Exhibit 10.7
OPTION TO PURCHASE REAL ESTATE
AGREEMENT entered into this 12 day of November, 2004, by and between Xxxx
Xxxxxx, Siouxland Ethanol, LLC (hereinafter referred to as "Owners") and Xxxxx,
Inc., (hereinafter referred to as "Optionee").
WHEREAS, Owners are the owners of certain property-legally described as:
(SEE ATTACHMENT)
Portions of Section Twp 29N Range 7 East
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 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 2005. During said
period, Optionee shall have the right to purchase Subject
Property, at $8,500 per gross acre, for a total purchase price of
approximately 33 acres or more. 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 Owners.
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 such taxes payable for the year
of sale.
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. Abstract of Title. In the event of notice of exercise of an
option contained herein by the Optionee, Owners, at their
expense, shall promptly obtain an Abstract of Title to the real
estate continued through the date of exercise of option by the
Optionee, and deliver it to the Optionee for examination. It
shall show merchantable title in the Owners in conformity with
this agreement, NE law and the Title Standards of the NE State
Bar Association. The abstract shall become the property of the
Optionee when the purchase price is paid in full.
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 easements and
restrictions of record.
i. Joint Tenancy in Proceeds and in Real Estate. If the Owners,
immediately preceding the exercise of any option herein, hold
title to the Subject Property in joint tenancy with full right of
survivorship, and the joint tenancy is not later destroyed by
operation of law or by acts of the Owners, then the proceeds of
thus sale, and any continuing or recaptured rights of the Owners
in Subject Property, shall belong to the Owners as joint tenants
with full rights of survivorship and not as tenants in common;
and Optionee; in the event of death of either Owner, agree to pay
any balance of the price due Owners under this contract to the
surviving Owner and to accept a deed from the surviving Owner
consistent with paragraph 2.
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 Unharvested Crops/Expenses. In the event
Optionee takes possession of the Subject Property after a crop is
planted thereon but before said crop is harvested, the Optionee
shall reimburse the Owners for seed, fertilizer, and pesticides,
if Optionee takes possession of Subject Property after spring
planning work has started. The reimbursement cost shall be
mutually agreed upon by both parties.
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. If Optionee exercises its option to purchase Subject
Property, the Owners and Optionee shall appear at a mutually convenient closing
date as agreed upon by the parties. The Parties agree to equally share the costs
of closing. The Parties shall split equally the cost of the title insurance
premium.
4. RIGHT TO FARM PROPERTY DURING TERM OF AGREEMENT. The Owners shall have
the exclusive use and possession of the Subject Property including but not
limited to the right to farm the same during the term of this agreement, or
until the Subject Property is sold, whichever occurs first.
5. RIGHT TO FARM PROPERTY PURCHASED. In the event that Optionee exercises
its option to purchase all or any portions of Subject Property and in the event
that row crops are cultivated upon said property, Owners shall have the first
right to farm said property under terms and conditions customary in the area.
6. 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 all property purchased pursuant to the
terms of this agreement.
7. 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.
8. 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.
9. TIME IS OF THE ESSENCE. Time is of the essence of each and every term
and provision of this agreement
10. REMEDIES. In any action between the parties seeking enforcement of any
of the terms and provisions of this agreement or in connection with the Subject
Property, the prevailing party in such action shall be awarded, in addition to
damages, injunctive or other relief, its reasonable costs and expense, not
limited to taxable costs, and reasonable attorneys fees.
11. 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:
Optionee: ATTN: Xxxxxxxxx Xxxxxx-Xxxxx & Xxxxx Xxxxxxxx
Xxxxx, Inc.
000 X. Xxx 000
X.X. Xxx 000
Xxxxxxx Xxxxx, 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, Nebraska, or on the 2nd day after
mailing if mailed elsewhere.
IN WITNESS THEREOF, this Agreement has been executed at Jackson, Dakota
County, State of Nebraska, by the parties as of the day and year first above
written.
By: /s/ Xxxx Xxxxxx /s/ Xxxxxxx Xxxxxxxxx
--------------------------------- ----------------------------------------
Owner Attest: Director,
Siouxland Ethanol
Siouxland Ethanol, LLC
By: /s/ Xxx Xxxxx Its: President
--------------------------------- Title
Authorized Signature Xxx Xxxxx
STATE OF NEBRASKA )
) ss.
COUNTY OF DAKOTA )
On this 12 day of November, 2004, before me, the undersigned, a Notary
Public, personally appeared Xxxx Xxxxxx, 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 12 day of November, 2004, before me, the undersigned, a Notary
Public, personally appeared Xxx Xxxxx, Buyer, 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 12 day of November, 2004, before me, the undersigned, a Notary
Public, personally appeared Xxxxxx Xxxxxxxxx, on behalf of said entity as Attest
Director, who executed the foregoing instrument, and acknowledged the execution
of the foregoing Option to Purchase Real Estate.
[Seal] /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Notary Public
