OPTION AGREEMENT
IN CONSIDERATION of the sum of One and 00/100 Dollars ($1.00) and other
good and valuable consideration ("Option Price"), the receipt of which is hereby
acknowledged, Xxxxx Xxxxxx and Xxxxx Xxxxxx, husband and wife, (Owner) hereby
grants to Granite Falls Community Ethanol Plant, LLC, ("Granite"), an exclusive
option to purchase approximately 31.72 acres of real property described as:
THE NORTHEAST QUARTER OF THE NORTHEAST QUARTER (NE3NE3) OF SECTION ONE
(1), TOWNSHIP ONE HUNDRED FIFTEEN (115), RANGE THIRTY-NINE (39),
EXCEPTING THEREFROM THE RIGHT OF WAY OF MINNESOTA HIGHWAY 23
located in Chippewa County, Minnesota, (the "Option Property") on the terms and
conditions set forth below:
1. TIME TO EXERCISE OPTION. This option shall be exercised by written
notice delivered to Owner by certified mail postmarked no later than December
31, 2002, or by personally delivering the notice to Owner no later than December
31, 2002 at 5:00 p.m. This Option is exclusive to Granite for the duration of
the option period and Owner shall not grant any options or agree to sell any
other interest in the Option Property to any other persons or entities at any
time while the option granted herein remains exercisable.
2. LAND PURCHASE PRICE. The purchase price, in the event of the
exercise of the option, shall be in the sum of One Hundred Sixty Eight Thousand
and 00/100 Dollars ($168,000.00), which includes the option price set forth
above.
3. TESTS AND INVESTIGATIONS ON PROPERTY. Granite shall, at Granite's
sole costs and expenses, have the right to conduct tests and investigations on
the Option Property prior to the time of exercise of this Option. Xxxxxxx agrees
to indemnify and hold Owner harmless from and against all costs, expenses,
damages, claims, and causes of action arising out of Xxxxxxx's activities on the
Option Property prior to the time of exercise of the Option. Granite's
activities on the Option Property may include, but not be limited to:
a. Soil tests and soil borings.
b. Any well drilling or other tests with respect to
investigation of the adequacy and quality of water
resources.
c. Any search of the Option Property or property of
Owner adjacent thereto for purposes of verifying that
no abandoned xxxxx are in existence within the
vicinity of the facility.
d. The parties understand that the foregoing tests are
intended to include but do not limit Granite from
performing all other tests and investigations as may
be necessary to determine the suitability of the
Option Property for construction and operation of an
Ethanol plant and related facilities and fixtures
(the "Plant").
e. Granite agrees that the testing and investigation
shall be conducted, to the extent reasonably possible
at a time and in a manner so as to not unduly
interfere with farming operations being conducted on
or about the Option Property. To the extent any crop
damage occurs as a result of Xxxxxxx's testing or
investigation, Xxxxxxx agrees to reimburse Owner for
the reasonable value thereof.
4. PRELIMINARY WORK. Prior to exercising its option, Granite may, after
notifying Owner, perform such preliminary earth moving or other initial site
preparation or other investigation of the site so long as Granite provides
financial assurance to Owner that is adequate to restore the property if the
option is not exercised by Granite.
5. PERMITTING. Owner understands that Granite will be required to
obtain permits and/or certifications from Federal, State, County and/or local
governmental units prior to construction and operation of the Plant. Owner
agrees to permit Granite to do such things as may be necessary to obtain such
permits and agrees to offer reasonable assistance in providing any information
or complying with any directives or orders issued by said governmental units
which may arise during any permitting or approval process.
6. SURVEY AND ROAD. The parties agree that on or before closing, they
must mutually agree on:
a. A survey of 31.72 acres more or less describing the
property which is the subject matter of this Option.
The parties shall equally share the costs of any such
survey.
b. Enter into an Agreement with respect to maintenance,
upkeep and repair of any driveway servicing the
property and the costs of any such maintenance which
shall be allocated on the basis of usage made of the
driveway by the respective parties.
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7. CLOSING. The closing shall take place at such time and place
mutually agreed to between the parties within thirty (30) days of completion of
the survey of the Option property and following Xxxxxxx's exercise of this
Option. In the event that Granite exercises this Option, then Owner shall
immediately forward to Granite (at Owner's expense) an updated abstract for
examination of title. Granite shall be allowed 20 days after receipt of the
abstract to make any objections with regard to title which shall be made in
writing and delivered to the Owner. If any objections are made, Owner shall have
90 days to make title marketable. Pending correction of title, the date of
closing shall be postponed, but upon correction of title within ten days after
written notice thereof to Granite, the closing shall be held. If title is not
correct, to the reasonable satisfaction of Granite, within the time provided
for, then at Granite's option, this Agreement shall be null and void and the
Option Price shall be refunded to it.
8. MISCELLANEOUS.
a. POSSESSION. Possession shall be delivered to Granite
Falls Community Ethanol Plant, LLC.
b. CLOSING COSTS. Each party shall be responsible for
paying those expenses normally paid by a purchaser or
seller of like kind real estate in the State of
Minnesota.
c. TAXES AND ASSESSMENTS.
i. All real estate taxes and assessments due
and payable in the year of closing shall be
pro rated between the parties.
ii. In the event that the sale of the Option
Property accelerates the payment of real
estate taxes and any other special
assessments on Owner's property other than
the Option Property, then Owner agrees that
all such accelerated taxes shall be paid by
Owner at the time of closing.
d. CROPS. If the date of closing occurs and there are
growing crops on the Option Property, then Granite
Falls Community Ethanol Plant, LLC may, at it's
option, do the following
i. Take title of the growing crops on the
Option Property, and pay Owner the mutually
agreed value of such crops, or
ii. Permit Owner to enter upon the Option
Property and promptly harvest such crops for
Owner's sole benefit.
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e. WARRANTY. Owner represents and warrants that there
are no active or abandoned xxxxx or underground
storage tanks on the Option Property.
f. EXPIRATION. If Granite does not exercise the option
granted hereunder, this Agreement shall terminate
upon the expiration of the option term and Granite
will deliver to Owner an instrument in writing and in
recordable form acknowledging the termination of this
Agreement and the non-exercise of its option to
purchase. If Granite does not exercise this Option on
account of not receiving all required local, county
and state permits by December 31, 2002, then the
Option Price shall be returned to Granite, - this
Agreement shall be null and void and neither party
shall have any claim or further responsibility to the
other. In the event that Granite does not exercise
its option for any other reason, Owner shall retain
the Option Price and neither party shall have any
claim against or further responsibility to the other.
g. NOTICES. All notices and other communications
required or permitted to be given or served under
this Agreement shall be in writing and shall be
deemed to have been duly given if delivered in person
or deposited in the U.S. Mail, postage prepaid, for
mailing by certified mail, return receipt requested,
as follows:
OWNER:
Xxxxx & Xxxxx Xxxxxx
Route 3, Box 98
Granite Falls, MN 56241
GRANITE FALLS COMMUNITY ETHANOL PLANT
c/o Xxxx Xxxxxx
0000 000xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
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h. SUCCESSORS BOUND. This Agreement is binding upon the
heirs, successors and assigns of the parties. Any
assignment of this Option Agreement by Granite shall
require the prior written consent of Owner.
Dated this 21st day February, 2001.
OWNER:
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
GRANITE FALLS COMMUNITY
ETHANOL PLANT
By /s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
Its Chairman
-----------------------------
State of Arizona )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this 21st day of
February, 2001, by Xxxxx Xxxxxx and Xxxxx Xxxxxx, husband and wife.
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Notary Public
State of Minnesota )
) ss.
County of Yellow Medicine )
On the 27th day of February, 2001, before me, personally appeared Xxxx
Xxxxxx, to me personally known, who, being by me duly sworn, did say that he is
the Chairman of Granite Falls Community Ethanol Plant, LLC, the limited
liability named
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in the foregoing instrument, and that said instrument was signed and sealed on
behalf of said limited liability company by authority of its Governors, and said
Xxxx Xxxxxx acknowledged said instrument to be the free act and deed of said
limited liability company.
/s/ Xxxxxxx X. Xxxx
----------------------------------
Notary Public
This Instrument Was Drafted By:
Xxxxxxx X. Xxxx
XXXXXXXXX & XXXX, PLLP
000 Xxxxxxxx Xxxxxx - XX Xxx 00
Xxxxxxx Xxxxx, XX 00000
320/564-3825
Attorney ID No: 59171
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EXTENSION OF OPTION AGREEMENT
The undersigned, having entered into an Option Agreement dated February
21, 2001, do hereby agree to extend the option as follows:
1. Section 1, Time to Exercise Option, is hereby amended to provide
that the references to December 31, 2002, shall be amended and replaced with
December 31, 2003, thereby extending the time to exercise the option for one
year.
2. Section 8 (f) is hereby amended to provide that references to
December 31, 2002, shall be amended and replaced with December 31, 2003, thereby
extending the date to which Granite Falls Community Ethanol Plant will have to
obtain all required permits and operating authorities.
3. In all other respects, the terms and conditions of the Option
Agreement shall remain as stated.
Dated this 22nd of April, 2002.
OWNER:
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
GRANITE FALLS COMMUNITY
ETHANOL PLANT
By /s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
Its: Chairman
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STATE OF MINNESOTA )
)ss.
COUNTY OF LYON )
The foregoing instrument was acknowledged before me this 22nd day of
April, 2002, by Xxxxx Xxxxxx and Xxxxx Xxxxxx, husband and wife.
/s/ Xxxxx Xxxxxx Xxxxxx
----------------------------------
Notary Public
STATE OF MINNESOTA )
)ss.
COUNTY OF YELLOW MEDICINE )
On the 25th day of April, 2002, before me, personally appeared Xxxx
Xxxxxx, to me personally known, who, being by me duly sworn, did say that he is
the Chairman of Granite Falls Community Ethanol Plant, LLC, the limited
liability named in the foregoing instrument, and that said instrument was signed
and sealed on behalf of said limited liability company by authority of its
Governors, and said Xxxx Xxxxxx, acknowledge said instrument to be the free act
and deed of said limited liability company.
/s/ Xxxx Xxx Eye
----------------------------------
Notary Public
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