Document:

exv10w14

 

Exhibit 10.14

	certificate Number: 8000845360

	American
Federal Bank

	Certificate of Deposit

	NON-NEGOTIABLE AND NON-TRANSFERABLE

	Agassiz Energy, LLC

	03-07-2007

	03-06-2008

	12 Months

	$ 970,000.00

	Monthly

	5.128

	5.25

	Compound

	See your Truth in Savings disclosure for renewal and penalty terms.

	American Federal Bank Authorized Signature

	American Federal Bank
304 North Broadway
Crookston, MN 56716

 

BUSINESS LOAN AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	    Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call/Coll	 	Account	 	Officer	 	Initials
	$970,000.00
	 	 	03-09-2007	 	 	 	03-06-2008	 	 	 	8000845380	 	 	 	 	 	 	 	 	 	 	PBlake	 	 	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing “***” has been omitted due to text length limitations.

	 	 	 	 	 	 	 	 	 
	Borrower:

	 	Agassiz Energy, LLC (TIN:
80-0130330)
	 	 	 	Lender:
	 	American Federal Bank
	 

	 	510 County Road 71
	 	 	 	 	 	215 North 5th Str
	 

	 	Crookston, MN 56716
	 	 	 	 	 	Fargo, ND 58102

THIS BUSINESS LOAN AGREEMENT dated March 9, 2007, is made and executed between Agassiz Energy, LLC
(“Borrower”) and American Federal Bank (“Lender”)
on the following terms and conditions. Borrower
has received prior commercial loans from Lender or has applied to Lender for a commercial loan or
loans or other financial accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement (“Loan”). Borrower understands and agrees that: (A) In
granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations,
warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending
of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and
(C) all such Loans shall be and remain subject to the terms and
conditions of this Agreement.

TERM. This Agreement shall be effective as of March 9, 2007, and shall continue in full force and
effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full,
including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or until
March 6, 2008.

ADVANCE AUTHORITY. The following persons currently are authorized to request advances and authorize
payments under the line of credit until Lender receives from Borrower, at Lender’s address shown
above, written notice of revocation of their authority: Donald Sergeant, President of Agassiz
Energy LLC; Larry Altringer, Treasurer of Agassiz Energy LLC; and Wayne Wagner, Vice President of
Agassiz Energy LLC.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each
subsequent Advance under this Agreement shall be subject to the fulfillment to Lender’s
satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the
Note; (2) Security Agreements granting to Lender security Interests in the Collateral; (3)
financing statements and all other documents perfecting Lender’s Security Interests; (4)
evidence of insurance as required below; (5) together with all such Related Documents as Lender
may require for the Loan; all in form and substance satisfactory to Lender and Lender’s counsel.

Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to
Lender properly certified resolutions, duly authorizing the execution and delivery of this
Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such
other resolutions, authorizations, documents and instruments as
Lender or its counsel, may
require.

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other
expenses which are then due and payable as specified in this Agreement or any Related Document.

Representations and Warranties. The representations and warranties set forth in this Agreement,
in the Related Documents, and in any document or certificate delivered to Lender under this
Agreement are true and correct.

No Event of Default. There shall not exist at the time of any Advance a condition which would
constitute an Event of Default under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this
Agreement , as of the date of each disbursement of loan proceeds, as of the date of any renewal,
extension or modification of any Loan, and at all times any Indebtedness exists:

Organization. Borrower is a limited liability company which is, and at all times shall be, duly
organized, validly existing, and in good standing under and by virtue of the laws of Borrower’s
state of organization. Borrower is duly authorized to transact business in all other states in
which Borrower is doing business, having obtained all necessary
filings, governmental licenses
and approvals for each state in which Borrower is doing business. Borrower maintains an office at
510 County Road 71, Crookston, MN 56716. Unless Borrower has designated otherwise in writing, the
principal office is the office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will notify Lender prior to any change in the
location of Borrower’s state of organization or any change in Borrower’s name.

Assumed Business Names. Borrower has filed or recorded all documents or filings required by law
relating to all assumed business names used by Borrower. Excluding the name of Borrower, the
following is a complete list of all assumed business names under which Borrower does business:
None.

Authorization.
Borrower’s execution, delivery, and performance of this
Agreement add all the Related
Documents have been duly authorized by all necessary action by Borrower and do not conflict with,
result in a violation of, or constitute a default under (1) any provision of (a) Borrower’s
articles of organization or membership agreements, or (b) any agreement or other instrument
binding upon Borrower of (2) any law, governmental regulation, court decree, or order applicable
to Borrower or to Borrower’s properties.

Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower’s
financial statements or in writing to Lender and as accepted by Lender, and except for property
tax liens for taxes not presently due and payable, Borrower owns and has good title to all of
Borrower’s properties free and clear of all liens and security interests, and has not executed
any security documents or financing statements relating to such properties. All of Borrower’s
properties are titled in Borrower’s legal name, and Borrower has not used or filed a financing
statement under any other name for at least the last five (5) years.

AFFIRMATIVE
COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement
remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse
changes in Borrower’s financial condition, and (2) all existing and all threatened litigation,
claims, investigations, administrative proceedings or similar actions affecting Borrower or any
Guarantor which could materially affect the financial condition of Borrower or the financial
condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with accounting principles
acceptable to Lender, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times.

Financial
Statements. Furnish Lender with the following:

Annual Statements. As soon as available, but in no event later than sixty (60) days after the end
of each fiscal year, Borrower’s balance sheet and income statement for the year ended, prepared
by Borrower.

Tax Returns. As soon as available, but in no event later than sixty (60) days after the
applicable filing date for the tax reporting period ended, Federal and other governmental tax
returns prepared by a professional accountant satisfactory to Lender.

 

 

BUSINESS LOAN AGREEMENT

(Continued)

			
	Loan No: 8000845380
	 	Page 2

All financial reports required to be provided under this Agreement shall be prepared in accordance
with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct.

Loan
Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless specifically
consented to the contrary by Lender in writing.

Taxes, Charges and Lines. Pay and discharge when due all of its indebtedness and obligations,
including without limitation all assessments, taxes, governmental charges, levies and liens, of
every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or
charge upon any of Borrower’s properties, income, or profits.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set
forth in this Agreement, in the Related Documents, and in all other instruments and agreements
between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in
connection with any agreement.

Operations. Maintain executive and management personal with substantially the same qualifications
and experience as the present executive and management personnel; provide written notice to Lender
of any change in executive and management personnel; conduct its business affairs in a reasonable
and prudent manner.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now
or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower’s
properties, businesses and operations, and to the use or occupancy of the Collateral, including
without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any
such law, ordinance, or regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so
long as, in Lender’s sole opinion, Lender’s interests in the Collateral are
not jeopardized. Lender may require Borrower to post adequate
security or a surety bond, reasonably
satisfactory to Lender, to protect Lender’s interest.

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all
Collateral for the Loan or Loans and Borrower’s other properties and to examine or audit Borrower’s
book, accounts, and records and to make copies and memoranda of
Borrower’s books, accounts, and
records. If Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the generation of such
records) in the possession of a third party, Borrower, upon request of Lender, shall notify such
party or permit Lender free access to such records at all reasonable times and to provide Lender
with copies of any records it may request, all at Borrower’s expense.

LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to
Borrower’s failure to discharge or pay when due any
amounts Borrower is required to discharge or pay under this Agreement or any Related Documents,
Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems
appropriate on any Collateral and paying all costs for insuring, maintaining and preserving any
Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by Lender to the date of
repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender’s
option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned
among and be payable with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon
payment which will be due and payable at the Note’s maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in
effect, Borrower shall not, without the prior written consent of Lender:

Continuity of Operations. (1) Engage in any business activities substantially different than
those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer,
acquire or consolidate with any other entity, change its name, dissolve or transfer or sell
Collateral out of the ordinary course of business, or (3) make any distribution with respect to any
capital account, whether by reduction of capital or otherwise.

Agreements. Borrower will not enter into any agreement containing any provisions which would be
violated or breached by the performance of Borrower’s obligations under this Agreement or in
connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether
under this Agreement or under any other agreement, Lender shall have no obligation to make Loan
advances or to disburse Loan proceeds if: (A) Borrower or any guarantor is in default under the
terms of this Agreement or any other agreement that Borrower or any guarantor has with Lender; (B)
Borrower or any guarantor dies, becomes incompetent or becomes insolvent, files a petition in
bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower’s financial condition, in the financial condition of any guarantor, or in the
value of any collateral securing any Loan; or (D) any guarantor seeks, claims or otherwise attempts
to limit, modify or revoke such guarantor’s guaranty of the Loan or any other loan with Lender; or
(E) Lender in good faith deems itself insecure, even though no Event of Default shall have
occurred.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh
accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such
accounts.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. Borrower fails to make any payment when due under the Loan.

Other Default. Borrower fails to comply with any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents.

False Statements. Any representation or statement made by Borrower to Lender is false in any
material respect.

Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is
made), any member withdraws from Borrower, or any other termination of Borrower’s existence as a
going business or the death of any member, the insolvency of
Borrower, the appointment of a receiver for any part of
Borrowers’ property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether
by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or
by any governmental agency against any collateral securing the Loan.

Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any
of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the
validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender,
at its option, may, but shall not be required to, permit the Guarantor’s estate to assume
unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and,
in doing so, cure any Event of Default.

 

 

BUSINESS LOAN AGREEMENT

(Continued)

			
	Loan No: 8000845380
	 	Page 3

Insecurity. Lender in good faith believes itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided
in this Agreement or the Related Documents, all commitments and obligations of Lender under this
Agreement immediately will terminate (including any obligation to make further Loan Advances or
disbursements), and, at Lender’s option, all indebtedness immediately will become due and payable,
all without notice of any kind to Borrower, except that in the case of an Event of Default of the type
described in the “Insolvency” subsection above, such acceleration shall be automatic and not
optional. In addition, Lender shall have all the rights and remedies provided in the Related
Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable
law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an obligation of Borrower
or of any Grantor shall not affect Lender’s right to declare a default and to exercise its rights
and remedies.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used
in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform
Commercial Code. Accounting words and terms not otherwise defined in
this Agreement shall have the meanings assigned
to them in accordance with generally accepted accounting principles as in effect on the date of
this Agreement:

Advance. The word “Advance” means a disbursement of Loan funds made, or to be made, to
Borrower or on Borrower’s behalf on a line of credit or multiple advance basis under the terms and
conditions of this Agreement.

Agreement. The word “Agreement” means this Business Loan Agreement, as this Business Loan
Agreement may be amended or modified from time to time, together with all exhibits and schedules
attached to this Business Loan Agreement from time to time.

Borrower. The word “Borrower” means Agassiz Energy, LLC and includes all co-signers and
co-makers signing the Note and all their successors and assigns.

Collateral. The word “Collateral” means all property and assets granted as collateral security
for a loan, whether real or personal property, whether granted directly or indirectly, whether
granted now or in future, and whether granted in the form of a security interest, mortgage,
collateral mortgage, deed of trust, assignment, pledge, crop pledge,
chattel mortgage, collateral chattel mortgage, chattel
trust, factors lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title
retention contract, lease or consignment intended as a security device, or any other security or
lien Interest whatsoever, whether created by law, contract, or otherwise.

Event of Default. The words “Event of Default” mean any of the events of default set forth in
this Agreement in the default section of this Agreement.

GAAP. The word “GAAP” means generally accepted accounting principles.

Grantor. The word “Grantor” means each and all of the persons or entities granting a Security
Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a
Security Interest.

Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any or
all of the Loan.

Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender, including without
limitation a guaranty of all or part of the Note.

Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or Related
Documents, including all principal and Interest together with all other indebtedness and costs and
expenses for which Borrower is responsible under this Agreement or under any of the Related
Documents.

Lender. The word “Lender” means American Federal Bank, its successors and assigns.

Loan. The word “Loan” means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter existing, and however evidenced, including without limitation
those loans and financial accommodations described herein or described on any exhibit or schedule
attached to this Agreement from time to time.

Note. The word “Note” means the Note executed by Agassiz Energy, LLC in the principle amount
of $970,000.00 dated March 9, 2007, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the note or credit agreement.

Related Documents. The word “Related Documents” means all promissory notes, credit agreements,
loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Loan.

Security Agreement. The word “Security Agreement” means and include without limitation any
agreements, promises, covenants, arrangements, understandings or other agreements, whether created
by law, contract, or otherwise, evidencing, governing, representing, or creating a Security
Interest.

Security
Interest. The word “Security Interest” means, without
limitation, any and all types of
collateral security, present and future, whether in the form of a lien, charge, encumbrance,
mortgage, deed or trust, security deed, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust
receipt, lien or title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by law, contract, or otherwise.

 

 

BUSINESS
LOAN AGREEMENT

					
	Loan No: 8000845380
	 	(Continued)
	 	Page 4

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND
BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED MARCH 9, 2007.

BORROWER:

AGASSIZ ENERGY, LLC

	 	 	 	 	 	 	 	 	 
	By:

	 	
 

Donald Sargeant, President of Agassiz Energy, LLC
	 	By:
	 	/s/ Larry Altringer
 

Larry Altringer, Treasurer of Agassiz Energy, LLC
	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Wayne Wagner
 
 Wayne
Wagner, Vice President of Agassiz Energy, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LENDER:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMERICAN FEDERAL BANK	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/  P. Blake
 
 Authorized
Signer	 	 	 	 	 	 

 

PROMISSORY NOTE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call/Coll	 	Account	 	Officer	 	Initials
	$970,000.000	 	 	03-09-2007	 	 	 	03-06-2008	 	 	 	8000845380	 	 	 	 	 	 	 	 	 	 	PBlake	 	 	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing “***” has been omitted due to text length limitations.

	 	 	 	 	 	 	 	 	 
	Borrower:

	 	Agassiz Energy, LLC (TIN: 80-0130330)
	 	 	 	Lender:
	 	American Federal Bank
	 

	 	510 County Road 71
	 	 	 	 	 	215 North 5th Str
	 

	 	Crookston, MN 56716
	 	 	 	 	 	Fargo, ND 58102

					
	 	 	 	 	 
	Principal Amount: $970,000.00
	 	Interest Rate: 7.000%
	 	Date of Note: March 9, 2007

PROMISE TO PAY. Agassiz Energy, LLC (“Borrower”) promises to pay to American Federal Bank
(“Lender”) or order, in lawful money of the United States of America, the principal amount of Nine
Hundred Seventy Thousand & 00/100 Dollars ($970,000.00) or so much as may be outstanding together
with interest at the rate of 7.000% per annum on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until repayment of each
advance. The interest rate may change under the terms and conditions of the “INTEREST AFTER
DEFAULT” section.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on March 6, 2008. Unless otherwise agreed or required by applicable law, payments
will be applied first to any accrued unpaid Interest; than to principal; then to any late charges;
and then to any unpaid collection costs. Interest on this Note is computed on a 365/365 simple
interest basis; that is, by applying the ratio of the annual interest rate over the number of days
in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days
the principal balance is outstanding. Borrower will pay Lender at Lender’s address shown above or
at such other place as Lender may designate in writing.

PREPAYMENT. Borrower may pay without penalty all or a porting of the amount owed earlier than it is
due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments. Rather, early payments will reduce the
principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without
recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without
losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any
further amount owed to Lender. All written communications concerning disputed amounts, including any
check or other payment instrument that indicates that the payment constitutes “payment in full” of
the amount owed or that is tendered with other conditions or limitations or as full satisfaction of
a disputed amount must be mailed or delivered to: American Federal Bank, Crookston Bank, 304 North
Broadway Crookston, MN 56716.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid
portion of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the total sum
due under this Note will continue to accrue interest at the interest rate under this Note.

DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under this
Note:

Payment Default. Borrower fails to make any payment when due under this Note.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or
condition contained in this Note or in any of the related documents or to
comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower
or on Borrower’s behalf under this Note or the related documents or misleading in any material
respect, either now or at the time made or furnished or becomes false or misleading at any time
thereafter.

Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue in
made), any member withdraws from Borrower, or any other termination of Borrower’s existence as a
going business or the death of any member, the Insolvency or Borrower, the appointment of a
receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type
of creditor workout, or the commencement or any proceeding under any bankruptcy or insolvency laws
by or against Borrower.

Creditor
or Forfeiture Proceeding. Commencement or foreclosure or forfeiture proceedings, whether
by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or
by any governmental agency against any collateral securing the loan. This includes a garnishment of
any of Borrower’s accounts, including deposit accounts with Lender. However, this Event or Default
shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness
of the claim which is the basis of the creditor of forfeiture proceeding and if Borrower gives
Lender written notice of the creditor of forfeiture proceeding and deposits with Lender monies or
a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its
sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by this Note. In the event or a
death, Lender, at its option, may but shall not be required to, permit the guarantor’s estate to
assume unconditionally the obligations arising under the guaranty in a manner satisfactory to
Lender, and, in doing so, cure any Event of Default.

Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect or payment or performance or this Note is impaired.

Insecurity. Lender in good faith believes itself insecure.

Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not
been given a notice of a breach of the same provision of this Note within the preceding twelve (12)
months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of
such default: (1) cures the default within thirty (30) days; or (2) if the cure requires more than
thirty (30) days, immediately
initiates steps which Lender deem in Lender’s sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonable practical.

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this
Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s reasonable attorneys’ fees and Lender’s legal expenses, whether or not
there is a lawsuit, including reasonable attorneys’ fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums
provided by law.

GOVERNING LAW. With respect to interest (as defined by federal law) this Note will be governed by
federal law applicable to Lender and, to

 

PROMISSORY NOTE

					
	Loan No: 8000845380
	 	(Continued)
	 	Page 2

the extent not preempted by federal law, the laws of the State of North Dakota without regard to
its conflicts of laws provisions. In all other respects, this Note will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws of the State of
Minnesota without regard to its conflicts of law provisions. The loan transaction that is evidenced
by this Note has been approved, made, and funded, and all necessary loan documents have been
accepted by Lender in the State of North Dakota.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower makes a payment on
Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against any and all such
accounts.

COLLATERAL. Borrower acknowledges this Note is secured by Certificate of Deposit 8000845360 in the
amount of $970,000.00.

LINE OF CREDIT. The Note evidence a revolving line of credit. Advances under this Note, as well as
directions for payment from Borrower’s accounts, may be requested orally or in writing by Borrower
or as provided in this paragraph. Lender may, but need not, require that all oral requests be
confirmed in writing. The following persons currently are authorized to request advances and
authorize payments under the line of credit until Lender receives from Borrower, at Lender’s
address shown above, written notice of revocation of their authority: Donald Sargeant, President of
Agassiz Energy LLC; Larry Altringer, Treasurer of Agassiz Energy LLC; and Wayne Wagner, Vice
President of Agassiz Energy LLC. Borrower agrees to be liable for all sums either: (A) advanced in
accordance with the instructions of an authorized person or (B) credited to any of Borrower’s
accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced
by endorsements on this Note or by Lender’s internal records, including daily computer print-outs.

CREDIT REPORTING NOTICE. We may report information about your account to credit bureaus. Late
payments, missed payments, or other defaults on your account may be reflected in your credit report.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s
heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if
we report any inaccurate information about your account(s) to a consumer reporting agency. Your
written notice describing the specific inaccuracy(ies) should be sent to us at the following
address: American Federal Bank 215 North 5th Street, Fargo, ND 58108.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest
of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note
without losing them. In addition, Lender shall have all the rights and remedies provided in the
related documents or available at law, in equity, or otherwise.
Except as may be prohibited by
applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of
any other remedy, and an election to make expenditures or to take action to perform an obligation
of Borrower shall not affect Lender’s right to declare a default and to exercise its rights and
remedies. Borrower and any other persons who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in
the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fall to realize upon or
perfect Lender’s security interest in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.

SECTION DISCLOSURE. Except for matters related to interest (as defined by federal law), and to the
extent not preempted by federal law, this loan is made under Minnesota Statutes, Section.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THE NOTE. BORROWER
AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

	 	 	 	 	 	 	 	 	 
	AGASSIZ ENERGY, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:
	 	/s/ Larry Altringer
	 

	 	 
	 	 	 	 	 	 
	 

	 	Donald Sargeant, President of Agassiz Energy, LLC
	 	 	 	 	 	Larry Altringer, Treasurer of Agassiz Energy, LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Wayne Wagner	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Wayne Wagner, Vice President of Agassiz Energy,

LLC	 	 	 	 	 	 

 

PROMISSORY NOTE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call/Coll	 	Account	 	Officer	 	Initials
	$970,000.000	 	 	03-09-2007	 	 	 	03-06-2008	 	 	 	8000845380	 	 	 	 	 	 	 	 	 	 	PBlake	 	 	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing “***” has been omitted due to text length limitations.

	 	 	 	 	 	 	 	 	 
	Borrower:

	 	Agassiz Energy, LLC (TIN: 80-0130330)
	 	 	 	Lender:
	 	American Federal Bank
	 

	 	510 County Road 71
	 	 	 	 	 	215 North 5th Str
	 

	 	Crookston, MN 56716
	 	 	 	 	 	Fargo, ND 58102

					
	 	 	 	 	 
	Principal Amount: $970,000.00
	 	Interest Rate: 7.000%
	 	Date of Note: March 9, 2007

PROMISE TO PAY. Agassiz Energy, LLC (“Borrower”) promises to pay to American Federal Bank
(“Lender”) or order, in lawful money of the United States of America, the principal amount of Nine
Hundred Seventy Thousand & 00/100 Dollars ($970,000.00) or so much as may be outstanding together
with interest at the rate of 7.000% per annum on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until repayment of each
advance. The interest rate may change under the terms and conditions of the “INTEREST AFTER
DEFAULT” section.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on March 6, 2008. Unless otherwise agreed or required by applicable law, payments
will be applied first to any accrued unpaid Interest; than to principal; then to any late charges;
and then to any unpaid collection costs. Interest on this Note is computed on a 365/365 simple
interest basis; that is, by applying the ratio of the annual interest rate over the number of days
in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days
the principal balance is outstanding. Borrower will pay Lender at Lender’s address shown above or
at such other place as Lender may designate in writing.

PREPAYMENT. Borrower may pay without penalty all or a porting of the amount owed earlier than it is
due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments. Rather, early payments will reduce the
principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without
recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without
losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any
further amount owed to Lender. All written communications concerning disputed amounts, including any
check or other payment instrument that indicates that the payment constitutes “payment in full” of
the amount owed or that is tendered with other conditions or limitations or as full satisfaction of
a disputed amount must be mailed or delivered to: American Federal Bank, Crookston Bank, 304 North
Broadway Crookston, MN 56716.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid
portion of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the total sum
due under this Note will continue to accrue interest at the interest rate under this Note.

DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under this
Note:

Payment Default. Borrower fails to make any payment when due under this Note.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or
condition contained in this Note or in any of the related documents or to
comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower
or on Borrower’s behalf under this Note or the related documents or misleading in any material
respect, either now or at the time made or furnished or becomes false or misleading at any time
thereafter.

Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue in
made), any member withdraws from Borrower, or any other termination of Borrower’s existence as a
going business or the death of any member, the Insolvency or Borrower, the appointment of a
receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type
of creditor workout, or the commencement or any proceeding under any bankruptcy or insolvency laws
by or against Borrower.

Creditor
or Forfeiture Proceeding. Commencement or foreclosure or forfeiture proceedings, whether
by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or
by any governmental agency against any collateral securing the loan. This includes a garnishment of
any of Borrower’s accounts, including deposit accounts with Lender. However, this Event or Default
shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness
of the claim which is the basis of the creditor of forfeiture proceeding and if Borrower gives
Lender written notice of the creditor of forfeiture proceeding and deposits with Lender monies or
a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its
sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by this Note. In the event or a
death, Lender, at its option, may but shall not be required to, permit the guarantor’s estate to
assume unconditionally the obligations arising under the guaranty in a manner satisfactory to
Lender, and, in doing so, cure any Event of Default.

Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender
believes the prospect or payment or performance or this Note is impaired.

Insecurity. Lender in good faith believes itself insecure.

Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not
been given a notice of a breach of the same provision of this Note within the preceding twelve (12)
months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of
such default: (1) cures the default within thirty (30) days; or (2) if the cure requires more than
thirty (30) days, immediately
initiates steps which Lender deem in Lender’s sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonable practical.

LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this
Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s reasonable attorneys’ fees and Lender’s legal expenses, whether or not
there is a lawsuit, including reasonable attorneys’ fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums
provided by law.

GOVERNING LAW. With respect to interest (as defined by federal law) this Note will be governed by
federal law applicable to Lender and, to

 

PROMISSORY NOTE

					
	Loan No: 8000845380
	 	(Continued)
	 	Page 2

the extent not preempted by federal law, the laws of the State of North Dakota without regard to
its conflicts of laws provisions. In all other respects, this Note will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws of the State of
Minnesota without regard to its conflicts of law provisions. The loan transaction that is evidenced
by this Note has been approved, made, and funded, and all necessary loan documents have been
accepted by Lender in the State of North Dakota.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower makes a payment on
Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against any and all such
accounts.

COLLATERAL. Borrower acknowledges this Note is secured by Certificate of Deposit 8000845360 in the
amount of $970,000.00.

LINE OF CREDIT. The Note evidence a revolving line of credit. Advances under this Note, as well as
directions for payment from Borrower’s accounts, may be requested orally or in writing by Borrower
or as provided in this paragraph. Lender may, but need not, require that all oral requests be
confirmed in writing. The following persons currently are authorized to request advances and
authorize payments under the line of credit until Lender receives from Borrower, at Lender’s
address shown above, written notice of revocation of their authority: Donald Sargeant, President of
Agassiz Energy LLC; Larry Altringer, Treasurer of Agassiz Energy LLC; and Wayne Wagner, Vice
President of Agassiz Energy LLC. Borrower agrees to be liable for all sums either: (A) advanced in
accordance with the instructions of an authorized person or (B) credited to any of Borrower’s
accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced
by endorsements on this Note or by Lender’s internal records, including daily computer print-outs.

CREDIT REPORTING NOTICE. We may report information about your account to credit bureaus. Late
payments, missed payments, or other defaults on your account may be reflected in your credit report.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s
heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if
we report any inaccurate information about your account(s) to a consumer reporting agency. Your
written notice describing the specific inaccuracy(ies) should be sent to us at the following
address: American Federal Bank 215 North 5th Street, Fargo, ND 58108.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest
of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note
without losing them. In addition, Lender shall have all the rights and remedies provided in the
related documents or available at law, in equity, or otherwise.
Except as may be prohibited by
applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of
any other remedy, and an election to make expenditures or to take action to perform an obligation
of Borrower shall not affect Lender’s right to declare a default and to exercise its rights and
remedies. Borrower and any other persons who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in
the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fall to realize upon or
perfect Lender’s security interest in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.

SECTION DISCLOSURE. Except for matters related to interest (as defined by federal law), and to the
extent not preempted by federal law, this loan is made under Minnesota Statutes, Section.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THE NOTE. BORROWER
AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

	 	 	 	 	 	 	 	 	 
	AGASSIZ ENERGY, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Donald Sargeant	 	 	 	By:
	 	/s/ Larry Altringer
	 

	 	 
	 	 	 	 	 	 
	 

	 	Donald Sargeant, President of Agassiz Energy, LLC
	 	 	 	 	 	Larry Altringer, Treasurer of Agassiz Energy, LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Wayne Wagner	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Wayne Wagner, Vice President of
Agassiz Energy, LLC	 	 	 	 	 	 

 

ASSIGNMENT OF DEPOSIT ACCOUNT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	$970,000.000	 	 	03-09-2007	 	 	 	03-06-2008	 	 	 	8000845380	 	 	 	 	 	 	 	 	 	 	PBlake	 	 	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this
document to any particular loan or item.
 Any item above
containing “***” has been omitted due to text
length limitations.

	 	 	 	 	 	 	 	 	 
	Grantor:

	 	Agassiz Energy, LLC (TIN: 80-0130330
	 	 	 	Lender:
	 	American Federal Bank
	 

	 	510 County Road 71
	 	 	 	 	 	215 North 5th Str
	 

	 	Crookston, MN 56716
	 	 	 	 	 	Fargo, ND 58102

THIS ASSIGNMENT OF DEPOSIT ACCOUNT dated March 9, 2007, is made and executed between Agassiz
Energy, LLC (“Grantor”) and American Federal Bank (“Lender”).

ASSIGNMENT. For valuable consideration, Grantor assigns and grants to Lender a security interest in
the Collateral, including without limitation the deposit accounts described below, to secure the
Indebtedness and agrees that Lender shall have the rights stated in this agreement with respect to
the Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION. The word “Collateral” means the following described deposit account
(“Account”):

     CD Account Number 8000845360 with Lender with an approximate balance of $970,000.00

together with (A) All Interest, whether now accrued or hereafter accruing; (B) all additional
deposits hereafter made to the Account; (C) any and all proceed from the Account; and (D) all
renewals, replacements and substitutions for any of the foregoing.

CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures all obligations, debts and
liabilities, plus Interest thereon, of Grantor to Lender, or any one or more of them, as well as
all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter
arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise,
whether due or not due, direct or indirect, determined or undetermined, absolute or contingent,
liquidated or unliquidated, whether Grantor may be liable individually or jointly with others,
whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon
such amounts may be or hereafter may become barred by any statute of limitations, and whether the
obligation to repay such amounts may be or hereafter may become otherwise unenforceable.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Grantor’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in
the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for
which setoff would be prohibited by law. Grantor authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against any and all such
accounts.

GRANTOR’S
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the
Collateral, Grantor represents and promises to Lender that:

Ownership. Grantor is the lawful owner of the Collateral free and clear of all loans, liens,
encumbrances, and claims except as disclosed to and accepted by Lender in writing.

Right to Grant Security Interest. Grantor has the full right, power, and authority to enter into
this Agreement and to assign the Collateral to Lender.

No Prior Assignment. Grantor has not previously granted a security interest in the Collateral to
any other creditor.

Limitations on Obligations of Lender. Lender shall use ordinary reasonable care in the physical
preservation and custody of any certificate or passbook for the collateral but shall have no other
obligation to protect the Collateral or its value. In particular, but without limitation, Lender
shall have no responsibility (1) for the collection or protection of any income on the Collateral;
(2) for the preservation of rights against issuers of the
Collateral or against third persons; (3)
for ascertaining any maturities, conversions, exchanges, offers, tenders, or similar matters
relating to the Collateral; nor (4) for informing the Grantor above, whether or not Lender has or
is deemed to have knowledge of such matters.

Default. Each of the following shall constitute an event of Default under this Agreement:

Payment Default. Grantor fails to make any payment when due under the Indebtedness.

Other Default. Grantor fails to comply with any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents.

False Statements. Any representation or statement made by Grantor to Lender is false in any
material respect.

Insolvency. The dissolution of Grantor (regardless of whether election to continue is made), any
member withdraws from the limited liability company, or any other termination of Grantor’s
existence as a going business or the death of any member, the Insolvency of Grantor, the
appointment of a receiver for any part of Grantor’s property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy
or insolvency laws by or against Grantor.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether
by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or
by any governmental agency against any collateral securing the Indebtedness.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the Indebtedness or guarantor, endorser, surety,
or accommodation party dies or becomes incompetent or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness.

Adverse Change. A material adverse change occurs in Grantor’s financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness is impaired.

Insecurity. Lender in good faith believes itself insecure.

Cure Provisions. If any default, other than a default in payment is curable and if Grantor has not
been given a notice of a breach of the same provision of this Agreement within the preceding twelve
(12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure
of such default: (a) cures the default within thirty (30) days; or (b) if the cure requires more
than thirty (30) days, immediately initiates steps which Lender deems in Lender’s sole discretion
to be sufficient to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably practical.

Rights and Remedies on Default. Upon the occurrence of an Event of Default, or at any time
thereafter, Lender may exercise any one or more of the following rights and remedies, in addition
to any rights or remedies that may be available at law, in equity, or otherwise:

 

 

ASSIGNMENT OF DEPOSIT ACCOUNT

					
	Loan No: 8000845380
	 	(Continued)
	 	Page 2

Accelerate Indebtedness. Lender may declare all Indebtedness of Grantor to Lender immediately due
and payable, without notice of any kind to Grantor.

Application of Account Proceeds. Lender may take directly all funds in the Account and apply them to
the Indebtedness. If the Account is subject to an early withdrawal penalty, that penalty shall be
deducted from the Account before its application to the application to the Indebtedness, whether
the Account is with Lender or some other institution. Any excess funds remaining after application
of the Account proceeds to the Indebtedness will be paid to Grantor as the interests of Grantor may
appear. Grantor agrees, to the extent permitted by law, to pay any deficiency after application of
the proceeds of the Account to the Indebtedness. Lender also shall have all the rights of a secured
party under the Minnesota Uniform Commercial Code, even if the Account is not otherwise subject to
such Code concerning security interests, and the parties to this Agreement agree that the
provisions of the Code giving rights to a secured party shall nonetheless be a part of this
Agreement.

Transfer Title. Lender may effect transfer of title upon sale of all or part of the Collateral. For
this purpose, Grantor irrevocably appoints Lender as Grantor’s attorney-in-fact to execute
endorsements, assignments and instruments in the name of Grantor and each of them (if more than
one) as shall be necessary or reasonable.

Other Rights and Remedies. Lender shall have and may exercise any or all of the rights and remedies
of a secured creditor under the provisions of the Minnesota Uniform Commercial Code, at law, in
equity, or otherwise.

Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any
deficiency remaining in the Indebtedness due to Lender after application of all amounts received
from the exercise of the rights provided in this section.

Election of Remedies. Except as may be prohibited by applicable law, all of Lender’s rights and
remedies, whether evidenced by this Agreement or by any writing, shall be cumulative and may be
exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to take action to perform an
obligation of Grantor under this Agreement, after grantor’s failure to perform, shall not affect
Lender’s right to declare a default and exercise its remedies.

Cumulative Remedies. All of Lender’s rights and remedies, whether evidenced by this Agreement or by
any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by
Lender to persue any remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor under this Agreement, after
Grantor’s failure to perform, shall not affect Lender’s right to declare a default and to exercise
its remedies.

Miscellaneous Provisions. The following miscellaneous provisions are a part of this Agreement:

Definitions. The following capitalized words and terms shall have the following meanings when used
in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed
to such terms in the Uniform Commercial Code:

Account. The word “Account” means the deposit account described in the “Collateral Description”
section.

Agreement. The word “Agreement” means this Assignment of Deposit Account, as this Assignment of
Deposit Account may be amended or modified from time to time, together with all exhibits and
schedules attached to this Assignment of Deposit Account from time to time.

Borrower. The word “Borrower” means Agassiz Energy, LLC and includes all co-signers and co-makers
signing the Note and all their successor and assigns.

Collateral. The word “Collateral” means all of Grantor’s right, title and interest in and to all
the Collateral as described in the Collateral Description section of this Agreement.

Event of Default. The words “Event of Default” mean any of the events of default set forth in this
Agreement in the default section of this Agreement.

Grantor. The words “Grantor” means Agassiz Energy, LLC.

Guaranty. The words “Guaranty” means the guaranty from guarantor, endorser, surety, or
accommodation party to Lender, including without limitation a guaranty of all or part of the Note.

Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other indebtedness and costs and
expenses for which Grantor is responsible under this Agreement or under any of the Related
Documents. Specifically, without limitation, Indebtedness includes all mounts that may be
indirectly secured by the Cross-Collateralization provision of this Agreement.

Lender. The word “Lender” means American Federal Bank, its successors and assigns.

Note. The word “Note” means the Note executed by Agassiz Energy, LLC in the principal amount of
$970,000.00 dated March 9, 2007, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the note or credit agreement.

Related Document. The words “Related Documents” mean all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust,
security deeds, collateral mortgages, and all other instruments, agreements and documents, whether
now or hereafter existing, executed in connection with the Indebtedness.

 

 

ASSIGNMENT OF DEPOSIT ACCOUNT

					
	Loan No: 8000845380
	 	(Continued)
	 	Page 3

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS ASSIGNMENT OF DEPOSIT ACCOUNT AND AGREES
TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 9, 2007.

GRANTOR:

AGASSIZ ENERGY, LLC

	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:
	 	/s/ Larry Altringer
	 

	 	 
	 	 	 	 	 	 
	 

	 	Donald Sargeant, President of Agassiz Energy, LLC
	 	 	 	 	 	Larry Altringer, Treasurer of Agassiz Energy, LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Wayne Wagner	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Wayne Wagner, Vice President of Agassiz Energy, LLC	 	 	 	 	 	 

 

 

Number:                     

COLLATERAL RECEIPT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Principal	 	 	Loan Date	 	 	Maturity	 	 	Loan No	 	 	Call/Coll	 	 	Account	 	 	Officer	 	 	Initials	 
	 	$970,000.00	 	 	03-09-2007	 	 	03-06-2008	 	 	8000845380	 	 	 	 	 	 	 	 	PBlake	 	 	 	 
	 	References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

	 	Any item above containing “***” has been omitted due to text length limitations.
	 
	 

	 	 	 	 	 	 	 
	Grantor:

	 	Agassiz Energy, LLC (TIN: 80-0130330)

510 County Road 71

Crookston, MN 56716
	 	Lender:
	 	American Federal Bank

215 North 5th Str

Fargo, ND 58102

	 	 	 	 	 	 	 	 	 
	 
	 	Description of Collateral	 	 	Custody Control	 	Date Released	 
	 	 	 	 	Signatures	 	 	 	 
	 	CD Account Number 8000845360 with Lender with an	 	 	 	 	 	 	 
	 	approximate balance of $970,000.00	 	 	 	 	 	 	 
	 

	 	 	 
	Initial Delivery Acknowledgments:
	 
	 	 
	Grantor:
	 	 
	 

	 	 
	 

	 	 (Grantor’s Signature)
	American Federal Bank
	By:

	 	/s/  P. Blake
	 

	 	 
	 

	 	(Authorized Officer)

Return Receipt Acknowledgment:

Grantor acknowledges the receipt of all
collateral, including all unmatured
Coupons, if any.

	 	 	 
	X
	 	 
	 

	 	 
	 

	 	          (Grantor’s Signature)

					
	Instructions for Returning Collateral and Disposition of Coupons:	 	 
	 

	 

	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 

      

 

 

LIMITED LIABILITY COMPANY RESOLUTION TO BORROW / GRANT

COLLATERAL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Principal	 	 	Loan Date	 	 	Maturity	 	 	Loan No	 	 	Call/Coll	 	 	Account	 	 	Officer	 	 	Initials	 
	 	$970,000.00	 	 	03-09-2007	 	 	03-06-2008	 	 	8000845380	 	 	 	 	 	 	 	 	PBlake	 	 	 	 
	 	References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

	 	Any item above containing “***” has been omitted due to text length limitations.
	 
	 

	 	 	 	 	 	 	 
	Company:

	 	Agassiz Energy, LLC (TIN: 80-0130330)

510 County Road 71

Crookston, MN 56716
	 	Lender:
	 	American Federal Bank

215 North 5th Str

Fargo, ND 58102

      

WE, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:

THE COMPANY’S EXISTENCE. The complete and correct name of the Company is Agassiz Energy,
LLC (“Company”). The Company is a limited liability company which is, and at all times
shall be, duly organized, validly existing, and in good standing under and by virtue of
the laws of the Company’s state of organization. The Company is duly authorized to
transact business in all other states in which the Company is doing business, having
obtained all necessary filings, governmental licenses and approvals for each state in
which the Company is doing business. Specifically, the Company is, and at all times shall
be, duly qualified as a foreign limited liability company in all states in which the
failure to so qualify would have a material adverse effect on its business or financial
condition. The Company has the full power and authority to own its properties and to
transact the business in which it is presently engaged or presently proposes to engage.
The Company maintains an office at 510 County Road 71, Crookston, MN 56716. Unless the
Company has designated otherwise in writing, the principal office is the office at which
the Company keeps its books and records. The Company will notify Lender prior to any
change in the location of the Company’s state of organization or any change in the
Company’s name. The Company shall do all things necessary to preserve and to keep in full
force and effect its existence, rights and privileges, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any governmental or
quasi-governmental authority or court applicable to the Company and the Company’s business
activities.

RESOLUTIONS ADOPTED. At a meeting of the members of the Company, duly called and held on
February 27, 2007, at which a quorum was present and voting, or by other duly authorized
action in lieu of a meeting, the resolutions set forth in this Resolution were adopted.

MEMBERS. The following named persons are members of Agassiz Energy, LLC:

	 	 	 	 	 	 	 	 	 	 	 
	NAMES	 	TITLES	 	AUTHORIZED	 	 	 	ACTUAL SIGNATURES	 	 
	Donald Sargeant

	 	President
	 	Y
	 	X	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Larry Altringer

	 	Treasurer
	 	Y
	 	X	 	/s/ Larry Altringer	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Wayne Wagner

	 	Vice President
	 	Y
	 	X	 	/s/ Wayne Wagner	 	 
	 

	 	 	 	 	 	 	 	 	 	 

ACTIONS AUTHORIZED. Any three (3) of the authorized persons listed above may enter into
any agreements of any nature with Lender, and those agreements will bind the Company.
Specifically, but without limitation, any three (3) of such authorized persons are
authorized, empowered, and directed to do the following for and on behalf of the Company:

Borrow Money. To borrow, as a cosigner or otherwise, from time to time from Lender, on
such terms as may be agreed upon between the Company and Lender, such sum or sums of
money as in their judgment should be borrowed; however, not exceeding at any one time
the amount of Nine Hundred Seventy Thousand & 00/100 Dollars ($970,000.00), in addition
to such sum or sums of money as may be currently borrowed by the Company from Lender.

Execute Notes. To execute and deliver to Lender the promissory note or notes, or other
evidence of the Company’s credit accommodations, on Lender’s forms, at such rates of
interest and on such terms as may be agreed upon, evidencing the sums of money so
borrowed or any of the Company’s indebtedness to Lender, and also to execute and
deliver to Lender one or more renewals, extensions, modifications, refinancings,
consolidations, or substitutions for one or more of the notes, any portion of the
notes, or any other evidence of credit accommodations.

Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or otherwise
encumber and deliver to Lender any property now or hereafter belonging to the Company or
in which the Company now or hereafter may have an interest, including without limitation
all of the Company’s real property and all of the Company’s personal property (tangible
or intangible), as security for the payment of any loans or credit accommodations so
obtained, any promissory notes so executed (including any amendments to or modifications,
renewals, and extensions of such promissory notes), or any other or further indebtedness
of the Company to Lender at any time owing, however the same may be evidenced. Such
property may be mortgaged, pledged, transferred, endorsed, hypothecated or encumbered at
the time such loans are obtained or such indebtedness is incurred, or at any other time
or times, and may be either in addition to or in lieu of any property theretofore
mortgaged, pledged, transferred, endorsed, hypothecated or encumbered.

Execute Security Documents. To execute and deliver to Lender the forms of mortgage,
deed of trust, pledge agreement, hypothecation agreement, and other security agreements
and financing statements which Lender may require and which shall evidence the terms
and conditions under and pursuant to which such liens and encumbrances, or any of them,
are given; and also to execute and deliver to Lender any other written instruments, any
chattel paper, or any other collateral, of any kind or nature, which Lender may deem
necessary or proper in connection with or pertaining to the giving of the liens and
encumbrances. Notwithstanding the foregoing, any one of the above authorized persons
may execute, deliver, or record financing statements.

Negotiate Items. To draw, endorse, and discount with Lender all drafts, trade
acceptances, promissory notes, or other evidences of indebtedness payable to or
belonging to the Company or in which the Company may have an interest, and either to
receive cash for the same or to cause such proceeds to be credited to the Company’s
account with Lender, or to cause such other disposition of the proceeds derived
therefrom as they may deem advisable.

Further Acts. In the case of lines of credit, to designate additional or alternate
individuals as being authorized to request advances under such lines, and in all cases,
to do and perform such other acts and things, to pay any and all fees and costs, and to
execute and deliver such other documents and agreements as the members may in their
discretion deem reasonably necessary or proper in order to carry into effect the
provisions of this Resolution. The following persons currently are authorized to request
advances and authorize payments under the line of credit until Lender receives from the
Company, at Lender’s address shown above, written notice of revocation of their
authority: Donald Sargeant, President of Agassiz Energy, LLC; Larry Altringer, Treasurer
of Agassiz Energy, LLC; and Wayne Wagner, Vice President of Agassiz Energy, LLC.

 

 

LIMITED
LIABILITY COMPANY RESOLUTION TO BORROW / GRANT COLLATERAL

					
	Loan No: 8000845380
	 	(Continued)
	 	Page 2

ASSUMED BUSINESS NAMES. The Company has filed or recorded all documents or fillings required by law
relating to all assumed business names used by the company. Excluding the name of the Company, the
following is a complete list of all assumed business name under which the Company does business:
None.

NOTICES TO LENDER. The Company will promptly notify Lender in writing at Lender’s address shown
above (or such other addresses as Lender may designate from time to time) prior to any (A) change
in the Company’s name; (B) change in the Company’s assumed business name(s); (C) change in the
management or in the Members of the Company; (D) change in the authorized signer(s); (E) change in
the Company’s principal office address; (F) change in the Company’s state of organization; (G)
conversion of the Company to a new or different type of business entity; or (H) change in any other
aspect of the Company that directly or indirectly relates to any agreements between the Company and
Lender. No change in the Company’s name or state of organization will take effect until after
Lender has received notice.

CERTIFICATION CONCERNING MEMBERS AND RESOLUTIONS. The members named above are duly elected,
appointed, or employed by or for the Company, as the case may be, and occupy the positions set
opposite their respective names. This Resolution now stands of record on the books of the Company,
is in full force and effect, and has not been modified or revoked in any manner whatsoever.

CONTINUING VALIDITY. Any and all acts authorized pursuant to this Resolution and performed prior to
the passage of this Resolution are herby ratified and approved. This Resolution shall be
continuing, shall remain in full force and effect and Lender may rely on it until written notice of
its revocation shall have been delivered to and received by Lender at Lender’s address shown above
(or such addresses as Lender may designate from time to time). Any such notice shall not affect any
of the Company’s agreements or commitments in effect at the time notice is given.

IN TESTIMONY WHEREOF, we have hereunto set our hand and attest that the signatures set opposite the
names listed above are their genuine signatures.

We each have read all the provisions of this Resolution, and we each personally and on behalf of
the company certify that all statements and representations made in this Resolution are true and
correct. This Limited Liability Company Resolution to Borrow / Grant Collateral is dated February 27,
2007.

CERTIFIED TO AND ATTESTED BY:

	 	 	 	 	 
	 

	 	x	 	 
	 

	 	 	 	 
	 

	 	 	 	Donald Sargeant, President of Agassiz Energy, LLC
	 
	 	 	 	 
	 

	 	x
	 	/s/ Larry Altringer
	 

	 	 	 	 
	 

	 	 	 	Larry Altringer, Treasure of Agassiz Energy, LLC
	 
	 	 	 	 
	 

	 	x
	 	/s/ Wayne Wagner
	 

	 	 	 	 
	 

	 	 	 	Wayne Wagner, Vice President of
Agassiz Energy, 
LLC

NOTE: If the members signing this Resolution are designated by the foregoing document as one of the
members authorized to act on the Company’s behalf, it is advisable to have this Resolution signed
by at least one non-authorized member of the Company.

 

DISBURSEMENT REQUEST AND AUTHORIZATION

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	$970,000.00	 	 	03-09-2007	 	 	 	03-06-2008	 	 	 	8000845380	 	 	 	 	 	 	 	 	 	 	PBlake	 	 	 	 

References in the shaded area are for Lender’s use only and do not limit the applicability of this
document to any particular loan or item.
Any item above containing has been omitted due to text
length limitations.

	 	 	 	 	 	 	 	 	 
	Borrower:

	 	Agassiz Energy, LLC (TIN: 80-0130330
	 	 	 	Lender:
	 	American Federal Bank
	 

	 	510 County Road 71
	 	 	 	 	 	215 North 5th Str
	 

	 	Crookston, MN 56716
	 	 	 	 	 	Fargo, ND 58102

LOAN TYPE. This is a Fixed Rate (7.000%) Nondisclosable Revolving Line of Credit Loan to a Limited
Liability Company for $970,000.00 due on March 6, 2008.

PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:

oMaintenance of Borrower’s Primary Residence.

o Personal, Family or Household Purposes or Personal Investment.

o Agricultural Purposes.

þ Business Purposes.

SPECIFIC PURPOSE. The specific purpose of this loan is: Operating Line of Credit.

DISBURSEMENT INSTRUCTIONS. Borrower understand that no loan proceeds will be disbursed until all of Lender’s conditions for making the loan have been satisfied. Please disburse the loan proceeds of $970,000.00 as follows:

	 	 	 	 	 
	Undisbursed Funds:
	 	$	970,000.00	 
	 
	 	 	 
	Note Principal:
	 	$	970,000.00	 

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO LENDER THAT
THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE
CHANGE IN BORROWER’S FINANCIAL CONDITION AS DISCLOSED IN BORROWER’S MOST RECENT FINANCIAL STATEMENT
TO LENDER. THIS AUTHORIZATION IS DATED MARCH 9, 2007.

BORROWER

AGASSIZ ENERGY, LLC

	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:
	 	/s/ Larry Altringer
	 

	 	 
	 	 	 	 	 	 
	 

	 	Donald Sargeant, President of Agassiz Energy, LLC
	 	 	 	 	 	 Larry Altringer, Treasurer of Agassiz Energy, LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Wayne Wagner	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Wayne Wagner, Vice President
of Agassiz Energy, 
LLC	 	 	 	 	 	 

[ILLEGIBLE]exv10w15

 

Exhibit 10.15

	 	 	 	 	 	 	 
	 	 	A000637185
	 	 
	 	 	POLK COUNTY RECORDER
	 	 
	 	 	POLK COUNTY, MINNESOTA
	 	 
	 	 	CERTIFIED, FILED, AND
	 	 
	 	 	RECORDED ON
	 	 
	 	 	03/26/2007 09:00AM
	 	 
	 	 	PAGES: 7
	 	 
	 	 	REC FEES: $46.00
	 	 
	 	 	MICHELLE M. COTE
	 	 
	 	 	POLK COUNTY RECORDER
	 	 
	 

	 	By:
	 	/s/ [ILLEGIBLE]
	 	Deputy
	 

	 	 	 	 

	 	 

SECOND AMENDED OPTION TO

PURCHASE REAL PROPERTY

     IN CONSIDERATION of the sum of Sixty Thousand Dollars ($60,000) previously paid and 53,000
warrants to purchase membership units in Agassiz Energy, LLC at $1,00 per unit exercisable between
April 1, 2007, and March 31, 2014, paid to Richard Scott Carroll and D’wana Jean Carroll, husband
and wife, hereinafter referred to as “Sellers,” receipt of said $60,000 and delivery of membership
warrants is hereby acknowledged, Sellers give and grant to Agassiz Energy, LLC, a Minnesota limited
liability company, hereinafter referred to as “Purchaser,” and Purchaser’s successors and assigns,
the exclusive option to purchase the real property of Sellers situated in the County of Polk, State
of Minnesota, particularly described as:

That part of the North Half of the Northwest Quarter
(N1/2
NW1/4)
of Section Ten (10), Township One Hundred
Forty-eight (148) North of Range Forty-two (42) West of the Fifth Principal Meridian, lying
west of the Soo Line Railroad Right of Way;

AND

That
part of the North Half of the Northwest Quarter
(N1/2
NW1/4) of Section Ten
(10), Township One Hundred Forty-eight (148) North of Range Forty-two (42) West of the Fifth
Principal Meridian described as follows: Commencing at the northeast
corner of the
NW1/4 of
Section 10-148-42; thence in a westerly direction along the
north line of said NW1/4  a
distance of 1200 feet to a point, which point is the point of beginning

 

 

 

of the tract herein conveyed; thence in a southerly direction and parallel with the
east line of said NW1/4  a distance of 60 rods (990 feet) to a point; thence in a westerly
direction and parallel with the north line of said NW1/4  a distance of 40 rods (660 feet) to
a point; thence in a northerly direction and parallel with the east
line of said NW1/4 a
distance of 60 rods, more or less, to the north line of said
NW1/4;  thence in an easterly
direction along the north line of said NW1/4  a distance of 40 rods, more or less, to the
point of beginning of the tract herein conveyed;

including
all easements, rights of way, and appurtenances, and all of
Sellers’ right, title, and
interest in all public ways adjoining the property.

     This option is given on the following terms and conditions:

SECTION ONE

PRICE AND TERMS OF PAYMENT

     The purchase price for the property shall be Four Hundred Forty-two Thousand Dollars
($442,000), which shall be paid on exercise of this Option by Purchaser. Sixty Thousand Dollars
($60,000) of said Option payments shall be applied toward the total purchase price.

     In addition, in the event the Option is exercised when the Sellers have growing crop on the
premises, Sellers shall be entitled to remove said crop at harvest or be compensated the fair
market value of the lost crop as agreed in writing or as determined by Minnesota Regional
Extension Service if the parties are unable to agree.

SECTION TWO

PERIOD OF OPTION

     This Option may be exercised by giving notice of exercise to Sellers at P.O. Box 274,
Erskine, Minnesota 56535, at any time during the period commencing March 15, 2007, and continuing
to March 31, 2008.

-2-

 

SECTION THREE

TITLE

     If the Option is exercised, Sellers shall, within thirty (30) days after the delivery to
Sellers of the notice of exercise, secure and submit to Purchaser for examination by Purchaser’s
attorneys, an updated Abstract of Title. Within thirty (30) days thereafter, Purchaser shall give
notice in writing to Sellers of any defects in or objections to the title as so evidenced, and
Sellers shall clear the title of the defects and objections so specified.

     If Sellers fail to clear title to the extent required in this Option or to submit evidence of
Sellers’ ability to do so prior to closing, and such failure continues for ninety (90) days after
the date of exercise of the Option, Purchaser may clear title to the extent so required and charge
the cost of clearing to Sellers or, at Purchaser’s option, may terminate the contract by giving
thirty (30) days’ written notice to Sellers.

     Title to be conveyed as provided in this Option shall be merchantable title, free and clear
of all liens, encumbrances, restrictions, and easements.

SECTION FOUR

CLOSING

     Sellers shall be responsible for providing an updated Abstract of Title, Deed in recordable
form; and payment of deed tax. Purchaser shall be responsible for surveying costs, title
examination (or owner’s title insurance), and recording the Deed. Taxes and assessments in the year
of closing shall be prorated between the parties as of the date of the closing. Closing shall be
scheduled ten (10) days following determination that the title to the real estate is marketable.

-3-

 

SECTION FIVE

POSSESSION

     Sellers shall continue in possession of the property until the closing of the
transaction, and shall maintain the property in its present condition, reasonable wear from
ordinary use excepted. Possession shall be transferred to Purchasers at closing.

SECTION SIX

HAZARDOUS SUBSTANCES

     Sellers hereby state that, to the best of Sellers’ knowledge, the real property is free
of hazardous substances as hereinafter defined and is not subject to any “Super-Fund” type liens
or claims by governmental regulatory agencies or other third parties arising from the release or
threatened release of hazardous substances in, on, or about the real property. For purposes of
this Agreement, hazardous substance means hazardous waste, toxic substances, polychlorinated
biphenyls, asbestos, or related materials and also includes, but is not limited to, substances
defined as hazardous substances or toxic substances in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9061, et. seq., Hazardous
Materials Transportation Act, 49 U.S.C. § 6901, et seq., or as hazardous substances, hazardous
waste, or pollutant or contaminant in the Environmental Response and Liability Act, Minn. Stat. §
115B.01, et. seq. The term does include petroleum, including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel or mixtures
thereof.

-4-

 

SECTION SEVEN

TESTING

     In the event soil testing or other testing is undertaken by Purchaser during the Option
period, Sellers shall be compensated in an amount to be determined by the Minnesota Regional
Extension service for any crop damage occurring on the parcel or adjacent area which is caused
directly or indirectly by said testing.

SECTION EIGHT

NOTICES

     Any notice under this Option shall be given in writing to the party for whom it is
intended in person or by certified mail at the following address, or such future address as may be
designated in writing:

	 	 	 
	Sellers:

	 	P.O. Box 274
	 

	 	Erskine, MN 56535
	 
	 	 
	Purchaser:

	 	Donald Sargeant
	 

	 	President and Chief Manager
	 

	 	510 County Road 71
	 

	 	Crookston, MN 56716

to any successor or assignee of either party, at the address stated in the notice of
succession or assignment.

SECTION NINE

GOVERNING LAW

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

-5-

 

SECTION TEN

AMENDMENT

     This Option Agreement may not be amended except by a written instrument signed by the
parties hereto. This Amended Option to Purchase Real Property shall amend the Option to Purchase
Real Property executed by the parties on July 8, 2006, and recorded in the Office of the Polk
County Recorder on July 12, 2006, at 9 a.m. as Document No. A000631612 and Amended Option to
Purchase Real Property dated November 17, 2005, and recorded in the Office of the Polk County
Recorder on November 29, 2006, at 9 a.m. as Document No. A000634676.

SECTION ELEVEN

ASSIGNMENT AND SUCCESSION

     This Option and the contract resulting from its exercise shall bind and inure to the benefit
of the heirs, administrators, executors, successors, and assigns of the respective parties. All
rights of Purchaser under this Option may be assigned without restriction, but notice of each
assignment shall be given in writing to Sellers.

DATED
this 21 day of March, 2007.

	 	 	 	 	 	 	 	 	 
	SELLERS:	 	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	AGASSIZ ENERGY, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Richard Scott Carroll
 

RICHARD SCOTT CARROLL

	 	 	 	By
	 	/s/ Donald Sargeant
 

Donald Sargeant, Chief Manager
	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ D’Wana Jean Carroll
 

D’WANA JEAN CARROLL

	 	 	 	By
	 	/s/ Larry Altringer
 

Larry Altringer, Treasurer
	 	 

-6-

 

	 	 	 	 	 	 	 
	STATE OF MINNESOTA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	COUNTY OF POLK

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this 21st day of
March, 2007, by Richard Scott Carroll and D’wana Jean Carroll, husband
and wife, Sellers.

	 	 	 	 	 
	 

	 	/s/ Jonas O. Sandberg
 

Notary Public, Polk County, MN
	 	 
	 

	 	My Comm. Expires:	 	 
	 
	 

	 		 	 

	 	 	 	 	 	 	 
	STATE OF MINNESOTA

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	COUNTY OF POLK

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this 21st day of March, 2007, by Donald Sargeant and Larry Altringer, the President
and
Treasurer, respectively of Agassiz Energy, LLC, a Minnesota limited liability
company, Purchaser.

	 	 	 	 	 
	 

	 	/s/ Jonas O. Sandberg
 

Notary Public, Polk County, MN
	 	 
	 

	 	My Comm. Expires:	 	 
	 
	 

	 		 	 

THIS INSTRUMENT WAS DRAFTED BY:

Johannson, Rust, Stock
   &
Rasmusson, P.A.

P.O. Box 605

Crookston, MN 56716

-7-

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