Prepared by and upon recordation return to Christopher Sackett, 666 Grand Avenue, Suite 2000, Des Moines, Iowa 50309; (515) 242-2400. OPTION AGREEMENT
EXHIBIT 10.4
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 March 13 , 2006, by
and between One Earth Energy, LLC, LLC, an Illinois limited liability company (“One Earth”), and
Xxx Xxxxxxx (“Grantor”).
W I T N E S S E T H :
WHEREAS, Grantor owns certain property located in Tolono, Champaign County, Illinois, as
legally described in attached EXHIBIT A (the “Real Estate”), and desires to grant One Earth
an option to purchase approximately eighty-one (81) acres (subject to survey) of such Real Estate
(the “Option Property”) 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 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 by written notice to Grantor at any time during the Option Period. In the
event that One Earth 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.
2. Option Price; Termination. The option price (the “Option Price”) is Seven Thousand
Dollars ($7,000.00), and shall be paid to Grantor upon Grantor’s execution of this Agreement. If
One Earth 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.
3. Purchase Price. The purchase price (the “Purchase Price”) for the Option Property
shall be 1,498,500 ($18,500.00) per acre, 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 shall bear responsibility for
the costs of title insurance and transfer taxes at Closing.
4. Right to Access Property. Grantor shall permit One Earth 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 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’s exercise of the Option, One Earth, at its sole expense,
shall have the Real Estate surveyed to precisely describe the Option Property.
6. Taxes and Assessments; Risk of Loss. Grantor shall pay all real estate taxes that
are a lien on the Option Property and all those that are due and payable in the fiscal year of
Closing. Grantor shall give One Earth 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 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 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’s exercise of the Option, Grantor
shall deliver to One Earth 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, in the amount of the Purchase Price, issued by a title company reasonably
acceptable to One Earth 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. If Grantor fails to remove any title
objections prior to Closing, One Earth may, in its discretion: (a) terminate this Agreement without
liability, in which case the Option Fee shall be returned to One Earth, without limiting any other
remedies that One Earth 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 that Grantor will, on the Closing Date, convey to One Earth 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’s
responsibility under Section 6 above, easements, rights-of-way, streets, and any other matters
affecting title which One Earth agrees to take title subject to pursuant to Section 7 above, and
the rights of existing tenant, Xxx Xxxxxxx, to farm the property during the 2006 crop year.
In the event One Earth exercises the Option, Grantor agrees to cooperate with One Earth in
providing whatever notices are legally required to terminate the farm tenancy of Xxx Xxxxxxx 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 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.
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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’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 a Warranty Deed conveying the Option Property to One Earth 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 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 on or before March 17, 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 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. 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 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.
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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, L.L.C.
By:
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/s/Xxxxxx Xxxxx
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By: | /s/Xxx Xxxxxxx
Xxx Xxxxxxx
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STATE OF ILLINOIS
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COUNTY OF CHAMPAIGN
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On this 17th day of March , 2006, before me, the undersigned, a Notary Public
in and for the State of Illinois, personally appeared Xxxxx Xxxxx, as President of One Earth
Energy, LLC to me known to be the identical persons named in and who executed the foregoing
instrument on behalf of One Earth Energy, LLC, and acknowledged that he executed the same as his
voluntary act and deed.
[Notary Seal] |
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“OFFICIAL SEAL” |
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Xxxxx X. Xxxxxxxxxx |
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Notary Public, Sate of Illinois |
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My Commission Expires 01-15-10
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/s/Xxxxx X. Xxxxxxxxxx
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STATE OF ILLINOIS
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COUNTY OF CHAMPAIGN
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On this 14th day of March, 2006, before me, the undersigned, a
Notary Public in and for the State of Illinois, personally appeared Xxx Xxxxxxx, to me
known to be the identical person named in and who executed the foregoing instrument, and
acknowledged that he executed the same as his voluntary act and deed.
[Notary Seal] |
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“OFFICIAL SEAL” |
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XXXXX XXXXXXXX |
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Notary Public — Sate of Illinois |
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My Commission Expires: 07/29/07
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/s/Xxxxx Xxxxxxxx
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EXHIBIT A
Beginning at the Southeast corner of the North half of Section 30, Township 18
North, Range 9 East of the 3rd P.M. Thence north to the Norfolk
Southern South property line, thence in a Northeasterly direction along the Norfolk
Southern property line 4011 feet, thence South 1,510 feet, thence West along the
South line of the North 1/2 of Section 30 to the place of beginning, containing 81.4
acres.
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