EXHIBIT 10.2


	
  STATE OF ALABAMA

  	
  )

  
	
  COLBERT COUNTY

  	
  )

  



 


OPTION AGREEMENT


THIS OPTION AGREEMENT (the “Agreement”) is by and between
Colbert County Commission (the “Optionor”) and Tennessee Valley Agri-Energy,
LLC (“Optionee”) as of the 13th day of May,
2007


WITNESSETH:


WHEREAS, Optionor is the owner of a certain parcel of
land situated in Colbert County, State of Alabama, the general parameters
thereof being labeled as Tract 13 on Exhibit “A” attached hereto and made a
part hereof by reference, together with the easements, appurtenances, and
rights thereunto belonging (collectively, the “Property”); and


WHEREAS, Optionee desires to acquire an option to purchase
the Property or a portion thereof (the “Option”) on the terms and conditions hereinafter
set forth, and Optionor is willing to grant such Option;


NOW THEREFORE, in consideration of the Property, the
payment by Optionee to Optionor of the sum of Two Hundred & Fifty Dollars
($ 250.00 the “Initial Option Fee”) plus legal, filing and any other related customary
fees ($5,000 maximum excluding land surveys) incurred by Optionor, which
Initial Option Fee shall be applied to the Purchase Price at Closing, the
promises and covenants hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:


1.                                       Option. Optionor hereby
grants, bargains, sells, and conveys to Optionee the Option to purchase the
Property for the Purchase Price (as hereinafter defined) for the purpose of
constructing an ethanol producing plant thereon and subject to the terms and
conditions hereinafter set forth.


2.                                       Initial Option Period. The Initial Option
Period shall start on the 13th day of November,
2006 and end on the 13th day of May, 2007.


3.                                       Extended Option Period. If the Optionee is in
compliance with all requirements set forth in this Option Agreement and the
Optionee has obtained all necessary transmission and construction permits, the
Optionee may extend the option period to the 13th day of August, 2007 (“Extended
Option Period”) by providing proof of ownership of all construction permits
necessary to construct and operate the above noted facility, a written request
to extend the Option period and payment of ($250.00 the “Extended Option
Fee”) to the Optionor on or before May 13th, 2007.


4.                                       Purchase Price. The purchase price (“the
Purchase Price”) for the Property, which consists of approximately 60 acres,
shall equal Fifteen 











Thousand Dollars ($ 15,000.00) per acre as
established by the survey required in Section 8 of this document.


5.                                       Exercise of Option. The Notice of
Exercise, the Request to Extend the Option Period and other relevant written
notices shall be sent to Colbert County Commission at the following address:
201 N. Main, Courthouse Tuscumbia, AL 35674.


6.                                       Closing:


(a)                                  Upon exercise of the
Option as herein provided, the closing (the “Closing”) of the purchase and sale
of the Property shall be consummated within thirty (30) days of receipt of the
Notice of Exercise. upon such date and at such place as Optionor and Optionee
may reasonably agree. If the Closing is delayed as a result of the act or
failure to act of Optionor in which event the date for Closing shall be
extended until such time as Optionor has complied with its obligations
hereunder.


(b)                                 Conveyance of the
Property by Optionor shall be by general warranty deed (the “Deed”) in a form
acceptable to Optionee, conveying fee simple, merchantable title to the
Property and subject only to itemized matters acceptable to Optionee,
including, but not limited to covenants, restrictions, and, easements of record
as of the date hereof (the “Permitted Exceptions”), matters of survey and taxes
for the current year. The Property shall be subject to a 100 foot easement
along the northern boundary (the exact location to be determined by Optionor
and be reasonably agreeable to Optionee for transportation and utilities to the
port location indicated on Exhibit “A”. At Optionee’s election, the legal
description used in the Deed shall be a legal description based upon the Survey
(as hereinafter defined).  Optionee shall
be responsible for the cost of preparing the deed.


(c)                                  Real estate taxes, if
any, with respect to the Property shall be prorated between Optionor and
Optionee as of the date of the Closing in accordance with the custom and
practice in Colbert County.


(d)                                 Optionor shall furnish,
at its expense, Optionee with an ALTA Form B Title Insurance Commitment showing
all liens, claims, and encumbrances (including easements, covenants, and
restrictions) affecting title to the real property. Copies of all underlying
title documents referred to in the title commitment report are to be included.


(e)                                  Conveyance of the
Property by Optionor to Optionee shall include a Right of Refusal and
Repurchase Option to be executed at Closing, including but not limited to, the
terms set forth on Exhibit “B” attached hereto.











(f)                                    Optionor shall provide
to Optionee copies of all relevant studies and 
documentation related to the property, including environmental reviews
and/or soil testing that have been performed to date. Optionee shall provide Optionor
copies of all property reviews, tests, surveys and other relevant studies
conducted during the initial or extended option period.


7.                                       Hazardous Waste. This Option Agreement
is contingent on the Property containing no solid waste or materials, the
disposal of which is regulated by any applicable federal, state or local law,
including, without limitation, waste, pollutants or materials deemed to be “hazardous
substances”. Hazardous substances shall mean any and all hazardous substances,
toxic materials,  pollutants, hazardous
or toxic waste defined in any federal, state, county or municipal law, rule,
regulation or ordinance. Optionee may, at its expense, conduct Phase I and II
environmental studies on the property during the Option Period.


8.                                       Representations and
Warranties of Seller. Optionor hereby warrants and represents to Optionee
that:


(a)                                  Optionor represents that
Optionor is the owner or representative of the Property and has full power and
absolute authority to enter into this Agreement and to grant the Option and
thereafter to convey the Property as herein set forth at the Closing.


(b)                                 To the best of Optionor’s
knowledge and information, Optionor hereby represents and warrants to Optionee
that there are no environmentally hazardous materials on or affecting the
Property, and further, that the Property, to the best of Optionor’s knowledge
and information, is in compliance with all applicable federal and state and
local environmental laws, rules and regulations including, but not limited to,
CERCLA, RCRA and all judicial and administrative interpretations thereof,
including any judicial or administrative orders, directives and judgments.


(c)                                  No broker’s commission
is due and owing to any broker for services 
rendered to Seller in connection with the transaction contemplated
herein. Optionor hereby agrees to indemnify and hold Optionee harmless from and
against any claim of any broker for any such fees or commissions resulting from
any such services allegedly rendered to Optionor.


9.                                       Survey. Optionee shall at its
expense, have a boundary survey (the “Survey”) of the Property prepared by a
Registered Land Surveyor during the Option Period, a copy of which shall be
provided to the Optionor.


10.                                 Failure to
Exercise/Close.


(a)                                  In the event Optionee
fails to exercise its Option to purchase the Property or, in the event Optionee
exercises the Option and then 











fails or refuses to purchase the Property,
Optionor shall have the right to cancel this Agreement and retain the Option
Fee. Notwithstanding the foregoing, if Optionee elects not to purchase the
property due to a breach of Optionor’s representations and warranties contained
herein, the Option Fee shall be returned to Optionee.


(b)                                 In the event Optionor
fails or refuses to comply with this Agreement, Optionee shall have the right
to cancel this Agreement and recover the Option Fee or to pursue other remedies,
including the remedy of specific performance. Optionor shall be liable for and
shall pay all costs and expenses incurred by Optionee arising out of or in
connection with or resulting from the failure or refusal of Optionor to close
the purchase of the Property as set forth herein, including, but not limited
to, legal fees and costs incurred in connection with Optionee’s efforts to
purchase the property.


11.                                 Notices. Any notice provided
pursuant to this Agreement shall not be deemed to have been duly given or
served unless in writing and forwarded by hand delivery, by certified U.S.
Mail, postage prepaid, addressed to a party at its principal business address.
Notices shall be deemed effective upon receipt if delivered by hand and upon
the deposit thereof in the U.S. Mail.


12.                                 General. This Agreement shall be
binding and inure to the benefit of the parties hereto, their successors and
assigns. The laws of the State of Alabama shall govern this Agreement.


13.                                 Existing Farm Operation. Optionor and Optionee
agree that in the event Optionee exercises this option, Dallas Holloway shall
be allowed to work the present crop of corn/soybeans through harvest and
agreements between the Optionor and Dallas Holloway shall remain in effect.


IN WITNESS
WHEREOF, the parties shall be deemed to have entered into this Agreement on May 13,
2007 or the date of the change last initialed by the parties, whichever is
later (the “Effective Date”). 


	
  OPTIONEE:  

  	
   

  	
  OPTIONOR:  

  
	
  TENNESSEE VALLEY AGRI-ENERGY, LLC

  	
   

  	
  COLBERT COUNTY  

  COMMISSION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /S/ Bartt R. McCormack

  	
   

  	
  By:

  	
  /S/ Rex Burleson

  
	
   

  	
   

  	
  Its: President

  	
   

  	
   

  	
   

  	
  Its: Chairman

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /S/ Charles Robertson

  	
   

  	
  By:

  	
  /S/ Donna K. Llewellyn

  
	
   

  	
   

  	
  Its: Secretary/Treasurer

  	
   

  	
   

  	
   

  	
  Its: Secretary

  
										



 











 


	
  STATE OF ALABAMA

  	
  )

  
	
   

  	
  )

  
	
  COLBERT COUNTY

  	
  )

  



 


I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that Rex Burleson, as the Chairman of Colbert County Commission, a
County Government, and whose name is signed to the foregoing and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the agreement, he has, as such officer and with full authority, executed the
same voluntarily as of the day the same bears date.


Given under my hand and official seal this the 13th day
of May, 2007.


	
  

  	
    /S/ James T. Brumley, Jr.

  
	
   

  	
    NOTARY PUBLIC

  
	
   

  	
  (SEAL)

  



My commission expires:


My
Commission Expires


June 22, 2008


STATE OF ALABAMA


COUNTY OF


I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that                                        ,
as the President of Tennessee Valley Agri-Energy, a Limited liability
corporation, and whose name is signed to the foregoing and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
agreement, he has, as such officer and with full authority, executed the same
voluntarily as of the day the same bears date.


Given under my hand and official seal this the 13th day
of May, 2007


	
  

  	
   

  
	
   

  	
    NOTARY
  PUBLIC 

  
	
   

  	
  (SEAL)

  



My commission expires:











Exhibit A


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