages shall be deemed
originals.


 


15.          Exercise of Rights
and Remedies.  Except as
otherwise provided herein, no delay of or omission in the exercise of any
right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Ethanol Marketing Contract Termination
shall impair any such right, power or remedy, nor shall it be construed as a
waiver or acquiescence in any such breach or default, or of any similar breach
or default occurring later; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default occurring before or
after that waiver.


 


16.          Time of the Essence.  Time is of the essence with respect to this
Ethanol Marketing Contract Termination. 
Notwithstanding anything to the contrary contained herein, it is a
condition precedent to the parties’ obligations hereunder that the Redemption
Agreement be executed and delivered by the parties contemporaneously herewith.


 


17.          Remedies Cumulative.  No right, remedy or election given by any
term of this Ethanol Marketing Contract Termination shall be deemed exclusive
but each shall be cumulative with all other rights, remedies and elections
available at law or in equity.


 


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IN WITNESS WHEREOF, the parties hereto have
executed this Ethanol Marketing Contract Termination as of the date first
written above for the purposes herein contained.


 


 


	
   

  	
  DAKOTA ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/
  Brian Woldt

  	
   

  
	
   

  	
   

  	
  Brian Woldt, Chairman, Board of Managers

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ETHANOL PRODUCTS, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Bob Casper

  	
   

  
	
   

  	
   

  	
  Bob Casper, Its President

  



 


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EXHIBIT A


 


OUTSTANDING CONTRACTS


 


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EXHIBIT B


 


OUTSTANDING ACCOUNTS RECEIVABLE


 


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EXHIBIT C


 


PROPERTY AND EQUIPMENT OF ETHANOL PRODUCTS,
LLC


 


•      Ethanol Products “Reference Guide” training manuals.


•      Unused Ethanol Products “Bill of Lading” paper stock.


•      PERS Stickers.


•      Railcar placards.


•      Railcar gaskets.


•      Railcar man-way bolts.


•      Ethanol Products market reports.


•      Ethanol Products board reports.


 


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