Exhibit 10.3


 


DDGS
MARKETING CONTRACT
TERMINATION


 


THIS DDGS
MARKETING CONTRACT
TERMINATION (the “DDGS Marketing Contract
Termination”) is made and entered into this 4th day of November,
2005 by and between Broin Enterprises, Inc., a South Dakota corporation, doing
business as Dakota Commodities (“Dakota Commodities”),
and Dakota Ethanol, L.L.C., a South Dakota limited liability company (“Dakota Ethanol”).


 


RECITALS:


 


WHEREAS,
Dakota Commodities and Dakota Ethanol are parties to a certain DDGS Marketing
Contract, dated as of June 7, 2001 (the “DDGS Marketing Contract”),
relating to Dakota Commodities’ marketing of dry distiller’s grain with
solubles, modified wet distiller’s grain, wet distiller’s grain and solubles
(syrup) (hereinafter collectively referred to as “DDGS”)
produced by Dakota Ethanol at its facility located in Lake County, South
Dakota, (the “Plant”);


 


WHEREAS,
pursuant to the DDGS Marketing Contract, Dakota Commodities agreed to market
all DDGS produced at the Plant, and Dakota Ethanol agreed to pay Dakota
Commodities a Marketing Fee in the amount of three percent (3%) of gross
monthly DDGS sales, with a minimum annual marketing fee of Two Hundred Thousand
Dollars ($200,000.00) per year;


 


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


 


WHEREAS,
each of the parties desires to terminate the DDGS 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 DDGS Marketing Contract. 
Effective as of the close of business on November 30, 2005 (the “Termination Date”), the DDGS Marketing Contract shall be
terminated in accordance with the provisions of this DDGS Marketing Contract
Termination.


 


A.           Notwithstanding
the foregoing, Dakota Ethanol shall be permitted to continue to access AgMotion
through December 5, 2005 in order to obtain shipment and related information
with respect to DDGS products shipped prior to the Termination Date.  On December 6, 2005, Dakota Commodities shall
disable Dakota Ethanol’s access to AgMotion.


 


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


 





















 


DDGS 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 Dakota Commodities represents and
warrants is a complete list of all such contracts; provided that Dakota
Commodities 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, hedging or other accounts established by Dakota
Commodities for the benefit of Dakota Ethanol to similar accounts established
by Dakota Ethanol at the sole cost and expense of Dakota Ethanol.


 


C.            Dakota
Commodities 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 Dakota
Commodities.   The list of outstanding
accounts receivable as of the date of this DDGS Marketing Contract Termination
is attached hereto as Exhibit B, and
on December 1, 2005, Dakota Commodities shall provide 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, Dakota Commodities shall assign such
accounts receivable to Dakota Ethanol and Dakota Commodities’ obligations with
respect to the collection of such accounts shall be terminated.


 


D.             In
connection with the termination of the DDGS Marketing Contract, all leases or
other rights of Dakota Ethanol to use any trucks or rail cars of Dakota
Commodities shall cease on the Termination Date, and any agreements, leases,
memorandums of understanding or other letter agreements between the parties
with respect thereto shall automatically terminate and any prior notice
provisions therein are hereby mutually waived by the parties hereto.


 


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


 


2.             Payments
to Dakota Commodities.


 


A.            Dakota
Ethanol shall pay Dakota Commodities the sum of Two Hundred Fourteen Thousand
Five Hundred Thirty-Nine Dollars ($214,539.00) on or before November 30,
2005.   Dakota Commodities agrees that
the amounts payable to Dakota Commodities hereunder represent fair and
sufficient consideration for termination of the DDGS Marketing Contract as
provided herein.


 


B.             Notwithstanding
anything to the contrary contained herein, subsequent to the Termination Date,
Dakota Commodities may receive payment on sales of DDGS made prior to the
Termination Date.  Upon receipt of such
funds, Dakota Commodities


 


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shall calculate the amounts payable to Dakota
Ethanol consistent with the terms of the DDGS Marketing Contract and related
purchase and sale 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
Dakota Commodities 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 DDGS 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
Dakota Commodities.


 


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


 


A.            Dakota Ethanol hereby
releases Dakota Commodities and agrees to indemnify and hold Dakota Commodities
and its offices, 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 Dakota
Commodities, except for any claims for breach of this DDGS Marketing Contract
Termination.


 


B.            Dakota Commodities
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, debt, and liabilities whatsoever,
both at law and in equity, that Dakota Commodities may have against Dakota
Ethanol, except for any claims for breach of this DDGS Marketing Contract
Termination.


 


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 DDGS 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.  Dakota Commodities
represents that the property listed on Exhibit C,
which is incorporated herein by this reference, was purchased with Dakota
Commodities’ own funds, and based upon such representation, Dakota Ethanol
agrees that all such property listed on Exhibit C shall
remain the sole property of Dakota Commodities and shall be removed from the
Plant by Dakota Commodities or its designated representative within


 


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thirty (30) days following the Termination
Date.


 


6.            Drafting
Presumption.  The parties
acknowledge and agree that they have participated equally in the drafting and
preparation of this DDGS Marketing Contract Termination, and that in the event
of a dispute having its origins in or relating to the provisions of this DDGS
Marketing Contract Termination, or any document, instrument or ancillary
agreement delivered pursuant to this DDGS 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 DDGS Marketing Contract
Termination.


 


7.            Benefit.  This DDGS 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 DDGS Marketing
Contract Termination and any exhibits or schedules attached hereto or
incorporated herein and any agreements referenced herein contain the entire
agreement of the parties as to the subject matter contained herein.  The terms, conditions, and provisions contain
in this DDGS Marketing Contract Termination supercede any contradicting terms,
conditions, and provisions contained in the DDGS Marketing Contract.


 


9.            Severability.  The parties agree that if any part, term,
paragraph, or provision of this DDGS 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 DDGS 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 DDGS Marketing Contract Termination to the maximum extent
permitted by law.


 


10.          Assignment.  Except as otherwise provided in this DDGS
Marketing Contract Termination, this DDGS Marketing Contract Termination is
made for the personal and individual benefit of the parties hereto, and no
party may assign this DDGS Marketing Contract Termination, or any part thereof,
or delegate any duty or obligation imposed by this DDGS Marketing Contract
Termination without the express written consent of the opposite party or
parties hereto.


 


11.          Captions.  The captions and titles utilized in this DDGS
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 DDGS Marketing Contract Termination.


 


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


 


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13.          Notices.  All notices required to be given by this DDGS
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 Dakota Commodities:


 


Broin
Enterprises, Inc.


2209 East 57th Street


Sioux Falls,
SD 57108


Telephone:  (605) 965-2201


Facsimile:   (605) 965-2203


 


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 DDGS Marketing Contract Termination may
be executed


 


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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 DDGS 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 DDGS 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
DDGS Marketing Contract Termination.


 


17.          Remedies Cumulative.  No right, remedy or election given by any
term of this DDGS 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.


 


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


 


 


	
   

  	
  DAKOTA ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/
  Brian Woldt

  
	
   

  	
  Its Chairman, Board of Managers

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BROIN ENTERPRISES, INC. doing business as 

  DAKOTA COMMODITIES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Jim Hansen

  
	
   

  	
    Jim Hansen, Its COO

  



 


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EXHIBIT A


 


OUTSTANDING CONTRACTS


 


 


October, 2005


 


DDGS 2850 ton @ $66.00


Modified 1150 ton @ $38.00


Syrup 200 ton @ $10.00


 


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EXHIBIT B


 


ACCOUNTS RECEIVABLE


 


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EXHIBIT C


 


PROPERTY TO BE RETAINED TO DAKOTA COMMODITIES


 


•              Ag Motion Training
Manual


 


•              Nutrient and product
brochures


 


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