HomeMy WebLinkAboutLease Agreement 04-02-08LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into on this `~ day of ~'~~~-k-' ,
2008 by and between the CITY OF CANTON (hereinafter "Lessor"), an Illinois Municipal
Corporation duly organized and existing under and by virtue of the laws of the State of Illinois,
and authorized to transact business in the State where the following described real estate is
located and MICHAEL KRULAC (hereinafter "Lessee), an individual authorized to transact
business in the State of Illinois.
WHEREAS, the Lessor is the owner of the Property hereinafter described; and
WHEREAS, Lessee desires to rent said Property subject to the rights of the Lessor
hereinafter set forth;
WHEREAS, on February 19, 2008 the City Council of the City of Canton voted in favor
of entering into Lease Agreement and in support thereof selected Method 2 as the choice for
determining any applicable rent payment due; and
NOW, THEREFORE, Lessor, for and in consideration of the covenants and agreements
herein after described ,the Lessor rents and leases to the Lessee, to occupy and to use for
agricultural purposes only, the following described real estate located in the Township of
Canton, County of Fulton, State of Illinois, to wit (hereinafter "the Property" or "Property"):
1. Description of Land. Approximately 40.24 acres of tillable cropland (based on GPS
maps provided by Lessee) located in part of Section 24, all in T. 7N, R. 4 E. of Fulton
County, Illinois, more commonly known as "Zink" Farm or "Kilroy" Farm.
2. Length of Tenure/Termination. The term of this lease shall be from the 1 S` day of
March, 2008 to the 31St day of December, 2008, and the Lessee shall surrender
possession at the end of the term. The lease may be terminated, at any time, by either
party, by serving a written notice at least four months prior to the effective termination
date. Termination may also be made for default pursuant to the terms of Section 8 below.
3. Amendments and Alterations. Amendments and alterations to this lease may be made
in writing at the end of this lease as addendums at any time by mutual agreement. If the
parties fail to agree on proposed alterations, the existing provisions of the lease shall
control operations.
4. Amount of Rent. At the election of the Lessor rent will be determine by one of the
following methods:
a. Method 1: In consideration of leasing said Property; Lessee agrees to pay Lessor
the sum of fifteen thousand one hundred fifty-eight dollars and 00/100
($15.158.00). This representscres of tillable cropland at $212.00' per acre.
Payment will be in the followtn~ manne
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' Source: Illinois Society of Professional Farm Managers and Rural Appraisers: Expected Cash Rent in 2008
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i. The first payment of seven thousand five hundred seventy nine dollars and
00/100 ($7,579.00) is due on or before March 15, 2008.
ii. The second payment of seven thousand five hundred seventy nine dollars
and 00/100 ($7,579.00) is due on or before November 30, 2008.
iii. Late payments are subject to a nine percent (9.0%) annual charge on the
unpaid balance.
b. Method 2: In consideration of leasing said Property; Lessee agrees to provide the
following "in-kind" services to the Property:
i. Mow all fields to tree lines or fence lines around all fields at least once per
month during the growing season.
ii. Mow all roadways throughout the Property to wood lines at least once per
month during the growing season.
iii. Cycle bar cutting of any areas where rock prevents mower travel at least
once per month throughout the growing season.
iv. Mow all "bottom" fields at least once per month during the growing
season.
v. Mow all grounds within fenced area, all levels, and all roadway and
cycling areas at the East Side Wastewater Treatment Plant at least twice
per month during the growing season.
vi. Mow the shooting range area and shooting wall at least twice per month or
more often as necessary to keep growth at a maximum of four (4") inches
during the growing season.
vii. Mow all holding ponds at the East Side Wastewater Treatment Plant,
when dry, but not more than twice per month during the growing season.
5. Lessor's Investment and Expenses. In return for the rent payments outlined in Section
4, Lessor agrees to rent, demise and to lease to the Lessee for agricultural purposes only
the above-described Property.
6. Lessee's Investment and Expenses. The Lessee agrees to pay the items of expense
listed below:
a. To furnish all machinery, equipment, power, labor, fuel, power, seed, fertilizer
and chemicals necessary to farm premises Properly.
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b. To furnish all machinery, equipment, power, labor, fuel, power, and chemicals
necessary to execute all in-kind services outlined in Section 4(b) (Amount of Rent
- Method 2) above, if Method 2 is the method of payment selected by Lessor.
7. Lessee's Duties in Operating Farm. The Lessee further agrees to perform and carry out
the stipulations below:
a. Activities required:
To report to the City of Canton, via written notice, crops and yields by
December 31, 2008.
ii. To cultivate the farm faithfully and in a timely, thorough, and businesslike
manner.
iii. To prevent noxious weeks from going to seed on said premises and to
destroy the same and keep the weeds and grass cut.
iv. To take proper care of all trees, vines, and shrubs, and to prevent injury to
the same.
v. To prevent any unnecessary waste or damage to the Property and to
inform Lessor of any problems as soon as practicable after being
discovered.
vi. Not to store any crops or equipment on the premises except that which
may be necessary while conducting normal farming operations or to allow
for execution of this agreement.
vii. To comply with pollution control and environmental protection
requirements, and to implement soil erosion control practices to comply
with the soil loss standards mandated by the State.
viii. To use prudence and care in transporting, storing, handling, and applying
all fertilizers, pesticides, herbicides and other chemicals and similar
substances, and to read and follow instructions on the labels for such
materials in order to avoid injury or damage to persons or Property or both
on the leased premises and adjoining areas.
ix. Any chemicals for weed or insect control or other use, when used, should
be applied at levels not to exceed the manufacturer's recommendation for
the soil types involved.
x. No chemicals will be stored on the Property.
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b. Restricted Activities. The Lessee further agrees, unless the written consent of
the Lessor has been obtained:
i. Not to assign this lease to any person or persons or sublet any part of the
premises herein leased.
ii. Not to erect or permit to be erected any structure or building or to incur
any expenses to the Lessor for such purposes.
iii. Not to permit, encourage, or invite other persons to use any part or all of
this Property, for any purpose or activity not directly related to its use for
agricultural production.
iv. Not to plow permanent pasture or meadowland.
v. Not to allow any stock on any tillable land except by agreement.
vi. Not to burn or remove cornstalks, straw or other crop residues grown upon
the farm.
vii. Not to cut live trees for sale purposes or personal uses.
viii. Not to erect or permit to be erected any commercial advertising signs on
the farm.
8. Termination upon Default. If either party fails to carry out substantially the terms of
this lease in due and proper time, the lease may be terminated by the other party by
serving a written notice citing the instance(s) of default and specifying a termination date
of thirty (30) days from the date of such notice. Settlement shall then be made in
accordance with the provisions of Section 10, below.
9. Yielding possession. The Lessee agrees at the expiration or termination of this lease to
yield possession of the Property to the Lessor without further demand or notice, in as
good order and condition as when they were entered upon by the Lessee, loss by fire,
flood, or tornado, and ordinary wear excepted. If the Lessee fails to yield possession, the
Lessee shall pay the Lessor a penalty of one hundred dollars ($100.00) per day or the
statutory double rent, whichever is less, for each day he or she remains in possession
thereafter, in addition to any damages caused by the Lessee to the Lessor's land or
improvements, and said payments shall not entitled the Lessee to any interest of any kind
or character in or on the premises.
10. Lessor's lien. The Lessor's lien provided by law on crops grown or growing shall be the
security for the rent herein specified and for the faithful performance of the terms of the
lease, regardless of the Method chosen to satisfy said rent. If the Lessee fails to pay the
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rent due all costs and attorneys fees of the Lessor in enforcing collection or performance
shall be added to and become a part of the obligations payable by said Lessee.
11. Mineral rights. Nothing in this lease shall confer upon the Lessee any right to minerals
underlying the land. Such mineral rights are hereby reserved by the Lessor together with
the full right to enter upon the premises and to bore, search, excavate, work, and remove
the minerals, to deposit excavated rubbish, to pass over the premises with vehicles, and to
lay down and work any railroad track or tracks, tanks, pipelines, powerlines, and
structures as may be necessary or convenient for the above purpose. The Lessor agrees to
reimburse the Lessee for any actual damage the Lessee may suffer for crops destroyed by
these activities and to release the Lessee from obligation to continue farming this
Property when development of mineral resources interferes materially with the Lessee's
opportunity to make a satisfactory return.
12. Lessor liability. The Lessee takes possession of the leased premises subject to the
hazards of operating a farm, and assumes all risk of accidents personally as well as for
family, employees, or agents in pursuance of farming operations.
13. Insurance. To maintain bodily injury and Property manage insurance with a responsible
company in the amount of not less than one million dollars ($1,000,000.00) for injury to
any one person and one million dollars ($1,000,000.00) for Property damage covering
Lessee's activities on and during the use of the Property. This insurance must include the
City of Canton as an additional insured. Within fifteen (15) days of execution of this
agreement, the Lessee will provide the Lessor with a certificate of insurance establishing
that coverage is in force.
14. Indemnity. Lessee agrees to Hold Lessor harmless and indemnify it from all injuries
occurring on said premises during the term of this least and to further indemnify and hold
Lessor harmless from any actions, including, but not limited to, any environmental
liabilities which may be brought against Lessor as a result of Lessee's utilization of said
Property, including all expenses, engineering and attorneys' fees incurred by Lessor in
defending the same, excluding, however, direct negligent acts of the Lessor, its agents or
assigns, and further provided that the Lessee agrees to reimburse or pay and discharge all
costs and attorney's fees and expenses that might arise from or be related to the condition
of the leased premises or acts or accidents occurring on the leased premises.
15. Lessor's right of entry. Lessor reserves onto itself, its contractors, agents, designees
and assigns, to enter the premises in connection with its own purposes.
16. Notice. All notices or other communications required or permitted hereunder shall be in
writing, and shall be delivered personally, by overnight air express service or by
registered or certified mail, postage prepaid, return receipt requested, addressed to the
parties hereto at their respective addresses set forth below. Such notice or other
communication shall be deemed given (a) upon receipt or upon refusal to accept delivery
if delivered personally, and (b) one (1) business day after tendering to an overnight air
express service; and (c) seven (7) business days after mailing if by registered or certified
mail.
To the Lessee: City of Canton
Attn: Mayor
2 N. Main Street
Canton, Illinois 61520
With a Copy To: City of Canton
Attn: City Attorney
2 N. Main Street
Canton, Illinois 61520
With a Copy to: City of Canton
Attn: Wastewater Treatment Plant Superintendent
2 N. Main Street
Canton, Illinois 61520
To Lessor: Michael Krulac
72 Redwood Circle
Canton, Illinois 61520
Notice of change of address shall be given by written notice in the manner detailed in this
section.
17. Entire Agreement. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter, and supersedes all prior representations, negotiations
and understandings.
18. Assignment. Lessee may not assign its rights or delegate its duties under this Lease
agreement.
19. Severability. The invalidity or unenforceability of any portion or provision of this Lease
agreement shall in no way affect the validity or enforceability of any other portion or
provision hereof. Any invalid or unenforceable provision shall be deemed severed from
the Agreement and the balance of the Lease agreement shall be construed and enforced as
if the Agreement did not contain the particular portion or provision held to be invalid or
unenforceable.
20. Captions Governing Law. The captions in this Agreement are for purposes of
convenience only; in no event shall they be deemed to limit, extend, expand or modify or
to aid in the interpretation of the text of this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above.
LE R:
By:
City Canton
LESSEE:
By:
Michael Krula