OPTION AGREEMENT
Option
agreement made 25th
day of
May, 2006, between Xxxxxxxxx
Family, LLC,
of 000
Xxxxxxx Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxxx (the "Seller"), and Gold-Eagle
Cooperative,
of 000
X Xxxxxx Xxxxxx, XX Xxx 000, Xxxxxxxxx, Xxxx (the "Buyer").
SECTION
ONE
GRANT
OF OPTION
A.
In
consideration of the mutual promises of the parties, the Seller does hereby
give
and grant to the Buyer the exclusive and irrevocable right, privilege and
option
to purchase, under the conditions hereinafter provided, all of the Seller's
right title and interest in the real property which is located in Kossuth
County, State of Iowa, and more particularly described as follows:
That
part
of the Northwest Quarter (NW ¼) and the Northwest Quarter (NW ¼) of the
Southwest Quarter (SW ¼) lying North of Railroad Right-of-way and the Northwest
Quarter (NW ¼) of the Northeast Quarter (NE ¼) all in Section Thirty-six (36),
Township Ninety-six (96) North, Range Twenty-seven (27) West of the
5th
P.M.,
Kossuth County, Iowa, EXCEPT public highways,
AND
The
South
Half of the Northwest Quarter (S ½ NW ¼) of Section Thirty-five (35), Township
Ninety-five (95) North, Range Twenty-seven (27), West of the 5th
P.M.,
Kossuth County, Iowa AND the North Half of the Northwest Quarter (N ½ NW ¼) of
Section Thirty-five (35), Township Ninety-five (95) North, Range Twenty-seven
(27), West of the 5th
P.M.,
Kossuth County, Iowa, EXCEPT a tract described as: commencing 2 rods South
and 2
rods East of the Northwest corner of said Section 35, thence South 4 rods,
thence East 66 rods, thence North 4 rods, thence West 66 rods to point of
beginning,
(the
"Property").
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B.
All
deposits and payments made by the Buyer to the Seller pursuant to this Agreement
prior to the Closing (either directly or through an escrow agent, if any) shall
be applied towards the Purchase Price of the Property subject to Section
2D.
The
Seller fully agrees and acknowledges that the consideration given by the Buyer
constitutes legal, adequate, and valuable consideration for the purposes of
this
Agreement.
C.
The
total purchase price for the Property shall be $1,500,000.00 for 200 acres,
more
or less. The consideration for the purchase option shall be $45,000.00 which
will be paid by the Buyer upon execution of this agreement. The remaining
consideration of the Purchase Price shall be paid by the Buyer at
closing.
D.
The
"Effective Date" shall be the date that the last of the parties to this
Agreement signs and executes below.
1
SECTION
TWO
OPTION
TERMS
A.
The
Seller, in consideration for the payment of the Option consideration and other
consideration, does hereby give to the Buyer the exclusive right and option
to
purchase the Property described above (the "Option").
B.
The
Option consideration shall be delivered to the Seller.
C.
If the
Buyer exercises this Option, the Option consideration shall be applied towards
the Purchase Price of the Property.
D.
The
Buyer shall have the right to exercise this Option for a period of six months
from execution of this agreement on the effective date. The Buyer may either
exercise such option or extend the option for an additional six month period.
In
order to extend the Option for an additional six month period, Buyer shall
pay
an additional $45,000.00 to Seller. Buyer shall then have the right to exercise
such Option during this six month period of time or renew and extend the Option
an additional six months. Again, the Seller shall retain the $45,000.00 for
each
six month period for which the Option is not exercised. Buyer can continue
to
have additional six month Option periods under the same terms as above as long
as the Buyer pays $45,000.00 for each additional period. The Buyer shall
exercise this Option by giving written notice by Registered Mail to the Seller
at the address indicated above. The date that Seller receives the Notice, shall
be known as the “Date of Commencement”.
E.
It is
understood and agreed that time is of essence as to the payment of the Purchase
Price under this provision. If the Buyer does not exercise the terms of this
Option by the ending date as specified above, then the right and option set
forth herein shall immediately terminate and all deposits paid shall be kept
by
the Seller.
SECTION
THREE
PROMISES
OF PARTIES FOLLOWING EXERCISE OF OPTION
Subject
to the Buyer exercising this Option, the Seller and the Buyer agree that the
Seller shall sell and the Buyer shall buy the Property upon the following terms
and conditions.
A.
Representations and Warranties
To
induce
the Buyer to enter into this Agreement, the Seller makes the following
representations, warranties, and covenants:
1.
Seller
has good and marketable fee simple title to the Property, free and clear of
all
liens, property taxes, encumbrances, and restrictions, except for those
restrictions appearing of record, taxes for the year of closing, encumbrances
that will be cleared prior to closing, and encumbrances that will be cleared
at
the closing out of the Seller's proceeds from the Purchase Price. Seller is
in
sole possession of the above described real property.
2.
There
are no condemnations or similar proceedings affecting any part of the Property
and no such proceeding shall be pending on the Closing Date. To the best of
the
Seller's knowledge, no such condemnations or other proceeds are threatened
or
planned.
3.
There
are no toxic wastes on, in or around the Property and the Property has not
been
used to manufacture, store, or dispose of environmentally hazardous
materials
4.
There
are no service contracts or agreements relating to the operation, maintenance,
or security of the property under which the Seller is bound and which will
survive the closing.
2
5. All encroachments, reservations, limitations, road right of ways, or servitudes affecting the Property are disclosed in the Public Records.
6.
The
Seller is not subject to any commitment, obligation, or agreement, including,
but not limited to, any right of first refusal or option to purchase, granted
to
a third party, which would or could prevent the Seller from completing the
sale
of the Property as contemplated by this Agreement.
7.
Seller
shall be in sole and exclusive possession of the Property and will deliver
possession of the Property free of all leases on the Closing Date.
B.
Conditions Precedent
The
obligations of the Buyer to close this transaction are subject to the Buyer
having given Notice to Purchase and subject to the following:
1.
All
representations and warranties of the Seller shall be true and correct as of
the
Closing Date as if such representations and warranties were being made on such
date.
2.
Seller
shall have performed all covenants to be performed by the Seller as is herein
provided.
3.
The
Property shall be vacant and any tenant relocation costs shall be incurred
by
the Seller. Seller shall be responsible to deliver possession free of any
claims, leases, management agreements or such other possessory rights.
4.
If any
of such conditions are not fulfilled on or as of the Closing Date, and
notwithstanding anything to the contrary in this Agreement, the Buyer shall
have
the right to terminate this Agreement and to obtain a full refund of any
deposits made to the Seller or escrow agent whereupon all parties shall be
relieved of any further obligations hereunder.
C.
Clear
Title
1.
Within
90 days of the execution of this Agreement by the Seller, the Seller,
at
their expense, shall obtain an abstract of title to the Real Estate continued
through the date of acceptance of this offer, and deliver it to Buyers for
examination. It shall show merchantable title in Sellers in conformity with
this
agreement, Iowa law and Title Standards of the Iowa State Bar Association.
The
abstract shall become the property of the Buyers when the purchase price is
paid
in full. Sellers shall pay the costs of any additional abstracting and title
work due to any act or omission of Sellers, including transfers by or the death
of Sellers or their assignees. Seller shall also provide any
existing surveys for the Property that are in the Seller's possession or which
the Seller might obtain possession of by reasonable efforts. The Buyer shall
return to these items to the Seller if the closing never occurs and this
Contract is terminated.
2.
Seller
shall convey a marketable title, subject only to liens, encumbrances,
exceptions, or qualifications set forth in this Agreement and those which shall
be discharged by Seller at or before closing. Marketable title shall be
determined according to applicable title standards adopted by authority of
the
Iowa State Bar Association and in accordance with law.
3.
If the
Buyer discovers that the title is defective, the Buyer shall notify the Seller
in writing specifying the defect(s). If the defect(s) render the title
unmarketable or uninsurable the Seller will have 120 days from receipt of notice
within which to remove the defect(s), and if the Seller is unsuccessful in
removing them within such time, the Buyer shall have the option of either
accepting the title as it then is, or demanding a refund of all monies paid
hereunder which shall forthwith be returned to the Buyer and thereupon the
Buyer
and the Seller shall be released as to one another of all further obligations
under this Agreement. All expenses to clear title defects shall be paid by
the
Seller.
3
D.
Closing
1.
The
closing date shall be set by mutual agreement after Buyer notifies Seller that
it will exercise its option, which date shall be not less than 60 days and
no
later than 90 days after the exercise of the purchase option by the buyer,
unless extended by other provisions of this Contract or by the mutual consent
of
both parties. The closing shall be held in Goldfield, Xxxxxx County, Iowa,
at
the office of the attorney or other closing agent designated by the
Buyer.
2.
At
closing the Buyer shall pay the cash portion of the Purchase Price by bank
cashier's check or certified check either of which shall be issued by and drawn
on a local institution and the Seller shall furnish the deed, an absence of
lien
affidavit, non-foreign status affidavit, and any corrective instruments that
may
be required in connection with perfecting the title. The Buyer shall furnish
the
closing statement.
3.
The
Seller shall pay the following closing costs: state documentary stamps and
surtax charges, the cost of recording any corrective instruments and the title
update charges necessary for the title insurance. The Buyer shall pay the cost
of recording the deed, title insurance premiums and the cost for recording
the
purchase money mortgage (if any).
E.
Restrictions; Easements; Limitations
The
Buyer
shall take title subject to: zoning, restrictions, prohibitions, and other
requirements imposed by governmental authority; restrictions and matters
appearing on the plat or otherwise common to the subdivision; public utility
easements of record; taxes for year of closing and subsequent years; assumed
mortgages and purchase money mortgages, and the following other exceptions
(if
any): provided, however, that there exists at closing no violation of the
foregoing and the same does not prevent the use of the property for
manufacturing and refining purposes.
F.
Survey
The
Buyer, at the Buyer's expense, within 120 days following the Date of Notice
of
Exercising its Option, may have the Property surveyed and certified by a
registered Iowa surveyor. If the survey shows any encroachment on the Property
or that improvements intended to be located on the Property in fact encroach
on
setback lines, easements, lands of others, or violate any restrictions,
Agreement covenants, or applicable governmental regulations, the same shall
be
treated as a title defect.
G.
Liens
The
Seller shall furnish to the Buyer at time of closing an affidavit attesting
to
the absence, unless otherwise provided for herein, of any financing statements,
claims of lien or potential lienors known to the Seller and further attesting
that there have been no improvements or repairs to the Property for 90 days
immediately preceding the date of closing in a form satisfactory to the Buyer.
If the Property has been improved, or repaired within such time, the Seller
shall deliver releases or waivers of mechanic's liens, executed by all general
contractors, subcontractors, suppliers, and materialmen, in addition to the
Seller's lien affidavit setting forth the names of all such general contractors,
subcontractors, suppliers, and materialmen and further reciting that in fact
all
bills for work to the Property or personalty which could serve as a basis for
a
mechanic's lien or a claim for damages have been paid or will be paid at
closing.
H.
Prorations
Taxes
and
assessments (if any) shall be prorated through the day to the closing. Cash
at
closing shall be increased or decreased as may be required by said prorations.
All prorations will be made through the day prior to occupancy if occupancy
occurs before closing. Taxes shall be prorated based on the current year's
tax
with due allowance made for maximum allowable discount and homestead or other
exemptions if allowed for said year.
4
I.
Special Assessment Liens
Certified,
confirmed, and ratified special assessment liens as of the date of closing
(and
not as of Effective Date) are to be paid by the Seller. Pending liens as of
the
date of closing shall be assumed by Buyer, provided, however, that if the
improvement has been substantially completed as of the Effective Date, such
pending lien shall be considered as certified, confirmed, and ratified and
the
Seller shall, at closing, be charged an amount equal to the last estimate by
the
public body of assessment for the improvement.
J.
Attorney's Fees; Costs
In
connection with any litigation arising out of this Agreement, the prevailing
party shall be entitled to recover reasonable attorney's fees and
costs.
K.
Contract Not Recordable; Persons Bound; Notice
Neither
this Agreement nor any notice thereof shall be recorded in any public records.
This Agreement shall bind and inure to the benefit of the parties hereto and
their successors in interest. Whenever the context permits, singular shall
include plural and one gender shall include all. Notice given by or to the
attorney for any party shall be as effective as if given by or to the
party.
L.
Occupancy
Seller
represents that there are no parties in occupancy other than the Seller. Seller
agrees to deliver occupancy of the property at the time of closing unless
otherwise stated herein. If occupancy is to be delivered prior to closing,
Buyer
assumes all risk of loss to the Property and personalty for the date of
occupancy, and shall be responsible and liable for maintenance thereof from
such
date, and shall be deemed to have accepted the Property and personalty in their
existing condition as of the time of taking occupancy unless otherwise stated
herein or in a separate writing.
M.
Conveyance
Seller
shall convey title to the Property by statutory warranty, trustee, personal
representative, or guardian deed, as appropriate to the status of the Seller,
subject only to matters contained in Section C hereof and those otherwise
accepted by Buyer.
N.
Other
Agreements
No
prior
or present agreements or representations shall be binding upon Buyer or Seller
unless included in this Agreement. No modifications or changes in this Agreement
shall be valid or binding upon the parties unless in writing and executed by
the
party or parties to be bound thereby.
O.
Typewritten or Handwritten Provisions
Typewritten
or handwritten provisions inserted herein or attached hereto as addenda shall
control all printed provisions of this contract in conflict
therewith.
P.
Repayment
of Crop Expenses
Regardless
of the closing date and the date upon which Buyer would take possession of
the
land, Buyer agrees to reimburse the Seller for any and all crop expenses that
Seller has incurred prior to the exercising of the Option and the Closing.
These
expenses would include but not be limited to all payments made to individuals
or
corporations to prepare the ground for planting, the cost of all seed and
machine hire to plant it, the cost of all chemicals, herbicides and fertilizer
and the cost to have it applied and the premiums paid for any crop insurance.
Buyer may reasonably request any invoice for any of these expenses if Buyer
so
desires.
5
Q.
Access
to
Land
Buyer
would be allowed access to the land for all legitimate purposes once the Option
Agreement is signed and the $45,000.00 Option payment has been made. The Buyer
would have the right to conduct all tests that it felt was reasonably necessary.
However, Buyer agrees to do so with the minimal amount of interference with
the
farming operation and any damage to any growing crop. Further, the Buyer would
be responsible for any damage done to any tile or drainage or other assets
of
Seller’s land which occurred during the testing.
R.
Indemnification
Buyer
will defend, indemnify and hold the Sellers harmless from any and all liability,
demands and claims including attorneys fees which might arise from employees
or
representatives of the Buyer while on the real estate which is subject to this
Option.
S.
Tax
Free
Exchange
Seller
shall have the right to make this sale part of a tax-free exchange pursuant
to
Section 1031 of the Internal Revenue Code. The Buyer will reasonably cooperate
in effectuating any tax-free exchange arranged by Seller.
The
parties have executed this agreement at their respective addresses the day
and
year first above written.
THIS
IS
INTENDED TO BE A LEGALLY BINDING CONTRACT. DO NOT SIGN IF THERE ARE BLANK SPACES
NOT FILLED IN. IF NOT FULLY UNDERSTOOD, SEEK THE ADVICE OF AN ATTORNEY PRIOR
TO
SIGNING.
Dated: 5/31/06.
|
BUYER
|
SELLER
|
||
| GOLD-EAGLE COOPERATIVE | XXXXXXXXX FAMILY, LLC | ||
| By: /s/Xxxx Xxxxxx | By: /s/Xxxx X. Xxxxxxxxx | ||
|
Xxxx
Xxxxxx
|
Its:
Asset
Manager
|
||
|
Its:
President
|
Member
|
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