**Exhibit 10.16**           POLK COUNTY RECORDER  POLK COUNTY, MINNESOTA  CERTIFIED, FILED, AND  RECORDED ON  03/30/2007 09:00AM  PAGES:  7     REC FEES: $46.00           MICHELLE M. COTE  POLK COUNTY RECORDER           By /s/  [ILLEGIBLE] Deputy         **OPTION TO PURCHASE REAL PROPERTY**     **IN CONSIDERATION** of Five Thousand Dollars ($5,000), paid to **Randy Kroeplin**, a singleperson, hereinafter referred to as “Seller,” receipt of which is acknowledged, Sellers give andgrant to **Agassiz Energy, LLC**, a Minnesota limited liability company, hereinafter referred toas “Purchaser,” and Purchaser’s successors and assigns, the exclusive option to purchase thereal property Sellers situated in the County of Polk, State of Minnesota, particularlydescribed as:Up to one hundred fifty (150) acres located in the following-described premises:The Northwest Quarter of the Southeast Quarter (NW1/4SE1/4) and the Northeast Quarter of theSouthwest Quarter (NE1/4SW1/4), except tracts for cemetery purposes, Section Ten (10), Township OneHundred Forty-eight(148) North of Range Forty-two (42) West of the Fifth Principal Meridianaccording 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 Westof the Soo Line Railroad right-of-way, AND EXCEPT the following-describedtract, 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 thenorth line of said NW1/4 a distance of 1200 feet to a point, which is the pointof beginning of the tract herein excepted; thence in a southerly direction andparallel 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 adistance of 40 rods to a point; thence in a northerly direction and parallel withthe 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 saidNW1/4 a distance of 40 rods, more or less, to the point of beginning of the tractherein excepted;ANDThat part of the South Half of the Northwest Quarter (S1/2NW1/4) andWest Haif of the Southwest Quarter (W1/2SW1/4) of Section Ten (10), Township Onehundred Forty-eight (148) North of Range Forty-two (42), West of the FifthPrincipal Meridian, lying Easterly of the Soo Line Railway right-of-way;(specific real estate description of the 150-acre parcel to be determined by survey providedby, and paid for by, Purchaser at the exercise of the Option);including all easements, rights of way, and appurtenances, and all of Seller’s right, title, andinterest 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 Hundred Thousand Dollars ($100,000) in cash;Two Hundred Thousand Dollars ($200,000) of Agassiz Energy, LLC membership units (value $1.00 perunit); and 200,000 warrants to purchase membership units in Agassiz Energy, LLC at $1.00 per unitexercisable between April 1, 2007, and March 31, 2014. Said cash payment plus membership units andwarrants shall be paid or delivered to Seller at closing. The Five Thousand Dollar ($5,000) optionpayment shall be applied toward the total purchase price.     In addition, in the event the Option is exercised when the Sellers have growing crop on thepremises, Sellers shall be entitled to remove said crop at harvest or be compensated the fairmarket value of the lost crop as agreed in writing or as determinedby Minnesota Regional Extension Service if the parties are unable to agree.
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**SECTION TWO****PERIOD OF OPTION AND EXTENSION**     This Option may be exercised by giving notice of exercise to Seller at 2812 Chestnut Street,Grand Forks, North Dakota 58201, at any time during the primary period from April 1, 2007, untilMarch 31, 2008.**SECTION THREE****TITLE**     If the Option is exercised, Seller shall, within thirty (30) days after the delivery toSeller of the notice of exercise, secure and submit to Purchaser for examination by Purchaser’sattorneys, an updated Abstract of Title. Within thirty (30) days thereafter, Purchaser shall givenotice in writing to Seller of any defects in or objections to the title as so evidenced, andSeller shall clear the title of the defects and objections so specified.     If Seller fails to clear title to the extent required in this Option or to submit evidence ofSeller’s ability to do so prior to closing, and such failure continues for ninety (90) days afterthe date of exercise of the Option, Purchaser may clear title to the extent so required and chargethe cost of clearing to Seller or, at Purchaser’s option, may terminate the contract by givingthirty (30) days’ written notice to Seller.     Title to be conveyed as provided in this Option shall be merchantable title, free and clearof all liens, encumbrances, restrictions, and easements.**SECTION FOUR****CLOSING**     Seller shall be responsible for providing an updated Abstract of Title, Deed in recordableform; and payment of deed tax. Purchaser shall be responsible for surveying costs, titleexamination (or owner’s title insurance), and recording the Deed. Taxes and
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assessments in the year of closing shall be prorated between the parties as of the date of theclosing. Closing shall be scheduled ten (10) days following determination that the title to thereal estate is marketable.**SECTION FIVE****POSSESSION**     Seller shall continue in possession of the property until the closing of the transaction, andshall maintain the property in its present condition, reasonable wear from ordinary use excepted.Possession shall be transferred to Purchaser at closing.**SECTION SIX****HAZARDOUS SUBSTANCES**     Seller hereby states that, to the best of Seller’s knowledge, the real property is free ofhazardous substances as hereinafter defined and is not subject to any “Super-Fund” type liens orclaims by governmental regulatory agencies or other third parties arising from the release orthreatened release of hazardous substances in, on, or about the real property. For purposes ofthis Agreement, hazardous substance means hazardous waste, toxic substances, polychlorinatedbiphenyls, asbestos, or related materials and also includes, but is not limited to, substancesdefined as hazardous substances or toxic substances in the Comprehensive Environmental ResponseCompensation and Liability Act of 1980, as amended, 42 U.S.C. § 9061, et. seq., HazardousMaterials Transportation Act, 49 U.S.C. § 6901, et. seq., or as hazardous substances, hazardouswaste, 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 mixturesthereof.
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**SECTION SEVEN****TESTING**     In the event soil testing or other testing is undertaken by Purchaser during the Optionperiod, Seller shall be compensated in an amount to be determined by the Minnesota RegionalExtension service for any crop damage occurring on the parcel or adjacent area which is causeddirectly 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 intendedin person or by certified mail at the following address, or such future address as may bedesignated in writing:       Seller: 2812 Chestnut Street    Grand Forks, ND 58201       Purchaser: Donald Sargeant    President and Chief Manager    510 County Road 71    Crookston, MN 56716to any successor or assignee of either party, at the address stated in the notice ofsuccession 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 signedby the parties hereto.**SECTIONELEVEN****ASSIGNMENT AND SUCCESSION**     This Option and the contract resulting from its exercise shall bindand inure to the benefit of the heirs, administrators, executors, successors, andassigns of the respective parties. All rights of Purchaser under this Option maybe assigned without restriction, but notice of each assignment shall be given inwriting to Seller.**DATED** this 29th day of March, 2007.       **SELLER:** **PURCHASER:**       /s/ Randy Kroeplin **AGASSIZ ENERGY, LLC** **RANDY KROEPLIN**               By /s/ Wayne Wagner             Wayne Wagner,