Document:

[FAGEN,
                    INC. LOGO]

                	 	
                  501
                    West Hwy. 212, P.O. Box 159

                
	 	
                  www.fageninc.com

                	
                  Granite
                    Falls, MN 56241

                
	 	 	
                  320-564-3324

                
	 	 	
                  320-564-3278
                    fax

                

        

      

       

      *
        Portions omitted pursuant to a request for confidential treatment and filed
        separately with the Securities and Exchange Commission.

       

      February
        1, 2007

       

      Prairie
        Creek Ethanol, LLC

      Attention:
        Brad Davis

      c/o
        Corn
        LP

      1303
        Highway 3 East

      Goldfield,
        IA 50542

       

      Re: Prairie
        Creek Ethanol, LLC Ethanol Project

      

      Dear
        Brad:

      

      This
        letter of intent will confirm our discussions regarding the proposed terms
        and
        conditions under which Fagen, Inc. (“Fagen”)
        will
        enter into exclusive negotiations with Prairie Creek Ethanol, LLC (“Owner”)
        to
        implement the transaction described in Paragraph 1 below (the “Transaction”).
        (Fagen and Owner are referred to herein individually as a “Party”
and
        collectively as the “Parties”).
        This
        letter will constitute a letter of intent between us (the “Letter
        of Intent”)
        if
        this letter is executed and returned by you within thirty (30) days of the
        date
        hereof.

      

      The
        Parties agree to effect the Transaction subject only to the execution and
        delivery (in each case in a form satisfactory to Fagen) of a definitive
        Design-Build Agreement and other ancillary instruments and agreements (the
        “Transaction
        Documents”).
        The
        Parties agree that Transaction Documents must be executed and delivered by
        the
        parties thereto no later than December 31, 2007 (the “Closing
        Date”)
        or
        this Letter of Intent will terminate by its terms in accordance with Paragraph
        11(a) hereof. 

      

      
        	
                1.

              	
                The
                  Transaction.
                  The Parties agree that the Transaction will consist of the
                  following:

              

      

      

      
        	 	
                (a)

              	
                Fagen
                  agrees to provide Owner with those services as described in this
                  Letter of
                  Intent which are necessary for Owner to develop a detailed description
                  of
                  a one hundred (100) million gallons per year (“MGY”)
                  dry grind ethanol production facility located at Wesley, Iowa (the
                  “Plant”)
                  and to establish a price for which Fagen would provide design,
                  engineering, procurement of equipment and construction services
                  for the
                  Plant. The description of the Plant will be sufficiently detailed
                  to
                  permit an analysis of the Owner’s lump-sum cost to develop the Plant and
                  to develop an economic pro forma sufficient to determine if the
                  Plant can
                  be financed. 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          
            	
                    Prairie
                      Creek Ethanol, LLC 

                  
	
                    Letter
                      of Intent

                  
	
                    January
                      31, 2007

                  
	
                    Page
                      2 of
                      14

                  

          

        

      

       

      
        	 	
                (b)

              	
                Fagen
                  will also provide Owner with assistance in evaluating, from both
                  a
                  technical and business perspective, Owner’s organizational options, the
                  appropriate location of the Plant, and business plan development.
                  Fagen
                  will assume no risk or liability of representation or advice to
                  Owner by
                  assisting in evaluating the above and all decisions made regarding
                  feasibility, financing, and business risks are the Owner’s sole
                  responsibility and liability. Owner acknowledges that Fagen has
                  no control
                  over cost of labor, materials, equipment, or services furnished
                  by others,
                  over other contractors’ methods of determining prices, or other
                  competitive bidding or market conditions. Fagen’s estimates of project
                  construction cost will be made on the basis of its experience and
                  qualifications and will represent Fagen’s best judgment as experienced and
                  qualified professionals familiar with the construction industry.
                  Fagen
                  does not guarantee that proposals, bids, or actual construction
                  cost will
                  not vary from its estimates of project cost and Owner acknowledges
                  the
                  same. 

              

      

      

      
        	 	
                (c)

              	
                Fagen
                  will also provide Owner with conceptual design and technical information
                  required to support Owner’s application for a construction air permit
                  prior to the commencement of Plant Construction.
                  

              

      

      

      
        	 	
                (d)

              	
                If
                  Owner determines that the Plant is economically feasible and desires
                  to
                  proceed with the development of the Plant, then Owner agrees to
                  enter into
                  a Lump Sum Design-Build contract with Fagen for the design, procurement
                  of
                  equipment and construction of the Plant (the “Design-Build
                  Agreement”).
                  

              

      

      
         
 

      

      
        	 	
                (e)

              	
                Owner
                  shall offer Fagen the right to invest in the project an amount
                  up to $5.0
                  million as decided by Fagen. Such investment shall entitle Fagen
                  to one
                  seat on the board of directors. Except as set forth above, and
                  unless
                  otherwise specifically agreed between Fagen and Owner, such investment
                  shall be offered on the same terms and conditions as all other
                  investors.

              

      

      

      
        	 	
                (f)

              	
                Owner
                  agrees that the Design-Build Agreement will be Fagen’s chosen form of
                  Design-Build Agreement and will contain among other things, those
                  terms
                  and conditions set forth in the General Terms and Conditions section
                  of
                  this Letter of Intent.

              

      

      

      
        	
                2.

              	
                Contract
                  Price.
                  Owner shall pay Fagen One Hundred Twenty-eight Million Eighty-five
                  Thousand One Hundred Ninety Dollars ($128,085,190.00) (the “Contract
                  Price”)
                  as full consideration to Fagen for complete performance of the
                  services
                  described in the Design-Build Agreement and all costs incurred
                  in
                  connection therewith. 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page 3
                  of
                  14

              

      

       

      
        	 	
                (a)

              	
                The
                  Contract Price shall not include any costs related to union labor
                  or
                  prevailing wage requirements. If any action by Owner, a change
                  in
                  Applicable Law, or a Governmental Authority (as those terms are
                  defined in
                  the Design-Build Agreement) acting pursuant to a change in Applicable
                  Law,
                  shall require Fagen to employ union labor or compensate labor at
                  prevailing wages, the Contract Price shall be adjusted upwards
                  to include
                  any increased costs associated with such labor or wages. Such adjustment
                  shall include, but not be limited to, increased labor, subcontractor,
                  and
                  material and equipment costs resulting from any union or prevailing
                  wage
                  requirement; provided, however, that if an option is made available
                  to
                  either employ union labor, or to compensate labor at prevailing
                  wages,
                  such option shall be at Fagen’s sole discretion and that if such option is
                  executed by Owner without Fagen’s agreement, Fagen shall have the right to
                  terminate this Letter of Intent or the Design-Build Agreement,
                  as
                  applicable, and receive compensation pursuant to Paragraph 4(c)
                  hereof or
                  the terms of the Design-Build Agreement, whichever is
                  applicable.

              

      

      

      
        	 	
                (b)

              	
                If
                  the Construction Cost Index published by Engineering News-Record
                  Magazine
                  (“CCI”)
                  for the earlier of (i) the month in which a Notice to Proceed is
                  given to
                  Fagen or (ii) September 2007, is greater than 7887.62 (December
                  2006), the
                  Contract Price shall be increased by a percentage amount equal
                  to the
                  percentage increase in CCI over such time
                  period.

              

      

      

      
        	 	
                (c)

              	
                Due
                  to rapidly accelerating costs of certain specialty materials required
                  for
                  Plant Construction, in addition to any adjustment provided for
                  in
                  Paragraph 2(b) hereof, Fagen shall also add a surcharge to the
                  Contract
                  Price of one half of one percent (0.50%) for each calendar month
                  that has
                  passed between December 2006 and the earlier of (i) the month in
                  which a
                  valid Notice to Proceed is given to Fagen or (ii) July 2007 (said
                  calculation to include the month of July). By way of example, if
                  a valid
                  Notice to Proceed is given in July 2007 and the CCI has increased
                  two
                  percent (2%) over such period of time, the total adjustment to
                  the
                  Contract Price shall be two percent (2%) in accordance with Paragraph
                  2(b)
                  plus one half of one percent (0.50%) for each of the seven months
                  from
                  December 2006 to the delivery of a valid Notice to Proceed in accordance
                  with this paragraph, for a total adjustment of five and one half
                  percent
                  (5.5%).

              

      

      

      
        	
                3.

              	
                General
                  Terms and Conditions.
                  The consummation of the Transaction will be subject to the Design-Build
                  Agreement containing the following
                  conditions:

              

      

      

      
        	 	
                (a)

              	
                Fagen
                  will have no responsibility for and will not perform any site preparation
                  work. Owner’s site responsibilities will include, but will not be limited
                  to:

              

      

      
        	 	 	 

        	 	
                i.

              	
                Obtaining
                  land and legal authority to use the site for its intended
                  purpose;

              

      

      
        	 	 	 

        	 	
                ii.

              	
                site
                  grading including soil stabilization and the costs connected
                  therewith;

              

      

      
        	 	 	 

        	 	
                iii.

              	
                final
                  grading, seeding, and mulching;

              

      

      
        	 	 	 

        	 	
                iv.

              	
                site
                  security, including any site
                  fencing;

              

      

      
        	 	 	 

        	 	
                v.

              	
                procuring
                  boundary and topographic surveys;

              

      

      
        	 	 	 

        	 	
                vi.

              	
                procuring
                  soil borings and geotechnical
                  reports;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page 4
                  of
                  14

              

      

       

      
        	 	
                vii.

              	
                obtaining
                  all operating permits, including any fees, bonding, and required
                  testing;

              

        	 	 	 

      

      
        	 	
                viii.

              	
                obtaining
                  storm water runoff permit;

              

        	 	 	 

      

      
        	 	
                ix.

              	
                obtaining
                  any necessary pollutant elimination discharge
                  permit;

              

      

      
        	 	 	 

        	 	
                x.

              	
                 obtaining
                  a natural gas supply and service agreement and providing all gas
                  piping to
                  the use points, providing burner tip pressures as specified by
                  Fagen, and
                  supplying a digital flowmeter; 

              

        	 	 	 

        	 	
                xi.

              	
                securing temporary and permanent
                  electrical service, including all infrastructure design and installation
                  for any line/service extensions, substation, primary feed and metering
                  system, and on-site electrical distribution system up to and including
                  the
                  service transformers;

              

      

      
        	 	 	 

        	 	
                xii.

              	
                supplying
                  a water source, storage, and water supply lines of appropriate
                  quality and
                  quantity;

              

      

      
        	 	 	 

        	 	
                xiii.

              	
                paying
                  for a water pre-treatment system should the project require such
                  a system,
                  the cost of which is not included in the Contract Price, and which
                  shall
                  be provided by Fagen pursuant to a separate side-letter agreement
                  executed
                  by Owner and Fagen at Fagen’s standard time plus material rates during the
                  relevant time period and at the relevant
                  locale;

              

      

      
        	 	 	 

        	 	
                xiv.

              	
                providing
                  wastewater discharge piping, septic tank and drainfield or connect
                  to a
                  municipal system as required for the sanitary sewer requirements
                  of the
                  Plant;

              

      

      
        	 	 	 

        	 	
                xv.

              	
                providing
                  and maintain required ditches and permanent
                  roads;

              

        	 	 	 

      

      
        	 	
                xvi.

              	
                constructing,
                  furnishing, and equipping the administration
                  building;

              

      

      
        	 	 	 

        	 	
                xvii.

              	
                providing
                  maintenance and power equipment and spare
                  parts;

              

      

      
        	 	 	 

        	 	
                xviii.

              	
                providing
                  all rail design, engineering, and construction, including any railroad
                  permits or approvals;

              

      

      
        	 	 	 

        	 	
                xix.

              	
                supplying
                  drawings of rail system and administration building to Fagen;
                  and

              

      

      
        	 	 	 

        	 	
                xx.

              	
                paying
                  for the required fire protection system for the Plant (as defined
                  by
                  Fagen, and which includes but is not limited to all piping systems,
                  instrumentation, controls, fire water process storage tank, deluge
                  system,
                  and other equipment areas as required by Fagen, applicable code,
                  and
                  Owner’s selected insurance requirements), the cost of which is not
                  included in the Contract Price. Owner shall have all fire protection
                  systems and equipment ordered within thirty (30) days of Fagen’s provision
                  of all necessary specifications, as determined by Fagen. Any labor
                  or
                  materials provided by Fagen with respect to such system shall be
                  provided
                  at Fagen’s standard time plus material rates during the relevant time
                  period and at the relevant locale.

              

      

      

      
        	 	
                (b)

              	
                [*]

              

      

      

      *
        Portion
        omitted pursuant to a request for confidential treatment and filed separately
        with the Securities and Exchange Commission.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page 5
                  of
                  14

              

      

       

      
        	 	
                (c)

              	
                Fagen
                  will provide reasonable assistance to Owner in obtaining Owner’s permits,
                  approvals and licenses.

              

      

      

      
        	 	
                (d)

              	
                Owner
                  will provide: surveys describing the property’s boundaries; geotechnical
                  studies describing subsurface conditions; temporary and permanent
                  easements, zoning and other requirements and encumbrances to enable
                  Fagen
                  to perform the work; a legal description of the site; as-built
                  and record
                  drawings of any existing structures; environmental studies, reports,
                  and
                  statements describing the environmental conditions, including hazardous
                  conditions at the site.

              

      

      

      
        	 	
                (e)

              	
                Owner
                  will be responsible for securing and executing all necessary real
                  estate
                  agreements to secure the site and is responsible for all costs
                  incurred in
                  obtaining those agreements. 

              

      

      

      
        	 	
                (f)

              	
                Fagen
                  may subcontract portions of the
                  work.

              

      

      

      
        	 	
                (g)

              	
                Fagen
                  will provide up to two (2) weeks of training for Owner’s employees and, if
                  applicable, Owner’s Operator’s employees required for the operation and
                  maintenance of the Plant.

              

      

      

      
        	 	
                (h)

              	
                Owner
                  must obtain Financial Closing prior to the issuance of a Notice
                  to
                  Proceed, or if agreeable to Fagen, in its sole discretion, provide
                  Fagen
                  an acceptable Owner’s certificate containing terms and conditions
                  satisfactory to Fagen.

              

      

      

      
        	 	
                (i)

              	
                Owner
                  will pay all reasonable costs incurred by Fagen for frost removal
                  so that
                  winter construction can proceed. Such costs will be in addition
                  to, and
                  not included in, the Contract
                  Price.

              

      

      

      
        	 	
                (j)

              	
                Fagen
                  will utilize certain proprietary property and information of ICM,
                  Inc., a
                  Kansas corporation (“ICM”),
                  in the design and construction of the project, and may incorporate
                  proprietary property and information of ICM into the project. Owner’s use
                  of the proprietary property and information of ICM shall be governed
                  by
                  the terms and provisions of a license agreement between Owner and
                  ICM
                  which shall be attached as an exhibit to the Design-Build Agreement.
                  Owner
                  will be responsible for negotiating any requested changes to the
                  ICM
                  license directly with ICM, not
                  Fagen.

              

      

      

      
        	 	
                (k)

              	
                All
                  drawings, specifications, calculations, data, notes and other materials
                  and documents, including electronic data furnished by Fagen to
                  Owner under
                  the Design-Build Agreement (“Work
                  Product”)
                  will be instruments of service and Fagen will retain the ownership
                  and
                  property interests therein, including copyrights
                  thereto.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page 6
                  of
                  14

              

      

       

      
        	 	
                (l)

              	
                Upon
                  payment in full under the Design-Build Agreement, Fagen will grant
                  Owner a
                  limited license to the Work Product for use solely in connection
                  with the
                  operation, maintenance, and repair of the Plant. The limited license
                  will
                  not permit Owner to use the Work Product in connection with any
                  expansion
                  or enlargement of the Plant, however, nothing in the limited license
                  granted to Owner is intended to limit Owner’s use of the Plant’s actual
                  production capability as built.

              

      

      

      
        	 	
                (m)

              	
                [*]

              

      

      

      
        	 	
                (n)

              	
                “Substantial
                  Completion”
                  will be the date on which the Plant construction has been completed
                  to a
                  point that the Plant is ready to grind the first batch of corn
                  for
                  producing ethanol and begin operation for its intended use as a
                  one
                  hundred (100) MGY dry grind ethanol production facility. No production
                  capacity is guaranteed on the Substantial Completion date, but
                  the Plant
                  is largely completed as of that date.

              

      

      

      
        	 	
                (o)

              	
                Substantial
                  Completion will occur within Six Hundred Thirty-Five (635) days
                  after the
                  date of the Notice to Proceed.

              

      

      

      
        	 	
                (p)

              	
                Fagen
                  will be entitled to an early completion bonus for each day that
                  Substantial Completion occurs in advance of Five Hundred Forty-Five
                  (545)
                  days (“Early
                  Completion Bonus”).
                  The Early Completion Bonus is earned for achieving Substantial
                  Completion
                  early, but is not due until the final
                  payment.

              

      

      

      
        	 	
                (q)

              	
                “Final
                  Completion”
                  will be achieved once Owner reasonably determines that: Substantial
                  Completion has been achieved; any outstanding amounts owed by Fagen to
                  Owner have been paid; remaining items of work have been completed;
                  clean-up of the site has been completed; all permits required to
                  have been
                  obtained by Fagen have been obtained; certain information including
                  an
                  affidavit stating that there are no outstanding liens, a release
                  from
                  further compensation, consent to final payment, and a hard copy
                  of the
                  as-built plans (which will remain Work Product) has been provided
                  to
                  Owner; releases and waivers of all claims and liens from Fagen
                  and
                  subcontractors have been provided; and the Performance Tests have
                  been
                  successfully completed. Final Completion will occur no more than
                  ninety
                  (90) days after the actual Substantial Completion date. The 90-day
                  period
                  between Substantial Completion and Final Completion will be tied
                  directly
                  to actual Substantial Completion. By way of example, if Substantial
                  Completion is achieved 10 days early, then the 90-day period to
                  Final
                  Completion would begin on that earlier
                  date.

              

      

      

      *
        Portion
        omitted pursuant to a request for confidential treatment and filed separately
        with the Securities and Exchange Commission.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page 7
                  of
                  14

              

      

      

      
        	 	
                (r)

              	
                Fagen
                  will demonstrate certain performance guarantee criteria through
                  performance testing performed following Substantial Completion
                  but prior
                  to Final Completion (“Performance
                  Tests”).
                  Air permit testing shall be done by a third party contractor retained
                  by
                  Owner.

              

      

      

      
        	 	
                (s)

              	
                Owner
                  will take control of the Plant after completion and acceptance
                  of the
                  Performance Tests. The Performance Tests will be completed by Owner’s
                  personnel under Fagen’s direction. 

              

      

      

      
        	 	
                (t)

              	
                [*]

              

      

      

      
        	 	
                (u)

              	
                [*]

              

      

      

      
        	 	
                (v)

              	
                The
                  warranty period for work completed pursuant to the Design-Build
                  Agreement
                  will extend for one year past Substantial Completion. The Warranty
                  will
                  not apply to defects caused by abuse, alterations, or failure to
                  maintain
                  the work by persons other than Fagen or anyone for whose acts Fagen
                  may be
                  liable. The warranty period will be extended one day for each day
                  that
                  such part of the work repaired under such warranty is malfunctioning
                  or
                  not in conformance with project requirements provided that Owner
                  must
                  report such non-conformance or malfunction within seven (7) days
                  of the
                  appearance of such non-conformance or malfunction.
                  

              

      

      

      
        	 	
                (w)

              	
                [*]

              

      

      

      
        	 	
                (x)

              	
                Fagen
                  will request payment and Owner will pay Fagen in accordance with
                  the
                  following procedures:

              

      

      

      
        	 	
                i.

              	
                Fagen
                  will submit to Owner a request for payment (an “Application
                  for Payment”)
                  on or before the twenty-fifth (25th) day of each month following
                  the
                  acceptance of Notice to Proceed. Along with each Application for
                  Payment,
                  Fagen will submit to Owner signed lien waivers for the work included
                  in
                  the Application for Payment submitted for the immediately preceding
                  pay
                  period and for which payment has been received.

              

      

       

      *
        Portion
        omitted pursuant to a request for confidential treatment and filed separately
        with the Securities and Exchange Commission.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  Prairie
                    Creek Ethanol, LLC 

                
	
                  Letter
                    of Intent

                
	
                  January
                    31, 2007

                
	
                  Page 8
                    of
                    14

                

        

         

      

      
        
          
            
                

              	 	  ii. 	
                      The
                        Application for Payment will constitute Fagen’s representation that the
                        work has been performed consistent with the Transaction Documents
                        and has
                        progressed to the point indicated in the Application for
                        Payment. No
                        additional documentation will be provided to Owner in support
                        of the
                        Application for Payment. The work completed at the site and
                        the comparison
                        of the Application for Payment against the Schedule of Values
shall
                        provide sufficient substantiation to Owner of the accuracy
                        of the
                        Application for Payment. The Schedule of Values subdivides
                        the work into
                        its respective parts, includes values for all items comprising
                        the work,
                        and serves as the basis for the monthly progress
                        payments.

                    

              	 	 	 

              	 	
                      iii.

                    	
                      The
                        Application for Payment may request payment for equipment
                        and materials
                        not yet incorporated into the project
                        only if Owner is reasonably satisfied that the materials
                        and equipment are
                        suitably stored at the site or elsewhere and are protected
                        by suitable
                        insurance. Upon payment, Owner will receive title to such
                        equipment and
                        materials.

                    

              	 	 	 

            

            
              	 	
                      iv.

                    	
                      Owner
                        shall make payment within ten (10) days of receipt of the
                        Application for
                        Payment. Failure to make such payment will result in the
                        accrual of
                        interest at a rate of eighteen percent (18%) per annum commencing
                        five (5)
                        days after the payment is due. Failure to make such payment,
                        except if due
                        to appropriate withholding of payment due to a good faith
                        dispute,
                        entitles Fagen to stop work.

                    

              	 	 	 

            

            
              	 	
                      v.

                    	
                      If
                        Owner wishes to dispute any portion of the Application for
                        Payment, Owner
                        must notify Fagen in writing at least five (5) days prior
                        to the date
                        payment is due. Such notice must state the specific amounts
                        Owner intends
                        to withhold, the reasons and contractual basis for withholding,
                        and the
                        specific measures Fagen must take to rectify Owner’s concerns. Regardless
                        of a dispute as to a portion of the Application for Payment,
                        Owner must
                        pay all undisputed amounts by the payment due
                        date.

                    

              	 	 	 

            

            
              	 	
                      vi.

                    	
                      Retainage
                        on progress payments made pursuant to the Design-Build Agreement
                        will be
                        capped at five percent (5%) of the total price. Owner will
                        retain ten
                        percent (10%) of each payment up to a maximum of five percent
                        (5%) of the
                        total Contract Price. Once five percent (5%) of the total
                        price has been
                        retained, Owner will not retain any additional amounts from
                        subsequent
                        payments. Owner will release retainage, less the amount equal
                        to the value
                        of subcontractor lien waivers not yet obtained, upon completion
                        of the
                        Performance Tests.

                    

              	 	 	 

              	 	
                      vii.

                    	
                      Upon
                        Final Completion, Fagen will deliver to Owner a request for
                        final payment.
                        Owner will make the final payment within thirty (30) days
                        after the
                        receipt of such request. Owner’s failure to make Final Payment will void
                        any and all warranties, whether express or implied, provided
                        by Fagen
                        pursuant to the Design-Build
                        Agreement.

                    

            

          

        

      

       

      
        	 	
                (y)

              	
                Fagen
                  will not be responsible for any hazardous condition encountered
                  at the
                  site and may stop work in an affected area until such hazardous
                  condition
                  is removed by Owner.

              

      

      

      
        	 	
                (z)

              	
                Fagen
                  will not be responsible for differing site conditions including
                  concealed
                  or latent physical conditions or subsurface conditions and will
                  be
                  entitled to a price adjustment to the Contract Price to the extent
                  that
                  its cost and/or time of performance is adversely impacted by the
                  differing
                  site conditions. 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page
                  9 of
                  14

              

      

       

      
        	 	
                (aa)

              	
                “Force
                  Majeure Events”
                  shall mean any cause or event beyond the reasonable control of,
                  and
                  without the fault or negligence of a Party claiming Force Majeure,
                  including, without limitation, an emergency, floods, earthquakes,
                  hurricanes, tornadoes, adverse weather conditions not reasonably
                  anticipated or acts of God; sabotage; vandalism beyond that which
                  could
                  reasonably be prevented by a Party claiming Force Majeure; terrorism;
                  war;
                  riots; fire; explosion; blockades; insurrection; strike; slow down
                  or
                  labor disruptions (even if such difficulties could be resolved
                  by
                  conceding to the demands of a labor group); economic hardship or
                  delay in
                  the delivery of materials or equipment that is beyond the control
                  of a
                  Party claiming Force Majeure, and action or failure to take action
                  by any
                  governmental authority after the effective date of the Design-Build
                  Agreement (including the adoption or change in any rule or regulation
                  or
                  environmental constraints lawfully imposed by such governmental
                  authority), but only if such requirements, actions, or failures
                  to act
                  prevent or delay performance; and inability, despite due diligence,
                  to
                  obtain any licenses, permits, or approvals required by any governmental
                  authority.

              

      

      

      
        	 	
                (bb)

              	
                If
                  Fagen is delayed at any time in the commencement or progress of
                  the
                  work
                  due to a delay in the delivery of, or unavailability of, essential
                  materials or labor to the project as a result of a significant
                  industry-wide economic fluctuation or disruption beyond the control
                  of and
                  without the fault of Fagen or its subcontractors which is experienced
                  or
                  expected to be experienced by certain markets providing essential
                  materials, equipment or labor to the project during the performance
                  of the
                  work and such economic fluctuation or disruption adversely impacts
                  the
                  price, availability, and delivery timeframes of essential materials
                  and
                  equipment (such event an “Industry-Wide
                  Disruption”),
                  Fagen shall be entitled to an equitable extension of the Contract
                  Time on
                  a day-for-day basis equal to such delay and an equitable adjustment
                  to the
                  Contract Price. The Owner and Fagen shall undertake reasonable
                  steps to
                  mitigate the effect of such delays. Notwithstanding any other provision
                  to
                  the contrary, Fagen shall not be liable to the Owner for any expenses,
                  losses or damages arising from a delay, or unavailability of, essential
                  materials or labor to the project as a result of an Industry-Wide
                  Disruption.

              

      

      

      
        	
                4.

              	
                Exclusivity,
                  No Solicitation or Negotiations.
                  

              

      

      

      
        	 	
                (a)

              	
                Neither
                  Owner, nor its affiliates, shareholders, members or other equity
                  owners,
                  or their officers, representatives, agents or employees will solicit
                  or
                  negotiate, directly or indirectly, with any third party to obtain
                  the
                  services contemplated by this Letter of
                  Intent.

              

      

       

      
        	 	
                (b)

              	
                During
                  the term of this Letter of Intent the Owner agrees that Fagen will
                  have
                  the exclusive right to provide to Owner the services contemplated
                  by the
                  Letter of Intent. Developer and Owner will not disclose any information
                  related to this Letter of Intent to a competitor or prospective
                  competitor
                  of Fagen.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page
                  10 of
                  14

              

      

       

      
        	 	
                (c)

              	
                Should
                  Owner choose not to develop the project or to develop or pursue
                  a
                  relationship with a company other than Fagen to provide the preliminary
                  engineering or design-build services for the project, then Owner
                  will
                  reimburse Fagen for all expenses Fagen has incurred in connection
                  with the
                  project
                  based upon Fagen’s standard rate schedule plus all third party costs
                  incurred from the date of this Letter of Intent. Such expenses
                  include,
                  but are not limited to, labor rates and reimbursable expenses such
                  as
                  legal charges for document review and preparation, travel expenses,
                  reproduction costs, long distance phone costs, and postage.
                  

              

      

      

      
        	 	
                (d)

              	
                In
                  the event Fagen’s services are terminated by Owner, title to the technical
                  data, which may include preliminary engineering drawings and layouts
                  and
                  proprietary process related information, will remain with Fagen
                  and any
                  copies thereof will be returned to
                  Fagen.

              

      

      

      
        	 	
                (e)

              	
                Owner
                  acknowledges that the technical data provided by Fagen under this
                  Letter
                  of Intent is preliminary and may not be suitable for construction.
                  Owner
                  agrees that any use of such technical data following termination
                  of
                  Fagen’s services will be at Owner’s sole
                  risk.

              

      

      

      
        	
                5.

              	
                Confidentiality.
                  Owner will hold in confidence and will use only for the purposes
                  of
                  completing the Transaction any and all confidential information
                  disclosed
                  to it except that Owner may disclose confidential information to
                  its
                  lenders, lenders’ agents, prospective investors, advisors and/or
                  consultants as may be reasonably necessary to enable them to advise
                  Owner
                  on the Transaction, provided that any party to whom confidential
                  information is disclosed is informed of the existence of this
                  confidentiality obligation and agree to be obligated to keep such
                  information confidential. The term “confidential
                  information”
                  will mean (i) any and all information concerning the Transaction,
                  including that Fagen and Owner are negotiating the consummation
                  of the
                  Transaction, and (ii) all information which Owner, directly or
                  indirectly,
                  may acquire from Fagen, but confidential information will not include
                  information falling into any of the following
                  categories:

              

      

      

      
        	 	
                (a)

              	
                information
                  that, at the time of disclosure hereunder, is in the public
                  domain;

              

      

      

      
        	 	
                (b)

              	
                information
                  that, after disclosure hereunder, enters the public domain other
                  than by
                  breach of this Agreement or the obligation of
                  confidentiality;

              

      

      

      
        	 	
                (c)

              	
                information
                  that, prior to disclosure hereunder, was already in the Owner’s
                  possession, either without limitation on disclosure to others or
                  subsequently becoming free of such
                  limitation;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page
                  11 of
                  14

              

      

       

      
        	 	
                (d)

              	
                information
                  obtained by the Owner from a third party having an independent
                  right to
                  disclose this information; and

              

      

      

      
        	 	
                (e)

              	
                information
                  that is available through discovery by independent research without
                  use of
                  or access to the confidential information acquired from
                  Fagen.

              

      

      

      Owner’s
        obligation to maintain confidential information in confidence will be deemed
        performed if Owner observes with respect thereto the same safeguards and
        precautions which Owner observes with respect to its own confidential
        information of the same or similar kind. It will not be deemed to be a breach
        of
        the obligation to maintain confidential information in confidence if
        confidential information is disclosed upon the order of a court or other
        authorized governmental entity, or pursuant to other legal requirements.
        However, if Owner is required to file the Transaction Documents or a portion
        thereof with a governmental entity, it agrees that it will not do so without
        first informing Fagen of the requirement and seeking confidential treatment
        of
        the Transaction Documents prior to filing the documents or a portion thereof.
        Owner’s
        confidentiality obligations under this section shall survive the expiration
        or
        termination of this Letter of Intent and shall be a legally binding obligation
        of Owner for five (5) years following
        the later to occur of termination of this Letter of Intent or completion
        of the
        Plant contemplated by the Transaction Documents.

      

      
        	
                6.

              	
                Publicity.
                  Neither Owner nor any of its affiliates, shareholders, subcontractors,
                  or
                  vendors or their officers, representatives, agents and employees
                  will
                  issue any press or publicity release or otherwise release, distribute,
                  announce, or disseminate any information for publication concerning
                  the
                  Transaction, the existence of the negotiations among Fagen and
                  Owner, the
                  participation of Fagen in the Transaction, or any other matter
                  affecting
                  Fagen hereunder, without the prior written consent of Fagen, which
                  consent
                  may be withheld for any reason, except where such press or publicity
                  release is required by order of a court or necessary or appropriate
                  under
                  the rules or regulations of any governmental
                  agency.

              

      

      

      The
        Parties will jointly agree on the timing and content of any public disclosure
        by
        Owner, including but not limited to, press releases, relating to Fagen’s
        involvement in Owner’s project,
        and no
        such disclosure will be made without Fagen’s consent and approval, except as may
        be required by applicable law.

       

      
        	
                7.

              	
                Disclaimer
                  of Consequential Damages.
                  In no event will either Fagen or Owner be liable to the other pursuant to
                  this Letter of Intent, or for activities conducted under this Letter
                  of
                  Intent, under any theory of recovery for any indirect, special,
                  incidental
                  or consequential damages (including, without limitation, loss of
                  revenues
                  or profits, loss of use, cost of replacement, cost of capital and
                  claims
                  of customers, interest charges, or increased costs of nature
                  whatsoever).

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page
                  12 of
                  14

              

      

       

      
        	
                8.

              	
                Legal
                  Effect. Although
                  this Letter of Intent does not contain all matters upon which agreement
                  must be reached in order for the Transaction to be consummated,
                  Fagen and
                  Owner wish to set forth, prior to the execution of the Transaction
                  Documents, their mutual agreement as to the material terms and
                  conditions
                  of the Transaction. Each Party agrees to negotiate in good faith
                  towards
                  entering into the written, definitive and legally binding Transaction
                  Documents containing, among other terms and conditions, those terms
                  and
                  conditions set forth in this Letter of Intent including, without
                  limitation, those terms set forth in Paragraphs 2 and 3 hereof;
                  provided, however, that except as specifically identified and set
                  forth
                  herein, nothing in this Agreement shall be read to promise, guarantee,
                  or
                  otherwise secure on Owner’s behalf any specific construction start date
                  with respect to the Plant including but not limited to any pour
                  concrete
                  date, scheduling slots or dates for the delivery of design packages
                  or to
                  entitle Owner to any rights, privileges, or claims with respect
                  thereto or
                  any right, privilege, or claim to any place on Fagen’s construction
                  schedule.
                  Notwithstanding the foregoing, the provisions of this Paragraph
                  and of
                  Paragraphs 1, 4, 5, 6, 7, 10, 11, 13, 16, and 17 hereof are agreed
                  to be
                  legally binding obligations of the Parties upon the execution and
                  acceptance of this Letter of Intent.

              

      

      

      
        	
                9.

              	
                Negotiation
                  of Definitive Agreements.
                  The Transaction Documents will contain reasonable terms and conditions
                  regarding releases, payment obligations, cooperation as to tax
                  planning
                  and structuring, other financial matters, legal opinions, confidentiality,
                  limitations of liability, assignment, breach, dispute resolution,
                  events
                  of default, remedies, representations, warranties, indemnifications
                  and
                  other provisions customary for similar transactions. Time is of
                  the
                  essence in the performance of this Letter of Intent in all
                  respects.

              

      

      

      
        	
                10.

              	
                Termination.
                  This Letter of Intent will terminate on December 31, 2007 unless
                  the basic
                  size and design of the Plant have been determined and mutually
                  agreed
                  upon, a specific site or sites have been determined and mutually
                  agreed
                  upon, and at least 10% of the necessary equity has been raised.
                  This date
                  may be extended upon mutual written agreement of the Parties. Furthermore,
                  unless otherwise agreed to by the Parties, this Letter of Intent
                  will
                  terminate:

              

      

      

      
        	 	
                (a)

              	
                at
                  the option of either Fagen or Owner if the Design-Build Agreement
                  is not
                  completed and executed by the Closing Date;
                  or

              

      

      

      
        	 	
                (b)

              	
                upon
                  the execution and delivery of the Transaction
                  Documents.

              

      

      

      
        	
                11.

              	
                Governing
                  Law. This
                  Letter of Intent and Transaction are governed by, and will be construed
                  and interpreted in accordance with the laws of the State of Minnesota,
                  without regard to any conflicts of law or choice of law
                  rules.

              

      

       

      
        	
                12.

              	
                Expenses.
                  Except as set forth in Paragraph 4(c) above, unless otherwise agreed
                  by
                  Fagen and Owner, each Party will bear its own expenses in connection
                  with
                  the negotiation and execution of definitive documentation for the
                  transactions contemplated herein.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page
                  13 of
                  14

              

      

       

      
        	
                13.

              	
                Indemnification.
                  Each Party will indemnify, defend and hold harmless the other Party
                  and
                  its respective agents, servants, officers, directors, employees
                  and
                  affiliates from and against any loss, cost, liability, claim, damage,
                  expense (including reasonable attorneys’ and consultants’ fees and
                  disbursements), penalty or fine incurred in connection with any
                  claim or
                  cause of action arising from or in connection with this Letter
                  of Intent
                  to the extent caused by the negligence, misrepresentation, fraud,
                  fault or
                  misconduct of the indemnifying Party.

              

      

      

      
        	
                14.

              	
                Assignability;
                  Binding Effect; Benefit. This
                  Letter of Intent will inure to the benefit of and be binding upon
                  the
                  Parties and their respective successors and assigns. Nothing in
                  this
                  Letter of Intent, either expressed or implied, is intended to confer
                  on
                  any person other than the Parties and their respective successors
                  and
                  permitted assigns, any rights, remedies, obligations or liabilities
                  under
                  or by reason of this Letter of Intent. Neither Fagen nor Owner
                  shall,
                  without the written consent of the other, assign or transfer this
                  Letter
                  of Intent. Any sale, transfer, or disposition by Owner of over
                  fifty
                  percent (50%) of its assets or any sale, transfer, or disposition
                  of more
                  than fifty percent (50%) of Owner to any single entity by one or
                  more
                  entities holding interest in Owner shall be deemed an assignment
                  subject
                  to this paragraph. Notwithstanding any consent granted by Fagen
                  to any
                  assignment, Owner shall remain jointly liable for any failure of
                  any
                  assignee to fulfill its obligations under this Letter of Intent,
                  including
                  but not limited to any payment and confidentiality obligations
                  established
                  hereunder.

              

      

      

      
        	
                15.

              	
                Further
                  Action.
                  Each Party agrees to execute and deliver all further instruments,
                  legal
                  opinions and documents, and take all further action not inconsistent
                  with
                  the provisions of this Letter of Intent that may be reasonably
                  necessary
                  to complete performance of the Parties’ obligations hereunder and to
                  effectuate the purposes and intent of this Letter of
                  Intent.

              

      

      

      
        	
                16.

              	
                Amendments.
                  The Parties agree that this Letter of Intent may be modified only
                  by
                  written agreement by the Parties.

              

      

      

      
        	
                17.

              	
                Integration;
                  Letter of Intent.
                  This Letter of Intent represents the entire understanding between
                  the
                  Parties in relation to the subject matter hereof, and supersedes
                  any and
                  all previous agreements, arrangements or discussions between the
                  Parties
                  (whether written or oral) in respect of the subject matter hereof.
                  No
                  change, amendment or modification of this Letter of Intent will
                  be valid
                  or binding upon the Parties unless such change, amendment or modification
                  will be in writing and duly executed by both
                  Parties.

              

      

      

      
        	
                18.

              	
                No
                  Representation, Warranties 
                  or Covenants. Notwithstanding
                  anything contained herein to the contrary, Fagen is not making
                  any
                  representation, warranty or covenant of any kind with respect to
                  any
                  design, engineering or construction scheduling, or with respect
                  to
                  projections, estimates or budgets heretofore delivered to or made
                  available to Owner of future revenues, expenses or expenditures,
                  future
                  results of operations (or any component thereof) or the future
                  business
                  and operations of the Owner, nor any other commitments or assurances
                  except as may be provided in the Transaction
                  Documents.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Prairie
                  Creek Ethanol, LLC 

              
	
                Letter
                  of Intent

              
	
                January
                  31, 2007

              
	
                Page
                  14 of 14

              

      

       

      
        	
                19.

              	
                Counterparts.
                  This
                  Letter of Intent may be executed in one or more counterpart, each
                  of which
                  when so executed and delivered will be deemed an original, but
                  all of
                  which taken together constitute one and the same instrument. Signatures
                  which have been affixed and transmitted by facsimile or other electronic
                  means will be binding to the same extent as an original signature,
                  although the Parties contemplate that a fully executed counterpart
                  with
                  original signatures will be delivered to each Party.
                  

              

      

       

      
        	
                20.

              	
                Owner
                  will market its ethanol through US BioEnergy Corporation (“USBio”) for a
                  period of two (2) years from the date of Final Completion, provided
                  that
                  such obligation is contingent on Owner obtaining competitive (though
                  not
                  necessarily superior) rates and services from
                  USBio.

              

      

       

      If
        the
        foregoing terms accurately reflect your understanding of our discussions
        and are
        acceptable to you, please sign and return the enclosed counterpart of this
        Letter of Intent to the attention of Becky Dahl at Fagen.

       

      
        	 	 	Yours sincerely,
	 	
              
	 	 	Fagen, Inc.
	 
 	 
 	 
 
	: 	 	/s/ Roland
                Fagen
	 	
                
                  

                

                By:  Roland “Ron” Fagen

                Title:  President
                  and CEO

              

      

       

       

      
        	Accepted
                and
                agreed to this 1	 	 
	day of February, 2007.	 	 
	 	 	 	 
	Prairie Creek Ethanol,
                LLC	 	 	 
	 	 	 
	/s/ Clay Hansen	 	 	 
	
                

                By:
                  Clay Hansen

                Title:
                  PresidentOPTION
      AGREEMENT

    

    Option
      agreement made 26th
      day of
      May, 2006, between David
      Kirsch and Susan Kirsch, husband and wife and Darrell Kirsch and Dawn Kirsch,
      husband and wife,
      of
      Wesley, Iowa (the "Seller"), and Gold-Eagle
      Cooperative,
      of 415
      N Locust Street, PO Box 280, Goldfield, Iowa (the "Buyer").

    

    SECTION
      ONE

    

    GRANT
      OF OPTION

    

    
      	A.  	
              In
                consideration of the mutual promises of the parties, the Seller does
                hereby give and grant to the Buyer the exclusive and irrevocable
                right,
                privilege and option to purchase, under the conditions hereinafter
                provided, all of the Seller's right title and interest in the real
                property which is located in Kossuth County, State of Iowa, and more
                particularly described as follows: 

            

    

    

    The
      South
      28 acres of the following described property:

     

    The
      Northeast Quarter of the Northeast Quarter (NE 1⁄4 NE 1⁄4 ) and all of the South
      Half of the Northeast Quarter (S 1⁄2 NE 1⁄4 ) lying North of the right of way of the
      Chicago, Milwaukee and St. Paul Railway Company in Section Thirty-six (36),
      Township Ninety-six (96) North, Range Twenty-seven (27), West of the
      5th
      P.M.,
      Kossuth County, Iowa, 

     

    EXCEPT
      land conveyed to the State of Iowa for Highway purposes by Deeds recorded in
      Book 91 of Land Deeds at page 601, and in Book 91 of Land Deeds at page 599,
      and

     

    EXCEPT
      a
      tract of land in the Southeast corner of the Northeast Quarter (NE 1⁄4) beginning
      at the intersection of the West right of way line of Iowa Highway 60 and the
      North right of way line of the Chicago, Milwaukee, St. Paul and Pacific Railway
      Company,

     

    Thence
      North along the highway right of way line 475 feet;

     

    Thence
      West at right angles 200 feet;

     

    Thence
      South parallel to the highway right of way line 498.23 feet to the North line
      of
      the railroad right of way; 

     

    Thence
      Northeasterly along the railroad right of way line 201.4 feet to the point
      of
      beginning; and 

     

    EXCEPT
      a
      tract of land commencing at the Northwest corner of the Northeast Quarter of
      the
      Northeast Quarter (NE 1⁄4 NE 1⁄4 ), thence East 414 feet, thence South 447 feet,
      thence West 414 feet, thence North 447 feet to the point of beginning, all
      in
      Section Thirty-six (36), Township Ninety-six (96) North, Range Twenty-seven
      (27), West of the 5th
      P.M.,
      Kossuth County, Iowa. 

    

    (the
      "Property").

    

    B.
      All
      deposits and payments made by the Buyer to the Seller pursuant to this Agreement
      prior to the Closing (either directly or through an escrow agent, if any) shall
      be applied towards the Purchase Price of the Property with the exception of
      $4,200.00 which shall be paid to Seller at the time of execution of this
      Agreement This payment shall be non-refundable and shall not apply to the
      purchase price. The Seller fully agrees and acknowledges that the consideration
      given by the Buyer constitutes legal, adequate, and valuable consideration
      for
      the purposes of this Agreement.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    C.
      The
      purchase price for the Property shall be $5,000 per acre, (the "Purchase Price")
      for acres purchased. Total consideration shall be $140,000.00 for approximately
      28 acres, more or less. If more acres are required, additional consideration
      shall be at the rate of $5,000 per acre. Buyer shall pay a $4,200.00
      non-refundable payment which has been paid by the Buyer, receipt of which is
      acknowledged by the Seller upon execution of this Agreement. The Purchase Price
      shall be paid by the Buyer at closing to be determined by the number of acres
      Buyer shall option. 

    

    Sellers
      at their option may require that Buyer at closing, in lieu of payment of the
      Purchase Price, convey to Sellers the Northwest Quarter of the Northeast Quarter
      (NW1/4 NE1/4) of Section Thirty-six (36), Township Ninety-six (96) North, Range
      Twenty-seven (27), West of the 5th
      P.M.,
      Kossuth County, Iowa. In the event that the tillable acres sold to Buyer
      pursuant to this Agreement is less than the tillable acres in the Northwest
      Quarter of the Northeast Quarter (NW1/4 NE1/4) of Section Thirty-six (36),
      Township Ninety-six (96) North, Range Twenty-seven (27), West of the
      5th
      P.M.,
      Kossuth County, Iowa conveyed to Sellers, Sellers shall pay to Buyer as boot
      $4,000.00 per tillable acre for the additional acres conveyed to Sellers. This
      purchase shall be structured as a simultaneous exchange resulting in deferral
      of
      recognition capital gain tax to the Sellers.

    

    D.
      The
      "Effective Date" shall be the date that the last of the parties to this
      Agreement signs and executes below.

    

    SECTION
      TWO

    

    OPTION
      TERMS

    

    A.
      The
      Seller, in consideration for the payment of the Option Deposit and other
      consideration, does hereby give to the Buyer the exclusive right and option
      to
      purchase the Property described above (the "Option").

    

    B.
      The
      Buyer shall have the right to exercise this Option during a period of time
      beginning at execution of this Agreement on the Effective Date and lasting
      until
      noon on the 10th
      day of
      April, 2008. The Buyer shall exercise this option by giving written notice
      by
      registered mail to the Seller at the address indicated above (the letter must
      be
      delivered to Seller by the time and date indicated above) or by hand delivering
      written notice to the Seller (with the Seller giving the Buyer a written receipt
      indicating the time and date of receipt). The date that the Seller receives
      this
      notice shall be known as the "Date of Commencement."

    

    SECTION
      THREE

    

    PROMISES
      OF PARTIES FOLLOWING EXERCISE OF OPTION

    

    Subject
      to the Buyer exercising this Option, the Seller and the Buyer agree that the
      Seller shall sell and the Buyer shall buy the Property upon the following terms
      and conditions. 

    

    A.
      Representations and Warranties

     

    To
      induce
      the Buyer to enter into this Agreement, the Seller makes the following
      representations, warranties, and covenants:

    

    1.
      Seller
      has good and marketable fee simple title to the Property, free and clear of
      all
      liens, property taxes, encumbrances, and restrictions, except for those
      restrictions appearing of record, taxes for the year of closing, encumbrances
      that will be cleared prior to closing, and encumbrances that will be cleared
      at
      the closing out of the Seller's proceeds from the Purchase Price.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    2.
      There
      are no condemnations or similar proceedings affecting any part of the Property
      and no such proceeding shall be pending on the Closing Date. To the best of
      the
      Seller's knowledge, no such condemnations or other proceeds are threatened
      or
      planned.

    

    3.
      There
      are no toxic wastes on, in or around the Property and the Property has not
      been
      used to manufacture, store, or dispose of environmentally hazardous
      materials

    

    4.
      There
      are no service contracts or agreements relating to the operation, maintenance,
      or security of the property under which the Seller is bound and which will
      survive the closing.

    

    5.
      All
      encroachments, reservations, limitations, road right of ways, or servitudes
      affecting the Property are disclosed in the Public Records.

    

    6.
      The
      Seller is not subject to any commitment, obligation, or agreement, including,
      but not limited to, any right of first refusal or option to purchase, granted
      to
      a third party, which would or could prevent the Seller from completing the
      sale
      of the Property as contemplated by this Agreement.

    

    7.
      Seller
      shall be in sole and exclusive possession of the Property and will deliver
      possession of the Property free of all leases on the Closing Date.

    

    B.
      Conditions Precedent

     

    The
      obligations of the Buyer to close this transaction are subject to the Buyer
      having given Notice to Purchase and subject to the following:

    

    1.
      All
      representations and warranties of the Seller shall be true and correct as of
      the
      Closing Date as if such representations and warranties were being made on such
      date.

    

    2.
      Seller
      shall have performed all covenants to be performed by the Seller as is herein
      provided.

    

    3.
      The
      Property shall be vacant and any tenant relocation costs shall be incurred
      by
      the Seller.

    

    4.
      If any
      of such conditions are not fulfilled on or as of the Closing Date, and
      notwithstanding anything to the contrary in this Agreement, the Buyer shall
      have
      the right to terminate this Agreement and to obtain a full refund of any
      deposits made to the Seller or escrow agent whereupon all parties shall be
      relieved of any further obligations hereunder.

    

    C.
      Clear
      Title

    

    1.
      Within
      90 days of the execution of this Agreement by the Seller, the Seller shall
      deliver to the Buyer any abstracts of title and surveys for the Property that
      are in the Seller's possession or which the Seller might obtain possession
      of by
      reasonable efforts. The Buyer shall return to these items to the Seller if
      the
      closing never occurs and this Contract is terminated. At closing, the Seller
      shall pay for any update of the abstract of title information that might be
      necessary so as to enable the Buyer to obtain clear title for the
      Property.

    

    2.
      Seller
      shall convey a marketable title, subject only to liens, encumbrances,
      exceptions, or qualifications set forth in this Agreement and those which shall
      be discharged by Seller at or before closing. Marketable title shall be
      determined according to applicable title standards adopted by authority of
      the
      Iowa State Bar Association and in accordance with law. 
       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    3.
      If the
      Buyer discovers that the title is defective, the Buyer shall notify the Seller
      in writing specifying the defect(s). If the defect(s) render the title
      unmarketable or uninsurable the Seller will have 120 days from receipt of notice
      within which to remove the defect(s), and if the Seller is unsuccessful in
      removing them within such time, the Buyer shall have the option of either
      accepting the title as it then is, or demanding a refund of all monies paid
      hereunder which shall forthwith be returned to the Buyer and thereupon the
      Buyer
      and the Seller shall be released as to one another of all further obligations
      under this Agreement. All expenses to clear title defects shall be paid by
      the
      Seller.

    

    D.
      Closing

    

    1.
      This
      transaction shall be closed and the deed and other closing papers delivered
      within 90 days following the Date of Commencement of this Agreement (the
      "Closing Date") unless extended by other provisions of this Contract or by
      the
      mutual consent of both parties. The closing date shall be set by mutual
      agreement after Buyer notifies Seller that it will exercise its option. The
      closing shall be held in Goldfield, Wright County, Iowa, at the office of the
      attorney or other closing agent designated by the Buyer.

    

    2.
      At
      closing the Buyer shall pay the cash portion of the Purchase Price by bank
      cashier's check or certified check either of which shall be issued by and drawn
      on a local institution and the Seller shall furnish the deed, an absence of
      lien
      affidavit, non-foreign status affidavit, and any corrective instruments that
      may
      be required in connection with perfecting the title. The Buyer shall furnish
      the
      closing statement.

    

    3.
      The
      Seller shall pay the following closing costs: state documentary stamps, the
      cost
      of recording any corrective instruments and continuation of abstract of title.
      The Buyer shall pay the cost of recording the deed, abstracting and the cost
      for
      recording the purchase money mortgage (if any).

    

    E.
      Restrictions; Easements; Limitations

     

    The
      Buyer
      shall take title subject to: zoning, restrictions, prohibitions, and other
      requirements imposed by governmental authority; restrictions and matters
      appearing on the plat or otherwise common to the subdivision; public utility
      easements of record; taxes for year of closing and subsequent years; assumed
      mortgages and purchase money mortgages, and the following other exceptions
      (if
      any): provided, however, that there exists at closing no violation of the
      foregoing and the same does not prevent the use of the property for
      manufacturing and refining purposes.

    

    F.
      Survey

     

    The
      Buyer, at the Buyer's expense, within 120 days following the Date of Notice
      of
      Exercising its Option, shall have the Property surveyed and certified by a
      registered Iowa surveyor. 

    

    G.
      Liens

     

    The
      Seller shall furnish to the Buyer at time of closing an affidavit attesting
      to
      the absence, unless otherwise provided for herein, of any financing statements,
      claims of lien or potential lienors known to the Seller and further attesting
      that there have been no improvements or repairs to the Property for 90 days
      immediately preceding the date of closing in a form satisfactory to the Buyer.
      If the Property has been improved, or repaired within such time, the Seller
      shall deliver releases or waivers of mechanic's liens, executed by all general
      contractors, subcontractors, suppliers, and materialmen, in addition to the
      Seller's lien affidavit setting forth the names of all such general contractors,
      subcontractors, suppliers, and materialmen and further reciting that in fact
      all
      bills for work to the Property or personalty which could serve as a basis for
      a
      mechanic's lien or a claim for damages have been paid or will be paid at
      closing.

    

    H.
      Prorations

     

    Taxes
      and
      assessments (if any) shall be prorated through the day to the closing. Cash
      at
      closing shall be increased or decreased as may be required by said prorations.
      All prorations will be made through the day prior to occupancy if occupancy
      occurs before closing. Taxes shall be prorated based on the current year's
      tax
      with due allowance made for maximum allowable discount and homestead or other
      exemptions if allowed for said year. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    I.
      Special Assessment Liens

     

    Certified,
      confirmed, and ratified special assessment liens as of the date of closing
      (and
      not as of Effective Date) are to be paid by the Seller. Pending liens as of
      the
      date of closing shall be assumed by Buyer, provided, however, that if the
      improvement has been substantially completed as of the Effective Date, such
      pending lien shall be considered as certified, confirmed, and ratified and
      the
      Seller shall, at closing, be charged an amount equal to the last estimate by
      the
      public body of assessment for the improvement.

    

    J.
      Attorney's Fees; Costs

     

    In
      connection with any litigation arising out of this Agreement, the prevailing
      party shall be entitled to recover reasonable attorney's fees and
      costs.

    

    K.
      Contract Not Recordable; Persons Bound; Notice

     

    Neither
      this Agreement nor any notice thereof shall be recorded in any public records.
      This Agreement shall bind and inure to the benefit of the parties hereto and
      their successors in interest. Whenever the context permits, singular shall
      include plural and one gender shall include all. Notice given by or to the
      attorney for any party shall be as effective as if given by or to the
      party.

    

    L.
      Occupancy

     

    Seller
      represents that there are no parties in occupancy other than the Seller. Seller
      agrees to deliver occupancy of the property at the time of closing unless
      otherwise stated herein. If occupancy is to be delivered prior to closing,
      Buyer
      assumes all risk of loss to the Property and personalty for the date of
      occupancy, and shall be responsible and liable for maintenance thereof from
      such
      date, and shall be deemed to have accepted the Property and personalty in their
      existing condition as of the time of taking occupancy unless otherwise stated
      herein or in a separate writing.

    

    M.
      Conveyance

     

    Seller
      shall convey title to the Property by statutory warranty, trustee, personal
      representative, or guardian deed, as appropriate to the status of the Seller,
      subject only to matters contained in Section C hereof and those otherwise
      accepted by Buyer.

    

    N.
      Other
      Agreements

     

    a.
       In
      the
      event this option is exercised where growing crops are damaged or removed,
      Buyer
      shall reimburse Seller for the fair and reasonable value of such crops. Fair
      and
      reasonable value shall be determined and calculated by the estimated lost yield
      times the average price at the Wesley elevator for the month of March following
      the destruction of the crop.

     

    b.
       Buyer
      will cooperate and help facilitate for the Seller simultaneously an Internal
      Revenue Service 1031 Tax Free Exchange for other farmland within the area.
      Specifically, Seller would like to exchange for land located on the west side
      of
      Ann Studer’s acreage along Highway 18. If the Seller elects to pursue an IRS
      1031 Tax Free Exchange. 

     

    c.
       Seller
      will provide to Buyer a copy of the existing tile map for the entire Kirsch
      farm
      to be used in designing of the drainage system for the ethanol plant. This
      will
      facilitate Buyer in planning and providing a good outlet for drainage tile
      from
      the Kirsch property. It is agreed by Buyer to provide an adequate drainage
      outlet over and across the land to be acquired by Buyer to drain Buyer’s land
      and to drain the land retained by the Sellers and the land to be acquired by
      the
      Sellers in the simultaneous 1031 Exchange. Buyer shall pay for the cost of
      the
      outlet. Seller shall pay for the cost to connect the drainage lines to drain
      their land to the main drainage outlet to be installed by the Buyer. Sellers
      shall be granted and easement over and across the land to be acquired to Buyer
      for Sellers’ drainage lines. Buyer will maintain and repair such drain lines
      that are located on Buyer’s property. Sellers shall be granted an access
      easement to Buyer’s property to have access from the south edge of Sellers’
property to deliver grain and for ingress and egress from Sellers’ property
      subject to any regulatory requirements or restrictions including but not limited
      to, the Department of Natural Resources environmental requirements.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    d.
       Currently,
      this option contemplates that Buyer will utilize 28 acres for the ethanol plant.
      It is understood between the parties since the ethanol plant is in the initial
      stages, the actual amount of acres are not known at this time. The number of
      actual acres purchased may be more or less depending upon the needs of the
      ethanol plant. 

     

    e.
       Any
      farmland that is not utilized by the ethanol plant or the construction of the
      ethanol plant that remains tillable farmland will be offered to David Kirsch
      and
      Darrel Kirsch for a fair and reasonable cash rent. Fair and reasonable rent
      shall be determined by the average cash rent medium grade land as published
      by
      the Iowa State University Extension for Kossuth County for tillable acres.
      

     

    f.
       No
      prior
      or present agreements or representations shall be binding upon Buyer or Seller
      unless included in this Agreement. No modifications or changes in this Agreement
      shall be valid or binding upon the parties unless in writing and executed by
      the
      party or parties to be bound thereby.

    

    O.
      Typewritten or Handwritten Provisions

     

    Typewritten
      or handwritten provisions inserted herein or attached hereto as addenda shall
      control all printed provisions of this contract in conflict
      therewith.

     

    The
      parties have executed this agreement at their respective addresses the day
      and
      year first above written.

    

    THIS
      IS
      INTENDED TO BE A LEGALLY BINDING CONTRACT. DO NOT SIGN IF THERE ARE BLANK SPACES
      NOT FILLED IN. IF NOT FULLY UNDERSTOOD, SEEK THE ADVICE OF AN ATTORNEY PRIOR
      TO
      SIGNING.

    

    
      	
              Dated:
                5/26/06

            	 	 	 
	 	 	 	 
	BUYER	 	 	SELLER
	 	 	 	 
	GOLD-EAGLE
              COOPERATIVE	 	 	/s/ David Kirsch   
	 	 	 	
              
David
              Kirsch
	By:
              /s/ Mark Wigans 	 	 	
            
	
              
                

              

              Its:
                President    

            	 	 	/s/ Susan
              Kirsch  
	
               

            	 	 	
              

              Susan
                Kirsch

            
	 	 	 	 
	 	 	 	/s/ Darrell Kirsch
	 	 	 	
              
Darrell
              Kirsch
	 	 	 	 
	 	 	 	
              /s/
                Dawn Kirsch   

            
	 	 	 	
              
                

                Dawn
                  Kirsch

              

            

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	 STATE OF IOWA	)	 
	 	)
              SS:	 
	 COUNTY OF  Wright	)	 

    

     

    On
      this
30th
      day of
      May 2006,
      before
      me, the undersigned, a Notary Public in and for said County and State,
      personally appeared Mark Wigans, to me personally known, who, being by me duly
      sworn, did say that he/she is the he
      of
      said
      corporation; that said instrument was signed on behalf of said corporation
      by
      its authority; and that the said ______ as
      such
      officer acknowledged the execution of said instrument to be the voluntary act
      and deed of said corporation, by it and by him/her voluntarily
      executed.

     

    
      
        	
                7-31-07

              	 	 	
                /s/
                  Janis Douglas

                
                  

                

                Notary
                  Public in and for the State

              

      

       

      
        	 STATE OF IOWA	)	 
	 	)
                SS:	 
	COUNTY
                OF  Hancock	)	 

      

    

    

    On
      this
      26th
      day of
      May 2006, before me, the undersigned, a Notary Public in and for said State,
      personally appeared David
      Kirsch and Susan Kirsch, husband and wife, known
      to
      be the identical persons named in and who executed the foregoing instrument
      and
      acknowledged that they executed the same as their voluntary act and deed.

    
       

      
        	
                [SEAL]

              	
                DAVID
                  J. SIEGRIST

                COMMISSION
                  NO. 123331

                MY
                  COMMISSION EXPIRES

                May
                  12, 2009

              	 	 	
                
                  /s/
                    David J. Siegrist

                

                
                  

                

                Notary
                  Public in and for Said State

              

      

       

    

    
      
        	 STATE OF IOWA	)	 
	 	)
                SS:	 
	COUNTY
                OF  Hancock	)	 

      

       

    

    On
      this
      26 day of May 2006, before me, the undersigned, a Notary Public in and for
      said
      State, personally appeared Darrell
      Kirsch and Dawn Kirsch, husband and wife, known
      to
      be the identical persons named in and who executed the foregoing instrument
      and
      acknowledged that they executed the same as their voluntary act and deed.

    
       

      
        	
                [SEAL]

              	
                DAVID
                  J. SIEGRIST

                COMMISSION
                  NO. 123331

                MY
                  COMMISSION EXPIRES

                May
                  12, 2009

              	 	 	
                
                  /s/
                    David J. Siegrist

                

                
                  

                

                Notary
                  Public in and for Said State

              

      

      
         

        
          
            
            

          

          
            7

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