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EXHIBIT 10.11
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
3rd. day of November, 2003, by and between
the COUNTY OF CLINTON OF THE STATE OF
ILLINOIS, Clinton County Courthouse, 850
Fairfax Street, Carlyle, Illinois
62231, (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"); and,
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,
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,
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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 THREE THOUSAND DOLLARS
($33,000.00), 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
(insert date to 24 months) 3rd. day of
November, 2005, 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
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.
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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
CLINTON COUNTY, ILLINOIS
BY /s/ Roy Kloeckrer
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Its
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BPI
BPI INDUSTRIES, INC.
BY /s/ James Azlein
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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
3rd. day of November, 2003, by and between
CLINTON COUNTY, ILLINOIS, Clinton
County Courthouse, 850 Fairfax Street,
Carlyle, Illinois 62231, (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 land:
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
excludes and expressly reserves the right to explore for, mine,
operate, produce, remove or market coal and
other hard minerals. The right to
explore for, mine, operate, produce,
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remove and market coal and other hard
minerals shall not interfere with any
operation by Lessee with respect to Coal
Bed Gas or Oil and Gas.
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 lon
