Farm Lease with Right to Make Improvements and Receive Reimbursements

Farm Lease with Right to Make Improvements and Receive Reimbursements

Lease Agreement made on the between

of referred to herein as Lessor, and of referred to herein as Lessee.

For and in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Lease of Premises

Lessor hereby leases to Lessee, to occupy and use for agricultural purposes and for no other purposes, the following real estate located in , , described as follows:

hereinafter called the Premises, and commonly known as , and consisting of approximately acres, together with all buildings and improvements in and on the Premises.

2. Term

The term of this lease agreement shall be from to , and subsequently from year to year unless written notice to terminate is given by either party to the other, at least months prior to the beginning of the succeeding lease year.

3. Binding Effect

The provisions of this lease agreement shall be binding on the heirs, executors, administrators, and assigns of both Lessor and Lessee in like manner as on the original parties, unless modified by mutual agreement.

4. Rent

Lessee agrees to pay Lessor, as annual cash rent for the above-described farm, $ in installments of $ each. The first installment is to be paid on , and the other installments are to be paid as follows:

5. Land Use and Cropping Program

Lessor and Lessee agree that about acres of the farm are to be cultivated; acres are to remain in permanent pastures; and acres are to remain in timber and woods and are not to be farmed with crops or grazed. Lessor and Lessee further agree that about % of the tillable land shall be planted with alfalfa, clover, peas, beans, lentils, lupins, mesquite, carob, soy, and/or peanuts. Said crops then shall be allowed to remain in about % of the tillable land for one year or more. Lessor and Lessee annually shall decide on the cropping program to be followed.

6. Lessor’s Investments and Expenses

Lessor agrees to pay the items of expense:

A. The above-described farm, including fixed improvements on it, except as provided in Section 9 of this Agreement.

B. Materials for necessary repairs and improvements to buildings and permanent fences, except as provided in Section 7 and Section 9.

C. Skilled labor employed in making permanent improvements or repairs; however such labor, improvements or repairs costing more than $ are to be paid by Lessee.

D. Taxes on land, improvements, and personal property owned by Lessor.

E. Fire and wind insurance, at a fair replacement value, on the residence of and all buildings used by the Lessee in storing or housing grain, feed, livestock, and equipment.

F. Ground limestone, rock phosphate, and seeds; however costs of more than $ are to be paid by Lessee.

7. Lessee’s Investments and Expenses

Lessee agrees to pay the following items of expense:

A. The expenses of hauling to the farm, except when otherwise agreed, of all material Lessor furnishes for making repairs and minor improvements, and the performing of labor required for such repairing and improving.

B. All seed, inoculation and disease-treatment materials, and fertilizers except that which Lessor agrees to furnish in Section 6 above.

C. The following-described items for the residence:

D. Description of other items:

8. Lessee’s Duties in Operating Farm

In addition to the agreements covered by the above sections of this lease agreement, Lessee further agrees to:

A. Faithfully cultivate the farm in a timely, thorough, and farmer-like manner.

B. Keep the buildings, fences (including hedges), and other improvements on the Premises in as good repair and condition as they are at the commencement of the lease, or in as good repair and condition as they may be put by Lessor during the term of the lease, ordinary wear, loss by fire, or unavoidable destruction excepted.

C. Take proper care of, and prevent injury to, all trees, vines, and shrubs.

D. Haul out and spread all manure as soon as practicable on fields agreed on by Lessor and Lessee.

E. Prevent tramping of fields by stock and rooting by hogs when injury will be done by the same.

F. Keep open ditches, tile drains, tile outlets, grass waterways, and terraces in good repair.

G. Prevent all unnecessary waste, or loss, or damage to the property of Lessor.

H. Allow no stock but Lessee's on stock fields without the consent of Lessor.

I. Inoculate all alfalfa and soybean seed sown on land not known to be thoroughly inoculated for the crop planted.

J. Follow standard disease treatments of all seeds.

K. Keep the farm property neat and orderly.

L. Farm no additional land and to enter into no other occupation, business, or sideline unless it be with the written approval of Lessor.

M. Not cut live trees, except by permission of Lessor, but to use only dead or down timber not suitable for saw logs or posts.

N. Not allow noxious weeds to go to seed on the Premises, but to destroy them, and keep trim the weeds and grasses on the roads adjoining the Premises.

O. Not burn corn stocks, straw, or other crop residues grown on the farm, except by permission of Lessor, but to leave or spread all such material on the land, and in no case to remove from the farm any such material without the consent of Lessor.

P. Not pasture new seedings of legumes and grasses in the year in which they are seeded, except with the consent of Lessor.

Q. Not break up established watercourses or ditches, or undertake any other operation that will injure the Premises.

R. Not plow pasture or meadow land without the consent of Lessor.

S. Not house automobiles, motor trucks, or tractors in the barns without the written permission of Lessor.

9. Lessee’s Right to Make Improvements and Receive Reimbursements for Unexhausted Improvements

Lessee shall have the right to make, at Lessee's own expense, such improvements as are listed in paragraphs A and B below, provided authorization has been obtained from Lessor. Lessee shall be compensated for such improvements by Lessor at the termination of this lease agreement for the costs less the agreed on depreciation of the improvements as provided below. Before making such improvements as Lessor ordinarily provides, including buildings, additions, or major repairs to buildings, permanent fixtures and equipment, fencing, water or sewage systems, erosion control structures, and other permanent structures, Lessee shall submit to Lessor a statement showing the improvement to be made, the approximate time when it is to be made, the estimated cost, and the rate of depreciation. When any such statement is approved and signed by both Lessor and Lessee, a copy of it shall be attached to each copy of this lease agreement and shall become a part of this lease agreement. In lieu of compensation for structural improvements for which Lessor has not agreed to pay, Lessee at Lessee's own discretion, and provided Lessee has given notice of the intention at the time of expiration of this lease agreement, may, within days after the termination of the tenancy, remove such structures, provided Lessee leaves the ground and buildings from which the improvements are removed in as good condition as they were prior to the erection of the improvements.

A. With respect to improvements for which Lessor and Lessee may share the cost, but for which Lessee shall have received no government payments, or, if any, such as only partially offset the cost, the compensation to Lessee for such unexhausted improvements at the expiration of this lease agreement shall be based on the original cost to Lessee, less any government payments received by Lessee and less accumulated depreciation of the balance of the cost at the yearly rate provided below:

1. Ground limestone, (with an annual depreciation percentage) %.

2. Rock phosphate, (with an annual depreciation percentage) %.

3. Heavy application of mixed or other fertilizer, (with an annual depreciation percentage) %. It is agreed that a heavy application is pounds per acre of .

4. Legumes and grass seedings, with Lessee's cost for seed on acreage exceeding acres (the acreage on the farm so seeded at the beginning of this lease agreement).

D. If, at the time Lessee assumes possession, Lessee pays Lessor or the outgoing tenant for the unexhausted value of the improvements then existing, Lessee shall be entitled to the value of the unexhausted improvements existing at the termination of this lease agreement.

10. Default

A. If Lessee should fail to carry out substantially the provisions of this lease agreement, within days after service by Lessor of written notice to Lessee of Lessee's failure to fulfill the obligations, Lessor and Lessee each shall select an arbitrator, and the two arbitrators so selected shall select a third. The three shall make an inspection of the farm to determine the damage, if any, that has occurred or will occur by reason of Lessee's default and report their findings in writing to both Lessor and Lessee.

B. If Lessee fails to select an arbitrator within the days, or if the arbitrator selected reports that serious damage has been caused or will result to the farm, Lessor shall have the right to reenter and to take full possession of the farm and buildings, which Lessee agrees to vacate peaceably without claim for damages.

C. Lessor shall do what is necessary and reasonable to carry out properly the contract of Lessee, or to repair the damage. To this end, Lessor may furnish all the labor, machinery, and equipment necessary to carry out the contract of Lessee and charge the cost of such operations or the amount of such damage, or both, to Lessee, the amount of such charge to become a lien on Lessee's share of the crops.

D. A reasonable compensation for the arbitration committee shall be divided equally between Lessor and Lessee.

11. Compensation for Damage

At the conclusion of this lease agreement, Lessee shall pay to Lessor a reasonable compensation for any damage to the property not compensated for under Section 10, for which Lessee is clearly responsible, after due allowance is made for damage resulting from ordinary wear and depreciation or from causes beyond Lessee's control.

12. Arbitration Committee

The parties agree that if a proper settlement cannot be reached between them at the close of the period of tenancy, they will submit all matters of disagreement to an arbitration committee and will abide by the decision of that committee. The selection and compensation for the committee shall be as provided in Section 10.

13. Right to Re-Entry

Lessor reserves the right to enter on the Premises at any reasonable time for the purpose of viewing them or making repairs or improvements on or to the Premises, or of plowing after severance of crops, or of seeding, or applying fertilizers, provided that such entry and activity shall not interfere with the occupancy of Lessee.

14. Severability

The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision.

15. No Waiver

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

16. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

17. Notices

Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

18. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

19. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

20. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

WITNESS our signatures as of the day and date first above stated.

(Acknowledgment form may vary by state)

STATE OF

COUNTY OF

Personally appeared before me, the undersigned authority in and for the said county and state, on this day of , 20, within my jurisdiction, the within named, , who acknowledged that he executed the above and foregoing instrument.

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NOTARY PUBLIC

My Commission expires:

STATE OF

COUNTY OF

Personally appeared before me, the undersigned authority in and for the said county and state, on this day of , 20, within my jurisdiction, the within named, , who acknowledged that he executed the above and foregoing instrument.

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NOTARY PUBLIC

My Commission expires: