Document:

exv10w15

 

Exhibit 10.15

ENERGY MANAGEMENT AGREEMENT

(Site Development and Operations)

The purpose of this Agreement is to set forth the understanding and agreement between U.S. Energy
Services, Inc. (“U.S. Energy”) and Buffalo Ridge Ethanol, LLC (“Client”) related to the
provision of energy management services.

PROJECT DESCRIPTION: Client is developing a 50 million gallon per year ethanol
plant (“Plant”) to be located near Sherman, SD. The Plant will have approximately a 5 MW peak
usage in electricity and will consume approximately 4,500 MMBtu of natural gas per day.

U.S. ENERGY RESPONSIBILITIES: U.S. Energy will provide consulting and energy management
services for supplies of natural gas and electricity for the Plant. These services will be
provided during the construction of the Plant (“Construction Period”), and after the Construction
Period when the Plant has been placed in service (“Completion Date”). The Completion Date shall be
determined when the Plant begins producing ethanol. These services will be provided to Client upon
request:

A. Energy Infrastructure Advisory Services During the Construction Period

	1.	 	Provide an economic comparison of distribution service options. Such options will include
service from area distribution utilities, interstate pipelines and third party contractors.

	 	 	In the event that a direct connect pipeline option is selected, U.S. Energy will submit a
tap request to the pipeline. In addition, U.S. Energy will also attempt to negotiate an
option for Client to minimize interconnect costs through the purchase of firm
transportation to the Plant.

	2.	 	Determine whether firm, interruptible, or a blend of transportation entitlement will provide
the lowest burnertip cost. Factors that will be considered include pipeline credits for the
new interconnect, cost of an alternate fuel system, and availability of specific receipt point
capacity.

	3.	 	Provide advisory services to Client regarding electric pricing and service agreements.

	 	a.	 	Analyze the electric service proposals along with primary, secondary and
generation options and recommend an electric sourcing strategy and plan. The plan may
include a combination of electric supplier agreement and/or installation of on-site
generation.
	 
	 	b.	 	Negotiate final electric service agreements that meet the pricing and
reliability requirements of Client, including options for third party access to
electric metering.

 

 

	 	c.	 	Prepare and implement a regulatory strategy, if required and if an
alternative power supplier is selected. Any attorney fees required for the specific
purpose of obtaining regulatory approval for an alternative power supplier, if any,
will be over and above U.S. Energy’s monthly fee herein, and must be pre-approved by
Client.

	4.	 	Evaluate the proposed electric distribution infrastructure (substation) for reliability,
future growth potential and determination of the division of ownership of facilities between
the utility and the Plant.

	5.	 	Investigate economic development rates, utility grants, equipment rebates and other utility
programs that may be available.

B. On-Going Energy Management Services Following the Completion Date

U.S. Energy will provide the following services at Client’s request:

	1.	 	Provide natural gas supply information to minimize the cost of natural gas purchased. This
will include acquiring multiple supply quotes and reporting to Client the various supply index
and fixed prices. U.S. Energy will not take title to Client gas supplies, but will
communicate supply prices and potential buying strategies.

	2.	 	Negotiate with pipelines, utilities, other shippers, and suppliers to provide transportation,
balancing, and supply agreements that meet Client’s performance criteria at the lowest
possible cost.

	3.	 	Develop and implement a price risk management plan that is consistent with Client’s pricing
objectives and risk profile. An analysis will be developed to help determine the
amount of fuel usage that should be considered for this price management service. U.S. Energy
will also provide price risk management information through the following communications:

Weekly Update: E-mailed each week

Monthly Pricing Letter: Mailed out the beginning of each month

Monthly Conference Call: Occurs the first Tuesday of each month

Hedge Recommendations: Updated regularly and published on U.S. Energy’s web site

Annual Energy Conference: Occurs in May of each year.

Gold+ Web Site Access: Gold+ is U.S. Energy’s password-protected web site that

allows clients access to their information. Gold+ access also makes available

industry news, hedging strategies and NYMEX pricing.

	4.	 	Provide daily nominations to the suppliers, pipeline, and other applicable shippers for
natural gas deliveries to the Plant. This will include daily electronic confirmations to
Client of all nominations and actual daily usage. U.S. Energy will utilize customer or
utility supplied telemetering to obtain actual usage data.

2

 

	5.	 	Provide a consolidated monthly invoice to Client that reflects all applicable natural gas and
electric energy costs. U.S. Energy will be responsible for reviewing, reconciling and paying
all shipper, supplier and utility invoices.

	6.	 	Provide a monthly usage report of electric energy consumption and costs. Also, where
applicable and available from the utility, obtain monthly interval electric load data and
provide monthly load profile graphs.

	7.	 	On-going review and renegotiation of electric service costs, as required. This may include:

	 	a.	 	Completing and evaluating annual proposals to identify the most reliable and
economic third party electric energy supply.
	 
	 	b.	 	Identifying new service tariffs or opportunities to renegotiate the service
agreement to provide lower costs.
	 
	 	c.	 	Identifying on-site generation opportunities as market conditions change.
	 
	 	d.	 	Provide a monthly projection of energy (natural gas and electricity) and
annual summaries.

	8.	 	Provide natural gas and electric energy operating budgets for the Plant.

AGENCY: U.S. Energy will act as Client’s agent while managing Client’s energy matters.
The scope of this agency is set forth in the Agency Authorization between U.S. Energy and Client
attached as Exhibit A (the terms of which are made a part of this Agreement).

TERM: The initial term of this Agreement shall commence on December 1, 2006 and continue
until twelve (12) months after the Plant’s Completion Date. It will then renew for a one-year
term, year to year thereafter, unless Client or U.S. Energy terminates the contract upon sixty (60)
days prior written notice before the annual renewal date. Invoicing during the development and
construction phase shall be capped at 12 months in the event that the plant is not operational
before December 1, 2007. Invoicing shall again begin upon plant startup. Client shall remain
responsible for payment and performance associated with any and all transportation, supply, and
storage transactions entered into by U.S. Energy and authorized by Client, prior to termination, as
well as fees and charges for U.S. Energy’s services occurring up until the termination date.

FEES: U.S. Energy’s fee for services during the term of this Agreement shall be a monthly
retainer fee of $2,900 per month plus pre-approved travel expenses. The monthly retainer fee will
increase 4% per year on the annual anniversary date of the effective date of this Agreement.

In the event that plant financing is not secured, this Agreement shall become null and void and
both parties will be relieved of professional and/or financial obligations due the other party.
However, Client shall remain responsible for payment and performance associated with any and all
transportation, supply, and storage transactions entered into

3

 

by U.S. Energy and authorized by
Client, prior to termination, as well as fees, charges
and pre-approved travel expenses for U.S. Energy’s services occurring up until the termination
date. In the event the project experiences significant delay, and U.S. Energy is not actively
performing tasks on behalf of Client, billing under this agreement may be suspended until such time
as the project is either terminated or reactivated.

If Client elects to utilize U.S Energy to provide physical or financial natural gas hedging
services, a $.01/MMBTu administrative fee will be assessed on volumes hedged to cover the costs
associated with compliance to Federal and State commodities rules and regulations and
administrative costs of facilitating this natural gas hedging service.

BILLING AND PAYMENT: On the first of the month, U.S. Energy shall invoice Client for
appropriate energy costs from the previous month and for the U.S. Energy retainer for the current
month. Client shall pay U.S. Energy within ten (10) days of receipt of invoice.

TAXES: Client will be responsible for payment of all taxes including, but not limited to,
all sales, use, excise, BTU, heating value and other taxes associated with the purchase and/or
transport of natural gas, electricity or other fuels and the provision of services hereunder.

CONFIDENTIALITY: U.S. Energy shall not divulge to any other person or party any
information developed by U.S. Energy hereunder or revealed to U.S. Energy pursuant to this
Agreement, unless such information is (a) already in U.S. Energy’s possession and such information
is not known by U.S. Energy to be subject to another Confidentiality Agreement, or (b) is or
becomes generally available to the public other than as a result of an unauthorized disclosure by
U.S. Energy, its officers, employees, directors, agents or its advisors, or (c) becomes available
to U.S. Energy on a non-confidential basis from a source which is not known to be prohibited from
disclosing such information to U.S. Energy by legal, contractual or fiduciary obligation to the
supplier, or (d) is required by U.S. Energy to be disclosed by court order, or (e) is permitted by
Client. All such information shall be and remain the property of Client unless such information is
subject to another Confidentiality Agreement, and upon the termination of this Agreement, U.S.
Energy shall return all such information upon Client’s request. Notwithstanding anything to the
contrary herein, U.S. Energy shall not disclose any information which is in any way related to this
Agreement or U.S. Energy’s services hereunder without first discussing such proposed disclosure
with Client.

NOTICES: Any formal notice, request or demand which a party hereto may desire to give to
the other respecting this Agreement shall be in writing and shall be considered as duly delivered
as of the postmark date when mailed by ordinary, registered or certified mail by said party to the
addresses listed below. Either party may, from time-to-time, identify alternate addresses at which
they may receive notice during the term of this Agreement by providing written notice to the other
party of such alternate addresses.

4

 

	 	 	 	 	 
	Client:	 	Buffalo Ridge Ethanol
	 

	 	 	 	304 Split Rock Blvd.
	 

	 	 	 	Suite 205
	 

	 	 	 	Brandon, SD 57005
	 
	 	 	 	 
	U.S. Energy:	 	Bank: US Bank
	 

	 	(Payment by wire)
	 	Account Name: U.S. Energy Services, Inc.
	 

	 	 	 	Account #: 173100561153
	 

	 	 	 	ABA: 091 0000 22
	 
	 	 	 	 
	 

	 	(Notices):
	 	U.S. Energy Services, Inc.
	 

	 	 	 	1000 Superior Blvd, Suite 201
	 

	 	 	 	Wayzata, MN 55391
	 

	 	 	 	Attn: Contract Administration

ASSIGNMENT OR AMENDMENT: The Agreement may not be assigned or amended without the written
consent of U.S. Energy and Client.

APPLICABLE LAW: The Agreement shall be construed in accordance with the laws of the State
of Minnesota.

ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement among the parties
pertaining to the subject matter hereof and supersedes all prior Agreements and understanding
pertaining hereto.

Agreed to and Accepted by:

Buffalo Ridge Ethanol, LLC

	 	 	 	 	 
	By:

	 	/s/ David Kolsrud
 

	 	 
	Name:

	 	David Kolsrud	 	 
	(Print)
	 	 	 	 
	Title:

	 	Buffalo Ridge Sec/Treasurer	 	 
	 
	 	 	 	 
	Date:

	 	11/16/06	 	 
	 
	 	 	 	 
	U.S. Energy Services, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Casey Whalan
 

	 	 
	Name:

	 	Casey Whalan	 	 
	(Print)
	 	 	 	 
	Title:

	 	VP	 	 
	 
	 	 	 	 
	Date:

	 	11/16/06	 	 

5

 

EXHIBIT A

AGENCY AUTHORIZATION

The purpose of this Agency Authorization (this “Authorization”) is to set forth the authorization
and agreement between U.S. Energy Services, Inc. (“U.S. Energy”) and Buffalo Ridge Ethanol, LLC
(“Client”) related to the provision of energy supply management services.

Client and U.S. Energy agree on the following terms and conditions:

	1.	 	APPOINTMENT AND SCOPE – Client hereby appoints U.S. Energy as its agent for managing Client’s
energy supplies and to deal with third parties on behalf of Client, in connection with
energy-related matters, in U.S. Energy’s capacity as Client’s agent, including, without
limitation, the purchase of energy resources in such quantity and at such times as Client may
authorize in writing, by electronic communications (e.g., by email), verbally or otherwise
(“Energy Procurements”). U.S. Energy is authorized to contract on behalf of Client for the
acquisition of energy supply, transportation and distribution. U.S. Energy hereby accepts
such appointment and agrees to use commercially reasonable efforts to perform the services
required by this Authorization.

	2.	 	AUTHORITY OF U.S. ENERGY TO ALIGN CREDIT – Client authorizes U.S. Energy, in making Energy
Procurements, to align credit from energy suppliers or third parties on behalf and as an agent
of Client, as needed.

	3.	 	AUTHORITY OF U.S. ENERGY TO EXTEND CREDIT – Client hereby agrees that when making Energy
Procurements on behalf of a Client, U.S. Energy may use U.S. Energy funds to pay suppliers,
thereby extending credit directly to Client (and acting as a “Creditor,” as that term is used
in this Authorization).

	4.	 	TERM – The term of this Authorization shall commence as of the date hereof and shall continue
indefinitely until such time as the parties hereto shall agree in writing to terminate the
Authorization.

	5.	 	INDEPENDENT CONTRACTOR – It is not the intent of the parties hereto to form any partnership
or joint venture relationship. Each party shall, in relation to its obligations hereunder,
act as an independent contractor.

	6.	 	RELEASE OF ENERGY CONSUMPTION RECORDS AND BILLS — This Agreement serves as authorization for
the release of Client’s energy consumption records and bills from pipelines and suppliers to
U.S. Energy.

	7.	 	AUTHORITY – Each of Assignor and Assignee represents and warrants to the other that it is
fully empowered and authorized to execute and deliver this Assignment, and the individuals
signing this Assignment each represent and warrant that he or she is fully authorized to do
so.

Agreed to and Accepted by:

	 	 	 	 	 	 	 	 	 	 	 
	Buffalo Ridge
Ethanol, LLC	 	 	 	U.S. Energy
Services, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David Kolsrud
 

	 	 	 	By:
	 	/s/ Casey Whalan
 

	 	 
	Print Name:

	 	David Kolsrud
	 	 	 	Print Name:
	 	Casey Whalan	 	 
	Title:

	 	Sec/Treasurer
	 	 	 	Title:
	 	VP	 	 
	 
	 	 	 	 
	Date:

	 	11/16/06
	 	 	 	Date:
	 	11/16/06exv10w16

 

Exhibit 10.16

THIS INSTRUMENT WAS DRAFTED BY:

Ronald E. Seanor

STONEBERG, GILES & STROUP, P.A.

300 O’Connell Street

Marshall, MN 56258

Telephone: (507) 537-0591

SDSB #3245

OPTION TO PURCHASE REAL ESTATE

     AGREEMENT
entered into this 18th day of November, 2006, by and
between The Estate of Pauline Johnson, also known as Pauline M. Johnson, (hereinafter referred to
as “Owners”) and Fagen, Inc., (hereinafter referred to as “Optionee”).

     WHEREAS, Owners are the owners of certain real property in Section 33, Township 103 North,
Range 47 West of the Fifth Principal Meridian, Minnehaha County, South Dakota included in a
proposed site for an ethanol plant and related facilities, a proposed footprint of which is annexed
and incorporated as Exhibit “A”; and

     WHEREAS, the approximate area of Owners’ real property included in the proposed site is
identified on Exhibit “A” as “Site” and

     WHEREAS, the precise acreage of Owners’ real property which Optionee shall have the option to
purchase will be determined at a later date, pursuant to paragraph 1 of this Option to Purchase
Real Estate, but shall be designated in increments of five (5) acres and shall neither exceed sixty
(60) contiguous acres, nor be less than twenty (20) contiguous acres, nor materially extend beyond
the boundaries appearing on Exhibit “A”, nor result in a parcel which is neither a square nor a
rectangle; and

     WHEREAS, the precise acreage so determined pursuant to paragraph 1 of this Option to Purchase
Real Estate is hereinafter referred to as the “Subject Property”; and

     WHEREAS, Optionee desires the right to obtain title to the Subject Property, at prices and
under terms and conditions hereinafter provided, for the purpose of constructing an ethanol plant
and related facilities,

     NOW THEREFORE, in consideration for the sum of an option fee of $5,000.00 in hand paid, and
other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto
agree that the foregoing recitals constitute covenants and agreements of the parties and further
agree as follows:

     1. DEFINITION OF TERMS AND DETERMINATION OF SUBJECT PROPERTY. Subject Property hereinafter
refers to the parcel owned by Owners and meeting the criteria aforesaid. Prior to any exercise of
the option to purchase the Subject Property, Optionee shall

1

 

present to Owners a survey thereof
prepared by a licensed South Dakota land surveyor in a form sufficient for inclusion in a
recordable plat of the Subject Property. Such survey shall be at the expense of Optionee and shall
specify the actual acreage of the Subject Property to the nearest hundredth of an acre and shall be
inclusive of “gross acres” of the Subject Property, that is inclusive of any portion of Subject
Property titled in Owners’ name but subject to road use or right of way.

     2. PURCHASE TERMS AND CONDITIONS. The Optionee shall have the right and option to acquire all
portions of the Subject Property upon the terms and conditions hereinafter set forth:

	 	a.	 	Minimum Parcel Requirements. The right and option to acquire
the Subject Property requires the Optionee to purchase the parcel as surveyed.
	 
	 	b.	 	Initial Option Period and Price. This initial option shall
continue for a period of time extending from the execution of this agreement to
and including May 15, 2007. During said period, Optionee shall have the right to
purchase Subject Property as surveyed, at $5000.00 per gross acre. If said option
to purchase is exercised, the $5,000.00 option fee shall be applied to the
purchase price. If said option is not exercised within the initial option period,
and no extension is requested, said option fee shall be retained by the Owners and
this agreement shall be without further force and effect except that the
provisions of paragraph 7 shall survive such expiration of this agreement.
	 
	 	c.	 	Right to Extend Option. The Optionee shall have the right and
option to extend the initial option for one (1) year, that is from May 16, 2007
through May 15, 2008. Said extension request shall be in writing and submitted to
Owners no later than seven (7) days prior to the expiration of the option in
place. If the right to extend the option is exercised, the option fee shall be
retained by the Owners but shall not be applied to the purchase price if the
extended option is exercised.
	 
	 	d.	 	Possession. If the Optionee timely performs all obligations
in connection with the exercise of any option pursuant to this agreement,
possession of the Subject Property shall be delivered to the Optionee upon
closing.
	 
	 	e.	 	Real Estate Taxes. If Optionee exercises its option to
purchase Subject Property, then the Owners shall pay all real estate taxes payable
in the year of sale or prior years. The Optionee shall pay all subsequent real
estate taxes.
	 
	 	f.	 	Special Assessments. The Owners shall pay all installments of
special assessments which are a lien on the real estate and, if not paid, would
become delinquent during the calendar year that the option is exercised, and all
prior installments thereof. All other special assessments shall be paid by the
Optionee.
	 
	 	g.	 	Duties Pending Closing. In the event of notice of exercise
of an option contained herein by the Optionee, Optionee shall obtain a commitment
from First Dakota Title, Sioux Falls, South Dakota, for an Owner’s Policy of Title
Insurance in the amount of the purchase price and showing merchantable title to
the Subject Property in the Owners in conformity with this agreement, South Dakota
law and Title Standards of the South Dakota State Bar Association. Optionee shall
also promptly submit the plat of the Subject Property for approvals and recording,
all at the expense of Optionee. Owners shall cooperate with Optionee in every

2

 

	 	 	 	reasonable respect in connection with the approval and recording of such plat.
Optionee shall cooperate in every reasonable respect in connection with the
relocation by Owners of residential building eligibilities from the Subject
Property to adjacent land owned by Owners, it being acknowledged that no
residential building eligibilities are to be purchased by Optionee.
	 
	 	h.	 	Deed. Upon closing, including payment of the purchase price,
Owners shall convey the real estate to the Optionee, by Warranty Deed, free and
clear of all liens and encumbrances but otherwise “AS IS” and without
representation or warranty by Owners other than as to title and, without limiting
the generality of the foregoing, subject to easements and restrictions of record.
Owner shall pay the statutory transfer fee. This provision shall survive the
closing.
	 
	 	i.	 	Joint Tenancy in Proceeds and in Real Estate. If the Owners,
immediately preceding the exercise of any option herein, hold title to the Subject
Property in joint tenancy with full right of survivorship, and the joint tenancy
is not later destroyed by operation of law or by acts of the Owners, then the
proceeds of thus sale, and any continuing or recaptured rights of the Owners in
Subject Property, shall belong to the Owners as joint tenants with full rights of
survivorship and not as tenants in common; and Optionee; in the event of death of
either Owner, agree to pay any balance of the price due Owners under this contract
to the surviving Owner and to accept a deed from the surviving Owner consistent
with paragraph 2.
	 
	 	j.	 	Method of Exercise of Option. Exercise of the option to
purchase the Subject Property shall be made by the Optionee delivering to the
Owners at the address to which notices are to be sent, a written notice of
exercise of the option as provided herein and shall be effective only if
contemporaneous with the exercise of similar options of even or similar date
herewith and regarding other parcels in Section 33 aforedescribed. Written notice
shall be given in compliance with paragraph 11 below.
	 
	 	k.	 	Notice of Exercise of Option. The written notice of exercise
of the option to acquire the Subject Property shall be made in the manner
described herein but shall only be effective if given on or before the end of the
last day of the last exercised option.
	 
	 	l.	 	Reimbursement for Unharvested Crops/Expenses. In the event
Optionee takes possession of the Subject Property during the haying season, the
Optionee shall, at closing, reimburse the Owners for the standing hay on
the Subject Property at the rate of $480.00 per acre for the Subject Property total
acreage, provided that the per acre rate shall be reduced by $175.00 if possession
is after the first cutting of the season has been taken by Owners and by $130.00,
$90.00, and $85.00, respectively, if subsequent second, third and fourth cuttings
are taken before the possession date.
	 
	 	m.	 	Opportunity for Like-Kind Exchange. If, within 30 days from
when the Optionee serves notice to the Owners of its intent to exercise its
purchase option, the Owners find a third party willing to enter into a multiparty
like-kind exchange agreement; the Optionee agrees to fully cooperate and enter
into such agreement for the purpose of effecting a multiparty like-kind exchange
pursuant

3

 

	 	 	 	to §1031 of the Internal Revenue Code, as amended, whereby the third
party will sell like-kind real estate to the Optionee and execute a Warranty Deed
in favor of the Owners; concurrently the Owners will convey their interest in
Subject Property to the Optionee; concurrently the Optionee shall pay the
third-party the lesser of the agreed upon value of the Subject Property and the
agreed upon value of the acquisition property; concurrently the difference between
the agreed upon value of the Subject Property and the agreed upon value of the
exchange property shall be paid to the Owners by the Optionee, or to the
third-party by the Owners, as circumstances dictate.
	 
	 	 	 	In the event the Owners fail to find a third party willing to enter into a
multiparty like-kind exchange agreement within 30 days of the Optionee’s notice, but
give notice to the Optionee of their intent to effect a deferred like-kind exchange
pursuant to §1031 of the IRC of 1986, as amended, after such period, the Optionee
agrees to deposit the purchase price of the Subject Property in an escrow or other
account pursuant to terms enabling the Owners to effect such an exchange. In the event
that Owners have not designated the property to be acquired by §1031 of the Internal
Revenue Code, as amended, to effect like- kind exchange treatment, then the Optionee
shall direct the closing agent to pay the balance of the purchase price to the Owners.
In the event that the Owners have designated the property to be acquired by them within
the identification period as required by §1031 of the Internal Revenue Code, as
amended, to effect like-kind exchange treatment, then the Optionee shall direct the
escrow agent to pay the third party the amount necessary to effect such an exchange and
the balance, if any, of the escrow account to the Owners.
	 
	 	n.	 	Investment Opportunity. In consideration of the granting of
this option and without regard to whether this option is exercised, Optionee
assures Owners of the opportunity to invest in an ethanol plant constructed by
Optionee or its affiliates in Minnehaha County, provided that such investment
shall be subject to all terms and conditions thereof. This provision shall
survive the closing.
	 
	 	o.	 	 Repurchase. Owners shall have the right to repurchase the
Subject Property if the option is exercised and there is closing but Optionee or
its affiliates do not construct, to “substantial completion”, as that term is
defined in AIA documents, an ethanol plant and related facilities thereon
materially similar to that planned at the date hereof. Such repurchase shall be
for the same price and on the same general transactional terms as set forth herein.

     3. CLOSING DATE. If Optionee exercises its option to purchase Subject Property, the Owners
and Optionee shall appear at First Dakota Title in Sioux Falls, South Dakota at a mutually
convenient closing date as agreed upon by the parties as soon as practical after the plat has been
recorded. The Parties agree to equally share the expense of the closing agent, First Dakota Title.
The Parties shall split equally the cost of the Owner’s Policy of title insurance premium.
Optionee shall pay the cost of any mortgagee’s endorsement. Optionee shall pay the cost of
recording the Warranty Deed. Optionee shall pay all brokerage commissions due in connection with
the transaction, including those payable to HJN Team Real Estate. Owners represent and warrant to
Optionee that they have incurred no brokerage obligations in connection with the transaction.

4

 

     4. RIGHT TO FARM PROPERTY DURING TERM OF AGREEMENT. The Owners shall have the exclusive use
and possession of the Subject Property including but not limited to the right to farm the same
during the term of this agreement, or until closing.

     5. RIGHT TO FARM PROPERTY PURCHASED. In the event that Optionee exercises its option to
purchase the Subject Property and in the event that row crops or hay are subsequently cultivated or
maintained upon said property, Owners shall have the first right to farm said property under terms
and conditions customary in the area. Such right shall be assignable by Owners to persons or
entities which have had or do have lease arrangements with Owners. This provision shall survive
the closing.

     6. SUBSURFACE DRAINAGE. Optionee acknowledges its understanding that the Subject Property may
contain certain drainage lines providing surface and subsurface water drainage from other real
property. Optionee agrees to preserve such subsurface drainage or to provide suitable alternative
surface or subsurface drainage at Optionee’s cost on any property purchased pursuant to the terms
of this agreement.

     7. LICENSE TO OPTIONEE TO ENTER EXHIBIT “A” SITE. The Owners hereby grant the Optionee a
nonexclusive license to enter the Exhibit “A” Site from time to time during the option period for
the sole and exclusive purpose of allowing the Optionee to perform boundary and topographic survey
work, and conduct soil, engineering, and other boring tests on such land. The Optionee agrees to
indemnify, reimburse and hold the Owners harmless from any and all damage caused by the Optionee or
its agents on the land or crops thereon and from, for and against any and all claims whatsoever
arising out of Optionee’s exercise of the license here granted. After performing its test and
engineering work, the Optionee shall restore the land to substantially the same condition as
existed prior to the Optionee’s conduct thereon, and shall be liable to the Owners for any damage
remaining on the land, or crops or fixtures thereon. Such license to go on the Exhibit “A” Site
shall be limited to the purpose of performing such survey work and soil tests, engineering and
other tests by the Optionee, and such license shall automatically terminate and be of no further
force and effect after the expiration of the term of this option agreement. The terms of this
provision shall survive the closing.

     8. RIGHT OF ASSIGNMENT. The Optionee shall have the full and unrestricted right to, at any
time, assign its interest in this agreement or any other interest hereunder to any entity
organized for the purposes of ownership and operation of an ethanol plant and related facilities in
which it and/or its employees have a majority interest. Optionee agrees that in the event of an
assignment, the Optionee shall retain responsibility for all of the rights, obligations and duties
contained herein, all of which shall be deemed to have survived any such assignment.

     9. TIME IS OF THE ESSENCE. Time is of the essence of each and every term and provision of this
agreement.

     10. REMEDIES. Each party to this agreement shall have any and all remedies in connection
therewith as exist at law or in equity. In any action between the parties seeking enforcement of
any of the terms and provisions of this agreement or in connection with the Subject Property, the
prevailing party in such action shall be awarded, in addition to damages, injunctive or other
relief, its reasonable costs and expenses, not limited to taxable costs, and reasonable attorneys
fees.

5

 

     11. NOTICES. Any notice to either party that may be required hereunder or which either party
is permitted or may desire to give to the other party must be in writing and may be given by
personal delivery or by mailing the same by registered or certified mail, return receipt requested,
to the party to whom the notice is directed at the address of such party as hereinafter set forth
or such other address as the parties may hereinafter designate:

	 	 	 	 	 	 	 	 	 
	 	 	Owners:	 	Marie Nordstrom	 	Jolene Barber
	 	 	 	 	25561 480th Street	 	48620 256th Street
	 	 	 	 	Garreston, SD 57030	 	Garreston, SD 57030
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	With a copy to:	 	 
	 

	 	 	 	 	 	John C. Quaintance	 	 
	 

	 	 	 	 	 	P.O. Box 2208	 	 
	 	 	 	 	 	 	Sioux Falls, SD 57101-2208
	 
	 	 	 	 	 	 	 	 
	 	 	Optionee:	 	ATTN: Stephanie Howard-Clark & Wayne Mitchell
	 	 	 	 	Fagen, Inc.
	 	 	 	 	501 W. Hwy 212
	 	 	 	 	P.O. Box 159
	 	 	 	 	Granite Falls, MN 56241

     Any notice given by mail shall be deemed given on the day after that on which the same is
deposited in the United States mail, properly addressed with postage fully prepaid, if mailed in
Sioux Falls, South Dakota, or on the 2nd day after mailing if mailed elsewhere.

     IN WITNESS THEREOF, this Agreement has been executed by the parties as of the day and year
first above written.

     The Estate of Pauline Johnson, also known as Pauline M. Johnson, Owners

	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Marie Nordstrom
 

	 	 	 	By:
	 	/s/ Jolene Barber
 

	 	 
	Marie Nordstrom, Personal Representative
	 	 	 	Jolene Barber, Personal Representative	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Fagen, Inc.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	Gregory Van Zanten
	 	 	 	Its:
	 	representative	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Authorized Signature
	 	 	 	Title	 	 	 	 

6

 

	 	 	 	 	 	 	 
	STATE OF SOUTH DAKOTA

	 	)	 	 	 	 
	 

	 	  ) ss.
	 	 
	COUNTY OF MINNEHAHA

	 	)	 	 	 	 

     On this 13th day of November, 2006, before me, the undersigned, a Notary Public,
personally appeared Marie Nordstrom, one of the Personal Representatives of The Estate of Pauline
Johnson, also known as Pauline M. Johnson, Owners, who executed the foregoing instrument on behalf
of said Estate, and acknowledged the execution of the foregoing Option to Purchase Real Estate.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

	 	 	 	 	 
	 

	 	/s/ Carla Hall
 

	 	 
	 

	 	Notary Public - State of South Dakota	 	 
	 

	 	(SEAL)	 	 

	 	 	 	 	 
	My Commission Expires: May 30, 2012    

	 	[           CARLA HALL
	 	]
	 

	 	[SEAL NOTARY PUBLIC SEAL
	 	]
	 

	 	[SOUTH DAKOTA
	 	]

	 	 	 	 	 	 	 
	STATE OF SOUTH DAKOTA

	 	)	 	 	 	 
	 

	 	  )ss.
	 	 
	COUNTY OF MINNEHAHA

	 	)	  	 	 	 

     On this 17th day of November, 2006, before me, the undersigned, a Notary Public,
personally appeared Jolene Barber, one of the Personal Representatives of The
Estate of Pauline Johnson, also known as Pauline M. Johnson, Owners, who executed the foregoing
instrument on behalf of said Estate, and acknowledged the execution of the foregoing Option to
Purchase Real Estate.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

	 	 	 	 	 
	 

	 	/s/ John C. Quaintance
 

	 	 
	 

	 	Notary Public - State of South Dakota	 	 
	 

	 	(SEAL)	 	 
	My Commission Expires: 10/17/2010

	 	[JOHN C. QUAINTANCE
	 	]
	 

	 	[SEAL NOTARY PUBLIC SEAL
	 	]
	 

	 	[SOUTH DAKOTA
	 	]

7

 

	 	 	 	 	 	 	 
	STATE OF South Dakota

	 	)	 	 	 	 
	 

	 	  )ss.
	 	 
	COUNTY OF Minnehaha

	)	 	 	 	 

     On
this 18th day of November, 2006, before me, the undersigned Officer, personally
appeared Greg Van Zanten, who acknowledged himself to be the
representative of Fagen, Inc., a Minnesota Corporation, and that he, as
such representative being authorized so to do, executed the foregoing instrument for the
purposes therein contained, by signing the name of the Corporation by himself as
representative.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

	 	 	 	 	 
	 

	 	  Kimberly A. Jensen
 

	 	 
	 

	 	Notary Public - State of South Dakota	 	 
	 

	 	(SEAL)	 	 
	 
	 	 	 	 
	My Commission Expires: 9/2/2011

	 	[KIMBERLY A. JENSEN
	 	]
	 

	 	[SEAL NOTARY PUBLIC SEAL
	 	]
	 

	 	[SOUTH DAKOTA
	 	]

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}]]