Document:

Exhibit 10.4

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (the “Guaranty”) made and entered into as of April 1,
2008, by and between HIGHWATER ETHANOL, LLC, a Minnesota limited liability
company having its principal offices at 205 N. Main Street, Lamberton,
Minnesota (the “Company”), and U.S. BANK NATIONAL ASSOCIATION, a national
banking association duly organized, existing and authorized to accept and
execute agreements of the character herein set out under and by virtue of the
laws of the United States of America, and having its main office and place of
business in St. Paul, Minnesota (the “Trustee”), together with any successor
trustee, at the time serving as such under the Trust Indenture dated as of the
date hereof, and as the same may be amended or supplemented from time to time,
between the City of Lamberton and the Trustee (the “Indenture”);

 

WITNESSETH:

 

WHEREAS, City of Lamberton, a political subdivision of the State of
Minnesota having its principal office at Lamberton, Minnesota (the “City”),
intends to issue its Solid Waste Facilities Revenue Bonds, Series 2008A
(Highwater Ethanol, LLC Project) in the aggregate principal amount of
$15,180,000 (the “Bonds”); and

 

WHEREAS, the Bonds are to be issued under and pursuant to the
Indenture; and

 

WHEREAS, the Bonds are being issued to finance the acquisition and
installation of certain solid waste disposal facilities for the Company (the “Equipment”),
as part of the Company’s ethanol plant as more fully described in the Indenture
(the “Project”); and

 

WHEREAS, the Equipment is to be leased to the Company by the City
pursuant to the terms of a Lease Agreement dated as of the date hereof and as
the same may be amended and supplemented from time to time (the “Bond Lease”);
and

 

WHEREAS, the Company is desirous that the City issue the Bonds and
apply the proceeds as aforesaid and is willing to enter into this Guaranty
Agreement in order to enhance the marketability of the Bonds and thereby
achieve cost and other savings to itself and as an inducement to the purchase
of the Bonds by all who shall at any time become holders of the Bonds;

 

ARTICLE I

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Section 1.1.            Organization, etc. 
The Company represents and warrants that the Company is duly organized
and in good standing under the laws of the State of Minnesota, has power to
enter into this Guaranty, and by proper corporate action has authorized the
execution and delivery of this Guaranty.

 

Section 1.2.            Absence of Conflicting Provision.  The Company represents and warrants that the
execution and delivery of this Guaranty and the fulfillment of the terms and
conditions hereof do not and will not conflict with or result in a breach of
any of the terms or provisions of 

 

 

any agreement or instrument to which the Company is now a party, and do
not and will not constitute a default under any of the foregoing, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
upon any of the property or assets of the Company contrary to the terms of any
instrument or agreement.

 

Section 1.3.            Direct Benefit.  The Company represents and warrants that the
assumption by the Company of its obligations hereunder will result in a direct
financial benefit to the Company.

 

ARTICLE II

 

COVENANTS AND AGREEMENTS OF COMPANY

 

Section 2.1.            Obligation.  The Company hereby unconditionally guarantees
to pay promptly to the Trustee for the benefit of the Holders from time to time
of the Bonds and of the interest coupons appertaining thereto (a) the full
amount of each installment of principal of and premium, if any, on any Bond
when and as the same shall become due, whether at the stated maturity thereof,
by acceleration, call for redemption or otherwise, and (b) the full amount
of any interest on any Bond when and as the same shall become due.  All payments by the Company shall be paid in
lawful money of the United States of America. 
Each and every default in payment of the principal of, premium, if any,
or interest on any Bond shall give rise to a separate cause of action hereunder,
and separate suits may be brought hereunder as each cause of action arises.

 

Section 2.2.            Term.  The obligations of the Company under this
Guaranty shall arise absolutely and unconditionally when the Bonds shall have
been issued, sold and delivered by the City and shall remain in full force and
effect until the entire principal of, premium (if any) and interest on the
Bonds shall have been paid or provided for in accordance with the Indenture.

 

Section 2.3.            Obligations Unconditional.  The obligations of the Company under this
Guaranty shall be absolute and unconditional and shall remain in full force and
effect until the entire principal of, premium, if any, and interest on the
Bonds shall have been paid or provided for, and such payment shall not be
affected, modified or impaired upon the happening from time to time of any
event, including without limitation any of the following:

 

(a)           the compromise, settlement, release or
termination of any or all of the obligations, covenants or agreements of the
City under the Indenture except by reason of payment in full of the Bonds;

 

(b)           the failure to give notice to the Company of
the occurrence of any default or Event of Default under the terms and
provisions of this Guaranty, the Bond Lease or the Indenture;

 

(c)           the assignment or mortgaging or the
purported assignment or mortgaging of all or any part of the interest of the
City in the Equipment or any failure of rights or title with respect to the
City’s interest in the Equipment or the site thereof;

 

2

 

(d)           the waiver of the payment, performance or
observance by the City or the Company of any of the obligations, covenants or
agreements of either of them contained in the Indenture, the Bond Lease or this
Guaranty;

 

(e)           the extension of the time for payment of
principal of, premium, if any, or interest on any Bond under this Guaranty or
of the time for performance of any other obligations, covenants or agreements
under or arising out of the Indenture, the Bond Lease or this Guaranty;

 

(f)            the modification or amendment (whether
material or otherwise) of any obligation, covenant or agreement set forth in
the Indenture, the Bond Lease or in the Bonds except as expressly permitted by
and in accordance with the provisions of the Indenture;

 

(g)           the taking or omission of any of the actions
referred to in the Indenture or the Bond Lease or this Guaranty;

 

(h)           any failure, omission, delay or lack on the
part of the City or Trustee to enforce, assert or exercise any right, power or
remedy conferred on the City or Trustee in this Guaranty, the Bond Lease or the
Indenture, or any other act or acts on the part of the City, Trustee or any of
the holders from time to time of the Bonds or of the interest coupons
appertaining thereto;

 

(i)            the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the assets,
marshalling of assets and liabilities, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition with creditors or readjustment of, or other similar proceeding
affecting the Company or the City, or a substantial part of the assets of any
of them, or any allegation or contest of the validity of this Guaranty or the Bond
Lease in any such proceeding;

 

(j)            the release or discharge (including
discharge in bankruptcy) of the Company from the performance or observance of
any obligation, covenant or agreement contained in this Guaranty or the Bond
Lease by operation of law or otherwise;

 

(k)           the foreclosure of the Bond Lease, the
termination of the Bond Lease, or the pursuit of any other remedy under the
Bond Mortgage, the Indenture or the Bond Lease; or

 

(l)            the default or failure of the Company fully
to perform any of its obligations set forth in this Guaranty or the Bond Lease.

 

Section 2.4.            Set-Offs, Counterclaims.  Except for payments made by Company and
received by City, no set-off, counterclaim, reduction, or diminution of any
obligation, or any defense of any kind or nature which the Company has or may
have against the City or Trustee or the holder of any Bond shall be available
hereunder to the Company, provided that the Company shall not be deemed by the
provisions of this Section to have waived any right to proceed
independently against the City or the Trustee.

 

3

 

Section 2.5.            Waiver of Acceptance.  The Company hereby expressly waives notice
from the Trustee or the holders from time to time of any of the Bonds or of the
interest coupons appertaining thereto of their acceptance of and reliance on
this Guaranty.

 

Section 2.6.            Attorneys’ Fees and Expenses.  The Company agrees to pay all the costs,
expenses and fees including all reasonable attorney’s fees, which may be incurred
by the Trustee or any Bondholder in enforcing or attempting to enforce this
Guaranty following any default on the part of the Company hereunder, whether
the same shall be enforced by suit or otherwise.

 

Section 2.7.            Maintenance of Existence.  The Company will maintain its existence, will
not dissolve or otherwise dispose of all or substantially all of its assets,
and will not consolidate with or merge into another entity or permit any other
entity to consolidate with or merge into it without the consent of the Trustee,
which consent will not unreasonably be withheld or conditioned, unless the
surviving, resulting or transferee corporation either (i) is the Company
or (ii) if other than the Company, assumes in writing all of the
obligations of the Company under the Bond Lease and this Guaranty and has a net
worth at least equal to that of the Company as of the date of such
consolidation, merger or transfer.  Every
surviving, resulting or transferee corporation shall be bound by all of the
covenants and agreements of the Company herein with respect to any further
consolidation, merger, sale or transfer.

 

ARTICLE III

 

RIGHTS AND RESPONSIBILITIES OF TRUSTEE

 

Section 3.1.            Duties of Trustee.  Except during the continuance of a default
under Section 2.1 hereof, the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Guaranty, and no
implied covenants or obligations shall be read into this Guaranty against the
Trustee.  In case a default under Section 2.1
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Guaranty and use the same degree of care and
skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.  No provision of this Guaranty shall be
construed to relieve the Trustee from liability for its own negligent act, its
own negligent failure to act or its own willful misconduct.

 

Section 3.2.            Default.  Upon the happening of a default in the payment
of principal of or premium, if any, on any Bond when and as the same shall
become due, whether at the stated maturity thereof, by acceleration, call for
redemption or otherwise, or in the payment of any interest on any Bond when and
as the same shall become due, and after the expiration of any applicable cure
period, the Trustee shall have the right to proceed first and directly against
the Company under this Guaranty without proceeding against City under the
Indenture, or the Company under the Bond Lease, or any other person, firm or
corporation, or exhausting any other remedies which it may have and without
resorting to any other security held by the City or the Trustee.

 

Section 3.3.            Filing Claims.  In the event a right of action and claim has
arisen under this Guaranty, in case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the 

 

4

 

Company or the property of the
Company, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

(i)            to file and prove a claim for the whole
amount of principal, premium (if any) and interest owing and unpaid in respect
of the Bonds and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents, and counsel) and of the Bondholders allowed in such
judicial proceeding, and

 

(ii)           to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same;

 

and any receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) in any such judicial proceeding is hereby authorized by each
Bondholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Bondholders to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

 

Section 3.4.            Authority of Trustee.  All rights of action and claims under this
Guaranty or the Bonds or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Bonds or coupons or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the holders of the Bonds
and coupons in respect of which such judgment has been recovered.

 

Section 3.5.            Immunities of Trustee.  The rights and immunities granted the Trustee
in Article VIII of the Indenture shall apply equally to the activities of
the Trustee hereunder.

 

ARTICLE IV

 

RIGHTS OF BONDHOLDERS

 

Section 4.1.            Directions to Trustee.  In the event a cause of action arises under
this Guaranty, the holders of at least fifty-one per centum (51%) in principal
amount of the outstanding Bonds shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available hereunder to
the Trustee, provided that

 

(1)           such direction shall not be in conflict with
any law or this Guaranty,

 

(2)           the Trustee shall not determine that the
action so directed would be unjustly prejudicial to the holders not taking part
in such direction, and

 

(3)           the Trustee may take any other action deemed
proper which is not inconsistent with such direction.

 

5

 

The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by the Guaranty at the request or direction of any of
the Bondholders pursuant to this Guaranty, unless such Bondholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.

 

Section 4.2.            Right of Payment.  Notwithstanding any limitations on the
ability of Bondholders to direct the actions of the Trustee hereunder, and
notwithstanding any other provisions of this Guaranty, the holder of any Bond
shall have the right, which is absolute and unconditional, to receive payment
of the principal of, premium (if any) and interest on such Bond on the respective
maturity date expressed in such Bond and such right shall not be impaired
without the consent of such Holder.

 

ARTICLE V

 

MISCELLANEOUS

 

Section 5.1.            Remedies
Not Exclusive.  No remedy herein
conferred upon or reserved to the Trustee is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Guaranty, the Bond Lease or the Indenture or now or hereafter existing at law
or in equity.  No delay or omission to
exercise any right or power accruing upon any default, omission or failure of
performance hereunder shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient.  In order to entitle the Trustee to exercise
any remedy reserved to it in this Guaranty, it shall not be necessary to give
any notice, other than such notice as may be herein or in the Indenture
expressly required, provided that demand for payment hereunder has been made by
the Trustee.

 

Section 5.2.            Waivers and Amendments.  In the event any provision contained in the
Guaranty should be breached by the Company and thereafter duly waived by Trustee,
such waiver shall not be deemed to waive any other breach hereunder.  No waiver, amendment, release or modification
of this Guaranty shall be established by conduct, custom or course of dealing,
but solely by an instrument in writing duly executed by the Trustee.  The Trustee shall not consent to any
amendment or modification of this Guaranty without the written approval of a
majority in aggregate principal amount of the Bonds outstanding under the
Indenture.  Nothing contained herein
shall permit, or be construed as permitting any amendment, change or
modification of this Guaranty which would (a) reduce the amount payable by
the Company hereunder, (b) change the time for payment of the amounts
payable by the Company hereunder, or (c) change the unconditional nature
of the Guaranty herein contained.

 

Section 5.3.            Entire Agreement.  This Guaranty constitutes the entire
agreement, and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof.

 

6

 

Section 5.4.            Separability.  The invalidity or unenforceability of any one
or more phrases, sentences, clauses or Sections in this Guaranty shall not
affect the validity or enforceability of the remaining portion of this
Guaranty, or any part thereof.

 

Section 5.5.            Definitions.  Any words or phrases capitalized herein but
not defined herein shall have the meanings given in the Indenture.

 

Section 5.7.            Counterparts.  This Guaranty may be executed simultaneously
in several counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.

 

7

 

IN WITNESS WHEREOF, the Company has caused this Guaranty to be executed
in its name and behalf and its corporate seal affixed hereto and attested by
its duly authorized officers as of the date first above written.

 

	
   

  	
   

  	
  HIGHWATER ETHANOL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
          /s/ Brian Kletscher

  
	
   

  	
   

  	
   

  	
  Its President

  

 

 

	
  Accepted this 25th day of April 2008 by

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION,

  	
   

  	
   

  
	
  as Trustee.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
          /s/ Christine
  Robinette

  	
   

  	
   

  
	
   

  	
  Its Vice President

  	
   

  	
   

  

 

S-2Exhibit 10.5

 

BILL OF
SALE

 

This Bill of Sale dated  as of April 25, 2008 from HIGHWATER
ETHANOL, LLC, a Minnesota limited liability company (the “Company”) to the CITY
OF LAMBERTON, MINNESOTA, a political subdivision of the State of Minnesota (the
“City”).

 

RECITALS

 

A.            The Company desires to transfer its
interest in and the City desires to acquire the Assets (as defined below) for
and in consideration of (i) the financing provided by of the City’s Solid
Waste Facilities Revenue Bonds (Highwater Ethanol, LLC Project), Series 2008A,
(ii) the execution and delivery of that certain Lease Agreement, dated as
of April 1, 2008 (the “Lease Agreement”), between the City and the
Company, and (iii) other good and valuable consideration.

 

B.            All capitalized terms used herein and not
otherwise defined have the meanings ascribed to them in the Lease Agreement.

 

C.            This Bill of Sale conveys an after-acquired
interest.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the
premises and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1: SALE OF ASSETS

 

Company does hereby BARGAIN, SELL ASSIGN AND
TRANSFER unto the City, its successors and assigns, all its estate, right,
title and interest in and to the buildings and all materials, supplies,
equipment, apparatus and other items of personal property now owned or
hereafter acquired by the Company which are described in Exhibit A, and
all replacements and substitutions thereof (the “Assets”). The Assets are
located or to be located on the Land legally described in Exhibit B.

 

TO HAVE AND TO HOLD all the said property
described herein unto the City, its successors and assigns, to its own use and
benefit forever.

 

SECTION 2: TITLE

 

Company agrees that it is the owner of the
Assets, that the Assets are free from all encumbrances (except the Lease and
Permitted Encumbrances as defined in the Lease Agreement) and that the Company
has the right to sell and convey the Company’s interest in the Assets to the
City. The  Company agrees to warrant and
defend the sale of the Assets to the City against any and all person(s) who
claim title to any of the Assets, subject only to the Lease and Permitted
Encumbrances. This Bill of Sale shall bind the Company and benefit the City and
its successors and assigns.

 

 

SECTION 3: LESSOR LIENS

 

The Company warrants that it is conveying
title to the Assets to the City free and clear of all liens except those
permitted under the terms of the Lease Agreement.

 

SECTION 4:  NO WARRANTIES

 

The foregoing sale, transfer, conveyance and
assignment of the Assets is made “as is,” where is, with all faults, without
any warranties, express or implied, including but not limited to warranties of
fitness, merchantability or fitness for a particular purpose, and without any
recourse to the Company for any reason whatsoever, except as provided in
Sections 2 and 3 hereof.

 

SECTION 5:  ASSIGNMENT OF WARRANTIES

 

The Company hereby bargains, sells, assigns,
transfers and sets over to and for the benefit of the City all right, title and
interest of the Company, if any, in, to and under any and all contracts to
which the Company is a party relating to the procurement, design, manufacture,
construction, installation or testing of the Assets (the “Facility Contracts”)
including, without limitation, all claims for damages arising under the
representations, indemnities, warranties, guarantees and agreements made to or
for the benefit of the Company by the parties (other than the Company) to the
Facility Contracts (other than the Company, the “Facility Contractors”), and
the right to compel performance of the terms of the Facility Contracts. The
Company agrees at the request of the City and at the City’s expense, to use
commercially reasonable efforts to preserve and protect the City’s rights under
any warranty, covenant or representation made by each Facility Contractor with
respect to the Assets.

 

SECTION 6:  MISCELLANEOUS

 

This Bill of Sale shall be governed by and
construed and interpreted in accordance with the laws of the State of Minnesota.
The terms and provisions of the Bill of Sale shall be binding upon and inure to
the benefit of the respective parties hereto, and their respective successors
and assigns.

 

This Bill of Sale may be executed in multiple
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.

 

2

 

IN WITNESS WHEREOF, the City and the Company
have caused this Bill of Sale to be executed by their duly authorized officers.

 

	
   

  	
  CITY OF LAMBERTON, MINNESOTA

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
          /s/
  Craig Wetter

  
	
   

  	
   

  	
  Its Mayor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
          /s/
  Steven Flaig

  
	
   

  	
   

  	
  Its City Administrator

  

 

Bill of Sale dated as of April 25, 2008, between the City of
Lamberton, Minnesota and Highwater Ethanol, LLC

 

3

 

	
   

  	
  HIGHWATER ETHANOL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
          /s/
  Brian D. Kletscher

  
	
   

  	
   

  	
  Brian D. Kletscher

  
	
   

  	
   

  	
  Its President

  

 

Bill of Sale dated as of April 25, 2008, between the City of
Lamberton, Minnesota and Highwater Ethanol, LLC

 

4

 

EXHIBIT A

 

Description of
Equipment

 

	
  Centrifuge System

  
	
  Boiler or Thermal Oxidizer

  
	
  Evaporator System

  
	
  Dryer System

  
	
  Methanator

  

 

A-1

 

EXHIBIT B

 

Location of
the Plant

 

PARCEL I
(PROJECT SITE)

 

TRACT A:  That part of the Southwest Quarter of Section 21,
Township 109 North, Range 37 West, Redwood County, Minnesota, lying north of
the northerly right-of-way line of the Dakota Minnesota & Eastern
Railroad.

 

Excepting
therefrom that part of said Tract A which lies northwesterly of “Line 1”
described below, southerly of a line run parallel with and distant 50 feet
southerly of “Line 2” described below, and easterly of the easterly
right-of-way line of Township Road T-190, as now located and established, said
exception containing 0.20 acres more or less.

 

“Line 1”:  Beginning at the intersection of the easterly
right-of-way line of said township road with a line run parallel with and
distant 180 feet southerly of “Line 2” described below; thence northeasterly to
a point distant 50 feet southerly (measured at right angles) of a point on said
“Line 2”, distant 167.4 feet easterly of its point of beginning, and there
terminating.

 

“Line 2”:  Beginning at a point on the west line of the
Northwest Quarter of Section 21, distant 1.0 foot north of the southwest
corner thereof; thence run northeasterly at an angle of 92 degrees 05 minutes
00 seconds (as measured from south to east) from said west line of 1521.8 feet;
thence deflect to the right at an angle of 01 degree 03 minutes 00 seconds for
1100 feet and there terminating.

 

Also Excepting
that part of said Tract A hereinbefore described, which lies within a distance
of 35 feet southerly of a line run parallel with and distant 50 feet southerly
of the following described line: 
Beginning at a point on “Line 2” hereinbefore described, distant 484.4
feet westerly of its point of termination; thence easterly on said “Line 2” for
484.4 feet and there terminating; said exception containing 0.37 acres more or
less.

 

Subject to
Township Road right-of-way over the westerly 33 feet of said Southwest Quarter,
also subject to Trunk Highway 14 right-of-way.

 

AND ALSO

 

PARCEL II
(PROJECT SITE)

 

All that part
of the Southeast Quarter of Section 21, Township 109 North, Range 37 West,
Redwood County, Minnesota, lying north of the northerly right-of-way line of
the Dakota Minnesota & Eastern Railroad, subject to Highway 14 right-of-way.

 

Excepting
therefrom that part of said Southeast Quarter which lies within a distance of
35 feet southerly of the following described line:  Beginning at a point on the westerly boundary
of said

 

B-2

 

Southeast
Quarter, distant 40 feet southerly of the northwest corner thereof; thence run
easterly for 345.6 feet along a line that intersects the easterly boundary of
the Southeast Quarter of said Section 21, distant 64.4 feet southerly of
the northeast corner thereof and there terminating.

 

Also Excepting
therefrom that part of the Northeast Quarter of the Southeast Quarter of Section 21,
Township 109 North, Range 37 West, Redwood County, Minnesota, described as
follows:  Commencing at the northeast
corner of said Southeast Quarter; thence southerly on a Minnesota State Plane
Grid Azimuth from north of 181 degrees 50 minutes 35 seconds along the east
line of said Southeast Quarter 102.21 feet; thence westerly 270 degrees 48
minutes 42 seconds azimuth 665.31 feet to the point of beginning; thence
continue westerly 270 degrees 48 minutes 42 seconds azimuth 400.00 feet; thence
southerly 180 degrees 48 minutes 42 seconds azimuth 200.00 feet; thence
easterly 90 degrees 48 minutes 42 seconds azimuth 400.00 feet; thence northerly
00 degrees 48 minutes 42 seconds azimuth 200.00 feet to the point of beginning.

 

Containing
0.27 acres, more or less.

 

AND ALSO

 

PARCEL III
(LAMBERTON ECONOMIC DEVELOPMENT AUTHORITY PARCEL)

 

That part of
the South Half (S1⁄2) of Section Twenty-two (22), Township One Hundred Nine
(109) North, Range Thirty-seven (37) West, Redwood County, Minnesota, lying
northerly of the northerly right-of-way line of the Dakota Minnesota &
Eastern Railroad, and southerly of the following described line:  Commencing at a point on the west line of the
Southwest Quarter (SW1⁄4) of said Section Twenty-two (22) where said line
intersects the northerly right-of-way line of the Dakota Minnesota and Eastern
Railroad, said right-of-way line being 50 feet northerly of and parallel with
the center line of the tracks; thence northerly along said west line on an
assumed azimuth of 01 degrees 50 minutes 35 seconds 145.69 feet to the point of
beginning of the line to be described; thence easterly 84 degrees 21 minutes 14
seconds azimuth 388.43 feet; thence 85 degrees 21 minutes 11 seconds azimuth
900.66 feet; thence easterly 83 degrees 46 minutes 16 seconds azimuth 896.53
feet; thence easterly 81 degrees 30 minutes 37 seconds azimuth 193.47 feet;
thence easterly 78 degrees 15 minutes 04 seconds 396.89 feet; thence easterly
80 degrees 37 minutes 13 seconds 299.78 feet; thence easterly 77 degrees 40
minutes 49 seconds 199.61 feet; thence easterly 80 degrees 37 minutes 44
seconds azimuth 200.67 feet; thence easterly 77 degrees 47 minutes 42 seconds
azimuth 316.70 feet to the southerly right-of-way line of Trunk Highway No. 14;
thence easterly 90 degrees 48 minutes 42 seconds azimuth along said southerly
right-of-way line 619.24 feet to its intersection with said northerly
right-of-way line of said Dakota Minnesota and Eastern Railroad and there
terminating.

 

B-3

 

AND ALSO

 

PARCEL IV
(ERICKSON WELL SITE PARCEL)

 

The East
2040.20 feet of the North 128.10 feet of the Northwest Quarter of Section 14,
Township 108 North, Range 37 West, Cottonwood County, Minnesota. Said tract
subject to a 33.00 foot township road right-of-way easement. Said tract
contains 6.00 acres more or less, including 1.55 acres of township road
right-of-way.

 

AND ALSO

 

PARCEL V
(GEIS WELL SITE PARCEL)

 

The East
1188.00 feet of the South 220.00 feet of the Southeast Quarter of the Southwest
Quarter of Section 29, Township 109 North, Range 37 West, Redwood County,
Minnesota. Said tract subject to a 33.00 foot township road right-of-way
easement. Said tract contains 6.00 acres more or less, containing 0.90 acres of
township road right-of-way.

 

B-4

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