HomeMy WebLinkAboutDraft Option Agreement'IJI GVICVVJ ~VJ~ !M1„ 6VV VV~ iJGV VVI,L.~ uLGU~~G44 xI~V4G(V1Y
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OPTION AGREEIbIE. T
This Option Agreement ("Agreement") is made and entered into effective as of the
day of , 20D3, by and between L.C. Development, Ina., an Idaho
corporation (hereinafter referred to as "Optionor"), and City of Meridian, a municipal
corporation of the State of Idaho (hereinafter referred to as "Optionee").
WHEREAS, Optionor is the developer of the proposed Silver Creek Subdivision located
in Ada County, Idaho; and
WHEREAS, Optionor is the owner of a water distribution system constructed in and for
khe said Silver Creek Subdivision, which water distribution system consists of real property,
water rights, wells, pumps, pipes, valves and other items of personal property used therefore
(hereinafter referred to as the "Water Distribution System"); and
WHEREAS, Ophonor desires to grant and extend to Optionee an option to purchase the
said Water Distribution System> subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual wvenants contained herein, the
parties hereto agree as follows:
Grapt of Option. Optionor hereby grants to Optionee an option to purchase, on
the terms and conditions set foRh herein; that certain Water Distribution System constructed by
Optionor for the Silver Creek Subdivision located in Ada County, Idaho, which, said Water
Distribution System consists of that certain real property desorbed on Exhibit A attached hereto,
together with all improvements therecn, including but not limited to wells, ptunps, pipes, valves
and other items of personal property more particularly described in Exhibit B attached hereto,
and also together with all water rights appurtenant thereto. As used herein, the Water
Distribution System shad be deemed to include all distribution ]ices and pipes from the well
OPTION AGREEMENT - 1
September 23, 2003
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head(s) up to fire point of connection to each individual lot served by the Water Distribution
System,
2. Option Consideration. As and for consideration for the option gamed hereby,
Optionee shall pay to Optionor the stun of Ten and No/100s Dollars ($ 10.00), the receipt and
sufficiency ofwhich is hereby acknowledged.
3. Terra of 4otion. Optionee shall have the right to exercise this option at any time
prior to that date which is tea (10) years from the effective date of this Agreement; pro~7ded,
however, that in the event Optionor shall at any time receive a bona fide offer to purchase the
Water Distribution System from a thud party, Optionor shall deliver notice thereof to Optionee,
,together with reasonable written evidence of the offer to prychase, whereupon Optionee shall
have forty-five (45) days within which to elect, in writing, to exercise its option upon the terms
set forth herein below. In the event Optionee shall not have given Optionor written notice of its
election to exercise its option to purchase the Water Distribution System within the said forty-
five (45j day period, the option to purchase gamed herein shall terminate and Optionor shall be
entitled to seU the Water Distnibution System free of any right or claim of right by Optionee.
4. Exercise of Oatloa. This option maybe exercised by Optionee by dclivering to
Optionor, before the expiration of the option term, written noriee of such exercise personally or
by delivering such notice in the United States Mail, postage prepaid, addressed to Optionor at the
address set forth in paragraph l.4 herein, together with a written appraisal of the fair market value
of the Water Distribution System prepared by a qualified appraiser of such property for and at
the sole cost and expense of Optionee. Said notice shall be deemed to have been delivered
within the option term if the postmark on the envelope containing the notice shows that it was
mailed in a United States Post Office prior to the expiration of the option term.
OPTION AGREEMENT ~ 2
September 23, 2003
5. rchase. P ce. The purchase price for flue Water Distribution System shall be
the then fair mazket value thereof (exclusive of distribution lines) deterntined in accordance with
the appraisal thereof made in accordance with the provisions of paragraph 4, above; provided,
however, that in the event Optionor shall disagree with the appraised value as set forth in
Optionee's notice of exercise, Optionor shall be entitled, at Optionot's sole cost and expense, to
have an additional appraisal made of the Water Distribution System, within thirty (30) days after
.its receipt of Optionee's notice of exercise, whereupon the purchase price shall be the average of
the two appraised values. The purchase price for the Water Distribution System shall be gayable
to Optionor in cash at closing.
6. Conveyance of Title. Optionor shall deliver to Optionee, at closing, a warranty
deed conveying that portion of the Water Distribution System consisting of real property, subject
only to current taxes, assessments, easements and restrictions of record, and such other
exceptions as may be reasonably acceptable to Optionee in its discretion. Optionor shall also
deliver to Optionee, at closing, a bill of sale convoying any personal property to Optionee, free
and clear of any liens or encumbrances. In the event Optionor is unable to convey such title, this
Agreement shall terminate and neither party shall have any further rights or obligations
hereunder.
7. Closine. 7n the event this option is exercised in accordance with the terms hereof,
closing shall take place at the affices of Transnation Title and Escrow, Inc., whose address is
1750 Fmnt Street, Suite 120, Boise, Idaho (the "'Citle Company"), on such daft and at such time
as is designated by Optionee, but not later than sixty (60} days following exercise of the option
by Optionee. Prior to the designated closing date, each of the parties hereto shall deposit with
the Title Company, ail instruments requued to complete the transaction in accordance with the
OPTION AGAEBMENT - 3
Sep[ember23,20D3
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terms and conditions of this Agreement, together with any escrow instructions and settlemen?
statements required by the Title Company.
8. Closin¢ Instructions. In connection with the closing hereof, the Title Company,
as the closing agent, shall:
(a) Prepare closing statements for execution by Optionor and Optionee in
acrnrdance with the terms hereof.
(b) Collect all funds to be received from the parties at closing and disburse and
pay the same to the patties and other such persons or entities entitled to collect funds.
(c) Collect the various documents and information to be provided by Optionor and
Optionee and secare the required signatures and acknowledgements and record such documents
as necessary and in the pmper sequence, and deliver the same to the respective parties as
required to close this transaction.
9. P~liverics to Title Comoanv. On or before the closing date, the OptionoP shall
deliver the following in escrow to the Title Company:
(a) A warranty deed in the form contemplated in paragraph 6, above,
(b) A bill of sale in the form contemplated in paragraph 6, above.
(c) The written instrument contemplated by and described in paragraph 14, below
which has been executed by Optionor,
(d) Any other instruments, documents, certificates or affidavits as may be
reasonably required by the Title Company and/or the Optionee in order to permit the title
company to close the transaction.
On or before the closing date, the Optionee shall deliver the following in escrow to the
Title Company:
OPTION AGREEMENT - 4
September 23, 2003
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(a) The purchase price in accordance with paragraph 5 , above, adjusted by any
applicable prorations.
(b) The written Instrument contemplated by and described in paragraph 14, below,
which has been executed by Optionor.
(c} Any other instruments, documents, certificates or affidavits which may be
reasonably required by the Title Company and/or the Qptionor in order to permit the title
company to close the transaction.
10. Prorations. All taxes, assessments, and other strnilaz items shall be prorated in
accordance with the standard procedures for such in Ada County, Idaho.
11. Closinst Coats. All closing and escrow costs and charges shall be shared equally
by Optionor and Optionee.
12. Reoreaeatations and Warranties of Ontionor. Optionor represents and
warrants to Optionee as of the date hereof and, except as otherwise set forth herein, as o£ the
closing date, as follows: (a) Optionor has authority to execute, deliver and perform this option;
(b} Optionor holds marketable fee title to the Water Distribution System; (c) there are no other
agreements or understandings affecting the Water Distribution System which would survive the
closing;. (d) to the best of Optionor's knowledge, there is not pending nor threatened any legal
action of any kind or nature affecting Optionor ar the Water Distribution System which would
enjoin or restrict the right of Optionor to consummate the transactions contemplated hereby; (e)
all persons and corporations supplyittg labor, materials and equipment to rho Water Distribution
System will have been paid, and there will be no materialmen's, laborer's or supplier's claims or
liens affecting the ~L'eter Distribution System; (f} Optionor is not aware of the presence of any
hazazdous waste or materials on the real property portion of the Water Distribution System and
Optionor wilt do no act or otherwise cause any hazardous waste or materials of any kind to be
OPTION AGREE1bIENT - 5
5ep~em6er 23, 2003
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deposited on or in the real property portion of the Wages Distribution System during the option
term; and (g) the Water Distribution System shall have been constructed in accordance with
applicable law, including but not limited to the Idaho Department of Environmental Quality
standards and specifications for Community Water Systems,
13. Reoresentatlons and Warranties of Oot~o~ee. Optionee represents and
warrants to Optionor as of the date hereof and, except as otherwise set forth herein as of the
closing date, as follows: (a) Optionee has authority to execute, deliver .and perform this
Agreement; (b) to the best of Optionee's knowledge, there is not pending or threatened legal
action of any kind or nature, affecting Optionee which would enjoin or restrict of right of
Optionee to consummate the transactions contemplated hereby; (c) Optionee is not relying upon
any representations and warranties of Optionor except as is expressly set forth herein; and (d)
Prior to closing, Optionee shall have had such opportunities to test and inspect, at its sole test
and expense, the Water Distribution System and shall not close the transaction contemplated
hereby unless Optionee is fully satisfied as to the condition of the Water Distribution System and
the standards and specifications to which it was constructed.
14, Further Uaderat nd~ss and Agreements of Ootionor aad Oodonee. Each of
the parties hereto acknowledges and ogees that the Water Distribution System has been
constntcted as a part of and is located in a residential subdivision to be developed by Optionor
aiui that, if Optionee exercises its option to purchase the Water Distribution System, Optionee
intends to connect it to and operate it as a part of its municipal water system. In furtherance
thereof, the parties agree that the Water Distribution System shall be sold subject to the
following additional agreements, covenants, conditions and restrictions, which said agreenents,
covenants, conditions and restrictions shall survive the closing of the transaction contemplated
OPTION AGREEMENT-6
5eatember 23, 20C3
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by this Agreement and shall be memorialized in a separate written agreement, in recordable
form, to be executed by Optionor and Uptionee at or before closiag:
(a) Optionee covenants and agrees that the real property component of the Water
Distribution System shall be used for the operation and mainte;tance of a municipal well and
well house, and shall not be used for any other propose or purposes without the prier written
consent of Optionor. In the event dptionee no longer uses the said real property for the
operation sad maintenance of a municipa! wall, Optionor shall have the option, Yo be exercised in
aceordattce with the provisions of paragraph 4, above to acquire the said real property, together
with all improvements and equipment located thereon, at such price attd payable in accordance
with rho provisions ofparagraph 5, above.
(b) From and after the date, if ever, that Optionee takes title to the Water
Distribution System, Optionee shall be responsible, at its sole cost and expense, to maintain the
well house, landscaping improvements and all other equipment located on the herein described
real property in a first class condition, consistent with the landscaping and other improvements
installed in Oprionor's subdivision development. In addition, Optionee shall not construct,
install, alter or modify any improvements of any description whatsoever on the herein described
real property without first having submitted plans and specifications therefore to, and obtained
the approval from, the Architectural Control Committee for OpNonor's residential subdtvision, in
accordance with any recorded covenants, conditions and restrictions for said residential -
subdivision.
(c) OpGonor covenants and agrees that ii will not construct, or allow to be
constructed, any subsurface waste water or storm water disposal facilities within fifty (54) feet of
any well head which is a part of the Water Distribution System.
OPT1ON AGREEMENT - 7
Septembar23, 3003
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(d) pptionor reserves the right to expand, enlarge, or in any fashion modify the
Wafer Distribution System at any time prior to the closing of the transactions contemplated
hereby without the necessity of obtaining Optionee's approval therefore, except to the extent
Optionee shall have such approval tights pursuant to the provisions of its ordinances.
(e) In the event Optionee shall exercise the option granted hereby prior to the
completion of Optionor's residential subdivision, Optionor shall be entitled to have any such
additional portions of its residential subdivision connected to and served by the Water
Distribution System, subject only to limitations on capacity of the Water Distribution System and
such other rules and regulations as are generally applicable to such Connections,
15. Condition of Water Distribution Svstem. Optionee acknowledges that the
Water Distribution System shall be conveyed by Optionor AS IS and, except as is specifically
contained herein, without warranty and Optionor makes no representations with respect to the
suitability of the Water Distribution System for the Optionee's intended purposes.
16. D salt. Lt the event of any material breach of any of the provisions of this
Agreement, including but not limited to the representations and warranties set forth herein, the non
breaching party shall be entitled to ptnsue any and all remedies, legal or equitable, available to it
under the circumstances including but not limited to the termination of this Agreement, the
enforcement of this Agreement by specific performance, and/or pursuit of any and all damages
resulting from said breach.
17. 7ime:Waiver. Time and the prompt performance of each and every obligation of
the parties hereto are agreed to be of the essence of this Agreement. Any departure from the
conditions and temra of this Agreement or any delay in the enforcement of the same by either party
hereto shall not operate to waive or be a waiver of the rights of ei ther party hereto to stand upon the
OPTION AGREEMENT' - fi
September 23, 2003
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stria letter oU oonscruaion of this Agreement or to require performance in accordanw with the
express terms set forth hweirr.
1 S. Attomev Fees. If either party hereto defaults in any manner or fails to fulfill any or
all provisions of this Agreemrnt, and if the nondefaulting party places this Agreement with an
attorney to exercise any rights available on at-count of such default or failure, the defaulting party
shall reimburse the other party upon demand for all attorney fees and costs incurred by said parry.
In the event the parties hereto became involved in litigation (including any proceedings in
bankruptcy), the prevailing party shall be entitled to t~cover resonable attorney fees, costs and
expenses From the other party. This paragraph shall be enforceable by the parties notwithstanding
any rescission, forfeiture or other temtination of this Agreement.
19. Notlces. Any notice authorized to be given from Optionor to Optionee or Optionee
to Optionor shall be sufficiently served or given for all purposes if delivered personally or sent by
United States Certi$ed Mail, return receipt requested, addressed to the party in question at the
addresses heroinaffer set forth:
Optlonor: L.C. bevelopment, Inc.
PO Box 518
Meridian, Idaho 83680
Opfionee: City of Meridian
33 East Idaho Street
Mar#dian, Idaho 83642
All nodoes requited or desired to be given under this Agrernteat shal] be deemed given
upon hand delivery or upon deposit in the United States Mail, postage paepaid. Either party shall be
entitled to change the address for service of notioe hereunder by sowing upon the other patty, in the
manner described above, a notice specifying the new address.
20. t~vernlne Law. 'This Agreemert shall be construed, interpreted and applied, and
the rights and obligations hereunder determined in accordance with the laws of the state of Idaho
OPTION AG1tEEMEN'f • 9
September 23,1003
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21. Amendments. 'Iltis Agreemrnt may not be amended, modified or changed in any
way, except by written document signed by all ofthe parties hereto.
22. Further Assurances. Each of the parties hereto agtrees to execute any other
documents necessary or appropriate to effect the intent of the parties as expressed in this
Agreement.
23. Survival of Covenants. To the extent any covenants and warranties contained
herein reutain unfulfilled or operative hereafter, said covenants and warranties shall survive the
transfer of title and possession and shall not be deemed mergod in any other document executed
pursuant to the terms ofthis Agreement,
24. Successors in Interest. This Agreement shall be binding upon the successors, heirs
and assigns, parsons) representatives, administrators, executors, legatees and devisees of the parties
hereto, it being specifically undarstood and agreed that Optionor shall have the tight, at its election,
to convey the Water Distrlbtttion System to a homeowners association formed in connection with
Optionor's residential subdivision, which such wnveyance shall be subject to the provisions of this
Agreement.
25. Hee The paragaph headings contained in this Agreement are employed
solely as a matter of oonveniortce, and the same shall noY be construed as limiting or expandittg the
contents hareofitt any way whatsoever.
26. EoOize Agreement. This Agreement supersedes ap prior agreemrnts between the
parties hereto, whether in writing or otherwise; and any such prior agreement shall have no force or
effect upon and after the date of execution of this Agreement. This Agreement contains the entire
agreement of the parties; and no represent~iorts, inducements, promises or agreements, oral or
otherwise, not embodied herein, shat! be of any farce or effect.
OPTIONOR:
L.C. DEVELOPMENT, INC.
OPTION AGREEMENT • 10
September 23, 2003
O ;f;~1JJY Ut~~~ la ~,i5 YAft %Utl ~iJl 75'1y JUNt~ tlLEUN1LL
OPTIONEE:
By:
~ ntzlota
L.ee Centers, President
CITY 4F MERIDIAN
sy:
Robert D. Cowie, Mayor
ATTEST:
William G. Berg, Jr., City Clerk
o~rto>s waREEMENr - t t
September 23, 2003