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Sale of Real Estate CONTRACT OF SALE OF REAL ESTATE This Contract of Sale of Real Estate ("Contract") is entered into this 28th day of September, 2004, by Eastridge Development, Inc., a Kansas corporation, ("Seller") and the City of Salina, Kansas ("Buyer"). 1. Property Description and Reservation of Mineral Ri2hts. Seller agrees to sell and Buyer agrees to purchase the Saline County, Kansas, real estate described on the attached Exhibit A, together with all appurtenances and subject to reservation of all mineral rights in and under the described real estate by Daniel C. King and Nancy L. King, husband and wife, their heirs, executors, and assigns, and the right to enter the described real estate for the purpose of extraction of all oil, gas and other minerals, on, in, and under the described real estate as set forth in Corrective Quit Claim Deed from Daniel C. King et at. to Eastridge Development, Inc., dated January 1, 1997, and recorded in Deed Book 380, at pages 48-49, (the "Property") upon the terms, conditions and requirements set forth in this Contract. 2. Purchase Price. The Purchase Price for the Property shall be the sum of Four Hundred Forty-Two Thousand and No/lOOths Dollars ($442,000.00), which shall be paid in cash on Closing Date. 3. Relocation of Tank Battery. The parties acknowledge that an operating oil well and a tank battery serving the oil well (the "Tank Battery") are currently located on the Property. The parties also acknowledge that upon construction of the planned Union Pacific Railroad track improvements on the Property ("Track Improvements"), access to the Tank Battery from Marymount Road will require crossing the Track Improvements. In order to assure consistent, daily access to the Tank Battery from Marymount Road and as partial consideration for purchase of the Property, the City agrees that it shall pay the expense of relocating the Tank Battery to a location on the Property east of the Track Improvements. Relocation of the Tank Battery shall occur prior to construction of the Track Improvements. The precise location of the relocated Tank Battery shall be determined upon the basis of consultation among Buyer, Seller, and Seller's oil well operator. 4. Crops and Future Farm Lease. Buyer agrees that Seller shall retain ownership of all 2004 crops and entitlement to the related 2004 FSA payments. Buyer agrees that it shall by separate lease agreement enter into a cash-rent farm lease with Seller for a specific acreage lying west of the Track Improvements to be identified by the parties (the "Farm Lease"). 5. Indemnification for Bio-solids Application. The parties acknowledge that bio- solids from the Buyer's public sewage treatment process have been applied by Seller to the Property. Buyer agrees to indemnify and hold the Seller and its officers, directors, shareholders, agents and employees harmless against all liability, loss, damage, expense, and judgment, including attorneys' fees so incurred, arising from or relating to Seller's application ofbio-solids obtained from the Buyer to the Property. 6. Indemnification for Groundwater Contamination. Seller represents and covenants, to its best information and belief, that the historical use of the Property has been limited to farming and crude oil production and that salt-water disposal from any oil welles) has always been and shall continue to be off the Property. Subject to the limitation set forth in this paragraph, Buyer agrees to indemnify and hold the Seller and its officers, directors, shareholders, agents and employees harmless against all liability, loss, damage, expense, and judgment, including attorneys' fees so incurred, arising from or relating to contamination of the groundwater under the Property. Buyer's indemnification of Seller relating to groundwater contamination, however, shall not extend to groundwater contamination resulting from the past or future exercise of any rights or the failure of any person to perform responsibilities arising from or relating to Seller's retention of mineral rights, including, without limitation, the production of crude oil or any related processes. 7. Involuntary Conversion. The parties acknowledge (a) that Buyer is acquiring the Property for purposes of the North Ohio Grade Separation Project and future municipal facilities and (b) that Seller's sale of the Property to Buyer is involuntary and under threat of condemnation. 8. Payment of Expenses. Buyer shall pay the following expenses: (a) Cost of preparation of contract, deed, and real estate sales validation questionnaire; Entire title insurance premium; Any closing fee. Cost of recording deed. (b) (c) (d) 9. Escrow A2ent. The Mid-Kansas Title Company, Inc., Salina, Kansas, is designated as the Escrow Agent of the parties and shall hold this Contract, deed, title insurance policy, and all other papers of transfer pending the complete fulfillment of this Contract. The Escrow Agent shall receive and disburse all payments to be paid under this Contract. 10. Evidence of Title. As soon as reasonably possible after execution of this Contract, Buyer shall request the preparation of a commitment for an owner's title insurance policy in the amount of the Purchase Price, insuring Buyer's title, subject only to liens, encumbrances, exceptions, or qualifications set forth in this Contract, and those which shall be discharged by Seller at or before Closing. Buyer shall have two (2) days after receipt to examine the title insurance commitment and to notify Seller in writing of any requirements to make the title marketable. In case of a dispute between the parties as to marketability of the title, the Title Standards adopted by the Bar Association for the State of Kansas, and the Kansas Marketable Title Act, as amended, shall control. 11. Closin2 Date and Possession. The Closing Date shall be on or before September 30, 2004. "Closing" means the settlement of the obligations of Seller and Buyer to each other under this Contract, including the payment of the Purchase Price to Seller, and the delivery to Buyer of a deed in a proper form for recording so as to transfer to Buyer fee simple title to the 2 Property, free of all encumbrances except as herein stated. Buyer shall take possession of the Property immediately following the Closing, subject to Seller's right to complete: harvest of all 2004 crops and Seller's rights of possession under the Farm Lease. 12. Restrictions. Easements. Limitations. Taxes. Buyer shall take title subject to the following: zoning restrictions, covenants, and matters appearing on the plat or of record; public utility easements of record, and taxes and special assessments prorated to Closing Date. 13. Materialmen's Liens. Seller certifies that at Closing there will be no lien claimants, nor potential lien claimants, nor improvements to the Property for 120 days prior to Closing Date. If there have been improvements on or to the Property within 120 days prior to the Closing Date, Seller shall deliver releases or waivers from the general contractors, subcontractors, suppliers, and materialmen furnishing the labor or materials for such improvements, together with such affidavits as Buyer may reasonably require naming such persons and reciting that all bills that might serve for a basis for materialmen's liens have or will be paid prior to or at Closing. 14. Conveyance. Seller shall properly execute the appropriate warranty deed conveying the Property to Buyer free and clear of all liens and encumbrances whatsoever, except as herein provided, and shall place such deed in escrow with the Escrow Agent as soon as may be reasonably possible. If Buyer shall pay the sums of money as they become due and payable, and otherwise fully comply with the provisions of this Contract, then this Contract shall become binding and the Escrow Agent shall deliver the warranty deed and other documents to the Property to Buyer. 15. Default by Sellers. If Seller is unable or fails to furnish title or possession as agreed in this Contract, Buyer may cancel this Contract, pursue any remedies avai]lable at law or in equity, initiate an eminent domain proceeding in order to acquire title to the Property, or any combination thereof. 16. Assi2nment. This Contract or any right or interest in the Property shall not be assigned by either Seller or Buyer. 17. No Commission. The parties stipulate that they have not consulted with any real estate broker or salesperson with respect to this sale, and that no commissions arising from this sale are due and owing. 18. Real Estate Reportin2 Person. The parties agree that the Escrow Agent is the real estate reporting person as that term is defined under Internal Revenue Code Section 6045(e). Seller agrees to provide Escrow Agent with a written statement, certified under penalties of perjury, setting forth Seller's correct name, address, and taxpayer identification number. The parties further agree that Escrow Agent shall be required to file the informational return required by Internal Revenue Code Section 6045. 19. Time. Time is of the essence of this Contract. 3 20. Persons Bound-Copies. This Contract shall extend to and bind the heirs, executors, administrators, trustees, successors, and assigns of the parties, and may be executed in any number of counterparts, each of which shall be deemed an original, or in multiple originals, and all such counterparts or originals shall for all purposes constitute one agreement. 21. Facsimile. For purposes of this Contract and the addenda, attachments or amendments thereto, Seller and Buyer agree to accept facsimile signatures and initials as originals. 22. Mer2er Clause. These terms are intended by the parties to be a complete, conclusive, and final expression of all the conditions of their Contract. Any amendment to this Contract, including an oral modification supported by new consideration, must be reduced to writing and signed by both parties before it will be effective. 23. Survival. This Contract and all representations and warranties contained herein shall survive the making, execution and delivery of this Contract, and the closing or termination thereof. IN WITNESS WHEREOF, the parties or their authorized representatives have hereunto set their hands the day and year first above written. By: CITY OF SALINA, KANSAS By: c:é7~ / ~ ~ity Manager 4 RECEIPT BY ESCROW AGENT The undersigned hereby acknowledges receipt of the executed original of this Contract, and agrees to act as Escrow Agent and Real Estate Reporting Person as defined under Internal Revenue Code Section 6045(e). This receipt is executed this .Z~day of September, 2004. Mid-Kansas Title Company, Inc. By: ~-~ ~ Robert M. Wasko President 5 The rvtid-Kmsas Title Co., Inc. 217 N. Santa Fe CORPORA TION WARRANTY DEED THIS INDENTURE, Made this ~ day of September, 2004, between EASTRIDGE DEVELOPMENT, INC., duly organized, incorporated and existing under and by virtue of the laws of the State of Kansas and having its principal place of business in Salina, in the State of Kansas, of the first part and THE CITY OF SALINA, KANSAS, a municipal corporation, of Saline County, in the State of Kansas, of the second part: WITNESSETH, That said party of the first part, in consideration of the sum of One Dollar ($1.00) and other valuable considerations, the receipt of which is hereby acknowledged, does by these presents, Grant, Bargain, Sell and Convey unto said party of the second part, its successors and assigns, all the following described real estate, situated in Saline County, State of Kansas, to-wit: See attached "Exhibit A" EXCEPT AND SUBJECT TO easements, covenants, restrictions and reservations of record; rights reserved by Grantor as tenant pursuant to unrecorded Lease Agreement; taxes and assessments for the year 2005 and subsequent years; TO HAVE AND TO HOLD THE SAME, Together with all and singular the tenements, hereditaments and appurtenances thereunto belonging or in anywise appertaining, forever. Any said grantor for itself, its successors and assigns, does hereby covenant, promise and agree, to and with said party of the second part, that at the delivery of these presents it is lawfully seized in its own right, of an absolute and indefeasible estate of inheritance, in fee simple, of and in all and singular the above granted and described premises, with the appurtenances; that the same are free, clear, discharged and unencumbered of and from all former and other grants, titles, charges, estates, judgments, taxes, assessments and encumbrances, of what nature or kind soever; see above exceptions; and that it will warrant and forever defend the same unto said party of the second part, its heirs and assigns, against said party of the first part, its successors and assigns, and all and every person or persons whomsoever, lawfully claiming or to claim the same. IN WITNESS WHEREOF, the said party of the first part has hereunto caused this Deed to be signed on its behalf by its Managing Member thereunto duly authorized so to do, and has caused its corporate seal to be hereunto affixed the day and year first above written. by: STATE OF KANSAS, SALINE COUNTY, ss. BE IT REMEMBERED, That on this ~-&lday of September, 2004, before me, the undersigned, a notary public, in and for the County and State aforesaid came Daniel C. King, President of Eastridge Development, Inc., a corporation duly organized, incorporated and existing under and by virtue of the laws of the State of Kansas, who is personally known to me to be such officer, and who is personally known to me to be the same person who executed, as such officer, the within instrument of writing on behalf of said corporation, and such person duly acknowledged the execution of the same to be the act and deed of said corporation. IN TESTIMONY WHEREOF, I have hereunto set my hand, and affixed my official seal the day and year last above mentioned. Ù n ~~ ~ . . ~ . . KELS CV~V . (S~ Notary Public ..&. Notlry puc/ R. STEINLE Term Expires: \ t ' -2a:16 My Appt E - IC. Stile of /tilt,,! . II .'. .... ,,"'\:>~~.':.9.u/l¡ --Þ, Entt~~tranZ~ in my office this: .--~ - ,AD.,20Q[. .. . . . :: : : : - . : REBECCA SEEMAN'"- RE6ISTER IF DEEDS ,'-.' ^ I S¡UtE COONTY KANSAS I VI ,Book: 1089 Page: 66 Receipt I: 20171 TOìal Fees: $120Ø Pages Recorded: 2 . Date Recorded: 9/38/2004 3:38:12 PM Cou~Yr~ler~' ..'~.. " l' °, . h- , " -<¡"'-'h...O"or::.- -, .', , " l\.; '" - . J,,'-,);:\\,:.,..,.'- ,... -", Book: 1089 Page: 67 EXHIBIT A All that part of The Lee Industrial Park, according to the plat thereof recorded in the office of the Register of Deeds of Saline County, Kansas, on April 1, 1964, in Book A-3 of Plats at Page 36, lying in the Northeast Quarter (NEV.) and the East Half (EV2) of the Northwest Quarter (NW1/.) of Section Seven (7), Township Fourteen (14) South, Range Two (2) West of the 6th P.M., in Saline County, Kansas, which tract is more particularly described as follows: Beginning at a stone found at the N'/4 corner of said Section 7; thence westerly along the north line of the NWV. of said Section a distance of 210.9 feet to a point on the east line of the Missouri Pacific Railroad right-of-way; thence southwesterly along the east RNI/ line of the Missouri Pacific Railroad, a distance of 315.0 feet; thence southerly along the east Rf\N line of the Missouri Pacific Railroad a distance of 1,022.32 feet to a point on the south line of the NEV. of the NW% of said Section 7; thence westerly along the south line of the NEV4 of the NW1/. of said Section 7 a distance of 33.0 feet; thence southerly along the east RNV line of the Missouri Pacific Railroad a distance of 74.4 feet to a point on the curve of the north RNV line of the main line of the Missouri Pacific Railroad; thence northeasterly along the arc of a curve having a radius of 2,914.93 feet, said arc being the north RNV line of the Missouri Pacific Railroad main line a distance of 289.0 feet; thence easterly along the north RNV line of the Missouri Pacific Railroad main line a distance of 2,677.8 feet to a point on the east line of the NE% of said Section 7; thence northerly along the east line of the NEV4 of Section 7 a distance of 1,346.66 feet more or less to the northeast corner of said Section 7; thence westerly along the north line of said Section 7 to the point of beginning, containing 91.1 acres more or less. Subject to reservation of all mineral rights in and under the above described real estate by Daniel C. King and Nancy L. King, husband and wife, their heirs, executors, and assigns, and the right to enter said real estate for the purpose of extraction of all oil, gas and other minerals, on, in, and under said real estate as set forth in Corrective Quit Claim Deed from Daniel C. King eta!. to Eastridge Development, Inc., dated January 1, 1997, and recorded in Deed Book 380, at pages 48-49. /I (Þ \cr-"'"