Prepared by and upon recordation return to Christopher Sackett, 666 Grand Avenue, Suite 2000, Des Moines, Iowa 50309; (515) 242-2400. OPTION AGREEMENT
EXHIBIT 10.6
Prepared by and upon recordation return to Xxxxxxxxxxx Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxx, Xxxx 00000; (000) 000-0000.
THIS OPTION AGREEMENT (the “Agreement”) is executed as of April 17 , 2006, by
and between One Earth Energy, LLC, an Illinois limited liability company (“One Earth Energy”), and
Xxxx Xxxxxx, a resident of the State of Illinois (collectively “Grantor”).
W I T N E S S E T H :
WHEREAS, Grantor owns certain property located in Xxxxxx City, Ford County, Illinois, as
legally described in attached EXHIBIT A (the “Real Estate”), and desires to grant One Earth
Energy an option to purchase approximately thirty-four (34) acres (subject to survey) of such Real
Estate (the “Option Property”) located in the south central portion of the Real Estate approximated
on the attached Exhibit “B” upon the general terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:
1. Option; Term; Exercise. Grantor hereby grants One Earth Energy an option (the
“Option”) to purchase the Option Property upon the terms and conditions set forth herein. The term
of the Option shall be for a period of one (1) year, commencing on the date hereof. The Option may
be exercised by One Earth Energy by written notice to Grantor at any time during the Option Period.
In the event that One Earth Energy does not timely exercise the Option, the Option shall become
null and void, and except as hereafter set forth, the parties shall have no continuing obligations
hereunder.
The Option is contingent for sixty (60) days from the execution of this Agreement to allow
Grantor to reasonably satisfy herself that the water table will not be negatively impacted by One
Earth Energy’s proposed use of the Option Property
2. Option Price; Termination. The option price (the “Option Price”) is Ten Thousand
Dollars ($10,000.00), and shall be paid to Grantor upon Grantor’s execution of this Agreement. If
One Earth Energy exercises the Option, the Option Price shall be applied to the Purchase Price. If
the Option is not exercised, except as otherwise provided herein, the Option Price shall be
forfeited by One Earth Energy.
3. Purchase Price. The purchase price (the “Purchase Price”) for the Option Property
shall be twelve thousand dollars ($12,000.00) per acre if the Option is exercised during the first
nine (9) months of the Option Period, and fourteen thousand dollars ($14,000.00) per acre if the
Option is exercised during the final three (3) months of the Option Period, and shall be payable at
Closing (as hereinafter defined), with adjustments and prorations for customary closing costs such
as real estate taxes, transfer taxes, utilities and other matters. One Earth Energy shall bear
responsibility for the costs of title insurance and transfer taxes at Closing.
4. Right to Access Property. Grantor shall permit One Earth Energy and its designees
access to the Real Estate and the Option Property to prepare the survey referred to in Section 5
below and to perform soil borings and other due diligence during the Option Period. One Earth
Energy and its designees shall provide Grantor with satisfactory evidence of liability insurance
and shall hold Grantor harmless from and against any claim for property damage (including, without
limitation, crop or tile damage) or personal injury resulting therefrom.
5. Survey. Upon One Earth Energy’s exercise of the Option, One Earth Energy, at its
sole expense, shall have the Real Estate surveyed to precisely describe the Option Property. In no
event will the Option Property include the pond located on the Real Estate
6. Taxes and Assessments; Risk of Loss. Grantor shall pay all real estate taxes that
are a lien on the Option Property. Grantor shall give One Earth Energy a credit at Closing for
Grantor’s prorated share of the real estate taxes for the fiscal year in which Closing occurs,
based upon the Closing Date and the last known actual real estate taxes payable according to public
record. One Earth Energy shall pay all other real estate taxes. Grantor shall pay all special
assessments which are a lien on the Option Property as of the Closing Date. One Earth Energy shall
pay all other special assessments. Risk of loss shall remain with Grantor until Closing. Grantor
agrees to maintain existing insurance until Closing.
7. Title. Within fifteen (15) days of One Earth Energy’s exercise of the Option,
Grantor shall deliver to One Earth Energy a preliminary Land Title Association owner’s title
insurance commitment, and at Closing Grantor shall cause the title insurance company to issue an
owner’s policy of title insurance to One Earth Energy, in the amount of the Purchase Price, issued
by a title company reasonably acceptable to One Earth Energy with respect to the Option Property.
Such title insurance commitment and policy shall show marketable fee simple title in Grantor in
conformity with this Agreement and Illinois law, free and clear of all liens, mortgage and
encumbrances. Grantor shall cure/remove prior to Closing any title objections raised by One Earth
Energy. If Grantor fails to remove any title objections prior to Closing, One Earth Energy may, in
its discretion: (a) terminate this Agreement without liability, in which case the Option Fee shall
be returned to One Earth Energy, without limiting any other remedies that One Earth Energy may
have; or (b) take title subject to the objection.
8. Representations and Warranties; Termination of Farm Tenancy. Grantor warrants and
represents to One Earth Energy that Grantor will, on the Closing Date, convey to One Earth Energy
good and marketable title to the Option Property free and clear of any and all liens, mortgages and
encumbrances, subject only to real estate taxes and assessments which are One Earth Energy’s
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responsibility under Section 6 above, easements, rights-of-way, streets, and any other matters
affecting title which One Earth Energy agrees to take title subject to pursuant to Section 7.
In the event One Earth Energy exercises the Option, Grantor agrees to cooperate with One
Earth Energy in providing whatever notices are legally required to terminate the farm tenancy of
Xxxxxxxx Enterprises with respect to the Option Property at the conclusion of the 2006 crop year.
9. Acts Prior to Closing. From the date hereof until Closing: (i) One Earth Energy
and its designees shall have the right * to enter the Real Estate and the Option Property to
conduct inspections, studies and investigations; (ii) Grantor shall keep and preserve the Option
Property in its present condition; and (iii) Grantor shall not enter into, modify or terminate any
agreement relating to or affecting the Option Property which will extend in force beyond the
Closing Date.
10. Closing. The consummation of the transactions contemplated by this Agreement (the
“Closing”) shall take place at a date (the “Closing Date”), time and place mutually agreeable to
the parties, but in no event later than ninety (90) days from the later of: (i) One Earth Energy’s
exercise of the Option; or (ii) Grantor’s delivery of the title insurance commitment pursuant to
Section 7 above.
11. Closing Obligations. At Closing: (i) Grantor shall execute and deliver to One
Earth Energy a Warranty Deed conveying the Option Property to One Earth Energy in accordance with
the terms of this Agreement, along with any other documents necessary to convey marketable title of
the Option Property or to effectuate a closing of the transaction contemplated by this Agreement;
and (ii) One Earth Energy shall deliver to Grantor the Purchase Price and any documents reasonably
necessary to effectuate a closing of the transaction contemplated by this Agreement.
12. Default; Remedies. If either party breaches this Agreement, the other party shall
be entitled to exercise any and all remedies or actions at law or in equity available to it,
including, but not limited to, specific performance.
13. Effectiveness. This Agreement shall become effective only upon execution by
Grantor and return of an executed original hereof to One Earth Energy on or before April ___, 2006.
Upon execution by Grantor prior to such date, Grantor shall insert the date of Grantor’s execution
hereof in the first line hereof, which shall be deemed the effective date of this Agreement. In
the event this Agreement has not been executed and delivered by Grantor to One Earth Energy on or
prior to such date, it shall be null and void and of no force or effect.
14. Recordable Form; Additional Documents. Either party may record this document or a
memorandum hereof, and both parties agree to execute such other instruments or agreements in
recordable form as the other party may request (including, without limitation, a Contract For Sale
of Real Estate) to effectuate the terms of this Agreement.
15. Indemnification. One Earth Energy hereby agrees to indemnify and hold harmless
Grantor for any and all damage to current tile lines effecting or present on the Option
Property or the remaining Real Estate caused by One Earth Energy’s use or development of the Option
Property. One Earth Energy shall be solely responsible for the cost of repair and rerouting, if
necessary, of the
[/s/L.F] [/s/SPK] *Upon prior notice
to Grantor’s tenant.
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tile line to adequately drain the remaining Real Estate as it was prior to One Earth Energy’s
development. Further, One Earth Energy shall indemnify and hold harmless Grantor for any damage to
the remaining Real Estate caused by the increase of surface water flowage onto and over the
remaining Real Estate due to One Earth Energy’s development of the Option Property. One Earth
Energy shall be solely responsible for the cost of construction of a retention pond pursuant to
regulations promulgated by the Illinois Department of Natural Resources and Environmental
Protection Agency.
16. Miscellaneous. This Agreement, including the recitals set forth above and any
exhibits attached hereto, constitutes the entire understanding between the parties concerning the
subject matter hereof. This Agreement shall be governed by and construed in accordance with
Illinois law, and shall not be modified except in a writing signed by all parties. All notices
hereunder shall be in writing. This Agreement is binding upon the parties and their heirs,
representatives, agents, successors and permitted assigns. Time is of the essence with respect to
this Agreement and all dates and timelines set forth herein. This Agreement may be assigned by One
Earth Energy upon written notice to Grantor. Except as provided in the preceding sentence, neither
this Agreement nor any parties’ rights or obligations shall be assigned without the prior written
consent of the other party. If any provision herein is held to be invalid or unenforceable, the
remaining provisions shall not be affected. No omission or delay by either party in enforcing any
right or remedy or in requiring any performance hereunder shall constitute a waiver. The remedies
herein are cumulative and in addition to all other remedies available at law and in equity. The
headings contained herein are for convenience only and shall not be considered in interpreting this
Agreement. All covenants, warranties, representations and indemnification obligations set forth in
this Agreement shall survive the termination or expiration hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this OPTION AGREEMENT effective as
of the day and year first above written.
ONE EARTH ENERGY, LLC
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GRANTOR: | |||||
An Illinois limited liability company |
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/s/Xxxxxx Xxxxx
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/s/Xxxx Xxxxxx
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STATE OF ILLINOIS
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) | |
| ) ss. | ||
COUNTY OF FORD
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) [/s/JKD] |
On this 17 day of April , 2006, before me, the undersigned, a Notary Public in
and for the State of Illinois , personally appeared Xxxxxx Xxxxx, as President of One
Earth Energy, L.L.C., to me known to be the identical persons named in and who executed the
foregoing instrument on behalf of One Earth Energy, L.L.C., and acknowledged that he executed the
same as his voluntary act and deed.
| /s/Xxxxx X. Xxxxx | ||||
| Notary Public In and For the State of Illinois | ||||
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[Notary Seal]
“OFFICIAL SEAL”
Xxxxx X. Xxxxx
Notary Public, State of Illinois
My commission Expires 00-00-0000
“OFFICIAL SEAL”
Xxxxx X. Xxxxx
Notary Public, State of Illinois
My commission Expires 00-00-0000
XXXXX XX XXXXXXXX
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) | |
| ) ss. | ||
COUNTY OF XXXX
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) |
On this 13th day of April , 2006, before me, the undersigned, a Notary Public
in and for the State of Illinois , personally appeared Xxxx Xxxxxx to me known to be the
identical person named in and who executed the foregoing instrument, and acknowledged that she
executed the same as her voluntary act and deed.
| /s/Xxxxx Xxxxx | ||||
| Notary Public In and For the State of Illinois | ||||
[Notary Seal]
“OFFICIAL SEAL”
XXXXX XXXXX
Notary Public, State of Illinois
My commission Expires 07-25-2009
“OFFICIAL SEAL”
XXXXX XXXXX
Notary Public, State of Illinois
My commission Expires 07-25-2009
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EXHIBIT A
[Attach legal description of Real Estate]
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EXHIBIT A
The West Half of the Southeast Quarter of Section 3, and the Southwest Quarter of Section
3, all in Township 23 North, Range 0 Xxxx xx xxx Xxxxx Xxxxxxxxx Xxxxxxxx, Xxxx Xxxxxx,
Xxxxxxxx.
P.I.N. (00) 00-00-000-000; (00) 00-00-000-000
