Exhibit

10.20




 




CORN

PRICE RISK MANAGEMENT AGREEMENT




 




THIS CORN

PRICE RISK MANAGEMENT AGREEMENT is made and entered into as of the

27 day of Nov, 2002 by and between Broin Management, LLC, a Minnesota limited

liability company (“Manager”) and Great Plains Ethanol, LLC, a South Dakota

limited liability company (“Company”).




 




WHEREAS, Company owns an ethanol

production plant near Chancellor, South Dakota (the “Plant”); and




 




WHEREAS, Manager is in the business of

management and operation of ethanol production facilities, including the Plant;

and




 




WHEREAS, Company and Manager have engaged

the services of Manager to manage the Plant pursuant to the Operating Agreement

dated January 15, 2001.




 




WHEREAS, Company desires to engage the

services of Manager to provide corn price risk management services not

addressed by the Operating Agreement between Manager and Company, and Manager

desires to provide such additional services on the terms and conditions

hereinafter described.




 




NOW,

THEREFORE,

in consideration of mutual covenants contained herein, the parties agree as

follows:




 




Definitions




 




Terms Defined in the

Operating Agreement. The capitalized terms defined in the Operating Agreement dated

January 15, 2001 are incorporated herein by reference.




 




Rights

and Obligations of Manager




 




General Rights and

Obligations.

Manager shall have the responsibility and authority to take all action

necessary or appropriate to engage in hedging and price risk management

relating to corn requirements including, without limitation, the power and

authority to:




 




(a)                                  Trade corn futures, options and

other contracts with the intention of controlling grain costs and market risk

exposure for any and all ethanol plants managed by Manager and the Broin

Enterprises Plant, including the Plant;




 




(b)                                 Devise and implement strategies for

carry protection and basis protection;




 




(c)                                  Recommend strategies for flat price

protection to each governing board and enact all flat price strategies approved

by the governing board;




 




(d)                                 From time to time enter into trades

to reduce market exposure and market risk in other co-products or commodities

relative to plant usage or production;




 





























 




(e)                                  Hire such employees and independent

contractors as Manager shall determine to be reasonably necessary to the

foregoing; and




 




(f)                                    Carry on any other activities

necessary to, in connection with, or incidental to the foregoing.




 




Storage/Forward Contract

Hedging.

Manager will recommend Storage and Forward Contract Hedging strategies to the

Commodity Manager at the Company. At no time will these strategies result in

the flat pricing of more than 25% of one year’s projected corn usage without

the approval of the Board of Governors of the Company. The Company will

establish a futures trading account with the assistance of the Manager for the

purpose of Flat Price/Storage/Forward Contract Hedging.




 




Flat Price Hedging. Manager will recommend flat price

strategies to the Board of Governors for flat price hedging in excess of 25% of

one year’s projected corn usage as it deems necessary. The Board of Governors

of the Company or a committee appointed by the Board of Governors will review

these strategies and direct Manager to implement any strategies that are

approved. Manager will promptly enact any Flat Price Hedging strategies

directed by the Company.




 




Independent Contractor

Status.

Manager in the performance of its duties under this Agreement shall occupy the

position of an independent contractor with respect to the Company. Nothing

contained herein shall be construed as making the parties hereto partners or

joint venturers, nor, except as expressly provided herein, construed as making

Manager an employee of the Company.




 




Reports

Issued by Manager




 




The following reports will

be issued to the Company by the Manager:




 




Daily Reports (to Commodity Manager):




-                 Market Update – Bid Sheet




-                 Market Summary and Commentary




Weekly Reports (to General Manager):




-                 Pool Position and Profitability




-                 DDGS Market Roundup




Quarterly Reports (to the Board of Directors)




-                 Quarterly Market and Trading Update




-                 Quarterly DDGS Update




 




Duties of

Company




 




Company hereby agrees to

cooperate with Manager in the performance of Manager’s duties and

responsibilities under this Agreement, to act in good faith, and to do all

reasonable




 




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things necessary to aid Manager’s performance as an independent

contractor under the terms of this Agreement.




 




Price

Risk Management Fee




 




Price Risk Management Fee. Company shall pay Manager a Price

Risk Management Fee of $50,000.00 per year, payable in quarterly installments

of $12,500.00 due on the first day of each quarter. In the event this Agreement

commences other than on the first date of a quarter, the first quarterly

installment shall be prorated. It is projected the first quarter will commence

on                     .

This fee is subject to modification in the case of plant expansions or

increases in corn usage.




 




Pooling

Arrangement




 




Company acknowledges that

Manager will be offering these price risk management services to all of the

ethanol facilities Manager manages. A pooling arrangement may be implemented

whereby Company and other ethanol facilities managed by Manager will contribute

funds for allocation to trading activities based on the price risk management

services. All trade expenses incurred by Manager in pursuing the foregoing

shall be paid out of the pool. Any profits or losses resulting from the trading

activity will be allocated proportionally to participants based on their

proportionate contribution to the pool.




 




Margin

Money




 




If pool is instituted

then, initial margin contribution to the pool account will be $65,000. Income

will be distributed as sufficient cash becomes available in the account. In the

case of pool losses, additional margin money will be requested pro-rata from

the plants trading in the pool account.




 




Effective

Date: Term: Termination




 




Effective Date. This Agreement shall be effective

as of the date first set forth above.




 




Term. The term of this Agreement shall

be for a period of one (1) year commencing with 1st payment. Thirty

(30) days prior to the expiration of the one (1) year term, this Agreement

shall be automatically extended for an additional one (1) year term following

the end of the one (1) year term unless either party gives notice of

termination as provided below.




 




The aforementioned renewal

provision shall apply in the same manner for all subsequent expiring terms.

Therefore, every one (1) year this Agreement shall be either automatically

extended or proper notice of termination given by either party as provided

below.




 




Termination. Either party has the right to

terminate this Agreement without cause by giving written notice to the other

party of such termination. Such written notice of termination shall be given

not more than ninety (90) days or less than thirty (30) days before the last

day of each expiration period (i.e. every year). Upon any such termination,

Manager shall have the right




 




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to continue to provide price risk management services until the end of

the then-current year. Likewise, upon any such termination, Company shall have

the right to Manager’s price risk management services until the end of the

then-current year.




 




Limitation

of Liability




 




Company acknowledges that

the corn market is volatile and subject to events over which Manager and

Manager’s Price Risk Consultant have no control. Accordingly, Manager and

Manager’s Price Risk Consultant will not be held liable by Company for any

losses related to the trading activities of Manager and Manager’s Price Risk

Consultant relating to this Agreement so long as Manager and Manager’s Price

Risk Consultant have acted in good faith and in a manner they reasonably

believed to be in the best interests of the business of the Plant. The parties acknowledge

that the price risk management services to be rendered pursuant to this

Agreement may affect the profitability of the Plant, and may accordingly affect

the bonuses to be paid to Manager under the terms of the Operating Agreement.




 




Dispute

Resolution




 




In the event of a dispute

between Company and Manager relating to the terms of or performance under this

Agreement, the dispute resolution provisions set forth in the Operating

Agreement shall govern, and same are incorporated herein by reference.




 




Assignment




 




This Agreement shall be

assignable by either party upon mutual written consent of the parties hereto.




 




Miscellaneous




 




Headings. The headings contained herein are

for convenience only and are not intended to define or limit the scope of

intent of any provisions of this Agreement.




 




Governing Law. The validity of this Agreement,

the construction of its terms and the interpretation of the rights and duties

of the parties hereto shall be governed by the laws of the State of South

Dakota.




 




Notices. Any notice required or permitted

herein to be given shall be given in writing and shall be delivered by United

States registered or certified mail, return receipt requested, to the President

of Manager or President of Company, as the case may be, at the addresses set

forth below or such address as Company or Manager shall provide notice of from

time to time during the term of this Agreement.




 




	

  Company:


  	

   


  	

  Great Plains Ethanol,

  LLC


  
	

  Attention:


  	

   


  	

                     -

  Chairman


  
	

   


  	

   


  	

  27716 462nd

  Avenue


  
	

   


  	

   


  	

  Chancellor, SD 57015


  





 




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  Manager:


  	

   


  	

  Broin Management, LLC


  
	

   


  	

   


  	

  Attention:  Mr. Jeffrey S. Broin


  
	

   


  	

   


  	

  2209 East 57th

  Street North


  
	

   


  	

   


  	

  Sioux Falls, SD 57104


  





 




Successors. This Agreement shall be binding

upon and inure to the benefit of the respective parties and their permitted

assigns and successors in interest.




 




Waivers. No waiver of any breach of any of

the terms or conditions of this Agreement shall be held to, be a waiver of any

other subsequent breach; nor shall any waiver be valid or binding unless the

same shall be in writing and signed by the party alleged to have granted the

waiver.




 




Counterparts. This Agreement may be executed in

multiple counterparts all of which shall constitute but one Agreement.




 




Amendment. This Agreement may be amended

with the written consent of Company and Manager.




 




Entire Agreement. Except as otherwise described

herein, this Agreement is the entire Agreement between the parties relating to

corn price risk management. Any amendment hereto must be in writing and signed

by both parties hereto to come into full force and effect.




 




IN WITNESS WHEREOF, the

parties hereto have executed this Agreement as of the 27 day of Nov, 2002.




 




	

  Company:


  	

   


  	

  Manager:


  
	

   


  	

   


  	

   


  	

   


  
	

  Great Plains Ethanol,

  LLC


  	

   


  	

  Broin Management, LLC


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  By


  	

  /s/ Darrin Ihnen


  	

   


  	

   


  	

  By


  	

  /s/ Jeff Broin


  	

   


  
	

   


  	

  Its Chairman


  	

   


  	

   


  	

   


  	

  Its Chief Manager


  	

   


  
								





 




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