OPTION TO PURCHASE REAL PROPERTY

Exhibit 10.16

OPTION TO PURCHASE REAL PROPERTY

      IN CONSIDERATION of Five Thousand Dollars ($5,000), paid to Randy Kroeplin , a single person, hereinafter referred to as “Seller,” receipt of which is 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 Sellers situated in the County of Polk, State of Minnesota, particularly described as:

Up to one hundred fifty (150) acres located in the following-described premises:

The Northwest Quarter of the Southeast Quarter (NW ¹ / ₄ SE ¹ / ₄ ) and the Northeast Quarter of the Southwest Quarter (NE ¹ / ₄ SW ¹ / ₄ ), except tracts for cemetery purposes, Section Ten (10), Township One Hundred Forty-eight (148) North of Range Forty-two (42) West of the Fifth Principal Meridian according to the United States Government Survey thereof;

The North Half of the Northwest Quarter (N ¹ / ₂ NW ¹ / ₄ ) of Section Ten (10), Township One Hundred Forty-eight (148) North of Range Forty-two (42) West of the Fifth Principal Meridian, EXCEPT that part thereof lying West of the Soo Line Railroad right-of-way, AND EXCEPT the following-described tract, to-wit: Commencing at the Northeast corner of the NW ¹ / ₄ of Section 10, Township 148 North of Range 42; thence in a westerly direction along the north line of said NW ¹ / ₄ a distance of 1200 feet to a point, which is the point of beginning of the tract herein excepted; thence in a southerly direction and parallel with the east line of said NW ¹ / ₄ a distance of 60 rods to a point; thence in a westerly direction and parallel with the north line of said NW ¹ / ₄ a distance of 40 rods to a point; thence in a northerly direction and parallel with the east line of said NW ¹ / ₄ a distance of 60 rods, more or less, to the north

line of said NW ¹ / ₄ ; thence in an easterly direction along the north line of said NW ¹ / ₄ a distance of 40 rods, more or less, to the point of beginning of the tract herein excepted;

AND

That part of the South Half of the Northwest Quarter (S ¹ / ₂ NW ¹ / ₄ ) and West Haif of the Southwest Quarter (W ¹ / ₂ SW ¹ / ₄ ) of Section Ten (10), Township One hundred Forty-eight (148) North of Range Forty-two (42), West of the Fifth Principal Meridian, lying Easterly of the Soo Line Railway right-of-way;

(specific real estate description of the 150-acre parcel to be determined by survey provided by, and paid for by, Purchaser at the exercise of the Option);

including all easements, rights of way, and appurtenances, and all of Seller’s 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 One Hundred Thousand Dollars ($100,000) in cash; Two Hundred Thousand Dollars ($200,000) of Agassiz Energy, LLC membership units (value $1.00 per unit); and 200,000 warrants to purchase membership units in Agassiz Energy, LLC at $1.00 per unit exercisable between April 1, 2007, and March 31, 2014. Said cash payment plus membership units and warrants shall be paid or delivered to Seller at closing. The Five Thousand Dollar ($5,000) option payment 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 AND EXTENSION

    &nb