Transportation Agreement between NEDAK Ethanol LLC and Western Oil Trans Inc.

 EXHIBIT 10.1 TRANSPORTATION AGREEMENT THIS AGREEMENT is entered into this 19th Day of July, 2007, (the "Effective Date") by and between NEDAK Ethanol LLC. ("Shipper") and Western Oil Trans Inc. ("Carrier"), in consideration of the mutual covenants and agreements herein contained, hereby mutually covenant and agree as follows: 1. Contract Carrier Authority. Carrier is engaged in the business of transporting property and is a duly qualified contract carrier by motor vehicle, holding operating authority from the Federal Motor Carrier Safety Administration (or one of its predecessor agencies) in Docket Number MC-563623 (the "Docket"). 2. General Obligations. a. Shipper shall tender to Carrier, and Carrier shall transport and deliver in its motor vehicle equipment, certain of Shipper's commodities on a continuing and recurring basis, pursuant to the provisions of this Agreement and under the terms, conditions, rates and charges set forth in the attached Exhibits which are incorporated herein by this reference. b. Carrier shall furnish, operate and maintain in good working condition and suitable appearance, at its own expense, all motor vehicles and all equipment necessary to perform the services required under this Agreement and shall assume all incidental costs and expenses including, but not limited to, all costs and expenses incident to or arising out of the maintenance, repair, or operation of such equipment, fuel, and supplies. Carrier agrees to save and hold Shipper harmless from any and all such costs, expenses and liabilities. Carrier shall also provide, supervise, and control all necessary drivers and dispatchers, and procure all necessary licenses for the proper operation of the equipment so furnished. c. Carrier assumes and shall pay any and all contributions, taxes and assessments which may be required to be paid under any so-called Unemployment Compensation, Disability, Old Age Pension, Social Security, or any similar laws, by reason of the employment by Carrier of Carrier's employees, and Carrier shall in all other respects comply with such laws. If, under the applicable State Unemployment Compensation Law, Carrier has the right to elect whether or not to come under and be bound by the terms of such Law, Carrier shall either self-insure or promptly register under said Law. d. Carrier shall keep Shipper's cargo free and clear from, and shall indemnify, defend and hold Shipper harmless from and against, all liens related to payment for which Carrier is responsible arising out of the transportation services, including, but not limited to, materialmen's, laborers' and mechanics' liens. Carrier shall deliver to Shipper prompt written notice of actual or prospective claims of any such liens known to Carrier. Carrier shall not have a lien on any cargo for which Carrier provides transportation services under this Agreement. 

  3. Term. This Agreement, including the Exhibits that are made a part hereof, shall commence on the date of first ethanol to be transported and shall be for a term of three (3) years from the Effective Date, and thereafter will automatically renew and continue for additional renewal terms of one (1) year each unless otherwise terminated by provisions contained herein. Unless otherwise terminated by provisions contained herein, this Agreement shall terminate: a. by either party giving written notice to the other party no less than one hundred eighty (180) calendar days prior to the ending date of the initial three-year term or of any renewal term; b. on the expiration or suspension of all or any part or aspect of the authority granted in the Docket; c. on any change in the authority granted in the Docket, such change of which adversely affects Carrier's ability to perform the services in the capacity represented herein; d. by mutual agreement of Shipper and Carrier; e. upon the discontinuance of business operations by either party which discontinuance of business materially affects such party's ability to perform the obligations agreed to pursuant to the terms of this Agreement; or f. upon notification to Shipper that Carrier has been issued a U.S. Department of Transportation Safety Rating of less than "Satisfactory" 4. Effect of Termination. Termination of this Agreement for any reason shall not release either party from any obligation that may have accrued before such termination, nor shall it preclude either party from exercising any remedies it might have in law or equity to enforce such obligations. 5. Carrier's Service Designed to Meet Shipper's Distinct Needs. The parties agree and acknowledge that the transportation services provided for under this Agreement are designed to meet the distinct needs of Shipper, and it is specifically because Carrier acknowledges its ability and willingness to meet such distinct needs that Shipper has entered into this Agreement. Carrier shall provide all services in a prompt, efficient and safe manner and shall warrant the safe and prompt delivery of the goods without loss, damage, delay or contamination. Carrier and Shipper acknowledge that this is a private contract to provide specified services under specified rates and conditions, and, to the extent permitted by 49 U.S.C. ss.14101, hereby waive all rights, obligations and remedies they may have under 49 U.S.C. ss.13101 through ss.14901 for the transportation covered by this Agreement, (except on matters relating to registration, insurance and safety fitness) only to the extent such rights, obligations and remedies are in conflict with this Agreement. 

 6. Independent Contractor. Carrier is and shall remain an independent contractor in all respects and in the performance of all transportation services and related activities hereunder. The detailed methods of transporting commodities in motor vehicles shall be under the exclusive control and direction of Carrier, Shipper being interested only in the results thereof. All persons engaged in performing the transportation services and related activities hereunder shall be employees or agents of Carrier or its subcontractors or their employees, and shall not be deemed to be subcontractors of agents of Shipper. Carrier, however, agrees to comply with all requests made to Carrier by Shipper concerning the time, coordination, and place of performance hereunder. 7. Determination of Freight Charges. a. Freight charges and fuel surcharges shall be those set forth in the attached Exhibit A. Unless expressly stated and agreed to otherwise herein, all such charges shall be inclusive of the following: i. all origin and destination services (including, but not limited to loading and unloading services) required by Shipper; ii. all accessorial charges; iii. all fuel surcharges; iv. all hazardous material fees; and v. all detention charges. b. In determining the freight and other charges applicable under this Agreement, the parties shall use those rates set forth in the attached Exhibit(s). 8. Invoicing and Payments. a. All commodities transported by Carrier for Shipper, whether received from Shipper or from a third party, shall be transported under the terms and conditions of this Agreement. Each shipment shall be evidenced by a document substantially in the form attached hereto as Exhibit B showing the product and quantity thereof received and delivered by Carrier at the loading and unloading points, respectively. b. Invoicing shall be accomplished either by Carrier mailing to Shipper the original and one copy of each applicable freight bill, or by sending Shipper the invoice information via Electronic Data Interchange (EDI) with the data transmitted serving as the freight invoice. c. Freight invoices sent to Shipper which reflect freight or other charges that exceed the charges previously agreed to by the parties and incorporated into the contract rates pursuant to this Agreement, shall, at Shipper's discretion, either be returned to Carrier for correction to reflect the previously agreed-to rates and charges or shall be manually revised by Shipper to reflect the correct amount due as previously agreed to by the parties pursuant to the terms of this 

 Agreement. In such cases, Shipper shall pay that portion of the invoice which Shipper reasonably believes is due and owing to Carrier under the terms of the Agreement. d. If Shipper desires to ship on a "freight collect" basis, Carrier agrees to collect from the consignee the charges listed in Exhibit A , except in the case where Carrier and consignee have a separate agreement. e. Shipper's payment of invoices shall not constitute acceptance of shipments and shall be subject to adjustment for errors, shortages or defect. 9. Scope and Governing Rules. This Agreement shall apply to and govern all shipments tendered to Carrier for shipment to and/or from Shipper's facilities, including shipments to and/or from any locations other than Shipper's facilities as designated by Shipper, and shipments from suppliers shipping to Shipper. To the extent any term or provision in this Agreement differs or is contrary to a term or provision of any tariff, bill of lading, freight bill, or other shipping or delivery document, the terms and provisions of this Agreement shall supersede and govern. 10. Loading and Handling Obligations. a. Carrier shall be responsible for loading Shipper's freight onto Carrier's equipment at the origin point and for unloading Shipper's freight at the delivery point. When on Shipper's premises, Carrier, its subcontractors and agents shall comply with the safety practices and procedures established for those premises. b. Carrier is responsible to maintain an accurate count of all of Shipper's freight at all times such freight is in Carrier's possession, custody, or control. Subject only to their taking appropriate safety measures. Carrier, Carrier's employees, agents and/or authorized representatives may visually inspect and count Shipper's freight during the loading process and during all times in which such freight is in Carrier's possession, custody, and control. 11. Loss of or Damage to Property, Third-Party Claims. a. Loss of or Damage to Property of Shipper or Third Parties. i. Regardless of the points of origin, destination or location of the transportation services provided, Carrier shall be liable to Shipper in the same manner and to the same extent as a common carrier under 49 U.S.C. ss.14706 (or its successor statute) for loss of, damage to, contamination of, or delay in delivery of Shipper's products when tendered and accepted for transportation hereunder, except where such loss or damage results from (1) acts of God, or public authority, (2) inherent vice or nature of the commodities, or (3) acts of Shipper. Irrespective of any provisions in Carrier's tariffs, service guides or similar publications, Carrier's liability for loss, damage, contamination, or delay shall be determined solely by the terms of this Contract. Any attempts to limit Carrier's liability by tariff or other provisions incorporated by reference in a bill of lading or other shipping document shall be deemed null and void. Products which have been tendered to Carrier in good order and condition, and subsequently 

 delivered by Carrier in damaged or contaminated condition, or lost or destroyed, or unreasonably delayed in delivery, shall be conclusively deemed to have been damaged, contaminated, lost, destroyed, or delayed by Carrier's negligence unless Carrier can otherwise establish by clear and convincing evidence. ii. Carrier's acceptance of Shipper's products for transportation shall be deemed to occur at the time such products (or any part thereof) pass the flange of the loading valve on Carrier's trailer. iii. Claims against Carrier for loss of, damage to, contamination of, or delay in delivery of the Shipper's products and the processing of any salvage shall be governed by 49 C.F.R. Part 370, or any applicable successor regulations, except as otherwise set out in this Agreement. Carrier shall not dispose of any damaged or contaminated cargo, without the prior written consent of Shipper. Shipper may determine, within its sole discretion, and not subject to a reasonableness standard, whether and how the cargo, may be salvaged, and if salvageable, the value of such salvage. Any salvage receipts shall be credited against Shipper's claim against Carrier. Shipper shall have the right to remove all identifying marks or labels when Carrier pays Shipper for the full value of the damaged or contaminated cargo and requests possession of the salvage. Alternatively, the cargo shall be permanently marked as "damaged" or a similar notation, without debiting Shipper for such notations. If any portion of 49 C.F.R. Part 370 conflicts with any portion of this Agreement, the provisions of this Agreement shall govern. iv. The parties agree and Shipper declares that, in case of loss, contamination, or damage to Shipper's products, the value of such products and the liability of Carrier for any cause for which Carrier may be liable, shall be the full invoice value of the products up to $50,000 per shipment, subject to reasonable mitigation of the lost, contaminated, or damaged products, plus all reasonable additional transportation costs. Such full invoice value shall be determined by the invoice between Shipper and the consignee, or if Shipper is the consignee, the invoice between the consignor and Shipper. v. Carrier shall be liable to Shipper and to third parties for any loss or contamination of, or damage to any products or property, other than commodities tendered for transportation hereunder, where and to the extent such loss, contamination, or damage is the result of Carrier's negligence or willful misconduct. vi. The parties agree that, in case of loss or contamination of, or damage to any products or property of third parties or Shipper, other than commodities tendered for transportation hereunder, the value of such products or property and the liability of Carrier for any cause for which Carrier may be liable, shall be the fair market value of such products or property or the reasonable cost of repair, whichever is less. b. Loss of or Damage to Property of Carrier. i. Shipper shall be liable to Carrier for loss of or damage to any property of Carrier where and to the extent such loss or damage is the result of Shipper's negligence or willful misconduct. 

 ii. The parties agree that in case of loss or damage to any property of Carrier, the value of such property and the liability of Shipper for any cause for which Shipper may be liable, shall be the fair market value of such property or the reasonable cost of repair, whichever is less. 12. Indemnification. a. Except as expressly provided below Carrier agrees to hold harmless and unconditionally indemnify Shipper against and from all liability, cost, expenses, claims, and damages which Shipper may at any time suffer or sustain or become liable for by reason of: i. Any and all penalties, fines, costs or expenses of any character which may be enforced or sought to be enforced against Shipper or Carrier by reason of the violation or alleged violation by Carrier of any federal, state or local law or regulation; ii. Any and all claims, actions and causes of action which may at any time arise by reason of accident or damage to the property of either party or third parties or the injury to or death of any party including employees of either party or any third parties caused by any negligent act or omission of Carrier, its officers, agents, or employees arising from or in connection with: (a) The maintenance, use, or operation (including loading and unloading) by Carrier or its agents, or employees of any motor vehicles or equipment used by Carrier in performance of this Agreement; (b) Carrier's performance of the transportation services to be provided under this Agreement; iii. Any and all claims, actions and causes of action which may at any time arise by reason of any state or local sales tax that may be assessed on payments made by Carrier to Shipper for loss or damage to Shipper's commodities or any other property of Shipper. b. The indemnity herein provided shall include, but shall not be limited to, all costs, expenses, and attorneys' fees incurred or payable by Shipper in settling such claims or penalties or fines or in investigating or defending against the same. c. Notwithstanding any other provision in this Agreement, such indemnity of Carrier shall not hold Shipper harmless from or against any such penalty, fine, claim, action or cause of action shown to arise from the negligence of Shipper. Where personal injury, death or loss of or damage to property (excluding property of Shipper or Carrier) is the result of the joint negligence or willful misconduct of Carrier and Shipper, Carrier's duty of indemnification shall be in proportion to its allocable share of such joint negligence or willful misconduct. d. This Section 12 shall not apply to claims for lost, contaminated, damaged or delayed cargo that are covered by Section 11.a. i-iv above. 

 13. Insurance. a. Carrier shall obtain and maintain at all times during the term of this Agreement the following insurance coverage: i. Comprehensive general liability (including automobile and contractual liability), bodily injury and property damage insurance, with an appropriately licensed company, in an amount not less than Five Million Dollars ($5,000,000.00) or the amount required by applicable state and/or federal law, whichever is greater, insuring Carrier's ability to pay for any loss, damage, or injury arising out of Carrier's performance or failure to perform under this Agreement. ii. Cargo insurance with an appropriately licensed company satisfactory to Shipper in an amount not less than Fifty Thousand Dollars ($50,000.00) for loss of or damage to property carried on motor vehicles used in connection with the transportation services agreed to under the terms of this Agreement, or for any and all amounts as per statutory requirements, whichever is greater; iii. Worker's compensation insurance, with an appropriate licensed company, in an amount not less than the statutory requirements, for injury to any of Carrier's employees arising out of Carrier's performance of this Agreement; iv. Environmental damage liability insurance, as evidenced by an MCS90, with limits of liability of not less than Five Million Dollars ($5,000,000.00) per occurrence; and v. Any other insurance required by any federal or state regulatory agency. b. Carrier shall provide certificates of insurance coverage to Shipper to evidence that the insurance required herein remains in force. c. Shipper, its subsidiaries and affiliated companies, co-owners and joint venturers, if any, and their employees, officers and agents shall be named as additional insureds or as beneficiaries of each of the policies required by this section, except Workers' Compensation. d. All policies shall be endorsed to provide that underwriters and insurance companies of Carrier shall not have any right of subrogation against Shipper, its subsidiaries, co-owners or joint venturers, if any, and their agents, employees, officers, invitees, servants, contractors, subcontractors, underwriters and insurance companies with respect to any loss of or damage to Shipper's cargo or commodities. e. Carrier agrees that unless it receives Shipper's prior written consent otherwise, it will (i) keep such policies in force, (ii) not reduce the amount or change the nature of the coverage, (iii) not remove Shipper as an additional insured or beneficiary, and (iv) not change insurers. Shipper shall not unreasonably withhold any approvals or consents as required herein. f. Any coverage provided Shipper by Carrier's insurance under this Agreement is primary insurance, to the extent the loss or damage in question is caused by Carrier's negligent 

 act or omission, and shall not be considered contributory insurance with any insurance policies of Shipper, its employees, subsidiaries, or joint venturers, if any. To the extent a particular loss or damage is caused by Shipper's negligent act or omission, any applicable coverage under policies of Shipper shall be primary insurance, and shall not be considered contributory insurance with any insurance policies of Carrier. g. Such insurance policies shall provide (unless prohibited by applicable statute), that written notice of any such cancellation shall be given to Shipper at least ten (10) calendar days prior to such cancellation. Carrier's obligations hereunder shall always be subject to any limitations imposed by applicable laws, regulations or orders of any governmental authority. 14. Compliance with Laws and Business Practices. a. Each party hereto agrees to comply with all laws and lawful regulations applicable to any activities carried out under the provisions of this Agreement and/or any amendments to it. b. Carrier agrees to comply with all safety practices and procedures established for each of Shipper's facilities and premises. c. Carrier agrees that at all times when its vehicles are transporting Shipper's freight, such vehicles shall carry a current copy of the Emergency Response Guide Book. d. Each party hereto agrees that all financial settlements, billings, and reports rendered to the other party as provided for in this Agreement and/or any amendments to it will, to the best of its knowledge and belief, properly reflect the facts about all activities and transactions related to this Agreement, which data may be relied upon as being complete and accurate in any further recording and reporting made by such other party for whatever purpose. Each party hereto agrees to notify the other party promptly upon discovery of any instance where the notifying party has reason to believe data covered by this subsection (d) above are no longer accurate and complete. e. In addition to and not in limitation of Carrier's general compliance requirements set forth elsewhere in this Agreement, Carrier warrants that when providing services for any material that is classified as a Hazardous Material or Dangerous Good, under applicable international, federal, state, or local law, Carrier assumes full responsibility that its (and its subcontractors') employees have been trained, qualified, and screened to safely handle the material for the purposes of such services and that the material will arrive at the required destination in a safe manner. Carrier certifies that it has developed and implemented a security plan in compliance with applicable regulations in the jurisdictions in which it will provide the services for such material and that Carrier will furnish a true and correct copy thereof to Shipper, upon Shipper's request. 15. Transportation of Waste and Hazardous Waste a. This Section 15 shall apply only in the event a heel remains in the tank truck after delivery, and, after notification by Carrier, Shipper determines that the heel must be managed as a hazardous waste. 

 b. In the event Carrier transports hazardous waste, as defined by the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et. seq. and applicable state counterparts, Carrier shall comply with all applicable requirements for transporters of hazardous waste, including but not limited to the hazardous waste transporter requirements at 40 CFR Part 263 or any applicable state counterpart. c. Carrier shall deliver any hazardous waste tendered by Shipper only to the "designated facility" listed on the manifest accompanying the hazardous waste. Carrier must have regulatory authority to transport waste and hazardous waste within the applicable state or provincial jurisdictions. 16. Surviving Obligations. If any provision of this Agreement should be found to be unenforceable or should become in contravention of any applicable laws or regulations, the parties shall remain obligated by that which remains or such provision shall be superseded by the appropriate provisions of such laws or regulations, so long as such laws or regulations remain in force and effect, whichever is applicable. 17. Required Notices. a. Shipper shall give Carrier prior notice of the toxic, flammable, or otherwise hazardous nature, if any, of the product to be shipped. b. Carrier must notify Shipper within ten calendar (10) days when Carrier's Department of Transportation safety rating falls below the rating of "satisfactory". c. Carrier shall notify Shipper of any notices of DOT hazardous material violations received by Carrier while Carrier is in possession of Shipper's freight, immediately upon Carrier's receipt of any such violation. 18. Confidentiality. The rights and obligations hereunder are personal to each party to this Agreement. No party may disclose the existence of, or any of the terms of this Agreement to any non-party without the prior written consent of the other parties except (1) as required by law, in particular securities laws applicable to Shipper; (2) to a corporate parent, subsidiary, or affiliate; or (3) to an authorized audit agency for audit or other financial purposes. 19. Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Nebraska (without giving effect to the principles of conflict of laws which might otherwise result in the application of the law another jurisdiction) and Title 49 of the United States Code. Litigation regarding this contract may be brought only in the courts in the State of Nebraska. 

 20. Force Majeure. In the event either party is unable to meet any of its obligations under this Agreement as a result of acts of God, acts of government, war, strike or other labor disturbance, or any other cause beyond its reasonable control, the obligations of the party affected by the force majeure condition shall be suspended for the duration of same; provided, however, that both parties shall make all reasonable efforts to continue to meet their obligations for the duration of the force majeure condition. The suspension of any obligations owing to force majeure shall neither cause the term of this Agreement to be extended nor affect any rights accrued under this Agreement prior to the force majeure condition. Nothing in this Section 20 shall apply to relieve Carrier from its responsibility and liability for cargo loss, damage, contamination, or delay in delivery set forth in Section 11 of this Agreement or its indemnification obligations under Section 12 of this Agreement, except as otherwise set forth in those sections. 21. Notices. All notices required to be given under this Agreement shall be in writing and sent either by first class U.S. Mail or overnight mail, postage prepaid, and addressed to the respective parties at the following addresses, or at such other addresses as one party may furnish to the other by written notice: Carrier Shipper Western Oil Trans Inc NEDAK Ethanol LLC Attn: Mike Danielski Attn: Jerome Fagerland 633 W Hwy 20 - PO Box 10 87590 Hillcrest Road - PO Box 391 Valentine, NE 69201 Atkinson, NE 68713 22. Assignment and Benefit. This Agreement shall not be transferred or assigned in whole or in part by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties and their lawful successors and assigns. 23. Entire Agreement. This instrument states the entire agreement between the parties and there are no other agreements or understandings whatsoever, expressed or implied, relating to the subject matter hereof. All amendments to this Agreement shall be in writing and signed by both parties. 

 24. Waiver. No waiver by either party of any breach of this Agreement by the other party shall be considered a waiver of any succeeding breaches. 25. Document Retention. Carrier agrees to obtain signed receipts, upon forms satisfactory to Shipper, from all persons to whom Carrier shall make deliveries, and Carrier shall retain said receipts for at least two (2) years following such delivery and shall, upon request, make said receipts available to Shipper for its inspection and/or use. Carrier agrees to retain this Agreement or a true and correct copy of the document for the life of the Agreement and for three (3) years thereafter. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written. NEDAK ETHANOL LLC By: /s/ Jerome Fagerland Title: President and General Manager WESTERN OIL TRANS INC By: /s/ Mike Danielski Title: President 

 EXHIBIT A TRANSPORTATION RATE The Freight charges for shipments from the Origin Loading Point of Atkinson Ethanol Storage Site to the Destination Unloading Point of O'Neill Ethanol Storage Site shall be $0.01299 per gallon unloaded. BULK FUEL SURCHARGE 1. Shipper & Carrier agree that the fuel surcharge is established on a "cents per gallon" basis and then applied to the base rate which was established above. 2. Each billing date (15th & 30th) the price of the fuel surcharge will be established using the price of #2 diesel fuel at a non-affiliated location such as Cubby's in O'Neill, NE. This price will set the additional surcharge based on the attached charge. 3. The fuel surcharge is fixed to the extent that it does not change from the time of tender of shipment during the course of the transportation of that shipment. FUEL SURCHARGE PER GALLON UNLOADED $2.499 DIESEL FUEL BASE CHANGE EVERY 25 CENTS INCREASE FUEL PRICE SURCHARGE $2.499 0 -------------------------------- $2 ###-###-#### ------------------------------- $2 ###-###-#### ------------------------------- $3 ###-###-#### ------------------------------- $3 ###-###-#### ------------------------------- $3 ###-###-#### ------------------------------- $3 ###-###-#### ------------------------------- 

 EXHIBIT B FORM OF SHIPPING DOCUMENT