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EXHIBIT 10.11
OPTION TO PURCHASE
THIS OPTION TO PURCHASE OR LEASE (this "Agreement") is entered into as
of June ___, 1999, by and between Columbiana County Port Authority, a body
corporate and politic (the "Authority"), and Probex Corporation, a Colorado
corporation, or its assignee ("Probex"),
WITNESSETH:
WHEREAS, the Authority is the owner of certain real property located in
Columbiana County, Ohio (the "Property"), more particularly described on Exhibit
A attached hereto and made a part hereof for all purposes; and
WHEREAS, the Authority is desirous of granting to Probex and Probex is
desirous of obtaining from the Authority, the exclusive, irrevocable right and
option to purchase the Property pursuant to the terms and conditions of the
Agreement for the purposes of erecting a used oil rerefining plant (the
"Facility").
NOW, THEREFORE, in consideration of $5,000, as well as approximately
$100,000 in expenses to be incurred by Probex with respect to this Agreement,
the Property, and the Facility during the Option Period (defined below) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the Authority, the premises and the following mutual
covenants and agreements, the parties hereto covenant and agree as follows:
ARTICLE I
GRANT OF OPTIONS
Section 1.01. Grant of Purchase Option. (a) Upon and subject to the
terms and conditions set forth in this Agreement, the Authority hereby grants
and conveys to Probex the exclusive, irrevocable right and option to purchase
the Property (the "Purchase Option") for a purchase price (the "Purchase Price")
of $1,350,000.00. (b) The Authority shall use its best efforts (i) to purchase,
at a competitive price acceptable to Probex, the approximately 4.2 acres of
property owned by Norfolk Southern described on Exhibit B attached hereto and
made a part hereof for all purposes (the "Norfolk Southern Property") and (ii)
to obtain the release of any easements owned by Norfolk Southern which burden
the Property. If the Authority is successful in so purchasing the Norfolk
Southern Property, then the Norfolk Southern Property shall automatically be a
part of, and shall be included within the definition of, "Property" for all
purposes and shall be burdened by this Agreement, except that Probex shall be
responsible for the cost of the Norfolk Southern Property paid by Port Authority
if Probex elects to purchase such property from Authority. (c) The purchase and
sale of the Property pursuant to any exercise of the Purchase Option shall be
subject to the terms and conditions set forth herein and in a purchase agreement
(the "Purchase Agreement") substantially in the form attached hereto which shall
be more fully negotiated in good faith by the Authority and Probex prior to the
consummation of such purchase and sale of the Property.
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Section 1.02. Interim Lease. The "Property" and certain other immediate
surrounding land will be improved by construction of an adjacent highway
primarily using Federal funds, The Federal Highway Administration has determined
that no transfers of title to such land to private industry may take place prior
to completion of the interchange which is projected to occur on or before the
end of the second quarter of the Calendar Year 2001. In the event Probex
chooses to exercise the Purchase Option, then an Interim Lease shall
automatically then be deemed to be in effect between the parties which shall
remain in effect until Authority certifies to Probex in writing that the
interchange is complete. Rental payments under the Interim Lease shall be Twenty
Thousand Dollars ($20,000.00) per month which payments in total shall be
credited against the Purchase Price. Other terms and conditions of the Interim
Lease are set forth in Exhibit C attached hereto and made a part hereof for all
purposes. Closing on the Purchase shall occur in the offices of Authority within
20 business days of Authority's notice to Probex that the interchange is
complete.
Section 1.03. Term of the Option. The Purchase Option shall commence on
the date of this Agreement and shall continue until 5:00 p.m. Central Time
twelve (12) months from the date of this Agreement (the "Option Period").
Section 1.04 Exercise of the Option. Probex may exercise the Purchase
Option by execution and tender to the Authority of a written notice exercising
such Option. If Probex fails to exercise the Purchase Option in accordance with
the terms of this Agreement within the Option Period then the Options and the
rights thereunder of Probex shall automatically and immediately terminate
without notice.
ARTICLE II
DUE DILIGENCE AND TITLE MATTERS
Section 2.01. Environment Assessments. During the Option Period,
Probex, its agents and contractors, shall have the right to enter upon the
Property for the purpose of conducting inspections and investigations, preparing
surveys and site plans, and performing an environmental assessment of the
Property. The environmental assessment may include, but shall not be limited to
subsurface soil and water tests, as well as the testing of any underground
storage tanks and related equipment upon the Property. Probex shall assume all
risks involved in entering upon the Property for the performance of such
activities and shall indemnify and hold the Authority harmless from and against
all loss or expense by reason of all liability due to bodily injury, death of
persons, damage to property sustained by any party or any damage to the Property
arising out of or caused by such entry by Probex, its agents or contractors or
the negligence of Probex or its agents or contractors in the exercise of any of
Probex's rights under this section. Probex, its agents and contractors, shall
also have the right to make inquiries into or contact with, governmental
agencies concerning potentially hazardous substances on the Property without any
liability on the part of Probex, its agents or contractors, to the Authority as
a result thereof.
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Section 2.02. Survey. Title Commitment and Miscellaneous Documents.
(a) Within thirty (30) days after the exercise of the Option (and
updated within ninety (90) days) before any consummation of the purchase and
sale or lease of the Property, the Authority, with the cost for such expense to
be borne equally by the parties, shall furnish to Probex a currently dated
survey (the "Survey") of the Property prepared and certified by a duly licensed
professional engineer or surveyor reasonably acceptable to Probex and a title
company selected by Probex (the "Title Company") and sufficient to allow the
Title Company to delete the survey exception. The Survey shall reflect the
following:
(i) A certification to Probex, the Title Company and a lender
to be designated by Probex to the effect that the Survey (a) was made
on the ground as per the field notes shown thereon and correctly shows
the boundary lines and dimensions and the area of the Property (or any
separate parcels thereof), (b) correctly shows the location of all
buildings, structures, and other visible improvements on the Property,
(c) correctly shows the location and dimensions of all alleys, streets,
roads, rights-of-way, easements, and other matters of record of which
the surveyor has been advised affecting the Property according to the
legal description in such easements and other matters (with instrument
book, and page number indicated), (d) except as shown, no portion of
the Property is located within a special flood hazard area, (e) there
are no visible easements, rights-of-way, party walls or conflicts, (f)
there are no visible encroachments or adjoining premises, streets, or
alleys by any of said buildings, structures or other improvements, (g)
there are no visible encroachments on the Property by buildings,
structures, or other improvements situated on adjoining premises, and
(h) the distance from the nearest intersecting street and road is as
shown thereon.
(ii) The location of all improvements, street, highways,
rights-of-ways and easements appurtenant to, traversing, adjoining or
bounding the Property (which shall show all applicable recording data);
(iii) Any encroachments on the Property or protrusions on
adjacent land;
(iv) A metes and bounds description of the Property and the
total acres contained therein;
(v) The beginning point should be established by a monument
located at the beginning point, or by reference to a nearby monument;
(vi) A legally sufficient description for all necessary
easements for access to and from the Property to the nearest publicly
dedicated road or street and for water, storm and sanitary sewer,
electricity, gas and telephone utility service to the Property; and
(vii) The boundary line of highways and streets abutting the
Property and the width of said highways and streets, including any
proposed relocation, modification or widening thereof.
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(b) Within thirty (30) days after the exercise for the Purchase Option
and updated within ten (10) days before any consummation of the purchase and
sale of the Property, the Authority, at the Authority's sole cost and expense,
shall cause to be furnished to Probex a current title commitment (a
"Commitment") for an owner's policy of title insurance issued through the Title
Company setting forth the state of title to the Property and all objections or
exceptions thereto including, without limitation, rights-of-way, easements,
restrictions, reservations, covenants, liens, encumbrances, estates and other
conditions, if any, affecting the Property which would appear in an owner's
policy of title insurance, if issued. The Authority shall also cause to be
furnished to Probex, at the Authority's sole cost and expense, a copy of all
instruments creating such aforesaid objections or exceptions to title, if any,
contemporaneously with the furnishing of the Commitment.
ARTICLE III
PROVISIONS OF GENERAL APPLICATION
Section 3.01. Commissions. Probex and the Authority warrant and
represent to the other that neither has made any agreements for real estate
brokers', agents' or finders' fees or commissions by reason of the sale of the
Property, the execution of this Agreement or the consummation of the
transactions contemplated herein. Each party hereto hereby agrees to indemnify
and hold the other party harmless from claims made by any person for any such
fees or like compensation arising on account of such party's acts.
Section 3.02. Condemnation. In the event that any portion or a Property
shall be taken in condemnation or under the right of eminent domain after the
date of the Authority's execution hereof and before the consummation of the
purchase and sale of the Property, this Agreement, at the option of Probex, may
either: (a) be declared null and void and all payments or deposits made
hereunder with respect to the Property shall then immediately be returned to
Probex or (b) the proceeds received from such condemnation or right of eminent
domain proceeding shall be applied against, and pro tanto reduce, the purchase
price hereunder of the Property.
Section 3.03. Further Instruments. Each party hereto shall from time to
time execute and deliver such further instruments as the other party or its
counsel may reasonably request to effectuate the intent of this Agreement,
including, but not limited to, documents necessary for compliance with the laws,
ordinances, rules or regulations of any applicable governmental authorities.
Section 3.04. Governing Law. The parties hereto hereby expressly agree
that the terms and conditions hereof, and the subsequent performance hereunder,
shall be constructed and controlled by the laws of the State of Ohio.
Section 3.05. Headings. Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction of any provision of this Agreement.
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Section 3.06. Entire Agreement; Alteration of Amendment. This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof. Except as incorporated herein by reference, any and all prior
agreements, whether written or oral are superseded hereby and are deemed null
and void and of no effect, The parties are not bound by any agreements,
understandings, conditions or inducements otherwise than are as expressly
referenced, set forth, or stipulate hereunder. No change, alteration, amendment,
modification or waiver of any of the terms or provisions hereof shall be valid
unless the same shall be in writing and signed by the parties hereto.
Section 3.07. Assignments. This Agreement shall be binding upon, and
inure to the benefit of, the Authority and Probex and their respective permitted
successors and assigns. This Agreement shall not be assignable by the Authority.
Probex shall not have the right to assign any or all of its rights or interest
herein without the Authority's prior written approval, which shall not be
unreasonably withheld.
Section 3.08. Notices. All notices, demands and requests provided for
hereunder shall be deemed given and received (a) when personally delivered; or
(b) on the fifth business day after the same are deposited in the United States
mail, postage prepaid, registered or certified mail, return receipt requested,
addressed to the applicable party at the address indicated below for such party,
or as to each party, at such other address as shall be designated by such party
in a written notice to the other party
TO THE AUTHORITY: Columbiana County Port Authority
0000 Xx. Xxxxxx Xxxxxx
Xxxx Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxx, Executive Director
TO PROBEX Probex Corporation
0000 XxXxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx XxxXxxxxx, Vice President Operations
or at such other place as Probex or the Authority may from time to time
designate in written notice pursuant to the terms hereof.
Section 3.09. Conditions Precedent. Except as otherwise modified or
changed by this Agreement, the contingencies and/or conditions contained in that
certain letter dated April 20, 1999, addressed to the Authority from Probex are
incorporated herein by reference thereto and shall be conditions precedent to
performance by the parties under the Purchase Agreement or the Lease Agreement
regardless of whether expressly stated therein. The party for whose benefit a
condition exists may unilaterally waive same.
Section 3.10. Attorney's Fees. In the event that any party is required
to commence any action or proceeding or against the other concerning the subject
matter of this Agreement, the
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prevailing party therein shall be entitled to recover, in addition to any
amounts or relief otherwise awarded, all reasonable costs incurred in connection
therewith, including reasonable attorneys' fees.
Section 3.11. Disclosure for Foreign Investment in Real Property Tax
Act. The Authority shall furnish to Probex on or before the consummation of the
purchase and sale or lease of the Property a sworn Affidavit in form acceptable
to Probex stating under penalty of perjury that the Authority is not a "foreign
person" as such term is defined in Section 1445(f)(3) of the Internal Revenue
Code of 1954, as amended (the "Code") or such other evidence that Probex is not
required to withhold taxes from the purchase price under Section 1445(a) of the
Code as Probex may reasonably determine to meet the requirements of Section
1445(b)(4) and Section 1445(b)(5) of the Code. In the event the Authority does
not furnish the sworn Affidavit or such other evidence deemed satisfactory by
Probex as required by this Section 3.11, Probex may withhold (or may direct the
Title Company to withhold) from the cash funds payable to the Authority pursuant
to this Agreement, an amount equal to the amount required to be so withheld
pursuant to Section 1445(a) of the Code and such withheld funds shall be
deposited with the Internal Revenue Service as required by said Section 1445(a)
and the regulations promulgated thereunder.
Section 3.12. Invalidly of Any Provision. In the event that any
condition or covenant herein contained is held to be invalid or void by any
court of competent jurisdiction, the same shall be deemed severable from the
remainder of this Agreement and shall in no way affect any other covenant or
condition herein contained. If such condition, covenant or other provision shall
be deemed invalid due to its scope or breadth, such provision shall be deemed
valid to the extent of the scope or breadth permitted by law.
Section 3.13. Waiver of Rights. Notwithstanding anything set forth
herein to the contrary, if no notice of a default or waiver is required
hereunder and none has been given, neither party hereto shall be deemed to have
waived any rights which it may have hereunder until forty-eight (48) hours
following receipt by it (the "Waiving Party") of written notice from the other
party alerting the Waiving Party to the fact that the time for exercising any,
right or remedy hereunder has elasped without exercise thereof and such time for
exercise shall automatically be a period which ends forty-eight (48) hours after
such notice or will elapse pursuant to the terms of this Agreement not more than
forty-eight (48) hours following the date of such notice. If no action is taken
by the Waiving Party within the forty-eight (48) hour period following such
notice, said right shall conclusively be deemed to have been waived. The intent
of this section is to avoid unintentional waivers by either party hereto of any
of its rights hereunder.
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Section 3.14. Memorandum of Option. The Authority shall execute and
deliver to Probex a written memorandum of this Agreement which Probex may record
in the state, county or municipality in which the Property is located.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the day and year first above written.
PROBEX: THE AUTHORITY:
Probex Corporation, Columbiana County Port Authority,
A Colorado corporation A body corporate and politic
By: /s/ Xxxxx XxxXxxxxx By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx XxXxxxxx Name: Xxxxx X. Xxxxx
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Title: Executive V.P. Title: Executive Director
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DATE: 07/07/99 DATE: 6/28/99
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EXHIBIT "A"
COLUMBIANA COUNTY, OHIO
[MAP]
