Exhibit 10.5
DAKOTA COMMODITIES
DDGS MARKETING CONTRACT
This DDGS Marketing Contract is made and entered into this 18th day
of December, 2000, by and between Great Plains Ethanol, LLC. having an
address of Xxxx Xxxxxx Xxx 000, Xxxxxx, Xxxxx Xxxxxx 00000 (the "Owner"), and
Broin Enterprises, Inc. d/b/a Dakota Commodities, having an address of 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx, 00000 (the "Marketer").
W I T N E S S E T H:
WHEREAS, Owner desires to utilize the services of Marketer to market
Dry Distiller's Grain with Solubles, Modified Wet Distiller's Grain, Wet
Distiller's Grain, and Solubles (syrup), (collectively the "DDGS") from its
ethanol plant to be located in Xxxxxx County, South Dakota; and,
WHEREAS, Marketer has the ability and experience to market DDGS; and,
WHEREAS, the parties desire to enter into and execute this Contract
for the purpose of setting forth mutually acceptable terms and conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties agree as follows:
AGREEMENT
Owner gives Marketer exclusive rights to market all DDGS from its
ethanol plant to be located in Xxxxxx County, South Dakota. Owner will inform
Marketer of daily inventories, plant shutdowns, daily production projections,
and other information requested by Marketer. Marketer will be responsible for
arranging truck and rail transportation. Owner agrees to participate in and
equally share with Marketer the cost for DDGS promotional activities.
FEES
Marketer guarantees the sale of Owner's DDGS at available market
prices. Marketing Fee will be 2% of gross monthly DDGS sales, with a minimum
annual marketing fee of $200,000 per year, F.O.B. the plant site. Fees will
not be earned on uncollected accounts receivable. Adjustment for the fee will
be made at the time writeoffs occurs.
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BILLING
Owner will be responsible for billing and receipt of payment for all
DDGS. Owner will be responsible for paying all freight bills.
Owner will be responsible for furnishing Marketer with a
report by 10:00 a.m. each workday informing Marketer of the previous day's
shipments.
COLLECTIONS
Marketer will make reasonable efforts to review the creditworthiness
of Owner's DDGS customers. As deemed necessary, at Marketer's discretion,
Marketer will obtain, at its expense, Credit Bureau reports or Dun and
Bradstreet reports for Owner's potential customers. Marketer will then
recommend to Owner which, if any, accounts Marketer believes should be
rejected. Owner will have the right to request and review the rejection
recommendations and/or reports and notify Marketer in writing of any
customers that should not be rejected and additional customers that are
rejected by Owner. Marketer will not sell product to any customers rejected
by Marketer or Owner.
Marketer will make reasonable efforts to collect any past due
accounts. Any collection agency fees resulting from the collection process
will be borne by Owner. All accounts receivable losses arising from the
marketing of DDGS are the sole responsibility of Owner.
TERM
The term of this Contract shall continue for the length of the
original primary debt financing for plant construction, or seven (7) years
from the date that the plant begins operations, whichever is the later to
occur. This Contract renews for an additional three (3) years, at the end of
each three (3) year period thereafter, unless discontinued by either party.
Notice of discontinuation must be made in writing at least three (3) months
prior to the then current expiration date of the Contract.
Within 15 days of written notice of discontinuation, Marketer will
provide Owner with a quantity per month for up to one year from
discontinuation that will be needed to fulfill sales contracts in existence
at the time of discontinuance. Owner agrees that all existing contracts
provided in the 15 day period will be fulfilled, and the terms of this
Contract will remain in effect for all such tons.
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DISCONTINUATION OF PRODUCTION
If Owner desires to discontinue the production of DDGS, Owner will
notify Marketer one year in advance so that all contract commitments made by
Marketer may be met. If less than one year notice of discontinuance of
production is provided to Marketer, or if unforeseen circumstances cause the
cessation of production, Owner grants Marketer the right to buy in product
shortfalls for Owner's account on any unfulfilled contracts, and any
associated losses will be reimbursed by Owner to Marketer.
LIABILITY
Any and all liability related to the product shall remain the sole
liability of Owner.
INSURANCE
Marketer will provide Owner with a certificate of insurance showing
a minimum of one million dollars in commercial general liability coverage.
Owner will provide Marketer with a certificate of insurance showing
a minimum of one million dollars in commercial general liability coverage.
REPORTING
Marketer will provide Owner with the following reports on a regular
basis during the term of this Contract:
LIST OF REPORTS
REPORT FREQUENCY
------ ---------
Shipping Orders Daily
Market Information Weekly
Contract Summary Monthly
Owner will share current and aged receivable reports with the
Marketer on a weekly basis.
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INDEMNIFICATION
1. INDEMNITY BY OWNER. Owner shall indemnify, hold harmless and
defend Marketer, and its officers, directors, employees and agents from and
against any and all claims, actions, damages, liabilities and expenses,
including but not limited to, attorneys' and other professional fees, in
connection with the loss of life, personal injury and/or damage to property
of third parties, arising from or out of Marketer's services provided under
the terms and conditions of this Agreement, except that the Owner shall not
indemnify, hold harmless and defend Marketer from (i) the negligent or
intentional acts of Marketer and its officers, directors, employees and
agents, (ii) any act beyond the scope of Marketer's services to be rendered
under the terms and conditions of this Contract, and (iii) any violation of
laws, regulations, ordinances and/or court orders. Any and all liability
related to the product shall remain the sole liability of Owner.
2. INDEMNITY BY THE MARKETER. Marketer shall indemnify, hold
harmless and defend Owner, and its officers, manager, employees and agents
from and against any and all claims, actions, damages, liabilities and
expenses, including, but not limited to, attorneys' and other professional
fees, in connection with loss of life, personal injury and/or damage to
property of third parties arising from or out of (i) the negligent or
intentional acts of Marketer and its officers, directors, employees and
agents, (ii) any act beyond the scope of Marketer's services to be rendered
under the terms and conditions of this Contract, and (iii) any violation of
laws, regulations, ordinances and/or court orders.
ENTIRE AGREEMENT AND AMENDMENT
This Contract contains the entire agreement between the parties for
the marketing of DDGS. No oral statements, representations or prior written
matter not contained in this Contract shall have any effect regarding the
marketing of DDGS. This Contract shall not be amended or modified in any
manner except by a writing executed by both parties.
NO ASSIGNMENT
Marketer shall not, without the prior written consent of Owner,
assign, transfer or subcontract any rights or obligations of Marketer under
this Contract. If the shareholders of Marketer sell, assign or transfer a
controlling interest in Marketer, or if Marketer sells substantially all of
its assets, Owner shall have the right to terminate this Contract without
liability to Marketer.
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IN WITNESS WHEREOF, the parties hereto have executed this Contract
on the date and year first above written.
GREAT PLAINS ETHANOL, LLC - Owner
By: /s/ Xxxxxx Xxxxx
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Its: Pres
BROIN ENTERPRISES, INC. d/b/a
DAKOTA COMMODITIES - Marketer
By: /s/ Xxxx Xxxxx
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Its: CEO
