Exhibit 10.6
OPTION TO PURCHASE REAL ESTATE
This AGREEMENT is hereby entered in to this 16th day of February, 2005, by
and between XXXXXXX XXXXXXX, of 0000 Xxxx Xxxx. Xxxxxxx, Xxxxxxxx 00000;
hereinafter referred to as "Owner" and SIOUXLAND ETHANOL, LLC, hereinafter
referred to as "Optionee".
WHEREAS, Owner is the lawful title holder and owner of certain real
property which includes Owner's residence and a farm building site best
described as a tract of land as highlighted on an aerial photo attachment;
and, such land is located in the south half of Sec. 27 Twp. 9N, Range 0
Xxxx xx Xx. Xxxxx Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxx; and, expected to be
approximately seven 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 $2,500.00 as option fee
hereby acknowledged as hand in 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 of real estate heretofore described.
Furthermore, it is understood that no personal property is included in this
Option, and the grain bins on said property shall be for the purpose of this
agreement considered personal property and are not included in this option
agreement, and if Optionee shall exercise this Option, said bins must be removed
from the property by the Owner.
Furthermore, the well located on said property is not included in this
agreement, and at time of survey to describe the exact parcel of the land to be
sold by Owner to Optionee, the parties may agree to exclude a small piece of
land containing said well which shall be retained by the Owner.
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 as follows: Optionee will pay
Owner $175,000.00 for the residence and one acre of land, and an
additional $75,000.00 for the buildings and remaining land
totally approximately six additional acres for a total purchase
price of $250,000.00. If said option to purchase is exercised,
the $2,500.00 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 Owner. 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 and each extended option shall
include an additional option fee of $2,000.00. 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(S)
shall be applied to the purchase price if the Option is
exercised, and all such option fee(s) paid shall be retained by
the Owner if said option(s) expire and a purchase is not made.
c. 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.
d. Real Estate Taxes. If Optionee exercises its option to purchase
Subject Property, then the Owners shall pay all real estate taxes
accrued pro-rata prior to date of possession by the Optionee,
including 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, or prior year if the current year
is not known.
e. 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.
f. 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 Title Insurance to the real
estate in an amount equal to the purchase price herein
established, and Owner shall deliver to the Optionee at Title
Commitment for examination as soon as possible upon receiving
Notice of intent to purchase. It shall show merchantable title in
the Owners in conformity with this agreement, Nebraska law and
the Title Standards.
g. 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.
h. 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.
i. 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.
j. 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.
k. 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.
l. 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 any 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: Xxxxxxx Xxxxxxx
0000 Xxxx 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 in the State of
NEBRASKA, by the parties as of the day and year first above written.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Xxxxxxx Xxxxxxx, Owner
By: /s/ Xxxxxx Xxxxx Its: President
---------------------------------
Xxxxxx Xxxxx
STATE OF NEBRASKA )
)ss.
COUNTY OF DAKOTA )
On this 16th day of February, 2005; before me, the undersigned, a Notary
Public, personally appeared XXXXXXX XXXXXXX, 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 17 day of February, 2005; before me, the undersigned, a Notary
Public, personally appeared Xxxxxx Xxxxx, as President for Siouxland Ethanol,
LLC on behalf of the Optionee, who executed the foregoing instrument, and
acknowledged the execution of the foregoing Option to Purchase Real Estate.
[Seal] /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Notary Public
[Aerial photo appears here.]
