Exhibit 10.68
OPTION
AGREEMENT
This Option Agreement (“Agreement”), dated effective as
of the 28 th day of September, 2005 (“Effective
Date”), is by and between Buckskin Mining Company, a Delaware
corporation (“Buckskin”) and KFx Plant III, LLC, a
Delaware limited liability company (“KFx” and together
with Buckskin, the “Parties”, and each, a
“Party”).
Preliminary
Statement
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A.
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KFx desires to build a K-Fuel plant using the patented
technology of KFx Inc. (the “Plant”) on or adjacent to
the Buckskin Mine.
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B.
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The Parties have agreed to the terms of a Sublease and
Facilities Use Agreement except as provided herein, which agreement
is attached hereto as Exhibit A.
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C.
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The Parties have agreed to the terms of a Coal Supply Agreement
except as provided herein, which agreement is attached hereto as
Exhibit B (together with the Sublease and Facilities Use Agreement,
the “Operative Agreements”).
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D.
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KFx will make a nonrefundable payment to Buckskin of One Hundred
Thousand Dollars ($100,000.00) concurrent with the execution of
this Agreement.
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E.
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KFx will have until January 1, 2007, to cause the Operative
Agreements to become effective as more fully set forth herein.
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F.
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KFX shall be permitted to use certain property of Buckskin to
perform site review for assessing the feasibility of the
construction and operation of the Plant.
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NOW THEREFORE, IN CONSIDERATION OF the mutual promises, terms and
conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
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1.
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Initial Payment. Concurrent with the execution of
this Agreement, KFx will pay to Buckskin, One Hundred Thousand
Dollars ($100,000.00) as consideration for KFx’s receipt of
the Option and negotiation of the Operative Agreements. This
payment is non-refundable, and if not made within five (5) days
after the Effective Date, this Agreement and all rights hereunder
shall automatically terminate.
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2.
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Option . (a) KFx shall have the option to cause the
Operative Agreements to become effective and be in full force and
effect (the “Option”) at any time after the Option
Commencement Date (as defined below) and prior to January 1, 2007
(the “Option Period”). The "Option Commencement Date"
shall mean the date upon which the Parties have agreed upon the
location of the Plant and facilities related thereto and all
exhibits to be attached to the Operative Agreements have been
completed to the mutual satisfaction of the Parties.
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(b) As of the Effective Date, the
Parties have not agreed upon the specific location of the Plant
and/or related facilities on Buckskin's property. Thus, the
Parties will discuss such in good faith in an effort to determine a
mutually agreeable location of the Plant, and facilities related
thereto, for purposes of the
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Operative Agreements; provided however, in the event that
Buckskin determines that the location of the Plant and related
facilities as proposed by KFx are not acceptable to Buckskin (in
Buckskin's absolute and sole discretion), then Buckskin may
terminate this Agreement without any liability or further
obligations to KFx.
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3.
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Exercise of Option. KFx shall only be permitted to
exercise the Option by delivering to Buckskin two copies of
both Operative Agreements in the form attached hereto, with
no changes thereto unless agreed upon by the Parties, signed by
KFX, along with the Letter of Credit required in each Operative
Agreement. KFx is not permitted to exercise the Option in
part and/or at different times; for example, by delivering a signed
copy of only one of the Operative Agreements or delivering a signed
copy of the Operative Agreements on different days.
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4.
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Failure to Exercise. If KFx fails to exercise the
Option within the Option Period as required herein, this Agreement
shall terminate and become null and void and the Operative
Agreements shall not become effective.
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5.
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Execution of Operative Agreements. If KFx
exercises the Option by timely delivery of the Operative Agreements
(and relevant Letters of Credit as required therein) to Buckskin,
then Buckskin shall, within ten (10) days after the delivery
thereof, execute and deliver to KFX a copy of each of the Operative
Agreements. The effective date of the Operative Agreements shall be
the date when the respective agreements are executed by
Buckskin.
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6.
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Grant of License. Upon execution of this Agreement
the letter agreement between the Parties dated August 30, 2005,
hereby terminates, and Buckskin hereby grants to KFx a license
(“License”) pursuant to the following terms:
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(a)
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The License permits KFx to use that portion of Buckskin's
property described on Exhibit A attached hereto (the "Property")
solely for Site Review. Site Review shall mean the use of the
surface of the Property to the extent necessary to conduct
exploratory core drilling and geotechnical sur
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