Document:

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                                                                    EXHIBIT 10.3

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                (Above space reserved for recording information)

                                OPTION AGREEMENT

         IN CONSIDERATION of the sum of One and 00/100 dollars ($1.00) and other
good and valuable consideration ("Option Price"), the receipt of which is here
by acknowledged, Earl & Cheryl Nellermoe, husband and wife and Daryl Nellermoe,
a single person, (collectively "Owners") grant to Granite Falls Community
Ethanol Plant, LLC, (GFCEP), an exclusive option ("Option") to purchase
approximately 25.3 acres more or less of real property described as follows, to
wit:

         Part of the East one-half of the Northeast Quarter (E 1/2NE 1/4) of
         Section One (1), Township One Hundred Fifteen (T115N), Range
         Thirty-Nine (R39W), Excepting therefrom the right of way of Minnesota
         Highway 23

Located in Chippewa County, Minnesota, (the "Option Property") and on the terms
and conditions set forth below:

         1. TIME TO EXERCISE OPTION. This Option shall be exercised at any time
by written notice delivered to Owners by certified mail postmarked no later than
December 31, 2004, or by personally delivering the notice to Owners no later
than December 31, 2004 at 5:00 p.m. This Option is exclusive to GFCEP for the
duration of the Option period and Owners shall not grant any options or agree to
sell, grant or otherwise convey any other interest in the Option Property to any
other persons or entities at any time while the Option granted herein remains
exercisable. The term, duration and period of the Option shall run from the date
of execution hereof until 5:00 p.m. on December 31, 2004.

         2. LAND PURCHASE PRICE. The purchase price, in the event of the
exercise of the Option shall be in the sum of One Hundred Sixty Eight Thousand
and 00/100 Dollars ($168,000.00), which includes the Option Price set forth
above.

         3. TEST AND INVESTIGATIONS ON PROPERTY. GFCEP shall, at GFCEP's sole
costs and expenses, have the right to conduct tests and investigations on the
Option Property prior to the time of exercise of this Option. GFCEP agrees to
indemnify and hold Owners harmless from and against all costs, expenses,
damages, claims, and causes of action arising out of GFCEP's activities on the
Option Property prior to the time of exercise of the Option. GFCEP's activities
on the Option Property may include, but not be limited to:

         a.       Soil test and soil borings.

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         b.       Any well drilling or other tests with respect to investigation
                  of the adequacy and quality of water resources.

         c.       Any search of the Option Property or property of owners
                  adjacent thereto for purposes of verifying that no abandoned
                  wells are in existence within the vicinity of the facility.

         d.       The parties understand that the foregoing tests are intended
                  to include but do not limit GFCEP from performing all other
                  tests and investigations as may be necessary to determine the
                  suitability of the Option Property for construction and
                  operation of an Ethanol plant and related facilities and
                  fixtures (the "Plant").

         e.       GFCEP agrees that the testing and investigation shall be
                  conducted, to the extent reasonably possible at a time and in
                  a manner so as to not unduly interfere with farming operations
                  being conducted on or about the Option Property. To the extent
                  any crop damage occurs as a result of GFCEP's testing or
                  investigation, GFCEP agrees to reimburse Owners $300/Acre for
                  the damaged crop.

4. PRELIMINARY WORK. Prior to exercising its Option, GFCEP may, after notifying
Owners, perform such preliminary earth moving or other initial site preparation
or other investigation of the site so long as GFCEP provides financial assurance
to Owners that is adequate to restore the Option Property if the Option is not
exercised by GFCEP.

5. PERMITTING. Owners understand that GFCEP will be required to obtain permits
and/or certifications from Federal, State, County and/or local governmental
units prior to construction and operation of the Plant. Owners agree to permit
GFCEP to do such things as may be necessary to obtain such permits and agrees to
offer reasonable assistance in providing any information or complying with any
directives or orders issued or otherwise required by said governmental units
which may arise during any permitting or approval process.

6. SURVEY AND ROAD. The parties agree that on or before closing, they must
mutually agree on:

         a.       A survey of 25.3 acres more or less describing the property
                  which is the subject matter of this Option.

         b.       Enter into an Agreement with respect to maintenance, upkeep
                  and repair of any driveway servicing the property and the
                  costs of any such maintenance which shall be allocated on the
                  basis of usage made to the driveway by the respective parties.

7. CLOSING. The closing shall take place at such time and place mutually agreed
to between the parties within thirty (30) days of completion of the survey of
the Option property and following GFCEP's exercise of this Option. In the event
that GFCEP exercises this Option, then Owners shall immediately forward to GFCEP
(at Owner's expense) an updated abstract for examination of title. GFCEP shall
be allowed 20 days after receipt of the abstract to make any objections with
regard to title which shall be made in writing and delivered to the Owners. If
any objections are made, Owners shall have 90 days to make title marketable.
Pending correction of title, the date of closing shall be postponed, but upon
correction of title within ten days after written notice thereof to GFCEP, the
closing shall be held. If title is not corrected, to the reasonable satisfaction
of GFCEP, within the time provided for herein, then at GFCEP's Option, this
Agreement shall be null and void and the Option Price shall be refunded to it.

8. MISCELLANEOUS.

         a.       POSSESSION. Possession shall be delivered to Granite Falls
                  Community Ethanol Plant, LLC at closing.

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         b.       CLOSING COSTS. Each party shall be responsible for paying
                  those expenses normally paid by a purchaser or seller of like
                  kind real estate in the State of Minnesota.

         c.       TAXES AND ASSESSMENTS.

                  i.       All real estate taxes and assessments due and payable
                           in the year of closing shall be pro rated between the
                           parties.

                  ii.      In the event that the sale of the Option Property
                           accelerates the payment of real estate taxed and any
                           other special assessments on Owner's property other
                           than the Option Property, then Owners agree that all
                           such accelerated taxes shall be paid by Owners at the
                           time of closing.

         d.       CROPS. If the date of closing occurs and there are growing
                  crops on the Option Property, then Granite Falls Community
                  Ethanol Plant, LLC may, at its option, do the following

                  i.       Take title of the growing crops on the Option
                           Property, and pay Owners the mutually agreed value of
                           such crops, or

                  ii.      Permit Owners to enter upon the Option Property and
                           promptly harvest such crops for Owner's sole benefit.

         e.       WARRANTY. Owners represent and warrant that they are the sole
                  fee title owners of the Option Property. Owners further
                  represent and warrant that there are no active or abandoned
                  wells or underground storage tanks on the Option Property.

         f        EXPIRATION. If GFCEP does not exercise the Option granted
                  hereunder, this Agreement shall terminate upon the expiration
                  of the Option term and GFCEP will deliver to Owners an
                  instrument in writing and in recordable form acknowledging the
                  termination of this Agreement and the non-exercise of its
                  Option to purchase. In addition, GFCEP agrees to pay Owners a
                  sum of $7,222.00 (Seven thousand two hundred twenty two
                  dollars) to cover Owners' cost for property title transfer.
                  Upon such payment, this Agreement shall be null and void and
                  neither party shall have any claim or further responsibility
                  to or for the other.

         g.       NOTICES. All notice and other communications required or
                  permitted to be given or served under this Agreement shall be
                  in writing and shall be deemed to have been duly given if
                  delivered in person or deposited in the U.S. Mail, postage
                  prepaid, for mailing by certified mail, return receipt
                  requested, as follows:

                           OWNERS:

                           Earl & Cheryl Nellermoe
                           12798 U. S. Hwy. 212
                           Sacred Heart, MN  56285

                           Daryl Nellermoe
                           316 Oehlke Avenue
                           Enderlin, ND 58027

                           GRANITE FALLS COMMUNITY ETHANOL PLANT, LLC
                           c/o Paul Enstad
                           P.O. Box 216
                           2448-540th Street, Suite1
                           Granite Falls, MN  56241-0216

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         h.       SUCCESSORS BOUND. This Agreement is binding upon the heirs,
                  successors and assigns of the parties. Any assignment of this
                  Option Agreement by either party shall require the advance
                  written consent of the other.

Dated this _____ day of February, 2003.

                                   OWNERS

                                            /s/ Earl Nellermoe
                                   -------------------------------------------
                                   Earl Nellermoe

                                            /s/ Cheryl Nellermoe
                                   -------------------------------------------
                                   Cheryl Nellermoe

                                            /s/ Daryl Nellermoe
                                   -------------------------------------------
                                   Daryl Nellermoe

                                   GRANITE FALLS COMMUNITY ETHANOL
                                   PLANT, LLC

                                   By:      /s/ Paul Enstad
                                       ---------------------------------------

                                       Its:          Chairman
                                            ----------------------------------

State of Minnesota              )
                                ) ss.
County of Yellow Medicine       )

         On the 21st day of February, 2003, Before me, personally appeared Paul
Enstad, to me personally known, who, being by me duly sworn, did say that he is
the Chairman of Granite Falls Community Ethanol Plant, LLC, the limited
liability named in the foregoing instrument, and that said instrument was signed
and sealed on behalf of said limited liability company by authority of its
Governors, and said Paul Enstad, Acknowledged said instrument to be the free act
and deed of said limited liability company.

                                             /s/ Michele L. Lund
                                    -------------------------------------------
                                    Notary Public

State of Minnesota              )
                                ) ss.
County of Renville              )

         The foregoing instrument was acknowledged before me this 18 day of
March, 2003, by Earl Nellermoe and Cheryl Nellermoe, husband and wife.

                                             /s/ Michele S. Mahlum
                                    -------------------------------------------
                                    Notary Public

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State of North Dakota           )
                                ) ss.
County of Ransom                )

         The foregoing instrument was acknowledged before me this 14th day of
March, 2003, by Daryl Nellermoe, a single person.

                                             /s/ Debra Thielges
                                    -------------------------------------------
                                    Notary Public<PAGE>

                                                                    EXHIBIT 10.1

                             FIFTH OMNIBUS AMENDMENT

         THIS FIFTH OMNIBUS AMENDMENT (this "Amendment"), dated as of December
19, 2003, is entered into, by and among CH FUNDING, LLC, (the "Borrower"),
CREDIT LYONNAIS NEW YORK BRANCH, as the Administrative Agent (the
"Administrative Agent"), as a Bank and as a Managing Agent, U.S. BANK NATIONAL
ASSOCIATION, as the Collateral Agent ("U.S. Bank"), BANK ONE, NA (MAIN OFFICE
CHICAGO), a national bank, (together with its successors and assigns, "Bank
One"), as a Bank and as a Managing Agent, LLOYDS TSB BANK PLC, a banking
corporation organized under the laws of England (hereinafter, together with its
successors and assigns, "Lloyds"), as a Bank, DANSKE BANK A/S, Cayman Islands
Branch (together with its successors and assigns, "Danske"), as a Bank, and CH
MORTGAGE COMPANY I, LTD., (the "Servicer"). Capitalized terms used and not
otherwise defined herein are used as defined in the related Operative Documents
(as defined below).

                                    RECITALS

         WHEREAS, CH Mortgage Company I, Ltd., as the Seller, and CH Funding,
LLC, as the Purchaser, entered into that certain Master Repurchase Agreement and
Addendum to the Master Repurchase Agreement incorporated therein, dated as of
July 9, 2002, as amended by the Omnibus Amendment, dated as of August 26, 2002,
by and among the Borrower, Atlantic Asset Securitization Corp. ("Atlantic"), the
Administrative Agent, and the Servicer (the "First Omnibus Amendment") and the
Second Omnibus Amendment, dated as of November 25, 2002, by and among the
Borrower, Atlantic, the Administrative Agent and the Servicer (the "Second
Omnibus Amendment") (as the same may be amended, restated, supplemented or
modified from time to time, the "Repurchase Agreement");

         WHEREAS, the Borrower, the Administrative Agent and U.S. Bank entered
into that certain Collateral Agency Agreement, dated as of July 9, 2002, as
amended by the First Omnibus Amendment and the Second Omnibus Amendment (the
"Collateral Agency Agreement");

         WHEREAS, CH Funding, LLC, as Debtor, Credit Lyonnais New York Branch,
as Administrative Agent, U.S. Bank and the Servicer entered into that certain
Security Agreement dated as of July 9, 2002, as amended by the Third Omnibus
Amendment dated as of April 18, 2003 by and among the Borrower, Atlantic, the
Administrative Agent and the Servicer (the "Third Omnibus Amendment") (as the
same may be amended, restated, supplemented or modified from time to time, the
"Security Agreement"); and

         WHEREAS, the Borrower, Atlantic, Falcon Asset Securitization
Corporation ("Falcon"), Bank One, Lloyds, the Administrative Agent, and the
Servicer, have entered into that certain Amended and Restated Loan Agreement
dated as of July 25, 2003, which incorporates those amendments contained in the
First Omnibus Amendment, the Second Omnibus Amendment and the Third Omnibus
Amendment and completely replaces and supplants the foregoing Omnibus Amendments
(as the same may be amended, restated,

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supplemented or modified from time to time, the "Loan Agreement" and,
collectively with the Repurchase Agreement, the Collateral Agency Agreement and
the Security Agreement, the "Operative Documents);

         WHEREAS, the Borrower, the Administrative Agent, U.S. Bank and the
Servicer have entered into that certain Fourth Omnibus Amendment, dated as of
July 25, 2003 which completely replaced and supplanted the foregoing Omnibus
Amendments; and

         WHEREAS, the parties hereto desire to further amend the Operative
Documents as hereinafter set forth in this Fifth Omnibus Amendment.

         NOW, THEREFORE, the parties agree as follows:

Section 1. Amendment to Repurchase Agreement.

         a.       The definition of "Advance Rate" in the Repurchase Agreement
is hereby amended by deleting the words "a Subprime Loan or" in clause (iii)
thereof.

         b.       The definition of "Collateral Value" in the Repurchase
Agreement is hereby amended by deleting clause (B)(d) thereof.

         c.       The definition of "Eligible Mortgage Loan" in the Repurchase
Agreement is hereby amended by deleting the words ", a Subprime Loan" in clause
(b) thereof.

         d.       The definition of "Non-Conforming Loan" in the Repurchase
Agreement is hereby amended by deleting the words "a Subprime Loan," therein.

         e.       The definition of "Subprime Loan" in the Repurchase Agreement
is hereby deleted in its entirety.

         f.       Section 6.2 of the Repurchase Agreement is amended as follows:

                  1)       By deleting the following in paragraph (A):

                  provided, that at no time shall the Collateral Value of
                  Mortgage Notes which have been so delivered and have not been
                  replaced with corrected Mortgage Notes hereunder exceed
                  $5,000,000. If the corrected Mortgage Note is not received
                  within such time, then, beginning on the first Business Day
                  following such fourteenth calendar day, the Collateral Agent
                  shall assign such Mortgage Loan a Collateral Value of zero.

                  2)       By deleting the value "two and one half percent
         (2.5%) therein and by substituting therefor the value "three and one
         half percent (3.5%)"at the end of paragraph (A); and

                  3)       By adding the word "If" at the beginning of paragraph
         (B).

Section 2. Amendment to Collateral Agency Agreement.

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         a.       The definition of "Advance Rate" in the Collateral Agency
Agreement is hereby amended by deleting the words "a Subprime Loan or" in clause
(iii) thereof.

         b.       The definition of "Collateral Value" in the Collateral Agency
Agreement is hereby amended by deleting clause (B)(d) thereof.

         c.       The definition of "Eligible Mortgage Loan" in the Collateral
Agency Agreement is hereby amended by deleting the words ", a Subprime Loan" in
clause (b) thereof.

         d.       The definition of "Non-Conforming Loan" in the Collateral
Agency Agreement is hereby amended by deleting the words "a Subprime Loan,"
therein.

         e.       The definition of "Subprime Loan" in the Collateral Agency
Agreement is hereby deleted in its entirety.

         f.       Section 3.2(b) of the Collateral Agency Agreement is hereby
amended by deleting clause (ii) in its entirety and replacing it with the
following:

                           "(ii) in the case of each Mortgage Loan that is not a
         MERS Designated Mortgage Loan, an original executed assignment in blank
         for each Mortgage Note and Mortgage securing such Mortgage Loan, in
         recordable form, executed by the Originator (and if the related
         Mortgage Loan is a MERS Designated Mortgage Loan, this document shall
         not be required to be delivered to the Collateral Agent); and"

         g.       Section 3.5 of the Collateral Agency Agreement is hereby
amended as follows:

                  1)       By deleting the value "two and one half percent
         (2.5%) therein and by substituting therefor the value "three and one
         half percent (3.5%)" in subsection (A)(i); and

                  2)       By adding the word "If" at the beginning of paragraph
         (B).

Section 3. Amendment to Amended and Restated Loan Agreement.

         a.       The definition of "Advance Rate" in the Amended and Restated
Loan Agreement is hereby amended by deleting the words "a Subprime Loan or" in
clause (iii) thereof.

         b.       The definition of "Collateral Value" in the Amended and
Restated Loan Agreement is hereby amended by (i) deleting clause (B)(d) thereof
and (ii) deleting the words "(except for Subprime Loans which if owned by the
Borrower for more than 120 days shall be zero)" in clause (B)(g) thereof."

<PAGE>

         c.       The definition of "Eligible Mortgage Loan" in the Amended and
Restated Loan Agreement is hereby amended by deleting the words ", a Subprime
Loan" in clause (b) thereof.

         d.       The definition of "Non-Conforming Loan" in the Amended and
Restated Loan Agreement is hereby amended by deleting the words "a Subprime
Loan," therein.

         e.       The definition of "Subprime Loan" in the Amended and Restated
Loan Agreement is hereby deleted in its entirety.

         f.       The definition of "Take-Out Commitment" in the Amended and
Restated Loan Agreement is hereby amended by replacing the words "Subprime
Loans" with the words "Non-Conforming Loans" in clause (B) thereof.

         g.       Section 3.2(b) of the Loan Agreement is hereby amended by
deleting clause (ii) in its entirety and replacing it with the following:

                           "(ii) in the case of each Mortgage Loan that is not a
         MERS Designated Mortgage Loan, an original executed assignment in blank
         for each Mortgage Note and Mortgage securing such Mortgage Loan, in
         recordable form, executed by the Originator (and if the related
         Mortgage Loan is a MERS Designated Mortgage Loan, this document shall
         not be required to be delivered to the Collateral Agent); and"

         h.       Section 3.4 of the Loan Agreement is hereby amended as
follows:

                  1)       By deleting the value "two and one half percent
         (2.5%) therein and by substituting therefor the value "three and one
         half percent (3.5%)" in subsection (a)(i).

                  2)       By adding the word "If" at the beginning of clause
         (b).

Section 4. Operative Documents in Full Force and Effect as Amended. Except as
specifically amended hereby, all of the provisions of the Operative Documents
and all of the provisions of all other documentation required to be delivered
with respect thereto shall remain in full force and effect from and after the
date hereof.

Section 5. Miscellaneous.

         a.       This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall not constitute a novation of any Operative Document, but shall constitute
an amendment thereof. The parties hereto agree to be bound by the terms and
conditions of each Operative Document, as amended by this Amendment, as though
such terms and conditions were set forth herein

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         b.       The descriptive headings of the various sections of this
Amendment are inserted for convenience of reference only and shall not be deemed
to affect the meaning or construction of any of the provisions hereof.

         c.       This Amendment may not be amended or otherwise modified except
as provided in each respective Operative Agreement.

         d.       This Amendment and the rights and obligations of the parties
under this amendment shall be governed by, and construed in accordance with, the
laws of the state of New York (without giving effect to the conflict of laws
principles thereof, other than Section 5-1401 of the New York General
Obligations Law, which shall apply hereto).

                     [Signatures appear on following page.]

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                  IN WITNESS WHEREOF, the parties have agreed to and caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

ADMINISTRATIVE AGENT,                CREDIT LYONNAIS NEW YORK BRANCH
BANK AND
MANAGING AGENT:

                                     By: /s/ Credit Lyonnais

SERVICER                             CH MORTGAGE COMPANY I, LTD.

                                     By: CH Mortgage Company  GP, Inc., general
                             partner

                                     By: /s/ CH Mortgage

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BORROWER                             CH FUNDING, LLC

                                     By:  /s/ CH Funding LLC

COLLATERAL AGENT                     U.S. BANK NATIONAL ASSOCIATION.

                                     By:  /s/ U.S. Bank  National

BANK AND                             BANK ONE, NA (MAIN OFFICE CHICAGO
MANAGING AGENT:

                                     By: /s/ Bank One, NA

BANKS:                               LLOYDS TSB BANK PLC

                                     By: Lloyds TSB Bank PLC

                                     DANSKE BANK A/S, CAYMAN ISLANDS
                                      BRANCH

                               By: Danske Bank A/S, Cayman Islands Branch

                                     :

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