Document:

Exhibit 10.19

 

General Electric Railcar Services Corporation

6200 So. Syracuse Way, Suite 125

Englewood, CO 80111

Phone (303) 721-7827, Fax (303) 779-8092

 

11/10/2003

 

Mr. Rodney Christianson

South Dakota Soybean Processors, LLC

100 Caspian Avenue, Box 500,

Volga, SD 57071

 

Dear Mr. Christianson,

 

In response to your inquiry, General Electric Railcar Services
Corporation is pleased to submit the following Net Service lease quotation for:

 

	
  Quantity

  	
   

  	
  7

  	
   

  
	
  Car Description

  	
   

  	
  Commodity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5400 cu ft gravity hopper car

  	
   

  	
  SOYBEAN CAKE, FLOUR, GRIT, MEAL, OR OTHER BY-PRODUCTS

  	
   

  

 

We have attached the mechanical specifications for the equipment
quoted. If you have any questions regarding these specifications, please call
me or Gail Moore, your customer
development representative, If our proposal meets with your approval, please
make one copy of the proposal letter, sign the original fax and the copy, and
mail two copies with original signatures to the attention of the Contract
Administration Department at 161 North Clark Street, Chicago, IL 60601. Upon
acceptance by GE Railcar, we will process your order, assign a rider number and
return one fully executed rider to you.

 

The terms and conditions of the proposed lease are outlined in the
attached rider and together with your existing Master Car Leasing Agreement No.
8105-83-02 will become the lease
agreement upon execution and acceptance by both parties. This transaction
remains subject to GE Railcar management’s approval until the rider is executed
by GE Railcar.

 

This quote will remain in effect until 12/7/2003. In our normal course of business, we may have
provided quotations for these cars to other customers. Therefore, our
acceptance of your order is subject to continued availability of the cars.

 

We hope this proposal meets your requirements. We look forward to your
order and servicing your future needs.

 

Sincerely,

 

Warren Sonaty

 

	
  cc: Gail Moore

  	
   

  	
  cc: Judy LeVoy

  
	
  Customer Development Representative

  	
   

  	
  Order Fulfillment Specialist

  
	
  General Electric Railcar Services Corporation

  	
   

  	
  General Electric Railcar Services Corporation

  
	
  161 North Clark Street

  	
   

  	
  161 North Clark Street

  
	
  Chicago, IL 60601

  	
   

  	
  Chicago, IL 60601

  
	
  Phone: 312-853-5113

  	
   

  	
  Phone: 312-853-5153

  
	
  Fax: 312-853-5160

  	
   

  	
  Fax: 312-853-5160

  

 

1

 

DATE:           11/10/2003

QUOTE EXPIRATION DATE: 12/7/2003

RIDER NO.

CAR LEASING AGREEMENT NO. 8105-83-02

 

This Rider (“Rider”) is made by and between South Dakota Soybean Processors, LLC (“Lessee”), and General Electric Railcar Services Corporation
(“Lessor”), and hereby incorporates by reference Car Leasing Agreement No. 8105-83-02 by and between Lessee and Lessor
and by such incorporation hereby constitutes a separate agreement. The use of
the terms “Car” or “Cars° shall mean the railcars listed below.

 

Proposed Matrix

 

	
  Car Description

  	
   

  	
  Monthly

  Rental  Rate

  	
   

  	
  Term

  (Months)

  	
   

  	
  # of

  Cars

  	
   

  	
  Lease

  Type

  	
   

  	
  Hi-U

  Charge

  	
   

  	
  Hi-U

  Threshold

  Miles

  	
   

  	
  New

  Cars

  	
   

  	
  Delivery

  Schedule

  Weeks

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5400 cu ft gravity hopper cars

  	
   

  	
  $

  	
  418.00

  	
   

  	
  216

  	
   

  	
  7

  	
   

  	
  Net

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Yes

  	
   

  	
  1st Quarter  2004

  	
   

  
																			

 

 

*Rental Rate is in US Dollars

 

New Car Cost Escalation

The rental rate under this Agreement is based upon an original
delivered car cost including freight of $52,455 per car. For each additional
$100 of actual car cost incurred by the Lessor (including -portions thereof)
the rental will be increased at the beginning of the lease $0.89 per car per
month. The escalation will be rounded to the nearest $0.50.

 

Load Limits

Lessor consents to Lessee loading railcars in excess 263,000 pounds,
but not to exceed 286,000 pounds, total weight on rail based on the following
obligations undertaken by Lessee:

 

a.                                       Lessee
will ensure all necessary approvals are secured from railroads over which cars
loaded in excess of 263,000 pounds total weight on rail shall run and will upon
the written request of Lessor furnish evidence demonstrating such approvals.

 

b.                                      Lessee
will indemnify and hold harmless Lessor and its officers, directors, employees,
contractors and agents against any and all loss, claims, actions, costs,
liability or expense caused by running or loading of any of the railcars in
excess of 286,000 pounds total weight on rail during the term of the lease.

 

c.                                       Lessee
will indemnify Lessor against structural damage or failures caused by the
loading in excess of 286,000 pounds total weight on rail excepting, however,
ordinary wear and tear, and will, immediately upon demand therefore, pay to
Lessor the full cost of any repairs made necessary or desirable as a result of
the loading in excess of 286,000 pounds total weight on rail; such payment will
be treated as additional rent due under the lease.

 

2

 

Term

The rental of the Cars shall commence on the date that each Car arrives
from the current location thereof.

 

The term of use of the Cars shall continue for the number of months
described in the above matrix front the first day of the month following the
average date of delivery of such Car(s) to Lessee.

 

Lessee’s obligation to pay rent under this rider with respect to each
of the cars will be deemed to have terminated on the later of the expiration
date of this Rider or the date that the respective car arrives at a point
designated by the Lessor plus five days.

 

Commodity

Lessee intends to use the Car(s) for service with the following
commodities. The Lessee agrees that the class of car listed above is correct
for service with the following commodities: SOYBEAN,
CAKE, FLOUR, GRITS, MEAL OR OTHER BY PRODUCTS.

 

Vibrator Brackets / Logo

The cars will enter Lessee’s service with vibrator brackets installed
and South Dakota Soybean Processors logo applied to all cars.

 

Net Lease Provisions

Articles 5, Mileage Compensation: 7A. Lessor Responsibility;7B. Lessee
Responsibility; 7C. Inspection, Maintenance, and Notification, and 7D. Shop
Repairs, of the Agreement shall not apply and are superseded by the following
provisions which shall apply:

 

Unconditional Obligations

This Lease is a net lease, and Lessee’s obligation to pay all rent and
all other amounts payable hereunder is ABSOLUTE, AND UNCONDITIONAL and shall
not be affected by any circumstances of any character whatsoever, including
without limitation, (i) any setoff, counterclaim, recoupment, defense,
abatement or reduction or any right which Lessee may have against Lessor, the
manufacturer or supplier of any of the Cars or anyone else; (ii) any defect in
the title, condition, design or operation of or lack of fitness for use of, or
any damage to, or loss of, all or any part of the Cars; or (iii) the existence
of any lien or Lessor’s lien with respect to-the Cars. Each payment of rent or
other amount paid by Lessee hereunder shall be final and Lessee will not seek
to recover all or any part of such patent from Lessor for any reason whatsoever.

 

Compliance with Laws; Operation and
Maintenance; Additions

(a)                                  Lessee
will use the Cars in a careful and proper manner, will comply with and conform
to all governmental laws, rules and regulations and industry association rules
and regulations relating thereto, and will cause the Cars to be operated in
accordance with the manufacturer’s or supplier’s instructions or manuals.
Without limitation to the generality of the foregoing, Lessee will (i) cause
the Cars to be used in compliance with all rules and recommendations of AAR and
FRA; (ii) will not permit any Car to be loaded improperly or in excess of the
load limit stenciled thereon; (iii) will not permit any Car to be loaded with
any commodity other than the Commodity designated in applicable Riders, and (iv)
will not permit

 

3

 

any Car to be outside the continental United States at any time,
without the prior written approval of Lessor. Any use approved by Lessor
outside the United States and Canada cannot exceed 180 days in any calendar
year with respect to any Car.

 

(b)                                 The
Car(s) must be maintained and returned (i) in a condition that would not
otherwise constitute a “cause for attention or renewal” as defined in
Section “A” of each rule in the Field Manual of the AAR then in effect,
(ii) without any AAR Interchange Rule 95 damage. (iii) without the necessity
for running repairs as defined in the AAR Interchange Rules, (iv) in compliance
with the AAR, DOT, FRA and all other laws and regulations of the government or
industry agency having authority over the use of the Car(s), repair
requirements, modifications, inspection and reporting and provide supporting
documentation evidencing compliance with aforementioned regulatory bodies; and
(v) suitable for the immediate loading, transporting, and unloading of
commodities as defined in the Rider. Lessee will be responsible for all
expenses during and at the end of the Lease term. Lessee will, at its own
expense, keep and maintain the Cars in good repair, condition and working order
and furnish all parts, replacements, mechanisms, devices and servicing required
therefor so that the value, condition and operating efficiency thereof will at
all times be maintained and preserved, reasonable wear and tear excepted. Lessee
will cause each Car to be maintained in conformance with all rules and
regulations of AAR and IRA and, if mandated, modified so that it will qualify
for unrestricted interchange in the United States and Canada and remain
suitable for loading, transporting and unloading the Commodity. All such
repairs, parts, mechanisms, devices, replacements and modifications shall
immediately, without further act, become the property of Lessor and part of the
Cars. Upon return of the Cars, Lessee will be responsible for any cost and
expense due to Lessee not providing Lessor with sufficient maintenance and
regulatory documentation.

 

(c)                                  Lessee
will not make or authorize any improvement, change, addition or alteration to
the Cars (i) if such improvement, change, addition or alteration will impair
the originally intended function or use of the Cars or impair the value of the
Cars as it existed immediately prior to such improvement, change, addition or
alteration; (ii) unless the parts installed are new and in compliance with all
rules and recommendations of AAR and FRA; (iii) if any parts installed in or
attached to or otherwise becoming a part of the Cars as a result of any such
improvement, change, addition or alteration shall not be readily removable
without damage to the Cars (unless such improvement is mandated by AAR, FRA or
other agency or organization having jurisdiction over the Cars) or (iv) without
prior written consent of Lessor. All such parts shall be and remain free and
clear of any Liens.  Any such part
attached to any Car shall, without further act, become the property of Lessor
and part of the Cars.

 

Taxes

Lessee will be obligated to pay all taxes, penalties or interest
incurred, levied or assessed on the Car(s) or the lease for the time period
covered. Lessee may contest the taxes in good filth by appropriate legal or
administrative proceedings. In the event taxes are contested, Lessee remains
liable for any resulting tax, penalty, or interest. Lessee will make and file
any tax reports that are required. Lessee will reimburse Lessor for any damages
resulting from failure to pay or discharge any items, taxes or interest levied
or assessed on the Car(s) or the lease.

 

4

 

Insurance

Lessee shall maintain at all times. on the Cars, at its expense,
“all-risk” physical damage insurance and comprehensive general liability
insurance (covering bodily injury, property damage and pollution exposures,
including, but not limited to, contractual liability and products liability) in
such amounts, against such risks, in such form and with such insurers as shall
be satisfactory to Lessor, provided, that the amount of “all-risk” physical
damage insurance shall not be less than 100% of the replacement value of the
Cars as of such date. It is required that the Insurer give Lessor at least
thirty (30) days prior written notice of any alteration in or cancellation of
the terms of such policy, and require that the interests of Lessor be
continually insured regardless of any breach of or violation by Lessee of any
warranties, declarations or conditions contained in. such insurance policy. In
no event shall Lessor be responsible for premiums, warranties or
representations to any Insurer or agent thereof. At Lessor’s option, Lessee
shall furnish to Lessor a certificate or other evidence satisfactory to Lessor
that such insurance coverage is in effect, provided, however, that Lessor shall
be under no duty to ascertain the existence or adequacy of such insurance.

 

Indemnity

Lessee shall indemnify Lessor from any claims, actions, costs, damages,
losses, liabilities, expenses, injuries (including without limitation, the
reasonable cost of investigating and defending against any claim for damages)
fines or penalties, including losses related to damage caused to or by
materials placed in the Car(s) which may at any time be imposed upon incurred
by or asserted or awarded against Lessor in connection with (a) the
manufacture, design, use, operation, possession, storage, abandonment repair,
maintenance lining, cleaning or return of the Car(s) during the term of the
Agreement or (b) any present or future applicable law, rule or regulation,
including without limitation common law and environmental law, related to the
release, remove, discharge or disposition, whether intentional or unintentional
of any materials from or placed in a Car during the term of this Agreement.

 

Markings

It is understood that car(s) will operate under Lessee’s reporting
marks. Lessee will be responsible, at its sole expense, for changing all
reporting marks and other related designations on each car, including AEI tags,
back to reporting marks and designations specified by Lessor prior to the last
loaded move of the cars in Lessee’ service, and Lessee shall give Lessor at
least sixty (60) days prior written notice of the date of such last loaded
move.

 

Other Terms

For lease terms 15 years or greater, GE Railcar Services will evaluate
the need for minimum financial covenants including, but not limited to, minimum
tangible net worth and minimum liquidity which will be defined based upon the
specifics of the proposed lease (e.g., number of cars, credit rating of Lessee,
etc.). The proposed lease is contingent upon, among other things, the Lessee
and GE Railcar Services agreeing to these minimum financial covenants.

 

5

 

Delivery

Subject to availability, manufacturing capabilities, and Lessor’s
ability to complete the purchase of a sufficient number of Car(s), the Car(s)
specified are forecast to be delivered to Lessee from point of manufacture
within the approximate number of weeks identified in the above matrix. The
delivery schedule is subject to change without notice.

 

	
  Accepted on behalf of:

  	
  Accepted on behalf of:

  
	
  South Dakota Soybean Processors, LLC

  	
  General Electric Railcar Services
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Rodney Christianson

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
  Date:

  	
  11/27/03

  	
   

  	
  Date:

  	
   

  	
   

  
								

 

6

 

MECHANICAL SPECIFICATIONS

 

5400 cu ft gravity hopper

 

Item Description

 

	
  Hatch Size

  	
  24” Aluminum battenless

  
	
   

  	
   

  
	
  Hatch Type

  	
  Trough

  
	
   

  	
   

  
	
  Unload Gate Type

  	
  Miner

  
	
   

  	
   

  
	
  Unload Gate Size

  	
  30 x 30

  
	
   

  	
   

  
	
  Exterior Paint Requirement

  	
  Custom

  
	
   

  	
   

  
	
  Cubic Capacity From

  	
  5400

  
	
   

  	
   

  
	
  Cubic Capacity To

  	
  5,401

  
	
   

  	
   

  
	
  Interior Paint

  	
  No

  
	
   

  	
   

  
	
  Vibrator Brackets

  	
  Yes

  
	
   

  	
   

  
	
  No. of Compartments

  	
  3

  
	
   

  	
   

  
	
  Truck Size

  	
  100 Ton Trucks 6 1⁄2 X 12 Std

  
	
   

  	
   

  
	
  Total Weight on Rails

  	
  286,000

  
	
   

  	
   

  
	
  Year Built

  	
  2004

  
	
   

  	
   

  
	
  Logo Applied

  	
  South Dakota Soybean Processors.

  

 

7

 

General Electric Railcar Services Corporation

6200 So. Syracuse Way, Suite 125

Englewood, CO 80111

Phone (303) 721-7827, Fax (303) 779-8092

 

11/25/2003

 

Mr. Rodney Christianson

South Dakota Soybean Processors, LLC

100 Caspian Avenue, Box 500,

Volga, SD 57071

 

Dear Mr. Christianson,

 

In response to your inquiry, General Electric Railcar Services
Corporation is pleased to submit the following Net Service lease quotation for:

 

 

	
  Quantity

  	
   

  	
  6-6

  	
   

  
	
  Car Description

  	
   

  	
  Commodity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5,400 cu. ft. aluminum gravity hopper cars

  	
   

  	
  Meal Soybean

  	
   

  

 

We have attached the mechanical specifications for the equipment
quoted. If you have any questions regarding these specifications, please call
me or Gail Moore, your customer
development representative. If our proposal meets with your approval, please
make one copy of the proposal letter, sign the original fax and fax it to Gail
Moore at 312-853-5160. Kindly mail two copies with original signatures to the
attention of the Contract Administration Department at 161 North Clark Street,
Chicago, IL 60601. Upon acceptance by GE Railcar, we will process your order,
assign a rider number and return one fully executed rider to you.

 

The terms and conditions of the proposed lease are outlined in the
attached rider and together with your existing Master Car Leasing Agreement No.
8105-83-02 Will become the lease
agreement upon execution and acceptance by both parties. This transaction
remains subject to CE Railcar management’s approval until the rider is executed
by GE Railcar.

 

This quote will remain in effect until 10/25/2003.  In our
normal course of business, we may have provided quotations for these cars to
other customers. Therefore, our acceptance of your order is subject to
continued availability of the cars.

 

We hope this proposal meets your requirements. We look forward to your
order and servicing your future needs.

 

Sincerely,

 

Warren Sonaty

 

	
  cc: Gail Moore

  	
   

  	
  Judy LeVoy

  
	
  Customer Development Representative

  	
   

  	
  Order Fulfillment Specialist

  
	
  General Electric Railcar Services Corporation

  	
   

  	
  General Electric Railcar Services Corporation

  
	
  161 North Clark Street

  	
   

  	
  161 North Clark Street

  
	
  Chicago, IL 60601

  	
   

  	
  Chicago, IL 60601

  
	
  Phone: 312-853-5113

  	
   

  	
  Phone: 312-853-5153

  
	
  Fax: 312-853-5160

  	
   

  	
  Fax: 312-853-5160

  

 

8

 

DATE:  11/25/2003

QUOTE EXPIRATION Date 
10/25/2003

RIDER NO. 

CAR LEASING AGREEME4T NO. 8105-83-02

 

This Rider (“Rider”)is made by and between South Dakota Soybean Processors, LLC (“Lessee”), and General Electric Railcar Services Corporation
(“Lessor”), and hereby incorporates by reference Car Leasing Agreement No. 8105-83-02 by and between Lessee and Lessor
and by such incorporation hereby constitutes a separate agreement. The use of
the terms “Car” or “Cars” shall mean the railcars listed below.

 

Proposed Matrix

 

	
  Opt # Car Description

  	
   

  	
  Monthly

  Rental

  Rate

  	
   

  	
  Term

  (Months)

  	
   

  	
  # of

  Cars

  	
   

  	
  Lease

  Type

  	
   

  	
  Hi-U

  harge

  	
   

  	
  Hi-U

  Threshold

  Miles

  	
   

  	
  New

  Cars

  	
   

  	
  Deliver

  Schedule

  Weeks

  	
   

  
	
  5400 cu ft gravity hopper cars

  	
   

  	
  $

  	
  325.00

  	
   

  	
  216

  	
   

  	
  6

  	
   

  	
  Net

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  No

  	
   

  	
  6 - 8

  	
   

  
																			

 

 

* Rental Rate is in US Dollars

 

Load Limits

Lessor consents to Lessee loading railcars in excess of 263,000 pounds,
but not to exceed 286,000 pounds, total weight on rail based on the following
obligations undertaken by Lessee:

 

a.                                       Lessee
will ensure all necessary approvals are secured from railroads over which cars
loaded in excess of 263,000 pounds total weight on rail shall run and will upon
the written request of Lessor furnish evidence demonstrating such approvals.

 

b.                                      Lessee
will indemnify and hold harmless Lessor and its officers, directors, employees,
contractors mid agents against any and alt loss, claims, actions, costs,
liability or expense caused by running or loading of any of the railcars in
excess of 286,000 pounds total weight on rail during the term of the lease.

 

c.                                       Lessee
will indemnify Lessor against structural damage or failures caused by the
loading in excess of 286,000 pounds total weight on rail excepting, however,
ordinary wear and tear, and will, immediately upon demand therefore, pay to
Lessor the full cost of any repairs made necessary or desirable as a result of
the loading in excess of 286,000 pounds total weight on rail; such payment will
be treated as additional rent due under the lease.

 

Term

The rental of the Cars shall commence on the date that each Car arrives
from the current location thereof.

 

The term of use of the Cars shall continue for the number of months
described in the above matrix from the first day of the month following the
average date of delivery of such Car(s) to Lessee.

 

9

 

Lessee’s obligation to pay rent under this rider with respect to each
of the cars will be deemed to have terminated on the later of the expiration
date of this Rider or the date that the respective car arrives at a point
designated by the Lessor plus five days.

 

Early Termination Option

Lessee will have the right to terminate this Rider per the below matrix
provided that Lessor has received written notice not less than 60 days prior to
termination.

 

This right to termination applies to the number of cars specified
below:

 

ET Schedule

 

	
  If Exercised At

  	
   

  	
  Number of
  Cars

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  180

  	
  Months

  	
   

  	
  6

  	
   

  
					

 

Commodity

Lessee intends to use the Car(s) for service with the following
commodities. The Lessee agrees that the class of car listed above is correct
for service with the following commodities: Meal,
Soybean

 

OT-5 Authority

In order to comply with the provisions of the Mileage Tariff and
protect your mileage earnings from the originating line haul carrier serving
your loading point, you should obtain verbal OT-5 authority and advise the
details to GE Railcar. Any changes in loading points must be reported.

 

	
  Net Lease Provisions

  
	
  Articles 5,
  Mileage Compensation: 7A. Lessor Responsibility; 7B. Lessee Responsibility;
  7C. Inspection, Maintenance, and Notification, and 7D. Shop Repairs, of the
  Agreement shall not apply and are superseded by the following provisions
  which shall apply:

  
	
   

  
	
  Unconditional Obligations

  
	
  This Lease is a net lease, and Lessee’s obligation to pay all rent
  and all other amounts payable hereunder is ABSOLUTE AND UNCONDITIONAL and
  shall not be affected by any circumstances of any character whatsoever,
  including, without limitation, (i) any setoff, counterclaim, recoupment,
  defense, abatement or reduction or any right which Lessee may have against
  Lessor, the manufacturer or supplier of any of the Cars or anyone else; (ii)
  any defect in the title, condition, design or operation of or lack of fitness
  for use of, or any damage to, or loss of, all or any part of the Cars; or
  (iii) the existence of any lien or Lessor’s lien with respect to the Cars.
  Each payment of rent or other amount paid by Lessee hereunder shall be final
  and Lessee will not seek to recover all or any part of such payment from
  Lessor for any reason whatsoever.

  

 

10

 

Compliance with Laws; Operation and
Maintenance; Additions

(a)                                  Lessee
will use the Cars in a careful and proper manner, will comply with and conform
to all governmental laws, rules and regulations and industry association rules
and regulations relating thereto, and will cause the Cars to be operated in
accordance with the manufacturer’s or supplier’s instructions or manuals.
Without limitation to the generality of the foregoing, Lessee will (i) cause
the Cars to be used in compliance with all rules and recommendations of AAR and
FRA; (ii) will not permit any Car to be loaded improperly or in excess of the
load limit stenciled thereon; (iii) will not permit any Car to be loaded with
any commodity other than the Commodity designated in applicable Riders, and
(iv) will not permit any Car to be outside the continental United States at any
time, without the prior written approval of Lessor. Any use approved by Lessor
outside the United States and Canada cannot exceed 180 days in any calendar
year with respect to any Car.

 

(b)                                 The
Car(s) must be maintained and returned (i) in a condition that would not
otherwise constitute a “cause for attention or renewal” as defined in Section “A”
of each rule in the Field Manual of the AAR then in effect, (ii) without any
AAR Interchange Rule 95 damage, (iii) without the necessity for running repairs
as defined in the AAR Interchange Rules, (iv) in compliance with the AAR, DOT,
FRA and all other laws and regulations of the government or industry agency
having authority over the use of the Car(s), repair requirements,
modifications, inspection and reporting and provide supporting documentation
evidencing compliance with aforementioned regulatory bodies; and (v) suitable
for the immediate loading, transporting, and unloading of commodities as
defined in the Rider. Lessee will be responsible for all expenses during and at
the end of the Lease term. Lessee will, at its own expense, keep and maintain
the Cars in good repair, condition and working order and furnish all parts,
replacements, mechanisms, devices and servicing required therefor so that the
value, condition and operating efficiency thereof will at all times be
maintained and preserved, reasonable wear and tear excepted. Lessee will cause
each Car to be maintained in conformance with all rules and regulations of AAR
and ERA and, if mandated, modified so that it will qualify for unrestricted
interchange in the United States and Canada and remain suitable for loading,
transporting and unloading the Commodity. All such repairs, parts, mechanisms,
devices, replacements and modifications shall immediately, without further act,
become the property of Lessor and part of the Cars. Upon return of the Cars,
Lessee will be responsible for any cost and expense due to Lessee not providing
Lessor with sufficient maintenance and regulatory documentation.

 

(c)                                  Lessee
will not make or authorize any improvement, change, addition or alteration to
the Cars (i) if such improvement, change, addition or alteration will impair
the originally intended function or use of the Cars or impair the value of the
Cars as it existed immediately prior to such improvement, change, addition or
alteration; (ii) unless the parts installed are new and in compliance with all
rules and recommendations of AAR and FRA; (iii) if any parts installed in or
attached to or otherwise becoming a part of the Cars as a result of any such
improvement, change, addition or alteration shall not be readily removable
without damage to the Cars (unless such improvement is mandated by AAR, FRA or
other agency or organization having jurisdiction over the Cars) or (iv) without
prior written consent of Lessor. All such parts shall be and remain free and clear
of any Liens. Any such part attached to any Car shall, without further act,
become the property of Lessor and part of the Cars.

 

11

 

Taxes

Lessee will be obligated to pay all taxes, penalties or interest
incurred, levied or assessed on the Car(s) or the lease for the time period
covered. Lessee may contest the taxes in good faith by appropriate legal or
administrative proceedings. In the event taxes are contested, Lessee remains
liable for any resulting tax, penalty, or interest.  Lessee will make and file any tax reports that are required.
Lessee will reimburse Lessor for any damages resulting from failure to pay or
discharge any items, taxes or interest levied or assessed on the Car(s) or the
lease.

 

Insurance

Lessee shall maintain at all times on the Cars, at its expense,
“all-risk” physical damage insurance and comprehensive general liability
insurance (covering bodily injury, property damage and pollution exposures,
including, but not limited to, contractual liability and products liability) in
such amounts, against such risks, in such form and with such insurers as shall
be satisfactory to Lessor; provided, that the amount of “all-risk” physical
damage insurance shall not be less than 100% of the replacement value of the
Cars as of such date. It is required that the insurer give Lessor at least
thirty (30) days prior written notice of any alteration in or cancellation of
the terms of such policy, and require that the interests of Lessor be
continually insured regardless of any breach of or violation by Lessee of any
warranties, declarations or conditions contained in such insurance policy. In
no event shall Lessor be responsible for premiums, warranties or
representations to any insurer or agent thereof. At Lessor’s option, Lessee
shall furnish to Lessor a certificate or other evidence satisfactory to Lessor
that such insurance coverage is in effect, provided, however, that Lessor shall
be under no duty to ascertain the existence or adequacy of such insurance.

 

Indemnity

Lessee shall indemnify Lessor from any claims, actions, costs, damages,
losses, liabilities, expenses, injuries (including without limitation, the
reasonable cost of investigating and defending against any claim for damages)
fines or penalties, including losses related to damage caused to or by
materials placed in the Car(s) which may at any time be imposed upon incurred
by or asserted or awarded against Lessor in connection with (a) the
manufacture, design, use, operation, possession, storage, abandonment repair,
maintenance lining, cleaning or return of the Car(s) during the term of the
Agreement or (b) any present or future applicable law, rule or regulation,
including without limitation common law and environmental law, related to the release,
remove, discharge or disposition, whether intentional or unintentional of any
materials from or placed in a Car during the term of this Agreement.

 

Markings

It is understood car(s) will operate under Lessee’s reporting marks.
Lessor shall be responsible, at its sole expense, for remarking cars to
Lessee’s reporting mark as Cars enter Lessee’s service. Lessee will be
responsible, at its sole expense, for changing all reporting marks and other
related designations on each car, including AEI tags, back to reporting masks
and designations specified by Lessor prior to the last loaded move of the cars
in Lessee’ service, and Lessee shall give Lessor at least sixty (60) days prior
written notice of the date of such last loaded move.

 

12

 

Freight

Lessor shall be responsible for all freight charges incurred in the
shipment of the Cars to Lessee’s initial loading point. Lessee shall be
responsible for all freight charges incurred in the return of the Cars to Lessor’s
designated location.

 

Delivery

Subject to availability, the Car(s) specified in this proposal are
forecast to be delivered within the approximate number of weeks identified in
the above matrix after the order is received. The delivery schedule is
subject to change without notice.

 

	
  Accepted on behalf of:

  	
  Accepted on behalf of:

  
	
  South Dakota Soybean Processors, LLC

  	
  General Electric Railcar Services
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Rodney Christianson

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  
	
  Tide:

  	
  CEO

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  11/24/03

  	
  Date:

  	
   

  	
   

  
										

 

13

 

MECHANICAL SPECIFICATIONS

 

5400 cu ft gravity hopper

 

Item Description

 

	
  Lining Required

  	
   

  	
  No

  
	
   

  	
   

  	
   

  
	
  Hatch Type

  	
   

  	
  Trough

  
	
   

  	
   

  	
   

  
	
  Unload Gates Type

  	
   

  	
  Gravity

  
	
   

  	
   

  	
   

  
	
  Unload Gates Size

  	
   

  	
  30 x 30

  
	
   

  	
   

  	
   

  
	
  Cubic Capacity From

  	
   

  	
  5,400

  
	
   

  	
   

  	
   

  
	
  Cubic Capacity To

  	
   

  	
  5,401

  
	
   

  	
   

  	
   

  
	
  Interior Paint

  	
   

  	
  No

  
	
   

  	
   

  	
   

  
	
  Vibrator Brackets

  	
   

  	
  No

  
	
   

  	
   

  	
   

  
	
  Truck Size

  	
   

  	
  6.5 x 9 – 110 Ton

  
	
   

  	
   

  	
   

  
	
  Total Weight on Rails

  	
   

  	
  286,000

  

 

14Exhibit 10.20

 

Natural
Gas Supply Agreement

 

 

1.                                       This
Natural Gas Supply Agreement (“Agreement”) is made and entered into by and
between NorthWestern Services Corporation (“NSC”), a South Dakota corporation
and Dakota Ethanol, LLC (“Customer”) this 23rd day of October, 2003.  This Agreement shall become effective on
November 1, 2003.  Delivery of natural
gas under this Agreement will be to the facilities owned by NorthWestern Energy,
which are located near Madison, South Dakota.

 

2.                                       Delivery
Quantities:

 

	
  Maximum
  Daily Quantity*

  	
  6,000 MMBtu
  per day

  
	
   

  	
   

  
	
  Average
  Minimum Daily Quantity*

  	
  4,500 MMBtu
  per day

  

 

* NSC and
Customer agree that the above stated volumes are estimates.  Plant volumes may change from time to time
and future expansion may occur prior to the end of this contract term. NSC will
have a maximum capacity of 6,000 MMBtu per day available at the Dakota Ethanol
site for their use throughout the term of this Agreement.

 

3.                                       Gas
Supply Charge: Per MMBtu equivalent price as reported in the first of the month
issue of Inside F.E.R.C. Gas Market Report for NNG-Ventura published for the
month of use.  Gas supply charge can be
converted to a fixed price for any month, at desired quantity of MMBtu’s, at
any time during the contract term.

 

4.                                       Term:  This agreement shall be in effect from
November 1, 2003 and shall continue until October 31, 2004.  There after agreement shall continue in
effect year to year.  Either party may
terminate the Agreement, with or without cause, upon at least forty-five (45)
days written notice prior to the end of any applicable termination period.  If notice of termination is made, the
obligations of the parties will continue during such notice period, and for
such additional periods of time for performance of obligations in place at the
termination date.

 

5.                                       Billing
and Payment: NSC shall use reasonable efforts to render invoices on or before
the 10th day of each month for all gas delivery commodity and monthly customer
charges applicable to gas deliveries to the Customer in the preceding
month.  Customer shall pay NSC on or
before the 25th day of each month for all charges reflected on the invoice
rendered by NSC in the current month.

 

	
  Dakota Ethanol, LLC

  	
  NorthWestern Services Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Dean
  Frederickson

  	
   

  	
  By:

  	
  /s/ Jeff
  McKinney

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  General
  Manager

  	
   

  	
  Title:

  	
  NSC

  	
   

  
										

 

 

Natural
Gas Interstate Pipeline Transportation Agreement

 

This Natural
Gas Interstate Pipeline Transportation Agreement (“Agreement”), for the
interstate transportation of natural gas on the Northern Natural Gas Pipeline
System (NNG), is made and entered into by and between NorthWestern Services
Corporation (“NSC”), a South Dakota corporation and Dakota Ethanol, LLC
(“Customer”) this 23rd day of October 2003. 
This Agreement shall become effective on November 1, 2003.  Delivery of natural gas will be to the
NorthWestern Energy interconnection located near Madison, South Dakota.

 

 

1.                           Pipeline
Transportation Services:

 

a)              NNG
Firm Reservation:

 

NSC shall
provide 100% firm transportation capacity to Customer on NNG’s interstate
pipeline system at 55% of NNG’s maximum TFX reservation rate applicable for the
month.  Such rate is inclusive of all
reservation charge surcharges imposed by NNG. 
The above rate will be converted to a 100% load factor rate and charged
on a volumetric basis.

 

b) Delivery Quantities:

 

	
  Maximum
  Daily Quantity*

  	
  6,000 MMBtu
  per day

  
	
   

  	
   

  
	
  Average
  Minimum Daily Quantity*

  	
  4,200 MMBtu
  per day

  

 

* NSC and
Customer agree that the above stated volumes are estimates.  Plant volumes may change from time to time
and future expansion may occur prior to the end of this contract term. NSC will
maintain a maximum firm capacity of 4,500 MMBtu per day available at the Dakota
Ethanol site for Customer’s use throughout the term of this agreement. Nonetheless,
NSC agrees to offer the same prices as stated herein, so long as additional
significant NSC capital improvements are not required to enable service under
this Agreement.

 

	
  c)

  	
  NNG Firm
  Commodity:

  	
   

  	
  Per MMBtu
  equivalent charge in NNG’s tariff.

  
	
   

  	
   

  	
   

  	
   

  
	
  d)

  	
  Carlton
  Surcharge:

  	
   

  	
  Per MMBtu
  equivalent charge in NNG’s tariff.

  

 

 

	
  e) NNG Fuel
  Retention: Gross-up for pipeline fuel based on the percentage for mainline
  fuel in NNG’s tariff.

  
	
   

  	
   

  	
   

  	
   

  
	
  f)

  	
  Receipt/Delivery
  Points:

  	
   

  	
  Firm Primary
  Receipt points into NNG’s Market Area shall be Ventura.

  
	
   

  	
   

  	
   

  	
   

  
	
  g)

  	
  Balancing
  Service

  	
   

  	
  Customer
  will provide nominations to NSC and pay a rate of $0.001 per therm of
  volumetric usage.

  
	
   

  	
   

  	
   

  	
   

  
	
  Plus
  applicable sales taxes

  

 

2)              Term:  This contract shall be in effect until
10-31-13, however if customer feels that NSC can not provide the level of
service that they require customer may cancel this contract with 45 days
written notice prior to the contract anniversary date.  If at the time of termination there exists a
firm capacity contract with NNG that is assigned to the Customer, that firm
capacity contract will be reassigned in the Customer’s name.

 

3)              Billing
and Payment: NSC shall use reasonable efforts to render invoices on or before
the 10th day of each month for all gas delivery commodity and monthly customer
charges applicable to gas deliveries to the Customer in the preceding
month.  Customer shall pay NSC on or
before the 25th day of each month for all charges reflected on the invoice
rendered by NSC in the current month.

 

 

	
  Dakota Ethanol, LLC

  	
  NorthWestern Services Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Dean
  Frederickson

  	
   

  	
  By:

  	
  /s/ Jeff
  McKinney

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  General
  Manager

  	
   

  	
  Title:

  	
  NSC

  	
   

  
										

 

2

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