Document:

Exhibit
10.5

SECURITY
AGREEMENT

This Security Agreement is entered into between NORTHERN LIGHTS ETHANOL, LLC, a South
Dakota limited liability company, as grantor and obligor (the “Borrower”), and U.S. BANK NATIONAL ASSOCIATION (the “Secured
Party”), is made effective August 28, 2006, and is executed and delivered by
Borrower to Secured Party pursuant to that Amended and Restated Loan Agreement
between Borrower and Secured Party dated as of August 28, 2006 (the “Loan
Agreement”):

Grant of Security Interest.  To secure the Secured Obligations as defined
below, the Borrower grants the Secured Party a security interest in the
following described personal property (hereinafter the “Collateral”):

All right, title and interest of Borrower in and to
all of Borrower’s assets and properties of all kinds and descriptions, wherever
the same may now or hereafter be located, now existing and/or owned or
hereafter arising and/or acquired or in which Borrower has or hereafter may
acquire an interest (to the extent of such interest), including, without
limitation, all of the following:

All accounts (as defined in the UCC), now owned or
hereafter created or acquired by Borrower including, without limitation, all of
the following now owned or hereafter created or acquired by Borrower:  (a) accounts receivable, contract rights,
book debts, notes, drafts and other obligations or indebtedness owing to
Borrower arising from the sale, lease or exchange of goods or other property
and/or the performance of services; (b) Borrower’s rights in, to and under all
purchase orders for goods, services or other property; (c) Borrower’s rights to
any goods, services or other property represented by any of the foregoing
(including returned or repossessed goods and unpaid sellers’ rights of rescission,
replevin, reclamation and rights to stoppage in transit); (d) monies due to or
to become due to Borrower under all contracts for the sale, lease or exchange
of goods or other property and/or the performance of services (whether or not
yet earned by performance on the part of Borrower); (e) health-care insurance
receivables; (f) insurance receivables for lost inventory and business
interruption; and (g) proceeds of any of the foregoing and all collateral
security and guaranties of any kind given by any person or entity with respect
to any of the foregoing;

All inventory (as defined in the UCC), now owned or
hereafter acquired by Borrower, wherever located, including, without
limitation, products intended for sale, rent, lease or other disposition and
other materials and supplies (including packaging and shipping materials) used
or consumed, or held for use or consumption, in the sale thereof and goods
which are returned to or repossessed by Borrower;

 

All general intangibles (as defined in the UCC) now owned
or hereafter acquired by Borrower, including, without limitation, all right,
title and interest of Borrower in and to: 
(a) all agreements, leases (including purchase options with respect
thereto), licenses and contracts (including all rights under the agreements
pursuant to which Borrower acquired or hereafter acquires any subsidiary,
division or operating entity and all documents, instruments, agreements and
understandings relating thereto) to which Borrower is or may become a party;
(b) all obligations or indebtedness owing to Borrower (other than accounts
described above) from whatever source arising; (c) all tax refunds and rights
to receive tax refunds; (d) all patents and patent applications, trademarks and
trademark applications or registrations, copyrights and copyright applications
or registrations, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other
business identifiers and other intellectual property; (e) all rights to refunds
or indemnification (including, without limitation, all amounts refunded or paid
to Borrower as a result of such amounts being deemed voidable transfers in any
insolvency or bankruptcy proceeding), contribution and subrogation; (f) all
causes of action, choses in action and judgments; and (g) all trade secrets,
know how, corporate and other business records and other confidential
information relating to the business of Borrower; the prices which Borrower
obtains for its services or at which it sells merchandise; estimating and cost
procedures; profit margins; policies and procedures pertaining to the sale of
products and services; information concerning suppliers of Borrower; and
information concerning the manner of operation, business plans, projections,
and all other information of any kind or character, whether or not reduced in
writing, with respect to the conduct by Borrower of its business not generally
known by the public; (h) all payment intangibles; (i) all software; (j) all
websites; (k) all partnership and limited liability partnership interests; and
(l) all membership interests in limited liability companies;

All documents (as defined in the UCC) or other
receipts covering, evidencing or representing goods now owned or hereafter
acquired by Borrower;

All instruments (as defined in the UCC) (including,
but not limited to, promissory notes, drafts, bills of exchange and trade
acceptances), chattel paper (as defined in the UCC) (whether tangible or
electronic) and letter-of-credit rights (whether or not the letter of credit is
evidenced by a writing), now owned or hereafter acquired by Borrower;

All equipment (as defined in the UCC) by Borrower
including, without limitation, all machinery, apparatus, furniture, fixtures,
tools, attachments, materials, storage and handling equipment, and all parts
thereof and all additions and accessions thereto and replacements therefor;

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All of the following: 
plant fixtures, business or trade fixtures, other fixtures and storage
office facilities, wherever located and all additions and accessions thereto
and replacements therefor;

All deposit accounts (as defined in the UCC) of
Borrower maintained with any bank or financial institution;

All monies, reserves and property of Borrower now or
at any time or times hereafter in the possession or under the control of the
Secured Party or any bailee of the Secured Party;

All building and construction materials before and
after incorporated into any improvement, including but not limited to, all
other items not considered a part of the real property legally described as
follows:

Parcel A in the Southwest
Quarter (SW 1/4) of Section Twelve (12), Township One Hundred Twenty-One (121)
North, Range Forty-Seven (47) West of the Fifth Principal Meridian, Grant
County, South Dakota, according to the recorded plat thereof.

Parcel B in the Southeast
Quarter (SE 1/4) of Section Eleven (11), Township One Hundred Twenty-One (121)
North, Range Forty-Seven (47) West of the Fifth Principal Meridian, Grant
County, South Dakota, according to the recorded plat thereof.

All contracts, plans, specifications, construction
documents and records of any kind relating to the Borrower’s properties;

All books, records, blueprints, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the property described above or are otherwise necessary or helpful in the
collection thereof or realization thereon;

All investment property
(as defined in the UCC);

All
supporting obligations (as defined in the UCC);

All bio-energy subsidies and other government
entitlements, subsidies, and payment rights and any other rights under
government and quasi government programs; and

All products and proceeds of, and all other profits,
rentals or receipts, in whatever form, arising from the collection, sale,
lease, exchange, assignment, licensing or other disposition of, or realization
upon, any property described above or the

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proceeds thereof, including, without limitation, all
claims of Borrower against third parties for loss of, damage to or destruction
of, or for proceeds payable under, or unearned premiums with respect to,
policies of insurance with respect to any property described above or business interruption,
and any condemnation or requisition payments with respect to any property
described above, and any condemnation or requisition payments with respect to
any property described above, in each case whether now existing or hereafter
arising.

The Collateral
shall include (i) all substitutions and replacements for and proceeds of any
and all of the foregoing property, and in the case of all tangible Collateral,
all accessions, accessories, attachments, parts, equipment and repairs now or
hereafter attached or affixed to or used in connection with any such goods, and
(ii) all warehouse receipts, bills of lading and other documents of title now
or hereafter covering such goods.  All
references to “UCC” in this Security Agreement shall mean the Uniform Commercial
Code as adopted in South Dakota.

Obligations Secured.  This security interest secures the payment
and performance of (i) all of the Borrower’s obligations under the Loan
Agreement and each Loan Document referenced therein, including the Expansion Construction
Note, and the Note, and (ii) each and every debt, liability and obligation of
every type and description which the Borrower may now or at any time owe to the
Secured Party, whether now existing or hereafter arising, direct or indirect,
due or to become due, absolute or contingent, primary or secondary, liquidated
or unliquidated, joint, several, or joint and several.

This
security interest also secures all extensions, renewals, modifications and
replacements of the above described obligations.  Such obligations are hereinafter collectively
referred to as the “Secured Obligations”.

Borrower’s Representations and Warranties and
Further Agreements.  Borrower
warrants, represents and agrees that:

1.             If part of the Collateral now
constitutes, or as and when acquired by Borrower will constitute, inventory or
equipment (as those terms are defined in the uniform Commercial Code as adopted
in South Dakota) such collateral is or will be kept at the offices of Northern
Lights Ethanol, LLC, which has a post office address of 48416 144th Street, Big
Stone City, South Dakota 57216 will not be removed from such location or
locations (except for transfers between Borrower’s locations in the ordinary
course of business) unless, prior to any such removal, Borrower has given
written notice to the Secured Party of the location or locations to which the
Borrower desires to remove the same, and the Secured Party has given its
written consent to such removal.  If any
of the locations where Borrower now or hereafter keeps the Collateral are
leased by the Borrower, the Borrower shall at Secured Party’s request, obtain a
Landlord’s waiver in a form satisfactory to Secured Party.  All of the Borrower’s inventory and equipment
shall constitute Collateral, even if located at a location not set forth above.

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2.             Borrower is organized under the laws of the State of South Dakota.  Borrower’s principal place of business has a
post office address of 48416 144th Street, Big Stone City, South Dakota
57216.  Borrower will notify the Secured
Party in writing of any change in Borrower’s location.  The Borrower’s Internal Revenue Service
Taxpayer Identification Number is 46-0460145, and the Borrower shall use such
number as its exclusive Internal Revenue Service Taxpayer Identification Number
until all of its Obligations under this Agreement are satisfied in full.  The Borrower will not change its name as
incorporated, without the Secured Party’s prior written consent, which may be
conditioned upon the Borrower signing amendments to UCC-1s or other documents
as the Secured Party may require. 
Borrower is not engaged in and will not engage in farming or growing
crops.

3.             Borrower has or will acquire title
to and will at all times keep the Collateral free of all liens and
encumbrances, except the security interest created hereby and has full power
and authority to execute this Security Agreement, to perform Borrower’s
obligations hereunder and to subject the Collateral to the security interest
created hereby.  Borrower will pay all
fees, assessments, charges or taxes arising with respect to the
Collateral.  There is no encumbrance or
security interest with respect to all or any part of the Collateral.  All costs of keeping the Collateral free of
encumbrances and security interests prohibited by this Agreement and of
removing same if they should arise shall be the obligation of the Borrower, and
such obligation shall be part of the Secured Obligations.

4.             Each right to payment and each
instrument, document, chattel paper and other agreement constituting or
evidencing Collateral is (or will be when arising or issued) a valid, genuine
and legally enforceable obligation, subject to no defense, set-off or
counterclaim (other than those arising in the ordinary course of business) of
the account debtor or other obligor named therein or in Borrower’s records
pertaining thereto as being obligated to pay such obligation.  Borrower will not agree to any material
modification, amendment or cancellation of any such obligation without Secured
Party’s prior written consent, and will not subordinate any such right to
payment to claims of other creditors of such account debtor or other obligor.

5.             Borrower will at any time or times
hereafter execute such financing statements and other documents and instruments
and perform such acts as the Secured Party may from time to time request to
establish, maintain, perfect and enforce a valid security interest in the
Collateral, and will pay all costs of filing and recording.  Borrower irrevocably authorizes the Secured
Party at any time and from time to time to file in any Uniform Commercial Code
jurisdiction any initial financing statements and amendments thereto that (a)
indicate the Collateral (i) as all assets of the Borrower or words of similar
effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9 of the Uniform Commercial Code of the State
or such jurisdiction, or (ii) as being of an equal or lesser scope or with
greater detail, and (b) contain any other information required by Article 9 of
the Uniform Commercial Code of the State for the sufficiency or filing office
acceptance of any financing statement or amendment, including (i) whether the
Borrower is an organization, the type of organization and any organization
identification number issued to the Borrower and, (ii) in the case of a
financing statement, filed as a fixture filing or indicating Collateral as
as-extracted

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collateral or
timber to be cut, a sufficient description of real property to which the Collateral
relates.  The Borrower agrees to furnish
any such information to the Secured Party promptly.  In the event the Borrower owns any right in a
commercial tort claim (as defined by the UCC), Borrower shall so inform Secured
Party and will sign any additional documentation granting Secured Party a
security interest therein as Secured Party may require.

6.             Borrower will maintain business
interruption insurance and keep all tangible Collateral and all lands, plants,
buildings and other property now or hereafter owned or used in connection with
its business in good condition, normal depreciation excepted, and insured
against loss or damage by fire (including so-called extended coverage), theft,
physical damage, and against such other risks, including without limitation
public liability, in such amounts, with such insurers and upon such terms as
Secured Party may reasonably require. 
Borrower will include Secured Party as an additional insured and obtain
loss payable endorsements on applicable insurance policies in favor of Borrower
and Secured Party as their interests may appear and at Secured Party’s request
will deposit the insurance policies with Secured Party.  Borrower shall cause each insurer to agree,
by Policy endorsement or by issuance of a Certificate of Insurance or by
independent instrument furnished to Secured Party, that such insurer will give
30 days’ written notice to Secured Party before such policy will be altered or
canceled.  Borrower irrevocably appoints
Secured Party as Borrower’s attorney in fact to make claim for, to negotiate
settlement of claims, to receive payment for and to execute and endorse any
documents, checks or other instruments in payment for loss, theft, or damage
under any insurance policy covering the Collateral.

7.             Borrower will promptly notify
Secured Party of any loss or material damage to any Collateral or of any
adverse change, known to Borrower, in the prospect of payment of any sums due
on or under any instrument, chattel paper, account or general intangible
constituting Collateral.

8.             Upon Secured Party’s request
(whether a Default as hereinafter defined, has occurred) Borrower will promptly
deliver to Secured Party any instrument, document or chattel paper constituting
Collateral.

9.             Upon Borrower’s Default in performing
its obligations hereunder, Secured Party shall have the authority, but shall
not be obligated to:  (i) effect such
insurance and necessary repairs and pay the premiums therefor and the costs
thereof; (ii) pay and discharge any fees, assessments, charges, taxes, liens
and encumbrances on the Collateral; and (iii) notify the appropriate
governmental authority or other obligor to remit directly to Secured Party or
its order any bio-energy subsidy or other government entitlement, subsidy,
payment or program right constituting part of the Collateral.  All sums so advanced or paid by the Secured
Party shall be payable by Borrower on demand with interest at the highest rate
then charged on the Secured Obligations (but not exceeding the maximum rate
allowed by law) and shall be a part of the Secured Obligations.

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10.           Borrower will not sell, lease or
otherwise dispose of the Collateral other than in the ordinary course of its
business at prices constituting the then fair market value thereof.

11.           The Secured Party shall have the
authority (whether or not a Default has occurred) but shall not be obligated
to:  (a) notify any or all account
debtors and obligors on instruments constituting Collateral of the existence of
the Secured Party’s security interest and if a Default has occurred to pay or
remit all sums due or to become due directly to the Secured Party or its
nominee; (b) place on any chattel paper received as proceeds or otherwise
constituting Collateral, a notation or legend showing the Secured Party’s security
interest; (c) if a Default has occurred, in the name of the Borrower or
otherwise, to demand, collect, receive and receipt for, compound, compromise,
settle, prosecute and discontinue any suits or proceedings in respect of any or
all of the Collateral; (d) if a Default has occurred, take any action which the
Secured Party may deem necessary or desirable in order to realize on the
Collateral, including, without limitation, the power to perform any contract,
to indorse in the name of Borrower any checks, drafts, notes or other
instruments or documents received in payment of or on account of the
Collateral; (e) to place upon Borrower’s books and records relating to the
accounts and general intangibles covered by the security interest granted
hereby a notation or legend stating that such account or general intangible is
subject to a security interest held by the Secured Party; and (f) after any
Default, to enter upon and into and take possession of all or such part(s) of
the properties of Borrower, including lands, plants, buildings, machinery,
equipment and other property as may be necessary or appropriate in the judgment
of the Secured Party to permit or enable the Secured Party to manufacture,
produce, process, store or sell or complete the manufacture, production,
processing, storing or sale of all or any part of the Collateral, as the
Secured Party may elect, and to use and operate such properties for these
purposes and for such length of time as the Secured Party may deem necessary or
appropriate for these purposes without the payment of any compensation to
Borrower thereof.

12.           Borrower will, if a Default has
occurred and upon receipt of request from Secured Party, notify all account
debtors and other obligors of the existence of the Secured Party’s security
interest and direct such account debtors and other obligors to pay or remit all
sums due or to become due directly to the Secured Party or its nominee.  Borrower will hold all of the proceeds of any
collections and all returned and repossessed goods thereafter received by
Borrower in trust for the Secured Party, and will not commingle the same with
any other funds or property of the Borrower, and will deliver the same
forthwith to the Secured Party at its request. 
Nothing in this Section restricts Secured Party’s right to notify
account debtors directly.

13.           Borrower will keep accurate books,
records and accounts with respect to the Collateral, and with respect to the
general business of Borrower, and will make the same available to the Secured
Party at its request for examination and inspection; and will make and render
to the Secured Party such reports, accountings and statements as the Secured
Party from time to time may request with respect to the Collateral; and will
permit any authorized representative of the Secured Party to examine and
inspect during normal business hours, any and all premises where the Collateral
is or may be kept or located.

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14.           The occurrence of any of the events
identified as a “Default” or “Event of Default” under the Loan Agreement will
constitute a Default hereunder.

15.           Whenever a Default shall exist, the
Secured Party may, at its option and without demand or notice, except to the
extent notice is required under the Loan Agreement, declare all or any part of
the Secured Obligations immediately due and payable, and the Secured Party may
exercise, in addition to the rights and remedies granted hereby, all rights and
remedies of a secured party under the Uniform Commercial Code or any other
applicable law.  The Secured Party shall
be entitled to recover its attorneys’ fees, service tax thereon, and all costs
incurred by such attorneys, to the extent permitted by law.

16.           Borrower agrees, in the event of
Default, to make the Collateral available to the Secured Party at a place or
places to be designated by the Secured Party, which is reasonably convenient to
both parties, and to pay all costs of the Secured Party, including reasonable
attorneys’ fees, service tax thereon, and all costs incurred by such attorneys,
in the collection of any of the Secured Obligations and the enforcement of any
of the Secured Party’s rights.  If any
notification of intended disposition of any of the Collateral is required by
law, such notification shall be deemed properly given if mailed a reasonable
time before such disposition, postage prepaid, addressed to the Borrower at the
address shown above.  Secured Party’s
duty of care with respect to Collateral in its possession shall be deemed
fulfilled if Secured Party exercises reasonable care in physically safekeeping
such Collateral or, in the case of Collateral in the custody or possession of a
bailee or other third person, exercises reasonable care in the selection of the
bailee or other third person, and Secured Party need not otherwise preserve, protect,
insure or care for any Collateral. 
Secured Party shall not be obligated to preserve any rights Borrower may
have against prior parties, to realize on the Collateral at all or in any
particular manner or order, or to apply any cash proceeds of Collateral in any
particular order of application.  No
delay or failure by the Secured Party in the exercise of any right or remedy
shall constitute a waiver thereof, and no single or partial exercise by the
Secured Party of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy.

17.           This Agreement is governed by the
laws of the State of South Dakota, without regard to its conflicts or choice of
law provisions.

Dated
this 28th day of August, 2006.

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  NORTHERN LIGHTS ETHANOL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Delton Strasser

  	
   

  
	
   

  	
   

  	
   

  	
  Delton Strasser

  
	
   

  	
   

  	
   

  	
  Its: President

  

 

 8Exhibit
10.6

CORN and NATURAL GAS PRICE RISK MANAGEMENT AGREEMENT

THIS CORN
and NATURAL GAS PRICE RISK MANAGEMENT AGREEMENT is made and
entered into as of the 1st day of January, 2007 by and between Broin
Management, LLC, a Minnesota limited liability company (“Manager”) and Northern
Lights Ethanol, LLC an South Dakota limited liability company (the “Company”).

WHEREAS,
Company owns an ethanol production plant near Big Stone City, 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 Management Agreement dated April 13, 1999.

WHEREAS, Company desires to engage the services of Manager to
provide corn and natural gas price risk management services not addressed by
the Management 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 Management Agreement. 
The capitalized terms defined in the Management Agreement dated April
13, 1999 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 and
natural gas requirements including, without limitation, the power and authority
to:

(a)          Trade corn and natural
gas 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 including the Company.

(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.

Performance. Manager agrees to use
its best efforts in the performance of management services for the Company during
the term of this Agreement and shall at all times perform its obligations
hereunder exercising that degree of skill and prudence which would reasonably
and ordinarily be expected from a skilled and experienced manager engaged in
the same type of business as the Company under the same or similar
circumstances and conditions.

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 years projected corn usage without the
approval of the Board of Managers 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 Managers of the Company for flat price hedging in excess of 25%
of one year’s projected corn usage as it deems necessary.  The Board of Managers of the Company or a
committee appointed by the Board of Managers 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

·                  Natural Gas Market Roundup

Quarterly Reports
(to the Board of Directors)

 

 

·                  Quarterly Market and Trading Update

·                  Quarterly DDGS Update

·                  Quarterly
Natural Gas 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 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 $55,920 per
year, payable in quarterly installments of $13,980 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.  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 five (5) year commencing with 1st payment.  Thirty (30) days prior to the expiration of
the five (5) year term, this Agreement shall be automatically extended for an
additional five (5) year term following the end of the original five (5) 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 five (5) 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 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 Management 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
Management 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:              Northern
Lights Ethanol, LLC

Attention:  Delton Strasser- Chairman

48416 144th Street

Big Stone City, SD
57216

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 3rd day of
November, 20006.

	
  Company:

  	
   

  	
   

  	
  Manager:

  	
   

  
	
  Northern Lights Ethanol, LLC

  	
   

  	
   

  	
  Broin Management, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Delton Strasser

  	
   

  	
   

  	
  By:

  	
  /s/ James Moe

  	
   

  
	
   

  	
  Its Chairman

  	
   

  	
   

  	
   

  	
  Its Chief Manager

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]