exv10w16



 




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 single
person, hereinafter referred to as “Seller,” 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 fifty (150) acres located in the following-described premises:




The Northwest Quarter of the Southeast Quarter (NW1/4SE1/4) and the Northeast Quarter of the
Southwest Quarter (NE1/4SW1/4), 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 Haif 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 150-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 Seller’s 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 Hundred Thousand Dollars ($100,000) in cash;
Two Hundred Thousand Dollars ($200,000) of Agassiz Energy, LLC membership units (value $1.00 per
unit); and 200,000 warrants to purchase membership units in Agassiz Energy, LLC at $1.00 per unit
exercisable between April 1, 2007, and March 31, 2014. Said cash payment plus membership units and
warrants shall be paid or delivered to Seller at closing. The Five Thousand Dollar ($5,000) option
payment shall be applied toward the total purchase price.



     In 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.



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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, until
March 31, 2008.



SECTION THREE




TITLE




     If the Option is exercised, Seller shall, within thirty (30) days after the delivery to
Seller 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 Seller of any defects in or objections to the title as so evidenced, and
Seller 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 of
Seller’s 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 Seller or, at Purchaser’s option, may terminate the contract by giving
thirty (30) days’ written notice to Seller.



     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




     Seller 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



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assessments in the year of closing shall be prorated between the parties as of the date of the
closing. Closing shall be scheduled ten (10) days following determination that the title to the
real estate is marketable.




SECTION FIVE




POSSESSION




     Seller 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 Purchaser at closing.



SECTION SIX




HAZARDOUS SUBSTANCES




     Seller hereby states that, to the best of Seller’s knowledge, the real property is free of
hazardous substances as hereinafter defined and is not subject to any “Super-Fund” type liens 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, Seller 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
designated in writing:



	 	 	 	 	 
	 

	 	Seller:
	 	2812 Chestnut Street
	 

	 	 	 	Grand Forks, ND 58201
	 
	 	 	 	 
	 

	 	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
succession 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 Seller.



DATED this 29th day of March, 2007.




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

RANDY KROEPLIN
	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Wayne Wagner	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Wayne Wagner, 

Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Larry Altringer	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Larry Altringer, Treasurer	 	 






	 	 	 	 	 	 	 	 	 
	STATE OF NORTH DAKOTA

	 	 	)	 	 	 
	 	 
	 

	 	 	)	 	 	SS.	 	 
	COUNTY OF GRAND FORKS

	 	 	)	 	 	 	 	 






     The foregoing instrument was acknowledged before me this
29th day of March, 2007, by Randy Kroeplin, a single
person, Seller.



	 	 	 	 	 
	 

	 	/s/ Laurie Feltman
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	

	 	Notary Public, Grand Forks County, ND

My Comm. Expires: 10/21/2010	 	 






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	STATE OF MINNESOTA

	 	 	)	 	 	 
	 	 
	 

	 	 	)	 	 	ss.	 	 
	COUNTY OF POLK

	 	 	)	 	 	 	 	 






     The foregoing instrument was acknowledged before me this 29th day of
March, 2007, by Wayne Wagner and Larry Altringer, the Vice Pres. and Treasurer, respectively of
Agassiz Energy, LLC, a Minnesota limited liability company, Purchaser.



	 	 	 	 	 
	 

	 	/s/ Marlys R. Mjoen
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	

	 	Notary Public, Polk County, MN 

My Comm. Expires: 1/31/2010	 	 






THIS INSTRUMENT WAS DRAFTED BY:

Johannson, Rust, Stock
 &
Rasmusson, P.A.

P.O. Box 605

Crookston, MN 56716





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