Document:

EXHIBIT
10.06

 

PROMISSORY
NOTE

 

	$340,000.00.	 	May
    16, 2014

 

FOR
VALUE RECEIVED, the undersigned, Verity Water, LLC, a South Dakota limited liability company (“Maker”) hereby promises
to pay to the order of Duane Spader, (“Payee”), at 1100 E. 64th St. North, Sioux Falls, SD 57104, or at such other
place as the holder hereof may from time to time direct, in lawful money of the United States of America, the principal sum of
Three Hundred Forty Thousand Dollars ($340,000.00), plus interest at a rate per annum equal to the Base Rate (hereinafter defined)
and accruing from and after from and after December 31, 2012, payable in installments as follows:

 

	 	(a)	On
    or before September 30, 2015, a payment of all interest accrued from and after December 31, 2012;
	 	 	 
	 	(b)
    	On
    September 30, 2016, a payment of all accrued interest not previously paid; 
	 	 	 
	 	(c)	On
    September 30, 2017, a payment of principal in the amount of One Hundred Thirteen Thousand Three Hundred Thirty-Three Dollars
    and Thirty-Three Cents ($113,333.33), plus all accrued interest not previously paid;
	 	 	 
	 	(d)	On
    September 30, 2018, a payment of principal in the amount of One Hundred Thirteen Thousand Three Hundred Thirty-Three Dollars
    and Thirty-Three Cents ($113,333.33), plus all accrued interest not previously paid; and
	 	 	 
	 	(e)	On
    September 30, 2019, a payment of principal in the amount of One Hundred Thirteen Thousand Three Hundred Thirty-Three Dollars
    and Thirty-Four Cents ($113,333.34), plus all accrued interest not previously paid. 

 

Any
amounts not previously paid shall be due and payable on September 30, 2019. Payments shall first be credited to interest and then
to principal. This Note memorializes advances previously made and amends the repayment terms.

 

As
used in this Note, the following terms shall have the respective meanings indicated below.

 

  “Base Rate” means interest at the rate of three percent (3%) per annum, for periods through September 30, 2016, and thereafter interest at a rate of five percent (5%) per annum.

 

  “Default Rate” means the sum of the Base Rate as of the applicable date plus six percent (6%).

 

  “Maximum Rate” means the maximum usurious interest permitted from time to time by applicable law.

 

    	1

    	 

    

 

 

Maker
shall have the right to prepay, at any time and from time to time without premium or penalty, the entire unpaid principal balance
of this Note or any portion thereof; provided there shall also be paid with such prepayment all accrued interest on the unpaid
principal balance.

 

If
this Note is not paid when due, whether at maturity or by acceleration, the undersigned promises to pay all costs of collection,
including but not limited to, reasonable attorneys’ fees, if and to the extent such are then permitted to be recovered by
the laws of the State of South Dakota, and all expenses incurred in connection with the protection or realization of the security
which may be incurred by the holder hereof on account of such collection, whether or not suit is filed hereon.

 

This
Note shall be governed by and construed in accordance with the laws of the State of South Dakota. Any action or proceeding under
or in connection with this Note against Maker or any other party ever liable for payment of any sums of money payable on this
Note may be brought in any state court in Minnehaha County, South Dakota. Maker and each such other party hereby irrevocably (i)
submits to the nonexclusive jurisdiction of such courts and (ii) waives any objection it may now or hereafter have as to the venue
of any such action or proceeding brought in such court or that such court is an inconvenient forum. Any action or proceeding by
Maker or any other party liable hereunder against Payee shall be brought only in a court located in Minnehaha County, South Dakota.

 

Maker,
for itself, its successors, transfers, and assigns, and each surety, guarantor, endorser, and other party ever liable for
payment of any sums of money payable on this Note jointly and severally waive notice, presentment, demand for payment,
protest, notice of protest and non-payment or dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, grace, and all other formalities of any kind, and consent to all extensions
without notice for any period or periods of time and partial payments, before or after maturity, and any impairment of any
collateral security this Note, all without prejudice to the holder. The holder shall similarly have the right to deal in any
way, at any time, with one or more of the foregoing parties without notice to any other party, and to grant any such party
any extensions of time for payment of any of said indebtedness, or to release or substitute part or all of the collateral
security this Note, or to grant any other indulgences or for bearances whatsoever, without notice to any other party and
without in any way affecting the personal liability of any party hereunder.

 

IN
WITNESS WHEREOF, the undersigned has caused this Promissory Note to be executed as of the day and year first above written.

 

	 	VERITY WATER, LLC
	 	 	 
	 	By:	 /s/ VERLYN SNELLER
	 	Its:	

 

    	2EXHIBIT
10.07

 

Prepared
by:

Catherine
A. Tanck

Davenport,
Evans, Hurwitz & Smith, LLP

206 W. 14th
St., PO Box 1030

Sioux Falls,
SD 57101-1030

(605) 357-1223

 

TERMINATION
AGREEMENT

 

This
TERMINATION AGREEMENT is made and entered into as of this 16 day of May, 2014, by and between Spader, Inc., a South Dakota corporation,
of 1601 E. Robur Dr., Sioux Falls, SD 57104, hereinafter referred to as “Seller”, and Verity Farms, LLC, a South Dakota
limited liability company, of 47184 258th St., Sioux Falls, SD 57107, hereinafter referred to as “Buyer.”

 

WITNESSETH:

 

WHEREAS,
Seller sold to Buyer, and Buyer purchased from Seller, pursuant to a contract for deed dated December 27, 2012, as amended to
date (“Contract for Deed”), that certain real estate located in Minnehaha County, South Dakota, which is legally described
on Exhibit A, attached hereto and incorporated herein by this reference, which real estate is referred to herein and in the Contract
for Deed as the “Property”; and

 

WHEREAS,
the Contract for Deed provided for payment of a total purchase price of Two Million Four Hundred Thousand Dollars ($2,400,000),
together with interest from and after the date of the Contract for Deed, at the rate of six percent (6%) per annum, payable in
five (5) annual installments of Four Hundred Thousand Dollars ($400,000) each, including principal and interest, commencing on
September 20, 2013, and continuing on the same date of the succeeding four (4) calendar years, and with a balloon payment of all
unpaid principal and accrued interest on September 20, 2018; and

 

WHEREAS,
Seller has not received any payments from Buyer to date of principal or interest under the Contract for Deed and, as such, Buyer
is in default thereunder; and

 

WHEREAS,
the parties now desire to terminate the Contract for Deed by mutual agreement and to return the Property to the Seller,

 

NOW,
THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, it is agreed as follows:

 

    	 

    	 

    

 

1.Termination.
The parties agree that in lieu of proceeding under the default provisions of Section 12 of the Contract for Deed, the parties
by mutual agreement hereby agree that the Contract for Deed shall terminate on _____________, 2014 (“Termination Date”).
Prior to the Termination Date, Buyer shall vacate the Property and surrender and return the Property to the Seller in substantially
the same condition as it was on December 27, 2012.

 

2.The
Existing Leases/Assignment of Rents. Buyer warrants and represents and agrees as follows:

 

(a)the
Property is subject to no leases or other contracts except (i) leases that were in place on December 27, 2012, and to which no
modifications or amendments have since been made; or (ii) other leases or other contracts to which Seller gave its prior written
consent;

 

(b)to
Buyer’s knowledge, no liens, restrictions or encumbrances have been placed on the Property from and after December 27, 2012,
with or without the permission of the Buyer;

 

(c)Buyer
is responsible for the real estate taxes and assessments on the Property for the 2013 calendar year (which are payable in 2014).
Within six (6) months following the date hereof, Buyer agrees to pay Seller for such taxes and assessments, together with interest
at the rate of three percent (3%) per annum from May 1, 2014 until payment is made;

 

(d)Buyer
has complied, in full, with all of its obligations under Sections 8 and 13 of the Contract for Deed up to through the Termination
Date;

 

(e)Buyer
has not assigned all or any part of its rights under the Contract for Deed in violation of Section 18 of the Contract for Deed
up through the Termination Date;

 

(f)Buyer
has complied, in full, with all of its obligations under Section 9 of the Contract for Deed up through the Termination Date;

 

(g)Buyer
hereby waives any right it may have to CRP and any other federal farm program payments associated with the Property under Section
17 of the Contract for Deed; and

 

(h)upon
execution of this Termination Agreement by both parties, Buyer shall deliver to Seller a duly executed Quit Claim Deed in the
form attached as Exhibit B.

 

As
additional security for Buyer’s obligations to Seller under the Contract for Deed, Buyer executed an Assignment of Rents
providing, in part, that Seller was entitled to receive all rents, income, issues, and profits in connection with any lease agreement
then in place, or to be entered into in the future, with respect to the Property. Pursuant to such provision, the parties agree
that Seller shall be entitled to retain any rents, income, issues and profits it has already received, and shall also be entitled
to receive any future profits with respect to the Property. To the extent that any of such amounts have been or in the future
are delivered to Buyer, Buyer agrees that it has and will receive such amounts shall only as an agent for the Seller (and not
for its own account) and shall notify Seller of their receipt and promptly turn them over to Seller.

 

    	2

    	 

    

 

3.Mutual
Release. Upon Buyer and Seller satisfying their obligations as set forth in this Termination Agreement, and subject to such
satisfaction:

 

(a)Except
as provided herein, Seller releases, discharges and waives any claims, known or unknown, against Buyer and its officers, directors,
managers, members, affiliates (including but not limited to Verity Corp.) or agents, and their respective successors and assigns,
arising out of or in any way connected to the Contract for Deed through the date hereof, including its right to accrued interest.
The foregoing release discharge, and waiver shall not apply to any claim that Seller may have for indemnification under Section
11 of the Contract for Deed for injuries occurring on or before the Termination Date, or for payment of real estate taxes, with
interest, under Section 2(c) hereof; and

 

(b)Buyer
releases, discharges and waives any claims, known or unknown, against Seller and its officers, directors, shareholders or agents,
and their respective successors and assigns, arising out of or in any way connected with the Contract for Deed through the date
hereof.

 

Nothing
in this Section shall operate as a release of any party from its liabilities and obligations arising under this Termination Agreement.

 

4.Binding
Effect. This Termination Agreement shall be for the benefit of, and shall be binding upon, the parties hereto and their respective
successors and assigns.

 

5.Final
Agreement. This Termination Agreement shall constitute the final agreement and understanding of the parties on the subject
matter hereof. This Termination Agreement may be modified only by a further writing signed by both parties.

 

6.Governing
Law; Illegality. This Termination Agreement shall governed by the laws of the State of South Dakota, without regard to its
conflict of law provisions. If one or more of the provisions contained herein shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this
Termination Agreement, and this Termination Agreement shall be construed as if such invalid, illegal or unenforceable provision
had not been contained herein, and shall be enforced to the maximum extent permitted by law.

 

7.Counterparts.
This Termination Agreement may be executed in any number of counterparts, each of which shall be deemed and original, but all
of which together shall constitute one and the same instrument.

 

IN
WITNESS WHEREOF, the parties have caused this Termination Agreement to be executed by their duly authorized representatives as
of the ___ day of ___________, 2014.

 

	 	SPADER, INC.
	 	 	 
	 	By:	/s/
    DUANE SPADER
	 	Its:	 
	 	 	 
	 	VERITY FARMS, L.L.C.
	 	 	 
	 	By:	/s/
    VERLYN SNELLER
	 	Its:	 

 

    	3

    	 

    

  

	STATE OF SOUTH DAKOTA 	)
	 	: SS
	COUNTY OF MINNEHAHA	)

 

On
this, the _____ day of _______________, 2014, before me, the undersigned officer, personally appeared ___________________, who
acknowledged himself to be the __________________________ of Spader, Inc., a corporation, and that he, as such officer, being
authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation
by himself as ______________________.

 

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

 

 

	 	 
	 	Notary Public, South Dakota
	 	My Commission expires:	 

 

	STATE OF SOUTH DAKOTA 	)
	 	: SS
	COUNTY OF MINNEHAHA	)

 

On
this, the _____ day of _______________, 2014, before me, the undersigned officer, personally appeared ___________________, who
acknowledged himself to be the __________________________ of Verity Farms, L.L.C., a limited liability company, and that he, as
such _____________, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing
the name of the company by himself as ______________________.

 

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

  

 

	 	 
	 	Notary Public, South Dakota
	 	My Commission expires:	 
	 	 

 

    	4

    	 

    

  

Exhibit
A

Legal
Description

 

The
Northwest Quarter of the Southeast Quarter (NW1/4SE1/4), the West Half of the Northeast Quarter (W1/2NE1/4), the South Half of
the Northwest Quarter (S1/2NW1/4), and the Northeast Quarter of the Southwest Quarter (NE1/4SW1/4), all in Section 24, Township
102 North, Range 49 West of the 5th P.M., Minnehaha County, South Dakota.

 

    	5

    	 

    

 

Exhibit
B

Quit
Claim Deed

 

    	6

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