EXHIBIT 10.2
OPTION AGREEMENT ON XXXXXX EAST PROPERTY
THIS OPTION AGREEMENT (the "Agreement") is made and entered into as of the 20th
day of October, 2005, (the "Commencement Date"), by and between Xxxxxxx X.
Xxxxx, Xxxxx Xxxxxx, Power of Attorney ("Optionor"), and Green Plains Renewable
Energy, Inc., ("Optionee").
RECITALS
This Agreement is entered into upon the basis of the following facts and
intentions:
A. Xxxxxxx X. Xxxxx owns approximately 66.6 acres, more or less, of
farm real estate ("Property") located in Fremont County, State of Iowa,
described as part of the North 1/2 of the Northwest 1/4 and part of the
Northwest 1/4 of the Northwest 1/4 of Section 25, Township 69 North, Range 40
West of the 5th PM, Fremont County, Iowa.
B. Pursuant to this Agreement, Optionor intends to grant to Optionee an
option to acquire the Property on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the covenants and conditions
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and the promises of the
parties, and undersigned agree as follows:
1. RECITATIONS. The above Recitals are incorporated herein by reference
and made a part of this agreement.
2. GRANT OF OPTION. For and in consideration of the payment by Optionee
to Optionor of the Option Consideration shown in Paragraph 4 below, Optionor
hereby grants to Optionee an option (the "Option") to acquire the Property,
subject to the provisions, terms, and conditions stated herein.
3. TERM OF OPTION. The term ("Term") of this Option shall commence at
8:00 a.m. on the Commencement Date and shall terminate and lapse for all
purposes at 5:00 p.m. Central Time on the 30th day of June, 2005, (the
"Expiration Date").
5. OPTION CONSIDERATION PAYMENT. In consideration for the Option herein
granted, Optionee hereby agrees to pay to Thien Farm Management, Inc., as Escrow
Agent for Optionor, concurrently with the execution and delivery of this
Agreement, the amount of $ 2,000.00 (the "Option Consideration Payment").
In the event Optionee fails, for any reason, to timely exercise the
Option herein granted, then (except as otherwise set forth in this Agreement)
the Option Consideration Payment placed into Escrow shall be distributed to
Optionor.
In the event Optionee does exercise the Option contained herein, the
Option Consideration Payment placed into Escrow shall be a credit against the
total purchase price at closing.
5. EXERCISE OF OPTION. Optionee shall exercise the Option herein
granted, if at all, by delivering written notice thereof (the
"Notice of Exercise") to Optionor at any time prior to the
Expiration Date of the Agreement. The Notice of Exercise must
unconditionally state that Optionee is exercising the Option
herein granted. On the date of Optionor's receipt of the
Notice of Exercise, a binding contract on the terms set forth
in this Agreement shall exist between Optionor, as transferor,
and Optionee, as transferee, for the acquisition of the
property.
6. ACQUISITION CONSIDERATION. The consideration for the acquisition of
said Property paid by Optionee shall be $ 7,500.00 per acre, exact acreage to be
determined by survey with the survey cost paid by Optionee.
7. ESCROW. If the Option herein granted is timely exercised, then the
transfer and conveyance of the Property of Optionor described in Paragraph A of
recitations above, shall be consummated through an escrow established with Thien
Farm Management, Inc., with an address of 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0,
Xxxxxxx Xxxxxx, Xxxx 00000, telephone number 000-000-0000; ATTN: Xxxx Xxxxx
("Escrow Officer"). Each of the parties shall timely execute and deposit into
escrow such instructions, documents, funds, and instruments as are required by
this Agreement or as the Escrow Officer shall reasonably require to consummate
the transaction contemplated hereby.
8. Within thirty (30) calendar days of notice by the Optionee to the
Optionor of the intent to execute options, Optionor (at its sole cost and
expense) shall deliver to Optionee an abstract of title ("Abstract"), with true
and correct copies of all documents and instruments referred to therein as
exceptions to title to the Property. The Abstract shall bear certification date
of not earlier than the Commencement Date hereof. Optionor covenants and
warrants that, on the date the Escrow closes, it shall deliver marketable fee
simple title in and to the Property to Optionee, free and clear of all liens and
encumbrances, including unrecorded liens for labor or materials rendered for or
involved in the Property, and subject to no exceptions other than:
a. A lien for real estate taxes and assessments not yet
delinquent to be prorated as hereinafter provided;
b. Exceptions to title approved in writing by Optionee after
its receipt and review of the Abstract; and
c. The covenants, conditions, and restrictions as described in
this Agreement.
In the event Optionee presents any reasonable objection to Optionor's
title evidenced by the Iowa Land Title Examination Standards to any condition of
title shown by the Abstract, Optionor shall have thirty (30) calendar days to
adequately address said condition. If the condition is not adequately addressed
(unless otherwise agreed between the parties), Optionee shall have the right to
terminate and cancel this Agreement, in which event Escrow (if theretofore
opened) shall be closed, this Agreement shall be terminated and canceled, the
Option Consideration Payment theretofore received by Optionor (if any) shall
immediately be returned to Optionee, and neither party shall have any further
obligation or liability one to the other. Upon giving notice of its intent to
exercise this option, Optionee shall, within thirty (30) days, tender, transfer
and convey the Acquisition Consideration described in Paragraph 6 above.
9. TITLE INSURANCE. At the close of Escrow, the Escrow Officer shall be
prepared to issue to Optionee a Title Insurance Company ALTA Owner's Police of
Title Insurance, For B 1970 (amended on 10/17/70 and again on 12/6/85) ("Title
Policy") in the stated amount of the Purchase Price, showing fee title to the
Property vested in Optionee, subject to the exceptions to title specified in
Paragraph 8 herein above. The Title Policy shall also include all endorsements
available for issuance by the Title Insurance Company that are required by
Optionee.
10. CLOSE OF ESCROW.
a. Date for Close of Escrow. Escrow shall close within 180
days of Exercise of Option.
b. Deposit of Documents and Funds by Optionor and Optionee.
Optionor and Optionee shall deposit into Escrow the following on or
before the date Escrow closes:
(i) A duly executed and acknowledged Warranty Deed
conveying Optionor's Property to Optionee, in the form of
Exhibit "C" attached hereto and incorporated herein by
reference;
(ii) The Title Policy or a written commitment to
issue the Title Policies executed by the Title Insurance
Company;
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(iii) Materials of Optionor and Optionee relating to
the Properties to be transferred, all of which shall be made
available to Optionor and Optionee outside of Escrow; and
(iv) Such other documents, instruments, and funds as
are required or necessary to consummate the transaction
described herein and convey Marketable Legal Title in the
Property to Optionor and Optionee.
c. Prorations. Except as otherwise provided herein, taxes and
other expenses, if any, affecting same shall be prorated as of 11:59
p.m. on the day preceding the date Escrow closes. Liens, mortgages,
pre-existing leases, and assessments encumbering the same, which have
been approved by Optionee and Optionor in writing (or have been deemed
approved) shall be assumed by Optionee. If, for any reason, any amounts
cannot be prorated on the date Escrow closes, they will be prorated
outside of Escrow as soon as said amounts may be determined.
d. Closing Costs. Optionee shall pay all (100%) of the premium
for the Title Insurance Policy on Optionor's Property. Optionee shall
pay all (100%) of any Escrow fees' notary fees, recording costs, and
other costs or expenses of Escrow. Optionor shall pay all (100%) of all
costs to obtain marketable and clear title, revenue stamps, and other
cost normally charged to seller.
11. INSPECTION OF THE PROPERTY: RIGHT OF ACCESS. Parties agree that the
other party and its agents shall have access to the properties at all times
during the Term hereof for the purpose of conducting at their own expense, any
inspections as may be related to the purchase of the Property, and/or related to
securing any land use permits or approvals (including environmental and
hazardous waste audits and inspections) pertaining to the use, development, or
construction of improvements thereon following acquisition of said properties.
Both are hereby granted the right but not the obligation to inspect the Property
of the other and determine to their own satisfaction the condition of same,
including the soil condition, environmental requirements, and the presence or
absence of hazardous waste or toxic materials. Provided, however, that the
foregoing right of access is subject to the following:
a. Indemnification RE: Third Party Claims. Parties shall
indemnify, protect, defend, and hold the other free and harmless from claims and
liabilities of any and all kinds asserted by third persons which arise out of or
in connection with any inspection of the Properties conducted by or authorized
by parties or its servants, agents, invitee, designees, or independent
contractors; and
b. Indemnification RE: Damage Claims. Parties shall indemnify,
protect, defend, and hold each other free and harmless from any claims and
liabilities of any and all kinds, including, without limitation, property damage
and mechanics' liens, which may be suffered or incurred by the other, including
damage to growing crops set at their fair market value, which may be caused by
other parties or its servants, agents, designees, or independent contractors.
12. CROPS. Parties agree that crops planted or growing on the premises
at the time of the transfer of the ownership of the respective premises between
Optionor and Optionee following an exercise of the Option by Optionee, shall
remain the property of the Optionor. Parties further agree that Optionee shall
have the right following the closing of escrow to enter upon the property
transferred to it to commence construction thereon of improvements contemplated
by it, but in such event Optionee shall reimburse Optionor for the fair market
value of any planted or growing crops damaged or destroyed by reason of such
construction, said value to be determined by an independent appraiser. Parties
further agree that the Optionor after closing escrow shall have the continued
right to access to the premises transferred to undertake and complete all
necessary field work until the crop thereon is harvested.
13. REPRESENTATIONS AND WARRANTIES OF OPTIONOR AND OPTIONEE. Parties
hereby represent and warrant to each other as follows:
a. Neither party has received any notice from any person or
entity to the effect that the use and operation of the Properties are not
currently in full compliance with all applicable environmental, zoning, and land
use laws, and other applicable local, state, and federal laws and regulations,
including, without limitation, those laws and regulations relating to use,
handling, and disposal of hazardous waste and hazardous substances.
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b. Parties, to the best of their knowledge, any tenant or
other third parties have not produced, manufactured, discharged, refined, or
disposed of on, under, or about the Properties any flammable materials or
wastes, toxic materials or wastes (including PCB's) (collectively, "Hazardous
Substances").
c. Parties have 'r will make available to each other, for
inspection and copying all of their books and records relating to the title of
the subject real estate. Parties agree that all copies of instruments,
agreements, and other documents provided by each other are true and correct
copies of such instruments, agreements, and documents in their possession.
d. Parties represent that there are no service contracts,
maintenance contracts, management contracts, warranties, guarantees, soil
report, plans, or similar documents or items relating to the Properties except
those that have been specifically disclosed each to each other in writing and
true copies of which have been or will be provided to the other.
e. Parties agree that there are no condemnation,
environmental, zoning, or other land-use regulation proceedings, either
instituted or planned to be instituted, which would affect the Properties, and
that parties have not received notice of any special assessment proceedings
affecting the Property.
f. Parties represent that there is no litigation pending
against either of them or basis therefor that arises out of the ownership of the
Properties that therefore detrimentally affect the use or operation of same or
adversely affect the ability to parties to perform their obligations under this
Agreement.
g. Optionor represents that it is owner of the real estate
described in Exhibit "A"; that this Purchase Agreement and all documents
executed by Optionor which are to be delivered to Optionee at the closing are or
at the time of the closing will not violate any provisions of any agreement or
judicial order of which Optionor is a party or to which Optionor or the Property
is subject. Optionee makes the same representations and agrees to the same
requirements.
h. Parties agree that at the time of the closing there will be
no outstanding contracts made by them for any improvements to their respective
Properties which have not been or will not be fully paid for, and parties shall
cause to be discharged all mechanics' or materialmen's liens arising from any
labor or materials furnished to their respective Properties prior to the time of
the closing.
14. LAND USE PLANNING AND COOPERATION. During the Term of this
Agreement, parties hereto shall have the right, without other party's prior
consent, to transmit any information related to the Property to be acquired
respectively, and to file any application with any governmental authority having
or asserting jurisdiction over the Property to be acquired, for the purpose of
seeking such land use approvals and development or construction authorizations
or both and permits (including, without limitations, environmental and zoning or
rezoning reviews and proceedings) as parties deem appropriate in the exercise of
its sole and absolute discretion. In the event any such transmittal of
information, or filing of an application, requires the consent of or signature
by or cooperation of the other party, other party hereby represents and warrants
that it shall timely provide said consent or signatures and cooperation, or
both.
15. NOTICES. Whenever any notice is required or permitted to be given
under any provision of this Agreement, such notice shall be in writing, signed
by or on behalf of the person giving the notice, and shall be personally
delivered, telefaxed, or mailed by prepaid certified or registered mail, return
receipt requested, to the person or persons to whom such notice is to be given,
addressed to such person as set forth below:
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If the Optionee: Xxxx Xxxxx, Vice President
Green Plains Renewable Energy, Inc
000 Xxxx Xxxxxx Xxx.
Xxxxxxx Xxxxxx, Xxxx 00000
If the Optionor: Xxxxxx X. Xxxxx % of Xxxxx Xxxxxx
0000 000xx Xxxxxx
Xxxxxxxx, Xxxx 00000
If telefaxed, such notice shall be deemed to have been effectively
given twenty-four (24) hours after the date transmitted; if mailed, such notice
shall be deemed to have been effectively given upon the earlier to occur of
receipt by the addressee or on the third (3rd) business day following the date
of mailing.
16. ATTORNEYS' FEES. In the event any dispute between the parties
hereto should result in litigation, the prevailing party shall be reimbursed for
all reasonable costs, including but not limited to, reasonable attorney's fees.
This provision shall survive the termination or later rescission of this
Agreement.
17. MISCELLANEOUS.
a. Invalidity of Provision. If any provision of this
Agreement, as applied to either party or to any circumstance, shall be adjudged
by a court of competent jurisdiction to be void or unenforceable for any reason,
the same shall in no way affect (to the maximum extent permissible by law) any
other provision of this Agreement, or the validity or enforceability for this
Agreement as a whole.
b. Amendments. No addition to or modification of any provision
contained in this Agreement shall be effective unless fully set forth in writing
signed by all parties.
c. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
d. Governing Law. The interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of Iowa
and any question arising thereunder shall be construed or determined according
to such law.
e. Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns.
f. Additional Documents. Parties agree to execute such
additional documents, including escrow instructions, as may be reasonable and
necessary to carry out the provisions of this Agreement.
g. Entire Agreement. This Agreement, together with the
exhibits hereto and the documents referred to herein, constitutes the entire
agreement of the parties with respect to the subject matter hereof. Any prior
correspondence, memoranda, or agreements are replaced in their entirety by this
Agreement, the exhibits hereto, and the documents referred to herein.
h. Time of Essence. Time is of the essence in the performance
of each and every provision of this Agreement.
i. Continuation and Survival of Representations and
Warranties. All representations and warranties by the respective parties
contained herein or made in writing pursuant to this Agreement are intended to
and shall remain true and correct as of the time of close of Escrow, shall be
deemed to be material, and shall survive the execution and delivery of this
Agreement and the delivery of the deed and transfer of title. All statements
contained in any certificate or other instrument delivered at any time by or on
behalf of Optionor or Optionee in conjunction with the transaction contemplated
hereby shall constitute representations and warranties hereunder.
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j. Real Estate Brokers. Each party warrants and represents to
the other that each shall indemnify and hold the other party harmless from any
dealing with regard to the Properties through or with any licensed real estate
broker or other person and specifically with respect to any claim of right to a
commission or finder's fee in this transaction or in any transaction related to
this transaction.
18. If prior to the exercise of this Option, Optionor expends funds and
efforts in anticipation of the 2005 crop season, and Optionee then exercises the
Option, Optionee shall reimburse Optionor for all reasonable work and expenses.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and date first above written.
Optionee:
/s/ Xxxx Xxxxx
-------------------------------------
Xxxx Xxxxx, Vice President
Green Plains Renewable Energy, Inc.
Date: October 20, 2005
Optionor:
/s/ Xxxxx Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxx, By Xxxxx Xxxxxx, POA
Date: October 20, 2005
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