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Agricultural Lease Agreement AGRICULTURAL LEASE AGREEMENT for TRACTS 1, 2, 3 & 4 This Agricultural Lease Agreement ("Agreement") is entered into July 20, 2015, by and between the City of Salina, Kansas, (the "City") and Mattison and Son Farms LLC, a Kansas Limited Liability Company(the "Lessee"). The City, in consideration of the rents, covenants, and agreements of Lessee herein set forth does hereby grant, lease and rent to Lessee the following described and depicted real estate; See attached "Exhibit A" for Legal Descriptions; See attached "Exhibit B" for Map; Together with appurtenances thereunto belonging, all of which are referred to herein as the "Premises". WHEREAS, the Lessee desires to lease for farming purposes the Premises, and City is willing to grant said lease; NOW, THEREFORE, City and Lessee agree as follows: 1. Term of Lease. The term of this Agreement shall be for a period of approximately three and one half(3.5) years, which shall commence on the 1St day of August, 2015, and shall expire, subject to the potential for prior termination pursuant to the terms of this Agreement, on February 28, 2019, or as soon thereafter as the crops planted as of February 28, 2019 have been harvested (excludes harvesting by grazing), but in no event later than August 1, 2019. 2. City's Right of Early Termination. The City reserves the right to terminate this Agreement at any time, with respect to all or any portion of the Premises, upon a determination by the City Commission of the City of Salina, that the Premises will be used other than for agricultural purposes. If such a determination is made by the City Commission, written notice shall be delivered to the Lessee describing specifically the portion of the Premises affected by said termination notice. Lessee agrees to surrender possession of the Premises, or the identified portion of said Premises subject to termination, no later than the last day identified in said termination notice or following harvest of any crop planted in the Premises or the portion thereof subject to the termination notice, whichever event last occurs. 3. Rental. (a) Lessee agrees to pay the City as rental for the Premises a cash rental which shall be equal to 51.1 % of the amount received by Lessee from the sale of all crops raised on the Premises during the each lease year and 51.1 % of all government payments and crop insurance proceeds received by Lessee which are applicable to the Premises, less 51.5% of the cost of purchasing any fertilizer, herbicides and crop insurance premiums in connection with the production of said crops. (b) In addition to the cash rental stated above, Lessee agrees to furnish, at Lessee's sole cost and expense: i. All material, labor, and equipment to properly apply all necessary fertilizer and herbicides in the treatment of noxious weeds on the Premises; ii. All seed to be used on the Premises, and all labor and equipment to plant, raise, cultivate, and thresh all crops grown on the Premises; and (c) The cash rentals provided for herein shall be due and payable on or before year end of each lease year; provided, however, that in the event that the crops grown on the Premises during said lease year have not been sold or in the event the government payments or crop insurance proceeds applicable thereto have not been received by year end, then in that event the additional amounts due hereunder shall be payable on or before the 10th day of the month following the month in which the crops are sold and/or the government payments or crop insurance proceeds received. (d) The City shall have the right to examine, or cause to be examined, the books and records of the Lessee for the purpose of determining whether there has been compliance with the requirements of this paragraph. 4. Possession: Lessee shall be entitled to possession of the Premises commencing on August 1, 2015, subject to the right of the City's existing lessee to harvest any crops that are growing as of August 1, 2015, and may remain in said possession thereafter for and during the term of this Agreement. 5. Right to Re-enter Premises and Surrender of Possession. The parties agree that upon termination of this Agreement for any reason, Lessee shall peaceably and quietly surrender and deliver possession of the Premises to the City. If Lessee fails to perform any provision of this Agreement within ten (10) days after receipt of written notice from the City to cure such default, or in the event Lessee abandons the Premises before the end of the term of the Agreement, or in the event Lessee is adjudged bankrupt or insolvent or makes an assignment for the benefit of creditors or commits any act of bankruptcy, the City shall have the right to pursue any remedy at law or in equity available to it under the laws of the State of Kansas, including without limitation terminating this Agreement and taking possession of the Premises without additional demand or notice and without any court order or other process of law. 6. Liability of City. Lessee is aware that lands adjacent to the Premises are used by the City as solid waste disposal area, and will continue to be used for those purposes during the term of this Agreement. City agrees that it will operate said solid waste disposal area in a prudent manner. However, the parties acknowledge and agree that trash, paper, etc., may blow from the area onto the Premises and City shall be under no obligation to remove the same therefrom. City agrees that it will use due care in regards to burning of solid wastes, however, parties recognize 2 that fire could spread to the Premises and City assumes no liability for loss to Lessee resulting from fire, whether caused by City employees or agents or persons using the solid waste disposal area and Lessee assumes such risk of loss. 7. Easement: City (or its agent) retains the right to enter upon the Premises, while making reasonable efforts to limit damage to crops: (a) To perform any and all necessary maintenance in connection with its utility lines (water, sewerage, gas) located thereon; or to install any new lines which may be necessary; (b) To remove, replace, salvage or modify such existing utility lines and appurtenances; (c) To drain water storage tank located on Premises through fire hydrants and isting water lines on the Premises; and (d) To enter onto and maintain facilities on crop land or pasture land for purpose of groundwater testing, soil testing, and/or other environmental purposes required to meet needs of federal, state or local government. 8. Compliance with Law. Lessee shall comply with all applicable laws, ordinances and regulations of the State of Kansas, Saline County, and the City of Salina. 9. Quiet Enjoyment. City warrants that Lessee shall be granted peaceful and quiet enjoyment of the demised Premises free from any eviction or any interference by City if Lessee pays the rent and other charges provided herein and otherwise fully and punctually performs the terms and conditions imposed on Lessee. 10. Care and Use of Premises; No Sublease by Lessee. Lessee covenants to farm and care for the Premises in a good and workmanlike manner and in accordance with good farming and soil conservation practices. Lessee shall not change the current use of the Premises, e.g., going from tilled acreage to pasture, without the advance rewritten approval from the City. Lessee shall not commit or permit waste thereon by virtue of failure to properly protect the Premises from wind or water erosion. Further, without the prior written consent of the City, Lessee shall not have the right to sublet the Premises or any part thereof, and no assignment shall be allowed without written consent of the City. 11. Hunting. Lessee shall not permit any person to hunt upon the Premises. 12. Nuisance. Lessee shall not during the term hereof maintain, commit or permit the maintenance or commission of any nuisance on the Premises. 13. Inspection. Lessee has inspected the Premises and accepts them in their present and existing condition. 3 • 14. Government and Agricultural Programs. Lessee agrees to comply with all farm crop programs promulgated by the United States Department of Agriculture. City agrees that it will cooperate with Lessee in abiding by all terms and conditions of any governmental agricultural programs which are now in effect or which may be applicable during the term of this Agreement. All benefits of all farm programs pertaining to the Premises during the term of this Agreement, including but not limited to programs administered by the Farm Service Agency, which include the Load Deficiency Payment Program, the Production Flexibility Contract, and the Market Loss Assistance Program, shall be payable to Lessee, to be divided and distributed as provided in paragraph 3 of this Agreement. 15. Insurance. Lessee agrees to procure and maintain commercial general liability insurance covering its use and operations of the Premises which policy shall name City as an additional insured thereunder, with limits of not less than $500,000.00 for claims of bodily injury, death, property damage, and personal injury which could be asserted against any one or more of such parties for any number of claims arising out of a single occurrence or accident on the Premises. The Lessee shall provide the City with proof of such insurance. 16. Taxes and Liens: City agrees to pay any real estate taxes and assessment which may be levied against the Premises during the term of this Agreement. City shall pay when due all fees, assessments charges, and taxes of any kind that may now or hereafter be imposed upon ownership, leasing, renting, possession, or use of the Premises, excluding, however, all taxes on or measured by Lessee's income. When the Premises are in Lessee's permission, Lessee shall keep it free and clear of all levies, liens, and encumbrances, other than those being contested which do not adversely threaten the City's title to the Premises. 17. Liability of City: Lessee shall be in exclusive control and possession of the Premises and the City shall not be liable for any injury or damage to any property or to any person on or about the Premises or for any injury or damage to any property of Lessee or any other person. 18. Indemnification. Lessee shall hold harmless and indemnify the City against all liability, loss, damage, expense, and judgment relating to Lessee's use of the Premises, including but not limited to any damage, neglect, or misadventure arising from or in any way growing out of the use, misuse, or abuse of the Premises, or any failure of Lessee to comply with the terms of this Agreement. Each party agrees that it shall give the other prompt notice of the assertion of any such claim or the institution of any such action, suit or proceeding. 19. Expenses by City or Lessee. If either party is in default of this Agreement, the defaulting party shall pay all costs and expenses incurred by the non-defaulting party in . exercising any of its rights or remedies hereunder or enforcing any of the terms, conditions or provision of this Agreement. 20. Ownership. The Premises are, and shall at all times, be and remain, the sole and exclusive property of the City. Lessee shall have no right, title or interest in the Premises except as expressly set forth in this Agreement. 4 21. Partnership. It is expressly agreed that this Agreement is one of lease and not of partnership, and that the City shall not become responsible for any debts contracted by Lessee. 22. Improvements. Lessee shall not make any alternations or additions to the Premises unless otherwise approved in writing by the City in advance of the proposed alteration or addition. 23. Merger Clause. The parties intend these terms to be a complete, conclusive and final expression of all the conditions of their agreement. No other promises, statements, warranties, agreements or understandings, oral or written, made before or at the signing thereof, shall be binding unless in writing and signed by all parties and attached hereto. Any amendment to this Agreement, including an oral modification supported by new consideration, must be reduced to writing and signed by both parties before it will be effective. 24. -Paragraph Headings. The title to the paragraphs of the Agreement are solely for the convenience of the parties and shall not be used to explain, modify; simplify, or aid in the interpretation of this Agreement. 25. ' Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and authorized assigns 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. 26. Severability and Waiver. No waiver by either party of any default hereunder shall operate as a waiver of any other default. If a court of competent jurisdiction determines any provision of the Agreement to be contrary to law, the remaining provisions of this Agreement shall remain in full force and effect. 27. Notice. Service of all notices under this Agreement shall be sufficient if given personally or mailed by certified mail, return receipt requested, to the party involved or at its respective address stated below, or at such address as such party may provide in writing from time to time. Any such notice mailed to such address shall be effective when deposited in the United States mail, duly addressed, and with postage prepaid, to the party to be notified at the address set forth as follows: CITY: City of Salina Attn: Jason Gage, City Manager 300 W. Ash St., P.O. Box 736 Salina, KS 67402-0736 LESSEE: Mattison and Son Farms LLC Donald J. Mattison, Owner 900 N Simpson Road Salina, KS 67401 5 28. Governing Law. This Agreement shall be governed by the laws of the State of Kansas. This Agreement shall be interpreted according to its fair meaning, and not in favor or of against any party. IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year herein stated. CITY OF SALINA, KANSAS Mattison and Son Farms LLC By: G' BY Ja on A. Gage, Ci y M. ager �it.QC ✓9 J, /J;114'7 5O ame) 'G�J� CO —0e-0 iL �-/` (title) Attest: fiwit, 111(66 Sh di Wicks, CMC, City Clerk � J Ma+-iron ? r Form:.. Le:.1 Cou 3;r 6 1XIBII[11IT A LEGAL DESCRIPTIONS • • • • 'A I• A fbe simple interest in a tract of land in Lee ladust ial Park,arming to the plat thesetheeetded in the aflame nd'tht Vie'ofDoda of Saline County,Kam.%on AO 1,1964,in Rook A,S of Plata atIPage 36,l3rhtg South and Waft.of the City of Salina Flood Control right of way,situated in the South fl nlf(S12)offer Southeast tie'(Sp14)of Section Six(6),Tao/whip Fourte n.(14) Booth,Uwe Two(2)West of the 6*1'i.in Wm Co't ,Loma,and more per' de sod es f : • B at the South t motor of said Soutleong Quarter; Thenon lfregumily a bite amid aid Soffit Quarter,on an Effisuatod bad of ht Olt°15•0r"V,a of 09739 feel; TM:MS 09°4 1WW,along t1 euth line mead matt Control x tt of*ay line,a dim of 298.2& IfhotoraN 24`7,4"23 W„ B sight of tYto lid a of Mal feet 4o apaiet omths existing southiellY Mime?WAG iftelhotd rat of tery 'fit 46 MOM"W,along acid tisid of troy Ilim a distance of 572.12 fit; noose Song:matey along 5 652.16.fant Ideas nondlanstat tune to alp right,on art length of 82'1 1 thet and homing a cad limas S 3*37'32"'11,a(Mono of .32 ; Truce S 01' 416'°W,a d tattoeof9!1.51 fest Thence S 001"W,a distenn2 of 123.41&sou a point on South Hoof a*Southeast tom; Th otil 2'14"13,along said South a&Woe of 75325 feat to the POSIT OF Said tract oantaite 89 S7 Mos or log,Malin e tottothiglz army. AND A Ste oiwple lama in tratZ of hod is Lee Industrial Pot a to1lnplt thexcerzosied lag*WA=oftheorof Duda of Sane County,l oat April 1,1964,ta Illook A3 of Plata at nor 36i ettdWet of tip City of a Moil bad eft of era,wed the South Half(S12)of the So tarter(SIN)of Sezdou Six(6):Ldp F (14) Std Row TOD d )West of the 61?X in Saline Oonnly,Kamm,and anon rattled:* descrabetl m follocnn d&a Southeast WON etitSid Thha ) &mli a of etdd Southeast Quarles,on an emoted bet*Wig o 1S 1"W,a Etiloisaue of(ISMS Times S $°y "W,along the South line of esid flood tight otr.►sy limy A c iniaaae of 233.2Si Them Itt 24°24°23" Woos said tWit of way Dine,a distance of 305$1 feet to a petal on the auistln southerly Unio Przeirse Whoa right of way 1:laey 'dam S 6S°20`2S"W,along t�trig!tofTrayline,a distance of 1027.93 feet; Meuse N 0013'46"W,aleng said tight army line,a amuse of 9041 feat tote Point of Thence N 13'41"W.along talitright ohm line,a distance 29.36 feat; v i t a e S 6 2 "W,albs of way line,a&taws of 64.07 Tl iue Souy along a 65S.iduet WILLS cwVe to ibe ,tam length of $9.81 feet and having&&heal nisidi' S 06°l3°0670 a distance of 59.79 fit to the POINT' OP INNING; Said treat contains 0.02 acres,(794 aware feat),Minn or terra. 3. The East B30 Feet of The Lec industrial Paartc,stecorarusg to the plat thereof recorded in the office of the Register of Deeds of Smote County,Kansas,on April 1, 1 S4, In Book A4 of Mete at Page 33, Lying In the Northeast Quartile(NE'4)an the Ecat Half (E%) of the,Norchweat Oieatter(1.1W IA South, Range Iwo(2 vi the of P.M. Saline County,Township� {9Ia mate policularly described as follows: Beginning at a stone found at the N % comer of said Section 1; Worm matt* alang4he store q6'e of tho %of arid Sin adistance of 89Qdt feet to a putt ort the amt line of the illlIssouri Isaac Railroad right-ofra% evaded oonthuosofedy stony tho east RRff line of UV Malawi Pueliks Railroad, a IllistanCe,of O'tLO feet; thence sutethiarly along the ect RAN tine of tho Missouri Palm Waded a distance of 1,0222 feetto a point on the south line of the MS 16 of the I `J%0 said Saatien y;these westerly along the sauna lea of tho '4 of fibre t 'la of eald gob=7 8 dietetics 0924.0 feet thence o along line ecet RPM line of the Dllissouti Paad lc Railroad a&Mance of 94.4 feet to a WA ors Rho curve of the north One of Me main floe of the Puri Pacific t lroad; Memo northeasterly along the an of a curve haring a radios of 10 %et, cold arc Wog the north Oil line of the lIgiaecurir troffile Railroad train Una'a diatom of 203;0 feat;thence easterly dace the north ltiW lino of The Missouri iltiblfic Raltrond awn One adistance of 2,677,0 feet to a Ord on the emit line of the RE 16 of mill n 7;thence northerly along this east Bne of the WE%of Section 9 a d rcm of 1,34010 feat more or lase to the northeast corner of amid Rein 7;thence westerly along the north line of eatd Becton I to the point of I rmIng INCLUDING OW THE EAST 530 FEET THEREOF; sa3ld tract eantaining26.87 toren more or less. 13ulklect to reservation of ail minaret rights let end under the above deasef o real mite try Daniel t;.King acrd*army L fling,lard sad wife,their heirs,smarter% end sew,amd the right to enter said real efetelo for the purpose of esdra ction of ell and ones ntlratata s, oe, In, and ura r.aelid real estate on oat 7c ih In Casrestfve Wt.Claire it d•Imo Csonlol C. -c,',, et aai., to Eaettidge Development, Gra.,a &nu ry 1, I989,end recoiled in Bead Kook 30,at pagcss elts.49 and ail a doling raltgead oasenaenba endlur ht••cf . : Sea attached mitt drawing locating the above lamed ground. (Leased ground to row to as Trade 1,2.,and 3, istparativaly) All leased wound,leoluellog tracts 9 through 3 above, IS subject to ,.o trail-road oasuments axtdiior r tt-of way 6 EI iR. IT 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, 1984, in Book A-3 of Plats at Page 36, lying In the Northeast Quarter (NE %) and the East Half (E s/z) of the Northwest Quarter(NW %) of Section Seven (7), Township Fourteen (14) South, Range Two (2) West of the 6th P.M., in Saline County, Kansas, except the East 830 feet thereof, which tract is more particularly described as follows: Beginning at a stone found at the N '/ corner of said Section 7; thence westerly along the north line of the NW '/, 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 RIW line of the Missouri Pacific Railroad, a distance of 315.0 feet; thence southerly along the east R/W line of the Missouri Pacific Railroad a distance of 1,022.32 feet to a point on the south line of the NE Y4 of the NW' of said Section 7; thence westerly along the south line of the NE ' of the NW'/4 of said Section 7 a distance of 33.0 feet; thence southerly along the east RAN One of the Missouri Pacific Railroad a distance of 74.4 feet to a point on the curve of the north R/W 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 R/W line of the Missouri Pacific Railroad main line a distance of 289.0 feet; thence easterly along the north RAN 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 Y of said Section 7; thence northerly along the east line of the NE 'A of Section 7 a distance of 1,348.68 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; except the East 830 feet thereof; said tract containing 84.5 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 at al., to Eastridge Development, Inc., dated January 1, 1997, and recorded in Deed Book 380, at pages 48-49. NOTE: See attached aerial drawing locating the above leased ground. (Leased ground is referred to as Tract 17) Egg I: I[T I:> MAP . . 1 -. . pH )unowfuerj i 1 ,--- ... , . 1 . 1 • --" , g E 1.5 0 tS 0 ,.. < co en et laat C.I .. .. .,. ! . "gr. •. ,lei t 6" 1"i „AP-1 — , liirmi4.1.!44.,1.7 . . i ' ., it . { .. : . ,*._ - 1 , f. t tit. C ' cp ';'"I n:1 t 0 tlr-Ssg 4..4, .. •- 1 i , , CV . la e4 < It" ei co 0. V E ci' • . u 1 w . ‘I- < I 't 4 In •••• .. . . 3V•fe••••-• 10).0 t r- ‘oe N s.. I. -. ..e-•••••• , 111:111,0, I irt-S civry .T6' ... r• .. ..as . ^ . '■ . \ i 0 8. , . , \ . \ , ',4*.f,, , . . ,,, I, , . , , r I I'-,.. -.. I. : ' • J.. .. 1. . . ii \, .. o t „..,.. •,. d i • • ■ •'.0 ti11' . 1 C ':.. . Lk; . .,..• 1 ga I t ....."• \ 'it' 1 CI I L. 1 • -._ "1 \!Alik • , ‘I-, t3 4 , Lt..,•.,.•: -.. . • .., • 1 � aV4I. If. LVIJ / V, I111 Irrlrrrl vvii Vrry v��I!I'SI r vr SV •�• ♦cif Farm Bureau Property&Casualty Insurance Company 5400 University Avenue ORM West Des Moines Iowa 50266-5997 M a PH(515)225-5400 FARM BUREAU FINANCIAL SERVICES FARM BUREAU MEMBER'S CHOICE PERSONAL PACKAGE POLICY LIABILITY INSURANCE CERTIFICATE POLICY#: 0000000007398896 CERTIFICATE ISSUED TO: FIRST NAMED INSURED: CITY OF SALINA RISK MANAGEMENT DEPARTMENT DONALD MATTISON P.O.BOX 736 900 NORTH SIMPSON RD SALINA,KS 674020736 SALINA,KS 674010000 EFFECTIVE DATE; 10.26-2014 EXPIRATION DATE: 10-26-2015 LNSURANCE COVERAGES ❑ Personal Vehicle Liability'" © Farm/Ranch Employer Liability • ❑ Personal Liability ❑ Business Liabilityss ❑ Personal injury Liability ❑ Umbrella Liability IN ]!arm/Ranch and Personal Liability'* This certificate certifies liability insurance is afforded as shown above. It is issued as a matter of information only and does not amend, alter or extend any of the coverages in the Farm Bureau Member's Choice Personal Package Policy, • COVERAGE LIMIT FARM/RANCH AND PERSONAL LIABILITY Bodily Injury/Property Damage $500,000 Each Occurrence + Personal Vehicle includes any of the following:An auto of the private passenger type designed solely to carry persons and their luggage. An auto of the pickup,panel truck,van or motorhome type not customarily used in any business or occupation other than farming or ranching for: delivery of products or supplies;carrying onoels or equipment;hauling for hire;office,Store or display purposes. An auto of the truck or truck tractor type owned by a farmer or rancher and used exclusively in connection with their farming or ranching operation,for exchange purposes with neighbors or for personal pleasure. A motorcycle or recreational motor vehicle. A snowmobile or watercraft. Fora certificate issued to a lessor for the above described vehicle,the lessor is also named as an additional insured for legal liability,but only with respect to the ownership,maintenance or use of the vehicle. se Business Liability includes bodily injury,property damage and personal injury/advertising injury. ''s• For certificates issued to lessors or lienholders of equipment under Farm/Ranch and Personal Liability,"insured"includes the"person(s)"or organization(:)to whom this certificate is issued,but only with respect to their liability"caused by"the maintenance,operation or use by the "insured"of equipment leased by them to the"insured". Coverage with respect to said"person"or organization does not apply to: - Any"occurrence"that takes place after the equipment lease expires; — Any"damages"arising out of the negligence of the additional insured;or — "Bodily Injury"to any employee of said"person"or organization arising out of and in the course of their employment by said"person"or organization. I /I' 4' / PKKS.NF002.1010 AUTHORIZED REPRESENTATIVE • n \S LIe- 0/IS I J