Exhibit 10.2


 


AMENDMENT TO MANAGEMENT AGREEMENT


 


THIS AMENDMENT is made and entered as of this 25th day of
October, 2005, by and between Northern Lights Ethanol, LLC, a South Dakota
limited liability company, (the “Company”) and Broin Management, LLC, a Minnesota
limited liability company (“Broin Management”).


 


RECITALS


 


A.            Company and Broin
Management entered into a Management Agreement on April 20, 2005 (the “Management
Agreement”).


 


B.            Company
and Broin and Associates, Inc., a South Dakota corporation, intend to
enter into a Technology and Patent Rights License Agreement dated the same as
this Amendment (the “License Agreement”) pursuant to which Broin and Associates, Inc.,
is agreeing to conduct certain research and development activities and, subject
to the terms of said License Agreement, make such New Technology available to
Company, on a case-by-case basis, by the execution of additional Addendums to
the License Agreement.


 


C.            As a precondition to
entering into the License Agreement, Broin and Associates, Inc., is
requiring the Company to extend the term of the Management Agreement by an
additional five (5) years.


 


D.            Company is agreeable
to extending the term of the existing Management Agreement by an additional
five (5) years, in accordance with the provisions of this Amendment.


 


NOW, THEREFORE, in consideration of the terms and conditions set forth
in this Amendment, Company and Broin Management agree that the Management
Agreement is amended as follows:


 


Section 1. Definitions. Company and Broin Management agree that
certain definitions in Section 1 are added or modified as follows:


 


A.            Section 1.10A is
created to read as follows:


 


Section 1.10A. “Existing Technology” means all of “Licensor’s
Technology” currently utilized in the production of the Licensed Products at
the Ethanol Plant using the cook/fermentation process described in the Original
License Agreement.


 


B.            Section 1.11 is
revised to read as follows:


 





















 


Section 1.11 “License Agreement” means the Technology and Patent
Rights License Agreement dated October 25, 2005 executed by Broin and
Associates, Inc., and Company, as amended and/or replaced from time to
time by Company and Broin and Associates, Inc.


 


C.            Section 1.15 is
revised to read as follows:


 


Section 1.15. “New Technology” means: (i) replacements,
improvements, enhancements or modifications to the Technology and Patent
Rights, (ii) new inventions and discoveries for the construction and
operation of the Ethanol Plant, the manufacture of the Licensed Products and/or
use of the Licensed Methods, and (iii) technology in research,
development, or testing stage, and technology to be researched, developed or
tested by Licensor subsequent to the date of the License Agreement, and (iv) any
processes, systems, diagrams, information, balances, blueprints,
configurations, manuals, videotapes or any other proprietary rights, patents,
trademarks, copyrights, trade secrets, formulas, research data, know-how,
process control systems, software certifications and specifications and other
technology that is not part of the Technology and Patent Rights.


 


D.            Section 1.16A is
created to read as follows:


 


Section 1.16A. “Original License Agreement” means that certain
Licensing Agreement dated November 2, 2000, originally executed by Broin
and Associates, Inc., and Northern Growers Cooperative, which License Agreement
has subsequently been assigned to Company.


 


E.             Section 1.18 is
revised to read as follows:


 


Section 1.18. “Technology” means: (i) all processes, systems,
diagrams, information, balances, blueprints, configurations, manuals,
videotapes, proprietary rights, patents, trademarks, copyrights, trade secrets,
formulas, research data, know-how, process control systems, software
configurations and specifications, and other technology required to operate the
Ethanol Plant, to manufacture the Licensed Products, and/or use the Licensed
Methods, all as identified in Exhibit A to the License Agreement, (ii) means
all inventions and discoveries covered by the claims in the Applications prior
to the issuance of, during the life of, and following the expiration of the
Patents, (iii) the Existing Technology, (iv) the Raw Starch
Technology and Patent Rights, and (v) any of the foregoing directed to the
manufacture of the Licensed Products and/or use of the Licensed Methods that
Licensor may own or gain rights to license during the term of this Agreement,
but not including the New Technology until so specified in an Addendum F. A new
paragraph is created at the end of Section 1 to read as follows:


 


2





















 


To the extent that capitalized terms are not otherwise defined in this
Amendment and/or the Agreement, said capitalized terms shall be as defined in
the License Agreement.


 


Section 2. Extension of Term. Company and Broin Management
agree that Section 11.2 of the Management Agreement is amended to read as
follows:


 


Section 11.2. Term. This Agreement shall be for a term of
ten (10) years commencing July 1, 2005, and terminating June 30,
2015.


 


Section 3. Termination by Company for Cause. Company and
Broin Management agree that Section 11.3 of the Management Agreement is
amended to read as follows:


 


Section 11.3. Termination by Company. Except as provided in
Section 11.5, Company may
terminate this Agreement only for “cause.” “Cause” shall be defined as (i) Broin
Management’s fraud, embezzlement, or other illegal conduct, (ii) the
termination or expiration of the License Agreement for any reason other than
Company’s default or breach of the License Agreement, (iii) Broin
Management’s substandard performance as compared to other similarly-sized
ethanol plants in the region not managed by Broin Management with such
substandard performance lasting for a period of twelve (12) consecutive months,
and/or (iv) Broin Management’s breach of the terms and conditions of this
Agreement. In the event that Company terminates this Agreement for “cause” as
defined in subparagraph (i) and (ii) above, Company shall give Broin
Management written notice of termination, and in said event this Agreement shall
terminate upon Broin Management’s receipt of said notice. If Company terminates
this Agreement for “cause” as defined in subparagraph (iii) above, Company
shall first give Broin Management written notice that Broin Management’s
performance as compared to other similarly-sized ethanol plants in the region
not managed by Broin Management has been substandard for a period of twelve
(12) consecutive months, in which event Broin Management shall have one hundred
and eighty (180) days within which to correct its performance. In the event
that Broin Management fails to correct its performance within the one hundred
and eighty (180) day period, this Agreement shall terminate without further
notice. If Company terminates this Agreement for “cause” as defined in
subparagraph (iv) above, Company shall first give Broin Management written
notice that Broin Management has breached the terms and conditions of this
Agreement, stating therein the defaults occurring, in which event Broin
Management shall have thirty (30) days within which to correct its performance.
In the event that Broin Management fails to correct its performance within the
thirty (30) day period, this Agreement shall terminate without further notice.


 


Section 4. Balance of Agreement. Except as expressly
modified herein, the existing Management Agreement shall continue in full force
and effect.


 


[Signature Page Follows]


 


3





















 


IN WITNESS WHEREOF, the authorized agents of the parties have executed
this Amendment as of the date listed above.


 


 


	
  COMPANY:

  	
  BROIN MANAGEMENT, LLC

  
	
   

  	
   

  
	
  NORTHERN LIGHTS

  	
   

  
	
  ETHANOL, LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Delton Strasser

  	
   

  	
  By:

  	
  /s/ Jeff Lautt

  	
   

  
	
  Its:

  	
  Chairman

  	
   

  	
  Its:

  	
  COO

  	
   

  



 


4