Document:

exv10w16

 

Exhibit 10.16

TRACK MATERIAL PURCHASE AGREEMENT

This Track
Material Purchase Agreement (“Agreement”) is entered this ___ day of May, 2006 by
and between The Tie Yard of Omaha, 8202 “F” Street, Omaha, NE 68127 (“Seller”) and Advanced
Bioenergy, LLC, 137 N.8thStreet, P.O. Box 424, Geneva,Nebraska 68361 (“Buyer”).

Downpayment: Buyer shall pay the sum of $___.00 as downpayment. Buyer shall receive a 100%
credit for the downpayment on the first payments due from Buyer to Seller until the downpayment is
exhausted. If Seller fails to ship Track Material equal to the downpayment, Seller shall refund
any remaining portion of the downpayment to Buyer.

Track Material: Subject to the inspection and approval terms and provisions set forth below,
Seller agrees to deliver to Buyer and Buyer agrees to accept delivery of the following specified
Track Material:

	 	 	 	 	 
	 
	 	25000 TF (933 NT) #1 Relay Rail 112 RE 39’ w/11% shorts	 	$765.00 / NT  ($714,000.00)
	 
	 	5000 TF (187 NT) #3 Relay Rail 112 RE 39’ w/11% shorts	 	$555.00 / NT  (103,600.00)
	 
	 	1600 Pair Relay 112 RE Joint Bars to match rail 24” 4 Hole	 	$25.00 / PR  ($40,000.00)
	 
	 	33,000 Each Relay DS Tie Plates 11” minimum 6 Hole	 	$4.85 / each  ($160,050.00)
	 
	 	5835 New Grade 3 (6”x8”x8’6”) Hardwood Crosstie	 	$33.35/ each  (194,597.00)
	 
	 	12,670 #1 Relay 6”x8”x8’6” Hardwood Crosstie	 	$16.25 / each ($189,638.00)
	 
	 	13 Each 115 RE Reconditioned Turnouts #11 Complete	 	$14,900.00 / TO ($193,700.00)
	 
	 	       Total	 	$1,595,585.00
	 
	 	 	 	 
	 
	 	Ballast and Sub-Base	 	 
	 
	 	                     NT 3” Minus Quartzite Sub- Base	 	$10.00 / NT
	 
	 	                     NT 3” Quartzite Ballast Rock	 	$19.50 / NT

Delivery and Shipping: The sale of the Track Material listed above shall be FOB at Buyer’s
location:

     The Advanced Bioenergy, LLC construction site in Fillmore County, Nebraska.

Buyer shall specify an exact location on the Buyer’s site that is suitable for drop off by Seller’s
shipper. Seller shall pay for all shipping costs and risk of loss shall be that of Seller until
delivery is completed. Following inspection for shipping damage, Buyer shall provide a signed
shipping receipt to Seller or Seller’s shipper upon receipt. All material is owned by Seller and
is available for prior inspection.

Date of Delivery: Seller shall deliver the Track Material to Buyer before July 31, 2006. The
parties acknowledge that delivery of the Track Material may be made in installments.

Payment: Thirty days following delivery, subject to the credit for the downpayment, Buyer shall
pay Seller for the Track Material by wire transfer or collected funds in U.S. Dollars made payable
to Seller. Payment shall be made as set out herein for delivery installment on the per-piece price
set out in this Agreement and payment shall not be withheld until delivery of all Track Material.

Inspection and Approval: Immediately upon delivery of any Track Material, Buyer shall inspect the
Track Material for damage from shipping and shall immediately notify Shipper and Seller of such
shipping damage. Buyer, at its option, has the right to inspect all materials purchased, prior to
shipment, any material deemed not acceptable will be rejected prior to shipment.

 

 

Warranty: Seller warrants title in and to the Track Material. Seller makes no other warranty
other than that the Track Material is as specified.

Time is of the Essence: Time is of the essence of this Agreement.

Notices: Except as otherwise stated in this Agreement, Notices shall be to the addresses set forth
in the signature blocks below.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Seller:	 	 	 	 	 	Buyer:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	The Tie Yard of Omaha	 	 	 	Advanced Bioenergy, LLC	 	 	 	 	 	 
	 	 	8202 “F” Street	 	 	 	137 N.8thStreet	 	 	 	 	 	 
	 	 	Omaha, NE 68127	 	 	 	P.O. Box 424	 	 	 	 	 	 
	 	 	(402) 339-4965	 	 	 	Geneva,Nebraska 68361	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	(402) 759-3774	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	By:	 	/s/ Terry Peterson	 	 	 	By:	 	/s/ Revis L. Stephenson, III	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Name:	 	Terry Peterson	 	 	 	Name:	 	Revis L. Stephenson, III	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Position:	 	President	 	 	 	Position:	 	Chairman	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Date:	 	5/5/06	 	 	 	Date:	 	5/5/06exv10w17

 

Exhibit 10.17

WHEN RECORDED RETURN TO:

James L. Pray

BrownWinick Law Firm

666 Grand Ave. Suite 2000

Des Moines, Iowa 50322

	 	 	 	 	 	 	 	 	 
	Preparer

    Information
	 	James L. Pray
	 	666 Grand Ave. Suite 2000
	 	Des Moines, IA
	 	(515) 242-2404
	 	 	 	 	 
	 
	 	Individual’s Name
	 	Street Address
	 	City
	 	Phone
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	SPACE ABOVE THIS LINE FOR RECORDER

REAL ESTATE OPTION AGREEMENT

     THIS
AGREEMENT is made this 5th day of             May             , 2005, by and
between Fillmore Western Railway Company and , (hereinafter referred to as “Seller”) and Advanced
BioEnergy, LLC, a Delaware limited liability company (hereinafter referred to as “Buyer”).

WITNESSETH:

     WHEREAS, Seller is the owner of real estate described in full at paragraph 1 below and is
desirous of securing a future purchaser of said real property under defined terms; and

     WHEREAS, Buyer desires to acquire said property from Seller in accordance with the terms and
conditions set forth hereafter.

     IN CONSIDERATION of the covenants and promises contained hereafter, it is agreed:

	 	1.	 	PREMISES: That Seller hereby agrees to convey to Buyer by quit claim
deed all real property and the 100-foot railroad right of way, including any “extra
width” railroad right of way, and all other easements appurtenant to the use of the
real estate, together with all track, ties, ballast, other track material and other
improvements thereon owned, possessed, or claimed by the Fillmore Western Railway
Company and more specifically described as follows:
	 
	 	 	 	All of the interests of Fillmore Western Railway Company, real or personal, from
milepost 1.7 to milepost 3.7 on the Fillmore Western Railway Company line and running
through the following sections:

 

 

	 	 	 	Section 25 and 36, Township Eight (8) North, Range Three (3) West of the 6th
P.M. AND Section 1, Township Eight (7) North, Range Three (3) West of the 6th
P.M. all in Fillmore County, Nebraska.
	 
	 	 	 	A breakdown of the values of the real estate and track materials will be
provided by the Seller at closing.
	 
	 	2.	 	CONSIDERATION: Buyer agrees to pay to Seller at the time of the
execution of this Option Agreement the sum of $50,000.00 as a downpayment toward. The
parties agree that there is valid and sufficient consideration for this Agreement based
on this sum, the mutual obligations herein contained and other good and valuable
consideration. In addition, Seller agrees not to enter into any other Purchase, Lease
or Agreement of any kind with any other party relating to the subject property while
this Purchase Agreement is in place.
	 
	 	3.	 	PURCHASE TERMS: Pursuant to the terms of this agreement, Seller agrees
to sell and Buyer agrees to purchase the above-described real property with
improvements thereon under the following terms and conditions:

	 	a.	 	Purchase Price: The purchase price shall be: $500,000.00,
inclusive of both real estate and all track, ties, ballast, other track material
and other improvements thereon. Buyer agrees to pay to Seller at the time of the
execution of this Purchase Agreement the sum of $50,000.00 as a downpayment toward
the Purchase Price.

The Buyer agrees to pay in cash at closing the relevant amount as set forth above.
Buyer shall be credited against said purchase price with the full amount paid in cash
as the option consideration hereunder.

	 	b.	 	Quit-Claim Deed: At closing, upon receipt of the full
purchase price set forth above, Seller shall execute and deliver to Buyer an
appropriate Quit Claim Deed, a Bill of Sale, if required for all track, ties,
ballast, other track material and other improvements thereon, and other required
filings for recording by Buyer.
	 
	 	c.	 	Taxes: Seller shall pay all real estate taxes
prorated to the date of closing [Initialed TP and RLS] through tax year 2004.
	 
	 	d.	 	The parties agree that there is valid and sufficient consideration
for this Agreement based on this sum, the mutual obligations herein contained and
other good and valuable consideration. In addition, Seller agrees not to enter
into any other Purchase, Lease or Agreement of any kind with any other party
relating to the subject property while this Purchase Agreement is in place.
	 
	 	e.	 	Special Assessments: The Seller shall pay all special
assessments which are a lien and due and payable on said property and can be paid
as of the date of
closing.

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	 	f.	 	Eminent Domain: In the event the property or any part
thereof is taken or threatened to be taken pursuant to eminent domain after the
notice of exercise of the above option, but prior to closing, the Buyer shall have
the right at its election to cancel and terminate this agreement or to complete
the purchase as set forth above with the Buyer being entitled to receive all
condemnations proceeding against the real property.
	 
	 	g.	 	Closing: Subject to any approval by the Surface
Transportation Board, closing shall be held on a date agreeable to the parties not
later than 90 days from the date of the signing Purchase Agreement.
	 
	 	h.	 	Default: In the event Seller has fulfilled all of its
obligations hereunder and all conditions precedent and concurrent to closing for
which it is responsible and Buyer fails to fulfill its obligations hereunder and
continues to fail and refuses to fulfill its obligations hereunder for more than
30 days after receipt of written notice of such default from Seller may either:
1) terminate this Agreement in which event it shall be entitled to retain the
downpayment money and any other monies paid hereunder and such termination and
retainage shall be the sole remedy and damages available to the Seller; or 2)
pursue any legal and/or equitable remedy available to it. In the event Buyer
fulfills all of its obligations hereunder and meets all conditions precedent and
concurrent to closing for which it is responsible and Seller is unable, fails or
refuses to meet its obligations hereunder for more than 30 days after receipt of
written notice of such default, Buyer may either: 1) terminate this Agreement in
which event it shall be entitled to receive refund of all of its option money
deposits and any other monies paid hereunder and; 2) pursue any legal and/or
equitable remedy available to it.
	 
	 	i.	 	Personal Property: Seller understands and agrees that Buyer
shall have all rights in and to any personal property currently situated on the
Real Estate.

	 	5.	 	RECORDING OF OPTION: The parties hereto
agree that this option Agreement shall be recorded. [Initialed TP and RLS]

	 	6.	 	INSPECTION RIGHTS: Buyer shall, until closing of this purchase
Agreement, have the unrestricted rights to enter upon the subject property for purposes
of performing any and all due diligence necessary to Buyer’s determination to purchase
the subject property including, but not limited to, the taking of soil samples and
testing of rail and track material. Seller has a duty to provide to Buyer any
documents evincing title or environmental tests and studies that it may have that
pertain to the Real Estate. TYO does not warrant any of the material contained therein
for any structural integrity or suitability for any particular purpose. Buyer
acknowledges that it is buying the materials from the track as salvage only, “AS IS –
WHERE IS” and will make its own determination as to fitness and suitability for a

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	 	 	 	purpose. Any attempt to continue use
of these materials as a track structure will be at the discretion of the Buyer, and
Buyer will assume all risks and liabilities associated with Buyer’ or any other persons
or entities use of these materials as railroad track.

	 	7.	 	RAILROAD DOCUMENTS: Seller agrees to provide copies of any related
railroad files or maps in Seller’s possession that pertain to the Real Estate.
	 
	 	8.	 	STB FILINGS: Seller agrees to cooperate with any necessary filings
that must be made with the Surface Transportation Board to effect this transaction.
	 
	 	9.	 	NOTICES: Any notice, demand or other document which either party is
required or may desire to give or deliver to or make upon the other party shall be
given in writing and served either personally or given by prepaid United States
certified mail, return receipt requested, and addressed to the following addresses:

	 	 	 	 	 
	 
	 	If to Seller:	 	Tie Yard of Omaha
	 
	 	 	 	c/o Terry Peterson
	 
	 	 	 	8202 F St
	 
	 	 	 	Omaha, NE  68127
	 
	 	 	 	 
	 
	 	If to Buyer:	 	Advanced BioEnergy, LLC
	 
	 	 	 	c/o Revis L. Stephenson III
	 
	 	 	 	137 N. 8th St.
	 
	 	 	 	Geneva, NE  68361

	 	 	 	Either party hereto may designate a different address for itself, or additional persons
to whom copies thereof are to be sent, by notice similarly given.
	 
	 	8.	 	REAL ESTATE BROKERS: The parties hereto represent that, absent
specific disclosure in writing, no real estate brokers have been employed, utilized or
relied upon by either party as a result of the real estate sale contemplated therein.
	 
	 	9.	 	TIME: Time is of the essence as to the performance of all of the terms
and conditions of this Agreement.
	 
	 	10.	 	ATTORNEY FEES: Any action required of the Seller hereunder to enforce
its rights to this Agreement shall entitle the Seller to the recovery of its reasonable
attorney fees, costs and expenses incurred and necessary to the enforcement of said
rights.
	 
	 	11.	 	GENERAL: This Agreement shall be deemed to have been made and shall be
construed and interpreted in accordance with the laws of the State of Nebraska. This
Agreement shall be binding upon and inure to the benefit of the respective parties
hereto and their successors and assigns. The captions and titles herein are for
reference only and are not to be considered a part of this Agreement or in the

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	 	 	 	interpretation hereof. This Agreement shall not be valid until signed by both parties.
The phrase “execution and delivery hereof,” as used above, shall be the date the last
party hereto signs this Agreement and serves it upon the other party in the same manner
as set forth for notices. Time is of the essence.

	 	12.	 	ADDITIONAL WARRANTY OF COOPERATION. Seller and Buyer acknowledge that
exact and perfect real estate legal descriptions were not available at the time that
this document was executed and agree that prior to closing a more exact and final real
estate description will be used. Seller and Buyer further agree that to the extent
that the milepost markers do not convey uninterrupted access to existing rail line to
the north or leave a gap in the legal description that Seller agrees to convey any
additional Real Estate owned by Seller that might be necessary. Any additional Real
Estate that must be conveyed pursuant to this paragraph shall be paid for on a per-foot
basis comparable to the consideration paid for the other Real Estate conveyed herein.

	13.	 	EASEMENT. Seller conveys to Buyer an easement to use the FWRY right of
way from MP 3.7 to Turkey Creek, for the purpose of underground pipeline and or other
utitlities. [Handwritten: Purchase price of easement shall be an additional $10,000.00
(ten thousand dollars) TP RLS]

     IN WITNESS WHEREOF, said parties hereto subscribe their names.

	 	 	 	 	 	 	 	 	 	 	 
	SELLER:	 	 	 	BUYER:	 	 	 	 
	 	 	 	 	 	 	ADVANCED BIOENERGY, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	      /s/ Terry Peterson
 

	 	 	 	By
	 	     /s/ Revis L. Stephenson III
 

	 	 
	 

	 	Fillmore Western Railway Company
	 	 	 	 	 	Revis L. Stephenson III, Chairman	 	 

STATE OF      Nebraska                                        )

SS:

COUNTY OF Douglas     Douglas                         )

     On
this 5th day of May, 2006, before me, the undersigned, a
Notary Public in and for the State of  Nebraska , personally appeared  Terry
Peterson to me personally known, who being by me duly sworn, did say that he is the 
Vice-President  of Fillmore Western Railway Company, executing the within and foregoing
instrument; that no seal has been procured by the said company; that said instrument was signed on
behalf of the limited liability company by authority of its Board of Directors; and           
Terry Peterson                     , as           Vice Pres          , acknowledged the
execution of the foregoing instrument to be the voluntary act and deed of the limited liability
company, by it and by him voluntarily executed.

	 	 	 	 	 	 	 
	 

	 	[SEAL]
	 	          /s/ Hollye Hempel
 

Notary Public in and for the State of   NE  
	 	 

5

 

STATE OF      Nebraska                                        )

SS:

COUNTY OF Douglas     Douglas                         )

     On
this 5th day of May, 2006, before me, the undersigned,
a Notary Public in and for the State of Nebraska, personally appeared Revis L. Stephenson
III to me personally known, who being by me duly sworn, did say that he is the Chairman of Advanced
BioEnergy, LLC, a limited liability company, executing the within and foregoing instrument; that no
seal has been procured by the said limited liability company; that said instrument was signed on
behalf of the limited liability company by authority of its members; and that Revis L. Stephenson
III, as Chairman, acknowledged the execution of the foregoing instrument to be the voluntary act
and deed of the limited liability company, by it and by him voluntarily executed.

	 	 	 	 	 	 	 
	 

	 	[SEAL]
	 	     /s/ Hollye Hempel
 

Notary Public in and for the State of NE
	 	 

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