OPTION TO PURCHASE REAL ESTATE
Exhibit 10.3
THIS OPTION (“Agreement”), is made and entered into as of the date of the last execution
hereof, which date is the 22nd day of February , 2006 (the
“Effective Date”), by and between the CITY OF SIKESTON, a Municipal Corporation, of the State of
Missouri, hereinafter referred to as “Optionor” and BOOTHEEL AGRI-ENERGY, LLC., a Delaware Limited
Liability Company, hereinafter referred to as “Optionee”. (Optionor and Optionee are collectively
referred to herein as “Parties”, and individually as “Party”).
WHEREAS, Optionor is the owner of that certain real property located in Xxxxx County,
Missouri, consisting of 158.42 acres, more particularly described in Exhibit “A” attached hereto
and made a part hereof (the “Property”); and
WHEREAS, in consideration for the Option Payment (as hereinafter defined), Optionor desires to
grant to Optionee, an Option to Purchase the Property, as more particularly set forth herein.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the Parties hereby agree as follows:
1. GRANT Of OPTION. Optionor hereby grants to Optionee the exclusive option to
purchase the Property upon the terms and conditions set forth herein (the “Option to Purchase”).
2. OPTION PAYMENT. In consideration of the option herein granted, Optionee has paid
to Optionor, the sum of Ten Thousand Dollars ($10,000.00) (the “Option Payment”).
3. DURATION OF OPTION AND OPTION PAYMENT. The Option to Purchase shall run from the
Effective Date through, and including, eighteen (18) months from the Effective Date (the “Option
Period”). In the event Optionee consummates the Closing, the Option Payment will be applied to the
purchase price as set forth in this Agreement. In the event that Optionee fails to deliver the
Purchase Notice (as hereinafter defined), by the last day of the Option Period, Optionor shall be
entitled to retain the Option Payment and the Option to Purchase shall terminate.
4. OPTIONEE DUE DILIGENCE. In order for Optionee to determine if it will exercise the
Option to Purchase during the Option Period, Optionee shall have full access to the Property to
perform such tests (environmental, seismic or otherwise), examinations, surveys, reports and
feasibility studies, which Optionee may deem necessary. Provided, however, Optionee shall be
responsible for the cost of such tests, examinations, surveys, reports or studies and shall further
be responsible to reasonably restore the Property to the condition that existed prior to such
testing, examinations, etc. and to indemnify the Optionor for any crop damages sustained by the
tenant during the due diligence testing, surveys, studies, etc. Optionee shall have the right to
have any such crop damages valued by a commercial crop inspection or adjustment service.
5. METHOD OF EXERCISE. Optionee may exercise the Option to Purchase the Property by notice to
Optionor (the “Purchase Notice”), given no later than the last day of the Option Period.
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6. TERMS OF PURCHASE. Upon Optionee delivering the Purchase Notice, the Parties agree
to consummate the purchase and sale of the Property according to the following terms:
| (a) | Purchase Price. The purchase price for the Property will be Seven Hundred Ninety-Two Thousand One Hundred Dollars ($792,100,00), (the “Purchase Price”). | ||
| (b) | Time for Closing. The closing on the purchase of the Property (the “Closing”) will take place on a mutually agreeable date and time (the “Closing Date”) no later than sixty (60) days after the date of the Purchase Notice. The Closing will take place at a mutually agreeable location. | ||
| (c) | Closing Costs. Optionor shall pay one-half (1/2) of the costs of obtaining an Owner’s Policy of Title Insurance on the Property, the cost of preparation of Optionor’s Warranty Deed, the cost of preparation of any documents prepared on Optionor’s behalf and one-half (1/2) of the Closing costs of the transaction. Optionee shall pay the cost of obtaining any Mortgagee’s Policy of Title Insurance, the cost of recording of Optionee’s Deed, the cost of preparation of any documents required to be prepared by Optionee hereunder and one-half (1/2) of the Closing costs on the transaction. | ||
| (d) | Method of Closing and Transfer. Optionor and Optionee will execute and deliver such documents necessary to effectuate the Closing, including, but not limited to, the Closing Settlement Statement apportioning the Closing Costs referred to in Section 6(c), affidavits required by the Title Company, any resolutions, ordinances or other documents indicating the authority of the persons executing the Closing documents on behalf of each Party. Optionor will transfer title to the Property to Optionee by General Warranty Deed, free and clear of all encumbrances, excepting only (i) real estate taxes which are not due and payable for the year in which Closing occurs and (ii) easements and rights of way of record. It is expressly understood and agreed by the Parties that title herein to be furnished by Optionor to Optionee, is marketable title as set forth in Title Standard No. 4 of The Missouri, Bar. It is also agreed that any encumbrance or defect in title which is within the scope of any of the Title Standards of The Missouri Bar shall not constitute a valid objection on the |
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| part of Optionee, provided Optionor furnishes the affidavits, or other title papers, if any, described in the applicable Standard. On the Effective Date of this Option Agreement, on delivery of the Deed, Optionee shall pay the Purchase Price by cash, cashier’s check or other immediately available funds, subject to a credit for the Option Payment and adjustments necessary to reflect the Closing costs set out in the Settlement Statement. | |||
| (e) | Title Policy. At least twenty (20) days prior to the Closing Date of this transaction with one-half (1/2) of the cost thereof to be paid by each party, Optionor will cause to be issued and delivered to Optionee, a Commitment from a Title Insurance Company acceptable to Optionee for an Owner’s Policy of Title Insurance covering the Property, showing marketable title, in fact, as that term is developed and defined by the Title Examination Standards of the Missouri Bar, with said Commitment to provide for issuance of a policy in the amount of the Purchase Price herein provided for, upon recording of the Warranty Deed from Optionor to Optionee. Said policy shall be subject only to standard title exceptions and matters herein provided for. | ||
| (f) | Possession Upon Consummation of the Closing. On the Closing Date, Optionor shall deliver to Optionee the sole and exclusive possession of the Property, free and clear of the rights of any tenant of Optionee. Optionee shall not be responsible for any damage to growing crops occurring after its exercise of the Option granted hereby. Provided, however, Optionee shall use all reasonable means which will not interfere with its activities and operations to mitigate any damages to growing crops. |
7. OPTION TO REPURCHASE. Optionee acknowledges that it intends to construct and
operate an ethanol production facility on the Property. Notwithstanding anything contained in the
Agreement to the contrary, any Deed to Optionee shall contain a restriction that if substantial
construction shall not be begun within twenty-four (24) months of the date of the Deed to Optionee,
and completion of such construction diligently pursued thereafter, the Optionor shall have the
option to repurchase the described
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premises at the original Purchase Price paid by Optionee. Optionor may exercise such option
by giving written notice to Optionee within thirty (30) days of the completion of the twenty-four
(24) month period and Closing shall occur within thirty (30) days of the date of such notice. Said
Deed from Optionor to Optionee shall contain a further restriction that the Property shall not be
subdivided or sold as less than one entire contiguous tract without the express written consent of
the City of Sikeston, which said consent shall not be unreasonably withheld.
8. OPTIONOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS. In consideration for
Optionee making the Option Payment and performing the due diligence contemplated hereunder,
Optionor represents, warrants and covenants that in the exercise of the Option by Optionee, it
will:
| (a) | Use its best efforts to obtain any and all available grants, etc. for any infrastructure improvements that are needed; | ||
| (b) | Extend and/or repair Rose Boulevard and XxXxxxxxx Drive to the property. Provided, however, that Optionor shall have 24 months after construction on the plant begins to complete XxXxxxxxx Drive. | ||
| (c) | To take all actions necessary to obtain a fifty percent (50%) abatement of real estate taxes for ten (10) years in the existing enterprise zone if Optionee shall maintain employment of fifty (50) people for its first five (5) years of operation and to assist in any other tax abatements or relief as may be authorized by law except those that diminish municipal revenues. |
The representations, warranties and covenants set forth in this Section 8 shall survive the
Closing.
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9. NOTICES. Any notices, requests or other communications required or permitted to be
given hereunder shall be in writing and shall be deemed given (except as otherwise provided herein)
when received if (i) delivered by hand, (ii) deposited with a widely recognized national overnight
courier service, or (iii) mailed by United States registered or certified mail, return receipt
requested, postage prepaid, and in each case addressed to each Party at its address set forth
below:
| To Optionor: | XXXX FRIEND | |||||
| City Manager | ||||||
| CITY OF SIKESTON | ||||||
| 000 Xxxx Xxxxxx | ||||||
| Xxxxxxxx, Xxxxxxxx 00000 | ||||||
| with a copy to: | XXXXXXX XXXXXX | |||||
| Attorney at Law | ||||||
| X.X. Xxx 000 | ||||||
| Xxxxxxxx, XX 00000 | ||||||
| To Optionee: | BOOTHEEL AGRI-ENERGY, LLC | |||||
Rejection or other refusal to accept or inability to deliver because of changed address of
which no notice was given shall be deemed to be receipt of the notice, request or other
communication. By giving at least five (5) days prior notice thereof, any Party may, from time to
time, at any time, change its mailing address hereunder.
10. ASSIGNMENT. Optionee will not assign this Option to Purchase or its rights
hereunder without the express written consent of Optionor. Such approval shall not be unreasonably
withheld or delayed, provided, any assignment furthers the objective of construction or operation
of
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an ethanol or other bio fuels plant or facilities for the capture, processing, transportation
or use of byproducts of bio fuels.
11. CONSTRUCTION. This Agreement shall be construed in accordance with the laws of
the State of Missouri.
12. RECORDING. This Agreement shall not be recorded. Upon the request of Optionee,
Optionor and Optionee will execute a Memorandum of this Agreement which may be recorded in the
public land records for Xxxxx County, Missouri.
13. ATTORNEYS’ FEES. In the event any Party brings suit to construe or enforce the
terms hereof, or raises this Agreement as a defense in a suit brought by another party, the
prevailing party is entitled to recover its attorney’s fees and expenses.
14. MISCELLANEOUS. Notwithstanding anything to the contrary, the City intends to
impose certain protective covenants on the property. The protective covenants will not be more
restrictive than those of the Sikeston Business Technology & Education Park recorded in Book 511,
Pages 879-907. Optionor acknowledges that Optionee proposes to construct a coal-fired bio fuels
plant with grain and coal storage on the site. None of the restrictions or protective covenants
shall materially interfere with Optionee’s intended use of the premises, including the erection and
operation of a coal-fired bio fuels plant, with necessary fermentors, boilers, smokestacks and
rail, open coal storage and grain handling facilities and related facilities for the capture,
processing, transportation or use of byproducts of bio fuels.
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Optionee’s obligation to close its purchase of the Property following exercise of the Option
shall be conditioned upon its approval of said restrictions, which will not be unreasonably
withheld or delayed.
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective
Date.
| CITY OF SIKESTON | ||||||
| By: | /s/ Xxxx Xxxxxxxx | |||||
| Mayor | ||||||
| “0ptionor” | ||||||
ATTEST: |
||||||
/s/
Xxxxxxx Xxxxx |
||||||
| BOOTHEEL AGRI-ENERGY, LLC | ||||||
| By: | /s/ Xxxxxx Xxxxxx | |||||
| (Name) | Xxxxxx Xxxxxx | |||||
| (Title) | Member | |||||
| “Optionee” | ||||||
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EXHIBIT “A”
TRACT 16
A tract or parcel of land being a part U.S.P.S. 626 and 633, Township 26 North, Range 13 East,
Xxxxx County Missouri and being further described by metes and bounds
as follows:
Commencing at the Northwest Corner of Xxx 0 xx Xxxxxxxx Xxxxxxxx & Xxxxxxxxxx Xxxx, 0xx Addition to
the City of Sikeston, Xxxxx County, Missouri as recorded in the office of the Recorder of Deeds of
Xxxxx County, Missouri in Plat Book 15, Page 36; thence S 71°56’ W along the North line of said
addition a distance of 190.00 feet to the Northwest Corner of said addition; thence N 18°04’00” W
along an extension of the West line of said addition a distance of 463.00 feet for the point of
beginning; thence continuing N 18°04’00” W a distance of 37.38 feet; thence S 71°56’00” W parallel
to the North line of said Lot 1 a distance of 990.00 feet; thence N 18°04’00” W parallel to the
West line of said addition a distance of 93.73 feet; thence N 3°54’18” E parallel with and 100.00
feet perpendicular to the West line of said U.S.P.S 626 a distance of 2276.11 feet; thence N
3°48’37” E parallel to and 100.00 feet perpendicular to the West line of said U.S.P.S. 633 a
distance of 2025.82 feet to the South right-of-way line of County Road 468, said point being 40
foot south of the centerline thereof; thence S 86°31’14” E along said right-of-way line a distance
of 960.68 feet to the West right-of-way line of the Burlington Northern-Sante Fe Railroad; thence S
18°04’00” E along said right-of-way line a distance of 3769.03 feet to a point N 18°04’00” W a
distance of 463.00 feet from the Northeast corner of said Sikeston Business & Technology Park, 1st
Addition; thence S 71°56’00” W parallel with the North line of said Sikeston Business & Technology
Park, 1st Addition a distance of 1510.00 feet to the point of beginning and containing 158.42
acres, more or less.
Subject to any and all easements, if any, affecting the same.
CERTIFICATION:
This survey and plat were executed in accordance with the requirements of the Standards for
Property Boundary Surveys adopted by the Missouri Board for Architects, Professional Engineers and
Land Surveyors, and the Missouri Department of Natural Resources.
Xxxx Xxxxxxxxxx, PLS 2108
Waters Engineering, Inc.
Waters Engineering, Inc.
