Exhibit 10.1
DDGS MARKETING CONTRACT
This DDGS Marketing Contract is made and entered into this 7th day of
June, 2001 by and between DAKOTA ETHANOL, LLC having an address of Xxxx Xxxxxx
Xxx 000, Xxxxxxxxx, Xxxxx Xxxxxx, 00000 (hereinafter referred to as "Owner"),
and DAKOTA COMMODITIES (a division of Broin Enterprises, Inc.), having an
address of 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx, 00000 (hereinafter
referred to as "Marketer").
WITNESSETH:
WHEREAS, the Owner would like 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), herein collectively referred to as DDGS
from its plant near Wentworth, South Dakota; and,
WHEREAS, the 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 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
The Owner gives Marketer exclusive rights to market all Distiller's
Feed Products from its ethanol plant near Wentworth, South Dakota. Marketer will
market all DDGS for an initial period of five years from the date the plant
begins production of DDGS.
The Owner will inform the Marketer of daily inventories, plant
shutdowns, daily production projections, and any other information requested by
the Marketer.
Marketer will be responsible for arranging truck and rail
transportation.
Owner agrees to participate in and share the cost for DDGS promotional
activities with Marketer.
FEES
Marketer will guarantee the sale of the Owner's DDGS at available
market prices. The Marketing Fee will be 3% of gross monthly DDGS sales, with a
minimum annual marketing fee of $200,000 per year, F.O.B. the plant site near
Wentworth, South Dakota.
BILLING
Marketer will be responsible for billing and receipt of payment for all
DDGS. Marketer will be responsible for paying all freight bills. Owner will be
invoiced for actual freight costs from Marketer. Each Thursday a payment will be
made to Owner for all DDGS invoiced 13-19 days prior that have been paid by
customer. The marketing fee will be deducted from each payment to Owner.
Owner will be responsible for furnishing Marketer with a report by
10:00 a.m. each workday of the previous day's shipments.
Owner will be responsible for EDI billing of railcars. Marketer will be
responsible for tracing railcars.
COLLECTIONS
Marketer will make reasonable efforts to review the creditworthiness of
the 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 customers of the Owner. Marketer will then recommend to
Owner which, if any, accounts Marketer feels should be rejected. Owner will have
the right to request and review the rejection recommendations and/or reports and
notify the Marketer in writing of any customers that should not be rejected and
additional customers that are rejected by the Owner. The Marketer will not sell
product to any customers rejected by the Marketer or Owner.
Marketer will make reasonable efforts to collect any past due accounts.
Any collection agency fees resulting from the collections process will be borne
by the Owner. All accounts receivable losses arising from the marketing of DDGS
are the sole responsibility of the Owner.
TERMS
The term of this Contract is for a period of five (5) years from the
start of production of DDGS. This Contract renews automatically for an
additional five (5) years, at the end of each five (5) year period, unless
discontinued by either party. Notice of discontinuation must be made in writing
at least three (3) months prior to the expiration date of the Contract.
DISCONTINUATION OF PRODUCTION
In the case that Owner wishes 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
cease of production, Owner grants Marketer the right to buy in product
shortfalls for the account of Owner on any unfulfilled contracts, and that 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 liability coverage.
Owner will provide Marketer with a certificate of insurance showing a
minimum of one million dollars in liability coverage.
REPORTING
Marketer will provide Owner with the following reports on a regular
basis during the term of this Contract:
LISTS OF REPORTS
Report Frequency
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Shipping Orders Daily
Railcar Tracing Daily
Market Information Weekly
Contract Summary Monthly
Owner will provide Marketer with the following reports on a regular
basis for the term of the contract.
Daily Production Daily
Summary of Shipments Daily
INDEMNIFICATION
1. INDEMNITY BY THE OWNER. Owner shall indemnify, hold harmless and
defend the 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 loss of life, personal injury and/or damage to property of third
parties, arising from or out of Marketer's services 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 Marketers' services
provided under the terms and conditions of this Agreement, except that Owner
shall not indemnify, hold harmless and defend Marketer from (i) the negligent or
intentional acts of the Marketer and its officers, directors, employees and
agents, (ii) any act beyond the scope of the Marketer's services to be rendered
under the terms and conditions of this Agreement, 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 the Owner.
2. INDEMNITY BY THE MARKETER. Marketer shall indemnify, hold harmless
and defend the Owner, and its governors, employees an d 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 Agreement, and
(iii) any violation of laws, regulations, ordinances and/or court orders.
ENTIRE AGREEMENT AND AMENDMENT
This Contract contains the entire DDGS Marketing agreement between the
parties. No oral statements, representations or prior written matter not
contained in this Contract shall have any effect regarding DDGS Marketing. 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 the
Marketer.
IN WITNESS WHEREOF, the parties hereto have executed this Contract on
the date and year first above written.
DAKOTA ETHANOL, L.L.C. (Owner)
BY /s/ Xxxx Xxx Xxxx
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Its Chairman Xxxx Xxx Xxxx
and
BY /s/ Xxxxx X. Xxxxx
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Its Secretary - Xxxxx X. Xxxxx
DAKOTA COMMODITIES (Marketer)
(A division of Broin Enterprises, Inc.)
BY /s/ Xxxxx Xxxxxx, Director of Marketing
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Title
WITNESS /s/ Xxxx Xxxxxxx
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