EXHIBIT 10.07

 

Prepared by:

Catherine A. Tanck

Davenport, Evans, Hurwitz & Smith, LLP

206 W. 14th St., PO Box 1030

Sioux Falls, SD 57101-1030

(605) 357-1223

 

TERMINATION AGREEMENT

 

This TERMINATION AGREEMENT is made and entered into as of this 16 day of May,
2014, by and between Spader, Inc., a South Dakota corporation, of 1601 E. Robur
Dr., Sioux Falls, SD 57104, hereinafter referred to as “Seller”, and Verity
Farms, LLC, a South Dakota limited liability company, of 47184 258th St., Sioux
Falls, SD 57107, hereinafter referred to as “Buyer.”

 

WITNESSETH:

 

WHEREAS, Seller sold to Buyer, and Buyer purchased from Seller, pursuant to a
contract for deed dated December 27, 2012, as amended to date (“Contract for
Deed”), that certain real estate located in Minnehaha County, South Dakota,
which is legally described on Exhibit A, attached hereto and incorporated herein
by this reference, which real estate is referred to herein and in the Contract
for Deed as the “Property”; and

 

WHEREAS, the Contract for Deed provided for payment of a total purchase price of
Two Million Four Hundred Thousand Dollars ($2,400,000), together with interest
from and after the date of the Contract for Deed, at the rate of six percent
(6%) per annum, payable in five (5) annual installments of Four Hundred Thousand
Dollars ($400,000) each, including principal and interest, commencing on
September 20, 2013, and continuing on the same date of the succeeding four (4)
calendar years, and with a balloon payment of all unpaid principal and accrued
interest on September 20, 2018; and

 

WHEREAS, Seller has not received any payments from Buyer to date of principal or
interest under the Contract for Deed and, as such, Buyer is in default
thereunder; and

 

WHEREAS, the parties now desire to terminate the Contract for Deed by mutual
agreement and to return the Property to the Seller,

 

NOW, THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, it is agreed as follows:

 

 

 

 

1. Termination. The parties agree that in lieu of proceeding under the default
provisions of Section 12 of the Contract for Deed, the parties by mutual
agreement hereby agree that the Contract for Deed shall terminate on
_____________, 2014 (“Termination Date”). Prior to the Termination Date, Buyer
shall vacate the Property and surrender and return the Property to the Seller in
substantially the same condition as it was on December 27, 2012.

 

2. The Existing Leases/Assignment of Rents. Buyer warrants and represents and
agrees as follows:

 

(a) the Property is subject to no leases or other contracts except (i) leases
that were in place on December 27, 2012, and to which no modifications or
amendments have since been made; or (ii) other leases or other contracts to
which Seller gave its prior written consent;

 

(b) to Buyer’s knowledge, no liens, restrictions or encumbrances have been
placed on the Property from and after December 27, 2012, with or without the
permission of the Buyer;

 

(c) Buyer is responsible for the real estate taxes and assessments on the
Property for the 2013 calendar year (which are payable in 2014). Within six (6)
months following the date hereof, Buyer agrees to pay Seller for such taxes and
assessments, together with interest at the rate of three percent (3%) per annum
from May 1, 2014 until payment is made;

 

(d) Buyer has complied, in full, with all of its obligations under Sections 8
and 13 of the Contract for Deed up to through the Termination Date;

 

(e) Buyer has not assigned all or any part of its rights under the Contract for
Deed in violation of Section 18 of the Contract for Deed up through the
Termination Date;

 

(f) Buyer has complied, in full, with all of its obligations under Section 9 of
the Contract for Deed up through the Termination Date;

 

(g) Buyer hereby waives any right it may have to CRP and any other federal farm
program payments associated with the Property under Section 17 of the Contract
for Deed; and

 

(h) upon execution of this Termination Agreement by both parties, Buyer shall
deliver to Seller a duly executed Quit Claim Deed in the form attached as
Exhibit B.

 

As additional security for Buyer’s obligations to Seller under the Contract for
Deed, Buyer executed an Assignment of Rents providing, in part, that Seller was
entitled to receive all rents, income, issues, and profits in connection with
any lease agreement then in place, or to be entered into in the future, with
respect to the Property. Pursuant to such provision, the parties agree that
Seller shall be entitled to retain any rents, income, issues and profits it has
already received, and shall also be entitled to receive any future profits with
respect to the Property. To the extent that any of such amounts have been or in
the future are delivered to Buyer, Buyer agrees that it has and will receive
such amounts shall only as an agent for the Seller (and not for its own account)
and shall notify Seller of their receipt and promptly turn them over to Seller.

 

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3. Mutual Release. Upon Buyer and Seller satisfying their obligations as set
forth in this Termination Agreement, and subject to such satisfaction:

 

(a) Except as provided herein, Seller releases, discharges and waives any
claims, known or unknown, against Buyer and its officers, directors, managers,
members, affiliates (including but not limited to Verity Corp.) or agents, and
their respective successors and assigns, arising out of or in any way connected
to the Contract for Deed through the date hereof, including its right to accrued
interest. The foregoing release discharge, and waiver shall not apply to any
claim that Seller may have for indemnification under Section 11 of the Contract
for Deed for injuries occurring on or before the Termination Date, or for
payment of real estate taxes, with interest, under Section 2(c) hereof; and

 

(b) Buyer releases, discharges and waives any claims, known or unknown, against
Seller and its officers, directors, shareholders or agents, and their respective
successors and assigns, arising out of or in any way connected with the Contract
for Deed through the date hereof.

 

Nothing in this Section shall operate as a release of any party from its
liabilities and obligations arising under this Termination Agreement.

 

4. Binding Effect. This Termination Agreement shall be for the benefit of, and
shall be binding upon, the parties hereto and their respective successors and
assigns.

 

5. Final Agreement. This Termination Agreement shall constitute the final
agreement and understanding of the parties on the subject matter hereof. This
Termination Agreement may be modified only by a further writing signed by both
parties.

 

6. Governing Law; Illegality. This Termination Agreement shall governed by the
laws of the State of South Dakota, without regard to its conflict of law
provisions. If one or more of the provisions contained herein shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Termination Agreement, and this Termination Agreement shall be construed
as if such invalid, illegal or unenforceable provision had not been contained
herein, and shall be enforced to the maximum extent permitted by law.

 

7. Counterparts. This Termination Agreement may be executed in any number of
counterparts, each of which shall be deemed and original, but all of which
together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have caused this Termination Agreement to be
executed by their duly authorized representatives as of the ___ day of
___________, 2014.

 

  SPADER, INC.         By: /s/ DUANE SPADER   Its:           VERITY FARMS,
L.L.C.         By: /s/ VERLYN SNELLER   Its:  

 

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STATE OF SOUTH DAKOTA )   : SS COUNTY OF MINNEHAHA )

 

On this, the _____ day of _______________, 2014, before me, the undersigned
officer, personally appeared ___________________, who acknowledged himself to be
the __________________________ of Spader, Inc., a corporation, and that he, as
such officer, being authorized so to do, executed the foregoing instrument for
the purposes therein contained by signing the name of the corporation by himself
as ______________________.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

      Notary Public, South Dakota   My Commission expires:  

 

STATE OF SOUTH DAKOTA )   : SS COUNTY OF MINNEHAHA )

 

On this, the _____ day of _______________, 2014, before me, the undersigned
officer, personally appeared ___________________, who acknowledged himself to be
the __________________________ of Verity Farms, L.L.C., a limited liability
company, and that he, as such _____________, being authorized so to do, executed
the foregoing instrument for the purposes therein contained by signing the name
of the company by himself as ______________________.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

  

 

      Notary Public, South Dakota   My Commission expires:      

 

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Exhibit A

Legal Description

 

The Northwest Quarter of the Southeast Quarter (NW1/4SE1/4), the West Half of
the Northeast Quarter (W1/2NE1/4), the South Half of the Northwest Quarter
(S1/2NW1/4), and the Northeast Quarter of the Southwest Quarter (NE1/4SW1/4),
all in Section 24, Township 102 North, Range 49 West of the 5th P.M., Minnehaha
County, South Dakota.

 

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Exhibit B

Quit Claim Deed

 

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