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HomeMy WebLinkAboutZydeco Investments, LLC - Option Agreement and Real Estate Agreement - 2/7/2022Preparer Information Christopher S. Wendland, P.O. Box 596, Waterloo IA 50704 After recording, return to: OPTION AGREEMENT (319) 234-5701 This Option Agreement (the "Agreement") is entered into as of noi ?.evz, by and between City of Waterloo, Iowa ("City") and Zydeco Investments, LLC ("Zeco"). RECITALS A. Zydeco and City are parties to a certain development agreement dated as of November 15, 2021 (the "DA") concerning the development of land described therein (the "Property"). B. The DA provides that City shall have an option to repurchase the Property, and the parties desire to set forth the terms of said option herein. AGREEMENT NOW, THEREFORE, in consideration of the mutual promises exchanged herein and for other consideration, the receipt and adequacy of which is acknowledged, the parties agree as follows: ARTICLE I REPURCHASE OPTION 1.1. Option Price. No price shall be paid for City's repurchase option, the DA itself constituting good and sufficient consideration for the option. 1.2. Option and Purchase Price. City shall have the option to repurchase the Property for $1,170,000.00, which option shall be exercisable only if Zydeco has not commenced construction of required improvements within the period upon the Property by June 30, 2022, or by expiration of any agreed period of extension, provided that if commencement of construction is stopped and/or delayed as a result of an act of God, war, civil disturbance, court order, labor dispute, fire, supply chain disruption or other cause beyond the reasonable control of Zydeco (each such condition or event being an "Unavoidable Delay"), the right to repurchase the Property shall not accrue until the expiration of the period of time equal to the period of the Unavoidable Delay. 1.3. Exercise of Option. City shall exercise its option, if at all, by delivery of written notice (the "Option Notice") to Zydeco no later than 5:00 p.m. on July 15, 2022, or within fifteen (15) days after expiration of any additional period after June 30, 2022 attributable to Unavoidable Delay. Within ten (10) days following delivery of an Option Notice, the parties shall execute a purchase agreement (the "Purchase Agreement") substantially in the form attached hereto as Exhibit "A." 1.4. Closing. Closing shall occur on a date to be agreed upon by the parties following delivery of an Option Notice, as set forth in the Purchase Agreement. Other terms and conditions of the Closing shall be as specified in the Purchase Agreement. ARTICLE II GENERAL TERMS 2.1. Remedies. If Zydeco fails to perform any of its obligations hereunder within the time for performance herein provided, or if City shall fail to perform any of its obligations hereunder after it delivers the Option Notice to Zydeco, then the other party shall have the right to commence an action against the party in breach for specific performance, provided that such action is commenced within six (6) months after the Option Notice delivery date. The party prevailing in any court action shall be entitled to an award for its reasonable attorney's fees and costs of enforcement. 2.2. Risk of Loss and Insurance. Zydeco shall bear the risk of loss or damage to the Property prior to the closing, and Zydeco agrees to maintain appropriate insurance. 2.3. No Partnership or Joint Venture. Nothing in this Agreement shall be interpreted as creating a partnership or joint venture between Zydeco and City relative to the Property. 2.4. Entire Agreement; Integration. This Agreement and the exhibits hereto constitute the entire agreement between the parties pertaining to the subject matter hereof. All exhibits hereto are hereby incorporated into and made a part of this Agreement. All previous negotiations and understandings between Zydeco and City, or their respective agents and employees, with respect to the transaction set forth herein are merged in this Agreement which alone fully and completely expresses the parties' rights, duties, and obligations with respect to the subject matter hereof. This Agreement may be amended or modified only in a written document signed by Zydeco and City. 2.5. Severability. In the event any provision of this Agreement is held invalid, illegal, or unenforceable, whether in whole or in part, such provision shall be deemed stricken but the remaining provisions of this Agreement shall not be affected thereby and shall continue in full force and effect. 2 2.6. Binding Effect. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal and legal representatives, successors, and assigns. 2.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which, including original signatures transmitted by facsimile or other electronic means, shall be deemed an original and all of which together shall constitute one and the same instrument. 2.8. Notices. Any notice required herein shall be in writing and shall be deemed effective if it is personally delivered or within three (3) business days after it is deposited in the United States mail, postage prepaid, certified or registered, return receipt requested, to Zydeco or City at the following addresses: If to Zydeco: Zydeco Investments, LLC 115 3rd St. SE, #806 Cedar Rapids, Iowa 52401 Attention: President If to City: City of Waterloo 715 Mulberry Street Waterloo, Iowa 50703 Attention: Community Planning & Development Director Either party may designate an additional or another address upon giving notice to the other party pursuant to this Section. Notice given in any manner other than as stated herein shall be deemed effective only upon receipt by the party to whom such notice is given. 2.9. Brokers. Neither party has retained a broker in connection with this Agreement, and each party agrees to indemnify, defend and hold the other harmless from and against any and all claims, fees, commissions and suits of any real estate broker or agent with respect to services claimed to have been rendered at the request of or through or under such party in connection with the execution of this Agreement or the transactions set forth herein. 2.10. Recording. Either party may, at its own expense, record this Agreement or a memorandum hereof in the land records of Black Hawk County, Iowa. 2.11. Time. Time shall be of the essence hereof. IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first written above. 3 CITY OF WATERLOO, IOWA By: Quentin M. Hart, Mayor Attest: Kelley Fe1chlCity Clerk 4 ZYDECO INVESTMENTS, LLC By: Title: EXHIBIT "A" Form of REAL ESTATE PURCHASE AGREEMENT TO: Zydeco Investments, LLC, or successor in title ("Seller") FROM: City of Waterloo, Iowa ("Buyer") Buyer hereby offers to buy, and the Seller by its acceptance agrees to sell, real property (the "Property") in Waterloo, Black Hawk County, described in that certain Development Agreement between Seller and Buyer dated as of November 15, 2021 (the "DA"), and legally described as per the abstract of title; together with any easements and appurtenant servient estates, but subject to restrictive covenants, ordinances, and mineral reservations of record, if any, herein referred to as the "Property," upon the following terms and conditions: 1. PURCHASE PRICE. The Purchase Price shall be $1,170,000.00. The entire Purchase Price shall be due and payable in full at closing. 2. POSSESSION AND CLOSING. Possession of the Property shall be delivered to Buyer at closing. Closing shall occur at City Hall, 715 Mulberry Street, Waterloo, within sixty (60) days after approval of this Agreement by the Waterloo City Council, subject to satisfaction of any conditions stated in this Agreement. 3. REAL ESTATE TAXES. Seller shall pay taxes prorated to the closing date in accordance with the provisions of Iowa Code § 427.2, and any unpaid real estate taxes payable in prior years, either paying Buyer, or giving Buyer a credit, for all of such taxes. Buyer shall pay all subsequent real estate taxes. 4. SPECIAL ASSESSMENTS. Seller shall pay at time of closing all installments of special assessments which are a lien on the Property as of closing or which can be verified to be owing as of the closing date but are not yet certified as a lien. Buyer shall pay all other special assessments or installments. 5. RISK OF LOSS AND INSURANCE. Seller agrees to maintain existing insurance to the date of closing and shall bear the risk of loss or damage to the Property to the date of closing. In the event of substantial damage or destruction prior to closing, the Buyer shall have the option to complete the closing and receive insurance proceeds regardless of the extent of damages or to declare this Agreement null and void. 6. FIXTURES. Included with the Property shall be all fixtures that integrally belong to, are specifically adapted to or are a part of the real estate, whether attached or detached. The following items shall not be included: 7. CONDITION OF PROPERTY. The Property as of the date of this Agreement, including buildings, grounds, and all improvements, will be preserved by the Seller in its present condition until closing, ordinary wear and tear excepted. Within 30 days after the acceptance of this Agreement, Buyer may, at its sole expense, have the property inspected by a person or persons of its choice to determine if there are any environmental or other deficiencies. Seller shall cooperate in providing reasonable access to Buyer's inspectors. Within this same period, the Buyer may notify the Seller in writing of any deficiency. The Seller shall immediately notify the Buyer in writing of what steps, if any, the Seller will take to correct any deficiencies before closing. The Buyer shall then immediately in writing notify the Seller that (1) such steps are acceptable, in which case this Agreement, as so modified, shall be binding upon all parties; or (2) that such steps are not acceptable, in which case this Agreement shall be null and void, and any earnest money shall be returned to Buyer. 8. ABSTRACT AND TITLE. Seller shall obtain an abstract of title to the Property continued through a date that is within thirty (30) days of the closing, and shall deliver it to Buyer's attorney for examination. It shall show marketable title in Seller in conformity with this Agreement, Iowa law, and title standards of the Iowa State Bar Association. The Seller shall make every reasonable effort to promptly perfect the title. If closing is delayed due to Seller's inability to provide marketable title, this Agreement shall continue in force and effect until either party rescinds the Agreement after giving ten days' written notice to the other party. The abstract shall become the property of Buyer when the Purchase Price is paid in full. Seller shall pay the costs of any additional abstracting and title work due to any act or omission of Seller, including transfers by or the death of Seller or its assignees. 9. SURVEY. Buyer may, at Buyer's expense, have the Property surveyed and certified by a registered land surveyor prior to closing if a survey is required by law. If the survey shows an encroachment on the Property or if any improvements located on the Property encroach on lands of others, the encroachments shall be treated as a title defect. 10. ENVIRONMENTAL MATTERS. A. Seller warrants to the best of its knowledge and belief that there are no abandoned wells, solid waste disposal sites, hazardous wastes or substances, or underground storage tanks located on the Property, the Property does not contain levels of radon gas, asbestos, or urea -formaldehyde foam insulation which require remediation under current governmental standards, and Seller has done nothing to contaminate the Property with hazardous wastes or substances. Seller warrants that the property is not subject to any local, state, or federal judicial or administrative action, investigation or order, as the case may be, regarding wells, solid waste disposal sites, hazardous wastes or substances, or underground storage tanks. Any exceptions to the warranties set forth above are fully described on a separate addendum attached hereto. B. Seller hereby represents that, to the best of its knowledge and belief, there is no active or abandoned septic tank or septic system on the property, except as described here: C. Buyer may, at Buyer's expense, have the Property inspected further for the existence of any hazardous materials, substances, or wastes. Seller shall cooperate in providing reasonable access to Buyer's inspectors and engineers. If hazardous materials, substances, or wastes are discovered on the Property, Buyer's obligation hereunder shall be contingent upon the removal of such materials, substances, conditions or wastes or other resolution of the matter reasonably satisfactory to Buyer. However, in the event Seller is required to expend any sum in excess of $5,000 to remove any hazardous materials, substances, conditions or wastes, Seller shall have the option to cancel this transaction and refund to Buyer all earnest money paid and declare this Agreement null and void. The expense of any action necessary to remove or otherwise make safe any hazardous material, substances, conditions or waste shall be paid by Seller, subject to Seller's right to cancel this transaction as provided above. 2 11. DEED. Upon payment of the Purchase Price, Seller shall convey the Property to Buyer by special warranty deed, free and clear of all liens, restrictions, and encumbrances arising by, through or under Seller, except as provided in this Agreement. General warranties of the title shall extend to the time of delivery of the deed excepting liens and encumbrances suffered or permitted by Buyer. 12. JOINT TENANCY IN PROCEEDS AND IN REAL ESTATE. Reserved. 13. JOINDER BY SELLER'S SPOUSE. Reserved. 14. STATEMENT AS TO LIENS. If Buyer intends to assume or take subject to a lien on the Property, Seller shall furnish Buyer with a written statement prior to closing from the holder of such lien, showing the correct balance due. 15. USE OF PURCHASE PRICE. At time of settlement, funds of the Purchase Price may be used to pay taxes and other liens and to acquire outstanding interests, if any, of others. 16. 1031 EXCHANGE. Reserved. 17. APPROVAL OF COURT. If the Property is an asset of any estate, trust, conservatorship, or receivership, this Agreement shall be subject to court approval, unless declared unnecessary by Buyer's attorney. If necessary, the appropriate fiduciary shall proceed promptly to a hearing for court approval. In that event a court officer's deed shall be used to convey title. 18. REMEDIES OF THE PARTIES. Buyer and Seller are entitled to utilize any and all remedies or actions at law or in equity available to them, and the prevailing party shall also be entitled to obtain judgment for costs and reasonable attorney fees. 19. NOTICE. Any notice under this Agreement shall be in writing and be deemed served when it is delivered by personal delivery or mailed by certified mail, addressed to the parties at the addresses given below. Seller: Zydeco Investments, LLC 115 3rd St. SE, #806 Cedar Rapids, Iowa 52401 Attention: President Buyer: City of Waterloo 715 Mulberry Street Waterloo, IA 50703 Attn: Community Planning & Development Director 20. GENERAL PROVISIONS. In the performance of each part of this Agreement, time shall be of the essence. Failure to promptly assert rights herein shall not, however, be a waiver of such rights or a waiver of any existing or subsequent default. This Agreement shall apply to and bind the successors in interest of the parties. This Agreement shall survive the closing. This Agreement contains the entire agreement of the parties and shall not be amended except by a written instrument duly signed by Seller and Buyer. Paragraph headings are for convenience of reference and shall not limit or affect the meaning of this Agreement. Words and phrases herein shall be construed as in the singular or plural number, and as masculine, feminine or neuter gender according to the context. 3 21. NO REAL ESTATE AGENT OR BROKER. Neither party has used the service of a real estate agent or broker in connection with this transaction. 22. ADDITIONAL PROVISIONS. A. The parties acknowledge that Buyer is acquiring the Property for community development purposes. Buyer's rights and duties under this Agreement are assignable to any person or entity that will further the development objectives contemplated by Buyer. B. Special contingencies to effectiveness of Agreement. Notwithstanding any signatures below by representatives of Buyer, this Agreement is expressly subject to approval by the city council of Buyer. C. The terms set forth in Sections 4, 4.1 and 4.2 of the DA are hereby incorporated herein by this reference as though fully set forth herein and shall survive the Closing. 23. ENTIRE AGREEMENT. This Agreement represents the entire agreement between the parties, superseding all prior or contemporaneous understandings, negotiations, discussions, or agreements between the parties with respect to the subject matter hereof. BUYER SELLER City of Waterloo, Iowa Zydeco Investments, LLC By: Mayor Attest: 4 By: Title: