**Exhibit10.20**

 

**LETTERAGREEMENT**

 

March 15, 2004

 
| LENDER:

AgStar Financial Services, PCA  1921 Premier Drive  Mankato, MN  56002 |   | BORROWER:  United Wisconsin Grain Producers, LLC  100 Richland Street  Friesland, WI  53935 |
|--------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|

 

Gentlemen:

 

This letter agreement memorializes certain matters relating to theConstruction and Revolving Loan Agreement in the amount of $33,024,200.00 (the“Loan”) being made by AgStar Financial Services, PCA to United Wisconsin GrainProducers, LLC (the “Borrower”) in accordance with the loan agreement (the“Loan Agreement”), promissory note, and other documents and agreements datedFebruary 26, 2004 related to the Loan (the “Loan Documents”).  Capitalized terms used and not defined inthis letter agreement shall have the meanings assigned to them in the LoanAgreement.

 

We have discussed the fact that some of theconditions and requirements of the Loan and Loan Documents remained outstandingat the time the Loan Documents were executed. These items include, but are not limited to, the following:

 

1.                                       Intercreditor and Subordination Agreementwith Fagen, Inc., before any Advances are made under the Loan, if subordinateddebt is used;

 

2.                                       Executed Agreement with WPS Energy Services,Inc.;

 

3.                                       Executed Agreement with Wisconsin Power& Light Company;

 

4.                                       Copy of building permit as soon asavailable;

 

5.                                       Copy of Tier II Stormwater Permit, as soonas available;

 

6.                                       Copy of Stormwater PPP Permit, as soon asavailable;

 

7.                                       Copy of BATF Permit, as soon as available;

 

8.                                       Update on EIS as soon as available;

 

9.                                       Procurement Agreements when available, ifany, and a Collateral Assignment of each such agreement;

 

10.                                 Ethanol Marketing Agreements when available,if any, and a Collateral Assignment of each such agreement;

 

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11.                                 DDGS Marketing Agreements when available, ifany, and a Collateral Assignment of each such agreement;

 

In accordance with Borrower’s requests,Lender agreed to sign and deliver the Loan Documents on February 26,2004.  Signature and delivery of theLoan Documents by the Lender is not and shall not be deemed a waiver by theLender of any term, condition or requirement contained in the Loan Documentsfor purposes of:  (i) any advance underthe Loan Documents; or (ii) constituting an event of default under the terms ofthe Loan Documents.  That is,notwithstanding the signature and delivery by the Lender of the Loan Documents,all of the terms, conditions and requirements of the Loan Documents must besatisfied prior to any advance of Loan proceeds being made under the LoanDocuments; and the Lender is not waiving or forgiving any event of defaultunder the Loan Documents constituted by the above referenced outstandingconditions and requirements, and Lender expressly reserves the right toexercise all remedies contained in the Loan Documents if, in its solediscretion, such outstanding conditions and requirements are not complied within a timely and satisfactory fashion.

 

The Borrower understands and acknowledgesthat the Lender’s signature and delivery of the Loan Documents is subject to theproduction and/or execution of the above listed items.  Except for items 5, 6 and 7, to whichBorrower does not expect permits to be issued until after operations begin,Borrower further acknowledges that Lender will be under no obligation toadvance any funds pursuant to the Loan Documents until Borrower meets the aboveconditions to the satisfaction of Lender.

 

The undersigned agree to be bound to the terms and conditions of theabove letter, and have executed this letter as of the 15th day ofMarch, 2004.

 
| LENDER:                        |   | BORROWER:                             |
|--------------------------------|--------|---------------------------------------|
| AgStar Financial Services, PCA |   | United Wisconsin Grain Producers, LLC |
|                           |   |                                  |
|                           |   |                                  |
| */s/ Mark Schmidt*             |   |   /s/ Kevin Roche           |
| By Mark Schmidt                |   | By Kevin Roche                        |
| Its Vice President             |   | Its President                         |

 

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