Exhibit 10.10
OPTION AGREEMENT
THIS OPTION AGREEMENT ("Option Agreement") is entered into as of June __,
2002, by Oregon Trail Ethanol Coalition, L.L.C., a Nebraska limited liability
company ("Purchaser") and Xxxxxx X. Xxxxxx, Trustee of the Xxxxxx X. Xxxxxx
First Trust and Xxx X. Xxxxxx, Trustee of the Xxx X. Xxxxxx First Trust, 0000
Xxxx 000, Xxxxx, Xxxxxxxx 00000 ("Owner")
1. GRANT OF OPTION. Owner owns an undivided one-half interest in
approximately 8.9 acres of real property located in Xxxxxx County, Nebraska,
which real property is described in Exhibit A, attached hereto and incorporated
herein (the "Owner's Parcel"). In consideration of the payment of the Option Fee
(as defined below) to Owner by Purchaser, Owner hereby grants to Purchaser the
sole, exclusive and irrevocable right and option (the "Option") to purchase
Owner's Parcel, together with all improvements and appurtenances thereto.
Owner's Parcel to be purchased by Purchaser is herein referred to as the
"Premises."
2. TERM AND EXERCISE OF OPTION. The Option may be exercised by Purchaser
at any time on or before 5:00 P.M. on June 30, 2003. Purchaser shall exercise
the Option by giving written notice to Owner at the following address by hand
delivery, or by registered or certified mail, return receipt requested,
deposited in the United States mail or by air express delivery at any time
during the term of the Option:
Xxxxxx X. Xxxxxx, Trustee and Xxx X. Xxxxxx, Trustee
2120 Road 301
Xxxxx, Xxxxxxxx 00000
Owner acknowledges that Purchaser intends to use the Premises to construct and
operate a 40 million gallon per year ethanol plant. In the event Purchaser has
not exercised the Option by April 30, 2002, Owner may in Owner's sole discretion
plant crops and farm the Premises, and if Purchaser exercises the Option between
May 1, 2002, and June 30, 2002, inclusive, Purchaser shall at the Closing
reimburse Owner for Owner's reasonable and verifiable expenses incurred in
undertaking such action.
3. OPTION FEE. On the date hereof, Purchaser agrees to deliver to Owner
the sum of Two Hundred Fifty Dollars ($250.00) (the "Option Fee"). In the event
that Purchaser exercises the Option, the Option Fee shall not be applied to the
purchase price of the Premises. If Purchaser does not exercise the Option, Owner
shall retain the Option Fee.
4. PURCHASE PRICE. The total purchase price for the Premises shall be
Twenty-Two Thousand Two Hundred Fifty Dollars ($22,250), of which Owner's
one-half portion shall be Eleven Thousand One Hundred Twenty-Five Dollars
($11,125). Purchaser shall pay the purchase price to Owner pursuant to the terms
of a Real Estate Purchase Agreement to be entered into between the parties
following Purchaser's exercise of the Option (the "Purchase Agreement").
5. POSSESSION. Owner will cause fee simple title to each parcel of the
Premises purchased to be conveyed to Purchaser, or to Purchaser's nominee or
assign, at closing, by General Warranty Deed in customary form properly
executed, free and clear of all liens and encumbrances but subject to easements,
restrictions and covenants of record reasonably acceptable to Purchaser in its
sole discretion. Possession shall be delivered to Purchaser at the date of
closing. Until closing, all risk of loss to the Premises to be purchased shall
be with Owner.
6. PURCHASE AGREEMENT. The purchase price, contingencies and other terms
of acquiring the Premises, should Purchaser exercise the Option, shall be
contained in the Purchase Agreement containing the following terms:
a. Conveyance. The Premises shall be conveyed to Purchaser, or its
nominee, by general warranty deed, free and clear of all liens and encumbrances
whatsoever, except for real estate taxes and general and special assessments not
then due and payable and such easements, reservations, limitations and
restrictions as Purchaser shall approve.
b. Closing. The transaction shall close on a date (the "Closing
Date") set by Purchaser, which date shall be not more than sixty (60) days
following the date Purchaser exercises the Option. The closing shall be held and
deed shall be delivered at the offices of Purchaser in Xxxxxx County, or such
other place as the parties may hereafter agree upon.
c. Other Conditions. The parties shall agree to such other terms and
conditions as are necessary and appropriate to close the transaction
contemplated by this Option. In the event of a disagreement over such terms,
those terms and conditions as are customary in similar real estate purchase
agreements in Xxxxxx County, Nebraska shall control to the extent not
inconsistent with the terms and conditions contained herein.
7. TITLE COMMITMENT. At any time during the term of this Option,
Purchaser may, upon prior written notice to Owner, and at Purchaser's initial
expense, request Owner to furnish Purchaser a currently certified written title
insurance commitment (the "Title Commitment"), issued by a title insurance
company acceptable to Purchaser. Such Title Commitment shall be provided within
20 days of Purchaser's request, and shall show in Owner a good and marketable
title in fee simple to the Premises subject only to defects, if any, which are
acceptable to Purchaser in Purchaser's sole judgment. Such Title Commitment
shall also provide that standard exceptions to coverage will be deleted from the
final title policy, as agreed to between Owner and Purchaser. Within fifteen
(15) days after receipt of the Title Commitment, Purchaser shall notify Owner
whether such Title Commitment discloses, in the opinion of Purchaser's attorney,
defects in title that are not acceptable to Purchaser. Owner shall have 30 days
to cure such title defects. If such defects are not corrected within 30 days,
Purchaser shall have the option of terminating this Option Agreement and the
parties will be relieved of further obligation hereunder, or Purchaser may
extend the cure period for a reasonable period to allow Owner to correct any
such defects. In the event of any title defects which are not corrected by Owner
as provided above, or in the event the Title Commitment or survey of the
Premises is not satisfactory to Purchaser for any reason, including without
limitation, matters relating to the Highway 4 right-of-way set forth below,
Purchaser's sole remedy shall be the termination or non-exercise of this Option,
and Owner shall not have any further liability to Purchaser. An owner's title
insurance policy, in the amount of the purchase price for the Premises
purchased, shall be paid for initially by Purchaser, and shall be issued to
Purchaser in conformity with such title insurance commitment upon delivery of
the deed and as a condition of Purchaser's obligation to close this purchase and
sale. Owner shall cause to be delivered to Purchaser at or prior to closing and
as a condition thereof, a "marked-up" copy of the Title Commitment dated as of
the Closing Date, deleting therefrom standard exceptions to coverage, as agreed
to between Owner and Purchaser, and showing compliance with all requirements for
issuance of the title insurance policy. Upon Closing, Owner shall reimburse
Purchaser for one-half of the amount of the Title Commitment, provided that
Owner's payment obligation for the Title Commitment shall be based on a Title
Commitment cost for the purchase price of the Premises.
8. LAND SURVEY. At any time during the term of this Option, Purchaser may
have prepared, at Purchaser's initial cost, a survey of the Premises by a
registered land surveyor (the "Survey").
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The Survey shall be used to compute the legal description of the real property
to be purchased pursuant to this Option. In the event such Survey discloses any
defects in Owner's title, Purchaser shall so notify Owner and Owner shall
endeavor to cure the same within 30 days after such notice, or such other period
agreed to by Purchaser and prior to closing. If such defects are not cured by
the Closing Date, Purchaser shall have the same remedies as are allowed in
Section 7 above for title defects disclosed in the Title Commitment.
9. OWNER COMMITMENTS. Owner agrees that from the date hereof until the
expiration of this Option, it will not lease or rent the Premises or any part
thereof to any person or entity, other than Purchaser, or grant any person or
entity any rights to use or occupy the Premises. Owner shall not grant any
easement on the Premises and nor will Owner mortgage or encumber the Premises
without Purchaser's prior written consent. During the term of this Option Owner
agrees to support, assist, and cooperate with, Purchaser with respect to
Purchaser's objective of constructing an ethanol plant at the Premises,
including obtaining any necessary regulatory approvals, obtaining necessary
zoning, and to take such actions as are reasonably necessary or desirable in
furtherance of the intents and purposes of this Option Agreement upon request of
Purchaser from time to time; provided, that all costs related to such actions
shall be borne by Purchaser.
10. TAXES AND ASSESSMENTS. Owner shall pay all special assessments for any
public improvements constructed or under construction at the Closing Date,
regardless of whether or not levied and regardless of whether or not then due,
and all real estate taxes, general and special, for prior years. General real
estate taxes which became due in the year in which the closing hereunder shall
occur (and which become delinquent in the year following closing), shall be
prorated between the parties as of the date of possession. If the amount of such
real estate taxes cannot be determined at the time of closing, such taxes will
be determined using the most current available assessment and tax levy rate for
the Premises. Owner shall pay all taxes for all years prior to the year in which
Closing occurs. Owner shall also pay any "greenbelt" or special agricultural
assessment tax recapture assessed against the Premises due to any change in use
by Owner prior to closing. Owner shall pay all documentary revenue tax on any
conveyance.
11. ENTRY FOR INSPECTION.
a. During the term of the Option, Owner shall provide Purchaser and
Purchaser's agents or representatives with complete access to the Owner's Parcel
for the purpose of conducting such inspections, engineering studies, surveys,
appraisals, test borings or any other activities reasonably required by
Purchaser in order to determine the suitability of the Owner's Parcel for
Purchaser's purposes (collectively, the "Inspections"). The right to conduct
Inspections shall include the right to enter upon any portion of the Owner's
Parcel to take measurements, make inspections, make boundary and topographical
survey maps, and to conduct geotechnical, environmental, groundwater, wetland
and other studies required by Purchaser, in its sole discretion, and to
determine the adequacy of utilities servicing the Owner's Parcel, zoning
ordinances and compliance with laws. No such Inspections shall constitute a
waiver or relinquishment on the part of Purchaser of its rights under any
covenant, condition, representation or warranty of Owner under this Option
Agreement.
b. Upon execution of this Option Agreement, Owner shall deliver to
Purchaser, at no cost to Purchaser, such of the following as are in the
possession of or available to Owner: existing soil and groundwater tests,
surveys, contracts, leases, title policies, environmental reports, underground
storage tank test results, waste disposal records, permit records, traffic
studies, other engineering tests and studies pertaining to the Owner's Parcel,
all existing site plans, drawings, architectural drawings or other plans related
to the development or proposed development of the Owner's Parcel. Owner shall
cooperate with Purchaser during the Inspections and hereby agrees to use best
efforts to attend all meetings in Xxxxxx
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County, Nebraska, to which Owner is invited by Purchaser relating to Purchaser's
intended use of the Premises, and site plan approval. Purchaser shall not be
obligated to undertake any soil borings or other invasive testing to determine
the existence of hazardous materials on the Owner's Parcel, it being the
intention of the parties that if noninvasive environmental inspections and
testing indicate that the Owner's Parcel may contain hazardous substances,
Purchaser shall have the option to terminate this Option Agreement or, at
Purchaser's sole election, to undertake further soil borings or invasive
testing. If in Purchaser's judgment, such borings, surveys, studies, inspections
or other tests indicate or determine that the Owner's Parcel contains any
hazardous materials or substances or the condition of the Owner's Parcel or
utility systems is not acceptable to Purchaser for any reason, then Purchaser
may terminate this Option Agreement as its sole remedy, and Owner shall not have
any further liability to Purchaser.
c. In the event Purchaser conducts soil and groundwater tests, surveys,
title searches, environmental reports, underground storage tank tests, or other
engineering tests and studies with respect to the Premises prior to the exercise
of the Option, a copy of such test results and reports shall be provided to
Owner at no additional cost; provided that this obligation of Purchaser shall
terminate upon exercise of the Option. In the event Purchaser conducts tests on
the Premises and does not exercise the Option, the Purchaser shall return the
condition of the Premises back to the same condition as found prior to such
tests, within 90 days after the expiration of this Option Agreement.
d. Purchaser agrees that its purchase of the Premises with respect to the
physical condition of the Premises is "AS IS" and is based on Purchaser's
Inspections and not upon any representation or warranty of Owner or Owner's
agents or employees as to the physical condition of the Premises or as to the
fitness of the Premises for Purchaser's intended use of the Premises for the
location of an ethanol plant.
12. FAILURE OR REFUSAL TO CONVEY. Subject to the provisions regarding
Purchaser's remedies set forth in Sections 7 and 11 above, in the event, through
no fault of Purchaser, Owner fails, refuses or is unable to convey to Purchaser
the Premises as required herein, or otherwise defaults hereunder, after
Purchaser exercises this Option to Purchase, Purchaser shall be entitled to seek
specific performance of Owner's obligations hereunder, and Owner shall be liable
for Purchaser's reasonable legal fees and costs in bringing such legal action
upon the grant of a court order of specific performance.
13. EMINENT DOMAIN. In the event, either before or after exercise of the
Option, but prior to closing, any portion of the Premises is taken by eminent
domain, or by a deed in lieu thereof, this Option shall terminate as to the
portion of the Premises so taken. In such event, and if such portion of the
Premises adversely impacts Purchaser's ability to construct and operate an
ethanol plant on the Premises, Purchaser may terminate this Option Agreement by
notice to Owner, and the parties will be relieved of further obligations
hereunder. If Purchaser does not terminate this Option Agreement, all amounts
received by Owner as a result of such taking or deed in lieu thereof, shall be
credited against the purchase price set forth in Section 4 above.
14. SHORT FORM NOTICE. A short form notice of this Option to Purchase for
recording in the public records shall be executed by the parties at the election
of Purchaser and may be recorded at Purchaser's expense.
15. NOTICE. All notices provided for herein shall be personally delivered,
by United States certified mail, return receipt requested or sent by a
nationally recognized overnight package carrier delivered to Purchaser at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, Attn: Xxxx Xxxxxx, Chairman, and to
Owner at the address specified in Section 2 above. Either party shall have the
right to designate a new address for the receipt of such notices by written
notice given as aforesaid.
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16. ASSIGNMENT. Neither party may assign this Option Agreement
without the prior written consent of the other party, which consent shall not be
unreasonably withheld.
17. MISCELLANEOUS. This Option Agreement may not be changed or
modified, either in whole or in part, except by initialing changes herein by the
parties or by an agreement in writing signed by all parties hereto. When used in
this instrument, unless the Option Agreement requires otherwise, words importing
the masculine gender include the feminine and neuter, words importing the
singular number include the plural, and words importing the plural number
include the singular. It is mutually agreed by and between the parties hereto
that the covenants and agreements herein contained shall extend to and be
obligatory upon the heirs, legal representative, successors, and permitted
assigns of the respective parties, and that time is of the essence of this
Option Agreement. This Option Agreement shall be interpreted under the laws of
the State of Nebraska. If Owner is a corporation or a partnership, the persons
executing this Option Agreement for Owner warrant that they have authority to do
so.
EXECUTED as of the date first above written.
OWNER:
Xxxxxx X. Xxxxxx, Trustee
--------------------------------------------
Xxxxxx X. Xxxxxx, Trustee of the Xxxxxx X.
Xxxxxx First Trust
Xxx X. Xxxxxx, Trustee
--------------------------------------------
Xxx X. Xxxxxx, Trustee of the Xxx X. Xxxxxx
First Trust
PURCHASER:
Oregon Trail Ethanol Coalition. L.L.C.,
a Nebraska limited liability company
By: Xxxx Xxxxxx, President
----------------------------------------
Xxxx Xxxxxx, President
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NOTARIZATION OF OWNER SIGNATURE:
STATE OF NEBRASKA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this 16th day of
August, 2002 by Xxxxxx X. Xxxxxx, Trustee of the Xxxxxx X. Xxxxxx First Trust
and Xxx X. Xxxxxx, Trustee of the Xxx X. Xxxxxx First Trust.
[SEAL]
Xxxxx X. Xxxxxxx
----------------
Notary Public
My commission expires: July 14, 2004
NOTARIZATION OF PURCHASER SIGNATURE:
STATE OF NEBRASKA )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this 16th day of
August, 2002 by Xxxx Xxxxxx, President of Oregon Trail Ethanol Coalition,
L.L.C., a Nebraska limited liability company on behalf of the company.
[SEAL]
Xxxxx X. Xxxxxxx
----------------
Notary Public
My commission expires: July 14, 2004
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Exhibit A
That portion of the Southwest Quarter (SW 1/4) of Section Sixteen (16), Township
Four (4) North, Range Four (4) West of the 6th P.M., Xxxxxx County, Nebraska
lying South of the right-of-way of the St. Xxxxxx and Grand Island Railway Co.,
EXCEPT that portion thereof previously occupied by Xxx Xxxxxxxx Xxxxx Xxxxxxx
Xx. 0 and relinquished by the State of Nebraska to The County of Xxxxxx,
Nebraska (8.9 acres, more or less).
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