exv10w1



 







Exhibit 10.1




OPTION TO PURCHASE REAL PROPERTY




     IF
CONSIDERATION of Five Thousand Dollars ($5,000), paid to Randy
Kroeplin and Jennifer
Kroeplin, husband and wife, hereinafter referred to as “Sellers,” receipt of which is acknowledged,
Sellers give and grant to Agassiz Energy, LLC, a Minnesota limited liability company, hereinafter
referred to as “Purchaser,” and Purchaser’s successors and assigns, the exclusive option to
purchase the real property Sellers situated in the County of Polk, State of Minnesota, particularly
described as:



     Up to one hundred (100) acres located in the following-described premises:




The
Northwest Quarter of the Southeast Quarter
(NW1/4 SE1/4) and the
Northeast Quarter of the Southwest Quarter
(NE1/4 SW1/4), except tracts for cemetery
purposes, Section Ten (10), Township One Hundred Forty-eight (148) North of Range
Forty-two (42) West of the Fifth Principal Meridian according to the United States
Government Survey thereof;




The
North Half of the Northwest Quarter (N1/2 NW1/4) of Section Ten (10),
Township One Hundred Forty-eight (148) North of Range Forty-two (42) West of the
Fifth Principal Meridian, EXCEPT that part thereof lying West of the Soo Line
Railroad right-of-way, AND EXCEPT the following-described tract, to-wit: Commencing
at the Northeast corner of the NW1/4 of Section 10, Township 148 North of
Range 42; thence in a westerly direction along the north line of said NW1/4 a
distance of 1200 feet to a point, which is the point of beginning of the tract
herein excepted; thence in a southerly direction and parallel with the east line of
said
NW1/4 a distance of 60 rods to a point; thence in a westerly direction and
parallel with the north line of said NW1/4 a distance of 40 rods to a
point; thence in a northerly direction and parallel with the east line of said
NW1/4 a distance of 60 rods, more or less, to the north



 









 






line of said NW1/4; thence in an easterly direction along the
north line of said NW1/4 a distance of 40 rods, more or less, to the
point of beginning of the tract herein excepted;




AND




That part of the South Half of the Northwest Quarter
(S1/2NW1/4) and West Half of the Southwest Quarter
(W1/2SW1/4) of Section Ten (10), Township One hundred
Forty-eight (148) North of Range Forty-two (42), West of the Fifth Principal
Meridian, lying Easterly of the Soo Line Railway right-of-way;




(specific real estate description of the 100-acre parcel to be determined by survey provided
by, and paid for by, Purchaser at the exercise of the Option);


including all easements, rights of way, and appurtenances, and all of Sellers’ right, title,
and interest in all public ways adjoining the property.




     This option is given on the following terms and conditions:



SECTION ONE




PRICE AND TERMS OF PAYMENT




     The purchase price for the property shall be One Thousand Two Hundred Dollars ($1,200;
per acre, which shall be paid on exercise of this Option by Purchaser. The Option payment (s)
shall be applied toward the total purchase price.



     It addition, in the event the Option is exercised when the Sellers have growing crop on the
premises. Sellers shall be entitled to remove said crop at harvest or be compensated the fair
market value of the lost crop as agreed in writing or as determined by Minnesota Regional
Extension Service if the parties are unable to agree.



SECTION TWO




PERIOD OF OPTION AND EXTENSION




     This Option may be exercised by giving notice of exercise to Sellers at 25728 120th
Avenue SE, Red Lake Falls, Minnesota 58750, at any time during the primary period from April
1, 2005, until March 31, 2006; or during the extension period, if the Option is



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extended as provided below, until March 31, 2007. The Option may be so extended by
Purchaser giving Sellers written notice of extension prior to the termination of the primary
period, and paying to Sellers at the time of the notice the additional consideration of Five
Thousand Dollars ($5,000).




SECTION THREE




TITLE




     If the Option is exercised, Sellers shall, within thirty (30) days after the delivery to
Sellers of the notice of exercise, secure and submit to Purchaser for examination by Purchaser’s
attorneys, an updated Abstract of Title. Within thirty (30) days thereafter, Purchaser shall give
notice in writing to Sellers of any defects in or objections to the title as so evidenced, and
Sellers shall clear the title of the defects and objections so specified.



     If Sellers fail to clear title to the extent required in this Option or to submit evidence of
Sellers’ ability to do so prior to closing, and such failure continues for ninety (90) days after
the date of exercise of the Option, Purchaser may clear title to the extent so required and charge
the cost of clearing to Sellers or, at Purchaser’s option, may terminate the contract by giving
thirty (30) days’ written notice to Sellers.



     Title to be conveyed as provided in this Option shall be merchantable title, free and clear
of all liens, encumbrances, restrictions, and easements.



SECTION FOUR




CLOSING




     Sellers shall be responsible for providing an updated Abstract of Title, Deed in recordable
form; and payment of deed tax. Purchaser shall be responsible for surveying costs, title
examination (or owner’s title insurance), and recording the Deed. Taxes and assessments in the
year of closing shall be prorated between the parties as of the date of



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the
closing. Closing shall be scheduled ten (10) days following determination that the
title to the real estate is marketable.




SECTION FIVE




POSSESSION




     Sellers shall continue in possession of the property until the closing of the
transaction, and shall maintain the property in its present condition, reasonable wear from
ordinary use excepted. Possession shall be transferred to Purchasers at closing.



SECTION SIX




HAZARDOUS SUBSTANCES




     Sellers hereby state that, to the best of Sellers’ knowledge, the real property is free
of hazardous substances as hereinafter defined and is not subject to any “Super-Fund” type lieis
or claims by governmental regulatory agencies or other third parties arising from the release or
threatened release of hazardous substances in, on, or about the real
property: For purposes of
this Agreement, hazardous substance means hazardous waste, toxic substances, polychlorinated
biphenyls, asbestos, or related materials and also includes, but is not limited to, substances
defined as hazardous substances or toxic substances in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9061, et. seq., Hazardous
Materials Transportation Act, 49 U.S.C. § 6901, et. seq., or as hazardous substances, hazardous
waste, or pollutant or contaminant in the Environmental Response and Liability Act, Minn. Stat. §
115B.01, et. seq. The term does include petroleum, including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel or mixtures
thereof



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SECTION SEVEN




TESTING




     In the event soil testing or other testing is undertaken by Purchaser during the Option
period Sellers shall be compensated in an amount to be determined by
the Minnesota Regional
Extension service for any crop damage occurring on the parcel or adjacent area which is caused
directly or indirectly by said testing.



SECTION EIGHT




NOTICES




     Any notice under this Option shall be given in writing to the party for whom it is intended
in person or by certified mail at the following address, or such future address as may be
lesigrated in writing:



	 	 	 	 	 
	 

	 	Sellers:
	 	25829 120th Avenue SE
	 

	 	 	 	Red Lake Falls, MN 56750
	 
	 

	 	Purchaser:
	 	Donald Sargeant
	 

	 	 	 	President and Chief Manager
	 

	 	 	 	510 County Road 71
	 

	 	 	 	Crookston, MN 56716





to any successor or assignee of either party, at the address stated in the notice of success on or
assignment.




SECTION NINE




GOVERNING LAW




     This Option Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of Minnesota.



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SECTION TEN




AMENDMENT




     This Option Agreement may not be amended except by a written instrument signed by the parties
hereto.



SECTION ELEVEN




ASSIGNMENT AND SUCCESSION




     This Option and the contract resulting from its exercise shall bind and inure to the
benefit of the heirs, administrators, executors, successors, and assigns of the respective
parties. All rights of Purchaser under this Option may be assigned without restriction, but notice
of each assignment shall be given in writing to Sellers.


DATED
his   16th   day of   March, 2005.




	 	 	 	 	 	 	 	 	 	 	 
	SELLER’S:	 	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	AGASSIZ ENERGY, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Randy Kroeplin
	 	 	 	 	 	 	 	 	 	 
	 

RANDY KROEPLIN

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	/s/ Donald Sargeant	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its	 	CHIEF MANAGER	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Jennifer Kroeplin
	 	 	 	 	 	 	 	 	 	 
	 

JENNIFER KROEPLIN

	 	 	 	By
	 	/s/ Larry Altringer	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 






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	STATE OF ND	 	)
	 	 	)  ss.
	COUNTY OF Grand Forks	 	)





     The foregoing instrument was acknowledged before me this 16th  day
of March, 2005, by Randy Kroeplin and Jennifer Kroeplin, husband and wife,
Sellers.



	 	 	 	 	 	 	 
	 

	 	 	 	 	 	/s/ Debbiek K. Ekren

 




Notary Public, Grand Forks County ND
	 

	 	 	 	 	 	My Comm. Expires:
	 
	 
	 	 	 	 	 	
	STATE OF MINNESOTA

	 	)	 	 	 
	 

	 	)ss.
	 
	COUNTY OF POLK

	 	)	 	 	 






The foregoing instrument was
acknowledged before me this 12 day of
April, 2005, by Donald Sargeant and Larry Altringer
the Chief Manager and Treasurer respectively of Agassiz Energy’
LLC, a Minnesota limited liability company, Purchaser




	 	 	 	 	 
	

	 	/s/
DANIEL L. RUST                                                                         

 




Notary Public, Polk County, MN
 My Comm. Expires:
	 	 






THIS INSTRUMENT WAS DRAFTED BY:

Johannson, Rust, Yon, Stock

& Rasnusson, P.A.

P.O. Box: 605

Crookston MN 56716





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