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THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD
CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING
CONTRACT TO BUY AND SELL REAL ESTATE
AGRICULTURAL
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Date
PARTIES AND PROPERTY
1. Cheryl L. Madison and Michael C. Madison, wife and husband and
Cindy L. Tustin, Trustee of the Cindy L. Tustin Trust, U/T/A dated January 20,
1999, Sellers (Seller), agree to sell to Western Plains Energy, L.L.C., a Kansas
Limited Liability Company, with its principal place of business located in
Sheridan County, Kansas, as Buyer (Buyer) and Buyer agrees to purchase, on the
terms and conditions set forth in this Contract, the following described real
estate in the County of Gove, State of Kansas, to-wit:
A TRACT OF LAND LOCATED IN THE SOUTH HALF (S1/2) OF SECTION ONE (S01),
TOWNSHIP ELEVEN SOUTH (T11S), RANGE THIRTY-ONE WEST (R31W) OF THE SIXTH
PRINCIPAL MERIDIAN (6TH P.M.), IN GOVE COUNTY, KANSAS, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID SECTION, THENCE, ON AN
ASSUMED BEARING OF N00 DEG. 18'21"W, ALONG THE WEST LINE OF SAID
SECTION, A DISTANCE OF ONE THOUSAND EIGHT HUNDRED SEVENTY-FIVE AND
FIFTY-FIVE HUNDREDTHS (1875.55) FEET TO THE SOUTH RIGHT-OF-WAY
BOUNDARY OF THE UNION PACIFIC RAILROAD, THENCE N88 DEG. 48'41"E, ALONG
SAID RAILROAD RIGHT-OF-WAY, FOR A DISTANCE OF TWO HUNDRED NINETY-NINE
AND EIGHTY-THREE HUNDREDTHS (299.83) FEET, THENCE EAST-NORTHEASTERLY,
ALONG SAID RAILROAD RIGHT-OF-WAY, ON A CIRCULAR CURVE TO THE LEFT (ARC
ANGLE = 01 DEG. 16'41" LT; RADIUS = 17304.17 FT.; LONG CHORD BEARING =
N88 DEG. 11'07"E), FOR A DISTANCE OF THREE HUNDRED EIGHTY-FIVE AND
NINETY-NINE HUNDREDTHS (385.99) FEET, THENCE N87 DEG. 32'00"E, ALONG
SAID RIGHT-OF-WAY, FOR A DISTANCE OF TWO THOUSAND FOUR HUNDRED TWELVE
AND EIGHTY-THREE HUNDREDTHS (2412.83) FEET, THENCE S00 DEG. 08'11"E
FOR A DISTANCE OF ONE THOUSAND NINE HUNDRED NINETY-SEVEN AND
SEVENTY-FIVE HUNDREDTHS (1997.75) FEET TO THE SOUTH LINE OF SAID
SECTION, THENCE S89 DEG. 59'55"W, ALONG THE SOUTH LINE OF SAID
SECTION, FOR A DISTANCE OF THREE THOUSAND NINETY AND NINETY HUNDREDTHS
(3090.90) FEET TO THE POINT OF BEGINNING CONTAINING 137.21 ACRES, SAID
TRACT BEING SUBJECT TO COUNTY ROAD RIGHT-OF-WAY ALONG ITS WEST AND
SOUTH BOUNDARIES.
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Together with all water and mineral rights, easements and right-a-ways
appurtenances thereto, all improvements thereon and all fixtures of a permanent
nature currently on the property, in their present condition, ordinary wear and
tear accepted, and hereinafter called the property.
PURCHASE PRICE AND TERMS
2. The purchase price shall be One Hundred Seventy Eight Thousand
Three Hundred Seventy Three Dollars ($178,370.00) payable by the Buyer as
follows:
(a) EARNEST MONEY. Seventeen Thousand Eight Hundred Thirty-seven
Dollars and Thirty Cents ($17,837.30) in the form of check, as earnest
money deposit and partial payment of the purchase price, payable to and
to be held by Kite & Day, L.L.P., (The Escrow Agent) it its trust account
on behalf of both Seller and Buyer. The Escrow Agent is hereby authorized
to deliver the earnest money deposit to the closing agent, if any, at or
before closing.
(b) CASH AT CLOSING. The balance of One Hundred Sixty Thousand Five
Hundred Thirty Two Dollars and Seventy Cents ($160,532.70) (purchase
price less earnest money) shall be paid by Buyer at closing in funds
which comply with all applicable Kansas law, which includes cash,
electronic transfer funds, certified check, savings and loan tellers
check and cashiers check (good funds).
(c) ASSIGNMENT OF RAIL ROAD LEASE. As further consideration of the
mutual promises and covenants of this agreement, at closing, Seller shall
assign, transfer and set over unto Buyer by proper instruments of
assignment and transfer the entire interest, free and clear of any liens
and/or encumbrances, those leases of Seller as lessee in and to certain
railroad right-of-way leases and/or industrial tract agreements with
Union Pacific Railroad Company, lease audit number 190319 covering the
following described property, to-wit:
A TRACT OF LAND LOCATED IN THE SOUTH HALF (S1/2) OF SECTION ONE
(S01), TOWNSHIP ELEVEN SOUTH (T11S), RANGE THIRTY-ONE WEST (R31W)
OF THE SIXTH PRINCIPAL MERIDIAN (6TH P.M.) IN GOVE COUNTY, KANSAS,
MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHWEST CORNER OF SAID SECTION, THENCE, ON AN
ASSUMED BEARING OF N00 DEG. 18'21"W, ALONG THE WEST LINE OF SAID
SECTION, A DISTANCE OF ONE THOUSAND EIGHT HUNDRED SEVENTY FIVE AND
FIFTY-FIVE HUNDREDTHS (1875.55) FEET TO THE POINT OF BEGINNING,
SAID POINT OF BEGINNING LOCATED ON THE SOUTH RIGHT-OF-WAY OF THE
UNION PACIFIC RAILROAD.
FROM THE POINT OF BEGINNING, THENCE N00 DEG. 18'21"W, ALONG THE
WEST LINE OF SAID SECTION, FOR A DISTANCE OF ONE HUNDRED FIFTY
AND TWO HUNDREDTHS (150.02) FEET, THENCE N88 DEG. 48'41"E FOR A
DISTANCE OF TWO HUNDRED NINETY-SEVEN AND FIFTY-FIVE
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HUNDREDTHS (297.55) FEET, THENCE EAST-NORTHEASTERLY, ON A
CIRCULAR CURVE TO THE LEFT (ARC ANGLE = 01 DEG. 16'41"LT;
RADIUS = 17154.17 FT.; LONG CHORD BEARING = N88 DEG. 11'07E)
FOR A DISTANCE OF THREE HUNDRED EIGHTY-TWO AND SIXTY-FIVE
HUNDREDTHS (382.65) FEET, THENCE N87 DEG. 32'00"E FOR A
DISTANCE OF TWO THOUSAND FOUR HUNDRED EIGHTEEN AND NINETY
HUNDREDTHS (2418.90) FEET, THENCE S00 DEG. 08'11"E FOR A
DISTANCE OF ONE HUNDRED FIFTY AND TWELVE HUNDREDTHS (150.12)
FEET TO THE SOUTH RIGHT-OF-WAY BOUNDARY OF SAID RAILROAD,
THENCE S87 DEG. 32'00"W, ALONG SAID RAILROAD RIGHT-OF-WAY, FOR
A DISTANCE OF TWO THOUSAND FOUR HUNDRED TWELVE AND EIGHTY-THREE
HUNDREDTHS (2412.83) FEET, THENCE WEST-NORTHWESTERLY, ALONG
SAID RAILROAD RIGHT-OF-WAY, ON A CIRCULAR CURVE TO THE RIGHT
(ARC ANGLE = 01 DEG. 16'41"W; RADIUS = 17304.17FT.; LONG CHORD
BEARING = S88 DEG. 11'07"W), FOR A DISTANCE OF THREE HUNDRED
EIGHTY-FIVE AND NINETY-NINE HUNDREDTHS (385.99) FEET, THENCE
S88 DEG. 48'41"W FOR A DISTANCE OF TWO HUNDRED NINETY-NINE AND
EIGHTY-THREE HUNDREDTHS (299.83) FEET TO THE POINT OF
BEGINNING, CONTAINING 10.66 ACRES, SAID TRACT BEING SUBJECT TO
COUNTY ROAD RIGHT-OF-WAY ALONG ITS WEST BOUNDARY.
WAIVER AND DISMISSAL OF WATER RIGHTS
3. Upon closing of this agreement and in consideration of the mutual
promises, covenants and payments hereinbefore set out, the Seller hereby assigns
to the Buyer a voluntary waiver and dismissal of water rights to the following
described water and water rights as described in appropriation Water Right File
Number 14027 to all water and water rights appurtenant to that portion of the
SOUTH HALF (S1/2) OF SECTION ONE (S01), TOWNSHIP ELEVEN SOUTH (T11S), RANGE
THIRTY-ONE WEST (R31W) OF THE SIXTH PRINCIPAL MERIDIAN (6TH P.M.), GOVE COUNTY,
KANSAS, LYING NORTH OF THE UNION PACIFIC RIGHT-OF-WAY AND ALL OF THAT PORTION OF
THE SOUTH HALF (S1/2) OF SECTION ONE (S01) laying to the East of the property
being sold pursuant to this agreement.
EVIDENCE OF TITLE
4. Seller shall furnish to Buyer a current commitment for owners
Title Insurance Policy in an amount equal to the purchase price (title
documents), on or before February 1, 2001, (title deadline). The cost of said
title insurance will be paid by the Seller. Upon receipt of the commitment or
abstract, Buyer shall examine said commitment and shall notify Seller within Ten
(10) days, in writing, of any defects which prevent title from being
satisfactory to Buyer, herein referred to as "Title Defects". Seller shall have
until the closing date to cure Title defects for which notification is given. If
Title Defects cannot be cured by closing date, the Seller may grant an extension
of time to Seller during which Seller shall use reasonable, good faith efforts
to cure the Title Defects, unless Buyer, in its sole discretion, waives the
Title Defects by written notice of same to Seller. Seller's failure to cure such
Title Defects within the extension period shall result in the termination of
this Contract. The premium will be paid at closing and the title insurance
policy will be delivered to Buyer as soon as practical after closing. The Buyer
shall be responsible for the payment of any premium on any mortgage insurance
policy.
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BUYER FINANCING
5. If a new loan is to be obtained by Buyer from a third party, Buyer
agrees to promptly and diligently:
(a) apply for such loan;
(b) execute all documents and furnish all information and documents
required by the lender;
(c) pay the customary cost, if any, of obtaining such loan.
Then if such loan is not approved on or before January 15, 2002, this Contract
shall be null and void and all payments and things of value received hereunder
shall be returned to Buyer.
COST OF APPRAISAL
6. The cost of any appraisal for loan purposes to be obtained after
this date shall be paid by Buyer.
INSPECTION
7. Buyer, or any designee, shall have the right to have inspection of
the physical condition of the property at Buyer's expense. If written notice of
any unsatisfactory condition, prepared by or on behalf of the Buyer, is not
received by Seller on or before January 15, 2002, (objection deadline), the
physical condition of the property and any exclusions shall be deemed to be
satisfactory to Buyer. If such notice is received by Seller as set forth above,
and if Buyer and Seller have not agreed, in writing, to a settlement thereof on
or before February 1, 2002, (resolution deadline), this Contract shall terminate
three (3) days following the resolution deadline; unless, within the three (3)
calendar days, Seller receives written notice from Buyer waiving objection to
any unsatisfactory condition. Buyer is responsible for and to pay any damage
which occurs to property as a result of such inspection.
DATE OF CLOSING
8. The date of closing shall be March 1, 2002, or by mutual agreement
at an earlier date. If closing does not occur by March 1, 2002, then unless an
extension is agreed to by and between the parties, this Contract shall
terminate.
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TRANSFER OF TITLE
9. Subject to payment at closing as required herein and compliance by
Buyer with the other terms and provisions hereof, Seller shall execute and
deliver a good and sufficient General Warranty Deed to Buyer, on closing,
conveying the property free and clear of all taxes except the general taxes for
the year of closing. Title shall be conveyed free and clear of all liens and
encumbrances except those that are reflected by the title documents accepted by
Buyer as hereinbefore provided and those rights, if any, of third parties in
possession of the property not shown by public records.
PAYMENT OF ENCUMBRANCES
10. Any encumbrance required to be paid shall be paid at or before
closing from the proceeds of this transaction or from other sources.
DUTIES OF ESCROW AGENT
11. The escrow agent for the purposes of this Contract shall be Kite &
Day, L.L.P., Attorneys at Law, St. Francis, Kansas. The escrow agent shall hold
the Abstract of Title when not being utilized for updating or examination
purposes, the Warranty Deed provided for herein and a fully executed copy of the
contract until time of closing unless otherwise instructed by both Seller and
Buyer. All payments shall be made directly to the escrow agent who shall then
deposit each payment to the trust account of the escrow agent. Upon closing of
the Contract, escrow agent shall pay the amounts received by it, less expenses
of closing, to Seller. All escrow charges shall be paid one-half (1/2) by
Sellers and one-half (1/2) by Buyer. Escrow charges shall be Fifty Dollars
($50.00). Upon full compliance with the terms and conditions of this Contract
and payments required hereunder, the escrow agent shall deliver the Abstract of
Title and Warranty Deed provided herein to Buyer.
REPORTING AGENT
12. The reporting agent for the sale of the hereinabove described real
estate as required by the rules and the regulations of the Internal Revenue
Service shall be Kite & Day, L.L.P., Attorneys at Law, St. Francis, Kansas. Said
reporting agent shall file all applicable informational returns, 1099s, 1096s
and any and all other reporting information as required by the Internal Revenue
Service as well as all related filings required by the State in which the
hereinabove described real estate is located. The reporting agent's fees shall
be Fifty Dollars ($50.00) and shall be paid by the Seller.
PRORATIONS
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13. Real estate taxes for 2001 and all prior years shall be paid by
the Seller with Buyer, being responsible for the payment of taxes for 2002.
LEASEBACK TO SELLER
14. In consideration of the mutual promises, covenants and payments
hereinbefore set out, upon closing of this agreement, Buyer shall lease the
property subject to this agreement back to the Seller for a five (5) year period
commencing on March 1, 2002, and ending on February 28, 2007 at the cash rental
amount of One Hundred Dollars ($100.00) per acre per year for the irrigated
acres and Thirty-five Dollars ($35.00) per acre per year for the dry land acres.
The parties agree that the irrigated acres on both the property being conveyed
and the railroad lease presently are _________ acres with the balance of
____________ acres being dryland. The cash rent shall be due in advance on or
before the 1st day of March of each year during the term of this lease back and
any extension thereof.
15. It is expressly understood and agreed by and between the parties
that Buyer intends to utilize the water and water rights being secured by this
agreement in the operation of an ethanol plant that Buyer intends to construct
on a tract of land located in the SOUTHWEST QUARTER (SW1/4) OF SECTION TWO
(S02), TOWNSHIP ELEVEN SOUTH (T11S), RANGE THIRTY-ONE WEST (R31W) OF THE SIXTY
PRINCIPAL MERIDIAN (6TH P.M.), IN GOVE COUNTY, KANSAS, and further that Buyer
intends to apply to the Kansas Department of Agriculture, Division of Water
Resources, for a change of type of use of the water appropriated pursuant to
water right file number 14027 from irrigation use to industrial use. Upon
approval of the change of type of use and Buyer's utilization of the water in
the operation of Buyer's ethanol plant, the availability of water for irrigation
use on the property subject to this agreement will be dramatically reduced, if
not eliminated, with the result being that the leaseback to the Sellers will
consist of dryland acreage. In the interim, Seller agrees to pump the well
located on the subject property and to apply the pumped water to the extent
necessary to maintain the water appropriation rights on water right file 14027
at current levels and further to prepare and file the appropriate water use
reports and other information as required by the Kansas Department of
Agriculture, Division of Water Resources.
16. At the expiration of the initial five (5) year term of the
leaseback, the term shall automatically renew for successive one (1) year terms
unless either party shall give ninety (90) days written notice to the other of
their intent not to renew this leaseback agreement.
FIRST RIGHT OF REFUSAL
17. In the event that Buyer would sell or otherwise convey fee simple
title of the property hereinbefore described in paragraph 1 within five (5)
years of the closing of this agreement, then in consideration of the mutual
promises, covenants and payments herein before setout, Seller shall have the
first right of refusal to repurchase the property for the consideration and for
the amount of a bona fied offer to purchase the property received by the Buyer
from a third party. A sixty (60) day written notice of the bona fied offer and
the right of the Seller to
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exercise its first right of refusal shall be given by the Buyer to the Seller.
POSSESSION
18. Possession of the property shall be granted to the Buyer upon
closing unless said property is subject to a prior existing lease or tenancy
arrangement.
INSURANCE
19. Upon closing, Seller shall be entitled to cancel any and all
existing insurance on the above described real estate and shall be entitled to
any and all refunds arising from cancellation of insurance. After closing, Buyer
shall be responsible for all insurance and for all risk of loss to the above
described real estate.
ALTERNATIVE DISPUTE RESOLUTION; MEDIATION
20. If a dispute arises relating to this Contract, and is not
resolved, the parties involved in such dispute (Disputants) shall first proceed
in good faith to submit the matter to mediation. The Disputants will jointly
appoint an acceptable mediator and will share equally in the cost of such
mediation. In the event the entire dispute is not resolved within thirty (30)
calendar days from the date written notice requesting mediation is sent by one
(1) disputant to the other, the mediation, unless otherwise agreed, shall
terminate. This section shall not alter any date in this Contract, unless
otherwise agreed.
FORCE MAJEURE
21. The parties understand and agree that neither the Seller or the
Buyer shall be liable to the other for any failure or delay in performance of
any obligation under this agreement due to events beyond their reasonable
control, including fire, storm, flood, earthquake, explosion, acts of public
enemy, war, acts of God, or acts or regulations or priorities of Federal, State
or local government.
RELATIONSHIP OF THE PARTIES
22. By execution of this agreement, the parties intend to create no
other relationship other than as set forth in this agreement. Specifically,
there is no agency, partnership, joint venture or other joint or mutual
enterprise or undertaking created hereby. Nothing contained within this
agreement authorizes one party to act for or on behalf of the other and neither
party is entitled to any commissions or other considerations other than as is
set forth specifically herein.
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ASSIGNMENT
23. It is understood and agreed by and between the parties that
neither party may assign their rights under this agreement without first
obtaining the written approval of the other party. Said approval shall not be
unreasonably withheld.
ADDITIONAL PROVISIONS
24. Seller and Buyer understand and agree that each party will be
responsible for the payment of their own attorneys fees and that the Seller
shall be responsible for the drawing of all deeds and any affidavits of
trustees.
TERMINATION
25. In the event this Contract is terminated, all payments and things
of value received hereunder be returned and the parties shall be relieved of all
obligations hereunder.
TIME OF ESSENCE/REMEDIES
26. Time is of the essence hereof. If any note or check received as
earnest money hereunder or any other payment due hereunder is not paid, honored
or tendered when due, or if any other obligation is not performed or waived as
herein provided, there shall be the following remedies;
(a) IF BUYER IS IN DEFAULT: Seller may elect to treat this Contract as
cancelled, in which case all payments and things of value received
hereunder shall be forfeited and retained on behalf of Seller, and Seller
may recover such damages as may be proper, or Sellers may elect to treat
this Contract as being in full force and effect and Seller shall have the
right to specific performance or damages, or both.
(b) IF SELLER IS IN DEFAULT: Buyer may elect to treat this Contract as
cancelled, in which case all payments and things value received hereunder
shall be returned and Buyer may recover such damages as may be proper, or
Buyer may elect to treat this Contract as being in full force and effect
and Buyer shall have the right to specific performance or damages, or
both.
(c) ATTORNEYS FEES, COSTS AND EXPENSES: Anything to the contrary
notwithstanding, in the event of any arbitration or litigation arising
out of this Contract, the arbitrator or court shall award to the
prevailing party all reasonable costs and expenses, including attorneys
fees.
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EARNEST MONEY DISPUTE
27. Notwithstanding any termination of this Contract, Buyer and Seller
agree that, in the event of any controversy regarding the earnest money and
things of value held by the escrow agent, unless mutual written instructions are
received by the holder of the earnest money and the things of value, escrow
agent shall not be required to take any action, but may await any proceeding, or
at the escrow agent's option and sole discretion, may interplead all parties and
deposit any moneys or things of value into a court of competent jurisdiction and
shall recover court costs and reasonable attorneys fees
NOTICE TO BUYER
28. Any notice to Buyer shall be effective when received by Buyer.
NOTICE TO SELLER
29. Any notice to Seller shall be effective when received by Seller.
MODIFICATION OF CONTRACT
30. No subsequent modification of any of the terms of this Contract
shall be valid, binding upon the parties, or enforceable unless made in writing
and signed by the parties.
ENTIRE AGREEMENT
31. This Contract constitutes the entire contract and agreement
between the parties relating to the subject hereof and any prior agreements
pertaining thereto, whether oral or written, have been merged and integrated
into this Contract.
GOVERNING LAW
32. This Contract shall be subject to and governed by the law of the
State of Kansas, irrespective of the fact that one or both of the parties is now
or may hereinafter become a resident of a state other than Kansas.
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Cheryl L. Madison, Seller Michael C. Madison, Seller
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Date of Seller's Signature
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Seller's Address and Social Security Number : Cheryl L. Madison
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SSN:
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Cindy L. Tustin,
Trustee of the Cindy L. Tustin Trust,
U/T/A dated January 20, 1999, Seller
Date of Seller's Signature
Seller's Address and Social Security Number Cindy L. Tustin Trust U/T/A
January 20, 1999
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SSN or TIN
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WESTERN PLAINS ENERGY, L.L.C.
BY:
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Title:
Address:
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TIN:
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