Exhibit 10.3
OPTION CONTRACT
THIS CONTRACT is made and entered into this 20th day of November,
1996, by and between Xxxx X. Xxxxxx and Xxxxx Xxxx Xxxxxx, husband and wife,
hereinafter referred to as "Seller", and Alliance Farms Cooperative Association,
a Colorado cooperative association, hereinafter referred to as "Buyer".
WITNESSETH:
1. Seller hereby grants to Buyer, subject to the terms and
conditions hereinafter set forth, an option to purchase (the "Option") certain
real property (the "Property") in Xxxxx County, Illinois, legally described on
Exhibit A, attached hereto and incorporated herein by this reference.
2. The Option term (the "Term") shall commence upon the execution of
this Agreement, and shall terminate on November 1, 1998. If all of Buyer's
conditions and contingencies contained herein have been satisfied on or prior to
the expiration of the Term, and Buyer shall fail to exercise the Option, or any
part thereof, prior to the expiration of the Term, and Seller shall have
satisfied all of their conditions to this Contract, then this Option shall
lapse, expire and become null and void, and Seller shall be entitled to
liquidated damages in an amount equal to One Hundred Fifty Thousand and No/100
Dollars ($150,000.00), and the parties hereby agree that this amount is a fair
and reasonable estimate of the damages sustained by Seller and is not a penalty
or forfeiture (the "Liquidated Damages Payment"). At or prior to the execution
of this agreement, Buyer shall deposit with Seller an original irrevocable
standby letter of credit in the amount of One Hundred Fifty Thousand and No/100
Dollars ($150,000.00) issued by CoBank; ACB and in substantially the form and
substance set forth in Exhibit B attached hereto and incorporated herein by this
reference. Said letter of credit shall give Seller the right to draw upon the
full amount of said Letter of Credit upon seller's delivery to Co Bank, ACB of
the original Letter of Credit and Seller's written certification as to the
satisfaction of all conditions on the face of the Letter of Credit entitling
Seller to payment. The letter of credit shall be released by Seller and
delivered to Buyer (or Buyer's assigns) upon closing of the transaction as
provided for herein which results in all remaining unpurchased tracts of
Property being sold as provided herein (other than any tracts that are excluded
form Buyer's obligation to purchase as provided herein). During the term of
this agreement the original Letter of Credit shall be held by Xxxxxxxxx, Xxxxx &
Xxxxx, Ltd. in its fireproof safe at 000 Xxxx Xxxx Xxxxxx, Xxxxx, Xxxxxxxx, and
Seller shall defend, indemnify and hold harmless Buyer from and against any
loss, liability or expense suffered as a result of the loss, theft, improper
drawing upon, or improper failure to release said Letter of Credit.
3. Concurrently with the execution hereof, Buyer shall pay to Seller
the sum of One Hundred Dollars ($100.00) (the "Initial Term Deposit") in
consideration of Seller's grant of the Option.
4. A. Buyer must exercise the Option granted herein to purchase
the following-described property (the "90.5 Acre Tract") by written
notice to Seller within fourteen (14) days of the execution of this
Contract:
A tract of land located in Xxxxxxx 0, Xxxxxxxx 0 Xxxxx,
Xxxxx 0 Xxxx of the Third Principal Meridian located in
Xxxxx County, Illinois and legally described as follows:
Commencing at the Southeast Corner of the Northeast Quarter
of said Section 1, thence in a northerly direction along the
east section line of Section 1 a distance of 1,970 feet to a
point, thence westerly parallel with the south line of said
Section 1 a distance of 2,000 feet to a point, thence
southerly parallel with the east line of said Section 1 a
distance of 1,970 feet to the south line of the Northeast
Quarter of said Section 1, thence easterly along said
quarter section line a distance of 2,000 feet to the point
of beginning, containing 90.5 acres, more or less.
Upon Buyer's giving of written notice of exercise, this Contract shall
immediately operate as a real estate sale contract for the purchase of the
90.5 Acre Tract on the terms herein set forth. Buyer may elect to divide
this 90.5 Acre Tract into two separate tracts for the purpose of allowing
separate closings. The total purchase price for this tract shall be Three
Hundred Ninety-Nine Thousand Six Hundred Forty-Nine and 84/100 Dollars
($399,649.84). Should Buyer elect to divide the 90.5 Acre Tract into two
separate tracts with separate closings, the purchase price for each tract
shall be the sum of One Hundred Ninety-Nine Thousand Eight Hundred
Twenty-Four and 92/100 Dollars (199,824.92). The date of closing for the
entire 90.5 Acre Tract shall be on or before thirty (30) days after
Seller's receipt of Buyer's notice of exercise of the option granted in
this paragraph 4.A (except to the extent that the closing is delayed by
Seller).
B. At any time prior to the expiration of the Term, Buyer may
exercise the Option granted herein to purchase an additional sixty (60)
acres of the Property in accordance with the following provisions for each
tract purchased:
(1) Buyer may elect to divide the sixty (60) acres into two
separate tracts for the purpose of allowing separate
closings.
(2) Buyer shall deliver written notice to Seller ("Buyer's
Notice") of Buyer's election to purchase one or more
identified tracts of Property (the "Purchase Parcel"), the
legal description of said Purchase Parcel to be determined
by a survey conducted by a licensed surveyor of the State of
Illinois, with the costs of said survey to be borne by
Buyer. Upon delivery of any such Buyer's Notice, this
Contract shall immediately operate as a real estate sale
contract for the purchase of each such Purchase Parcel on
the terms hereinafter set forth. The date of closing for
any identified tract shall be on or before thirty (30) days
after Seller's receipt of Buyer's notice of exercise of the
option granted in this paragraph 4.B (except to the extent
that the closing is delayed by Seller).
(3) The purchase price for each such Purchase Parcel shall be
equal to the sum of One Thousand Eight Hundred Fifty and
No/100 Dollars ($1,850.00) per acre, plus the cost of any
grading, terracing, excavating and other earthmoving
improvements made to the real estate by Seller at the
written request of Buyer. Seller shall have the exclusive
right to perform all labor and to provide all equipment
required for the grading, terracing, excavating and other
earthmoving improvements requested by Buyer. The cost of
any such improvements shall be calculated and determined as
follows:
Seller shall provide the following equipment and operator at
rates determined under the following schedule:
Per Hour Rates
Tractor and disk - $70.00
Road Grader - $65.00
Compactor - $60.00
Single Pull 613 - $80.00
Single Pull with Laser - $100.00
Single Pull 615 - $125.00
Double Pull 29 yd. - $140.00
Double Pull 28 yd. with Laser $160.00
Trackhoe - $85.00
Bulldozer (D-8, D-9, 21-C) - $90.00
Land Leveler - $65.00
Land Leveler with Laser - $85.00
Disk Roller - $65.00
C. Notwithstanding the foregoing, the Buyer shall not be
entitled to exercise the Option granted herein as to the balance of the
Property until October 15, 1998 and must exercise said Option by
written notice on or before November 1, 1998. The total purchase price
for the balance of the Property shall be One Thousand Eight Hundred
Fifty and No/100 Dollars ($1,850.00) per acre plus the cost of a dam
and lake previously constructed by Seller in the amount of $38,056.67.
The date of closing for the balance of the Property shall be on or
before November 15, 1998 or such other date as Buyer and Seller shall
mutually agree (except to the extent that the closing is delayed by
Seller).
D. Seller shall convey to Buyer merchantable fee simple
title to the property, subject only to Permitted Exceptions (as
hereinafter defined). Possession of such tract shall be delivered to
Buyer at closing.
E. (1) Seller excepts and reserves all oil, gas, coal or other
minerals for a period of twenty-five (25) years from the date
of closing on any portion of the Property and as long
thereafter as oil, gas, coal or other minerals are produced
from the Property. Any conveyance shall be subject to
mineral reservations, exceptions and conveyances of record.
Notwithstanding the foregoing, under no circumstances shall
Seller's exercise and enjoyment of the rights reserved in
this paragraph be permitted to create a nuisance or otherwise
disturb Buyer's business and operations on the Property, and
Seller shall defend, indemnify and hold harmless Buyer from
and against any loss, liability or expense suffered as a
result of Seller's exercise and enjoyment of the rights
reserved in this paragraph.
(2) Seller reserves exclusive hunting and fishing rights on
the property during the term of his natural life. Buyer
hereby grants an irrevocable license to Seller for such
purposes.
F. In connection with any tax-free exchange pursuant to
Section 1031 of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, involving the Property and other
property owned or to be acquired by Seller, Seller may, without the
consent of Buyer, assign this Agreement and their rights hereunder to
any qualified intermediary (an "Intermediary") participating with
Seller in such exchange as contemplated by Treasury Regulation Section
1.1031(k)-1(g)(4) and related regulations. In the event of any such
assignment to an Intermediary: (i) Seller shall give written notice of
such assignment and the identity of the Intermediary to the Buyer at
least ten (10) days prior to the date of closing; (ii) except to the
extent of any liabilities expressly assumed by the Intermediary in
writing in connection with such assignment, the Intermediary shall have
no personal liability to the Buyer or any other person or entity under
this Agreement, or under any other document or instrument at any time
executed by Seller or the Intermediary in connection herewith or
pursuant hereto (each such document or instrument being referred to
herein as "Related Document@), and neither the Buyer nor any other
person or entity shall have any recourse against the Intermediary or
any of its assets on account of any breach or default hereunder or
under any Related Document; (iii) the Intermediary shall have all of
the rights and remedies of Seller provided for herein or in any Related
Documents; (iv) there shall be no diminution of the Buyer's rights or
remedies, and no increase of the Buyer's liabilities or obligations,
hereunder or under any Related Documents on account of such assignment;
(v) notwithstanding anything to the contrary contained herein, Seller
shall continue to be liable for all obligations imposed upon Seller
under this Agreement and under any Related Document executed by Seller.
G. Seller shall pay all taxes and assessments, general and
special, which are a lien upon each tract of Property purchased by
Buyer and can be paid at the Closing and Buyer shall assume all taxes
and assessments, general and special, which become a lien after the
Closing except that (a) as to any assessments payable in installments,
Seller shall be liable only for those instruments payable with respect
to the years prior to the year in which the Closing occurs, and (b) all
taxes and assessments, general and special, and all installments of any
assessments, which are due and payable for the year in which the
Closing occurs shall be prorated as of the Closing. In the event that
the amount of any such tax or assessment for the year in which the
Closing occurs cannot be determined, then such proration shall be based
upon the amount of such tax or assessment for the preceding year.
H. For each tract of Property purchased by Buyer, Seller
shall furnish to Buyer, at Seller's cost, an Owner's Title Insurance
Policy, ALTA Form B-1970 (amended 10-17-70 and 10-17-84) (the "Policy@)
in the amount of the Purchase Price, from a company reasonably
acceptable to Buyer authorized to insure titles in the State of
Illinois (the "Title Company") insuring a merchantable fee simple title
in such Purchase Parcel in Buyer as of the date and time of the
recording of the Deed. Permitted Exceptions to title shall include
only:
(1) The lien of general taxes not yet payable;
(2) Zoning laws and building ordinances;
(3) Easements of record for utilities, drainage and public roads,
highways and improvements;
(4) Covenants and restrictions of record that do not interfere
with Buyer's current and contemplated business; and,
(5) Reservation of mineral title as set forth above.
Seller shall, within fifteen (15) days from the date of
delivery of each Buyer's Notice, deliver to Buyer a commitment for
the Policy (the "Commitment"). Within fifteen (15) days of
receipt of each Commitment, Buyer shall notify Seller of any
defect or exception to title to which Buyer objects ("Buyer's
Objections"). If Buyer fails to notify Seller within said fifteen
(15) day period of any such exception or defect, Buyer shall be
deemed to have accepted the exceptions noted on the Commitment,
and such exceptions shall constitute the "Permitted Exceptions",
as said term is used herein. Seller shall use their best efforts
to eliminate or modify Buyer's Objections to the satisfaction of
Buyer. If Seller is unable to eliminate or modify Buyer's
Objections to the satisfaction of Buyer, Buyer (a) may terminate
and cancel Buyer's obligation to purchase the affected tract of
Property by notice in writing to Seller by the earlier to occur of
(i) the Closing Date, or (ii) five (5) business days following
notice from Seller that it is unable to so eliminate or modify
Buyer's Objections, and thereupon Buyer's failure to purchase said
tract of Property shall not entitle Seller to the Liquidated
Damages Payment or (b) shall accept such title to such Purchase
Parcel as Seller can deliver with a reasonable reduction in the
Purchase Price, with said reduction determined by a qualified real
estate appraiser, appointed by Buyer, with a minimum of ten (10)
years of experience in appraising rural property. The title
commitment shall be conclusive of title as therein shown as to all
matters insured by the policy, subject to exceptions as therein
stated.
I. (1) Buyer has already taken possession of the 90.5 Acre
Tract of real estate described in paragraph 4.A. above on or
about May 1, 1996 and has been conducting a hog confinement
operation on the tract since said date. As a results of such
uses and activities, physical and other changes may have
occurred on the tract. Prior to taking possession, Buyer had
full right of access to the 90.5 Acre Tract to enable it to
conduct any independent environmental audits and tests for
the existence of environmental conditions in violation of
environmental laws, as a result of which Buyer determined
that there existed prior to its possession of the tract no
adverse physical or environmental condition on the tract.
Accordingly, Buyer waives, releases, covenants not to xxx and
forever discharges Sellers, their agents and employees and
other persons acting on behalf of Seller, of and from any and
all claims, actions, causes of actions, demands, rights,
damages, costs, expenses or compensation whatsoever, direct
or indirect, known or unknown, foreseen or unforeseen, which
Buyer now has or which may arise in the future on account of
or growing out of or in connection with any physical
characteristics or existing condition, including without
limitation, subsurface conditions, solid and hazardous waste,
and hazardous materials on, under, or related to the 90.5
acres, or any applicable law or regulation. Buyer
acknowledges that this clause is a negotiated part of this
Agreement and serves as an essential component of
consideration for the property. The release contained under
this clause includes, but is not limited to, the release of
Seller from all claims pursuant to the Illinois Responsible
Property Transfer Act S.H.A., 765 ILCS 90/1 et seq. and the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
(2) As additional consideration in determining the purchase
price of the tract, Buyer assumes and covenants to undertake
and discharge all liabilities of Seller or Buyer arising
from:
(i) Any condition which now exists or may be found to exist
in, on, under or about the 90.5 Acre Tract,
(ii) A determination that the 90.5 Acre Tract or any portion
violates any applicable environmental or health or
safety law, ordinance, regulation or ruling, and
(iii) The presence, use, generation, storage, release,
threatened release, or containment, treatment or
disposal of any hazardous materials on the 90.5 Acre
Tract. Such liabilities include without limitation any
losses, damages or expenses, including attorney fees and
related expenses arising from any matters relating to
the existence of hazardous substances or hazardous
wastes as defined in the Comprehensive Environmental
Response, Compensation and Liability Act, as amended,
482 U.S.C. 9601, et seq. or the Resource, Conservation
and Liability Act, 42 U.S.C. 6901, et seq., or similar
state environmental laws or subsequent federal or state
legislation of a similar nature which may be enacted
from time to time.
(3) Buyer shall defend, indemnify and hold Seller harmless
from and against any and all damage, costs, loss, liability
and expense, which may be incurred by Seller by reason of,
resulting from, or in connection with or arising in any
manner whatsoever from any breach of the covenant of Buyer
contained in this paragraph. The covenants and agreements of
Buyer in this paragraph shall survive the closing and
consummation of the transactions contemplated in this
Contract.
(4) Buyer shall have the right to have access to the
remainder of the Property (approximately 410 acres) to enable
an independent environmental consultant chosen by Buyer and
approved in advance by Seller, which approval shall not be
unreasonably withheld or delayed, to inspect, audit and test
the Property for the existence of environmental conditions
and violations of environmental laws ("environmental
assessment"). The scope, sequence and timing of the
environmental assessment shall be at the sole discretion of
the Buyer but shall be conducted in a manner which will
minimize disruption to the farming operations to be conducted
on the Property.
Buyer may terminate this agreement no later than five
(5) business days after receipt of any environmental
assessment by so notifying the Seller if the environmental
assessment reveals the existence of any violation of
environmental law which Buyer is unwilling to accept. The
notification to Seller shall include a copy of the
environmental assessment. Seller shall have the option to
elect to remove or remediate any condition which has caused
any violation of an environmental law in which event Buyer
shall have no right to terminate this agreement. If Buyer
elects to remove or remediate any environmental concerns, he
shall so notify Seller within five (5) days of receipt of the
Buyer's notification and a copy of the environmental
assessment. Seller shall have ninety (90) days from receipt
of notification from Buyer of said violation within which to
remove or remediate the condition which resulted in the
violation of environmental law at the Seller's sole cost and
expense. Seller shall not be obligated to remove or
remediate non-compliance with any environmental law and shall
not be liable to Buyer for their failure or refusal to do so,
it being understood that Buyer's sole remedy will be the
option to terminate this agreement, in which event it shall
be entitled to the prompt return of the xxxxxxx money and the
Letter of Credit as its full remedy, or Buyer may close this
transaction without abatement of the purchase price in which
case Seller shall not be obligated to remove or remediate any
non-compliance with any environmental laws.
J. Subject to the other terms and provisions of this Contract,
the closing hereunder shall take place as follows: Seller shall
deliver to Buyer, at the office of the Title Company, a General
Warranty Deed (the "Deed"), properly executed and conveying each tract
of Property purchased free and clear of all liens and encumbrances
whatsoever, except as herein provided, and reserving for Seller any and
all mineral rights on the tract of Property purchased; Buyer shall then
and there pay the balance of the Purchase Price for said tract of
Property purchased. It is agreed that Seller and Buyer shall each
deliver the Deed, the original Letter of Credit (at the final closing,
if applicable), the money and other instruments to be delivered by them
to the Title Company to be held by the Title Company under instructions
that the same not be delivered unless and until the requirements of
this Contract have been satisfied.
K. Subject to the rights of termination otherwise contained
herein, if Seller has complied with all the terms and conditions
contained herein and Buyer thereafter fails to perform by failing to
deliver the balance of the Purchase Price on any tract on or before the
Closing Date or Buyer fails to perform any other agreement contained
herein and such default continues for five (5) days after notice in
writing to Buyer, then Seller shall be entitled to declare this
Contract null and void and forfeit and retain the Liquidated Damages
Payment and enforce collection of such damages by presentment of the
irrevocable letter of credit as their sole and exclusive remedy. If
Buyer has complied with all the terms and conditions contained herein,
and thereafter Seller fails to perform any of the covenants or
conditions contained herein prior to the Closing Date and such default
continues for five (5) days after notice in writing to Seller, Buyer,
may at its option, terminate this Contract and obtain the prompt return
of the original Letter of Credit and this contract shall be considered
canceled, null and void, or Buyer may seek specific performance of this
Contract. If this Contract is terminated prior to closing, Buyer shall
not be entitled to damages of any type, direct or consequential, it
being expressly understood and agreed that the remedies specifically
described herein shall constitute Buyer's sole remedies hereunder for
Seller's default prior to closing, and that Buyer hereby waives any and
all remedies not expressly provided herein.
L. The parties hereto shall negotiate in good faith a lease for
the growing and harvesting of crops by Seller on each tract purchased
and an additional three hundred fifty (350) acre tract previously
purchased from Seller, utilizing that certain standard Farm Lease
entitled "Illinois Crop-Share Cash Farm Lease" prepared by the
Department of Agricultural Economics, Cooperative Extension Service,
College of Agriculture, University of Illinois at Champaign, Urbana.
5. Seller and Buyer represent to, and agree with, each other that
neither has dealt with any real estate broker or agent or any other party who
may claim or be entitled to a commission in connection with the sale of the
Property, or any part thereof.
6. All notices and other communications required hereunder shall be
in writing and shall be considered as given when delivered personally or when
deposited in the U.S. mails, registered or certified, return receipt requested,
postage prepaid, addressed (a) if to Seller, at Xxxxx Xxxxx 0, Xxx 00, Xxxxx,
Xxxxxxxx 00000, and (b) if to Buyer, at Alliance Farms Cooperative Association,
c/o Farmland Industries, Inc., 0000 Xxxxx Xxx Xxxxxxxxxx, X.X. Xxx 0000, Xxxxxx
Xxxx, Xxxxxxxx 00000-0000. Either party may by notice as aforesaid designate a
different address for notices or other communications intended for it. All
notices given as aforesaid shall be deemed given as of the second day after the
date upon which such notice is placed in the U. S. mail.
7. Seller hereby covenants and agrees to defend (with counsel of
Buyer's choice), indemnify and hold Buyer harmless from and against all claims,
suits, orders, judgments and decrees, losses, damages, fines, penalties, liens,
liabilities and expenses (including Buyer's personnel and overhead costs and
attorney's fees and other costs incurred in connection therewith, regardless of
whether they or any of them involve litigation) resulting from any actual or
alleged injury (including death) to any person or from any actual or alleged
loss of or damage to any property alleged to be attributable to Seller or
Seller's operation or occupation (including through its agents, employees,
guests, invitees and independent contractors) of the Property, or any part
thereof, or alleged to be or have been caused by or resulting from any act or
omission of Seller or any agent, employee or independent contractor thereof, or
any licensee, guest or invitee or independent contractor of any such entity in
or about the Property, or any part thereof.
8. Buyer hereby covenants and agrees to defend (with counsel of
Seller's choice), indemnify and hold Seller harmless from and against all
claims, suits, orders, judgments and decrees, losses, damages, fines, penalties,
liens, liabilities and expenses (including Seller's personnel and overhead costs
and attorney's fees and other costs incurred in connection therewith, regardless
of whether they or any of them involve litigation) resulting from any actual or
alleged injury (including death) to any person or from any actual or alleged
loss of or damage to any property, alleged to be attributable to Seller or
Seller's operation or occupation (including through its agents, employees,
guests, invitees and independent contractors) of the Property prior to Closing,
or to Seller's breach of any of its obligations under this Contract, alleged to
be or have been caused by or resulting from any act or omission of Seller or any
agent, employee or independent contractor thereof, or any licensee, guest or
invitee or independent contractor of any such entity in or about the Property,
or any part thereof.
9. Seller and Buyer each warrant and represent to the other that it
has all requisite power and authority to enter into this Contract and to carry
out its obligations hereunder, and that its entering into this Contract and
carrying out its obligations hereunder shall not be violative of any statute,
law, ordinance or regulation or of any agreement to which it is a party.
10. Seller and Buyer shall execute, concurrently with the execution of
this Contract, a memorandum (the "Memorandum") of this Contract in form
sufficient for recording. Buyer shall cause the Memorandum to be recorded at
its cost and expense.
11. This Contract contains the entire agreement between the parties
respecting the matters set forth, and expressly supersedes all previous or
contemporaneous agreements, understandings, representations or statements
between the parties respecting such matters.
12. Any covenants and agreements which this Contract does not require
to be fully performed prior to the Closing of each Purchase Parcel shall survive
said Closing and shall be fully enforceable thereafter in accordance with their
terms.
13. This Contract and any of its terms may only be altered, amended,
waived, discharged or terminated by a written instrument signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought.
14. If any provision of this Contract, or any instrument to be
delivered by either of the parties at the Closing of each such Purchase Parcel
pursuant to this Contract, is declared invalid or is unenforceable for any
reason, such provision shall be deleted from such document and shall not
invalidate any other provision contained in the document.
15. Nothing in this Contract, express or implied, is intended to
confer upon any person, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Contract.
16. Headings at the beginning of each section and subsection are
solely for the convenience of the parties and are not a part of and shall not be
used to interpret this Contract. The singular form shall include plural and the
masculine shall include the feminine and vice versa. This Contract shall not be
construed as if it had been prepared by one of the parties, but rather as if
both parties had prepared the same. Unless otherwise indicated, all references
to sections are to this Contract.
17. This Contract shall be binding upon and inure to the benefit of
the parties, and their respective heirs, personal representatives, successors
and assigns.
18. This Contract shall be governed and construed in accordance with
the laws of the State of Illinois.
19. Time is of the essence of this Agreement. If the date for
performance of a condition hereof shall fall on a Saturday, Sunday or a holiday,
it may be performed on the next business day.
20. This Agreement supersedes all previous agreements, negotiations,
statements and undertakings which are merged herein and its terms and
conditions, including all representations, indemnities, covenants and
warranties, shall remain in full force and effect and shall not merge or
terminate on the closing.
This Agreement may be signed in counterparts, all of which shall be deemed
originals.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed in two or more counterparts and dated as of the date first above written.
SELLER:
XXXX X. XXXXXX
XXXXX XXXX XXXXXX
BUYER:
Alliance Farms Cooperative Association, a Colorado
cooperative association.
By
Typed Name:
Title:
EXHIBIT A
TRACT 1: The North Half of Section 1, EXCEPT a part of the Northwest Quarter of
Section 1, Township 1 North, Range 8 East of the Third Principal Meridian, more
particularly described as follows: Commencing at the Northeast corner of said
Section 1; thence North 89 Degrees 45 Minutes 10 Seconds West, 2897.43 feet
along the north line of Section 1 to the point of beginning; thence North 89
Degrees 45 Minutes 10 Seconds West, 208.88 feet along the North line of
Section 1; thence
South 0 Degrees 43 Minutes 05 Seconds East, 205.93 feet; thence South 88 Degrees
49 Minutes 30 Seconds East, 199.79 feet; thence North 0 Degrees 23 Minutes 30
Seconds West, 209.04 feet to a point on the North line of Section 1 being the
point of beginning, and FURTHER EXCEPT a tract more particularly described as
beginning at a point 8 chains East of the Northwest corner of the Northeast
Quarter of Section 1, Township 1 North, Range 8 East of the Third Principal
Meridian, thence South 4 chains, thence East 2.50 chains, thence North 4 chains,
thence West 2.50 chains to the point of beginning;
and
The North Half of the North Half of the South Half of Section 1;
and
The Northeast Quarter (known as the East Half of Lot 2) of the Northeast Quarter
of Section 2;
and
All in Township 1 North, Range 8 East to Third Principal Meridian.
EXHIBIT B
APPLICANT:
ALLIANCE FARMS COOPERATIVE ASSOCIATION
0000 XXXXX XXX XXXXXXXXXX
P. O. XXX 0000
XXXXXX XXXX, XX 00000-0000
BENEFICIARY;
XXXX X. XXXXXX AND XXXXX XXXX XXXXXX
X X 0, XXX 00
XXXXX, XX 00000
IRREVOCABLE LETTER OF CREDIT NO.
AT THE REQUEST, AND FOR THE ACCOUNT, OF ALLIANCE FARMS COOPERATIVE ASSOCIATION,
WE HEREBY ESTABLISH THIS IRREVOCABLE LETTER OF CREDIT NUMBER
IN THE AMOUNT OF ONE HUNDRED FIFTY THOUSAND U.S. DOLLARS ($150,000.00)
EXPIRATION DATE NOVEMBER 30, 1998 IN DENVER, COLORADO WHICH IS AVAILABLE FOR
PAYMENT UPON PRESENTATION OF YOUR SIGHT DRAFT AND THE FOLLOWING DOCUMENTS:
THIS ORIGINAL LETTER OF CREDIT.
2. A WRITTEN CERTIFICATE, SIGNED BY THE BENEFICIARY AND ACKNOWLEDGED BY A
NOTARY PUBLIC, WHICH CERTIFIES AS FOLLOWS:
A. AS OF NOVEMBER 1, 1998, ALL OF THE CONDITIONS AND CONTINGENCIES
SPECIFIED IN THE OPTION CONTRACT DATED NOVEMBER 20,1996 BETWEEN
APPLICANT AND BENEFICIARY HAVE BEEN SATISFIED.
B. AS OF NOVEMBER 1, 1998, APPLICANT HAS FAILED TO EXERCISE THE OPTION
GRANTED TO IT UNDER SAID OPTION CONTRACT.
C. NOT LESS THAN FIVE NOR MORE THAN 26 BUSINESS DAYS PRIOR TO
BENEFICIARY'S PRESENTMENT OF THIS ORIGINAL LETTER OF CREDIT AND
BENEFICIARY'S CERTIFICATE TO COBANK BENEFICIARY HAS NOTIFIED APPLICANT
OF BENEFICIARY'S INTENTION TO DRAW ON THIS LETTER OF CREDIT.
WE HEREBY ENGAGE WITH THE BENEFICIARY THAT DOCUMENTS DRAWN UNDER AND IN
COMPLIANCE WITH THE TERMS OF THIS CREDIT WILL BE DULY HONORED UPON PRESENTATION
IN OUR OFFICES, AS SPECIFIED.
THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICES FOR
DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE,
PUBLICATION NO. 600 (THE "UCP").
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
