EXHIBIT 10.2
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OPTION AGREEMENT
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THIS OPTION AGREEMENT ("Option Agreement") is entered into as of
October 17th, 2001, by ELMER W. FRANK AND IRENE ELIZABETH FRANK, husband and
wife, hereinafter collectively referred to as "Owner" in favor of NORTHWEST
ETHANOL, LLC, an Ohio limited liability company, hereinafter referred to as
"Purchaser."
1. GRANT OF OPTION. The parties referred to in this Option Agreement as
the "Owner" collectively own approximately 150 acres of real property located in
Defiance County, Ohio, which real property is described in Exhibit A, attached
hereto and incorporated herein (the "Owner's Parcel"). In consideration of the
payment of the Option Fee (as hereinafter defined) to Owner by Purchaser, Owner
hereby grants to Purchaser the sole and exclusive right and option (the
"Option") to purchase all of the Owner's Parcel, together with all improvements
and appurtenances thereto. The Owner's Parcel to be purchased by Purchaser, is
herein referred to as the "Premises."
2. TERM. The Option may be exercised by the Purchaser at any time on or
before 5:00 P.M. on March 31, 2002 or, if extended by Purchaser pursuant to the
provisions of Paragraph 3 hereof, on or before September 30, 2002. Purchaser
shall exercise the Option by giving written notice to Owner at the following
address: 07526 SR 18, Hicksville, OH 43526.
3. OPTION FEE. On the date hereof, Purchaser agrees to deliver to Owner
the sum of Five Hundred Dollars ($500.00) (the "Option Fee"), receipt of which
is hereby acknowledged. In the event that Purchaser has not exercised the Option
prior to March 31, 2002, Purchaser may deliver to Owner, on or before such date,
an additional option fee of Five Hundred Dollars ($500.00) (the "Additional
Deposit") in consideration of which Owner shall extend the term of the Option
for an additional six (6) month period. Purchaser's failure to deliver the
Additional Deposit on or before such date shall terminate the Option and Owner
shall be entitled to retain the Option Fee. In the event that Purchaser
exercises the Option, the Option Fee and, if applicable, the Additional Deposit
shall be applied to the purchase price of the Premises.
4. FAILURE TO EXERCISE OPTION. If Purchaser does not exercise the
Option, Owner shall retain the Option Fee, but the Additional Deposit, if
applicable, shall be refunded to Purchaser.
5. PURCHASE PRICE. The total purchase price for the Premises shall be
the product of the net acreage of the Premises, as delineated by the Survey
contemplated by Section 6(c) hereof, multiplied by the sum of Three Thousand
Dollars ($3,000.00) per acre for each acre (which amount shall be prorated for
any part of the Premises that is less than a full acre). Purchaser shall pay the
purchase price to Owner pursuant to the terms of a Real Estate Purchase
Agreement to be entered into between the parties following Purchaser's exercise
of the Option (the "Purchase Agreement") which Purchase Agreement shall allocate
to each of the Owners that portion of the purchase price that is attributable to
the Premises owned by such Owner.
6. EXERCISE OF OPTION. The purchase price, contingencies and other
terms of acquiring the Premises, should Purchaser exercise the Option, shall be
contained in the Purchase Agreement containing the following terms:
a. Conveyance. The Premises shall be conveyed to Purchaser, or
its nominee, by general warranty deed, free and clear of all liens and
encumbrances whatsoever, except for real estate taxes and general and
special assessments not then due and payable and such easements,
reservations, limitations and restrictions as Purchaser shall approve.
b. Closing. The transaction shall close on a date (the
"Closing Date") set by Purchaser, which date shall be sixty (60) to
ninety (90) days following the date Purchaser exercises the Option.
c. Title Policy and Survey. Owner shall supply Purchaser with
an ALTA owner's policy of title insurance insuring that title to the
Premises is as described in Section 6(a) above. Owner shall supply
Purchaser with an ALTA/ACSM survey of the Premises made by a licensed
surveyor (the "Survey"), which Survey shall contain a calculation of
the total acreage of the Premises, exclusive of portions thereof within
public highways or streets (the "net acreage") and shall also contain
the location of all easements, encroachments, utility lines, access to
public highways abutting the Premises, all improvements located on the
Premises, a legal description for the Premises and shall confirm that
the internal boundaries of any parcels comprising the Premises are
contiguous to each other without any gap or gore. The Survey and the
title insurance policy shall be in form and substance satisfactory to
Purchaser.
d. Owners shall be entitled to rent the residential portion of
the Premises for the term of their natural lives at an annual rental
rate of one dollar per year. Owners shall be responsible for all
utilities, insurance, repairs and other costs of occupancy during such
term. Purchaser shall pay all real estate taxes during such term.
Owners' rights shall be personal and cannot be transferred (through
lease, gift, or other method).
e. Taxes. All taxes, assessments or utility charges related to
the Premises shall be prorated between the parties as of the Closing
Date, with the Closing Date being treated as a day of ownership by
Seller.
f. Other Conditions. The parties shall agree to such other
terms and conditions as are necessary and appropriate to close the
transaction contemplated by this Option. In the event of a disagreement
over such terms, those terms and conditions as are customary in similar
real estate purchase agreements in Defiance, Ohio shall control to the
extent not inconsistent with the terms and conditions contained herein.
In the event there are growing crops on the premises at the time of
closing, Purchaser shall assume all rights and duties of Owner with
respect to such crops including all obligations to the then current
tenant.
7. ENTRY FOR INSPECTION. During the term of the Option, Owner shall
provide Purchaser and Purchaser's agents or representatives with complete access
to the Owner's
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Parcel for the purpose of conducting such inspections, engineering studies,
surveys, appraisals, test borings or any other activities reasonably required by
Purchaser in order to determine the suitability of the Owner's Parcel for
Purchaser's purposes (collectively, the "Inspections"). The right to conduct
Inspections shall include the right to enter upon any portion of the Owner's
Parcel to take measurements, make inspections, make boundary and topographical
survey maps, and to conduct geotechnical, environmental, groundwater, wetland
and other studies required by Purchaser, in its sole discretion, and to
determine the adequacy of utilities servicing the Owner's Parcel, zoning
ordinances and compliance with laws. No such Inspections shall constitute a
waiver or relinquishment on the part of Purchaser of its rights under any
covenant, condition, representation or warranty of Owner under this Agreement.
Upon execution of this Option Agreement, Owner shall deliver to Purchaser, at no
cost to Purchaser, such of the following as are in the possession of or
available to Owner: existing soil and groundwater tests, surveys, contracts,
leases, title policies, environmental reports, underground storage tank test
results, waste disposal records, permit records, traffic studies, other
engineering tests and studies pertaining to the Owner's Parcel, all existing
site plans, drawings, architectural drawings or other plans related to the
development or proposed development of the Owner's Parcel. Owner shall cooperate
with Purchaser during the Inspections and hereby agrees to attend all meetings
relating to Purchaser's intended use of the Premises, as well as all site plan
approval meetings. Purchaser shall pay for any crop damage incurred by exercise
of the rights granted in this paragraph.
8. NOTICE. All notices provided for herein shall be personally
delivered, by United States certified mail, return receipt requested or sent by
a nationally recognized overnight package carrier delivered to Purchaser at 101
Clinton Street, Suite 1500, Defiance, Ohio 43512, Attn: Ted Penner, and to Owner
at the address specified in Section 2 above. Either party shall have the right
to designate a new address for the receipt of such notices by written notice
given as aforesaid.
9. ASSIGNMENT. This Option Agreement and all rights hereunder shall be
freely assignable by Purchaser. If Purchaser shall assign the same, all acts to
be performed by Purchaser with respect to this Option Agreement and the Purchase
Agreement, including payment of the purchase price, may be performed by any such
assignee, whether the assignment is made prior to or after the exercise of the
Option.
EXECUTED as of the date first above written.
Witnessed By: OWNER:
/s/ Wayne E. Shaffer /s/ Elmer W Frank
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Witness 1 - Signature Elmer W. Frank
Wayne E. Shaffer
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Witness 1 - Print or Type Name
/s/ Elaine K. Webster
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Witness 2 - Signature
Elaine K. Webster Date: October 17, 2001
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Witness 2 - Print or Type Name
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/s/ Wayne E. Shaffer /s/ Irene Elizabeth Frank
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Witness 1 - Signature Irene Elizabeth Frank
Wayne E. Shaffer
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Witness 1 - Print or Type Name
/s/ Elaine K. Webster
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Witness 2 - Signature
Elaine K. Webster Date: October 17, 2001
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Witness 2 - Print or Type Name
PURCHASER:
Witnessed By:
NORTHWEST ETHANOL, LLC
an Ohio limited liability company
/s/ Ted W. Penner By: /s/ Eugene H. Schubert
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Witness 1 - Signature
Ted W. Penner Printed Name: Eugene H. Schubert
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Witness 1 - Print or Type Name
/s/ Virgil H. Hoene Its: Vice President
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Witness 2 - Signature
Virgil H. Hoene Date: 10-17-01
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Witness 2 - Print or Type Name
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STATE OF OHIO )
) SS.
COUNTY OF WILLIAMS )
The foregoing instrument was acknowledged before me this 17TH day of
OCTOBER, 2001 by Elmer W. Frank and Irene Elizabeth Frank.
/s/ Wayne E. Shaffer
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Notary Public, State of Ohio
My Commission has no expiration date.
STATE OF OHIO )
) SS.
COUNTY OF DEFIANCE )
The foregoing instrument was acknowledged before me this 17TH day of
OCTOBER, 2001 by EUGENE H. SCHUBERT of Northwest Ethanol, LLC, an Ohio limited
liability company on behalf of the company.
/s/ Ted W. Penner
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Notary Public
Notarial Seal Ted W. Penner, Attorney At Law
State of Ohio Notary Public, State of Ohio
My commission has no expiration date.
Section 147.03 R.C.
This Instrument Prepared By:
Ted W. Penner, Esq.
101 Clinton St.
Suite 1500
Defiance, OH 43512
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