Document:

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                                                                    Exhibit 10.7

                                LETTER AGREEMENT

                     OREGON TRAIL ETHANOL COALITION, L.L.C.
                               426 Lincoln Avenue
                             Hebron, Nebraska 68370

May 15, 2002

Rodney and Judy Tegtmeier

         Re:   OTEC Relocation Payment

Dear Mr. and Mrs. Tegtmeier:

     As you are aware, Oregon Trail Ethanol Coalition, L.L.C. ("OTEC") is in the
process of raising funds to construct and operate a 40 million gallon per year
ethanol plant at a site east of Davenport, Nebraska, and located adjacent to
your feedlot (the "East Davenport Site"). Your feedlot is located in the
Northwest corner of the Northwest Quarter of Section 21-4-4, and is immediately
east of the East Davenport Site. OTEC is negotiating option agreements with the
owners of the East Davenport Site to purchase such property for the purpose of
constructing and operating the proposed ethanol plant. You have indicated that
you would like to relocate your feedlot as a result of its close proximity to
the proposed ethanol plant. OTEC is willing to reimburse you for certain
expenses incurred in connection with such relocation as set forth in this letter
agreement.

     At a mutually agreed upon date after the closing of OTEC's public offering,
but no later than five (5) days after the closing of the purchase of the East
Davenport Site, OTEC shall pay you $40,000 in cash to cover the relocation costs
related to the cattle lots currently located east of the East Davenport Site
(the "Relocation Payment"), provided that payment of the Relocation Payment is
not contingent upon you destroying or moving your existing cattle facilities.
You expressly acknowledge that except for the Relocation Payment, OTEC shall
have no further obligation to you relating to this or any other relocation. In
the event OTEC does not close on its public offering, purchase the East
Davenport Site, or commence construction of the proposed ethanol plant, OTEC
shall have no obligation to pay you the Relocation Payment.

     In consideration for the Relocation Payment, you fully and forever release
and discharge OTEC, and its subsidiaries, successors, assigns, agents and
employees from any and all claims, demands, causes of action, duties,
obligations or liabilities whatsoever, whether known or unknown, in law or
equity, which you ever had, now have or hereafter can, shall or may, have
against OTEC arising out of or in any way connected with this letter agreement,
your relocation costs and expenses, OTEC's purchase of the East Davenport Site,
or its construction and operation of the proposed ethanol plant, whether
presently asserted or unasserted, known or unknown. The parties mutually agree
that they intend this release to permanently eliminate all claims of every
nature whatsoever you have against OTEC, and this letter agreement shall be
broadly construed to that end. You also agree that you will support the OTEC
purchase of the East Davenport Site and construction of an ethanol plant at such
location and will not directly or indirectly oppose or object to OTEC's proposed
purchase of the East Davenport Site or construction of an ethanol plant,
including without limitation, in any public proceeding or in any public
statements.

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     This letter agreement constitutes the entire agreement and understanding
between the parties hereto and is the final expression of their agreement and no
evidence of oral or other written promises shall be binding. All other prior
agreements or understandings related to the subject hereof between the parties,
whether written or oral, shall be null and void and of no further force and
effect upon the execution of this letter agreement.

     This letter agreement and performance hereunder shall be governed by and
construed in accordance with the substantive laws of Nebraska without reference
to its conflict of laws rules.

     Neither party may assign this letter agreement without the prior written
consent of the other party, which consent shall not be unreasonably withheld. If
any severable provision of this letter agreement is deemed invalid or
unenforceable by any judgment of a court of competent jurisdiction, the
remainder of this letter agreement shall not be affected by such judgment. This
letter agreement may only be amended by written agreement of the parties hereto.
The failure to enforce or to require the performance at any time of any of the
provisions of this letter agreement shall in no way be construed to be a waiver
of such provisions. This letter agreement is binding on the party's heirs, legal
representatives, successors and permitted assigns.

     If you approve of this letter agreement, please so indicate by executing
and returning one copy hereof to me.

                                       Yours very truly,

                                       OREGON TRAIL ETHANOL COALITION, L.L.C.

                                       By:  /s/ Mark Jagels
                                            ------------------------------------
                                            Mark Jagels, Chairman of the Board
                                               and President

AGREED TO AND ACCEPTED BY:

/s/ Rodney Tegtmeier
---------------------------------
Rodney Tegtmeier, and

/s/ Judy L. Tegtmeier
---------------------------------
Judy Tegtmeier

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                                  NOTARIZATION

STATE OF NEBRASKA          )
                           )  ss.
COUNTY OF Thayer           )

     The foregoing instrument was acknowledged before me this 15th day of May,
2002 by Rodney Tegtmeier and Judy Tegtmeier.

GENERAL NOTARY-State of Nebraska
       STEVEN J.RIGGERT
  My Comm. Exp. Nov. 23, 2004

                                                  /s/ Steven J. Riggert
                                                  ------------------------------
                                                  Notary Public

My commission expires:  11/23/04
                      --------------<PAGE>

                                                                    Exhibit 10.8

                                STATE OF NEBRASKA
                         NEBRASKA DEPARTMENT OF REVENUE

                       ETHANOL PRODUCTION CREDIT AGREEMENT

     This agreement is entered into pursuant to Neb. Rev. Stat (S) 66-1344 and
Laws 2001, LB 536, Section 7, between Oregon Trail Ethanol Coalition, LLC,
hereinafter referred to as "OTEC," and the State of Nebraska, by the State Tax
Commissioner, hereinafter referred to as "the State."

     It is hereby agreed between OTEC and the State that:

     1. OTEC is in the process of planning and constructing an ethanol
production facility and, upon completion of the anticipated construction, will
own and control an ethanol production facility located in either Thayer or
Nuckolls County.

     2. OTEC hereby agrees to produce ethanol at the facility and any expansion
thereof.

     3. The State agrees to furnish OTEC the tax credits as provided by and
limited in Neb. Rev. Stat (S) 66-1344 in effect on the date of the agreement.
Credits in the amount of eighteen cents per gross gallon of ethanol produced,
before denaturing, will be furnished following the procedures described below.
The tax credits furnished by the State shall be in the form of nonrefundable,
transferable motor vehicle fuel tax credit certificates.

     4. The name plate design capacity for the production of ethanol, before
denaturing, at this facility at the commencement of production will be forty
million (40,000,000) gross gallons.

     5. The credits will be given only for ethanol produced at the ethanol
production facility identified above at which all fermentation, distillation and
dehydration take place.

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ETHANOL PRODUCTION CREDIT AGREEMENT                                       Page 2
Oregon Trail Ethanol Coalition, LLC

     6. OTEC may begin to apply for credits once it attains a minimum rate of
ethanol production, before denaturing, of one hundred thousand (100,000) gross
gallons annually. This minimum rate of ethanol production must be accomplished
prior to June 30, 2004.

     7. In order to show that it can accurately measure the requisite minimum
rate of production, OTEC shall initially provide the State with documentation
indicating that the metering devices used to measure the minimum rate of
production have been approved by the State of Nebraska, Department of
Agriculture, Division of Weights and Measures. In order to show that it can
accurately measure the quantity of ethanol produced thereafter, OTEC shall
provide the State with documentation annually indicating that the metering
devices used to measure the production of ethanol have been approved by the
State of Nebraska, Department of Agriculture, Division of Weights and Measures.

     8. The initial application to receive credits filed by OTEC must establish
that the minimum rate of ethanol production required has been attained. The
initial application shall cover a period of one calendar month or any part
thereof, but in no event shall the period be less than one day. Once the minimum
rate of ethanol production has been established, OTEC can receive credits for a
period of ninety-six (96) consecutive months, but in no event can OTEC apply for
any credits for ethanol production which occurs after June 30, 2012. The
applications used to apply for credits following the initial application shall
be for periods measured by whole calendar months except that the last
application of the agreement may be for a partial calendar month.

     9. Not more than fifteen million six hundred twenty-five thousand
(15,625,000) gross gallons of ethanol produced annually at the ethanol
production facility will be eligible for the tax credits. Not more than one
hundred twenty-five million (125,000,000) gross gallons of ethanol produced at
the ethanol facility by the end of the ninety-six (96) consecutive-month period
described above shall be eligible for the tax credits.

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ETHANOL PRODUCTION CREDIT AGREEMENT                                       Page 3
Oregon Trail Ethanol Coalition, LLC

     10. OTEC must provide to the State copies of the reports filed with the
Federal Bureau of Alcohol, Tobacco and Firearms on an annual basis.

     11. This agreement may be amended to include any proposed expansion that is
not contemplated at the time of this agreement.

     12. This agreement shall not be assigned by OTEC without first receiving
written consent from the State. Such consent shall not be unreasonably withheld
and, if granted, shall be provided within thirty days of a written request for
said consent. If such consent is granted, a fully executed amendment to this
agreement reflecting the assignment shall be provided to the State no later than
ten days following the execution of the assignment.

     13. This agreement shall be binding between the parties hereto. It shall be
governed by the laws of the State of Nebraska. No oral statements, proposals, or
agreements shall be binding on either party.

     The undersigned parties hereto accept and bind themselves to the provisions
of this agreement.

     Dated this 15/th/ day of January, 2002.

                       OREGON TRAIL ETHANOL COALITION, LLC

By  /s/ Mark Jagels                  and  /s/  Mike Schardt
   ---------------------------------     --------------------------------------
         Mark Jagels                            Mike Schardt
         Co-Chair                               Co-Chair

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ETHANOL PRODUCTION CREDIT AGREEMENT                                       Page 4
Oregon Trail Ethanol Coalition, LLC

     Dated this 17/th/ day of January.

                                   NEBRASKA DEPARTMENT OF REVENUE

                                   By   /s/ Mary Jane Egr
                                      ----------------------------
                                      Mary Jane Egr
                                      State Tax Commissioner

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