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Exhibit
10(i)
OPTION TO PURCHASE
AGREEMENT
THIS OPTION TO PURCHASE
AGREEMENT (the “Agreement”) is made and entered into as
of 3 29, 2007 (the “Effective Date”), by and between
the Arvilla Mae Wiggers Trust, the Orville E. Wiggers Trust, the
Herby Wenger Family Living Trust dated February 27, 1991, and
the Velma I. Wenger Revocable Trust dated November 16,
1999 , with their address c/o Warren Wiggers at 109 Meadow
Lane, Hesston, Kansas 67062 (collectively, the
“Optionor”), and U.S. Bio Energy, Inc., a Kansas
corporation, with its address at 101 E. Industrial Drive, Sedgwick,
Kansas 67135 (the “Optionee”).
WITNESSETH:
WHEREAS , the Optionor
is the owner of certain real property comprised of approximately 60
acres and located on North Emma Creek Road in Hesston, Harvey
County, Kansas, as more particularly described on Exhibit
‘A’ attached hereto, and all buildings and
improvements, if any, thereon and all appurtenances thereto and
rights associated therewith (such real estate, together with the
buildings, improvements, rights and appurtenances, collectively is
referred to as the “Real Property”); and
WHEREAS , the Optionor
desires to grant to Optionee, and Optionee desires to obtain from
Optionor, an exclusive option to purchase the Real Property for the
period commencing on the Effective Date, and extending for a period
of eighteen (18) months thereafter;
NOW THEREFORE , in
consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, Optionor and Optionee hereby agree as
follows:
Optionor, in consideration of
the payment of a nonrefundable $1,000.00 fee by Optionee on the
Effective Date hereof (the “Initial Deposit”), agrees
to sell and convey the Real Property to Optionee, or its successors
and assigns, upon the notice as provided in Section 3 herein
(the “Option”), at any time after the Effective Date
and continuing for a period of eighteen (18) months
thereafter, through and including 9/29, 2008 (the “Option
Period”). This Option shall be exclusive to the Optionee
during the Option Period. If Optionee does not exercise the Option
during the first six (6) months of the Option Period, Optionee
shall be required to pay, within ten (10) days after the end
of the sixth month of the Option Period, an additional
nonrefundable deposit fee in the amount of $5,000.00 (the
“Additional Deposit”). If Optionee thereafter does not
exercise the Option during the seventh through the twelfth months
of the Option Period, Optionee shall be required to pay, within ten
(10) days after the end of the twelfth month of the Option
Period, a second additional nonrefundable deposit fee in the amount
of $10,000.00 (the “Second Additional Deposit”). The
Deposit, Additional Deposit and Second Additional Deposit shall be
collectively referred to herein as the “Deposit”. Each
Deposit shall be
paid to Regier Title, Inc. (the
“Escrow Agent”), for the benefit of Optionor. Upon
receipt of any Deposit, Escrow Agent shall invest such Deposit in
an institution insured by the Federal Deposit Insurance
Corporation. All interest earned on the Deposit shall be deemed a
part of the Deposit, and shall be disbursed or credited in the same
manner as the Deposit pursuant to the terms, covenants and
conditions of this Agreement.
If Optionee elects to
exercise its Option to purchase the Real Property, the purchase
price shall be $6,000.00 per acre (the “Purchase
Price”), payable in readily available funds at Closing (as
such term is defined below). The Deposit paid pursuant to
Section 1 herein plus any interest shall be credited against
the Purchase Price at Closing.
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3. |
Notice of Exercise of Option |
If the Optionee elects to
exercise the Option to purchase the Real Property in accordance
with the terms hereof, notice of such election shall be given by
Optionee to Optionor by either hand delivery, registered or
certified mail, return receipt requested, or via overnight courier,
to Optionor c/o Warren Wiggers, with his address at 109 Meadow
Lane, Hesston, Kansas 67062, prior to the expiration of the Option
Period.
A. Physical
Inspections . Beginning on the Effective Date and continuing
through the end of the Option Period, Optionee and its contractors,
employees, agents and assigns, shall have the right and permission
to enter upon the Real Property at any time from time to time (so
long as 24 hours advance notice has been given to Optionor) for the
purpose of inspecting the Real Property and, testing, making
surveys, conducting surface or sub-surface soil and geotechnical
tests, conducting topography tests, engineering tests,
environmental tests and any other tests at the Real Property as
Optionee may deem necessary in its sole discretion (the
“Inspections”), and all at Optionee’s expense.
Optionee shall indemnify and hold Optionor harmless from and
against all claims, demands, suits, assertions, causes of action
and expenses, including, without limitation, attorney’s fees,
arising out of, as the result of or in connection with the
Inspections by Optionee, and the agents and representatives of
Optionee at the Real Property. In the event that the rights granted
under this Section result in any crop damage or other damage to the
Real Property, Optionee shall reimburse Optionor for such damages
within a reasonable period of time after the amount of the same is
determined.
B. Deed
Restrictions/Zoning . Beginning on the Effective Date and
continuing through the end of the Option Period, Optionee shall
have the right to verify, to its own satisfaction, that there exist
no easements, deed restrictions, subdivision restrictions or
regulations of any lawful governmental authority having
jurisdiction over the Real Property, including, without limitation,
regulations issued by the local zoning board, which will adversely
affect or impair the use of the Real Property for Optionee’s
intended use, and, furthermore, that the Real Property is properly
zoned or can be zoned for Optionee’s intended use. Optionee
shall further be entitled to seek a change in zoning for the Real
Property if necessary for Optionee’s intended use of the Real
Property, and Optionor agrees to cooperate with Optionee in such
zoning change process.
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C. Title . Beginning
on the Effective Date and continuing through the end of the Option
Period, Optionee shall have the right to obtain a title insurance
commitment from a national title insurance company setting forth
the commitment of such title insurance company to issue an
owner’s and/or mortgagee title insurance policy on the
standard American Land Title Association (“ALTA”) form
for an amount not less than the Purchase Price and subject to no
liens, encumbrances and other title exceptions or defects, except
easements of record and all restrictions as to use and applicable
regulations imposed by the Planning and Zoning Commission, and
expressly insuring against the claims of any persons in possession
of all or any part of the Real Property
D. Survey . Beginning
on the Effective Date and continuing through the end of the Option
Period, Optionee shall, at Optionee’s expense, have the right
to obtain an accurate ALTA survey of the Real Property satisfactory
to Optionee prepared by a registered land surveyor licensed by the
State of Kansas (i) showing the boundaries of the Real
Property and the locations of all easements, rights-of-way, curb
cuts, structures and other improvements, encroachments, overlaps,
bodies of water, officially designated flood hazard areas, nearest
public street or highway, public utilities, and building set-back
lines on, under or affecting the Real Property, if any,
(ii) showing the adjoining property owners, (iii) staking
the corners of the Real Property with permanent iron stakes,
(iv) containing a complete legal description of the Real
Property, (v) certifying the exact acreage and the exact
square footage of the Real Property, exclusive of any portion used
or dedicated for public rights-of-way, which shall be used to
determine the Purchase Price, and (vi) stating whether all or
any part of the Real Property lies within a flood hazard area (the
“Survey”). In all other respects, the Survey shall meet
the requirements of any governmental agency having jurisdiction
over the Real Property and any requirements of the title insurance
company of Optionee and Optionee’s lender necessary to comply
with any and all applicable regulations.
A. Closing . If
Optionee exercises the Option, the closing on the purchase of the
Real Property by Optionee from Optionor shall occur within sixty
(60) days from the date of the exercise of the Option by the
Optionee (the “Closing”), at a time and place that is
mutually agreed upon by Optionor and Optionee.
B. General Warranty
Deed . Upon the exercise of the Option, the Optionor shall
execute, acknowledge, and deliver to Optionee, at Closing, a good
and sufficient general warranty deed conveying fee simple title to
the Real Property and all improvements thereon, free and clear of
all liens, encumbrances, and other defects in title. If a defect in
the title to the Real Property is identified by Optionee pursuant
to Section 4(C) and Optionor agrees to cure said defect(s),
all costs and expenses of curing such defects in the title shall be
borne by the Optionor, and any such costs and expenses, together
with all moneys required for the satisfaction of delinquent taxes,
liens, or encumbrances, may be subtracted from the Purchase Price
and applied directly to the curing of such defects, if any, and to
the satisfaction and release of such taxes, liens, and
encumbrances. In the event Optionor refuses to cure any title
deficiencies
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identified pursuant to
Section 4(C), but Optionee nonetheless proceeds to close the
transaction, all costs and expenses of curing such defects in the
title shall be borne by the Optionee excepting that the cost of
curing delinquent taxes, liens and encumbrances shall remain
Optionor’s responsibility. Optionee acknowledges that a
pipeline currently exists on and across the Real Property and that
the presence of said pipeline is an acceptable exception to the
status of the title to the Real Property.
C. Real Property Taxes
. All real property ad valorem taxes and assessments against the
Real Property for the then current tax year shall be prorated
between Optionor and Optionee as of the date of Closing; such taxes
shall be estimated in accordance with the taxes assessed against
the Real Property for the tax year prior to the year in which the
Closing occurs.
In compliance with Kansas
law, Optionor hereby discloses to Optionee that to the best of
Optionor’s knowledge, the Real Property is not subject to
special assessments and is not located in an improvement
district.
D. Closing Costs .
Optionee shall pay the recording fee for the deed and any documents
relating to Optionee’s financing of the Purchase Price, if
any. Except as provided otherwise, Optioner and Optionee will share
equally in the costs of Closing. All title examination fees and
title insurance premiums necessary to provide Optionee with an
owner’s policy of title insurance and Optionee’s
lender, if applicable, with a loan policy of title insurance shall
be paid 50% by Optioner and 50% by Optionee, except Optionee shall
pay the costs of all endorsem
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