Document:

Exhibit 10.11

 

Purchase Agreement

 

THIS
AGREEMENT (the “Agreement”)  is
executed as of the 25TH day of October, 2006 (the “Contract Date”) by
and between JONATHAN C. PIEKARSKI and BRENDA K. PIEKARSKI, husband and wife
(collectively, “Seller”), and OTTER TAIL AG ENTERPRISES, LLC,
a  Minnesota
limited liability company (together with any permitted assignee, the “Purchaser”).

 

ARTICLE I

Sale and Purchase

 

Subject
to the terms and conditions set forth in this Agreement, made pursuant to that
certain Option to Purchase Agreement between Seller and Purchaser (the “Option”),
Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from
Seller the following (collectively, the “Property”):

 

1.1          Land.  All
of Seller’s right, title and interest in and to that certain parcel of land
legally described on the attached Schedule
1.1.  including all right, title and interest of Seller, if any,
in and to the land lying in the bed of any street or highway in front of or
adjoining each such parcel to the center line thereof, all water and mineral
rights, development rights and all easements, rights and other interests
appurtenant thereto.

 

1.2          Permitted Exceptions.  The Property shall be conveyed subject only
to the exceptions set forth in this subdivision 1.2 (the “Permitted Exceptions”):

 

a.             Building and zoning laws, ordinances, State
and Federal regulations.

 

b.             Restrictions relating to use or improvement
of Property without effective forfeiture provision.

 

c.             Reservation of any minerals or mineral rights
to the State of Minnesota, or others.

 

d.             Utility and drainage easements of record
which do not interfere with present or planned improvements.

 

e.                                       Any statutes, rules or regulations
promulgated by the state or federal government or any of its agencies relating
to the restriction of use of the Property which shall be subject to such
statutes, rules or regulations.

 

f.                                         Existing liens and encumbrances which will be
paid and satisfied on or before Closing or the Release of Funds Date, as the
case may be.

 

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ARTICLE II

Purchase Price

 

2.1          Purchase
Price.  The
Purchase Price (the “Purchase Price”) for the Property shall be Seven
Hundred Thousand and No/100ths Dollars ($700,000.00). Upon Seller’s compliance
with all obligations under this Agreement, Purchaser shall pay the Purchase
Price to Seller as follows:

 

(a)                                  The sum of $3,000.00 shall be credited
against the Purchase Price, which represents amounts previously paid by
Purchaser to Seller as an option price for the Property under the Option.

 

(b)                                 The balance of the Purchase Price,
$697,000.00, shall be paid by Purchaser to Seller via wire transfer funds to an
account designated by Seller as follows:

 

i)                                         $447,000.00 (subject to deduction for
Purchaser paid closing costs) on the Closing Date or the Release of Funds Date,
as the case may be.

ii)                                      $250,000.00 payable on Friday, January 5,
2007. On the Closing Date or the Release of Funds Date, as the case may be,
$250,000.00 shall be paid into an interest bearing trust account held by First
Minnesota Title and Abstract Company (“Title Company”). Title Company shall
release the escrowed funds to Purchaser on January 5, 2007, together with
any interest earned thereon. Seller and Purchaser shall enter into an escrow
agreement with Title Company, and Seller shall pay the cost of the escrow
charges by Title Company ($125.00).

 

(c)                                  The Seller acknowledges that the funds
payable by Purchaser hereunder are presently in escrow and that funds may not
be immediately available on the Closing Date. Purchaser agrees that the parties
shall proceed to Closing on the Closing Date, and if funds are not then
available to Purchaser to pay the purchase price payable on the Closing Date,
the Purchaser shall deliver the Warranty Deed to Title Company, to be held in
escrow until Purchaser pays to Title Company, for payment to Seller, the
purchase price payable under Subdivision 2.1(b). Said payment shall be made
within seven (7) days of the Closing Date and the date said payment is
made shall be the “Release of Funds Date”. Upon Title Company’s receipt of the
payment described in Subdivision 2.1(b), Title Company shall proceed to
immediately record the Warranty Deed, pay in full any liens or encumbrances
against the Property and release the balance to Seller.

 

ARTICLE III

Seller’s Representations, Warranties and Covenants

 

In order to induce Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller makes the following
representations and warranties to, and covenants with, Purchaser as follows
(the “Seller’s Warranties”). The Seller’s Warranties shall be
true and correct on the date hereof and on the Closing Date.

 

3.1          Title.  Seller owns the Property, subject only to the
Permitted Exceptions.

 

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3.2          Binding Obligation. This Agreement constitutes a valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms.

 

3.3          Violations or Defaults. To
the best of Seller’s knowledge, Seller is not in violation or default under any
agreement with any third party, or under any judgment, order, or decree of any
court, arbitrator, administrative agency or other governmental authority to
which Seller may be subject, which violation or default may, in anyone case or
in the aggregate, materially and adversely affect the ownership of the Property
or Seller’s ability to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not (a) violate any law or any
order of any court or governmental authority with proper jurisdiction; (b) result
in a breach or default under any contract or other binding commitment of
Seller; (c) require any consent, or approval or vote of any court or
governmental authority or of any third person or entity that, as of the Closing
Date, has not been given or taken, and does not remain effective; or (d) result
in any encumbrance, other than a Permitted Exception, against the Property.

 

3.4          Litigation.
There are no actions, suits, arbitrations, governmental investigations or other
proceedings pending or, to the knowledge of Seller, threatened against Seller
or affecting the Property before any court or governmental authority, an adverse
determination of which might adversely affect (a) the condition or
operations of the Property, (b) Seller’s ability to enter into or perform
this Agreement, (c) Seller’s ability to enter into or perform this
Agreement or (d) Seller’s title to the Property.

 

3.5          Compliance with Laws. Seller has received no notice from any governmental authority to the
effect that either Seller or the Property does not comply with any Laws as they
affect the Property and its use.

 

3.6          Tax Payments. All real estate taxes for the Property due
and payable in 2006 and prior years have been paid in full. The Property has
not been the subject of any real estate tax or assessment contest, appeal or
similar action during the past five (5) years.

 

3.7          Encroachment. Seller has not received any notice of, and
is not aware of, any boundary line disputes or encroachments of or on the
Property.

 

3.8          Condemnation Actions or Special
Assessments. There are
no pending condemnation actions or special assessments of any nature with
respect to the Property or any part thereof, and Seller has no knowledge of any
such threatened or contemplated condemnation action or special assessments.

 

3.9          No Covenants or Restrictions. There are no private covenants or
restrictions that govern the Property or its use.

 

3.10        Hazardous Material

 

(a)           “Hazardous Materials” means any of the following presently or
previously

 

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located
on or under, emanating from or affecting the Property: asbestos containing
materials, polychlorinated biphenyls (PCBs), flammable materials, explosives,
radioactive materials, petroleum products and any materials, wastes,
substances, or chemicals that are deemed hazardous, toxic, a pollutant or a
contaminant under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 US.c. Section 9601, et seq.),
the Hazardous Materials Transportation Act as amended (49 US.C. Section 1801,
et seq.), the Resource Conservation and Recovery Act of 1976, as amended
(42 US.c. Section 6901, et seq.), in the regulations adopted or
publications promulgated pursuant thereto, or in any other applicable federal,
state or local laws, ordinances, rules or regulations in effect on the
Closing Date relating to protection of public health, safety or the environment.

 

(b)                                 Seller has not used, stored, disposed of or
released (or to the best of Seller’s knowledge permitted to be used, stored,
disposed of or released) Hazardous Materials in any manner which would result
in any Claim, as defined below, against Purchaser. Seller has no knowledge of
the presence of any Hazardous Materials on the Property except for Hazardous
Materials as are used in the ordinary course of business on the Property in
accordance with applicable legal standards and without exposing Purchaser to
any actual or potential Claim. Seller is not obligated to and will not record
such notice as set forth in §115B.16 -Subdivision 2 of the Minnesota Statutes.

 

(c)                                  Seller shall defend, indemnify, and hold
harmless Purchaser and its owners, officers, directors, members, employees,
agents and partners from and against any and all claims, demands, penalties,
fines, liabilities, losses, settlement, damages, costs or expenses of whatever
kind or nature, known or unknown, contingent or otherwise, asserted against or
incurred by Purchaser, directly or indirectly, as a result of any governmental
action or legal action by a third party (collectively, “Claims”),
including, without limitation, costs of clean-up and losses (including, without
limitation, lost profits and reductions in value) due to the partial or total
interruption of the operations of the Property, attorneys’ and consultants’
fees and disbursement, investigation and laboratory fees, court costs and
litigation expenses, wising out of or in any way related to (i) the
presence, use, storage, disposal, handling or release of any Hazardous
Materials prior to the Closing Date; (ii) any personal injury (including
wrongful death) or property damage (real or personal) arising out of or related
to Hazardous Materials present prior to the Closing Date; and (iii) any lawsuit
brought or threatened, settlement reached, or government order relating to
Hazardous Materials present prior to the Closing Date; and (iv) any
violation of laws, orders, regulations, requirements, or demands of government
authorities that are based on or related to Hazardous Materials present prior
to the Closing Date.

 

3.11        Liens. Except
for work commissioned by Purchaser, no work has been performed or materials
supplied on or to the Property, except for work or materials for which full
payment has been made. If at any time either before or after the Closing Date,
any mechanics’, laborers’,

 

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or materialmens’ lien is
filed against the Property or any part thereof for work attributable to the
period before the Closing Date and not commissioned by Purchaser, Seller shall
cause such lien to be discharged by payment, bonding or otherwise as provided
by law within ten (10) days after the date that such lien was filed.
Seller upon written demand from Purchaser, shall also defend Purchaser, at
Seller’s expense, against any action, suit, or proceeding brought for the
enforcement of any such lien and shall pay damages and reasonable attorney’s
fees and satisfy and discharge any judgment entered in such action, suit, or
proceeding and save Purchaser harmless from any liability, claims or damages
resulting therefrom. The provisions of this Section 3.11 shall
specifically survive the Closing.

 

3.12        Commitments.
These are no commitments, signed or expressly agreed to by Seller to any
governmental or quasi-governmental authority, or any other entity,
organization, group or individual relating to the Property which would impose upon
Purchaser an obligation to take any action, to make any payment, contribution
or dedication of money or property or to construct, install or maintain any
improvements of a public or private nature on or off the Property.

 

ARTICLE IV

Purchaser’s Representations, Warranties and Covenants

 

In
order to induce Seller to enter into this Agreement and to consummate the
transactions contemplated hereby, Purchaser represents and warrants to, and
covenants with, Seller as follows:

 

4.1          Due Authorization. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all requisite actions of Purchaser
(none of which actions have been modified or rescinded, and all of which
actions are in full force and effect). This Agreement constitutes a valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms.

 

4.2          No Violations or Defaults. The execution, delivery and performance of
this Agreement and the consummation of transactions contemplated hereby by
Purchaser will not (a) violate any law or any order of any court or
governmental authority with proper jurisdiction; (b) result in a breach or
default under any contract or other binding commitment of Purchaser or any
provision of it governing documents or (c) require any consent or approval
or vote that has not been taken or given, or at the time of the transaction
involved, shall not have been taken or given.

 

4.3          Litigation. There are no actions, suits, arbitrations,
proceedings, governmental investigations or other proceedings that are pending
against Purchaser that adversely and materially affect its right to enter into
or perform this Agreement.

 

 

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ARTICLE V

Closing

 

Subject
to the full satisfaction of the terms and conditions of this agreement, the
consummation of the purchase and sale of the Property as contemplated by this
Agreement (the “Closing”) shall take place on October 27,2006
(the “Closing Date”) at 9:00 a.m. at the
offices of Title Company in Fergus Falls, Minnesota.

 

ARTICLE VI

 

[Intentionally Omitted]

 

ARTICLE VII

Conditions Precedent to Closing

 

7.1          It shall be an express precondition to Purchaser’s obligation to
purchase the Property that each and every one of the following conditions shall
have been satisfied as of the Closing Date (or waived by Purchaser).

 

(a)                                  Representations and Warranties. Each of Seller’s representations and
warranties in this Agreement shall be true and accurate in all material
respects as if made on and as of the Closing Date.

 

(b)                                 Covenants of Seller. All actions Seller covenants herein to take
shall have been materially completed.

 

(c)                                  Permits. No Impediments. Purchaser shall have been able to obtain all
permits and licenses necessary to acquire and operate the Property on and
subsequent to the Closing Date, or such permits shall have been applied for and
will be issued in the normal course and the absence thereof will not interfere
with the operation of the Property immediately subsequent to the Closing Date.
Purchaser has achieved all conditions necessary to break escrow under the
Impound Agreement governing Purchaser’s registered private offering is a
condition to the Closing.

 

(d)                                 Title. Purchaser shall be able to obtain a policy
of title insurance in conformance with the Title Commitment provided for below,
together with such coverage or endorsement reasonably required by Purchaser,
subject only to Permitted Exceptions.

 

(e)                                  Failure of Condition. In the event of the failure of any condition
precedent set forth above, Purchaser, at its sole election, may (a) terminate
this Agreement by notice in writing delivered to Seller and the Title Company
on or before the Closing Date; (b) waive the condition and proceed to
Closing; (c) extend the Closing Date for such additional period of time as
may be reasonably required to allow Seller if, and to the extent, requested by
Seller, to remedy such failure; or (d) if such failure raises from Seller’s
breach of this Agreement, avail itself of any remedies provided in Article 10
hereof.

 

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ARTICLE VIII

Title and Survey

 

8.1          Seller’s Title Evidence.  Seller shall, as soon as reasonable after the
date of this Agreement, furnish to Purchaser the following (collectively, the “Title
Evidence”) to Purchaser:

 

(a)                                  Title Insurance Commitment. A commitment (the “Commitment”)
for an ALT A 1992 Form of Owner’s Policy of Title Insurance (the “Title Policy”)  insuring title to
the Property in the amount of the Purchase Price, issued by the Title Company.
The Commitment will commit the Title Company to insure title to the Property
subject only to the Permitted Encumbrances. The Commitment shall be accompanied
by true and correct copies of all instruments noted as encumbrances therein.
Seller shall pay the cost incurred necessary to deliver to Purchaser an
Abstract of Title to the Land certified to a current date to include all
appropriate judgment, bankruptcy, and tax lien searches.

 

(b)                                 UCC Searches. A report of UCC Searches made of the Uniform
Commercial Code records of the Secretary of State of Minnesota, made by said
Secretary of State, or by a search firm acceptable to Purchaser, showing no UCC
filings regarding any of the Property.

 

8.2          Purchaser’s Objections.  Within one (1) day after receiving the
last of the Title Evidence, Purchaser shall make written objections (the “Objections”)  to the form and/or contents
of the Title Evidence. Purchaser’s failure to make Objections within such time
period will constitute a waiver of Objections, or the parties may address
Objections at Closing. Any matter shown on the Title Evidence and not objected
to by Purchaser shall be a Permitted Exception hereunder. Seller will have
ninety (90) days after receipt of the Objections to cure the Objections, during
which period the Closing will be postponed as necessary. Seller shall use its best
efforts and expend reasonable resources to correct any Objections. If an
Objection results from a lien, judgment or other monetary obligation that can
be satisfied by the payment of money, Purchaser shall have the right to apply a
portion of the cash payable to Seller at the Closing to satisfaction of such
Objection and the amount so applied shall reduce the amount of cash payable to
Seller at the Closing. If the Objections are not cured within said ninety (90)
day period, Purchaser will have the option to do either of the following:

 

(a)                                  Terminate this Agreement by notice in writing
to Seller and the Title Company, whereupon the Title Company shall immediately
disburse the Deposit to Purchaser; or

 

(b)                                 Waive the objections..

 

ARTICLE IX

Closing Deliveries

 

9.1.         Seller’s Closing Documents.  On the Closing Date, Seller shall execute
and/or deliver to Purchaser the following (collectively, the “Seller’s Closing Documents”):

 

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(a)                                  Deed. A Warranty Deed, in the form reasonably satisfactory to Purchaser,
conveying the Property to Purchaser, free and clear of all encumbrances, except
the Permitted Exceptions. The Deed shall contain a certification that Seller
does not know of the location of any wells upon the Property.

 

(b)                                 Title Policy. Subject to Purchaser’s payment of the
premium therefore, the Title Policy, or a suitably marked up Commitment
initialed by the Title Company showing coverage to be in force as of the
Closing Date, in the form required by this Agreement.

 

(c)                                  Seller’s Affidavit. An Affidavit of Seller indicating that on
the Closing Date there are no outstanding, unsatisfied judgments, tax liens or
bankruptcies against or involving Seller or the Property; that there has been
no skill, labor or material furnished to the Property for which payment has not
been made or for which mechanics’ liens could be filed; and that there are no
other unrecorded interests in the Property, together with whatever standard
owner’s affidavit and/or indemnity which may be required by the Title Company
to issue the Title Policy Insurance with the standard exceptions waived.

 

(d)                                 FIRPTA Affidavit. A non-foreign affidavit, properly executed
and in recordable form, containing such information as is required by IRC Section 1445(b)(2) and
its regulations.

 

(e)                                  Storage Tanks. An affidavit with respect to storage tanks
in the form required by Minn. Stat. Section 116.48, if the Property
presently contains or previously contained a storage tank.

 

(f)                                    Other Documents. All other documents reasonably determined by
Purchaser or the Title Company to be necessary to transfer the Property to
Purchaser free and clear of all encumbrances.

 

9.2.         Purchaser’s Closing Documents. On the Closing Date, Purchaser shall execute and/or deliver to Seller
the following (collectively, the “Purchaser’s Closing
Documents”):

 

(a)                                  Purchase Price. The amount required by Section 2.1 by
wire transfer of U.S. Federal Funds or the delivery of other guaranteed funds
to be received in the Title Company’s trust account on the Closing Date, or
notice that the purchase price required to be paid at Closing will be paid on
the Release of Funds Date.

 

(b)                                 Other Instruments. Such other Affidavits of Purchaser,
Certificates of Value or other documents as may be reasonably required by the
Title Company in order to record the Seller’s Closing Documents and issue the
Title Insurance Policy required by this Agreement.

 

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ARTICLE X

Default and Remedies

 

If
Purchaser defaults under this Agreement, then Seller may cancel this Agreement
pursuant to Minn. Stat § 559.21 et. seq. On the completion of such
cancellation action, any escrow deposit shall be retained by Seller as
liquidated damages hereunder. Except for the enforcement of Section 6.6(b) hereof,
the cancellation of this Agreement pursuant to Minn. Stat § 559.21 et. seq.
shall be the sole remedy of Seller for Purchaser’s default under this
Agreement. If Seller defaults in the performance of its obligations hereunder,
and remains in default for a period of ten (10) days after the date
Purchaser delivers written notice of default to Seller, Purchaser may pursue
any rights or remedies allowed at law or equity under Minnesota Law, including
the right to specific performance, provided that any action for specific
performance must be commenced within six (6) months after the date of
Seller’s default If Purchaser is required to commence action to enforce its
rights hereunder, then Purchaser shall be entitled to receive, in addition to
any damages, specific performance or other relief which it receives pursuant to
such action, all of Purchaser’s costs and expenses of bringing the action,
including reasonable attorneys’ fees.

 

ARTICLE XI

Indemnification

 

11.1        Agreement to Indemnify. Subject to any express provisions of this Agreement to the contrary, (a) Seller
shall hold harmless, indemnify and defend Purchaser against any and all
obligations, claims, losses, damages, liabilities and expenses (including
reasonable attorneys’ fees and other charges) arising out of (i) the
material inaccuracy of any representation or warranty of Seller herein, (ii) the
failure of Seller to perform any of its obligations hereunder, (iii) events,
contractual obligations, acts or omissions of Seller that occurred in
connection with the ownership or operation of the Property prior to the
Closing, or (iv) damage to property or injury to or death of any person or
any claims for any debts or obligations occurring on or about or in connection
with the Property or any portion thereof or with respect to the Property’s
operations at any time or times prior to the Closing, and (b) Purchaser
shall hold harmless, indemnify and defend Seller against any and all
obligations, claims, losses, damages, liabilities and expenses (including,
without limitation, reasonable attorneys’ fees and other charges) arising out
of (i) the material inaccuracy of any representation of warranty of
Purchaser herein, (ii) the failure of Purchaser to perform any of its
obligations herein, (iii) events, contractual obligations acts or
omissions of Purchaser or its agents that occur in connection with the
ownership or operation of the Property after the Closing, (iv) any damage
to property or injury to or death of any person or any claims for any debts or
obligations occurring on or about the Property or any portion thereof or with
respect to the property’s operations at any time or times after the Closing,
and (v) the failure to perform any obligations of Purchaser under this
Agreement which have been assumed by Purchaser’s property manager, lessee or
other designee pursuant to this Agreement.

 

ARTICLE XII

 

[Intentionally Omitted]

 

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ARTICLE XIII

Apportionments and Closing Adjustments

 

13.1        Apportionments. The following apportionments shall be made
between the parties at the Closing as of 12:01 a.m. on the Closing Date
(the “Apportionment Date”).

 

(a)                                  Subject to the other provisions of this Section 13,
all other charges and fees customarily prorated and adjusted in similar
transactions.

 

13.2        Real Estate Taxes and Special
Assessments. Seller
shall pay all real estate taxes and installments of special assessments payable
therewith due and payable for the Property in 2005 and prior years. In
addition, Seller shall pay at Closing all special assessments for public or
private improvements levied, pending or otherwise assessed against the Property
as of the Closing Date. All real estate taxes payable in the year of the
Closing shall be prorated as of the Closing Date.

 

13.3       Closing Adjustments and Payment Obligations.

 

(a)                                  Title Insurance and Closing Fee. Purchaser will pay the costs of the Title
Commitment ($1,200.00), except Seller shall be responsible for the cost of
continuing the abstract to current and for tract searches ($150.00). The
closing fee or charge imposed by the Title Company ($200.00) shall be allocated
equally between Seller and Purchaser.

 

(b)                                 Deed Tax. Seller shall pay all state deed tax regarding the Warranty Deed to be
delivered by Seller under this Agreement.

 

(c)                                  Recording Fees. Purchaser shall pay all recording fees for
the Warranty Deed to be delivered hereunder. Seller shall pay all recording
fees necessary to put title in the condition warranted by Seller hereunder.

 

ARTICLE XIV

Miscellaneous

 

14.1        Survival. The representations, warranties, covenants
and indemnities contained in this Agreement shall be effective as of the
Closing Date, and any liability with respect to breach thereof shall survive
the Closing. The obligations of Purchaser and Seller under this Agreement to
the extent not fully performed as of the Closing Date or to the extent so
indicated herein shall survive the Closing. Except as otherwise expressly
provided herein, all claims by either party hereto, whether for amounts due or
otherwise, under any provision of this Agreement, must be made in writing to
the other party within three (3) years from the Closing Date.

 

14.2        Assignment.

 

(a)           Purchaser may assign this Agreement, without
the consent of Seller, to any entity

 

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with
which Purchaser is affiliated or related. Otherwise, neither party shall assign
or transfer or permit the assignment or transfer of its rights or obligations
under this Agreement without the prior written consent of the other, any such
assignment or transfer without such prior consent being hereby declared to be
null and void.

 

(b)                                 If either party consents to an assignment of
this Agreement by the other for which consent is required, no further
assignment shall be made without another written consent from the consenting
party, unless the assignment may otherwise be made without consent under this
Agreement.  An assignment by either
Seller or Purchaser of its interest in this Agreement shall not relieve Seller
or Purchaser, as the, case may be, from its obligations, but this Agreement
shall then inure to the benefit of, and be binding on, the assignee’s
successors, heirs, legal representatives and assigns.

 

14.3        Consents. If, under this Agreement, the consent of a
party is required, the consent shall be in writing and shall be executed by a
duty authorized officer or agent.

 

14.4        Applicable
Law. This Agreement
shall be governed by, construed and enforced in accordance with the laws of the
State of Minnesota.

 

14.5        Headings;
Exhibits. The headings
of articles and sections of this Agreement are inserted only for convenience;
they are not to be construed as a limitation of the scope of the particular
provision to which they refer. All exhibits attached or to be attached to this
Agreement are incorporated herein by this reference.

 

14.6        Notices. Notices and other communications required by
this Agreement shall be in writing and delivered by telecopy (with confirmation
of receipt) by hand against receipt or sent by recognized overnight delivery
service or by United States mail, postage prepaid. All notices shall be
addressed as follows:

 

If to Seller:

 

Jonathan
C. and Brenda K. Piekarski

24479
120th Avenue
South

Fergus
Falls, MN 56537

 

If to Purchaser:

 

Otter
Tail Ag Enterprises, LLC

1220
North Tower Road, Suite 201

Fergus
Falls, MN 56537

 

or to such other address as
may be designated by a proper notice. Notices shall be deemed to be effective
upon receipt (or refusal thereof) if personally delivered or sent by recognized
overnight delivery service or three (3) days following the date of mailing
if sent by certified mail.

 

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14.7        Waiver. The failure of either party to insist on
strict performance of any of the provisions of this Agreement or to exercise
any right granted to it shall not be construed as a relinquishment or future
waiver; rather, the provision or right shall continue in full force. No waiver
of any provision or right shall be valid unless it is in writing and signed by
the party giving it.

 

14.8        Partial Invalidity. If any part of this Agreement is declared
invalid by a court of competent jurisdiction, this Agreement shall be construed
as if such portion had never existed, unless this construction would operate as
an undue hardship on Seller or Purchaser or would constitute a substantial
deviation from the general intent of the parties as reflected in this Agreement.

 

14.9        Entire Agreement. This Agreement, together with the other
writings signed by the parties and incorporated by reference and together with
any instruments to be executed and delivered under this Agreement, constitutes
the entire agreement between the parties with respect to the purchase and sale
of the Property and supersedes all prior oral and written understandings.
Amendments to this Agreement shall not be effective unless in writing and
signed by the parties hereto.

 

14.10      Time is of the Essence. Time is of the essence with respect to
performance of all obligations under this Agreement.

 

14.11      Waiver of Jury Trial. Seller and Purchaser each hereby waives any
right to jury trial in the event any party files an action relating to this
Agreement or to the transactions or obligations contemplated hereunder.

 

14.12      Counterparts. This Agreement may be executed in any number
of counterparts which, when taken together, shall constitute a single, binding
instrument. A facsimile signature shall be binding.

 

14.13      Brokerage. Seller and Purchaser represent and warrant
to each other that they have dealt with no other brokers, finders or the like
in connection with this transaction, and agree to indemnify each other and to hold
each other harmless against all claims, damages, costs or expenses of or for
any such other fees or commissions resulting from their actions or agreements
regarding the execution or performance of this Agreement, and will pay all
costs of defending any action or lawsuit brought to recover any such fees or
commissions incurred by the other party, including reasonable attorneys’ fees.

 

14.14      Time for Performance. If the date for the performance of any
obligation, or the giving of any notice, by Seller or Purchaser hereunder falls
upon a Saturday, Sunday or legal holiday recognized by the United States
government, then the time for such performance or notice shall be extended
until the next business day.

 

14.15      No Negotiations. Unless and until this Agreement is
terminated in accordance with its terms, Seller shall neither solicit or
consider any other offers for, nor engage in any

 

12

 

negotiations with respect
to, the sale of the Property to any party other than Purchaser.

 

14.16      Exhibits and Schedules. The Exhibits and Schedules referred to in
this Agreement constitute an integral part of this Agreement as if fully
rewritten herein. All Exhibits and referred to in this Agreement are
incorporated herein by this reference.

 

14.17      Further Assurances. Seller and Purchaser each covenant and agree
to sign, execute and deliver, or cause to be signed, executed and delivered,
and to do or make, or cause to be done or made, upon the written request of the
other party, any and all agreements, instruments, papers, deeds, acts or
things, supplemental, confirmatory or otherwise, as may be reasonably required
by either party hereto for the purpose of or in connection with consummating
the transactions described herein.

 

14.18      Attorney Fees. In the event any party hereto fails to
perform any of its obligations under this Agreement or in the event a dispute
arises concerning the meaning or interpretation of any provision of this
Agreement resulting in litigation, the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all
reasonable costs and expenses incurred by the other party in enforcing or
establishing its rights hereunder, including, without limitation, reasonable
attorneys’ fees.

 

14.19      Early Work. Seller hereby confirms his consent to
Purchaser engaging in early construction work on the Property prior to Closing
and exchange of the Warranty Deed. Purchaser will defend, indemnify and holder
Seller harmless from any and all costs associated with such work or resultant
from such work.

 

IN
WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed
as of the date indicated below.

 

 

	
   

  	
  /s/ Jonathan C. Piekarski

  	
   

  
	
   

  	
  Jonathan C. Piekarski, Seller

  
	
   

  
	
   

  
	
   

  	
  /s/ Brenda K. Piekarski

  	
   

  
	
   

  	
  Brenda K. Piekarski, Seller

  
	
   

  
	
   

  
	
   

  	
  OTTER TAIL AG ENTERPRISES, LLC

  
	
   

  
	
   

  
	
   

  	
  By: 

  	
  /s/ Kelly [Illegible]

  	
   

  
	
   

  	
   

  	
  Its: CEO

  
					

 

13

 

EXHIBIT A

 

That part of the West Half
(W1/2) of Section Twenty (20), Township One Hundred
Thirty-three (133), Range Forty-three (43) lying South of Railroad right of
way, except school site and subject to easements of record, containing 110
acres, more or less, Otter Tail County, Minnesota, the school site is described
as follows: Two (2) acres in square formed in the Southwest corner of the
Southwest Quarter (SW1/4) of Section Twenty (20), Township One
Hundred Thirty-three (133), Range Forty-three (43); EXCEPTING THEREFROM, the
following-described tract of land:

 

All
that part of the Southwest Quarter (SW1/4) of Section Twenty (20), Township One
Hundred Thirty-three (133), Range Forty-three (43), Otter Tail County,
Minnesota, described as follows: Commencing at the Southwest corner of said Section Twenty
(20); thence on an assumed bearing of East along the South line of said Section Twenty
(20), a distance of 312.35 feet to the point of beginning of the land to be
described; thence North 00°08’29” East a distance of 318.00 feet; thence on a
bearing of East a distance of 180.00 feet; thence South 00°08’29” West a
distance of 318.00 feet to said South line of Section Twenty (20); thence
on a bearing West along said South line of Section Twenty (20), a distance
of 180.00 feet to the point of beginning, containing 1.31 acres, more or less.

 

14Exhibit 10.12

 

	
                                                                  1008485

  	
   

  
	
  No delinquent
  taxes and transfer entered; Certificate of

  Real Estate Value x
  filed o
  not required.

  Certificate
  of Real Estate Value No.    082640

  	
  OFFICE
  OF COUNTY RECORDER

  OTTER
  TAIL MINNESOTA

  I hereby
  certify that

  
	
   

  	
  November
  1, 2006

  	
  this
  instrument # 1008485

  
	
   

  	
                            (Year)

  	
  was
  filled/recorded in this office

  
	
  Wayne
  Stein, County Auditor

  	
  for
  record on the 1 day of

  
	
  by

  	
  /s/ Cora
  A. Nelson

  	
   

  	
       Nov
  2006 at 2:05 am/pm

  
	
  26-000-20-0128-000
  Deputy

  	
  Wendy L.
  Metcalf, County Recorder

  By: Wendy
  L. Metcalf Deputy

         46.00
  recording fee

                            
  well certificate

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WARRANTY DEED

  
	
   

  	
   

  
	
  Individual
  to Corporation

  or
  Partnership

  	
   

  
	
   

  	
   

  
	
  STATE DEED
  TAX

  DUE HEREON:
  $2,310.00

  	
  COUNTY
  OF OTTER TAIL

  STATE OF
  MINNESOTA

  DEED TAX
  $ 2310.00

  NUMBER [ILLEGIBEL]
  250523

  DATE [ILLEGIBEL]

  
	
  Dated:
  October 27, 2006.

  	
   

  
						

 

FOR VALUABLE
CONSIDERATION, JONATHAN C. PIEKARSKI and 
BRENDA K. PIEKARSKI, husband and wife, Grantor(s), hereby convey and
warrant to OTTER TAIL AG ENTERPRISES, LLC, Grantee, a limited liability company
under the laws of the state of Minnesota, real property in Otter Tail County,
Minnesota, described as follows:

 

See attached
Exhibit A;

 

together with all hereditaments
and appurtenances belonging thereto, subject to the following exceptions:
easements, restrictions, reservations and covenants of record.

 

 

	
   

  	
  /s/ Jonathan
  C. Piekarski

  	
   

  
	
   

  	
  Jonathan
  C.Piekarski

  
	
   

  
	
   

  
	
   

  	
  /s/ Brenda
  K. Piekarski

  	
   

  
	
   

  	
  Brenda K.
  Piekarski

  
				

 

 

STATE OF
MINNESOTA                    )

                                                               )
ss.

COUNTY OF OTTER
TAIL              )

 

The foregoing
instrument was acknowledged before me this 27 day of October, 2006, by JONATHAN
C. PIEKARSKI and BRENDA K. PIEKARSKI, husband and wife, Grantors.

 

	
  

  	
   

  	
  /s/ Brenda Daniels

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
   

  	
   

  

 

THE SELLER CERTIFIES THAT SELLER DOES NOT
KNOW

OF ANY WELLS ON THE ABOVE-DESCRIBED REAL
PROPERTY.

 

 

Tax statements
for the real

property
described in this

instrument
should be sent to:

 

Otter Tail Ag
Enterprises, LLC

1220 North
Tower Road, Suite 201

Fergus Falls,
MN 56537

 

 

This instrument was drafted by:

PEMBERTON, SORLIE, RUFER & KERSHNER,
P.L.L.P.

110 North Mill Street, P.O. Box 866

Fergus Falls, Minnesota 56538-0866

Telephone: 
218-736-5493

 

PSR&K NOT CLOSING AGENT

KDM:tlc

2005-1932

 

2

 

EXHIBIT A

 

All that part of the W1/2 of
Section 20, Township 133 North, Range 43 West of the Fifth Principal Meridian,
situate in the County of Otter Tail and the State of Minnesota, lying South of
the Railroad Right-of-Way, EXCEPT the following described tracts of land:

1.             The
school site, described as follows: Two acres in square from in the Southwest corner
of the SW1/4 of section 20, Township 133 North, Range 43 West.

2.             The tract described
as follows: That part of the SW1/4 of Section 20, Township 133, Range 43,
described as follows: Commencing at the Southwest corner of said Section 20;
thence on an assumed bearing of East along the South line of said Section 20 a
distance of 312.35 feet to the point of beginning of the land to be described;
thence North 00  08’29”
East a distance of 318.00 feet; thence on a bearing of East a distance of 180
feet; thence South 00 08’29” West a distance of 318.00 feet to said South
line of Section 20; thence on a bearing West along said South line of Section
20, a distance of 180.00 feet to the point of beginning.

3.             All that part of
the following-described tract: The E1/2 of W1/2  of
Section 20, Township 133, Range 43, except railroad right of way; which lies
Easterly of a line run parallel with and distant 100.00 feet westerly to the
following-described line: Beginning at a point on the North Line of said
Section 20, distant 99.15 feet East of the North Quarter corner thereof, thence
run southerly to a point on the South line of said Section 20, 96.10 feet East
of the South Quarter corner thereof, and there terminating; together with all
that part of the above-described tract adjoining and westerly of the
above-described strip and easterly of the following-described line: From a
point on the above-described line, distant 1,077.80 feet North of the South
line of said Section 20, run westerly at right angles with said above-described
line for 100.0 feet to the point of beginning of the line to be described;
thence run southwesterly to a point which is distant 110.0 feet westerly (measured
at right angles) from a point on the above-described line distant 977.80 feet
North of the South line of said Section 20  (when measured along the above-described
line); thence run southerly and parallel with said above-described line to the
northeasterly boundary line of the railroad running in a southeasterly and
northwesterly direction over and across the above-described tract; in addition
to the existing highway; together with all right of access, being the right of
ingress to and egress from all that portion of the above-described tract, not
acquired herein, to Trunk Highway No. 392.

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