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EXHIBIT 10.13
OPTION TO PURCHASE
MINERAL LEASE
Prepared by:
Craig R. Hedin
Attorney at Law
P.O. Drawer C
Mt. Vernon, Illinois
62864
OPTION TO PURCHASE MINERAL LEASE
This
option to purchase Mineral Lease (herein "this Option") is made
this
8th day of June, 2004, by and between the,
COUNTY OF MARION ILLINOIS, with and
address of Marion County Courthouse, 100
East Main St., Salem, Illinois 62881
(herein "Optionor") and BPI INDUSTRIES,
INC., of 501 East DeYoung Street,
Marion, Illinois, 62959, (herein
"BPI").
WHEREAS,
Optionor may own all or a portion of the coal bed methane, coal
seam gas, all gas desorbed from coal or
captured in the coal seam, and all gas
in abandoned mines, void spaces, and zones
in communication therewith, as to the
following described lands (herein "Coal Bed
Gas"); containing approximately
17,882 acres more or less, and,
SEE ATTACHED EXHIBIT FOR LEGAL DESCRIPTIONS
WHEREAS,
Optionor may own all or a portion of the oil, liquid
hydrocarbons, all gases and their
constituent products (except Coal Bed Gas as
defined herein) as to the following
described lands (herein "Oil and Gas"); and,
WHEREAS,
for purposes of this Option, the Coal Bed Gas and the Oil and
Gas
may be referred to jointly as ("the
Minerals"); and,
WHEREAS,
in addition to owning a possible interest in the Minerals,
Optionor would also own the right to
explore, drill for, and produce the
Minerals; and,
WHEREAS,
Optionor desires to grant to BPI and BPI desires to receive
from
Optionor, an Option to purchase a Mineral
Lease as to Optionor's interest in the
Minerals; and,
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WHEREAS,
in the event the Option is timely exercised by BPI, the Option
shall be consummated by the execution and
delivery by Optionor to BPI of a
Mineral Lease in the form as attached
hereto as Exhibit A (herein the "Mineral
Lease"); and,
WHEREAS,
Optionor and BPI desire to enter into this writing for purposes
of setting forth the terms and conditions
of this Option.
NOW,
THEREFORE, for and in consideration of the foregoing recitals,
the
mutual benefits to be derived herefrom and
One Dollar and other valuable
consideration, Optionor and BPI agree as
follows:
1.
OPTION.
For and in consideration of THIRTY THOUSAND DOLLARS
($30,000.00),
herein "the Option Payment"), the receipt
of which is hereby acknowledged,
Optionor gives and grants to BPI the
exclusive option to obtain a Mineral Lease
corresponding to Optionor's interest in the
Minerals pursuant to and upon the
terms and conditions as set forth herein.
In the event the Option is exercised,
the Option Payment shall be applied to any
amounts that may be due and owing
pursuant to the Mineral Lease.
2. PERIOD
OF OPTION.
This Option may be exercised by BPI by giving notice of the
exercise
thereof (herein the "Option Notice") to
Optionor at any time during the period
from the date of this Option until the 8th
day of June, 2007, at 12:00 o'clock,
P.M., (herein the "Exercise Period").
Notice shall be given and may be sent by
personal delivery or by depositing the same
in the United States Mail addressed
to Optionor, postage prepaid and registered
or certified with return receipt
requested with notice being deemed to have
been given and received upon the date
of BPI's posting in the United States Mail
as shown on the postal receipt or the
date of personal delivery if delivered in
this manner. In the alternative, the
notice may be given by prepaid courier
service addressed to Optionor and
requiring the signature of Optionor upon
delivery with said notice being deemed
to have been given and received upon the
date of BPI's delivery to the courier
service as shown on the signed receipt of
the courier service.
3. MINERAL
LEASE.
Contemporaneous with the execution of this Option, Optionor
executes
the Mineral Lease in the form as set forth
on Exhibit A attached hereto. In the
event this Option is timely exercised as
provided herein, BPI shall execute the
Mineral Lease and said lease shall be
deemed delivered to BPI and shall cover
and be effective as to all interest of
Optionor in the Minerals as of the date
of this Option.
4. REVIEW
DURING EXERCISE.
During the Exercise Period of the Option, Optionor will
cooperate
with BPI for purposes of determining the
title of Optionor as to the Minerals
and for purposes of conducting field tests
as to the Minerals. Optionor, upon
request, shall provide to BPI all title
materials corresponding to Optionor's
interest in the Minerals. Optionor shall
also cooperate with BPI in providing
access to the Minerals for purposes of
conducting any test deemed necessary by
BPI to determine the extent and nature of
the Minerals. Such testing may include
the utilization of the surface
corresponding to the Minerals, the drilling for
core samples or for the conducting of
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seismic, and other operations pertaining
thereto. BPI shall indemnify and hold
Optionor harmless from any claim for
damages that may be asserted against
Optionor with respect to BPI's operations
pursuant to the matters set forth in
this paragraph.
5.
MEMORANDUM OF OPTION:
Optionor and BPI shall execute a memorandum of this option and
record the same in the County Clerk and
Recorder's Office in the county where
the Minerals are located. All parties
dealing with Optionor with respect to the
Minerals shall deal and take any interest
subject to the rights of BPI and the
obligations of Optionor as set forth
herein.
6.
SUCCESSION OF ASSIGNMENT.
This Option and the Mineral Lease resulting from the exercise
thereof shall be binding upon and inure to
the benefit of the parties hereto
together with their successors and assigns.
All rights of the parties under this
Option may be assigned without restriction
but notice of such assignment should
be given in writing to the other party.
EXECUTED
the day and year above written.
OPTIONOR
MARION COUNTY, ILLINOIS
BY /s/ Sam Nall
-----------------------
Its Board Chairman
OPTIONEE
BPI INDUSTRIES, INC.
BY /s/ James Azlein
-----------------------
Its President
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MINERAL LEASE
Prepared by:
BPI Industries, Inc.
501 East DeYoung Street
Marion, Illinois 62959
MINERAL LEASE
This
Mineral Lease (herein "this Lease") is made and entered into
this
______ day of ____________, 200__, by and
between COUNTY OF MARION, ILLINOIS,
with the address of Marion County
Courthouse, 100 East Main St., Salem, Illinois
(herein the "Lessor"), and BPI INDUSTRIES,
INC., of 501 East DeYoung Street,
Marion, Illinois 62959, (herein the
"Lessee").
THIS
INDENTURE WITNESSETH:
1. The
Lessor, for and in consideration of Ten Dollars and other
valuable
consideration, the receipt of which is
hereby acknowledged, and for and in
consideration of the covenants and
agreements herein provided on the part of the
Lessee, has granted, demised, leased, and
let, and by these presents does grant,
demise, lease and let unto Lessee, all of
Lessor's title and interest, but only
to the extent in fact actually legally
owned or held by Lessor, in the Coal Bed
Gas (as herein defined) and the Oil and Gas
(as herein defined) underlying the
following described lands and containing
approximately 17,882 acres more or
less:
See
Attached Exhibit For Legal Descriptions
"Coal Bed
Gas" shall mean herein all coal bed methane, coal seam gas, all
gas desorbed from coal or captured in the
coal seam, all gas produced from
abandoned mines, void spaces, and zones in
communication therewith and all
associated hydrocarbons contained therein,
with the right to investigate,
explore, drill, operate, produce, save,
take care of, treat, process, and
transport, and market the Coal Bed Gas.
"Oil and
Gas" shall mean all oil, liquid hydrocarbons, gases, and their
constituent produces except for Coal Bed
Gas together with the right to
investigate, explore, drill, operate,
produce, save, take care of, treat,
process, and transport and market the Oil
and Gas.
Lessor or
its assigns hereby excludes and expressly reserves the right to
explore for, mine, operate, produce, remove
or market coal and other hard
minerals.
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It is
agreed that the right of Lessor or its assigns to explore for,
mine,
operate, produce, remove and market coal or
other hard minerals shall take
precedence and that BPI's rights hereunder
shall be subordinate to those mining
rights. BPI's operations shall not
interfere with any operations by Lessor or
it's assigns with respect to the coal and
other hard minerals.
For
purposes of this lease, Coal Bed Gas and Oil and Gas may jointly
be
referred to as "Minerals".
2. For the
same consideration as set forth above, Lessor grants, demises,
leases, and lets to Lessee the right (a) to
use the seismograph and other
geophysical and geological methods of
exploration; (b) to inject gas, water, and
other fluids and air into the subsurface
strata; (c) to lay pipelines, establish
and utilize facilities for the disposition
of produced substances; (d) to build
roads, bridges, tanks, utility lines, power
stations and other structures; (e)
to undertake recovery by primary and
secondary or other methods; (f) to have the
right of ingress and egress as to lands
described herein or other lands under
lease to Lessee; and (g) to utilize the
surface to the extent of Lessor's title
for all purposes as described herein.
3. This
Lease shall and does include all lands and interest therein
contiguous to or appurtenant to the lands
specifically described herein, and
owned or claimed by Lessor including all
interest in which Lessor has a
preferential right of acquisition or
acquires by reversion or otherwise, whether
or not specifically described herein. This
Lease shall also include all lands
underlying all alleys, streets, roads or
highways and if the land is riparian
to, bounds, or embraces within its
boundaries a stream, lake, or other body of
water, then all of Lessor's interest in the
lands under said bodies of water and
all area now or hereafter added by
accretion. This Lease shall cover all
interest in the lands covered hereby now
owned or hereafter vested in or claimed
by Lessor.
4. This
Lease shall remain in force for a primary term of five (5)
years
from the date hereof and as long thereafter
as Minerals, or any of them, are
being produced from the lands described
herein or land with which said land is
pooled or unitized.
5. If
operations for the exploration of Minerals are not co
