Exhibit 10.8
OPTION TO PURCHASE REAL ESTATE
This AGREEMENT is hereby entered into this 7th. day of January, 2005, by
and between XXXX X. XXXX, of 0000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxxx (hereinafter
referred to as "Owner(s)") and SIOUXLAND ETHANOL, LLC, (hereinafter referred to
as "Optionee").
WHEREAS, Owner(s) are the lawful owners of certain property best described
as outlined in an aerial photo attachment, such land is located in the
Southeast Quarter of Sec. 27 Twp. 29N, Range 7 East of the 6th P.M., Dakota
County, Nebraska; and, said parcel of land is located southwest of U.S.
Hwy. 20 and adjacent to, and just north of, Xxxx Ave., which parcel of
farmland when surveyed for actual legal description at Optionee's expense
is expected to be approximately 8 acres more or less:
(SEE ATTACHMENT)
hereinafter referred to as the "Subject Property"; and
WHEREAS, Optionee desires the right to obtain title to the Subject
Property, at prices and under terms and conditions hereinafter provided, for the
purpose of industrial or commercial expansion and development,
NOW THEREFORE, in consideration for the sum of an option fee of $1,000.00
in hand paid, and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITION OF TERMS AND DESCRIPTION OF PROPERTY. Subject Property
hereinafter refers to the entire parcel heretofore described.
For the purposes of this agreement the term "gross acres" shall include any
portion of Subject Property titled in Owners' name but subject to road use or
right of way.
2. PURCHASE TERMS AND CONDITIONS. The Optionee shall have the right and
option to acquire all portions of the Subject Property upon the terms and
conditions hereinafter set forth:
a. Minimum Parcel Requirements. The right and option to acquire the
Subject Property requires the Optionee to purchase the parcel.
b. Initial Option Period and Price. This initial option shall
continue for a period of time extending from the execution of
this agreement to and including December 31, 2005. During said
period, Optionee shall have the right to purchase Subject
Property, at $8,000.00 per gross acre, for a total purchase price
of actual surveyed acres, or portions of acres, times eight
thousand dollars. If said option to purchase is exercised, the
$1,000 option fee shall be applied to the purchase price. If said
option is not exercised within the initial option period, and no
extension is requested, said option fee shall be retained by the
Owners.
c. Right to Extend Option. The Optionee shall have the right and
option to extend the initial option for up to two (2) additional
ninety (90) day terms. Said extension request shall be in writing
and submitted to Owners no later than seven (7) days prior to the
expiration of the option in place. If the right to extend the
option is exercised, the option fee shall be retained by the
Owners, and the same shall not be applied toward the purchase
price."
d. Possession. If the Optionee timely performs all obligations in
connection with the exercise of any option pursuant to this
agreement, possession of the real estate shall be delivered to
the Optionee within 60 days following notice of exercise of
option by Optionee.
e. Real Estate Taxes. If Optionee exercises its option to purchase
Subject Property, then the Owners shall pay all real estate taxes
accrued prior to date of possession by the Optionee and any
unpaid real estate taxes payable in prior years. The Optionee
shall pay all subsequent real estate taxes. Any proration of real
estate taxes shall be based upon the prior year's taxes."
f. Special Assessments. The Owners shall pay all installments of
special assessments which are a lien on the real estate and, if
not paid, would become delinquent during the calendar year that
the option is exercised, and all prior installments thereof. All
other special assessments shall be paid by the Optionee.
g. Title Insurance. Within thirty days after Optionee has exercised
its option to purchase the subject property, Owners shall deliver
to Optionee, for purposes of examination, a title insurance
commitment reflecting marketable title of record in the Owners,
subject to patent reservations, outstanding mineral interests,
easements of record of use, and public roads. Optionee shall have
ten days thereafter in which to examine the title Insurance
commitment and certify in writing to Owners any defects deemed to
impair marketability of title. Owners shall thereafter place
title in a marketable condition, subject to the exceptions
aforesaid, with reasonable dispatch, with the parties cooperating
to complete the curative title work and the approval thereof at
the earliest possible date. Title standards approved by the
Nebraska State Bar Association to the date of examination of
title shall serve as a guide to the marketability of title.
Optionee shall pay the entire cost of the title insurance, or
title commitment even if the option is never exercised.
h. Deed. Upon payment of the purchase price, Owners shall convey the
real estate to the Optionee, by Warranty Deed, free and clear of
all liens and encumbrances but subject to patent reservations,
outstanding mineral interests, easements or restrictions of
record or of use, and public roads.
i. Joint Tenancy. It is understood and agreed that in the event
Owners hold title to said property as joint tenants, they are
contracting as joint tenants in their acceptance of this
agreement or option to purchase.
j. Method of Exercise of Option. Exercise of the option to purchase
the Subject Property shall be made by the Optionee delivering to
the Owners at the address to which notices are to be sent, a
written notice of exercise of the option as provided herein.
Written notice shall be given in compliance with paragraph 10
below.
k. Notice of Exercise of Option. The written notice of exercise of
the option to acquire the Subject Property shall be made in the
manner described herein but shall only be effective if given on
or before the end of the last day of the last exercised option.
l. Reimbursement for Loss of Use Income. Because it is the intent of
the Optionee to exercise this option and take possession prior to
fall 2005, and because such parcel of land is farmland generally
cash rented by Owner, the parties hereby agree that Optionee
shall make a cash payment in lieu of cash rent for the 2005 crop
year in the amount of $1,500 due Owner on or before March 1,
2005; and, in lieu of said cash payment Owner hereby agrees that
no crops will be planted or grown on said parcel during 2005.
Should Optionee exercise its right of extension past March 1,
2006, Optionee shall pay Owner the same $1,500.00 cash payment on
or before March 15, 2006 in lieu of cash rent for 2006, and Owner
agrees that no crops will be planted during the 2006 year.
m. Opportunity for Like-Kind Exchange. If, within 30 days from when
the Optionee serves notice to the Owners of its intent to
exercise its purchase option, the Owners find a third party
willing to enter into a multiparty like-kind exchange agreement;
the Optionee agrees to fully cooperate and enter into such
agreement for the purpose of effecting a multiparty like-kind
exchange pursuant to Section 1031 of the Internal Revenue Code,
as amended, whereby the third party will sell like-kind real
estate to the Optionee and execute a Warranty Deed in favor of
the Owners; concurrently the Owners will convey their interest in
Subject Property to the Optionee; concurrently the Optionee shall
pay the third-party the lesser of the agreed upon value of the
Subject Property and the agreed upon value of the acquisition
property; concurrently the difference between the agreed upon
value of the Subject Property and the agreed upon value of the
exchange property shall be paid to the Owners by the Optionee, or
to the third-party by the Owners, as circumstances dictate.
In the event the Owners fail to find a third party willing to
enter into a multiparty like-kind exchange agreement within 30
days of the Optionee's notice, but give notice to the Optionee of
their intent to effect a deferred like-
kind exchange pursuant to Section 1031 of the IRC of 1986, as
amended, after such period, the Optionee agrees to deposit the
purchase price of the Subject Property in an escrow or other
account pursuant to terms enabling the Owners to effect such an
exchange. In the event that Owners have not designated the
property to be acquired by Section 1031 of the Internal Revenue
Code, as amended, to effect like-kind exchange treatment, then
the Optionee shall direct the closing agent to pay the balance of
the purchase price to the Owners.
In the event that the Owners have designated the property to be
acquired by them within the identification period as required by
Section 1031 of the Internal Revenue Code, as amended, to effect
like-kind exchange treatment, then the Optionee shall direct the
escrow agent to pay the third party the amount necessary to
effect such an exchange and the balance, if any, of the escrow
account to the Owners.
3. CLOSING DATE AND COSTS. If Optionee exercises his option to purchase
Subject Property, the Owners and Optionee shall appear at a mutually convenient
location and close on said purchase within sixty days of the exercise option.
The Owners shall pay such costs necessary to meet Owners obligations under this
agreement, including the state documentary stamps required for the recording of
the deed of conveyance. Optionee shall pay such other costs necessary to
complete this transaction including the costs of the survey and title insurance.
4. SUBSURFACE DRAINAGE. Optionee acknowledges its understanding that the
Subject Property may contain certain drainage lines providing surface and
subsurface water drainage from other real property. Optionee agrees to preserve
such subsurface drainage or to provide suitable alternative surface or
subsurface drainage at Optionee's cost on any property purchased pursuant to the
terms of this agreement.
5. LICENSE TO OPTIONEE TO ENTER PROPERTY. The Owners hereby grant the
Optionee a nonexclusive license to enter the Subject Property from time to time
during the option period for the sole and exclusive purpose of allowing the
Optionee to perform boundary and topographic survey work, and conduct soil,
engineering, and other tests on such land. The Optionee agrees to indemnify and
hold the Owners harmless from any and all damage caused by the Optionee or its
agents on the land or crops thereon. After performing its test and engineering
work, the Optionee shall restore the land to substantially the same condition as
existed prior to the Optionee's conduct thereon, and shall be liable to the
Owners for any damage remaining on the land, or crops or fixtures thereon. Such
license to go on the Subject Property shall be limited to the purpose of
performing such survey work and soil tests, engineering and other tests by the
Optionee, and such license shall automatically terminate and be of no further
force and effect after the expiration of the term of this option agreement.
6. RIGHT OF ASSIGNMENT. The Optionee shall have the full and unrestricted
right to assign its interest in this agreement or any other interest hereunder
at any time. Optionee agrees that in the event of an assignment, the Optionee
shall assume responsibility for all of the rights, obligations and duties
contained herein which shall survive any such assignment.
7. TIME IS OF THE ESSENCE. Time is of the essence of each and every term
and provision of this agreement
8. REMEDIES. Each party will have available to them such remedies as exist
under Nebraska law.
9. NOTICES. Any notice to either party that may be required hereunder or
which either party is permitted or may desire to give to the other party must be
in writing and may be given by personal delivery or by mailing the same by
registered or certified mail, return receipt requested, to the party to whom the
notice is directed at the address of such party as hereinafter set forth or such
other address as the parties may hereinafter designate:
Owners: Xxxx X. Xxxx
0000 Xxxxx Xxxx
Xxxxxxx, XX 00000
Optionee: ATTN: Xxx Xxxxx, President
Siouxland Ethanol, LLC
X.X. Xxx 000
Xxxxxxx, XX 00000
Any notice given by mail shall be deemed given on the day after that on
which the same is deposited in the United States mail, properly addressed with
postage fully prepaid, if mailed in Jackson, NE, or on the 2nd day after mailing
if mailed elsewhere.
IN WITNESS THEREOF, this Agreement has been executed at Xxxxxxx, NE, Dakota
County, State of NEBRASKA, by the parties as of the day and year first above
written.
By: /s/ Xxxx X. Xxxx
--------------------------------- ----------------------------------------
Owner: Xxxx X. Xxxx Owner
Siouxland Ethanol, LLC
By: /s/ Xxxxxx Xxxxx Its: President
--------------------------------- Title
Xxxxxx Xxxxx
STATE OF NEBRASKA )
) ss.
COUNTY OF DAKOTA )
On this 7th day of JANUARY, 2005, before me, the undersigned, a Notary
Public, personally appeared XXXX X. XXXX, Owner, who executed the foregoing
instrument, and acknowledged the execution of the foregoing Option to Purchase
Real Estate.
[Seal] /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Notary Public
STATE OF NEBRASKA )
) ss.
COUNTY OF DAKOTA )
On this 7th day of JANUARY, 2005, before me, the undersigned, a Notary
Public, personally appeared XXXXXX XXXXX, President of Siouxland Ethanol, LLC,
Optionee, who executed the foregoing instrument, and acknowledge the execution
of the foregoing Option to Purchase Real Estate.
[Seal] /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Notary Public
[Aerial photo attached here.]
