Exhibit 10.2


 


THIS OPTION AND THE UNITS
ISSUABLE UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND STATE LAWS,
UNLESS PRIOR TO SUCH SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
THE ISSUER RECEIVES AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE
SATISFACTORY TO IT, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND STATE
LAWS.


 


UNIT PURCHASE
OPTION


 


To Purchase Capital Units of


 


ETHANOL GRAIN PROCESSORS, LLC


 


[November 9, 2004][January 21][June 2][July 26],
2005


 


THIS CERTIFIES
THAT, for good and valuable consideration, the receipt of which is hereby
acknowledged,                                     
[name of grantee] (the “Holder”) is entitled to subscribe for and purchase from
Ethanol Grain Processors, LLC, a Tennessee limited liability company (the “Company”),
on the terms and conditions set forth below, twenty-five thousand (25,000)
of the Company’s capital units at an exercise price of One Dollar ($1.00)
per unit, subject to anti-dilution adjustments as provided below.


 


This Option is subject to the following provisions, terms and
conditions:


 


1.             Vesting, Duration
and Forfeiture.  This Option becomes
exercisable, subject to the last sentence of this paragraph 1, on the date that
the Board of Governors of the Company determines that the Company has closed on
a sufficient amount of debt financing which, when added to the amount of the
subscription payments being held in escrow in connection with the Company’s
initial public offering of units, together with the amount of all other equity
proceeds and commitments the Company has received and all grant proceeds the
Company has received or been awarded, will allow the Company to construct the
proposed ethanol plant and provide reasonable working capital at plant start-up
(the “Vesting Date”).  This Option shall
expire five (5) years from the Vesting Date, with any remaining rights
terminating if not exercised prior to the close of business on the fifth (5th)
anniversary of the Vesting Date (the “Expiration Date”).  In the event the Holder shall, for any
reason, cease to be a member of the Board of Governors or an officer of the
Company prior to the Vesting Date, this Option shall automatically terminate.


 


2.             Exercise. The
rights represented by this Option may be exercised by the holder hereof, in
whole or in part (but not as to a fractional unit), at any time or from time to
time prior to the Expiration Date as to those units which are then purchasable,
by written notice of exercise (the “Exercise Notice”) delivered to the Company
and by the surrender of this Option (properly endorsed 


 





















 


if required) at the principal office of the Company together with
payment to it by certified or cashier’s check of the applicable purchase price.


 


3.             Issuance of Units.  Unless a later date is specified in the
Exercise Notice, any units purchased hereby shall be deemed to be issued to the
record holder hereof as of the close of business on the tenth (10th) day
following the date on which the rights represented by this Option shall have
been exercised as aforesaid.  As soon as
practicable after such issuance date, if the Company’s units are certificated,
certificates for the units so purchased (bearing any applicable restrictive
legends) shall be delivered to the holder hereof, and, unless this Option has
expired, a new Option representing the number of units, if any, with respect to
which this Option shall not then have been exercised shall also be delivered to
the holder hereof.


 


4.             Covenants of
Company.  The Company agrees that all
units which may be issued upon the exercise of the rights represented by this
Option shall, upon issuance, be duly authorized and issued, fully paid and
nonassessable.  The Company further
agrees that during the period within which the rights represented by this
Option may be exercised, in the event this Option is exercised, the Company
shall have authorized, and reserved for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Option, a sufficient
number of its units to provide for the exercise of the rights represented by
this Option.


 


5.             Anti-dilution
Adjustments.  The above provisions
are, however, subject to the following:


 


(a)           In case the Company
shall at any time hereafter subdivide or combine its outstanding units or
declare a dividend payable in its units, the exercise price of this Option in
effect immediately prior to the subdivision, combination or record date for
such dividend shall forthwith be proportionately increased, in the case of
combination, or decreased, in the case of subdivision or dividend, and each unit
purchasable upon exercise of this Option shall be changed to the number
determined by dividing the exercise price of this Option in effect immediately
prior to the subdivision, combination or record date for such dividend by the
exercise price as so adjusted.


 


(b)           No fractional units are
to be issued upon the exercise of this Option, but the Company shall pay a cash
adjustment in respect of any fraction of a unit which would otherwise be
issuable.  Such payment shall be made based
on the fair market value of the Company’s units at the time of exercise, as
determined in good faith by the Company.


 


(c)           If any capital
reorganization or reclassification of the capital units of the Company, or
consolidation or merger of the Company with another company (other than a
merger or consolidation in which the Company is the survivor), or the sale of
all or substantially all of its assets to another company shall be effected in
such a way that holders of its outstanding units shall be entitled to receive
units, other securities or assets with respect to or in exchange for its units
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provision shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive, upon the basis
and upon the terms and conditions specified in this Option and in lieu of the
units otherwise purchasable and receivable upon the exercise of the rights
represented hereby, such units, securities or assets to which a holder of the
number of the Company’s units then 


 


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deliverable upon the exercise hereof would have been entitled upon such
reorganization, reclassification, consolidation, merger or sale, for the same
aggregate price immediately theretofore applicable, and in any such case
appropriate provisions shall be made with respect to the rights and interests
of the holder of this Option to the end that the provisions hereof (including
without limitation provisions for adjustments of the option exercise price and
of the number of units purchasable upon the exercise of this Option) shall
thereafter be applicable, as nearly as may be, in relation to any units,
securities or assets thereafter deliverable upon the exercise hereof.  The Company shall not effect any such
consolidation, merger or sale unless prior to the consummation thereof the
successor company (if other than the Company) resulting from such consolidation
or merger, or the company purchasing such assets, shall assume by written
instrument executed and mailed to the registered holder hereof at the last
address of such holder appearing on the books of the Company, the obligation to
deliver to such holder such units, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to purchase.


 


(d)           Upon any adjustment of
the option exercise price or the number of units issuable hereunder, then and
in each such case, the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the registered holder of this Option
at the address of such holder as shown on the books of the Company, which
notice shall state the option exercise price resulting from such adjustment and
the increase or decrease, if any, in the number of units purchasable at such
price upon the exercise of this Option, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.


 


6.             No Voting Rights.  This Option shall not entitle the holder
hereof to any voting rights or other rights as a holder of the Company’s units.


 


7.             Transfer Requires
Consent.  This Option shall not be
transferable, in whole or in part, without the prior written consent of the
Company


 


IN WITNESS WHEREOF, Ethanol Grain Processors, LLC has caused this
Option to be signed by its duly authorized officer.


 


	
   

  	
  ETHANOL GRAIN PROCESSORS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  / Baxter Sanders /

  
	
   

  	
  Name:

  	
  Baxter Sanders

  
	
   

  	
  Its:

  	
  President

  
				



 


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Option Exercise Notice


 


Ethanol Grain Processors, LLC


1918 McDonald Road


Rives, TN  38253


 


Ladies and Gentlemen:


 


The undersigned,                                     ,
hereby irrevocably elects to exercise the right to purchase                         
capital units (the “Units”) of Ethanol Grain Processors, LLC (the “Company”),
under and pursuant to the Unit Purchase Option granted by the Company to the
undersigned dated                      
(the “Option”).  The total purchase price
for the Units is $                  .  Enclosed herewith is payment for the Units as
required under the Option.


 


In connection with the issuance of the Units to the undersigned, the
undersigned hereby certifies and represents to the Company that the undersigned
is acquiring such Units for investment purposes and not with a view toward
distribution.  The undersigned
understands that the Units have not been registered under the Securities Act of
1933, as amended, or applicable state law and rules and that the Units may
not be sold, transferred, pledged, hypothecated or otherwise disposed of in the
absence of an effective registration statement under such act and state laws,
unless prior to such sale, transfer, pledge, hypothecation or other disposition
the Company receives an opinion of counsel, in form and substance satisfactory
to it, that registration is not required under such act and state laws.  The undersigned understands that a legend
reciting these restrictions shall be placed on any certificate that may be
issued to the undersigned with respect to the Units.


 


The undersigned further understands that the undersigned may suffer
adverse tax consequences as a result of the purchase or future disposition of
the Units.  The undersigned represents
that the undersigned has consulted with any tax consultants the undersigned
deems advisable in connection with the exercise of the Option and that the
undersigned is not relying on the Company for any tax advice.


 


 


	
   

  	
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  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Taxpayer I.D. Number