Document:

exhibit10321_amendcsaolympus.htm

    Exhibit
10.32.1

    
 

    
      AMENDMENT NO.
1

      TO

      COMMON STOCK PURCHASE
AGREEMENT

      

      This
Amendment No. 1 to Common Stock Purchase Agreement (the “Amendment”) is made as
of August 8, 2008, by and between Cytori Therapeutics, Inc., a Delaware
corporation with its principal executive office located at 3020 Callan Road, San
Diego, CA 92121 (the “Company”), and Olympus Corporation, a Japan corporation
with its principal executive office located at  43-2 Hatagaya
2-chome, Shibuya-ku, Tokyo, Japan (“Purchaser”) (the
Company and Purchaser are referred to collectively as the “Parties”).

      

      WHEREAS,
the Parties entered into that certain Common Stock Purchase Agreement executed
as of August 7, 2008 (the “Agreement”) (capitalized terms used in this Amendment
but not defined herein shall have the meaning assigned to them in the
Agreement); and

      

      WHEREAS,
Section 13 of the Agreement provides that in the event the final terms of the
Offering to third parties were more favorable than the terms offered to Olympus
in the Agreement, that Olympus would be entitled to adjust the terms of the
Agreement to reflect such more favorable terms; and

      

      WHEREAS,
The terms of the Offering were in fact more favorable to the third parties, and
the Parties hereto now agree to amend the terms of the Agreement to match the
more favorable terms provided to such third parties and effectuate the
provisions of Section 13 of the Agreement; and

      

      NOW,
THEREFORE, in consideration of the foregoing premises and the mutual
covenants and conditions set forth below, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties to this
Amendment hereby agree as follows:

      

      1. Amendments.

      

      
        	
                a.  

              	
                Section
      1 (Sale of Stock) of the Agreement shall be deleted in its entirety and
      the following inserted in its
place:

              

      

      

      “1.           Sale of
Stock.  Subject to the
terms and conditions of this Agreement, the Company will issue and sell to
Purchaser, and Purchaser agrees to purchase from the Company 1,000,000
unregistered shares of the Company’s Common Stock (the “Shares”) at a
purchase price of US$6.00 per Share for a total of US $6,000,000 (the “Purchase Price”). The
Purchase Price per share reflects the adjustment to more favorable terms for the
Purchaser in accordance with the terms of Section 13 of this
Agreement.

       

      (i) Warrants. For
each Share purchased above, Olympus shall be issued a five year Warrant to
purchase one half of a Share (a “Warrant Share”) at an
exercise price of $8.50 per Warrant Share, for a aggregate of 500,000 additional
Warrant Shares that may be acquired pursuant to the Warrant. The terms of the
Warrant shall be as contained in the form attached as hereto as Exhibit
A.

       

      2. Effect of
Amendment.  Except as and to the extent expressly modified by
this Amendment, the Agreement shall remain in full force and effect in all
respects.  In the event of a conflict or inconsistency between this
Amendment and the Agreement, the provisions of this Amendment shall
govern.

      

      3. Counterparts.  This
Amendment may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one instrument. Delivery of 

       

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      
         

        an
executed counterpart of a signature page of this Amendment by facsimile or other
electronic means shall constitute effective delivery.

         

      

      The
parties have executed this Amendment No. 1 to Common Stock Purchase Agreement as
of the date first set forth above.

       

      COMPANY:

       

      CYTORI
THERAPEUTICS, INC.

       

      /s/
Christopher J. Calhoun        

       

      By:
Christopher J. Calhoun

       

      Title:
CEO

       

      Address:

      3020
Callan Road

      San
Diego, CA 92121

       

      Fax:  US
858-458-0994

       

      

       

      PURCHASER:

       

      OLYMPUS
CORPORATION

       

      /s/
Yasunobu Toyoshima        

       

      By:
Yasunobu Toyoshima

      

       

      Title:
General Manager

       

      Address:

      43-2
Hatagaya 2-chome

      Shibuya-ku,
Tokyo

      Japan

      

      Fax:
Japan 03-3340-2062

      

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      Warrant

      
        
           

        

        
          -3-Exhibit
10.1

 

Confidential
Treatment Requested.  Confidential
portions of this document have been redacted and have been separately filed
with the Commission.

 

DISTILLERS GRAINS MARKETING AGREEMENT

 

THIS
DISTILLERS GRAINS MARKETING AGREEMENT  (the “Agreement”) is made and entered into as of the 15th
day of July, 2008 (the “Effective Date”) by and between RPMG, INC., a
Minnesota corporation (“RPMG”) and Dakota Ethanol, LLC, a South Dakota
corporation (“Producer”), collectively referred to hereinafter as “Parties”
or individually as a “Party”.

 

RECITALS

 

A.            RPMG markets DDGS (as
hereinafter defined).

 

B.            Producer produces or
shall produce DDGS at Producer’s ethanol production facility located or to be
located at Wentworth, SD (the “Ethanol Facility”).

 

C.            The Parties do desire
that RPMG shall market the DDGS produced at the Ethanol Facility.

 

NOW,
THEREFORE, in consideration of the foregoing, the mutual promises herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows.

 

AGREEMENT

 

1.             Marketing of
Distillers Grains.  Producer shall
sell to RPMG, and RPMG shall purchase and market, all of Producer’s production,
excluding such production Producer sells directly to the entities set forth on Schedule
1 attached hereto, of distillers dried grains with solubles (“DDGS )
produced at the Ethanol Facility, including any expansion or increase in
capacity at the Ethanol Facility.  RPMG
shall be the exclusive marketer of DDGS, and Producer shall not, either itself
(except as set forth in the foregoing sentence) or through any affiliate or any
third party, market any DDGS during the term of this Agreement.  Except as otherwise provided in this Agreement,
RPMG shall provide management resources to market and sell DDGS, including the
management of logistics and collection.

 

2.             Payments to Producer;
Commissions; Audit Rights

 

(a)           Payments
to Producer.  Subject to the other
terms of this Agreement, RPMG shall pay Producer for its DDGS in accordance
with the terms set forth in Exhibit A.  RPMG shall use commercially reasonable
efforts to make such payments to Producer on an average net ten (10) days.

 

(b)           RPMG
Commission.  Producer shall pay RPMG
commissions as follows: $*** for each ton of DDGS sold to third party end
purchasers (each, an “End Customer”) . As used herein, a “ton” means
2,000 lbs.  Parties shall from time to
time, or upon the reasonable request of RPMG, negotiate in good faith
adjustments to the foregoing commissions to reflect prevailing commissions
being paid to marketers of DDGS produced by third parties in the United States.

 

***
Confidential material redacted and filed separately with the Commission.

 

 

(c)           Accessorial
Charges.  As set forth on Exhibit A,
RPMG shall be responsible for payment of Accessorial Charges (as defined in Exhibit A)
to third parties; provided, however, that Producer agrees (i) to promptly
reimburse RPMG for such Accessorial Charges upon submission to Producer of an
invoice itemizing such Accessorial Charges, and (ii) that RPMG may deduct
and setoff the Accessorial Charges from and against payments due to Producer by
RPMG.

 

(d)           Late
Payments.  Overdue amounts not
disputed in good faith payable to either Party shall be subject to late payment
fees equal to interest accrued on such amounts at the maximum rate permitted by
applicable law.

 

(e)           No
Warranty as to Prices.  RPMG shall
market Producer’s DDGS using commercially reasonable efforts and the same
standards it uses to market the DDGS production of third parties for whom RPMG
provides DDGS marketing services.  RPMG
shall endeavor to (i) maximize the DDGS price and minimize freight and
other costs relevant to DDGS sales and (ii) achieve the best available
return to Producer, subject to relevant market conditions.  PRODUCER ACKNOWLEDGES THAT RPMG MAKES NO
REPRESENTATIONS, GUARANTEES OR WARRANTIES OF ANY NATURE WHATSOEVER AS TO THE
PRICES AT WHICH IT SHALL BE ABLE TO SELL PRODUCER’S DDGS TO END CUSTOMERS.

 

(f)            Waiver
of Certain Claims.  Producer acknowledges
(i) that RPMG shall use its reasonable judgment in making decisions
related to the quantity and price of DDGS marketed under this Agreement, in
light of varying freight and other costs, and (ii) that RPMG may sell and
market DDGS of third parties into the same markets where RPMG sells Producer’s
DDGS.  Producer waives any claim of
conflict of interest against RPMG or for failure by RPMG to maximize the
economic benefits of this Agreement for Producer in light of the foregoing.

 

(g)           Audit
Rights.  Within ninety (90) days
following the end of RPMG’s fiscal year end, Producer shall have the right to
inspect the books and records of RPMG for the purpose of auditing calculations
of the payments to Producer for the preceding year made in connection with this
Agreement.  Producer shall give written
notice to RPMG of its desire to conduct an audit and RPMG shall provide
reasonable access to all financial information necessary to complete such
audit.  The audit shall be conducted by
an accounting firm agreeable to both Parties and shall be completed within
forty-five (45) days after the completion of RPMG’s annual audit, but no later
than one hundred and fifty (150) days following RPMG’s fiscal year end.  The cost of the audit shall be the
responsibility of Producer unless the auditor determines that RPMG underpaid
Producer by more than three percent (3%) for the period audited, in which case
RPMG shall pay the cost of the audit.  If
the auditor determines that RPMG underpaid Producer, RPMG shall promptly pay
such underpayment to Producer and if the auditor determines that RPMG overpaid
Producer, Producer shall promptly pay the overpayment to RPMG.  The determination of the auditor shall be
final and binding on both Parties.  If
Producer fails to exercise its right to audit as provided in this Section 2(g) for
any year, it shall be deemed to have waived any rights to dispute payments made
to Producer for that year.

 

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3.             Scheduled
Production

 

(a)           Notice
of First Delivery.  RPMG may begin to
market Producer’s DDGS upon the Effective Date. 
If Producer is not producing DDGS as of the Effective Date, Producer
shall, on the Effective Date, provide RPMG with the projected date on which
Producer will first deliver DDGS produced at the Ethanol Facility to RPMG (the “Projected
Date of First Delivery”).  Producer
shall notify RPMG as soon as possible of any revisions to the Projected Date of
First Delivery.

 

(b)           Notices of Scheduled
Production.  Beginning on the
Effective Date, and on the 1st and 15th of each month
thereafter, Producer shall provide to
RPMG a rolling best estimate of production and inventory by DDGS product for
that month and each of the following twelve (12) months.  Beginning on the Effective Date and
each Wednesday thereafter, Producer shall provide to RPMG a best estimate of
production and inventory by DDGS product for that day and the next seven days.

 

(c)           Additional
Production Notices.  Producer shall
notify RPMG of anticipated production downtime or disruption in DDGS
availability at least one (1) month in advance of such outage.  Producer
shall timely inform RPMG of daily inventories, plant shutdowns, daily
production projections, and any other information (i) to facilitate RPMG’s
performance of the Agreement or (ii) that may have a material adverse
effect on RPMG’s ability to perform the Agreement.

 

(d)           RPMG
Entitled to Rely on Producer Estimates and Notices.  RPMG, in marketing and selling Producer’s
DDGS, is entitled to rely upon the production estimates and other notices
provided by Producer, including without limitation those described in Sections
3(a), (b), and (c).  Producer’s failure to provide
accurate information to facilitate RPMG’s performance of the Agreement may
negatively impact RPMG’s ability to market and sell DDGS at prevailing
prices.  Producer’s failure to provide
accurate information to facilitate RPMG’s performance of the Agreement may be
deemed by RPMG, in its sole but reasonable discretion, a material breach of the
Agreement by Producer.

 

(e)           Sale
Commitments.  From time to time
during the term of this Agreement and in order to maximize the sales price of
DDGS, RPMG may enter sales contracts or other agreements with End Customers for
future delivery of DDGS.  In the event
Producer fails to produce DDGS in accordance with the information provided to
RPMG under Sections 3(a), (b), or (c) above for reasons other than Force
Majeure (as defined in Section 10 herein), and as a result RPMG is
required to purchase DDGS from third parties to meet previous DDGS sale
commitments that are based upon such information, RPMG may charge Producer the
amount (if any) that the price of such replacement DDGS exceeded the price that
RPMG would have paid to Producer for the applicable DDGS under this Agreement.

 

4.             Logistics
and Transportation

 

(a)           No
Liens, Title and Risk of Loss.  Producer warrants that DDGS
delivered to RPMG hereunder shall be free and clear of all liens and
encumbrances of any nature whatsoever other than liens in favor of RPMG.  Title to and risk of loss of each load of
DDGS shall pass to RPMG at the time such load passes across the

 

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scale into rail
cars or trucks at the Ethanol Facility (the “Title Transfer Point”).  Until such time, Producer shall be deemed to
be in control of and in possession of the DDGS.

 

(b)           Loading.  RPMG shall schedule the loading and shipping
of all outbound DDGS purchased hereunder, but all labor and equipment necessary
to load trucks and rail cars and other associated costs shall be supplied and
borne by Producer without charge to RPMG. 
Producer shall handle the DDGS in a good and workmanlike manner in
accordance with RPMG’s written requirements and normal industry practice.  Producer shall maintain the truck and rail
loading facilities in safe operating condition in accordance with normal
industry standards and shall visually inspect all trucks and rail cars to
assure (i) cleanliness so as to avoid contamination, and (ii) that
such trucks and railcars are in a condition suitable for transporting the
DDGS.  RPMG and RPMG’s agents shall have
adequate access to the Ethanol Facility to load Producer’s DDGS on an industry
standard basis that allows RPMG to economically market Producer’s DDGS.  RPMG’s employees shall follow all reasonable
safety rules and procedures promulgated by Producer and provided to RPMG
reasonably in advance and in writing. 
Producer shall supply product description tags, certificates of
analysis, bills of lading and/or material safety data sheets that are
applicable to all shipments.  In the
event that Producer fails to provide the labor, equipment and facilities
necessary to meet RPMG’s loading schedule, Producer shall be responsible for
all costs and expenses, including without limitation actual demurrage and wait
time, incurred by RPMG resulting from or arising in connection with Producer’s
failure to do so.

 

(c)           Transportation
and Certain Transportation Costs. 
RPMG shall perform certain logistics functions for Producer, including
the arranging of rail and truck freight, inventory management, contract
management, bills of lading, and scheduling pick-up appointments.  RPMG shall determine the method of
transporting DDGS to End Customers. 
Notwithstanding any provision to the contrary herein, Producer shall be
solely responsible for any damage to any trucks, railcars, equipment, or
vessels caused by acts or omissions of Producer and its consignees.  All truck freight charges and rail tariff
rate charges shall be billed directly to RPMG and, as set forth in Exhibit A,
be recouped by RPMG from the proceeds of RPMG’s sales of DDGS to End
Customers.  Notwithstanding the
foregoing, rail cars required to transport the DDGS will be leased directly by
Producer.  If requested in writing by
Producer, RPMG will make lease payments for such rail cars on behalf of
Producer, and in such event RPMG shall recoup lease payments from the proceeds
of RPMG’s sales of DDGS to End Customers.

 

(d)           Weight.  The quantity of DDGS delivered to RPMG at the
Ethanol Facility shall be established by weight certificates obtained from
Producer’s scales or from such other scales as the Parties shall mutually
agree, which are certified as of the time of weighing and which comply with all
applicable laws, rules and regulations. In the case of rail shipments, the
official railroad weights shall govern establishment of said quantities.  Producer shall provide RPMG with a
fax/emailed copy of the outbound weight certificates on a daily basis and, except
as otherwise expressly agreed upon, such outbound weight certificates shall be
determinative of the

 

4

 

quantity of DDGS for which RPMG is obligated to pay
Producer pursuant to this Agreement.

 

(e)           DDGS
Storage at Ethanol Facility.  The
estimated storage capacity of the Ethanol Facility,  is as follows:

 

DDGS: Silo 4,000
tons, Warehouse 1,200 tons.

 

5.             Specifications;
Quality.

 

(a)           DDGS
Specifications.  Producer covenants
that it shall produce DDGS that, upon delivery to RPMG at the Ethanol Facility,
meets the respective specifications (“Specifications”) set forth in Exhibit B.  RPMG shall have the right to test each
shipment of DDGS to ascertain that the Specifications are being met.  If the DDGS provided by Producer to RPMG is
shown, by independent testing or analysis of a representative sample or samples
taken consistent with industry standards, to not meet the Specifications
through no fault of RPMG or any third party engaged by RPMG, then RPMG may, in
its sole discretion, (i) reject such DDGS and require Producer to promptly
replace such non-conforming DDGS with DDGS that complies with the
Specifications, or (ii) accept such DDGS for marketing and, if necessary,
adjust the price to reflect the inferior quality, as provided in Exhibit A.  Payment and acceptance of delivery by RPMG
shall not waive RPMG’s rights if DDGS does not comply with the terms of this
Agreement, including the Specifications.

 

(b)           Trade
Rules.  This Agreement shall be
governed by the then-current Feed Trade Rules of the National Grain and
Feed Association (the “Trade Rules”), unless otherwise specified.  In the event the Trade Rules and the
terms and conditions of this Agreement conflict, this Agreement shall control.

 

(c)           Compliance
With FDA and Other Standards. 
Producer warrants that, unless caused by the negligence or intentional
misconduct of RPMG or a third party engaged by RPMG, DDGS provided by Producer
to RPMG (i) shall not be “adulterated” or “misbranded” within the meaning
of the Federal Food, Drug and Cosmetic Act (the “Act”), (ii) may
lawfully be introduced into interstate commerce under the Act, and (iii) shall
comply with all state and federal laws, rules and regulations (including
without limitation the Trade Rules) including those governing quality, naming
and labeling of bulk product.  If
Producer knows or reasonably suspects that any DDGS produced at the Ethanol
Facility is adulterated or misbranded, or otherwise not in compliance with the
terms of the Agreement, Producer shall immediately so notify RPMG in writing.

 

(d)           Regulatory
Seizure.  Should any DDGS provided by
Producer to RPMG hereunder be seized or condemned by any federal or state
department or agency as a result of its failure to conform to any applicable
law, rule or regulation prior to delivery to an End Customer, such seizure
or condemnation shall operate as a rejection by RPMG of the goods seized or
condemned and RPMG shall not be obligated to offer any defense in connection
with such seizure or condemnation.  When
such rejection occurs, RPMG shall deliver written notice to Producer

 

5

 

within a reasonable time of the rejection and identify the deficiency
that resulted in such rejection.  In
addition to other obligations under this Agreement or at law, Producer shall
reimburse RPMG for all out-of-pocket costs reasonably incurred by RPMG in
storing, transporting, returning and disposing of the rejected goods in
accordance with this Agreement.

 

(e)           Sampling.  Producer shall take one representative origin
sample (pint size) from each lot of the DDGS before it leaves the Ethanol
Facility (each, a “Sample”).  RPMG
shall be entitled to witness the taking of Sample.   Producer shall label Sample to indicate the
applicable DDGS lot numbers, date of shipment, and the truck or railcar
number.    Producer shall send half of
Sample to RPMG promptly upon RPMG’s request. 
Producer may request that RPMG test results be provided to it at any
time after the tests are completed. 
Producer shall retain DDGS Sample for no less than three (3) months
or any longer period required by law RPMG knows or reasonably suspects that any
DDGS produced by Producer at the Ethanol Facility is not in compliance with the
terms of this Agreement, then RPMG may obtain independent laboratory tests of
such DDGS, and, if such DDGS is found not to be in compliance with the terms of
this Agreement, Producer shall, in addition to its other obligations hereunder,
pay all such testing costs.

 

6.             Term
and Termination

 

(a)           Term.  This Agreement shall have an initial term of
two (2) years, commencing on the Effective Date.  This Agreement shall be automatically
extended for an additional one (1) year term following the end of the
initial term and any renewal term unless either Party gives written notice to
the other of non-extension not less than one hundred and eighty (180) days
before the termination of the initial term or the then-current renewal term.

 

(b)           Producer Termination
Right.  Producer may immediately
terminate this Agreement upon written notice to RPMG if RPMG fails on three (3) separate
occasions within any 12-month period to purchase DDGS or to market DDGS under
circumstances where such breach or failure is not excused by this Agreement.

 

(c)           RPMG Termination
Right.  RPMG may immediately terminate
this Agreement upon written notice to Producer, if, for reasons other than a
Force Majeure (as defined in Section 10 herein) event, during any
consecutive three (3) months, Producer’s actual production or inventory of
any DDGS product at the Ethanol Facility varies by twenty percent (20%) or more
from the monthly production and inventory estimates provided by Producer to
RPMG pursuant to Section 3(b) hereunder.

 

(d)           Termination for
Insolvency.  Either Party may
immediately terminate the Agreement upon written notice to the other Party if
the other Party files a voluntary petition in bankruptcy, has filed against it
an involuntary petition in bankruptcy, makes an assignment for the benefit of
creditors, has a trustee or receiver appointed for any or all of its assets, is
insolvent or fails or is generally

 

6

 

unable to pay its debts
when due, in each case where such petition, appointment or insolvency is not
dismissed, discharged or remedied, as applicable, within sixty (60) days.

 

7.             Indemnification;
Limitation on Liability

 

(a)           Producer’s
Indemnification Obligation.  Producer
shall indemnify, defend and hold harmless RPMG and its shareholders, directors,
officers, employees, agents and representatives, from and against any and all
Damage (as defined in Section 7(c) herein) to the extent arising out
of (i) any fraud, negligence or willful misconduct of Producer or any of
its directors/governors, officers, employees, agents, representatives or
contractors or (ii) any breach of this Agreement by Producer.  RPMG shall promptly notify Producer of any
suit, proceeding, action or claim for which Producer may have liability
pursuant to this Section 7(a).

 

(b)           RPMG’s
Indemnification Obligation.  RPMG
shall indemnify, defend and hold harmless Producer and its
shareholders/members, directors/governors, officers, employees, agents and
representatives from and against any and all Damages to the extent arising out
of (i) any fraud, negligence or willful misconduct of RPMG or any of its
directors, officers, employees, agents, representatives or contractors or (ii) any
breach of this Agreement by RPMG. 
Producer shall promptly notify RPMG of any suit, proceeding, action or
claim for which Producer may have liability pursuant to this Section 7(b).

 

(c)           Definition
of Damages.  As used in this
Agreement, the capitalized term “Damages” means any and all losses, costs,
damages, expenses, obligations, injuries, liabilities, insurance deductibles
and excesses, claims, proceedings, actions, causes of action, demands,
deficiencies, lawsuits, judgments or awards, fines, penalties and interest,
including reasonable attorneys’ fees, but excluding any indirect, incidental,
special, exemplary, consequential or punitive damages.

 

(d)           Limitation
on Liability.  NEITHER PARTY MAKES
ANY GUARANTEE, WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY PROFIT, OR OF ANY PARTICULAR ECONOMIC RESULTS FROM TRANSACTIONS
HEREUNDER.  IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY FOR PUNITIVE OR EXEMPLARY DAMAGES OR FOR
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES.  EXCEPTING FOR A BREACH OF ITS NONDISCLOSURE
OBLIGATIONS OR PERFORMANCE OF ITS INDEMNIFICATION OBLIGATIONS HEREUNDER, RPMG’S
AGGREGATE LIABILITY TO PRODUCER SHALL IN NO EVENT EXCEED THE AMOUNT PAID BY
PRODUCER TO RPMG UNDER THIS AGREEMENT.

 

8.             Insurance.  During the term of this Agreement, each
party shall maintain insurance coverage that is standard for a company of its
type and size that is engaged in the production and/or selling of DDGS.  At a minimum, each party’s insurance coverage
shall include:  (i) comprehensive
general product and public liability insurance, with liability limits of at
least $5 million in the aggregate; (ii) property and casualty insurance
adequately insuring its facilities and its other assets against theft, damage
and destruction

 

7

 

on a replacement
cost basis; and (iii) workers’ compensation insurance to the extent
required by law.  RPMG, or Producer, as
the case may be, shall be added as a loss payee under the comprehensive general
product and public liability insurance policy and the property and casualty
insurance policy.  In relation to insurance
requirements on the DDGS leased railcars, (a) the Producer will be
responsible for the liability insurance on the DDGS leased railcars in the form
and amount as required by the railcar lessor’s contract, or at a minimum in the
amounts required by this Article 8 and (b) RPMG will carry property/physical
damage insurance for the DDGS railcars for loss or destruction, but will not be
responsible for the insurance deductible, maintenances (scheduled or
otherwise), including normal wear and tear related to such DDGS railcars.  The Producer will be listed as a Loss Payee
on RPMG’s Rolling Stock Policy in relation to the DDGS leased railcars.  A party shall not change its insurance
coverage during the term of this Agreement, except to increase it or enhance
it, without the prior written consent of the other Party which consent shall
not be unreasonably withheld.

 

9.             Confidentiality

 

(a)           Confidential
Information.  As used in this
Agreement, the capitalized term “Confidential Information” means (i) the
terms and conditions of this Agreement and (ii) any information disclosed
by one Party to the other, including, without limitation, trade secrets,
strategies, marketing and/or development plans, End Customer lists and other
End Customer information, prospective End Customer lists and other prospective
End Customer information, vendor lists and other vendor information, pricing
information, financial information, production or inventory information, and/or
other information with respect to the operation of its business and assets, in
whatever form or medium provided.

 

(b)           Nondisclosure.  Each Party shall maintain all Confidential
Information of the other in trust and confidence and shall not without the
prior written consent of the other Party:

 

(i)            disclose,
disseminate or publish Confidential Information to any person or entity without
the prior written consent of the disclosing Party, except to employees of the
receiving Party who have a need to know, who have been informed of the
receiving Party’s obligations hereunder, and who have agreed not to disclose Confidential
Information or to use Confidential Information except as permitted herein, or

 

(ii)           use
Confidential Information for any purpose other than the performance of its
obligations under the Agreement.

 

(c)           Standard
of Care.  The receiving Party shall
protect the Confidential Information of the disclosing Party from inadvertent
disclosure with the same level of care (but in no event less than reasonable
care) with which the receiving Party protects its own Confidential Information
from inadvertent disclosure.

 

(d)           Exceptions.  The receiving Party shall have no obligation
under this Agreement to maintain in confidence any information which it can
prove:

 

(i)            is
in the public domain at the time of disclosure or subsequently becomes part of
the public domain through no act or failure to act on the part of the

 

8

 

receiving Party or
persons or entities to whom the receiving Party has disclosed such information;

 

(ii)           is
in the possession of the receiving Party prior to the time of disclosure by the
disclosing Party and is not subject to any duty of confidentiality;

 

(iii)          the receiving Party obtains from any third
party not under any obligation to keep such information confidential; or

 

(iv)          the
receiving Party is compelled to disclose or deliver in response to a law,
regulation, or governmental or court order (to the least extent necessary to
comply with such order), provided that the receiving Party notifies the
disclosing Party promptly after receiving such order to give the disclosing
Party sufficient time to contest such order and/or to seek a protective order.

 

(e)           Ownership
of Confidential Information.  All
Confidential Information shall remain the exclusive property of the disclosing
Party.

 

(f)            Injunctive
Relief for Breach.  The receiving
Party acknowledges that monetary damages may not be a sufficient remedy for
unauthorized disclosure or use of Confidential Information, and that the
disclosing Party may be entitled, in addition to all other rights or remedies
in law and equity, to obtain injunctive or other equitable relief, without the
necessity of posting bond in connection therewith.

 

10.          Force
Majeure.  In the event either Party
is unable by Force Majeure (as defined below) to carry out its obligations
under this Agreement, it is agreed that on such Party’s giving notice in
writing, or by telephone and confirmed in writing, to the other Party as soon
as possible after the commencement of such Force Majeure event, the obligations
of the Party giving such notice, so far as and to the extent they are affected
by such Force Majeure, shall be suspended from the commencement of such Force
Majeure and during the remaining period of such Force Majeure, but for no
longer period, and such Force Majeure shall so far as possible be remedied with
all reasonable dispatch; provided, however, the obligation to make payments
then accrued hereunder prior to the occurrence of such Force Majeure shall not
be suspended and Producer shall remain obligated for any loss or expense to the
extent otherwise provided in this Agreement. 
The capitalized term “Force Majeure” as used in this Agreement shall
mean events beyond the reasonable control and without the fault of the Party
claiming Force Majeure, including acts of God, war, riots, insurrections, laws,
proclamations, regulations, strikes of a regional or national nature, acts of
terrorism, sabotage, and acts of any government body.

 

11.          Dispute
Resolution.  In the event a dispute
arises under this Agreement that cannot be resolved by those with direct
responsibility for the matter in dispute, such dispute shall be resolved by way
of the following process:

 

(a)           Senior management from Producer and from RPMG shall meet to discuss the
basis for the dispute and shall use their best efforts to reach a reasonable
resolution to the dispute.

 

9

 

(b)           If negotiations pursuant to Section 11(a) are unsuccessful, the
matter shall promptly be submitted by either Party to arbitration in accordance
with the Commercial Arbitration Rules then in effect of the American
Arbitration Association (“AAA”), except to the extent modified
herein.  The arbitration shall be held in
Hennepin or Scott County, Minnesota. 
Judgment on the award rendered may be entered in any court having
jurisdiction thereof.  The Parties shall
bear their respective costs incurred in connection with the procedures
described in this Section 11.  If
the Parties reach agreement pertaining to any dispute pursuant to the
procedures set forth in this Section 11, such agreement shall be reduced
to writing, signed by authorized representatives of each Party, and shall be
final and binding upon the Parties.

 

12.          Miscellaneous.

 

(a)           Successors and
Assigns; Assignment.  All of the terms, covenants, and
conditions of this Agreement shall be binding upon, and inure to the benefit of
and be enforceable by the Parties and their respective successors, heirs,
executors and permitted assigns.  No
Party may assign its rights, duties or obligations under this Agreement to any
other person or entity without the prior written consent of the other Party,
such consent not to be unreasonably withheld or delayed; notwithstanding the
foregoing, a Party may, without the consent of the other Party, assign its rights
and obligations under this Agreement to (i) its parent, a subsidiary, or
affiliate under common control with the Party or (ii) a third party
acquiring all or substantially all of the assets or business of such Party.

 

(b)           Notices.  Any
notice or other communication required or permitted hereunder shall be in
writing and shall be considered delivered in all respects when delivered by
hand, mailed by first class mail postage prepaid, or sent by facsimile with
delivery confirmed, addressed as follows:

 

To RPMG:             RPMG, Inc.

1157 Valley Park Drive, Suite 100

Shakopee, MN 55379

Fax: 952-465-3222

 

To Producer:         Dakota Ethanol

PO Box 100

Wentworth, SD 57075

Fax: 605-483-2681

 

Either Party may, from
time to time, furnish, in writing, to the other Party, notice of a change in
the address and/or fax number(s) to which notices are to be given
hereunder.

 

(c)           Applicable Law.  This Agreement shall be governed
in all respects by the laws of the State of Minnesota, except with respect to
its choice of law provisions.

 

(d)           Severability.  In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to
be illegal, unenforceable or void,

 

10

 

either in whole or in part, this Agreement shall
continue in full force and effect without said provision.

 

(e)           No
Third Party Beneficiaries.  No
provision of this Agreement is intended, or shall be construed, to be for the
benefit of any third party.

 

(f)            Entire Agreement; Amendment.  This Agreement constitutes the
entire understanding and agreement between the Parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous
understandings and/or agreements, written or oral, regarding the subject matter
of this Agreement.  No amendment or
modification to this Agreement shall be binding unless in writing and signed by
a duly authorized officer of both Parties.

 

(g)           Counterparts.  This Agreement may be executed in
counterparts, including facsimile counterparts, each of which shall be deemed
an original but together shall constitute but one and the same instrument.

 

(h)           Waiver.  The failure of either Party at any time to
require performance of any provision of the Agreement or to exercise any right
provided for in the Agreement shall not be deemed a waiver of such provision or
right unless made in writing and executed by the Party waiving such performance
or right. No waiver by either Party of any breach of any provision of the
Agreement or of any right provided for in the Agreement shall be construed as a
waiver of any continuing or succeeding breach of such provision or right or a
waiver of the provision or right itself.

 

(i)            Independent Contractors. 
The Parties to this Agreement are independent contractors. There is no
relationship of partnership, joint venture, employment, franchise, or agency
between the Parties, and no Party shall make any representation to the
contrary.

 

(j)            Additional
Rules of Interpretation.

 

(i)            The
words “include,” “includes” and “including” as used in this Agreement shall be
deemed to be followed by the phrase “without limitation” and shall not be
construed to mean that the examples given are an exclusive list of the topics
covered.

 

(ii)           The
headings as to contents of particular sections of this Agreement are inserted
for convenience and shall not be construed as part of the Agreement or as a
limitation on the scope of any terms or provisions of this Agreement.

 

(k)           Survival.  The following provisions of this Agreement
shall survive its termination: (i) to the extent of outstanding payment
obligations, Sections 2(a), 2(b), 2(c), and 2(d) and (ii) Sections
2(e), 2(f), 7, 9, 11, and 12.

 

IN
WITNESS THEREOF, each of the Parties hereto has caused this Agreement to
be executed by its respective duly authorized representative as of the day and
year first above written.

 

11

 

	
   

  	
  RPMG

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randy Hahn

  
	
   

  	
  Name:

  	
  Randy
  Hahn

  
	
   

  	
  Its
  (title):

  	
  CEO

  
	
   

  	
  Date:
  7/15/08

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRODUCER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Scott A. Mundt

  
	
   

  	
  Name:

  	
  Scott
  A. Mundt

  
	
   

  	
  Its
  (title):

  	
  CEO

  
	
   

  	
  Date: 7/15/08

  
							

 

12

 

SCHEDULE
1

 

Entities
to which Producer sells DDGS directly:

 

 

EXHIBIT  A

 

Terms
Relating to Payment and Commission Calculation

 

RPMG shall pay Producer for all Standard-Grade
and Non-Standard Grade DDGS loaded into
railcars and trucks and weighed at the Ethanol Facility for shipment to End
Customers an amount equal to the F.O.B. Ethanol Facility Price per ton, with
RPMG being entitled to retain its commission, with settlement weights as
described in Section 4(d) of the Agreement.

 

“Accessorial Charges”
shall mean charges imposed by third parties for the off-loading, movement and
storage of Producer’s DDGS, including without limitation taxes, tonnage taxes,
hard-to-unload truck or railcar charges/transloading charges, railcar repair
charges, fuel surcharges, storage charges, demurrage charges, product
shrinkage, detention charges, switching, and weighing charges (but excluding
Tariff Freight Costs).  Neither Party
shall be responsible for demurrage charges caused solely by the negligence or
willful misconduct of the other Party.

 

“Delivered Sale Price” shall mean sales dollars
received by RPMG for Producer’s DDGS, inclusive of tariff freight, as evidenced
by RPMG’s invoices to End Customers.

 

“F.O.B. Ethanol Facility Price” shall mean the
F.O.B. sale price equivalent net of applicable deductions and costs as
described in this Agreement, including without limitation Accessorial Charges
and Tariff Freight Costs (or, if applicable, the Delivered Sales Price net of
applicable deductions and costs as described in this Agreement, including
without limitation Accessorial Charges and Tariff Freight Costs) that RPMG
invoices End Customers.

 

“Tariff Freight Costs” shall mean freight and
related costs incurred by RPMG to transport Producer’s DDGS.

 

“Standard-Grade” shall mean DDGS that meet the
Specifications set forth in this Agreement.

 

“Non-Standard-Grade” shall mean DDGS that fail
to meet the Specifications set forth in this Agreement, but which RPMG
nonetheless accepts for marketing under this Agreement.

 

 

EXHIBIT
B

 

DDGS
Specifications

 

Producer covenants that all DDGS shall, upon delivery
to RPMG at the Ethanol Facility, conform to the following Specification:

 

	
  Component

  	
   

  	
  Maximum %

  	
   

  	
  Minimum %

  	
   

  
	
  Protein

  	
   

  	
   

  	
   

  	
  ***

  	
   

  
	
  Fat

  	
   

  	
   

  	
   

  	
  ***

  	
   

  
	
  Fiber

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  Moisture

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  Ash

  	
   

  	
  ***

  	
   

  	
   

  	
   

  
	
  Sulfur

  	
   

  	
  ***

  	
   

  	
   

  	
   

  

 

***
Confidential material redacted and filed separately with the Commission.

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