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Purchase Option with Financing

 

PURCHASE OPTION

WITH OWNER FINANCING

 

Between us MICHAEL DOUGLAS, of legal age, businessman, resident of Escazú, Urbanización Trejos Montealegre in his capacity as President of ISLAND PROPERTY, SOCIEDAD ANONIMA, corporate identity card number 3-101-12555 herinafter “SELLER” and JAMES DEAN, of legal age, businessman, citizen of the United States with passport number 22222222 and SANDRA DEAN, of legal age, business person, citizen of the United States with passport number 1111111111, hereinafter referred to as the “BUYER” have agreed to enter into a PURCHASE OPTION AGREEMENT which shall be governed by existing legislation and in particular by the following clauses:

FIRST: The Property: The SELLER is the owner of real property registered in the Public Registry, Alajuela Section, pursuant to Title Number ONE EIGHT SIX ONE ONE EIGHT- CERO CERO CERO (186118-000) situated in District thirteen of the first Canton of the Province of Alajuela and which measures 12,000 square meters pursuant to property platt map recorded in the Catasdre Section of the National Registry at A 456774-92 and which shall hereinafter be referred to as the “PROPERTY”. The property consists of raw land with a residential home and fixtures located in La Garita, Alajuela.

SECOND: The Object:  The SELLER hereby confers upon the BUYER the option to purchase the PROPERTY and the BUYER agrees to buy said property free from any liens, encumbrances, and with the Municipal and property taxes paid to date pursuant to the following terms and conditions:

(1)   The Sales Price of the Property:  The SELLER agrees to sell the PROPERTY to the BUYER for the sum of  THREE HUNDRED THOUSAND DOLLARS, CURRENCY OF THE UNITED STATES OF AMERICA.

(2)   The Terms of Sale:  The SELLER must deliver to the BUYER within the time frame stipulated in this option the sum of ONE HUNDRED THOUSAND DOLLARS, CURRENCY OF THE UNITED STATES OF AMERICA in cash or certified check from one of the Costa Rican national banks in funds immediately available.  The balance of TWO HUNDRED THOUSAND DOLLARS shall be financed by the SELLER to the BUYER as follows:  Term of Loan: two years, Interest rate of loan: 4% above the U.S. Treasury Bond Rate payable monthly in arrears. Mortgage Guarantee:  The loan shall be guaranteed by a first mortgage being placed and recorded in the Costa Rican Public Registry against the property which is the subject of this option recorded in the Alajuela Section, pursuant to Title Number indicated above.

THIRD: Fixtures and Inventory: The sale of the PROPERTY includes all fixtures adhered to the land or the structure and which form an integral part of the use, benefit and enjoyment of the property. Also included in the sales price are the items set forth in the inventory list attached as Appendix “A” to this contract.

FOURTH: The Option Term:  The term of this option is for two months beginning on December 1, 2007 and shall expire at 6:00 p.m. in the afternoon (Costa Rica time) on February 1, 2008. The BUYER must notify the SELLER in writing at the legal domicile indicated in this contract of his intent to exercise the purchase option and it is clearly understood between the parties that the closing must take place within the option period stipulated above. 

FIFTH:  The Option Deposit Guarantee: Upon execution of this option purchase contract the BUYER shall deliver to the SELLER an earnest money deposit in the amount of TEN THOUSAND  DOLLARS, CURRENCY OF THE UNITED STATES OF AMERICA. Said deposit shall constitute the consideration for this option contract. If the SELLER does not exercise the option or is in any way unable to comply with the terms set forth in this option he shall lose the consideration tendered herein. On the other hand if the SELLER exercises this option within the stipulated time frame and tenders the initial payment required under the terms of this option the SELLER shall credit the deposit towards the purchase price of the PROPERTY.

SIXTH:  The Closing: As previously indicated, the closing and signing of the property transfer deed must occur before the expiration of the option term.  At closing, the SELLER will provide the following documentation: (a) Certification issued by the Municipal authorities indicating that the seller is current in any municipal and property tax payments. (b) The last paid receipts for utility services, lights, and water. (c) The last paid receipt for telephone number 444-4444.

SEVENTH: Closing Costs:  The BUYER specifically agrees that he shall be solely responsible for the payment of all closing costs related to the transfer of the property If the BUYER requires the financing alternative offered by the SELLER then the SELLER shall select the Notary Public to draft the transfer documents simultaneously with the mortgage guarantee.

EIGHTH: Both parties expressly understand and agree that this contract confers upon the BUYER the OPTION to purchase the PROPERTY and in no manner does it confer upon the BUYER any rights whether direct or implied to possession or occupation of the property prior to the execution of the property transfer deed.

NINTH:  Public Instrument: The parties may elevate this contract to a public instrument by having it translated into Spanish by either a Notary Public or an Official Translator.

Either party may have this agreement elevated to a Public Instrument by having it notarized by a Notary Public. In agreement we sign in duplicate.  At 2 :00 p.m. hours, on  this  1s day of  December, 2007.

         

 

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