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                           CONSTRUCTION LOAN AGREEMENT

This Construction Loan AGREEMENT (the "AGREEMENT") is dated as of the 25th day
of September, 2000, and is by and between DAKOTA ETHANOL, L.L.C., a South Dakota
limited liability company ("BORROWER") and FIRST NATIONAL BANK OF OMAHA
("BANK"), a national banking association established at Omaha, Nebraska.

WHEREAS, the BORROWER has requested the BANK to lend to BORROWER up to the sum
of Twenty Six Million, Six Hundred Thousand ($26,600,000.00) Dollars (the
"CONSTRUCTION LOAN"), for the purpose of partially funding the cost of
construction for an ethanol plant (the "PROJECT") on the real estate described
in Exhibit A (the "PROPERTY") and providing permanent financing for the PROJECT.

WHEREAS, the BANK is willing to lend such sums to BORROWER upon the terms and
conditions herein set forth.

SECTION 1 DEFINITIONS.

1.1 "ASSIGNMENT OF CONSTRUCTION CONTRACT" means the assignment of the agreement
between the BORROWER and Broin and Associates, Inc. (the "GENERAL CONTRACTOR")
for design and construction of the PROJECT (the "DESIGN/BUILD CONTRACT") in
accordance with PLANS therein described, by which the BORROWER assigns, as
additional security for repayment of the OBLIGATIONS, the BORROWER's interest in
the DESIGN/BUILD CONTRACT in a form acceptable to the BANK.

1.2 "ASSIGNMENT OF RENTS" means the assignment of rents and leases as to the
PROPERTY between BORROWER as assignor and the BANK as assignee as security for
payment of the CONSTRUCTION NOTE in a form acceptable to the BANK.

1.3 "BANKING DAY" means a day on which the BANK is open for substantially all of
its business.

1.4 "CLOSING" shall mean the date on which the BANK receives this AGREEMENT,
executed by the BORROWER, together with the CONSTRUCTION NOTE.

1.5 "CONSTRUCTION LOAN TERMINATION DATE" means September 1, 2001 or such earlier
date upon which the BANK's commitment to make disbursements under the
CONSTRUCTION LOAN is terminated.

1.6 "COMPLETION DATE" means the earlier of September 1, 2001, or the date the
BANK determines that the PROJECT has been completed in accordance with the
PLANS.

1.7 "CONSTRUCTION NOTE" means the promissory note of the BORROWER in the form of
Exhibit B evidencing borrowings under the CONSTRUCTION LOAN of up to a maximum
amount of Twenty Six Million Six Hundred Thousand ($26,600,000.00) Dollars.

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1.8 "DEBT SERVICE" means the sum of a) interest expense attributable to all
BORROWER's loans and b) scheduled principal payments on all INDEBTEDNESS due
within one year.

1.9 "DRAW REQUEST" means forms acceptable to the BANK to be submitted to the
BANK when a disbursement is requested under the CONSTRUCTION NOTE.

1.10 "EVENT OF DEFAULT" has the meaning provided for in Section 7 of this
AGREEMENT.

1.11 "EXCESS CASH FLOW" means net income plus interest expense, depreciation and
amortization, less annual debt service.

1.12 "GAAP" means generally accepted accounting principles, applied on a basis
consistent with the accounting principles applied in the preparation of the
annual financial statements of the BORROWER referred to in the Financial
Condition Section of this AGREEMENT. All accounting terms not otherwise defined
in this AGREEMENT have the meaning assigned to them in accordance with GAAP.

1.13 "INDEBTEDNESS" means all indebtedness for borrowed money including long
term debt, and capital leases.

1.14 "INDEPENDENT INSPECTOR" means the firm which will be retained by BANK, at
BORROWER's cost, to conduct on site inspections of the work-in-progress on the
PROJECT, and to issue periodic reports to BANK as to the progress of
construction and adherence to the PLANS. The BANK's selection of the INDEPENDENT
INSPECTOR shall be subject to BORROWER's approval, which approval will not be
unreasonably withheld.

1.15 "LOAN DOCUMENTS" means this AGREEMENT and each document referred to in
Section 4 of this AGREEMENT.

1.16 "LOAN TERMINATION DATE" means the earliest to occur of the following: (i)
September 1, 2011, (ii) the date the OBLIGATIONS are accelerated pursuant to
this AGREEMENT, and (iii) the date BANK receives (a) notice in writing from
BORROWER of BORROWER's election to terminate this AGREEMENT and (b) indefeasible
payment in full of the OBLIGATIONS.

1.17 "MANAGEMENT CONTRACT" means that written contract dated as of October 7,
1999 between BORROWER and Broin Management, L.L.C. by which the latter agreed to
provide management and operation of BORROWER's ethanol plant.

1.18 "MARKETING CONTRACT" means that written contract dated as of October 7,
1999 between BORROWER and Broin Enterprises, Inc. doing business as Ethanol
Products and as Dakota Gold, by which the latter agreed to provide marketing
services as to BORROWER's products, which MARKETING CONTRACT may be assigned by
Broin Enterprises, Inc. to Ethanol Products, L.LC.


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1.19 "MORTGAGE" means the Mortgage between the BORROWER as mortgagor and the
BANK as mortgagee, creating a first lien on the PROPERTY and a security interest
in all of the personal property located thereon as security for payment of the
OBLIGATIONS in a form acceptable to the BANK.

1.20 "NET WORTH" means total assets less total liabilities and less the
following types of assets: (1) leasehold improvements; (2) receivables and other
investments in or amounts due from any member, employee or other person or
entity related to or affiliated with the BORROWER; (3) goodwill, patents,
copyrights, mailing lists, trade names, trademarks, servicing rights,
organizational and franchise costs, bond underwriting costs and other like
assets properly classified as intangible, and (4) treasury stock or treasury
membership units.

1.21 "OBLIGATIONS" means the obligation of the BORROWER:

         (A) To pay the principal of, and interest on, the CONSTRUCTION NOTE in
         accordance with the terms thereof and to satisfy all of its other
         liabilities to the BANK, whether hereunder or otherwise, whether now
         existing or hereafter incurred, matured or unmatured, direct or
         contingent, joint or several, including any extensions, modifications,
         renewals thereof, and substitutions therefore and including, but not
         limited to, any obligations under letter of credit agreements;

         (B) To repay to the BANK all amounts advanced by the BANK hereunder or
         otherwise on behalf of the BORROWER, including, but without limitation,
         advances for principal or interest payments to prior secured parties,
         mortgagees, or licensers, or taxes, levies, insurance, rent, or repairs
         to, or maintenance or storage of, any of the real or personal property
         securing BORROWER's payment and performance of this AGREEMENT; and

         (C) To reimburse the BANK, on demand, for all of the BANK's expenses
         and costs, including the reasonable fees and expenses of its counsel,
         in connection with the preparation, administration, amendment,
         modification, or enforcement of this AGREEMENT and the documents
         required hereunder, including, without limitation, any proceeding
         brought or threatened, to enforce payment of any of the OBLIGATIONS
         referred to in the foregoing Paragraphs (A) and (B).

1.22 "OPERATING CASH FLOW" means operating revenue (excluding extra-ordinary
revenues or income not derived from the ordinary course of business) less all
direct operating expenses other than interest expense (other than interest on
accounts payable), depreciation and other similar noncash charges, interest, and
income taxes.

1.23 "PERMIT" or "PERMITS" means any permit, and all permits, required under any
environmental law or regulation required to construct and operate the facility
on the PROPERTY after completion of the PROJECT at its operational capacity,
including without limitation the following:


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         (a) An Air Emissions Permit, which PERMIT will allow the BORROWER to
         operate the facility on the PROPERTY after construction of the PROJECT
         at maximum capacity.

         (b) All permits required in connection with the construction and
         operation of all above ground storage tanks included in the PLANS for
         the facility on the PROPERTY after construction of the PROJECT.

         (c) A National Pollution Discharge Elimination System Construction
         Permit for any storm water that is discharged from the facility on the
         PROPERTY during construction and after construction of the PROJECT.

1.24 "PLANS" means the plans and specifications prepared by the GENERAL
CONTRACTOR for the PROJECT and identified to this AGREEMENT by the GENERAL
CONTRACTOR, the BORROWER and the BANK.

1.25 "PROJECT" means the design and construction of an ethanol plant, together
with all necessary and appropriate fixtures, equipment, attachments, and
accessories, as described in the PLANS, to be constructed on the PROPERTY.

1.26 "SECURITY AGREEMENT" means the SECURITY AGREEMENT between the BORROWER and
the BANK, creating a first security interest in all BORROWER's assets, including
General Intangibles, securing the OBLIGATIONS in a form acceptable to the BANK.

1.27 "SUBCONTRACTOR" means any person who agrees with the GENERAL CONTRACTOR to
perform any work or supply any of the materials or equipment necessary to
complete the PROJECT.

1.28 "WORKING CAPITAL" means current assets (less investments in or other
amounts due from any member, employee or any person or entity related to or
affiliated with the BORROWER and prepayments) less current liabilities (less any
portion of such current liabilities that constitute debt that is expressly
subordinated to the BANK in a writing acceptable to the BANK).

SECTION 2 AMOUNT AND TERMS OF THE CONSTRUCTION LOAN.

2.1 CONSTRUCTION LOAN. The BANK agrees, on the terms and subject to the
conditions hereinafter set forth, to make from time to time during the period
from the date of execution of this AGREEMENT to and including the CONSTRUCTION
LOAN TERMINATION DATE disbursements to the BORROWER in an aggregate principal
amount not to exceed the amount of the CONSTRUCTION LOAN for the sole purpose of
paying approved construction costs of the PROJECT. Approved construction costs
are costs actually incurred in connection with the construction of the PROJECT,
which shall include but not be limited to costs of permits, licenses, labor,
supplies, materials, services, equipment, insurance premiums, real estate taxes
and interest on disbursements, operating costs of the facility located on the
PROJECT.


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2.2 THE CONSTRUCTION NOTE. The obligation of the BORROWER to repay the
CONSTRUCTION LOAN shall be evidenced by the CONSTRUCTION NOTE. Notwithstanding
any provisions of the CONSTRUCTION NOTE, interest shall be payable at the rate
provided therein only on such portions of the CONSTRUCTION LOAN proceeds as
actually have been disbursed pursuant to this AGREEMENT.

2.3 INTEREST. Interest on the principal amount outstanding on the CONSTRUCTION
LOAN shall accrue, for the period through and including the COMPLETION DATE, at
a rate (the "RATE") equal to the BASE RATE in effect from time to time until
maturity, and three per cent (3%) above the BASE RATE in effect from time to
time after maturity, whether by acceleration or otherwise. For purposes hereof,
BASE RATE shall mean the rate announced by BANK from time to time as its
"National Base Rate".

         Each time the BASE RATE shall change, the RATE shall change
contemporaneously with such change in the BASE RATE. Interest shall be
calculated on the basis of a 360-day year, counting the actual number of days
elapsed.

         Following the COMPLETION DATE, interest on the CONSTRUCTION LOAN shall
accrue at a rate of nine (9%) percent per annum prior to maturity, and twelve
(12%) percent per annum after maturity, whether by acceleration or otherwise.

2.4 REPAYMENT. Interest only shall be payable quarterly on the CONSTRUCTION NOTE
for the period through the COMPLETION DATE. On and after the COMPLETION DATE
principal and interest shall be payable quarterly on the CONSTRUCTION NOTE in an
amount sufficient, as determined by the BANK, to amortize the amount outstanding
on the CONSTRUCTION NOTE at the applicable interest period over a ten (10) year
period commencing from the COMPLETION DATE. All outstanding principal and
accrued but unpaid interest shall be payable on the LOAN TERMINATION DATE.

2.5 PAYMENTS. All principal, interest and fees due under this AGREEMENT, the
Construction Note, and the LOAN DOCUMENTS shall be paid in immediately available
funds as contracted in this AGREEMENT and no later than the payment due date set
forth in the statement mailed to the BORROWER by the BANK. Should a payment come
due on a day other than a BANKING DAY, then the payment shall be made no later
than the next BANKING DAY and interest shall continue to accrue during the
extended period.

2.6 CLOSING FEE. At CLOSING, the BORROWER shall pay to the BANK a closing fee of
$125,000.00 which fee BORROWER agrees and acknowledges has been earned by BANK
as of the execution hereof.

2.7 APPRAISAL. If the BANK is required by any government entity with regulatory
authority over the BANK the BANK may, at BORROWER's expense, order an appraisal
of the PROPERTY. If such appraisal shows that the outstanding CONSTRUCTION LOAN
amount at that time exceeds the value of the PROPERTY as determined by the
appraisal then the BORROWER shall, within thirty (30) days of notice by the
BANK, pay the difference between the outstanding CONSTRUCTION LOAN amount and
the appraised value amount as


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determined by such appraisal, and no further advances shall be made on the
CONSTRUCTION LOAN thereafter.

SECTION 3 DISBURSEMENT PROCEDURES.

3.1 SUBMISSION OF DRAW REQUESTS. Whenever the BORROWER desires a disbursement
under the CONSTRUCTION LOAN, which shall be no more often than once a month, the
BORROWER shall submit to the BANK a DRAW REQUEST, duly executed on behalf of the
BORROWER setting forth the information requested therein. Each DRAW REQUEST
shall be delivered to the BANK at least five (5) days before the date the
disbursement is desired.

3.2 AMOUNT OF DRAW REQUEST. Each DRAW REQUEST shall be limited to amounts equal
to (i) the total of costs actually incurred and paid or owing by the BORROWER to
the date of such DRAW REQUEST for work performed or materials incorporated in
the PROJECT as described in the PLANS, plus (ii) the cost of materials and
equipment not incorporated in the PROJECT, but delivered to and suitably stored
at the PROJECT site, plus (iii) prepayments for equipment when prepayment is
required by the manufacturer or supplier, less, (iv) prior disbursements for
such costs and from the CONSTRUCTION LOAN or BORROWER's working capital for such
costs. Notwithstanding anything herein to the contrary, no disbursements for
materials stored at the PROJECT site will be made by the BANK unless the
BORROWER shall advise the BANK of its intention to store materials prior to
their delivery, and provide suitable security for such storage.

3.3 OTHER DOCUMENTS. At the time of submission of each DRAW REQUEST, the
BORROWER shall submit or cause to be submitted to the BANK the following:

         3.3.1. A written lien waiver from the GENERAL CONTRACTOR and each
         SUBCONTRACTOR for work done and materials supplied by it which were
         paid for pursuant to the next preceding DRAW REQUEST with copies of all
         invoices supporting the DRAW REQUEST.

         3.3.2. A written report from the INDEPENDENT INSPECTOR approving
         payment of the relevant DRAW REQUEST.

         3.3.3. Such other supporting evidence as may be requested by the BANK
         to substantiate all payments which are to be made out of the relevant
         DRAW REQUEST and/or to substantiate all payments then made with respect
         to the PROJECT.

3.4 COST OVER RUNS. The BORROWER agrees that all cost over runs on the PROJECT
shall be paid solely by the BORROWER and that the BORROWER shall deliver
additional funds to the BANK in accordance with Section 3.6 of this AGREEMENT to
pay any cost over runs on the PROJECT.

3.5 MAKING THE DISBURSEMENTS. If on the date a DRAW REQUEST is received by BANK,
the BORROWER has performed all of its agreements and complied with all
requirements therefore to be performed or complied with hereunder including
satisfaction of all applicable


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conditions precedent contained in Section 4 of this AGREEMENT and the BANK has
received a current report from the INDEPENDENT INSPECTOR documenting compliance
with the PLANS for those portions of the PROJECT indicated as completed in the
DRAW REQUEST and otherwise confirming the acceptability of the PROJECT work
represented by the DRAW REQUEST; the BANK shall pay to the BORROWER the amount
of the requested disbursement. Each disbursement disbursed to the BORROWER under
the CONSTRUCTION LOAN shall bear interest at the rate provided in the
CONSTRUCTION NOTE evidencing the disbursement from the date such disbursement is
so disbursed to the BORROWER or deposited into BORROWER's account.

3.6 DEPOSIT OF FUNDS BY THE BORROWER. If the BANK shall at any time in good
faith determine that the undisbursed amount of the CONSTRUCTION LOAN is less
than the amount required to pay all costs and expenses of any kind which
reasonably may be anticipated in connection with the completion of the PROJECT
after application of all fiends received from the BORROWER's equity and shall
thereupon send written notice thereof to the BORROWER specifying the amount
required to be deposited by the BORROWER with the BANK to provide sufficient
funds to complete the PROJECT, the BORROWER agrees that it will, within fifteen
(15) calendar days of receipt of any such notice, deposit with the BANK, the
amount of funds specified in the BANK's notice. The BORROWER agrees that any
such funds deposited with the BANK may be disbursed before any further
disbursement of CONSTRUCTION LOAN proceeds from the BANK, to pay any and all
costs and expenses of any kind in connection with completion of the PROJECT.

3.7 DISBURSEMENTS WITHOUT RECEIPT OF DRAW REQUEST. Notwithstanding anything
herein to the contrary, the BANK shall have the irrevocable right at any time
and from time to time to apply funds which it agrees to disburse hereunder to
pay interest on the CONSTRUCTION NOTE as and when such interest becomes due, and
to pay any and all of the expenses of BANK referred to in this AGREEMENT, all
without receipt of a DRAW REQUEST for funds from the BORROWER.

3.8 MISCELLANEOUS PROCEDURES. BANK may establish additional procedures regarding
disbursements as are reasonable to assure the proceeds of the CONSTRUCTION LOAN
are paid only to those persons and entities entitled to the same, and that the
liens securing the OBLIGATIONS are in all cases first and paramount liens on the
PROPERTY.

3.9 APPOINTMENT OF INDEPENDENT INSPECTOR. No DRAW REQUEST shall be honored after
commencement of construction unless BORROWER has consented to the appointment of
an INDEPENDENT INSPECTOR.

SECTION 4 CONDITIONS OF LENDING.

4.1 CONDITIONS PRECEDENT TO THE INITIAL DISBURSEMENT. The obligation of the BANK
to make its initial disbursement under the CONSTRUCTION LOAN is subject to the
condition precedent that the BORROWER shall be in compliance with the conditions
set forth in Section 4.2 of this AGREEMENT and to the further condition
precedent that the BANK shall have received on or


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before the CLOSING all of the following, each dated (unless otherwise indicated)
such day, in form and substance satisfactory to the BANK:

         4.1.1 The CONSTRUCTION NOTE, duly executed on behalf of the BORROWER.

         4.1.2 The MORTGAGE duly executed on behalf of the BORROWER.

         4.1.3 The ASSIGNMENT OF RENTS, duly executed on behalf of the BORROWER.

         4.1.4 The SECURITY AGREEMENT, duly executed on behalf of the BORROWER.

         4.1.5 A financing statement or statements sufficient when filed to
         perfect the security interests granted under the MORTGAGE, the
         ASSIGNMENT OF RENTS, the SEA AGREEMENT, and the ASSIGNMENT OF
         CONSTRUCTION CONTRACT, to the extent such security interests are
         capable of being perfected by filing.

         4.1.6 A copy of the PLANS, certified by the GENERAL CONTRACTOR and the
         BORROWER

         4.1.7 The Assignment of the DESIGN/BUILD CONTRACT, duly executed by the
         BORROWER and consented to by the GENERAL CONTRACTOR and a copy of the
         DESIGN/BUILD CONTRACT.

         4.1.8 A Total Project Cost Statement on the PROJECT duly executed by
         the BORROWER and the GENERAL CONTRACTOR, setting forth the anticipated
         total cost of the PROJECT's completion.

         4.1.9 AN ALTA (AMERICAN LAND TITLE ASSOCIATION) SURVEY OF THE PROPERTY,
         prepared at the BORROWER's expense, currently certified by a licensed,
         registered surveyor and incorporating the legal description of the
         PROPERTY, showing the location of all points and lines referred to in
         the legal description, the location of any existing improvements, the
         proposed location of the PROJECT (including parking) as being within
         the exterior boundaries of the PROPERTY and in compliance with all
         applicable building set-back requirements, and the location of all
         utilities and the location of all easements and encroachments onto or
         from the PROPERTY that are visible on the PROPERTY, known to the
         surveyor preparing the survey or of record, identifying easements of
         record by recording data, and currently certified by the surveyor that
         there are no such easements or encroachments upon the PROPERTY except
         as shown on the survey.

         4.1.14 An as built appraisal to the BANK based upon the PLANS to be
         performed by Herman Natwick & Co., which shows the as-completed value
         of the PROPERTY and PROJECT acceptable to BANK.

         4.1.15 A title binder, issued by Dakota Homestead Title Insurance
         Corporation (the "Title Company"), at the BORROWER's expense,
         constituting a commitment by the


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         Title Company to issue a mortgagee's title policy in favor of the BANK
         as mortgagee under the MORTGAGE, that will be free from all standard
         exceptions, including mechanics' liens and all other exceptions not
         previously approved by the BANK and includes a plat endorsement and
         that will insure the MORTGAGE to be a valid first lien on the PROPERTY.

         4.1.16 A soil report on the PROPERTY certified by a registered engineer
         including structural design recommendations in form and substance
         satisfactory to the BANK.

         4.1.17 A Phase I Environmental Report of the PROPERTY in form and
         content satisfactory to the BANK.

         4.1.18 Copies of all PERMITS from the applicable county or any other
         state or local agency from whom a construction permit is required and
         such other licenses and permits, as may be required to construct and
         operate the facility on the PROPERTY after completion of the PROJECT.

         4.1.19 Copies of all environmental permits and other PERMITS as my be
         required to construct and operate the facility on the PROPERTY at
         maximum capacity after completion of the PROJECT.

         4.1.20 Copies of documents from the appropriate state, federal, city or
         county authority having jurisdiction over the PROPERTY and the PROJECT
         that provide to the reasonable satisfaction of the BANK that the
         PROJECT when constructed in accordance with the PLANS will comply in
         all respects with all applicable ordinances, zoning, subdivision,
         platting, environmental and land use requirements, without special
         variance or exception, and such other evidence as the BANK shall
         reasonably request to establish that the PROJECT and the contemplated
         use thereof are permitted by and comply with all applicable use or
         other restrictions and requirements in prior conveyances, zoning
         ordinances, environmental laws and regulations, water shed district
         regulations and all other applicable laws or regulations, and
         governmental authorities having jurisdiction over the PROJECT. BORROWER
         is not required to obtain advance confirmation from any governmental
         body that the PROJECT will comply with such ordinances, regulations and
         requirements.

         4.1.22 Copies of the policy of property/casualty insurance and
         comprehensive general liability insurance and a certificate of the
         worker's compensation insurance required under Section 6.3 of this
         AGREEMENT, with all such insurance in full force and effect and
         approved by the BANK, and naming BANK as additional named insured,
         together with appropriate flood insurance, if the PROPERTY is in a
         flood hazard area. BORROWER is not required to obtain worker's
         compensation insurance until required by South Dakota law.

         4.1.23 A signed opinion of counsel for the BORROWER, addressed to the
         BANK, opining that: 1) the BORROWER is duly organized and in good
         standing in its state of organization; 2) the BORROWER is qualified in
         each state in which it does business and


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         is legally required to be qualified; 3) the BORROWER has the power to
         execute and deliver the LOAN DOCUMENTS and to borrow money and perform
         in accordance with the terms of the LOAN DOCUMENTS; 4) all actions and
         consents necessary to the validity of the LOAN DOCUMENTS have been
         obtained; 5) the LOAN DOCUMENTS have been duly signed and are the valid
         and binding obligation of the BORROWER and enforceable in accordance
         with their terms; and 6) to the best of counsel's knowledge, the LOAN
         DOCUMENTS and the transactions contemplated thereunder do not conflict
         with any provision of the operating agreement of BORROWER or any
         agreement binding upon the BORROWER or its properties.

         4.1.24 A Certificate of Authority executed by such person or persons
         authorized by the BORROWER's organizational documents and/or agreements
         to do so, certifying the incumbency and signatures of the managers or
         other persons authorized to execute the LOAN DOCUMENTS, and authorizing
         the execution of the LOAN DOCUMENTS and performance in accordance with
         their terms.

         4.1.25 A recently certified copy of the BORROWER's operating agreement,
         and any amendments, if applicable.

         4.1.26 A recently certified copy of the BORROWER's Articles of
         Organization and any amendments, if applicable.

         4.1.27 A certificate of good standing from the office of the South
         Dakota Secretary of State on the BORROWER.

         4.1.28 A Flood Hazard Determination Form for the PROPERTY, confirming
         whether or not the parcel is in a flood hazard area and whether or not
         flood insurance must be obtained.

         4.1.29 If requested by the BANK at any time, a copy of the payment and
         performance bond relating to the performance of any SUBCONTRACTOR on
         the PROJECT.

         4.1.30 Proof of injection of equity capital into BORROWER of no less
         than $2,000,000.00 by Broin Enterprises, Inc., and no less than
         $14,700,000.00 by Lake Area Corn Processors Cooperative.

         4.1.31 A copy of the MANAGEMENT CONTRACT, providing for management
         services until at least January 1, 2006, together with an assignment in
         favor of BANK in form satisfactory to BANK.

         4.1.32 A copy of the MARKETING CONTRACT, together with an assignment in
         favor of BANK in form satisfactory to BANK.

4.2 CONDITIONS PRECEDENT TO ALL DISBURSEMENTS. The obligation of the BANK to
make each disbursement under the CONSTRUCTION LOAN (including the initial
disbursement) shall be subject to the further conditions precedent that on the
date of such disbursement:


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         4.2.1 The representations and warranties contained in Section 5 of this
         AGREEMENT are correct on and as of the date of such disbursement as
         though made on and as of such date, except to the extent that such
         representations and warranties relate solely to an earlier date.

         4.2.2 No event has occurred and is continuing, or would result from
         such disbursement, which constitutes an EVENT OF DEFAULT.

         4.2.3 No determination shall have been made by the BANK that the
         undisbursed amount of the CONSTRUCTION LOAN is less than the amount
         required to pay all costs and expenses of any kind which reasonably may
         be anticipated in connection with the completion of the PROJECT; or, if
         such a determination has been made and notice thereof sent to the
         BORROWER, the BORROWER has deposited the necessary funds with the BANK
         in accordance with the Section 3.6 of this AGREEMENT.

         4.2.4 The disbursement requirements of Section 3 of this AGREEMENT have
         been satisfied.

         4.2.5 If required by the BANK, the BANK shall be furnished with a
         statement from the BORROWER and the GENERAL CONTRACTOR, in form and
         substance satisfactory to the BANK, setting forth the names, addresses
         and amounts due or to become due as well as the amounts previously paid
         to every SUBCONTRACTOR.

         4.2.6 The BORROWER shall have provided to the BANK such evidence of
         compliance with all of the provisions of this AGREEMENT as the BANK may
         reasonably request.

         4.2.7 No license or permit necessary for the construction of the
         PROJECT shall have been revoked or the issuance thereof subjected to.
         challenge before any court or other governmental authority having or
         asserting jurisdiction as to the PROJECT.

4.3 CONDITIONS PRECEDENT TO THE FINAL DISBURSEMENT. The obligation of the BANK
to make the final disbursement shall be subject to the condition precedent that
the BORROWER shall be in compliance with all conditions set forth in Sections
4.2 and 4.3 of this AGREEMENT and, further, that the following conditions shall
have been satisfied prior to the COMPLETION DATE:

         4.3.1 The PROJECT has been completed in accordance with the PLANS and
         the BANK shall have received a certificate of completion from the
         GENERAL CONTRACTOR, certifying that (i) work on the PROJECT has been
         completed in accordance with the PLANS and all labor, services,
         materials and supplies used in such work have been paid for and (ii)
         the completed PROJECT conforms with all applicable zoning, land use
         planning, building and environmental laws and regulations of the
         governmental authorities having jurisdiction over the PROJECT.


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         4.3.2 The BANK has received satisfactory evidence that all work
         requiring inspection by municipal or other governmental authorities
         having jurisdiction has been duly inspected and approved by such
         authorities and by the rating or inspection organization, bureau,
         corporation or office having jurisdiction, and that all requisite
         certificates of occupancy and other approvals have been issued.

         4.3.3 The BANK shall have received alien waiver from each SUBCONTRACTOR
         and the GENERAL CONTRACTOR for all work done and for all materials
         furnished by it for the PROJECT.

         4.3.4 The BANK has received an itemized list from BORROWER of all
         equipment and fixtures which are at that time subject to BANK's
         security interest.

4.4 NO WAIVER. The making of any disbursement under the CONSTRUCTION LOAN prior
to fulfillment of any condition thereto shall not be construed as a wavier of
such condition, and the BANK reserves the right to require fulfillment of any
and all such conditions prior to making any subsequent disbursements under the
CONSTRUCTION LOAN.

SECTION 5 REPRESENTATIONS AND WARRANTIES.

To induce the BANK to enter into this AGREEMENT, the BORROWER, makes the
following representations and warranties and agrees that each request for a
disbursement under this AGREEMENT constitutes a reaffirmation of these
representations and warranties.

5.1 EXISTENCE AND POWER. The BORROWER is a limited liability company duly formed
and in good standing under the laws of the State of South Dakota. The BORROWER
has all requisite power and authority to own the PROPERTY and construct the
PROJECT, and to execute and deliver, and to perform all of its obligations under
the LOAN DOCUMENTS.

5.2 AUTHORIZATION OF BORROWING; NO CONFLICT AS TO LAW OR OTHER AGREEMENTS. The
execution, delivery and performance by the BORROWER of the LOAN DOCUMENTS and
the borrowings from time to time hereunder have been duly authorized by all
necessary actions of the BORROWER and do and will not (a) require any consent or
approval, or authorization, by any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, (b) violate any
provision of any law, rule or regulation or of any order, writ, injunction or
decree presently in effect having applicability to the BORROWER, or of the
operating agreement of the BORROWER, (c) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the BORROWER is a party or by which it or its
properties may be bound or affected, or (d) result in, or require, the creation
or imposition of any mortgage, deed of trust, pledge, lien, security interest or
other charge or encumbrance of any nature to or with any other creditor of the
BORROWER upon or with respect to any of the properties now owned or hereafter
acquired by the BORROWER.


                                       12
<Page>

5.3 LEGAL AGREEMENTS. The LOAN DOCUMENTS constitute the legal, valid and binding
obligations of the BORROWER enforceable against the BORROWER in accordance with
their respective terms.

5.4 LICENSE AND PERMITS. The BORROWER has all necessary licenses and PERMITS
required for construction and operation of the PROJECT except those which cannot
be obtained until completion of the PROJECT.

5.5 CONSTRUCTION OF THE PROJECT. The PROJECT will be constructed strictly in
accordance with the PLANS; will be constructed entirely on the PROPERTY; and
will not encroach upon or overhang any easement or right-of-way on land not
constituting part of the PROPERTY, except for the rail spur line which shall in
part be located upon the rail line property owned by the State of South Dakota.
The PROJECT, both during construction and at the time of completion, and the
contemplated use thereof, will not violate any applicable zoning or use statute,
ordinance, building code, rule or regulation, or any covenant or agreement of
record. The BORROWER agrees that it will furnish from time to time such
satisfactory evidence with respect thereto as may be required by the BANK.

5.6 TITLE TO THE PROPERTY. The BORROWER has good and marketable fee simple title
to the PROPERTY.

5.7 FINANCIAL CONDITION. The BORROWER has furnished to the BANK the annual
financial statement of the BORROWER as of December 31,1999. This financial
statement fairly presents the financial condition of the BORROWER on the date
thereof and the results of its operations for the period then ended, and was
prepared in accordance with GAAP. There has been no material adverse change in
the operations, properties or condition (financial or otherwise) of the BORROWER
since the date of the financial statement referred to above and no additional
borrowings have been made by the BORROWER other than the borrowing contemplated
hereby or approved by the BANK. The above-referenced financial statement or any
certificate or statement furnished to the BANK by or on behalf of the BORROWER
in connection with the transactions contemplated hereby, and the representations
and warranties in this AGREEMENT, do not contain any untrue statements of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein or herein not misleading. To the best of the
knowledge of the BORROWER, there is no fact which materially adversely affects
or in the future (so far as the BORROWER can now foresee) may materially
adversely affect the operation or prospects or condition (financial or other) of
the BORROWER or its properties or assets, which has not been set forth herein or
in a certificate or statement furnished to the BANK by the BORROWER.

5.8 LITIGATION. There are no actions, suits or proceedings pending or, to the
knowledge of the BORROWER, threatened against or affecting the BORROWER or the
properties of the BORROWER before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which, if determined adversely to the BORROWER, would have a material adverse
effect on the financial condition, properties, or operations of the BORROWER.


                                       13
<Page>

5.9 TAXES. The BORROWER has paid or caused to be paid to the proper authorities
when due all federal, state and local taxes, including taxes on the PROPERTY,
required to be paid or withheld by it. The BORROWER has filed all federal, state
and local tax returns which to the knowledge of the members of the BORROWER are
required to be filed, and the BORROWER has paid or caused to be paid to the
respective taxing authorities all taxes as shown on said returns or on any
assessment received by it to the extent such taxes have become due.

5.10 NO DEFAULT. There is no event which is, or with notice or the lapse of time
would be, an EVENT OF DEFAULT under this AGREEMENT.

5.11 YEAR 2000 COMPLIANCE PROGRAM. The BORROWER has (1) conducted a detailed
inventory and assessment of all of its computer hardware and software systems
and imbedded chip technology ("Information Systems") and of its business and
operations that could be adversely affected by its failure to be Year 2000
Compliant on a timely basis; (2) developed, funded, and implemented a project
plan to make its Information Systems Year 2000 Compliant, and completed
implementation of the plan and the remediation and testing of its Information
Systems; and (3) initiated a process to determine whether its material
suppliers, vendors, and customers have taken meaningful steps to become Year
2000 Compliant on a timely basis, and developed and implemented a feasible
contingency plan to ensure the uninterrupted and unimpaired operation of its
business in the event of the failure of the systems of such third parties or of
its own Information Systems.

5.12 ERISA. The BORROWER is in compliance in all material respects with the
Employee Retirement Income Security Act of 1974, as amended, and has received no
notice to the contrary from the Internal Revenue Service, the Department of
Labor, the Pension Benefit Guaranty Corporation or any other governmental entity
or notice of any claims or pending claims under ERISA.

5.13 ENVIRONMENTAL MATTERS. Except as set forth in the Phase I Environmental
Report referenced in Section 4.1 of this AGREEMENT: 1) the BORROWER is in
compliance in all material respects with all health and environmental laws
applicable to the BORROWER and its operations and knows of no conditions or
circumstances that could interfere with such compliance in the future; 2) the
BORROWER has obtained all PERMITS, environmental permits and approvals required
by law for the operation of its business; and 3) the BORROWER has not identified
any "recognized environmental conditions," as that term is defined by the
American Society for Testing and Materials in its standards for environmental
due diligence, which could subject the BORROWER to enforcement action if brought
to the attention of appropriate governmental authorities.

5.14 NECESSARY UTILITIES, ETC. BORROWER has made suitable arrangements so that
the PROJECT has all necessary electrical, gas, water, and sewer facilities in
place for the proper construction and operation of its ethanol plant. BORROWER
has made adequate provision for all storage facilities, equipment and product
supplies, including corn, as specified by its engineers for the maximum output
and operation of the plant.

SECTION 6 ADDITIONAL COVENANTS OF THE BORROWER.


                                       14
<Page>

6.1 FINANCIAL INFORMATION AND REPORTING. Except as otherwise stated in this
AGREEMENT, all financial information provided to the BANK shall be compiled
using GAAP consistently applied. During the time period that any amounts are
outstanding under the CONSTRUCTION NOTE or this AGREEMENT or the LOAN DOCUMENTS;
unless the BANK shall otherwise agree in writing:

         6.1.1 Annual Financial Statements. Provide the BANK within 120 days of
         the BORROWER's fiscal year end, the BORROWER's consolidated, annual
         financial statements. The statements must be audited with an
         unqualified opinion by a certified public accountant acceptable to the
         BANK, and must be accompanied by a certificate of such accountants
         stating whether, in conducting their audit, they have become aware of
         any event of default under this AGREEMENT, or of any event which would,
         after the lapse of time or the giving of notice, or both, constitute an
         event of default under this AGREEMENT, specifying the nature and
         duration of the default. Such audit statement shall be accompanied by
         the accountants' calculations of BORROWER's compliance with the
         covenants contained in Section 6.2 of this AGREEMENT as of the said
         fiscal year end.

         6.1.2 The BORROWER will furnish to the BANK within 30 days after the
         end of each calendar quarter, consolidated financial statements of the
         BORROWER for such period and year to date all in reasonable detail.
         Such financial statements shall be accompanied by a calculation of
         BORROWER's compliance with covenants contained in Section 6.2 of this
         AGREEMENT, certified by a manager of BORROWER.

         6.1.3 The BORROWER will provide the BANK concurrently with the
         financial statements required above in Sections 6.1.1, a certificate in
         the form of Exhibit C that has been signed by a manager of BORROWER,
         which: 1) certifies that the statements have been accurately prepared
         in accordance with GAAP applied consistently; 2) certifies that the
         manager has no knowledge of any EVENT OF DEFAULT under this AGREEMENT
         or the LOAN DOCUMENTS, or of any event which would, after the lapse of
         time or the giving of notice, or both, constitute an event of default
         under this AGREEMENT or the LOAN DOCUMENTS.

         6.1.3 BORROWER shall immediately notify BANK of the existence of any
         EVENT OF DEFAULT.

         6.1.4 BORROWER shall authorize all federal, state and municipal
         authorities to furnish reports of examinations, records and other
         information relating to the condition and affairs of the BORROWER and
         its ethanol plant, and any information from reports, returns, files and
         records by such authorities regarding BORROWER upon request to the
         BANK.

         6.1.5 The BORROWER will give the BANK prompt written notice of any
         violation as to any environmental matter by the BORROWER and, of the
         commencement of any judicial or administrative proceeding relating to
         health, safety or environmental matters


                                       15
<Page>

         (i) in which an adverse determination or result could result in the
         revocation of or have a material adverse effect on any operating
         permits, air emission permits, water discharge permits, hazardous waste
         permits or other PERMITS held by the BORROWER which are material to the
         operations of the BORROWER, and (ii) which will or threatens to impose
         a material liability on the BORROWER to any person or party or which
         will require a material expenditure by the BORROWER to cure any alleged
         problem or violation.

         6.1.6 The BORROWER will give immediate notice to the BANK of (i) any
         litigation or proceeding in which it is a party if an adverse decision
         therein would require it to pay more than $100,000.00 or deliver assets
         the value of which exceeds such sum (whether or not the claim is
         considered to be covered by insurance); and (ii) the institution of any
         other suit or proceeding involving it that might materially and
         adversely affect its operations, financial condition, property, or
         business prospects.

         6.1.7 The BORROWER will provide the BANK with such other information as
         it may reasonably request.

6.2 FINANCIAL COVENANTS. At all times that any amounts are outstanding under the
CONSTRUCTION NOTE or this AGREEMENT or the LOAN DOCUMENTS, unless the BANK shall
otherwise agree in writing, the BORROWER agrees to comply with the financial
covenants described below, which shall be calculated using GAAP consistently
applied, except as they may be otherwise modified by the capitalized
definitions:

         6.2.1 The BORROWER shall maintain a DEBT SERVICES COVERAGE RATIO of no
         less than 1.20 : 1.0, for the first year following COMPLETION DATE, and
         no less than 1.25 : 1.0 for all periods subsequent thereto. For
         purposes of this covenant, to determine such ratio, OPERATING CASH FLOW
         shall be compared to DEBT SERVICE.

         6.2.2 The BORROWER shall maintain WORKING CAPITAL of at least
         $1,000,000.00 at all times after COMPLETION DATE.

         6.2.3 The BORROWER shall maintain a NET WORTH of not less than (i)
         $10,000,000.00 at all times prior to a date one year after COMPLETION
         DATE and (ii) $10,000,000.00 plus an amount equal to undistributed
         earnings at all times subsequent thereto.

         6.2.4 The BORROWER shall determine, at each fiscal year end, the amount
         of its EXCESS CASH FLOW for said fiscal year, and within one hundred
         twenty days following such fiscal year end, pay ten percent (10%) of
         such sum to BANK, to be applied to the principal amount of the
         CONSTRUCTION LOAN. Such annual payment shall not release. BORROWER from
         making any payment of principal or interest otherwise required by the
         CONSTRUCTION NOTE.


                                       16
<Page>

6.3 AFFIRMATIVE COVENANTS. During the time period that any amounts are
outstanding under the CONSTRUCTION NOTE or this AGREEMENT or the LOAN DOCUMENTS,
unless the BANK shall otherwise agree in writing the BORROWER shall:

         6.3.1 Diligently proceed with construction of the PROJECT according to
         the PLANS and in accordance with all applicable laws and ordinances,
         and complete the PROJECT by the COMPLETION DATE.

         6.3.2 Use the proceeds of each of the disbursements under the
         CONSTRUCTION LOAN solely for the purposes set forth in this AGREEMENT.

         6.3.3 Use its best efforts to require the GENERAL CONTRACTOR and each
         SUBCONTRACTOR to comply with all rules, regulations, ordinances and
         laws bearing on its conduct of work on the PROJECT.

         6.3.4 Provide and maintain at all times during the process of building
         the PROJECT and, from time to time at the request of the BANK, furnish
         the BANK with proof of payment of premiums on:

                  (i) Builders' risk completed value form insurance insuring the
                  PROJECT against fire, lightning and all other risks covered by
                  the extended coverage endorsement then in use in the State of
                  South Dakota to the full value of the PROJECT (subject to
                  reasonable loss deductible provisions). The BANK's interest
                  shall be protected by naming the BANK as additional named
                  insured;

                  (ii) Comprehensive general liability insurance (including
                  operations, contingent liability, operations of
                  subcontractors, complete operations, removal of contaminated
                  soil and other environmental coverage and contractual
                  liability insurance) with limits reasonably acceptable to
                  BANK;

                  (iii) Worker's compensation insurance, with statutory
                  coverage.

                  The policies of insurance required pursuant to clauses (i) and
                  (ii) above shall be in form and content satisfactory to the
                  BANK and shall be placed with financially sound and reputable
                  insurers. The policy of insurance referred to in clause (i)
                  above shall contain an agreement of the insurer to give not
                  less than thirty (30) days' advance written notice to the BANK
                  in the event of cancellation of such policy or change
                  affecting the coverage thereunder. Acceptance of insurance
                  policies referred to in clauses (i) and (ii) above shall not
                  bar the BANK from requiring additional insurance which it
                  reasonably deems necessary.

         6.3.5 Purchase and maintain hazard insurance (including fire, extended
         coverage vandalism and malicious mischief) on the PROPERTY and all
         assets in which BANK has a security interest with limits acceptable to
         the BANK. BANK shall be named as additional named insured.


                                       17
<Page>

         6.3.6 Maintain accurate and complete books, accounts and records
         pertaining to the PROPERTY and the PROJECT and its ongoing and
         continuing operations in form and substance satisfactory to the BANK.
         The BORROWER will permit the BANK, acting by and through its officers
         and employees, to examine upon reasonable notice all books, records,
         contracts, plans, drawings, PERMITS, bills and statements of account
         pertaining to the PROJECT and to inspect upon reasonable notice all
         books and records pertaining to its operations and to make extracts
         therefrom and copies thereof.

         6.3.7 Cause to be paid to the proper authorities when due all federal,
         state and local taxes, including taxes on the PROPERTY, required to be
         paid or withheld by it except those which the BORROWER is contesting in
         good faith and with respect to which adequate reserves have been set
         aside.

         6.3.8 Allow the BANK to conduct such inspections of the PROJECT and
         BORROWER's personal property subject to the BANK's security interest as
         the BANK may deem necessary for the protection of the BANK's interest.
         Any such inspections shall be made and any certificates issued are
         solely for the benefit and protection of the BANK, and the BORROWER
         shall not be entitled to rely thereon.

         6.3.9 Make all repairs, renewals or replacements necessary to keep its
         plant, properties and equipment in good working condition.

         6.3.10 Comply in all material respects with all laws applicable to its
         form of organization, business, and the ownership of its property.

         6.3.11 Maintain and preserve all PERMITS, licenses, rights, privileges,
         charters and franchises that it now owns.

         6.3.12 Observe and comply with all laws, rules, regulations and orders
         of any government or government agency relating to health, safety,
         pollution, hazardous materials or other environmental matters to the
         extent non-compliance could result in a material liability or otherwise
         have a material adverse effect on the BORROWER.

6.4 NEGATIVE COVENANTS. During the time period that any amounts are outstanding
under the CONSTRUCTION NOTE or this AGREEMENT or the LOAN DOCUMENTS, unless the
BANK shall otherwise agree in writing the BORROWER shall not:

         6.4.1 Permit any security interest or mortgage or lien on the PROPERTY
         or PROJECT or other real or personal property BORROWER owns now or in
         the future, or assign any interest that it may have in any assets or
         subordinate any rights that it may have in any assets now or in the
         future, except: (i) liens, assignments, or subordinations in favor of
         the BANK; (ii) liens, assignments, or subordinations outstanding on the
         date of this AGREEMENT and disclosed in advance to the BANK in writing
         and approved by the BANK; (iii) liens for taxes or assessments or other
         governmental charges not delinquent or which the BORROWER is contesting
         in good faith; (iv) liens which secure purchase money indebtedness
         allowed under this AGREEMENT; (v) liens that are imposed by law


                                       18
<Page>

         for obligations for labor or materials not overdue for more than 120
         days, such as mechanics', materialmen's, carriers', landlords', and
         warehousemen's liens, or liens, pledges, or deposits under workers'
         compensation, unemployment insurance, Social Security, or similar
         legislation.

         6.4.2 Agree or consent to any changes in the PLANS, any changes in the
         terms and provisions of the DESIGN/BUILD CONTRACT or any of the
         contracts specifically identified in Section 4 of this AGREEMENT, or,
         following execution of this AGREEMENT, to any one change order in an
         amount exceeding $50,000.00, or all change orders when combined
         exceeding $200,000.00.

         6.4.3 Incorporate in the PROJECT any materials, fixtures or property
         which are subject to the claims of any other person, whether pursuant
         to conditional sales contract, security agreement, lease, mortgage or
         otherwise.

         6.4.4 Lease, sell, transfer, convey, assign, or otherwise transfer all
         or any part of the interest of the BORROWER in the PROJECT or the
         PROPERTY.

         6.4.5 Permit or suffer any material change in its management personnel
         or management structure or any change, direct or indirect, in its
         capital ownership.

         6.4.6 Engage in any line of business materially different from that
         presently engaged in by the BORROWER.

         6.4.7 Change its legal form of organization.

         6.4.8 Make any material changes in its accounting procedures for tax or
         other purposes.

         6.4.9 Incur any indebtedness except: (1) debt arising under this or
         another agreement with the BANK; (ii) trade credit incurred in the
         ordinary course of business; and (iii) indebtedness in existence on the
         date of this AGREEMENT and disclosed in advance to the BANK in writing.

         6.4.10 Consolidate, or merge or pool or syndicate or otherwise combine
         with any other entity, or give any preferential treatment, make any
         advance, directly or indirectly, by way of loan, gift, bonus, or
         otherwise, to any company directly or indirectly controlling or
         affiliated with or controlled by BORROWER, or any other company, or to
         any partner or employee of BORROWER, or of any such company.

         6.4.11 Make, or commit to make, capital expenditures (including the
         total amount of any capital leases) in an aggregate amount exceeding
         $250,000.00 in any single fiscal year.

         6.4.12 Make or pay, without the written consent of BANK, which written
         consent will not be unreasonably withheld, in any fiscal year
         distributions to members of the BORROWER in excess of 80% of EXCESS
         CASH FLOW or which would result in the BORROWER at the time of such
         distribution not being in compliance with any of the


                                       19
<Page>

         covenants set forth in this AGREEMENT after payment of such
         distribution. Any such distributions shall be made only after receipt
         by BANK of BORROWER's annual financial statements and compliance
         statement as required herein.

         6.4.13 Assume, guarantee, endorse or otherwise becoming contingently
         liable for any obligations of any other person, except for those
         guaranties outstanding at the time of execution of this AGREEMENT and
         disclosed to the BANK in writing.

         6.4.14 Make sales to or purchases from any affiliate of the BORROWER or
         extend credit or make payments for services rendered by any affiliate
         of the BORROWER, except under the MANAGEMENT CONTRACT or the MARKETING
         CONTRACT, unless such sales or purchases are made or such services are
         rendered in the ordinary course of business and on terms and conditions
         at least as favorable to the BORROWER as the terms and conditions which
         would apply in a similar transaction with a person or party not an
         affiliate of the BORROWER.

SECTION 7 EVENTS OF DEFAULT, RIGHTS AND REMEDIES.

7.1 EVENTS OF DEFAULT. Each of the following shall be an EVENT OF DEFAULT and
give the BANK the right to exercise its remedies under this AGREEMENT:

         7.1.1 The BORROWER shall fail to pay when due any OBLIGATIONS or any
         other installment of principal or interest or fee payable to BANK.

         7.1.2 The BORROWER shall fail to observe or perform any other
         obligation to be observed or performed by it hereunder or under any of
         the LOAN DOCUMENTS.

         7.1.3 The BORROWER shall fail to pay any INDEBTEDNESS due any third
         persons, and such failure shall continue beyond any applicable grace
         period, or the BORROWER shall suffer to exist any other default under
         any agreement binding the BORROWER.

         7.1.4 Any financial statement, representation, warranty, or certificate
         made or furnished by or with respect to the BORROWER to the BANK in
         connection with this AGREEMENT, or as an inducement to the BANK to
         enter into this AGREEMENT, or in any separate statement or document to
         be delivered to the BANK hereunder, shall be materially false,
         incorrect, or incomplete when made.

         7.1.5 The BORROWER shall admit its inability to pay its debts as they
         mature or shall make an assignment for the benefit of itself or any of
         its creditors.

         7.1.6 Proceedings in bankruptcy, or for reorganization of the BORROWER,
         or for the readjustment of debt under the Bankruptcy Code, as amended,
         or any part thereof, or under any other laws, whether state or federal,
         for the relief of debtors, now or hereafter existing, shall be
         commenced against or by the BORROWER and, except with respect to any
         such proceedings instituted by the BORROWER, shall not be discharged
         within thirty (30) days of their commencement.


                                       20
<Page>

         7.1.7 A receiver or trustee shall be appointed for the BORROWER or for
         any substantial part of its respective assets, or any proceedings shall
         be instituted for the dissolution or the full or partial liquidation of
         the BORROWER, and except with respect to any such appointments
         requested or instituted by the BORROWER, such receiver or trustee shall
         not be discharged within thirty (30) days of his appointment, and
         except with respect to any such proceedings instituted by the BORROWER,
         such proceedings shall not be discharged within thirty (30) days of
         their commencement, or the BORROWER shall discontinue business or
         materially change the nature of its business, or the property securing
         the OBLIGATIONS becomes, in the reasonable judgment of the BANK,
         insufficient in value to satisfy the OBLIGATIONS, or the BANK otherwise
         reasonably finds itself insecure as to the prompt and punctual payment
         and discharge of the OBLIGATIONS.

         7.1.8 The BORROWER shall suffer final judgments for payment of money
         aggregating in excess of $100,000.00 which are not covered, without
         reservation, by insurance or shall not discharge the same within a
         period of thirty (30) days unless, pending further proceedings,
         execution has not been commenced or, if commenced, has been effectively
         stayed.

         7.1.9 A judgment creditor of the BORROWER shall obtain possession of
         any of the COLLATERAL by any means, including (without implied
         limitation) levy, distraint, replevin, or self-help.

         7.1.10 The construction of the PROJECT is abandoned or shall be
         unreasonably delayed or be discontinued for a period of fifteen (15)
         consecutive calendar days, in each instance for reasons other than acts
         of God, fire, storm, strikes, blackouts, labor difficulties, riots,
         inability to obtain materials, equipment or labor, governmental
         restrictions or any similar cause over which the BORROWER is unable to
         exercise control.

         7.1.11 The BORROWER at any time prior to the completion of the PROJECT,
         shall delay construction or suffer construction to be delayed for any
         period of time, for any reason whatsoever, so that the completion of
         the PROJECT cannot be accomplished, in the reasonable judgment of the
         BANK, by the COMPLETION DATE.

         7.1.12 The PROJECT is materially damaged or destroyed by fire or other
         casualty and the loss, in the reasonable judgment of the BANK, is not
         adequately covered by insurance actually collected or in the process of
         collection.

         7.1.13 Broin and Associates, Inc. shall cease to be the GENERAL
         CONTRACTOR or, following COMPLETION DATE, shall cease to be the general
         manager of BORROWER's ethanol plant, and BORROWER has not replaced the
         GENERAL CONTRACTOR, or the GENERAL MANAGER, whichever is applicable,
         within thirty (30) days following the termination of the DESIGN/BUILD
         CONTRACT or the MANAGEMENT CONTRACT, whichever is applicable, to the
         satisfaction of BANK, which BANK approval shall not be unreasonably
         withheld.


                                       21
<Page>

         7.1.14 Broin Enterprises, Inc. or its permitted assignee shall cease to
         be the marketing agent of BORROWER as to sale of its products, and
         BORROWER has not within thirty (30) days following termination of the
         MARKETING CONTRACT hired a replacement marketing agent to the BANK's
         satisfaction, which BANK approval will not be unreasonably withheld.

7.2 RIGHTS AND REMEDIES. Upon the occurrence of an EVENT OF DEFAULT and at any
time thereafter, the BANK may refrain from making any further disbursements
hereunder (but the BANK may make disbursements after the occurrence of such an
EVENT OF DEFAULT without thereby waiving its rights and remedies hereunder), and
upon the occurrence of an EVENT OF DEFAULT or at any time thereafter, the BANK
may exercise any or all of the following rights and remedies:

         7.2.1 The BANK may declare the CONSTRUCTION LOAN to be terminated,
         whereupon the same shall forthwith terminate.

         7.2.2 The BANK may declare the entire unpaid principal amount of the
         CONSTRUCTION NOTE then outstanding, all interest accrued and unpaid
         thereon, and all other amounts payable under this AGREEMENT to be
         forthwith due and payable, whereupon the CONSTRUCTION NOTE, all such
         accrued interest and all such amounts shall become and be forthwith due
         and payable, without presentment, demand, protest or further notice of
         any kind, all of which are hereby expressly waived by the BORROWER.

         7.2.3 The BANK may exercise and enforce its rights and remedies under
         any or all of the LOAN DOCUMENTS.

         7.2.4 The BANK may enter upon the PROPERTY and take possession thereof,
         together with the PROJECT then in the course of construction, and
         proceed either in its own name or in the name of the BORROWER, as the
         attorney-in-fact of the BORROWER (which authority is coupled with an
         interest and is irrevocable by the BORROWER) to complete or cause to be
         completed the PROJECT, at the cost and expense of the BORROWER. If the
         BANK elects to complete or cause to be completed the PROJECT, it may do
         so according to the PLANS or according to such changes, alterations or
         modifications in and to the PLANS as the BANK may deem reasonable and
         appropriate; and the BANK may enforce or cancel all contracts let by
         the BORROWER relating to construction of the project, and/or let other
         contracts which in the BANK's sole judgment may seem advisable; and the
         BORROWER shall forthwith turn over and duly assign to the BANK, as the
         BANK may from time to time require, contracts not already assigned to
         the BANK relating to construction of the PROJECT, blueprints, shop
         drawings, bonds, building permits, bills and statements of accounts
         pertaining to the PROJECT, whether paid or not, and any other
         instruments or records in the possession of the BORROWER pertaining to
         the PROJECT. The BORROWER shall be liable under this AGREEMENT to pay
         to the BANK, on demand, any amount or amounts expended by the BANK in
         so completing the PROJECT, together with any costs, charges, or
         expenses incident thereto or resulting therefrom, all of which shall be
         secured by the LOAN DOCUMENTS. In the


                                       22
<Page>

         event that a proceeding is instituted against the BORROWER for recovery
         and reimbursement of any moneys expended by the BANK in connection with
         the completion of the PROJECT, a statement of such expenditures,
         verified by the affidavit of an officer of the BANK, shall be prima
         facie evidence of the amounts so expended and of the propriety of the
         necessity for such expenditures; and the burden of proving to the
         contrary shall be upon the BORROWER. The BANK shall have the right to
         apply any funds which it agrees to disburse hereunder to bring about
         the completion of the PROJECT and to pay the costs thereof; and if such
         money so agreed to be disbursed is insufficient, in the sole judgment
         of the BANK, to complete the PROJECT, the BORROWER agrees to promptly
         deliver and pay to the BANK such sum or sums of money as the BANK may
         from time to time demand for the purpose of completing the PROJECT or
         of paying any liability, charge or expense which may have been incurred
         or assumed by the BANK under or in performance of this AGREEMENT, or
         for the purpose of completing the PROJECT. It is expressly understood
         and agreed that in no event shall the BANK be obligated, or liable in
         any way to complete the PROJECT or to pay for the costs of construction
         thereof beyond the amount of the CONSTRUCTION LOAN.

         7.2.5 The BANK may exercise any other rights and remedies available to
         it by law or agreement.

SECTION 8 MISCELLANEOUS.

8.1 INSPECTIONS. The BORROWER and the GENERAL CONTRACTOR shall be responsible
for making inspections of the PROJECT during the course of construction and
shall determine to their own satisfaction that the work done or materials
supplied by the GENERAL CONTRACTOR or any SUBCONTRACTOR to whom payment is to be
made out of each disbursement has been properly done or supplied in accordance
with the DESIGN/BUILD CONTRACT. If any work done or materials supplied by the
GENERAL CONTRACTOR or any SUBCONTRACTOR are not satisfactory to the BORROWER
and/or its GENERAL CONTRACTOR and the same is not remedied within fifteen days
of the discovery thereof, the BORROWER will immediately notify the BANK in
writing of such fact. It is expressly understood and agreed that the BANK and
any party designated by the BANK may conduct such inspections of the PROJECT as
BANK may deem necessary for the protection of the BANK's interest, and that any
inspections which may be made of the PROJECT by the BANK will be made, solely
for the benefit and protection of the BANK, and that the BORROWER will not rely
thereon.

8.2 INDEMNIFICATION BY THE BORROWER. The BORROWER shall bear all loss, expense
(including attorneys' fees) and damage in connection with, and agrees to
indemnify and hold harmless the BANK, its agents, servants and employees from,
all claims, demands and judgments made or recovered against the BANK, its
agents, servants and employees, because of bodily injuries, including death at
any time resulting therefrom, and/or because of damages to property (including
loss of use) from any cause whatsoever, arising out of, incidental to, or in
connection with the construction of the PROJECT, whether or not due to any act
of omission or commission, including negligence of the BORROWER or the GENERAL
CONTRACTOR or of his or their employees, servants or agents, and whether or not
due to any act of omission or


                                       23
<Page>

commission of the BANK, its employees, servants or agents. The BORROWER's
liability hereunder shall not be limited to the extent of insurance carried by
or provided by the BORROWER or subject to any exclusions from coverage in any
insurance policy. The obligations of the BORROWER under this Section shall
survive the payment of the CONSTRUCTION NOTE.

8.3 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part of the BANK
in exercising any right, power or remedy under the LOAN DOCUMENTS shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy under the LOAN DOCUMENTS. The remedies
provided in the LOAN DOCUMENTS are cumulative and not exclusive of any remedies
provided by law.

8.4 AMENDMENTS, ETC. No amendment, modification, termination or waiver of any
provision of any of the LOAN DOCUMENTS or consent to any departure by the
BORROWER therefrom shall be effective unless the same shall be in writing and
signed by the BANK, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No notice to
or demand on the BORROWER in any case shall entitle the BORROWER to any other or
further notice or demand in similar or other circumstances.

8.7 ADDRESSES FOR NOTICES, ETC. Except as otherwise expressly provided herein,
all notices, requests, demands and other communications provided for under the
LOAN DOCUMENTS shall be in writing and mailed or delivered to the applicable
party at its address indicated below:

         If to the BORROWER:     DAKOTA ETHANOL, L.L.C.
                                 c/o Lake Area Corn Processors Cooperative
                                 P.O. Box 100
                                 Wentworth, South Dakota 57075
                                 Attention:  Steven R. Sershen or Doug Van Duyn

             with a copy to:     James M. Wiederrich
                                 Woods, Fuller, Shultz & Smith, P.C.
                                 300 South Phillips Avenue, Suite 300
                                 Post Office Box 5027
                                 Sioux Falls, South Dakota 57117-5027

         If to the BANK:         First National Bank of Omaha
                                 One First National Center
                                 1600 Dodge Street
                                 Omaha, Nebraska 68102
                                 Attention: Michael Doyle

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section. All such notices, requests, demands and other communications
shall, when mailed, be effective when deposited in


                                       24
<Page>

the mails, addressed as aforesaid, except that notices or requests to the BANK
pursuant to any of the provisions hereunder shall not be effective until
received by the BANK.

8.8 TIME OF ESSENCE. Time is of the essence in the performance of this
AGREEMENT.

8.9 EXECUTION IN COUNTERPARTS. The LOAN DOCUMENTS may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts of each instrument or agreement,
taken together, shall constitute but one and the same instrument.

8.10 BINDING EFFECT, ASSIGNMENT. The LOAN DOCUMENTS shall be binding upon and
inure to the benefit of the BORROWER and the BANK and their respective
successors and assigns, except that the BORROWER shall not have the right to
assign its rights thereunder or any interest therein without the prior written
consent of the BANK.

8.11 GOVERNING LAW. The LOAN DOCUMENTS shall be governed by, and construed in
accordance with, the laws of the State of Nebraska except for the MORTGAGE and
ASSIGNMENT OF RENTS which shall be governed by and construed in accordance with
the laws of the State of South Dakota.

8.12 SEVERABILITY OF PROVISIONS. Any provision of this AGREEMENT which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.

8.13 HEADINGS. Section headings in this AGREEMENT are included herein for
convenience of reference only and shall not constitute a part of this AGREEMENT
for any other purpose.

8.14 INTEGRATION. This AGREEMENT supersedes, replaces and terminates any prior
oral offers, negotiations, understandings or agreements and any commitment
letters or similar writings relating to any of the matters contemplated herein.

8.15 PARTICIPATIONS. Notwithstanding any other provision of this AGREEMENT, the
BORROWER understands that the BANK may enter into participation agreements with
other lenders whereby the BANK will allocate a certain percentage of the
CONSTRUCTION LOAN to them. The BORROWER specifically permits and authorizes the
BANK to exchange financial information about the BORROWER with actual or
potential participants. The BORROWER acknowledges that, for the convenience of
all parties, this AGREEMENT is being entered into with the BANK only and that
its obligations under this AGREEMENT are undertaken for the benefit of, and as
an inducement to, each of the Participating Lenders as well as the BANK, and the
BORROWER hereby grants to each of the Participating Lenders to the extent of its
participation in the CONSTRUCTION LOAN, the right to set off deposit accounts
maintained by the BORROWER with such BANK. The BORROWER understands that the
terms of such participation agreements with any of the participants will limit
the BANK's rights to amend, waive or modify the terms and conditions of this
AGREEMENT without the express written consent of all or a designated percentage
of such participants.


                                       25
<Page>

         IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
executed by their respective officers or managers thereunto duly authorized, as
of the date first above written.

DAKOTA ETHANOL, L.L.C.                            FIRST NATIONAL BANK OF OMAHA

/s/ Doug Van Duyn                                 /s/ Michael Doyle

By:      Doug Van Duyn                            By:      Michael Doyle
Its:     Chairman of the Board of Governors       Its:     2nd VP


STATE OF SOUTH DAKOTA      )
                           ) ss.
COUNTY OF MINNEHAHA        )

         On this 25th day of September, 2000, before me, the undersigned, a
Notary Public, personally appeared Doug Van Duyn, the Chairman of the Board of
Governors, __________________________ Dakota Ethanol, L.L.C., on behalf of said
entity, who executed the foregoing instrument, and acknowledged that he executed
the same as his voluntary act and deed.


                                                    /s/ James M. Wiederrich
                                                    -----------------------
                                                    Notary Public

STATE OF SOUTH DAKOTA      )
                           ) ss.
COUNTY OF MINNEHAHA        )

         On this 25th day of September, 2000, before me, the undersigned, a
Notary Public, personally appeared Michael Doyle, the 2nd Vice President First
National Bank of Omaha, on behalf of said entity, who executed the foregoing
instrument, and acknowledged that he executed the same as his voluntary act and
deed.


                                                    /s/ James M. Wiederrich
                                                    -----------------------
                                                    Notary Public


                                       26
<Page>

                                    EXHIBIT A

                             DAKOTA ETHANOL, L.L.C.
                             Real Estate Description


West Half of the Northeast Quarter (W 1/2 NE 1/4) of Section Twenty-one (21),
Township One Hundred Six (106) North, Range Fifty-one (51) West of the Fifth
Principal, Lake County, South Dakota














                                       27
<Page>

                                    EXHIBIT B

                                Construction Note

Note Date: ______________ __, 2000                               $26,600,000.00
                                                                 __________1999


Maturity Date:  September 1, 2011

FOR VALUE RECEIVED, DAKOTA ETHANOL, L.L.C., a South Dakota limited liability
company ("BORROWER") promises to pay to the order of First National Bank of
Omaha ("BANK"), at its principal office or such other address as BANK or holder
may designate from time to time, the principal sum of Twenty Six Million Six
Hundred Thousand and No/100 Dollars ($26,600,000.00), or the amount shown on the
BANK's records to be outstanding, plus interest (calculated on the basis of
actual days elapsed in a 360-day year) accruing each day on the unpaid principal
balance at the annual interest rates defined below. Absent manifest error, the
BANK's records shall be conclusive evidence of the principal and accrued
interest owing hereunder.

This promissory note is executed pursuant to a Construction Loan Agreement
("CONSTRUCTION LOAN AGREEMENT") between BORROWER and BANK dated as of
____________, __ 2000. All capitalized terms not otherwise defined in this note
shall have the meanings provided in the CONSTRUCTION LOAN AGREEMENT.

INTEREST ACCRUAL. Interest on the principal amount outstanding shall accrue, for
the period through and including the COMPLETION DATE, at a rate (the "RATE")
equal to the BASE RATE in effect from time to time until maturity, and three per
cent (3%) above the BASE RATE in effect from time to time after maturity,
whether by acceleration or otherwise. For purposes hereof, BASE RATE shall mean
the rate announced by BANK from time to time as its "National Base Rate".

Each time the BASE RATE shall change, the RATE shall change contemporaneously
with such change in the BASE RATE. Interest shall be calculated on the basis of
a 360-day year, counting the actual number of days elapsed.

Following the COMPLETION DATE, interest on the CONSTRUCTION LOAN shall accrue at
a rate of nine (9%) percent per annum prior to maturity, and twelve (12%)
percent per annum after maturity, whether by acceleration or otherwise.

REPAYMENT TERMS. Until COMPLETION DATE, interest only shall be payable on the
1st day of each calendar quarter, commencing September 1, 2000. After COMPLETION
DATE, BORROWER will pay forty equal quarterly payments of amortized interest and
principal, commencing November 1, 2001, with the full amount of the CONSTRUCTION
LOAN outstanding on COMPLETION DATE being amortized over a period of ten years.
Any


                                       28
<Page>

remaining principal balance, plus any accrued but unpaid interest, shall be
fully due and payable on September 1, 2011.

PREPAYMENT. The BORROWER may prepay this CONSTRUCTION NOTE in full or in part at
any time. Provided, however, a condition of any prepayment is that a fee shall
be paid to BANK sufficient to make BANK whole for any expenses related to
breaking fixed interest rates. Each prepayment may be applied in inverse order
of maturity or as the BANK in its sole discretion may deem appropriate. Such
prepayment shall not excuse the BORROWER from making subsequent payments each
quarter until the indebtedness is paid in full.

ADDITIONAL TERMS AND CONDITIONS. The LOAN AGREEMENT, and any amendments or
substitutions, contains additional terms and conditions, including default and
acceleration provisions, which are incorporated into this CONSTRUCTION NOTE by
reference. The BORROWER agrees to pay all costs of collection, including
reasonable attorneys fees and legal expenses incurred by the BANK if this
CONSTRUCTION NOTE is not paid as provided above. This CONSTRUCTION NOTE shall be
governed by the substantive laws of the State of Nebraska.

WAIVER OF PRESENTMENT AND NOTICE OF DISHONOR BORROWER and any other person who
signs, guarantees or endorses this CONSTRUCTION NOTE, to the extent allowed by
law, hereby waives presentment, demand for payment, notice of dishonor, protest,
and any notice relating to the acceleration of the maturity of this CONSTRUCTION
NOTE.

                                                     DAKOTA ETHANOL, L.L.C.



                                                     By:
                                                     Its:


                                       29
<Page>

                                    EXHIBIT C

                             DAKOTA ETHANOL, L.L.C.

                            CERTIFICATE OF COMPLIANCE


TO:      First National Bank of Omaha
         One First National Center
         1600 Dodge Street
         Omaha, Nebraska 68102
         Attn:  Michael Doyle

         I am a manager of DAKOTA ETHANOL, L.L.C., (the "BORROWER") and under
the terms of a CONSTRUCTION LOAN AGREEMENT (the "AGREEMENT") between the BANK
and the BORROWER dated _______________________, 2000, certify that:

1. The attached financial statements of the BORROWER from through (the
"Statement Date") are true and correct and have been accurately prepared in
accordance with generally accepted accounting principles applied consistently
with the BORROWER's most recent annual financial statement; and

2. I have read and am familiar with the AGREEMENT and have no knowledge of an
existing EVENT OF DEFAULT under the AGREEMENT or of any event which would, after
the lapse of time or the giving of notice, or both, constitute an EVENT OF
DEFAULT under the AGREEMENT.

         The calculations regarding each financial covenant, as of the Statement
Date, and regardless of whether the BORROWER must be in compliance with each
covenant as of the Statement Date, are as follows:

         COVENANT                             ACTUAL                REQUIRED

         NET WORTH                          $____________          $____________

         WORKING CAPITAL                    $____________          $____________

         DEBT SERVICE COVERAGE RATIO        _______ : 1.0          _______ : 1.0



                                                  DAKOTA ETHANOL, L.L.C.


                                                  By:
                                                        A Manager




                                       30