Exhibit 10.3


 


AGREEMENT TO COMPENSATE GUARANTORS


 


THIS AGREEMENT is made and
entered into effective this 25th day of February, 2004, by and between Great
Plains Ethanol, LLC (the “Company”) and Robert Broin, Jeff Broin, Todd Broin,
Duane Sather, Fred Thurman, John Ludens, and Dennis Schrag.


 


RECITALS:


 


A.            The Company entered into a Natural Gas Distribution
Delivery Agreement dated September 2, 2002 with NorthWestern Energy Corporation
(“NEC”).


 


B.            In connection with the Natural Gas Distribution Delivery
Agreement, Home Federal Bank issued an Irrevocable Standby Letter of Credit
dated February 28, 2003 in the amount of $1,600,000.00 (the “Letter of Credit”)
in favor of NEC.


 


C.            In consideration for the Letter of Credit, the Company
executed a Promissory Note dated February 28, 2003 in the amount of
$1,600,000.00 in favor of Home Federal Bank (the “2003 Note”).


 


D.            Robert Broin, Jeff Broin, Todd Broin, Duane Sather, Fred
Thurman, Dwayne Atkins, John Ludens, Dennis Schrag and Steve Sershen each
personally guaranteed the 2003 Note in part. 
The Company entered into an Agreement dated March 4, 2003 with such
guarantors to compensate each of them for their guarantees of the 2003 Note in
an amount equal to two percent (2%) per annum of their respective guarantee
amounts.


 


E.             The Letter of Credit was modified and restated pursuant
to a First Amended and Restated Irrevocable Standby Letter of Credit dated May
28, 2003.


 


F.             The Letter of Credit was further modified and restated
pursuant to a Second Amended and Restated Irrevocable Standby Letter of Credit
dated February 25, 2004 in the amount of $1,250,000.00.


 


G.            In consideration for the Second Amended and Restated
Letter of Credit, the Company executed a Promissory Note dated February 25,
2004 in the amount of $1,250,000.00 in favor of Home Federal Bank (the “2004
Note”).


 


H.            Robert Broin, Jeff Broin, Todd Broin, Duane Sather, Fred
Thurman, John Ludens, and Dennis Schrag (collectively the “Guarantors”) are
each willing to personally guarantee the 2004 Note in part.


 

















 


I.              The Company wishes to provide certain compensation to
the Guarantors in consideration for their agreement to enter into the
guarantees.


 


NOW, THEREFORE, the parties
agree as follow:


 


1.             In consideration of the Guarantors’ agreement to provide
their personal guarantees to Home Federal Bank in connection with the 2004
Note, the Company agrees to compensate each Guarantor in an amount equal to two
percent (2%) per annum of his respective guarantee amount, for so long as such
guarantee continues.  The amounts of the
individual guarantees related to the 2004 Note are as follows:


 


	
  Robert Broin

  	
   

  	
  $

  	
  250,000.00

  	
   

  
	
  Jeff Broin

  	
   

  	
  $

  	
  250,000.00

  	
   

  
	
  Todd Broin

  	
   

  	
  $

  	
  250,000.00

  	
   

  
	
  Duane Sather

  	
   

  	
  $

  	
  100,000.00

  	
   

  
	
  Fred Thurman

  	
   

  	
  $

  	
  100,000.00

  	
   

  
	
  John Ludens

  	
   

  	
  $

  	
  200,000.00

  	
   

  
	
  Dennis Schrag

  	
   

  	
  $

  	
  100,000.00

  	
   

  



 


2.             Payment will be made by the Company to the Guarantors on
or before March 31 of each year in which the guarantees are executed, renewed,
replaced or extended.


 


3.             This Agreement constitutes the entire agreement among
the parties with respect to compensation to be paid by the Company to the
Guarantors for their guarantees.  This
Agreement supercedes any prior negotiations, agreements, or understandings
between the parties with respect to compensation to be paid by the Company to
the Guarantors for their guarantees.


 


 


	
  GREAT PLAINS ETHANOL, LLC

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Darrin Ihnen

  	
   

  
	
  Its: 

  	
  President

  	
   

  
				



 


2

















 


	
  /s/ Robert Broin

  	
   

  	
  /s/ Jeff Broin

  	
   

  
	
  Robert Broin

  	
  Jeff Broin

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Todd Broin

  	
   

  	
  /s/ Duane Sather

  	
   

  
	
  Todd Broin

  	
  Duane Sather

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Fred Thurman

  	
   

  	
  /s/ John Ludens

  	
   

  
	
  Fred Thurman

  	
  John Ludens

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Dennis Schrag

  	
   

  	
   

  
	
  Dennis Schrag

  	
   

  
									



 


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