OPTION
Exhibit 10.7
THIS
OPTION TO PURCHASE granted this 5th day of May , 2006, by Xxxx
Xxxxx and Xxxxxxxx Xxx Xxxxx, husband and wife, party of the first part, to Homeland Energy
Solutions, LLC an Iowa Limited Liability Company, having its principal place of business at 000
Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxx 00000, party of the second part.
WITNESSETH that in consideration of the agreements and conditions herein contained, and the sum of
nine hundred and thirty seven dollars and fifty cents ($937.50) which is consideration for the
option only, paid by the said party of the second part to the said party of the first part, the
receipt whereof is hereby acknowledged, the party of the first part hereby grants unto the party of
the second part the exclusive right, at the option of the party of the second part, for and during
the period until April 1, 2007, to purchase the following tract or parcel of land, or a portion
thereof (hereinafter referred to as “the premises”), situated in the County of Chickasaw, State of
Iowa, to-wit:
South Half of the Southwest Quarter of Section 1, Township 95 North, Range 12 West
of the 5th P.M.
All of the foregoing is subject to a legal description based on an actual site survey. Said site
survey shall be obtained at the sole cost and expense of the party of the second part.
It is understood and agreed that the party of the first part upon the signing of this Option, does
immediately grant the party of the second part the right and privilege without liability, to enter
upon the premises herein described, by foot and/or vehicle, to obtain soil borings, samples, and
make other tests, land and archaeological surveys, as said party of the second part deems necessary
to determine the suitability of the premises for the use and type of construction proposed. All
such operations shall be conducted so as to cause the least interference with farming operations
being conducted on the premises.
In the event of the exercise of this Option, the party of the second part shall have the right, but
not the obligation, to purchase the premises for two and one half (2 1/2 ) times for the value of the
premises as determined through the completion of a real estate appraisal obtained by the party of
the first part; however, in the event the party of the second part disagrees with the value so
determined, the party of the second part may also obtain a real estate appraisal, in which event,
the average of the two appraisals will determine the purchase price. Each appraisal shall be
performed by a Certified General Appraiser licensed to practice in the state of Iowa and in
compliance with the state of Iowa. The real estate appraisal shall be completed using the date of
exercise of this option by the party of the second part as the date of valuation with the
assumption that the highest and best use of the property is for agricultural purposes. Each party
shall pay all the reasonable costs of the appraisal completed on behalf of the party.
It is further understood that in the event that party of the second part exercises its option to
purchase the property that the party of the second part, in addition to payment of the purchase
price specified herein, shall make all relocation payments and render all relocation assistance to,
for, or on behalf of the party of the first part as may be required, if such be the case, by
federal and/or local state law.
This transaction shall be closed no later than 90 days after the date upon which the party of the
second part gives written notice to the party of the first part of its election to exercise this
option to purchase. This transaction will be closed at the office of the Buyer’s attorney or at
such other date or place that is mutually agreeable to the parties.
This option is governed by the laws of the State of Iowa, and any court action which may be taken
by either party as a result of this Option shall be resolved within the jurisdiction of Chickasaw
County, Iowa.
All notices to either party hereunder shall be effective only when made in writing and deposited,
postage and/or feeds prepaid, in the U.S. Mail, via certified or registered mail, return receipt
requested, and addressed to the party as follows:
| If for the party of the first part: | If for the party of the second part: | |
Xxxx Xxxxx
|
Homeland Energy Solutions, LLC | |
Xxxxxxxx Xxx Xxxxx
|
000 Xxxxx Xxxx Xxxxxx | |
0000 00xx Xxxxxx
|
Xxx Xxxxxxx, XX 00000 | |
Xxxxxxxx, XX 00000 |
||
The party of the first part hereby agrees to execute an affidavit and/or memorandum of this option
to purchase upon request and as may be determined reasonably necessary by the party of the second
part, and further consents to the recording of such instrument with the county recorder.
The party of the first part, upon exercise of the Option and payment of the balance of the purchase
price, agrees to execute and deliver to the party of the second part a Warranty Deed, conveying the
premises free and clear of all liens and encumbrances, except public roads, restrictions of record
and taxes not due and payable to the party of the second part. This agreement shall be binding
upon the parties hereto, their heirs, executors, administrators, successors, and assigns.
In the event that this Option is not exercised, then the party of the first part shall retain all
payments made by the party of the second part as liquidated damages, and the party of the second
part shall remove all its facilities from the premises and restore the surface to as near as
possible its pre-disturbed condition.
Party of the second part shall pay party of the first part for damages to crops, fences, and other
physical improvements damages as a result of its exploratory work on the premises. In the event
that the Option is exercised and possession is required by party of second part prior to crop
harvest, then party of second part shall pay party of the first part for standing crops.
Said option may be extended by said party of the second part for two successive periods of one year
upon the additional payment of the sum of One Hundred and Twenty Five Dollars ($125.00) per acre
for each year, prior to the expiration of the option. In the event of the exercise of the Option,
the additional payments made for extension of the Option shall be applied to the purchase price of
the premises.
In the event the party of the first part wishes to utilize a tax-free exchange pursuant to Section
1031 of the Internal Revenue Code, party of the second part agrees to cooperate and execute
whatever documents may be necessary for purposes of the tax free exchange.
Homeland Energy Solutions, LLC guarantees that Xxxx Xxxxx and Xxxxxxxx Xxx Xxxxx, the survivor of
them, or their children, shall have the right, but not the obligation, to invest a sum of money,
not to exceed $400,000.00, in Homeland Energy Solutions, LLC if this Option is exercised, from the
date which it is exercised until the date of closing. This right has been granted to Xxxx Xxxxx
and Xxxxxxxx Xxx Xxxxx at their request and in no way obligates them to invest any sum of money
with Homeland Energy Solutions, LLC.
IN WITNESS WHEREOF, the party of the first part have hereunto set their hands and seals the day and
year first above written.
| /s/ Xxxx Xxxxx | ||||||
| /s/ Xxxxxxxx Xxx Xxxxx | ||||||
| XXXXXXXX XXX XXXXX |
INDIVIDUAL ACKNOWLEDGEMENT
STATE OF ILLINOIS, COUNTY OF WHITESIDE, ss:
On this 8th day of May , 2006, before me personally appeared
Xxxx Xxxxx and Xxxxxxxx Xxx Xxxxx, husband and wife, to me known to be the persons named in and who
executed the foregoing instrument and acknowledged that they executed the same as their voluntary
act and deed.
| /s/Xxxx X. Xxxxxxxxx | ||||
| My Commission Expires 10/13/07 |
| [ | Official Seal | ] | ||||||
| [ | Xxxx X. Xxxxxxxxx | ] | ||||||
| [ | Notary Public State of Illinois | ] | ||||||
| [ | My Commission Expires 10/13/07 | ] | ||||||
