<Page>
Exhibit 10.3
WHEN RECORDED RETURN TO:
Michael J. Green
Regency West 5
4500 Westown Parkway, Suite 277
West Des Moines, Iowa 50266
<Table>
PREPARER
INFORMATION Michael J. Green 4500 Westown Pkwy., Ste. 277 West Des Moines, IA (515) 242-2431
---------------------------------------------------------------------------- --------------
Individual's Name Street Address City Phone
</Table>
________________________________________________________________________________
SPACE ABOVE THIS LINE FOR RECORDER
REAL ESTATE OPTION AGREEMENT
THIS AGREEMENT is made this 18th day of February, 2005, by and between WDB,
Inc., a Nebraska corporation, (hereinafter referred to as "Optionor") and
Advanced BioEnergy, LLC, a Delaware limited liability company (hereinafter
referred to as "Optionee").
W I T N E S S E T H:
WHEREAS, Optionor is the sole owner of real estate described in full at
paragraph 1 below and is desirous of securing a future purchaser of said real
property under defined terms; and
WHEREAS, Optionee desires to acquire said property from Optionor in
accordance with the terms and conditions set forth hereafter.
IN CONSIDERATION of the covenants and promises contained hereafter, it is
agreed:
1. PREMISES: That Optionor hereby grants to Optionee the exclusive option
to purchase real property, together with all improvements thereon, if
any, in Fillmore County, Nebraska, more specifically described as
follows:
A part of the 112 acres, further described as the North half of the
Northeast quarter and Southwest quarter of Northeast quarter of
Section 36-8-3, being not less than 75 acres, calculated as part of
the 80 acres of the Northwest quarter and Southwest quarter less
railroad right-of-way and a part or all of the Northeast quarter
including the well and pump operation located thereon. If Optionor
requests more than 75 acres, Optionee, at its sole discretion, can
cause Optionor to include the entire 112 acre parcel as the premises.
<Page>
2. OPTION CONSIDERATION: As consideration for the option grant provided
in paragraph 1 above, Optionee agrees to pay to Optionor at the time
of the execution of this Option Agreement the sum of $10,000.00. The
parties agree that there is valid and sufficient consideration for
this Agreement based on this sum, the mutual obligations herein
contained and other good and valuable consideration subject to the
terms of paragraph 4(k) hereafter. In addition, Optionor agrees not to
enter into any other Purchase, Lease or Agreement of any kind with any
other party relating to the subject property while this Option
Agreement is in place.
3. TERM: This option shall commence on the date of the execution of this
Option Agreement and continue to the 1st day of August, 2006, at 12:00
midnight at which time it expires and is null and void if not
exercised.
4. PURCHASE TERMS: Pursuant to the terms of this option, Optionor agrees
to sell and Optionee agrees to purchase the above-described real
property with improvements thereon under the following terms and
conditions:
a. PURCHASE PRICE: The purchase price shall be: $6,000.00 per acre
after final survey. In any event, if this Option is exercised,
not less than seventy-five (75) acres shall be purchased.
Purchaser shall have a credit for the option consideration of
$10,000.00.
The Optionee agrees to pay in cash at closing the relevant amount
as set forth above. Optionee shall be credited against said
purchase price with the full amount paid in cash as the option
consideration hereunder.
b. ABSTRACT: Optionor shall promptly after receipt of notice of
exercise of option provide a title commitment showing title to be
marketable in accordance with this Agreement, the land title laws
of the State of Nebraska and the Nebraska Title Standards of the
Nebraska State Bar Association. If closing is delayed due to
Optionor's inability to provide marketable title, then Optionee
may rescind this Agreement after giving 14 days written notice to
the other party and the broker if any. Cost of title insurance
split one-half to the Optionor and one-half to the Optionee.
c. WARRANTY DEED: At closing, upon receipt of the full purchase
price set forth above, Optionor shall execute and deliver to
Optionee an appropriate Warranty Deed, subject to easements and
restrictions of record, Declaration of Value and Hazard Statement
for recording by Optionee.
d. TAXES: Optionor shall pay all real estate taxes prorated to the
date of closing. If the amount of any such tax to be prorated
cannot be ascertained, proration shall be computed on the amount
for the preceding year.
2
<Page>
e. SPECIAL ASSESSMENTS: The Optionor shall pay all special
assessments which are a lien and due and payable on said property
and can be paid as of the date of closing.
f. EMINENT DOMAIN: In the event the property or any part thereof is
taken or threatened to be taken pursuant to eminent domain after
the notice of exercise of the above option, but prior to closing,
the Optionee shall have the right at its election to cancel and
terminate this agreement or to complete the purchase as set forth
above with the Optionee being entitled to receive all
condemnations proceeding against the real property.
g. CLOSING: Closing shall be held on a date agreeable to the parties
not later than 90 days from the date of the notice of demand to
close.
h. DEFAULT: In the event Optionor has fulfilled all of its
obligations hereunder and all conditions precedent and concurrent
to closing for which it is responsible and Optionee fails to
fulfill its obligations hereunder and continues to fail and
refuses to fulfill its obligations hereunder for more than 30
days after receipt of written notice of such default from
Optionor may either: 1) terminate this Agreement in which event
it shall be entitled to retain the option money deposits and any
other monies paid hereunder and such termination and retainage
shall be the sole remedy and damages available to the Optionee;
or 2) pursue any legal and/or equitable remedy available to it.
In the event Optionee fulfills all of its obligations hereunder
and meets all conditions precedent and concurrent to closing for
which it is responsible and Optionor is unable, fails or refuses
to meet its obligations hereunder for more than 30 days after
receipt of written notice of such default, Optionee may either:
1) terminate this Agreement in which event it shall be entitled
to receive refund of all of its option money deposits and any
other monies paid hereunder and such termination and refund shall
be the sole remedy and damages available to the Optionee; or 2)
pursue any legal and/or equitable remedy available to it.
i. PERSONAL PROPERTY: Optionor understands and agrees that Optionee
shall have the right under the Purchase Agreement to retain the
well, pump, engine, water rights and any other equipment
necessary to get water out of the ground on the subject property.
Optionee further agrees that Optionor shall have the right to
retain the pivot located on the property and shall have a
reasonable time period for removal of the same at Optionor's
expense.
j. GROUND LEASE: Optionor shall cause, at Optionor's expense, the
lease of the subject property to be terminated as to lease years
3, 4 and 5 and Optionor shall modify, with Optionee's consent at
Optionee's expense, the lease for year 2 so as to comply with and
allow for the terms of paragraph 4(k) hereafter. Failure to
provide evidence of said change within fourteen (14) days of the
date hereof shall
3
<Page>
entitle the Optionee to the return to it of the full amount of
the option consideration and the termination of this Agreement.
k. CROP DAMAGE: In the event that Optionee's due diligence and/or
closing and conveyance of the Property to Optionee shall occur
after Optionor plants crops, but before harvest of those crops,
the parties hereto mutually agree that Optionor shall have the
right, upon notice to the Optionee and at the Optionee's
convenience, to harvest any crops not destroyed by the Optionee
in the process of its due diligence and/or its constructing of
the ethanol plant and related improvements thereto. The Optionee
shall have no duty to preserve any of such crops, and the
Optionor accepts as liquidated damages (in lieu of any and all
other damages) an amount equal to 120% of the University of
Nebraska estimated per acre crop input cost for Fillmore County,
Nebraska for the applicable crop year multiplied by the number of
acres, or fractional acres, of crop destroyed on the Property by
the Optionee prior to the harvest of such crop acres by the
Optionor. The number of such acres destroyed shall be measured by
a third-party as the parties hereto may mutually identify.
5. RECORDING OF OPTION: The parties hereto agree that this Option
Agreement shall be recorded.
6. INSPECTION RIGHTS: Optionee shall, during the term of this Option
Agreement, have the unrestricted rights to enter upon the subject
property for purposes of performing any and all due diligence
necessary to Optionee's determination to purchase the subject property
in its sole discretion including, but not limited to, the taking of
soil samples. Optionee understands and agrees that during the term of
this Option Agreement Optionor shall have the full and unrestricted
right to plant irrigated corn on the subject property. Should
Optionee, as a part of its inspection, damage any of the growing crop
on the subject property, Optionee shall be responsible for the payment
of the fair market value thereof to Optionor as calculated under the
terms of paragraph 4(k) above.
7. NOTICES: Any notice, demand or other document which either party is
required or may desire to give or deliver to or make upon the other
party shall be given in writing and served either personally or given
by prepaid United States certified mail, return receipt requested, and
addressed to the following addresses:
If to Optionor: WDB, Inc.
c/o Kelly Thomas
Svehla Law Offices
408 Platte Avenue, Suite A
York, Nebraska 68467
If to Optionee: Advanced BioEnergy, LLC
c/o Brown, Winick, Graves, Gross, Baskerville
4
<Page>
and Schoenebaum, P.L.C.
Attn: William E. Hanigan
666 Grand Avenue, Suite 2000
Des Moines, Iowa 50309-2510
Either party hereto may designate a different address for itself, or
additional persons to whom copies thereof are to be sent, by notice
similarly given.
8. REAL ESTATE BROKERS: The parties hereto represent that, absent
specific disclosure in writing, no real estate brokers have been
employed, utilized or relied upon by either party as a result of the
grant of this option or the real estate sale contemplated therein.
9. TIME: Time is of the essence as to the performance of all of the terms
and conditions of this Agreement.
10. ATTORNEY FEES: Any action required of either party hereunder to
enforce its rights to this Agreement shall entitle said party to the
recovery of its reasonable attorney fees, costs and expenses incurred
and necessary to the enforcement of said rights.
11. GENERAL: This Agreement shall be deemed to have been made and shall be
construed and interpreted in accordance with the laws of the State of
Nebraska. This Agreement shall be binding upon and inure to the
benefit of the respective parties hereto and their successors and
assigns. The captions and titles herein are for reference only and are
not to be considered a part of this Agreement or in the interpretation
hereof. This Agreement shall not be valid until signed by both
parties. The phrase "execution and delivery hereof," as used above,
shall be the date the last party hereto signs this Agreement and
serves it upon the other party in the same manner as set forth for
notices. Time is of the essence.
IN WITNESS WHEREOF, said parties hereto subscribe their names.
OPTIONOR: OPTIONEE:
WDB, INC. ADVANCED BIOENERGY, LLC
By: /s/ William Bettger By /s/Revis L. Stephenson
- ---------------------------------- --------------------------------
William Bettger, President
By: /s/Susan L. Bettger Chairman
------------------------------- ----------------------------------
Its: Secretary
------------------------------
5
<Page>
STATE OF Arizona )
)SS:
COUNTY OF Maricopa )
On this 18th day of February, 2005, before me, the undersigned, a Notary
Public in and for said County and State, personally appeared William Bettger and
Susan L. Bettger to me personally known, who, being by me duly sworn, did say
that they are the President and Secretary, respectively, of said corporation
executing the within and foregoing instrument; that said instrument was signed
on behalf of said corporation by authority of its Board of Directors; and that
the said William Bettger, President and Susan L. Bettger, Secretary as such
officers acknowledged the execution of said instrument to be the voluntary act
and deed of said corporation, by it and by them voluntarily executed.
[NOTARY SEAL]
/s/Robert Coopersmith
---------------------------------------------
Notary Public in and for the State of Arizona
STATE OF Minnesota )
)SS:
COUNTY OF Hennipen )
On this 8 day of March, 2005, before me, the undersigned, a Notary Public
in and for the State of Minnesota, personally appeared Revis L. Stephenson to
me personally known, who being by me duly sworn, did say that he is the Chairman
of Advanced BioEnergy, LLC, a limited liability company, executing the within
and foregoing instrument; that no seal has been procured by the said limited
liability company; that said instrument was signed on behalf of the limited
liability company by authority of its members; and that Revis L. Stephenson, as
Chairman, acknowledged the execution of the foregoing instrument to be the
voluntary act and deed of the limited liability company, by it and by him
voluntarily executed.
/s/Marie DeVoe White
----------------------------------------
Notary Public in and for the State of MN
[NOTARY SEAL]
6