Exhibit 10.1
ETHANOL MARKETING CONTRACT
TERMINATION
THIS ETHANOL MARKETING CONTRACT
TERMINATION (the “
Ethanol Marketing Contract Termination ”) is made and
entered into this 4th day of November, 2005 by and between Ethanol
Products, LLC, a South Dakota limited liability company (“
Ethanol Products ”) and Dakota Ethanol, L.L.C., a
South Dakota limited liability company (“ Dakota
Ethanol ”).
RECITALS:
WHEREAS , Ethanol Products (by assignment from Broin
Enterprises, Inc.) and Dakota Ethanol are parties to a certain
Ethanol Marketing Contract, dated as of October 7, 1999, as amended
on June 7, 2001 and as further amended on November 26, 2002 (the
“ Ethanol Marketing Contract ”), relating to
Ethanol Products’ marketing of fuel grade ethanol produced by
Dakota Ethanol at its facility located in Lake County, South Dakota
(the “ Plant ”);
WHEREAS , pursuant to the Ethanol Marketing Contract,
Ethanol Products agreed to market all fuel grade ethanol produced
at the Plant, and Dakota Ethanol agreed to pay Ethanol Products a
marketing fee for ethanol sold and administrative services fee for
administrative services performed on behalf of Dakota
Ethanol;
WHEREAS , Ethanol Products’ duties under the
Ethanol Marketing Contract commenced upon the start of production
of ethanol at the Plant and under the terms of the Ethanol
Marketing Contract expires on September 1, 2006, a date five (5)
years from the start of production of ethanol;
WHEREAS , each of the parties desires to terminate the
Ethanol Marketing Contract under the terms and conditions stated
herein;
NOW THEREFORE
, in consideration of the mutual
representations, warranties and covenants contained herein and of
other good and valuable consideration, the receipt and sufficiency
of which is acknowledged, the parties agree as follows:
1.
Termination of Ethanol
Marketing Contract . Effective as of the close of business on
December 31, 2005 (the “ Termination Date ”),
the Ethanol Marketing Contract shall be terminated in accordance
with the provisions of this Ethanol Marketing Contract
Termination.
A.
Notwithstanding the foregoing,
Dakota Ethanol shall be permitted continued dial up access through
PCAnywhere through January 5, 2006 in order to allow for the
orderly deactivation and removal of the proprietary Ethanol
Products systems. On January 6, 2006, Ethanol Products shall
disable Dakota Ethanol’s access to PCAnywhere.
B.
From and after the Termination Date,
Dakota Ethanol shall assume all rights and responsibilities arising
from the services previously undertaken by Ethanol
Products under the Ethanol Marketing
Contract and under the outstanding contracts listed on Exhibit
A attached hereto and incorporated herein by this
reference. Without limiting the foregoing, Dakota Ethanol
shall be responsible for completing any outstanding futures,
options, hedges or other contracts outstanding as of the
Termination Date as set forth on Exhibit A hereto, which Ethanol
Products represents and warrants is a complete list of all such
contracts; provided that Ethanol Products shall not enter into any
futures, options, hedges or other contracts on behalf of Dakota
Ethanol after the date hereof without the express written consent
of Dakota Ethanol. Dakota Ethanol shall further be
responsible for transferring any existing risk management or
hedging accounts established by Ethanol Products for the benefit of
Dakota Ethanol to similar accounts established by Dakota Ethanol,
at the sole expense of Dakota Ethanol. Without limiting the
foregoing, on or prior to the Termination Date, Dakota Ethanol
shall have made arrangements to transfer the data on the Plant to
Excel with respect to bills of lading, denaturant receipts,
certificates of analysis and similar data.
C.
Ethanol Products shall be obligated
to make reasonable efforts to collect accounts receivable
outstanding as of the Termination Date and to remit to Dakota
Ethanol payments received therefrom, less any amounts owed to
Ethanol Products. The list of outstanding accounts receivable
as of the date of this Ethanol Marketing Contract Termination is
attached hereto as Exhibit B , and on January 3, 2006,
Ethanol Products shall provide Dakota Ethanol with an updated list
of accounts receivable outstanding as of the Termination
Date. If the accounts receivable are not collected after
reasonable attempts to do so, Ethanol Products shall assign such
accounts receivable to Dakota Ethanol and Ethanol Products’
obligations with respect to the collection of such accounts shall
be terminated.
D.
Any and all outstanding invoices,
billing statements, and other amounts due and owing to Dakota
Ethanol pursuant to the Ethanol Marketing Contract shall be paid in
full by Ethanol Products as of the Termination Date, except for the
accounts receivable outstanding as of such date but not yet
collected.
E.
Dakota Ethanol and Ethanol Products
each acknowledge and agree that they will not directly or
indirectly, verbally or in writing, make statements to any third
party which defames the other party, or disparages or reflects
adversely on the reputation or business of the other
party.
2.
Payments to Ethanol
Products .
A.
Dakota Ethanol shall pay Ethanol
Products the amount of Four Hundred Thirty Five Thousand Fifty
Dollars ($435,050.00), as follows: Dakota Ethanol will
receive a credit of $200,000 for the amount payable to Dakota
Ethanol by Ethanol Products under the terms of the Redemption
Agreement dated of even date herewith (the “Redemption
Agreement”), between Dakota Ethanol and Ethanol Products, and
the balance in the amount of Two Hundred Thirty Five Thousand Fifty
Dollars ($235,050.00) shall be payable by Dakota Ethanol to Ethanol
Products on or before December 31, 2005. Ethanol Products
agrees that the amounts payable to Ethanol Products
hereunder
2
represent fair and sufficient
consideration for termination of the Ethanol Marketing Contract as
provided herein.
B.
Notwithstanding anything to the
contrary contained herein, subsequent to the Termination Date,
Ethanol Products may receive payment on sales and services
performed prior to the Termination Date. Upon receipt of such
amounts, Ethanol Products shall calculate the amounts payable to
Dakota Ethanol consistent with the terms of the Ethanol Products
Marketing Contract and related agreements and shall promptly remit
the amounts payable to Dakota Ethanol in accordance with current
practices existing among the parties.
C.
Dakota Ethanol agrees that it shall
not enter into any financing agreements, covenants, or restrictions
or other agreements or covenants that would prohibit or restrict
Dakota Ethanol from paying the amounts in Section 2(A) above to
Ethanol Products by the required deadline.
D.
Dakota Ethanol shall be responsible
for payment of all taxes and charges now or hereafter imposed
(whether by federal, state, municipal or other public
