EXHIBIT 10.7


 


MEMBERSHIP
INTEREST PURCHASE AGREEMENT


 


This Membership Interest
Purchase Agreement (this “Agreement”) is made as of the 5th
day of August, 2005 by and between Farm City Elevator, Inc., a Wisconsin
corporation (“FCE”) and Badger State Ethanol, LLC, a Wisconsin limited
liability company (“BSE”).


 


RECITALS:


 


WHEREAS,
BSE has loaned $2,584,846.66 to Spring Valley Ventures, LLC, a Wisconsin
limited liability company (“SVV”) and wholly owned subsidiary of FCE
pursuant to a promissory note dated August 4, 2005 (the “Note”);


 


WHEREAS, FCE desires to
sell, and BSE desires to purchase, all capital membership interests of SVV (“Interests”);
and


 


NOW, THEREFORE, IT IS
AGREED AS FOLLOWS:


 


AGREEMENT:


 


Section 1.  Purchase and Sale.  As of the date hereof, FCE agrees to sell,
transfer and assign to BSE, and BSE agrees to purchase and accept from FCE, all
of the Interests of SVV free and clear of all liens, security interests, and
other claims and encumbrances whatsoever. 
FCE shall execute and deliver to BSE the membership interest power
certificate in a form as mutually agreed between BSE and FCE (the “Membership
Interest Power Certificate”).   In
exchange for the sale of the Interests and the execution and delivery of the
Membership Interest Power Certificate by FCE, BSE shall pay to FCE $103,360.


 


Section 2.  Lease. 
As a condition to the execution of this Agreement, BSE and FCE shall
each execute and deliver to the other a lease agreement in a form as mutually
agreed between them.


 


Section 3.  FCE’s Representations.  FCE represents and warrants to BSE that (i) FCE
has the full capacity to execute and deliver this Agreement and sell the
Interests to BSE, (ii) FCE is the lawful record and beneficial owner of
all of the Interests of SVV free and clear of all liens, security interests,
and other claims and encumbrances whatsoever, and (iii) neither FCE nor
SVV have granted any options, warrants, commitments, agreements or other rights
to acquire capital interests in SVV.


 


Section 4.  BSE’s Representations.  BSE represents and warrants to FCE that BSE
has the full capacity to execute and deliver this Agreement and purchase the
Interests from FCE.


 





















 


Section 5.  Certificates.


 


a)  As a condition to this Agreement, BSE shall
execute and deliver to FCE the Officer’s Certificate in a form as mutually
agreed between BSE and FCE.


 


b)  As a condition to this Agreement, FCE shall
execute and deliver, and shall cause SVV to execute and deliver, to BSE the
Officer’s Certificate and Manager’s Certificate, respectively, in forms as
mutually agreed between BSE and FCE.


 


Section 6.  Miscellaneous.


 


a)                                      Binding Agreement. 
This Agreement is binding upon the respective successors, heirs,
personal representatives, executors and permitted assigns of each of FCE and
BSE.


 


b)                                     Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and all of which shall constitute one and the same
document.  This Agreement may be executed
by facsimile signatures.


 


c)                                      Governing Laws.  This
Agreement is governed by the laws of the State of Wisconsin without regard to
its conflict of laws principles or rules of construction concerning the
draftsman hereof.


 


[Signature Page Follows]


 


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IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.


 


	
   

  	
  FARM CITY ELEVATOR,
  INC.

  
	
   

  	
   

  
	
   

  	
  /s/
  Randall Wuttke

  	
   

  
	
   

  	
  Randall Wuttke, Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BADGER STATE ETHANOL,
  LLC

  
	
   

  	
   

  
	
   

  	
  /s/
  Gary L. Kramer

  	
   

  
	
   

  	
  Gary L. Kramer,
  President

  



 


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