LEASE OF LAND AND CERTAIN IMPROVEMENTS
LOCATED AT ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
entered into by and between
▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇, Landlord
and
Vinifera Inc., Tenant
THIS LEASE ("Lease"), dated as of February 1, 1996, is made and entered
into by and between ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ (hereafter "Landlord" without
regard to number or gender) and Vinifera Inc. ("Tenant") upon the following
terms and conditions.
ARTICLE 1
DEFINITIONS
Unless the context otherwise specifies or requires, the following terms
shall have the following meaning:
1.1 Landlord. "Landlord" means ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇, except as
otherwise noted.
1.2 Tenant. "Tenant" means Vinifera Inc.
1.3 Leased Premises. "Premises" means the land, consisting of
approximately 8.8 acres, four Greenhouse Buildings (as defined below), two cold
boxes, two packing sheds, two ▇▇▇▇▇, and all other improvements currently
located on the Premises or hereafter installed at the Premises by Tenant,
commonly known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, all as
depicted on EXHIBIT "A", attached hereto, but excluding any and all underground
and aboveground storage tanks, rental housing, and those areas that are
cross-hatched in red on EXHIBIT "A". The Leased Premises shall also include
certain personal property (i.e., conveyors, sprayers, carts) as set forth on
EXHIBIT "B" attached hereto.
1.4 Greenhouse Buildings. The term "Greenhouse Buildings" shall mean
the four Greenhouses situated on the Leased Premises consisting in the aggregate
of approximately 250,000 square feet, as follows: Range 1 consisting of 13 bays
covered with glass and including approximately 50,000 square feet; Range 2
consisting of 13 bays covered with glass and including approximately 50,000
square feet; Range 3 consisting of 8 bays covered with fiberglass and including
approximately 75,000 square feet; and Range 4 consisting of 8 bays covered with
fiberglass and including approximately 75,000 square feet, as depicted on
EXHIBIT "A".
1.5 Lease. The term "Lease" shall mean this Lease document and any
exhibits and addenda attached hereto or attached in the future if duly executed
by Landlord and Tenant.
1.6 Lease Term. The "Lease Term" shall mean the period between the
Commencement Date and the Expiration Date (as such terms are hereinafter
defined), unless sooner terminated or renewed or otherwise provided in this
Lease. The Lease Term is for five (5) years.
1.7 Commencement Date. Subject to adjustment as provided in Article 3,
the Scheduled Term Commencement Date shall mean February l, 1996.
1.8 Expiration Date. The term "Expiration Date" shall mean January 31,
2001.
1.9 Base Rent. Subject to Article 4, the term "Base Rent" shall mean:
$12,500 per month throughout the term of this Lease for the Leased Premises.
1.10 Buildings. "Buildings" means the buildings, cold boxes, sheds, and
other improvements situated on the Property.
1.11 Tenant's Permitted Use. The term "Tenant's Permitted Use" shall
mean general agricultural purposes including, without limitation, the planting
and growing of various grape rootstock, scionwood, grafted grape vines, and
other plants in accordance with the farming practices of the community in which
the Leased Premises are situated.
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1.12 Landlord's Address for Rent and Notices. The term "Landlord's
Address for Rent and Notices" shall ---------------------------------------
mean:
(a) For ▇▇▇▇▇▇ ▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- with copy to -
(b) For ▇▇▇▇▇ ▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- with copy to -
1.13 Tenant's Address for Notices. The term "Tenant's Address for
Notices" shall mean:
Vinifera, Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President and CEO
- with copy to -
▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
1.14 Security Deposit. The term "Security Deposit" shall refer to the
payment by Tenant to Landlord of $12,500 pursuant to paragraph 4.4 of this
Lease.
ARTICLE 2
PREMISES
2.1 Lease of Premises. Landlord hereby leases the Leased Premises
("Premises") to Tenant, and Tenant hereby leases the Premises from Landlord,
upon all of the terms, covenants and conditions contained in this Lease. On the
Commencement Date described herein, Landlord shall deliver the Premises to
Tenant and warrants and represents to Tenant that the Premises are fit and zoned
for Tenant's Permitted Use.
ARTICLE 3
TERM
3.1 Lease Term. Except as otherwise provided in this Lease, the Lease
Term shall be for the period described in Paragraph 1.6 of this Lease,
commencing on the Commencement Date described in Paragraph 1.7 of this Lease and
ending on the Expiration Date described in Paragraph 1.8 of this Lease:
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ARTICLE 4
RENTAL
4.1 Definitions. As used herein,
(A) "Base Year" shall mean the calendar year 1996.
(B) "Property Taxes" shall mean all payments and related
expenses paid or incurred by Landlord with respect to taxes or assessments
affecting the Greenhouse Buildings or the Premises, including without
limitation, any form of real property tax, assessment, business or license fee
or tax, commercial rental tax, and any tax or similar imposition in substitution
for any of the foregoing imposed by any governmental or quasi-governmental
authority.
4.2 Base Rent. During the Lease Term, Tenant shall pay to Landlord as
rental for the Premises the Base Rent described in Section 1.9 above, subject to
the following provisions:
(A) Tenant shall pay to Landlord $12,500 per month in Base
Rent throughout the Lease Term on the first of each month for the Premises
(B) Payment. All Base Rent payable to Landlord by Tenant
pursuant to the provisions of this Lease, shall be paid one-half to ▇▇▇▇▇▇ ▇▇▇▇
and one-half to ▇▇▇▇▇ ▇▇▇▇ without notice, demand, abatement, deduction or
offset, except as otherwise permitted herein, in lawful money of the United
States to Landlord's address in Paragraph 1.12 or to such other person or at
such other place as Landlord may designate from time to time by written notice
given to Tenant. No payment by Tenant or receipt by Landlord of a lesser amount
than the correct Rent due hereunder shall be deemed to be other than a payment
on account; nor shall any endorsement or statement on any check or any letter
accompanying any check or payment to be deemed to effect or evidence an accord
or satisfaction; and Landlord may accept such check or payment without prejudice
to Landlord's right to recover the balance or pursue any other remedy in this
Lease or at law or in equity provided.
(C) Late Charge; Interest. Other remedies for non-payment of
Rent notwithstanding, if any Monthly Base Rent payment is not received by
Landlord on or before the 15th day of any month in which the Rent is due, a late
charge of ten percent (10%) of such past due amount shall become due and payable
in addition to such amounts owed under this Lease.
(D) Additional Rental. For purposes of this Lease, all amounts
payable by Tenant to Landlord pursuant to this Lease, whether or not denominated
as such, shall constitute additional rental hereunder. Such additional rental
together with the Base Rent shall sometimes be referred to in this Lease as
"Rent."
4.3 Property Taxes. In addition to the Base Rent and other charges to
be paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for any
increase in Property Taxes over the real Property Taxes billed in the Base Year
payable or imposed upon Landlord with respect to: any improvements made by
Tenant to the Premises. Tenant shall have no responsibility for any increase in
Property Taxes over the Property Taxes for the Base Year due to any sale or
other transfer of Landlord's interest in the Premises.
4.4 Security Deposit. Upon the execution of this Lease, Tenant shall
deposit with Landlord the Security Deposit described in Paragraph 1.14 above.
The Security Deposit is made by Tenant to secure the faithful performance of all
the terms, covenants and conditions of this Lease to be performed by Tenant. If
Tenant shall default with respect to any covenant or provision hereof, Landlord
may use, apply or retain all or any portion of the Security Deposit to cure such
default or to compensate Landlord for any loss or damage which Landlord may
suffer thereby. If Landlord so uses or applies all or any portion of the
Security Deposit, Tenant shall immediately upon written demand deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to the full
amount hereinabove stated. Landlord shall not be required to keep the Security
Deposit separate from its general accounts and Tenant shall not be entitled to
interest on the Security Deposit. Within thirty (30) days after the expiration
of the Lease Term and the vacation of the Premises by Tenant, the Security
Deposit, or such part as has not been applied to cure the default, shall be
returned to Tenant.
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ARTICLE 5
USE OF PREMISES
5.1 Tenant's Permitted Use. Tenant shall use the Premises only for
Tenant's Permitted Use as set forth in Paragraph 1.11 above and shall not use or
permit the Premises to be used for any other purpose without the prior written
consent of Landlord, which consent shall not be unreasonably withheld. TENANT
SHALL, AT ITS SOLE COST AND EXPENSE, OBTAIN ALL GOVERNMENTAL LICENSES AND
PERMITS REQUIRED TO ALLOW TENANT TO CONDUCT TENANT'S PERMITTED USE, INCLUDING
QUALIFICATION FOR THE STATE'S CERTIFICATION PROGRAM, ALL OF WHICH ARE EXPRESS
CONDITIONS PRECEDENT TO THE VALIDITY OF THIS LEASE.
5.2 Compliance With Laws and Other Requirements.
(A) Tenant shall not use the Premises, or permit the Premises
to be used, in any manner which: (a) violates any law, ordinance, regulation or
directive of any governmental authority having jurisdiction, including without
limitation any Certificate of Occupancy, or any covenant, condition or
restriction affecting the Premises; (b) causes or is reasonably likely to cause
damage to the Premises; (c) violates a requirement or condition of any fire and
extended insurance policy covering the Building and/or the Premises, or
increases the cost of such policy; (d) impairs or is reasonably likely to impair
the proper maintenance or repair of the Premises.
5.3 Landlord's Hazardous Materials.
(A) Definition of "Hazardous Materials". "Hazardous Materials"
shall be interpreted broadly to include, but not be limited to, any material or
substance that is so defined or classified under federal, state or local laws
including, without limitation, hazardous wastes, hazardous substances, hazardous
constituents, toxic substances or related materials, whether solids, liquids or
gases, including but not limited to substances defined as "hazardous wastes",
"hazardous substances", "toxic substances", "pollutants", "contaminants",
"chemicals known to the State to cause cancer or reproductive toxicity",
"radioactive materials", or other similar designations in, or otherwise subject
to regulation under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("CERCLA"), 42 U.S.C. ss. 9601 et seq; the Hazardous
Substances Account Act ("HSAA), California Health and Safety Code ss. 25300 et
seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C. ss. 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. ss. 1802 et seq.; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss. 9601 et seq.; the
Hazardous Waste Control Law ("HWCL"), California Health and Safety Code ss.
25100 et seq.; the Safe Drinking Water and Toxic Enforcement Act of 1986,
California Health and Safety Code Section 25249.5: et seq.; the ▇▇▇▇▇▇-Cologne
Water Quality Control Act ("▇▇▇▇▇▇-Cologne"), California Water Code Section
13000, et seq.; the Clean Water Act ("CWA"), 33 U.S.C. ss. 1251 et seq.; the
Safe Drinking Water Act, 42 U.S.C. ss. 300 (f) et seq; the Clean Air Act
("CAA"), 42 U.S.C. ss. 7401 et seq.; the California Air Pollution Control Law,
California Health and Safety Code Section 2900O, et seq.; and in the plans,
rules regulations or ordinances adopted, or other criteria and guidelines
promulgated pursuant to the preceding laws or other similar laws, regulations,
rule or ordinance now or hereafter in effect (collectively the "Environmental
Laws"); and any other substances, constituents or wastes subject to
environmental regulations under any applicable federal, state or local law,
regulation or ordinance now or hereafter in effect.
(B) Environmental Representations and Warranties. Landlord
represents and warrants to Tenant that (a) Landlord has the full right, power
and authority to execute this Lease and to lease the Premises as provided in the
Lease and to carry out all obligations hereunder; (b) Landlord is financially
capable of performing and satisfying, or has obtained sufficient financial
assurance to satisfy, in full its obligations pursuant to this Lease; (c)
neither Landlord nor any tenant of Landlord's who has occupied the Premises is
in violation or subject to any existing, pending, or threat of investigation by
any governmental authority under any applicable federal, state or local law,
Environmental Laws and any and all zoning and land use laws and regulations; (d)
any handling, transportation, storage, treatment or use of Hazardous Materials
that has occurred on the Premises to date has been in compliance with all
applicable federal, state and local laws, regulations and ordinances, (e) To
Landlord's knowledge no leak, spill, release, discharge, emission, or disposal
of Hazardous Materials has occurred on the Premises to date and the soil,
groundwater, and soil vapor on or under the Premises is free of Hazardous
Materials as of the date of the Lease Commencement
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Date; and (f) Landlord has complied with all Environmental Laws with respect to
the underground and above ground storage tanks.
(C) Environmental Indemnity. Landlord agrees to indemnify and
defend (with counsel satisfactory to tenant) and hold Tenant and its officers,
employees, contractors, and agents harmless from any claims, judgment, damages,
penalties, fines, expenses, liabilities, losses arising during or after the
Lease Term out of or in any way relating to the presence, release or discharge
of Hazardous Materials on or from the Premises, or from a breach of any of the
Environmental Warranties and Representations made by Landlord above, unless the
Hazardous Materials are present solely as a result of the actions of Tenant, its
officers, employees, contractors, invitees, licensees, or agents. That indemnity
shall include, without limitation, costs incurred in connection with:
a. Hazardous Materials present or suspected to be
present in the soil, ground water, or soil vapor on or under the Premises before
Tenant occupies the Premises or the Lease Term commences; or
b. Hazardous Materials present or suspected to be
present in the soil, ground water, or soil vapor on or under the Premises after
Lease Term commences resulting from actions by Landlord made at any time; or
c. Hazardous Materials that migrate, flow, percolate,
diffuse, or in any way move onto or under the Premises, during Tenant's
occupancy of the Premises after Lease Term commences; or
d. Hazardous Materials present on or under the
Premises as the result of any discharge, dumping, or spilling (accidental or
otherwise) on the Premises during Tenant's occupancy of the Premises or after
the Lease Term commences by any person, corporation, partnership or entity other
than Tenant, its officers, employees, contractors, or agents unless such person,
corporation, partnership, or entity is an invitee or licensee of Tenant, in
which event there shall be no indemnification by Landlord.
The indemnification provided by this Paragraph shall also specifically
cover, without limitation, costs incurred in connection with any investigation
of site conditions (except any conducted in conjunction with the due diligence
period under the Option Agreement between the parties) or any cleanup, remedial,
removal, or restoration work required by any federal, state, or local
governmental agency or political subdivision or other third party because of the
presence or suspected presence of Hazardous Materials in the soil, ground water
or soil vapor on or under the Premises unless the Hazardous Materials are
present solely as the result of the actions of Tenant, its officers, employees,
contractors, agents, invitees or licensees. These costs may include, but are not
limited to, diminution of the value of the Premises, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the
Premises, sums paid in settlement of claims, attorneys' fees, consultant fees,
and expert fees.
The foregoing environmental indemnity shall survive the expiration or
termination of this Lease and/or any transfer of all or any portion of the
Premises to Tenant or to any third party. It shall be governed by the laws of
the State of California. Notwithstanding any provision of this Lease, Landlord
shall be personally liable without limitation on recourse, for performance of
its obligations under this Section.
(D) Environmental Release. Landlord, on behalf of themselves
and any corporation in which Landlord owns or owned shares hereby releases
Tenant and its officers, directors, trustees, agents, employees, and its
successors and assigns, from any and all manner of action or actions, causes of
action (at law or in equity), obligations, claims, covenants, demands,
liabilities, and losses of any nature whatsoever, known or unknown, fixed or
contingent, arising out of or related to the present or future physical
condition of the Premises or the present or future presence of Hazardous
Materials on or about the Premises or which arise out or are related to any
Environmental Laws, for which Landlord is indemnifying Tenant hereunder ("the
Release"). Landlord agrees never to commence, aid in any way or prosecute
against the Tenant, its officers, directors, trustees, agents and employees and
its and their respective successors, any action or other proceeding based on any
claims, demands, causes of action, obligations, damages, or liabilities covered
by this Release. Landlord further acknowledges and waives any rights or benefits
available to them with respect to the Release under the provisions of Section
1542 of the California Civil Code, which provides:
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A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
(E) Corrective Action. If any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work (the "Remedial
Work") of any kind is necessary under Environmental Laws, or as required by any
governmental entity or other third person because of or in connection with the
presence or suspected presence of Hazardous Materials on or under the Premises,
Landlord shall assume full responsibility for all such Remedial Work and all
costs and expenses of such Remedial Work shall be paid by Landlord, unless the
Hazardous Materials are present solely as a result of the actions of Tenant or
its officers, directors, employees, licensees, invitees, contractors, or agents.
In the event Hazardous Materials are present as the result of actions by both
Landlord and Tenant, the parties shall determine the percentage of
responsibility of each party, and if unable to agree, then they shall submit the
issue to arbitration in accordance with the rules of the American Arbitration
Association.
(F) Environmental Default Provision. Any reasonable
interference with Tenant's operations resulting from the presence of Hazardous
Materials on, under, in, or adjacent to the Premises or from the Remedial Work
not caused by Tenant shall be a material default for which Tenant may exercise
any remedy set forth in this Lease including, but not limited to: (a) abating
Rent, or (b) terminating this Lease. Tenant's right to ▇▇▇▇▇ Rent hereunder
shall be based on the extent to which the Environmental Default interferes with
Tenant's use of the Premises.
5.4 Tenant's Hazardous Materials.
(A) No Hazardous Materials, as defined herein, shall be
Handled, as also defined herein, upon, about, above or beneath the Premises by
or on behalf of Tenant, its subtenants or its assignees, or their respective
contractors, clients, officers, directors, employees, agents, invitees, or
licensees except those quantities of those Hazardous Materials customarily used
for Tenant's Permitted Use, provided Tenant complies with applicable
Environmental Laws.
(B) "Handle," "Handled," or "Handling" shall mean any
installation, handling, generation, storage, treatment, use, disposal,
discharge, release, manufacture, refinement, presence, migration, emission,
abatement, removal, transportation, or any other activity of any type in
connection with or involving Hazardous Materials.
(C) Tenant's Indemnity. Tenant shall indemnify Landlord for
the handling of any Hazardous Materials in accordance with Article 9.
ARTICLE 6
UTILITIES AND SERVICES
6.1 Utilities. Tenant shall be responsible for all utility costs
incurred and used by Tenant at the Premises including, without limitation,
water, electricity, and garbage.
ARTICLE 7
MAINTENANCE AND REPAIRS
7.1 Landlord Repairs. Landlord shall not be required to make any
improvements, replacements or repairs of any kind or character to the Premises
during the Term of this Lease except as are set forth in this Section. Landlord
shall repair and maintain all underground and aboveground storage tanks, septic
tank(s) and waste disposal facilities.
7.2 Tenant Repairs. Tenant, at its own cost and expense, shall maintain
the Premises (except for the items that are the responsibility of Landlord under
Paragraph 7.1 and Article 5). Without limiting the generality of the foregoing,
Tenant shall maintain and keep in good repair (including replacement when
necessary): (a) the interior of the Premises, including walls, floors and
ceilings; (b) all windows and doors, including frames, glass and fiberglass
coverings, and hardware; (c) all wires and plumbing within the Greenhouse
Buildings, (d) all signs, air conditioning, heating equipment, and other
mechanical equipment situated on or in the Greenhouse Buildings. Tenant shall
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further make all other repairs to the Premises made necessary by Tenant's
failure to comply with its obligations under this Section.
Notwithstanding the foregoing, Tenant shall not be required to make any
structural repair to, structural modification of, or structural addition to any
of the Greenhouse Buildings or the Premises as may be required by any federal,
state or local governmental laws, ordinances and regulations, except and to the
extent required because of Tenant's use of the Premises. Otherwise, any and all
repairs, maintenance or alterations to the Premises required by any governmental
authorities shall be the responsibility of Landlord, including the abatement of
any asbestos, if any, located at the Premises.
7.3 Request for Repairs. All requests for repairs or maintenance that
are the responsibility of the Landlord pursuant to any provision of this Lease
must be made in writing to Landlord at the address in Paragraph 1.12.
7.4 Tenant Damages. Tenant shall not allow any damage to be committed
on any portion of the Premises, and at the termination of this Lease, by lapse
of time or otherwise, Tenant shall deliver the Premises to Landlord in as good
condition as existed at the Commencement Date of this Lease, ordinary wear and
tear excepted. The cost and expense of any repairs necessary to restore the
condition of the Premises shall be borne by Tenant. Notwithstanding anything to
the contrary contained herein, Tenant shall leave all electrical systems,
lighting fixtures, space heaters, air conditioning, plumbing and other
irrigation systems upon the Premises in good operating condition, except as
otherwise permitted in Paragraph 8.1. In the event Tenant fails to perform
Tenant's repair and maintenance obligations under this Section, Landlord may at
its option, but shall not be required to, enter upon the Premises after ten (10)
days prior written notice to Tenant (except in case of an emergency, in which
case no notice shall be required), to perform such obligations on Tenant's
behalf and to place the Premises in good order, condition and repair, and Tenant
shall pay the cost thereof as Additional Rent to Landlord.
7.5 Landlord's Rights. Landlord and its contractors shall have the
right, at all reasonable times, to enter upon the Premises to make any repairs
to the Premises reasonably required or deemed reasonably necessary by Landlord
and to erect such equipment, including scaffolding, as is reasonably necessary
to effect such repairs.
ARTICLE 8
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
8.1 Landlord's Consent; Conditions. Tenant shall not make or permit to
be made any alterations, additions, or improvements in or to the Premises
("Alterations") without the prior written consent of Landlord. Landlord may
impose as a condition to such consent such requirements as Landlord in its sole
discretion deems necessary or desirable including without limitation: Tenant's
submission to Landlord, for Landlord's prior written approval, of all plans and
specifications relating to the Alterations; Landlord's prior written approval of
the time or times when the Alterations are to be performed; Landlord's prior
written approval of the contractors and subcontractors performing work in
connection with the Alterations; Tenant's receipt of all necessary permits and
approvals from all governmental authorities having jurisdiction prior to the
construction of the Alterations; Tenant's written notice of whether the
Alterations include the Handling of any Hazardous Materials, pursuant to
Paragraph 5.4; Tenant's delivery to Landlord of such bonds and insurance as
Landlord shall reasonably require; and Tenant's payment to Landlord of all costs
and expenses incurred by Landlord because of Tenant's Alterations, including but
not limited to costs incurred in reviewing the plans and specifications for, and
the progress of, the Alterations. Notwithstanding the foregoing to the contrary,
Landlord preconsents to Tenant making certain alterations to the Greenhouse
Buildings including, without limitation, the following: cleaning the Greenhouse
Buildings; removal of the sideboards to the beds in the Greenhouse Buildings,
soil sterilization in the Greenhouse Buildings; power washing the Greenhouse
Buildings' bays; sterilization of structures within the Greenhouse Buildings;
recovering the Greenhouse Buildings; and painting. Moreover, Landlord shall
allow Tenant to install weed barriers, gravel and benches in the Greenhouses and
to install certain equipment therein including, without limitation, circulation
fans, grow lights, modification to the heating system, modification to the
irrigation system, modification to the cooling system, and installation of
bottom heat moist and fog systems. Landlord agrees that Tenant, upon the
expiration or sooner termination of this Lease, shall be allowed to remove from
the Premises the benches,
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bottom heat, moist and fog systems, grow lights, and such other personal
property moved into the Premises by Tenant which can be removed without causing
damage to the Premises.
8.2 Performance of Alterations Work. All work relating to the
Alterations shall be performed in compliance with the plans and specifications
approved by Landlord, and all applicable laws, ordinances, rules, regulations
and directives of all governmental authorities having jurisdiction.
8.3 Liens. Tenant shall pay when due all costs for work performed and
materials supplied to the Premises. Tenant shall keep Landlord, the Premises and
the Building free from all liens, stop notices and violation notices relating to
the Alterations or any other work performed for, materials furnished to or
obligations incurred by Tenant and Tenant shall protect, indemnify, hold
harmless and defend Landlord, the Premises and the Building of and from any and
all loss, cost, damage, liability and expense, including attorneys' fees,
arising out of or related to any such liens or notices. Further, Tenant shall
give Landlord not less than seven (7) business days prior written notice before
commencing any Alterations in or about the Premises to permit Landlord to post
appropriate notices of nonresponsibility. Tenant shall secure, at Tenant's sole
expense, a completion and lien indemnity bond satisfactory to Landlord for such
work, and during the progress of such work, Tenant shall, upon Landlord's
request, furnish Landlord with sworn contractor's statements and lien waivers
covering all work theretofore performed. Tenant shall satisfy or otherwise
discharge all liens, stop notices or other claims or encumbrances within ten
(10) days after Landlord notifies Tenant in writing that any such lien, stop
notice, claim or encumbrance has been filed. If Tenant fails to pay and remove
such lien, claim or encumbrance within such ten (10) days, Landlord, at its
election, may pay and satisfy the same and in such event the sums so paid by
Landlord, with interest from the date of payment at the rate set forth in
Paragraph 4.2 hereof for amounts owed Landlord by Tenant shall be deemed to be
additional rent due and payable by Tenant at once without notice or demand.
8.4 Lease Termination. Except as provided in this section, upon
termination of this Lease Tenant shall surrender the Premises to Landlord in the
same condition as when received, subject to reasonable wear and tear. Except as
otherwise provided in Paragraph 8.1, all Alterations shall become a part of the
Premises and shall become the property of Landlord upon the expiration or
earlier termination of this Lease, unless Landlord shall, by written notice
given to Tenant, require Tenant to remove some or all of Tenant's Alterations,
in which event Tenant shall promptly remove the designated Alterations and shall
promptly repair any resulting damage, all at Tenant's sole expense. All business
and trade fixtures, machinery and equipment, furniture, movable partitions and
items of personal property owned by Tenant or installed by Tenant at its expense
in the Premises shall be and remain the property of Tenant; upon the expiration
or sooner termination of this Lease, Tenant shall, at its sole expense, remove
all such items and repair any damage to the Premises or the Building caused by
such removal. If Tenant fails to remove any such items or repair such damage
promptly after the expiration or sooner termination of the Lease, Landlord may,
but need not, do so with no liability to Tenant, and Tenant shall pay Landlord
the cost thereof upon demand.
ARTICLE 9
INDEMNIFICATION AND INSURANCE
9.1 Indemnification. Tenant and Tenant's officers and directors agree
to protect, indemnify, hold harmless and defend Landlord (with counsel
satisfactory to Landlord) and any mortgagee or ground lessor, and each of their
respective partners, directors, officers, agents and employees, successors and
assigns, regardless of any negligence imputed to Landlord as owner of the real
property involved in an injury, from and against:
(A) Any and all loss, cost, damage, liability or expense as incurred
(including but not limited to attorneys' fees and legal costs) arising out of or
related to any claim, suit or judgment brought by or in favor of any person or
persons for damage, loss or expense due to, but not limited to, bodily injury,
including death, or property damage sustained by such person or persons which
arises out of, is occasioned by or is in any way attributable to the use or
occupancy of the Premises by Tenant or the acts or omissions of Tenant or its
agents, employees, contractors, clients, invitees or subtenants except that
caused by the sole active negligence of Landlord or its agents or employees.
Such loss or damage shall include, but not be limited to, any injury or damage
to, or death of, Landlord's employees or agents or damage to the Premises or any
portion of the Building.
(B) Any and all environmental damages which arise from: (i) the
Handling of any Tenant's Hazardous Materials, as defined pursuant to Section 5.4
or (ii) the breach of any of the
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provisions in this Lease. For the purpose of this Lease, "environmental damages"
shall mean (a) all claims, judgments, damages, penalties, fines, costs,
liabilities, and losses (including without limitation, diminution in the value
of the Premises or any portion of the Building, damages for the loss of or
restriction on use of rentable or usable space or of any amenity of the Premises
or any portion of the Building, and from any adverse impact of Landlord's
marketing of space; (b) all reasonable sums paid for settlement of claims,
attorneys' fees, consultants' fees and experts' fees; and (c) all costs incurred
by Landlord in connection with investigation or remediation relating to the
Handling of Tenant's Hazardous Materials, whether or not required by
Environmental Laws, necessary for Landlord to make full economic use of the
Premises or any portion of the Building, or otherwise required under this Lease.
To the extent that Landlord is strictly liable under any Environmental Laws,
Tenant's obligation to Landlord and the other indemnities under the foregoing
indemnification shall likewise be without regard to fault on Tenant's part with
respect to the violation of any Environmental Law which results in liability to
the indemnitee. Tenant's obligations and liabilities pursuant to this Section
9.1 shall survive the expiration or earlier termination of this Lease.
9.2 Property Insurance.
(A) At all times during the Lease Term, Tenant shall procure
and maintain, at its sole expense, "all-risk" property insurance, in an amount
not less than one hundred percent (100%) of the replacement cost covering (a)
all leasehold improvements in and to the Premises which are made at the expense
of Tenant; and (b) Tenant's trade fixtures, equipment, plants (product), and
other personal property from time to time situated in the Premises. The proceeds
of such insurance shall be used for the repair or replacement of the property so
insured, except that if not so applied or if this Lease is terminated following
a casualty, the proceeds applicable to the leasehold improvements shall be paid
to Landlord and the proceeds applicable to Tenant's personal property shall be
paid to Tenant.
(B) At all times during the Lease Term, Tenant shall procure
and maintain business interruption insurance in such amount as will reimburse
Tenant as Tenant deems necessary.
9.3 Liability Insurance.
(A) At all times during the Lease Term, Tenant shall procure
and maintain, at its sole expense, general liability insurance applying to the
use and occupancy of the Premises and the business operated by Tenant. Such
insurance shall have a minimum combined single limit of liability of at least
$1,000,000 per occurrence and a general aggregate limit of $2,000,000. All such
policies shall be written to apply to all bodily injury, property damage,
personal injury losses and shall be endorsed to include Landlord and its agents,
beneficiaries, partners, employees, and any deed of trust holder or mortgagee of
Landlord or any ground lessor as additional insureds. Such liability insurance
shall be primary and not excess or contributing to any other insurance as may be
available to the additional insureds.
9.4 Workers' Compensation Insurance. At all times during the Lease
Term, Tenant shall procure and maintain Workers' Compensation Insurance in
accordance with the laws of the State of California, and Employer's Liability
insurance with a limit not less than $1,000,000 Bodily Injury Each Accident;
$1,000,000 Bodily Injury By Disease - Each Person; and $1,000,000 Bodily Injury
to Disease - Policy Limit.
9.5 Policy Requirements. All insurance required to be maintained by
Tenant shall be issued by insurance companies authorized to do insurance
business in the State of California and rated not less than A-VII in Best's
Insurance Guide. A certificate of insurance (or, at Landlord's option, copies of
the applicable policies) evidencing the insurance required under this Article
shall be delivered to Landlord not less than thirty (30) days prior to the
Commencement Date. No such policy shall be subject to cancellation or
modification without thirty (30) days prior written notice to Landlord and to
any deed of trust holder, mortgagee or ground lessor designated by Landlord to
Tenant. Tenant shall furnish Landlord with a replacement certificate with
respect to any insurance not less than thirty (30) days prior to the expiration
of the current policy.
9.6 Waiver of Subrogation. Each party hereby waives any right of
recovery against the other for injury or loss due to hazards covered by
insurance, to the extent of the injury or loss covered thereby. Any policy of
insurance to be provided by Tenant pursuant to this Article shall contain a
clause denying the insurer any right of subrogation against Landlord.
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9.7 Failure to Insure. If Tenant fails to maintain any insurance which
Tenant is required to maintain pursuant to this Article, Tenant shall be liable
to Landlord for any loss or cost resulting from such failure to maintain.
Landlord shall have the right, in its sole discretion, to procure and maintain
such insurance which Tenant is required to maintain hereunder and the cost
thereof shall be deemed additional rent due and payable by Tenant. Tenant may
not self-insure against any risks required to be covered by insurance without
Landlord's prior written consent.
9.8 Landlord's Insurance. Landlord, at its sole cost shall maintain on
the Leased Premises a policy of standard fire and extended coverage insurance,
with vandalism and malicious mischief, boiler and machinery insurance, to the
extent of at least full replacement value of the Greenhouse Buildings and other
structures located on the Leased Premises.
The insurance policy shall be issued in the names of Landlord, Tenant,
and Landlord's Lender, if any, as their interests appear. The insurance policy
shall provide that any proceeds shall be payable as provided herein.
Landlord shall pay the premiums for maintaining the insurance required
by this paragraph.
The "full replacement value" of the Greenhouse Buildings and other
structures located on the Leased Premises to be insured hereunder shall be
determined by the company issuing the insurance policy at the time the policy is
initially obtained. Not more frequently than once every two years, either party
shall have the right to notify the other party if it elects to have the
replacement value redetermined by an insurance company. The redetermination
shall be made promptly and in accordance with the rules and practices of the
Board of Fire Underwriters, or a like board recognized and generally accepted by
the insurance company, and each party shall be promptly notified of the results
by the company. The insurance policy shall be adjusted according to the
redetermination.
ARTICLE 10
DAMAGE OR DESTRUCTION
10.1 Damage. In the event of a casualty to the Premises, the following
shall apply:
10.2 Reconstruction. If the Leased Premises are damaged or destroyed
during the term, Landlord shall, to the extent that insurance proceeds are
available therefor and are not applied by any lender against payment of any
existing loan on the Premises, except as hereinafter provided, diligently repair
or rebuild them to substantially the same condition in which they existed
immediately prior to such damage or destruction; provided, however, that any
damage which is estimated in good faith by the Landlord to be $1,000 or less
shall be repaired by Tenant, and Landlord shall reimburse Tenant upon demand for
expenses incurred in such repair work;
10.3 Rent Abatement. The Base Rent shall be abated from the date of the
damage or destruction in the same proportion that the rentable area of the
portion of the Premises which is usable by Tenant bears to the total rentable
area of the Premises.
10.4 Excessive Damage or Destruction. Notwithstanding whether the
Leased Premises have been damaged or destroyed, if any of the Greenhouse
Buildings are damaged or destroyed to the extent that Landlord determines that
they cannot, with reasonable diligence, be fully repaired or restored by
Landlord within one hundred eighty (180) days after the date of the damage or
destruction, Landlord or Tenant may terminate this Lease. Notwithstanding
whether the Lease Premises have been damaged or destroyed, Landlord shall
determine whether any of the other Buildings on the Premises damaged or
destroyed can be fully repaired or restored within ninety (90) days, and
Landlord's reasonable determination shall be binding upon Tenant. Landlord shall
notify Tenant of its determination, in writing, within twenty (20) days after
the date of the damage or destruction. If Landlord reasonably determines that
any of the Buildings damaged or destroyed can be fully repaired or restored
within the ninety (90) days, this Lease shall remain in force and effect and
Landlord shall diligently repair and restore the damage as soon as reasonably
possible.
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ARTICLE 11
CONDEMNATION
11.1 Taking. If the entire Premises or so much of the Premises as to
render the balance unusable by Tenant shall be taken by condemnation, sale in
lieu of condemnation or in any other manner for any public or quasi-public
purpose (collectively "Condemnation"), this Lease shall terminate on the date
that title or possession to the Premises is taken by the condemning authority,
whichever is earlier.
11.2 Award. In the event of any Condemnation, the entire award for such
taking shall belong to Landlord, except that Tenant shall be entitled to
independently pursue a separate award relating to the loss of, or damage to,
Tenant's personal property and trade fixtures and Tenant's moving costs directly
associated with the taking. Tenant shall have no claim against Landlord or the
award for the value of any unexpired term of this Lease or otherwise.
11.3 Temporary Taking. No temporary taking of the Premises shall
terminate this Lease or entitle Tenant to any abatement of the Rent payable to
Landlord under this Lease; provided, further, that any award for such temporary
taking shall belong to Tenant to the extent that the award applies to any time
period during the Lease Term and to Landlord to the extent that the award
applies to any time period outside the Lease Term.
ARTICLE 12
ASSIGNMENT AND SUBLETTING
12.1 Restriction. Without the prior written consent of Landlord, Tenant
shall not, either voluntarily or by operation of law, assign, encumber, or
otherwise transfer this Lease or any interest herein, or sublet the Premises or
any part thereof, or permit the Premises to be occupied by anyone other than
Tenant or Tenant's employees. An assignment, subletting or other action in
violation of the foregoing shall be void and, at Landlord's option, shall
constitute a material breach of this Lease. For purposes of this Section, an
assignment shall include any transfer of any interest in this Lease or the
Premises by Tenant pursuant to a merger, division, consolidation or liquidation,
or pursuant to a change in ownership of Tenant involving a transfer of voting
control in Tenant (whether by transfer of partnership interests, corporate stock
or otherwise). Notwithstanding anything contained in this Article to the
contrary, Tenant expressly covenants and agrees not to enter into any lease,
sublease, license, concession or other agreement for use, occupancy or
utilization of the Premises which provides for rental or other payment for such
use, occupancy or utilization based in whole or in part on the net income or
profits derived by any person from the property leased, used, occupied or
utilized (other than an amount based on a fixed percentage or percentages of
receipts or sales), and that any such purported lease, sublease, license,
concession or other agreement shall be absolutely void and ineffective as a
conveyance of any right or interest in the possession, use, occupancy or
utilization of any part of the Premises.
12.2 Notice to Landlord. If Tenant desires to assign this Lease or any
interest herein, or to sublet all or any part of the Premises, then at least
twenty (20) business days prior to the effective date of the proposed assignment
or subletting, Tenant shall submit to Landlord in connection with Tenant's
request for Landlord's consent:
(A) A statement containing (i) the name and address of the
proposed assignee or subtenant; (ii) such financial information with respect to
the proposed assignee or subtenant as Landlord shall reasonably require; (iii)
the type of use proposed for the Premises; and (iv) all of the principal terms
of the proposed assignment or subletting; and
(B) Four (4) originals of the assignment or sublease on a form
approved by Landlord and four (4) originals of the Landlord's Consent to
Sublease or Assignment and Assumption of Lease and Consent.
12.3 Landlord's Recapture Rights. At any time within twenty (20)
business days after Landlord's receipt of all (but not less than all) of the
information and documents described in Paragraph 12.2 above, Landlord may, at
its option by written notice to Tenant, elect to: (a) sublease the Premises or
the portion thereof proposed to be sublet by Tenant upon the same terms as those
offered to the proposed subtenant; (b) take an assignment of the Lease upon the
same terms as those
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offered to the proposed assignee; or (c) terminate the Lease in its entirety or
as to the portion of the Premises proposed to be assigned or sublet, with a
proportionate adjustment in the Rent payable hereunder if the Lease is
terminated as to less than all of the Premises. If Landlord does not exercise
any of the options described in the preceding sentence, then, during the
above-described twenty (20) business day period, Landlord shall either consent
or deny its consent to the proposed assignment or subletting.
12.4 Landlord's Consent: Standards. Landlord's consent shall not be
unreasonably withheld; but, in addition to any other grounds for denial,
Landlord's consent shall be deemed reasonably withheld if, in Landlord's good
faith judgment: (i) the proposed assignee or subtenant does not have the
financial strength to perform its obligations under this Lease or any Proposed
sublease; (ii) the business and operations of the proposed assignee or subtenant
are not of comparable quality to the business and operations being conducted by
Tenant; (iii) the proposed assignee or subtenant intends to use any part of the
Premises for a purpose not permitted under this Lease; or (iv) the proposed
assignee or subtenant is disreputable.
12.5 Continuing Liability of Tenant. Notwithstanding any assignment or
sublease, Tenant shall remain as fully and primarily liable for the payment of
Rent and for the performance of all other obligations of Tenant contained in
this Lease to the same extent as if the assignment or sublease had not occurred;
provided, however, that any act or omission of any assignee or subtenant, other
than Landlord, that violates the terms of this Lease shall be deemed a violation
of this Lease by Tenant.
12.6 Non-Waiver. The consent by Landlord to any assignment or
subletting shall not relieve Tenant, or any person claiming through or by
Tenant, of the obligation to obtain the consent of Landlord, pursuant to this
Article, to any further assignment or subletting. In the event of an assignment
or subletting, Landlord may collect rent from the assignee or the subtenant
without waiving any rights hereunder and collection of the rent from a person
other than Tenant shall not be deemed a waiver of any of Landlord's rights under
this Article, an acceptance of assignee or subtenant as Tenant, or a release of
Tenant from the performance of Tenant's obligations under this Lease.
ARTICLE 13
DEFAULT AND REMEDIES
13.1 Events of Default by Tenant. The occurrence of any of the
following shall constitute a material default and breach of this Lease by
Tenant:
(A) The failure by Tenant to pay Base Rent or make any other
payment required to be made by Tenant hereunder as and when due.
(B) The abandonment of the Premises by Tenant or the vacation
of the Premises by Tenant for fourteen (14) consecutive days (with or without
the payment of Rent).
(C) The failure by Tenant to observe or perform any other
provision of this Lease to be observed or performed by Tenant, other than those
described in Article 13 above, if such failure continues for ten (10) days after
written notice thereof by Landlord to Tenant: provided, however, that if the
nature of the default is such that it cannot be cured within the ten (10) day
period, no default shall exist if Tenant commences the curing of the default
within the ten (10) day period and thereafter diligently prosecutes the same to
completion. The ten (10) day notice described herein shall be in lieu of, and
not in addition to, any notice required under Section 1161 of the California
Code of Civil Procedure or any other law now or hereafter in effect requiring
that notice of default be given prior to the commencement of an unlawful
detainer or other legal proceeding.
(D) The making by Tenant of any general assignment for the
benefit of creditors, the filing by or against Tenant of a petition under any
federal or state bankruptcy or insolvency laws (unless, in the case of a
petition filed against Tenant, the same is dismissed within thirty (30) days
after filing); the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets at the Premises or Tenant's interest in
this Lease or the Premises, when possession is not restored to Tenant within
thirty (30) days; or the attachment, execution or other seizure of substantially
all of Tenant's assets located at the Premises or Tenant's interest in this
Lease or the Premises, if such seizure is not discharged within thirty (30)
days.
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13.2 Landlord's Right to Terminate Upon Tenant Default. In the event of
any default by Tenant as provided in Paragraph 13.1 above, Landlord shall have
the right to terminate this Lease and recover possession of the Premises by
giving written notice to Tenant of Landlord's election to terminate this Lease,
in which event Landlord shall be entitled to receive from Tenant:
(A) The worth at the time of award of any unpaid Rent which
had been earned at the time of such termination; plus
(B) The worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss Tenant proves could have been
reasonably avoided; plus
(C) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; plus
(D) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom; and
(E) At Landlord's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by applicable
law.
As used in subparagraphs (A) and (B) above, "worth at the time of
award" shall be computed by allowing interest at the then highest lawful rate,
but in no event to exceed one percent (1%) per annum plus the rate established
by the Federal Reserve Bank of San Francisco on advances made to member banks
under Sections 13 and 13a of the Federal Reserve Act ("discount rate")
prevailing on the date of execution of this Lease by Landlord. As used in
paragraph (C) above, "worth at the time of award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
13.3 Landlord's Right To Continue Lease Upon Tenant Default. In the
event of a breach of this Lease and abandonment of the Premises by Tenant, if
Landlord does not elect to terminate this Lease as provided in Paragraph 13.2
above, Landlord may from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease. Without limiting the foregoing,
Landlord has the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations). To the fullest extent
permitted by law, the proceeds of any reletting shall be applied first to pay to
Landlord all costs and expenses of such reletting (including without limitation,
costs and expenses of retaking or repossessing the Premises, removing persons
and property therefrom, securing new tenants, including expenses for
redecoration, alterations and other costs in connection with preparing the
Premises for new tenant, and if Landlord shall maintain and operate the
Premises, the costs thereof) and receivers' fees incurred in connection with the
appointment of and performance by a receiver to protect the Premises and
Landlord's interest under this Lease and any necessary or reasonable
alterations; second, to the payment of any indebtedness of Tenant to Landlord
other than Rent due and unpaid hereunder; third, to the payment of Rent due and
unpaid hereunder; and the residue, if any, shall be held by Landlord and applied
in payment of other or future obligations of Tenant to Landlord as the same may
become due and payable, and Tenant shall not be entitled to receive any portion
of such revenue.
13.4 Right of Landlord to Perform. All covenants and agreements to be
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense. If Tenant shall fail to pay any sum of money, other than
Rent, required to be paid by it hereunder or shall fail to perform any other act
on its part to be performed hereunder, Landlord may, but shall not be obligated
to, make any payment or perform any such other act on Tenant's part to be made
or performed, without waiving or releasing Tenant of its obligations under this
Lease. Any sums so paid by Landlord and all necessary incidental costs, together
with interest thereon at the lesser of the maximum rate permitted by law if any
or twelve percent (12%) per annum from the date of such payment, shall be
payable to Landlord as additional rent on demand and Landlord shall have the
same rights and remedies in the event of nonpayment as in the case of default by
Tenant in the payment of Rent.
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13.5 Non-Waiver. Nothing in this Article shall be deemed to affect
Landlord's rights to indemnification for liability or liabilities arising prior
to termination of this Lease for personal injury or property damages under the
indemnification clause or clauses contained in this Lease. No acceptance by
Landlord of a lesser sum than the Rent then due shall be deemed to be other than
on account of the earliest installment of such rent due, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such installment or pursue any other remedy in the Lease provided.
The delivery of keys to any employee of Landlord or to Landlord's agent or any
employee thereof shall not operate as a termination of this Lease or a surrender
of the Premises.
13.6 Cumulative Remedies. The specific remedies to which Landlord may
resort under the terms of the Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which it may be lawfully
entitled in case of any breach or threatened breach by Tenant of any provisions
of the Lease. In addition to the other remedies provided in the Lease, Landlord
shall be entitled to a restraint by injunction of the violation or attempted or
threatened violation of any of the covenants, conditions or provisions of the
Lease or to a decree compelling specific performance of any such covenants,
conditions or provisions.
13.7 Default by Landlord. Landlord's failure to perform or observe any
of its obligations under this Lease shall constitute a default by Landlord under
this Lease only if such failure shall continue for a period of thirty (30) days
(or the additional time, if any, that is reasonably necessary promptly and
diligently to cure the failure) after Landlord receives written notice from
Tenant specifying the default. The notice shall give in reasonable detail the
nature and extent of the failure and shall identify the Lease provision(s)
containing the obligation(s). Landlord's breach of any of its warranties and
representations shall also constitute a default by the Landlord entitling Tenant
to all remedies and damages available at law or in equity.
ARTICLE 14
ATTORNEYS' FEES: COSTS OF SUIT
14.1 Attorneys' Fees. If either Landlord or Tenant shall commence any
action or other proceeding against the other arising out of, or relating to,
this Lease or the Premises, the prevailing party shall be entitled to recover
from the losing party, in addition to any other relief, its actual attorneys
fees irrespective of whether or not the action or other proceeding is prosecuted
to judgment and irrespective of any court schedule of reasonable attorneys'
fees. In addition, Tenant shall reimburse Landlord, upon demand, for all
reasonable attorneys' fees incurred in collecting Rent or otherwise seeking
enforcement against Tenant, its sublessees and assigns, of Tenant's obligations
under this Lease.
14.2 Indemnification. Should Landlord be made a party to any litigation
instituted by Tenant against a party other than Landlord, or by a third party
against Tenant, Tenant shall indemnify, hold harmless and defend Landlord from
any and all loss, cost, liability, damage or expense incurred by Landlord,
including attorneys' fees, in connection with the litigation.
ARTICLE 15
SUBORDINATION AND ATTORNMENT
15.1 Subordination. This Lease, and the rights of Tenant hereunder, are
and shall be subordinate to the interests of (i) all present and future ground
leases and master leases of all or any part of the Buildings; (ii) present and
future mortgages and deeds of trust encumbering all or any part of the
Buildings; (iii) all past and future advances made under any such mortgages or
deeds of trust; and (iv) all renewals, modifications, replacements and
extensions of any such ground leases, master leases, mortgages and deeds of
trust; provided, however, that any lessor under any such ground lease or master
lease or any mortgagee or beneficiary under any such mortgage or deed of trust
shall have the right to elect, by written notice given to Tenant, to have this
Lease made superior in whole or in part to any such ground lease, master lease,
mortgage or deed of trust. Upon demand, Tenant shall execute, acknowledge and
deliver any instruments reasonably requested by Landlord or any such lessor,
mortgagee or beneficiary to effect the purposes of this Paragraph 15.1. Such
instruments may contain, among other things, provisions to the effect that such
lessor, mortgagee or beneficiary (hereafter, for the purposes of this Paragraph
15.1, a "Successor Landlord") shall (i) not be liable for
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any act or omission of Landlord or its predecessors, if any, prior to the date
of such Successor Landlord's succession to Landlord's interest under this Lease;
(ii) not be subject to any offsets or defenses which Tenant might have been able
to assert against Landlord or its predecessors, if any, prior to the date of
such Successor Landlord's succession to Landlord's interest under this Lease,
(iii) not be liable for the return of any security deposit under the Lease
unless the same shall have actually been deposited with such Successor Landlord;
and (iv) be entitled to receive notice of any Landlord default under this Lease
plus a reasonable opportunity to cure such default prior to Tenant having any
right or ability to terminate this Lease as a result of such Landlord default.
15.2 Attornment. If requested to do so, Tenant shall attorn to and
recognize as Tenant's landlord under this Lease any superior lessor, superior
mortgagee or other purchaser or person taking title to the Building by reason of
the termination of any superior lease or the foreclosure of any superior
mortgage or deed of trust, and Tenant shall, upon demand, execute any documents
reasonably requested by any such person to evidence the attornment described in
this Section.
15.3 Mortgage and Ground Lessor Protection. Tenant agrees to give any
holder of any mortgage and any ground lessor, by registered or certified mail, a
copy of any notice of default served upon the Landlord by Tenant, provided that
prior to such notice Tenant has been notified in writing (by way of service on
Tenant of a copy of Assignment of Rents and Leases, or otherwise) of the address
of such mortgage holder or ground lessor (hereafter the "Notified Party").
Tenant further agrees that if Landlord shall have failed to cure such default
within thirty (30) days after such notice to Landlord (or if such default cannot
be cured or corrected within that time, then such additional time as may be
necessary if Landlord has commenced within such thirty (30) days and is
diligently pursuing the remedies or steps necessary to cure or correct such
default), then the Notified Party shall have an additional thirty (30) days
within which to cure or correct such default (or if such default cannot be cured
or corrected within that time, then such additional time as may be necessary if
the Notified Party has commenced within such thirty (30) days and is diligently
pursuing the remedies or steps necessary to cure or correct such default). Until
the time allowed, as aforesaid, for the Notified Party to cure such default has
expired without cure, Tenant shall have no right to, and shall not, terminate
this Lease on account of Landlord's default.
ARTICLE 16
QUIET ENJOYMENT
Provided that Tenant performs all of its obligations hereunder, Tenant
shall have and peaceably enjoy the Premises during the Lease Term, subject to
all of the terms and conditions contained in this Lease.
ARTICLE 17
ENTRY BY LANDLORD
Landlord may enter the Premises at all reasonable times after 24 hours
advance notice to Tenant to: inspect the same; exhibit the same to prospective
purchasers, lenders or tenants; determine whether Tenant is complying with all
of its obligations under this Lease; post notices of nonresponsibility; and make
repairs or improvements in or to the Building or the Premises; provided,
however, that all such work shall be done as promptly as reasonably possible and
so as to cause as little interference to Tenant as reasonably possible.
ARTICLE 18
HOLDOVER TENANCY
If Tenant holds possession of the Premises after the expiration or
termination of the Lease Term, by lapse of time or otherwise, Tenant shall
become a tenant at sufferance upon all of the terms contained herein, except as
to Lease Term and Rent. During such holdover period, Tenant shall pay to
Landlord a monthly rental equivalent to one hundred fifty percent (150%) of the
Rent payable by Tenant to Landlord with respect to the last month of the Lease
Term. The monthly rent payable for such holdover period shall in no event be
construed as a penalty or as liquidated damages for such retention of
possession. Without limiting the foregoing, Tenant hereby agrees to indemnify,
defend and hold harmless Landlord, its beneficiary, and their respective agents,
contractors and employees, from and against any and all claims, liabilities,
actions, losses, damages (including without
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limitation, direct, indirect, incidental and consequential) and expenses
(including, without limitation, court costs and reasonable attorneys' fees)
asserted against or sustained by any such party and arising from or by reason of
such retention of possession, which obligations shall survive the expiration of
termination of the Lease Term.
ARTICLE 19
NOTICES
All notices which Landlord or Tenant may be required, or may desire, to
serve on the other may be served, as an alternative to personal service, by
mailing the same by registered or certified mail, postage prepaid, addressed to
the Landlord at the address for Landlord set forth in Paragraph 1.12 above and
to Tenant at the address for Tenant set forth in Paragraph 1.13 above, or, from
and after the Commencement Date, to the Tenant at the Premises whether or not
Tenant has departed from, abandoned or vacated the Premises, or addressed to
such other address or addresses as either Landlord or Tenant may from time to
time designate to the other in writing. Any notice shall be deemed to have been
served at the time the same was posted.
ARTICLE 20
OPTION TO EXTEND
Landlord hereby grants Tenant two five-year options to extend the term
of this Lease on all of the terms, conditions and provisions contained in this
Lease (except for the Base Rent as hereinafter provided) following expiration of
the Initial Term, by giving notice of exercise of the option ("First Option
Notice") to Landlord at least 180 days prior to the expiration of the Initial
Term, and similar notice 180 days prior to the expiration of the First Option
Period (in the event Tenant wishes to exercise the second five-year option). The
options granted herein shall be ineffective if Tenant is in default of this
Lease on the date of giving the Option Notice, or if Tenant is in default of
this Lease on the date the Extended Term is to commence.
The Base Rent for the first Extended Term shall be equal to the greater
of: l ) the Base Rent in effect immediately prior to the commencement of the
first Extended Term, or 2) the then-prevailing fair market rental value of the
Property. The Base Rent for the second Extended Term shall be equal to the
greater of: 1) the Base Rent in effect for the first Extended Term, or 2) the
then-prevailing fair market rental value of the Property. In no event shall the
Base Rent for the first and second Extended Terms be greater than the
then-prevailing fair market value of the Property plus five percent (5%). For
example, if the Base Rent in effect immediately prior to the start of the first
Extended Term is $12,500 per month, and the then-prevailing fair market rental
value of the Property is $11,500, the Base Rent shall not exceed $11,500 x 5% or
$12,075.
The term "fair market rental value" shall mean the then-prevailing
monthly base rent for similarly sized spaces in similar quality buildings for a
duration of five (5) years.
In the event the parties are unable to agree on a fair market rental
value for the Property for either Extended Term within thirty (30) days of
Tenant giving notice of its exercise of the option to extend the term of the
Lease, such fair market rental value shall be determined by the below appraisal
procedure.
Landlord and Tenant shall each immediately select and pay the appraiser
of their choice (each appraiser to have at least fifteen (15) years' experience
in appraising commercial agricultural land in the Petaluma area) to establish a
fair market rental value of the Property within thirty (30) days. If, for any
reason, either one of the appraisals is not completed within such 30 day period,
as stipulated, then the appraisal that is completed at that time shall
automatically become the new Base Rent for such Extended Term. If both
appraisals are completed and the two appraisers cannot agree on a reasonable
average fair market rental value, then they shall immediately select a third
mutually acceptable appraiser (with 15 years' experience in commercial
agricultural land in the Petaluma area) to establish a third fair market rental
value within the next 30 days. The average of all three appraisals shall then
become the new Base Rent for such Extended Term. The costs of the third
appraisal will be split equally between the parties.
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ARTICLE 21
EARLY TERMINATION
Tenant shall have the right, at its option, to terminate this Lease at
any time after the expiration of the first two years; provided, however, that
upon the termination of this Lease as provided herein, Tenant shall pay to
Landlord (i) any rental and other charges due hereunder through the date of
termination, and (ii) the sum of SEVENTY-FIVE THOUSAND DOLLARS ($75,000) as
consideration for the early termination of this Lease.
ARTICLE 22
OPTION TO PURCHASE
Landlord grants to Tenant the option to purchase the Premises in
accordance with the provisions of the Option Agreement and Purchase and Sale
Agreement attached hereto as EXHIBITS "C" AND "D", respectively. The option to
purchase shall be exercisable by Tenant during the period February 1, 1996
through January 31, 1999.
ARTICLE 23
MISCELLANEOUS
23.1 Entire Agreement. This Lease contains all of the agreements and
understandings relating to the leasing of the Premises and the obligations of
Landlord and Tenant in connection with such leasing. Landlord has not made, and
Tenant is not relying upon, any warranties, or representations, promises or
statements made by Landlord or any agent of Landlord, except as expressly set
forth herein. This Lease supersedes any and all prior agreements and
understandings between Landlord and Tenant and alone expresses the agreement of
the parties.
23.2 Amendments. This Lease shall not be amended, changed or modified
in any way unless in writing executed by Landlord and Tenant. Landlord shall not
have waived or released any of its rights hereunder unless in writing and
executed by the Landlord.
23.3 Successors. Except as expressly provided herein, this Lease and
the obligations of Landlord and Tenant contained herein shall bind and benefit
the successors and assigns of the parties hereto.
23.4 Force Majeure. Landlord shall incur no liability to Tenant with
respect to, and shall not be responsible for any failure to perform, any of
Landlord's obligations hereunder if such failure is caused by reason of strike,
other labor trouble, governmental rule, regulations, ordinance, statute or
interpretation, or by fire, earthquake, civil commotion, or failure or
disruption of utility services, or any and all other causes reasonably beyond
control of Landlord. The amount of time for Landlord to perform any of
Landlord's obligations shall be extended by the amount of time Landlord is
delayed in performing such obligation by reason of such force majeure
occurrence.
23.5 Survival of Obligations. Any obligations of Tenant accruing prior
to the expiration of the Lease shall survive the termination of the Lease, and
Tenant shall promptly perform all such obligations whether or not this Lease has
expired.
23.6 Light and Air. No diminution or shutting off of any light, air or
view by any structure now or hereafter erected shall in any manner affect this
Lease or the obligations of Tenant hereunder, or increase any of the obligations
of Landlord hereunder.
23.7 Governing Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.
23.8 Severability. In the event any provision of this Lease is found to
be unenforceable, the remainder of this Lease shall not be affected, and any
provision found to be invalid shall be enforceable to the extent permitted by
law. The parties agree that in the event two different interpretations may be
given to any provision hereunder, one of which will render the provision
unenforceable, and one of which will render the provision enforceable, the
interpretation rendering the provision enforceable shall be adopted.
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23.9 Captions. All captions, headings, titles, numerical references and
computer highlighting are for convenience only and shall have no effect on the
interpretation of this Lease.
23.10 Interpretation. Tenant acknowledges that it has read and reviewed
this Lease and that it has had the opportunity to confer with counsel in the
negotiation of this Lease. Accordingly, this Lease shall be construed neither
for nor against Landlord or Tenant, but shall be given a fair and reasonable
interpretation in accordance with the meaning of its terms and the intent of the
parties.
23.11 Independent Covenants. Each covenant, agreement, obligation or
other provision of this Lease to be performed by Tenant are separate and
independent covenants of Tenant, and not dependent on any other provision of the
Lease.
23.12 Number and Gender. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include the appropriate number and gender, as the context may require.
23.13 Time is of the Essence. Time is of the essence of this Lease and
the performance of all obligations hereunder.
23.14 Joint and Several Liability. If Tenant comprises more than one
person or entity, or if this Lease is guaranteed by any party, all such persons
shall be jointly and severally liable for payment of rents and the performance
of Tenant's obligations hereunder.
23.15 Exhibits. EXHIBIT "A" (Outline of Premises)
EXHIBIT "B" (List of Personal Property)
EXHIBIT "C" (Option Agreement)
EXHIBIT "D" (Purchase and Sale Agreement)
are incorporated into this Lease by reference and made a part hereof.
23.16 Offer to Lease. This Lease shall have no force and effect until
it is executed and delivered by Tenant to Landlord and executed by Landlord;
provided, however, that, upon execution of this Lease by Tenant and delivery to
Landlord, such execution and delivery by Tenant shall, in consideration of the
time and expense incurred by Landlord in reviewing the Lease and Tenant's
credit, constitute an offer to Lease the Premises upon the terms and conditions
set forth herein (which offer to Lease shall be irrevocable for five (5)
business days following the date of delivery).
23.17 Boilers. Landlord shall provide Tenant prior to the commencement
of the Term a State Boiler Inspection Report. Landlord's failure to provide a
State Boiler Inspection Report to Tenant shall entitle Tenant to terminate this
Lease.
23.18 Landlord's Bankruptcy. Landlord hereby discloses to Tenant the
bankruptcy action filed in the U.S. Bankruptcy Court for the Northern District
of California, Case No. 94-11324, filed on behalf of Neve Roses, Inc., a former
tenant of the Premises. As an express condition precedent to the validity of
this Lease, Landlord must provide evidence to Tenant, satisfactory to Tenant,
that the bankruptcy action has no, and will have no, effect on the validity of
this Lease or on Tenant's rights hereunder.
23.19 Enforcement and Dispute Resolution. Any and all disputes, claims,
issues and disagreements (collectively referred to in this Paragraph as
"Disputes" and, in the singular, as a "Dispute") arising out of or relating to
this Agreement or the breach of this Agreement shall be resolved exclusively in
the manner set forth in this Paragraph, except that Landlord may seek possession
of the Premises and certain rents and damages by litigation as permitted by
California Code of Civil Procedure Sections 1161, et seq.
A. Mediation. All Disputes shall first be submitted before
commencing litigation or arbitration to non-binding mediation in accordance with
the mediation procedures of the American Arbitration Association ("AAA"). The
parties agree to participate in at least ten (10) hours of mediation to occur
within the City of Napa and to occur within thirty (30) days of such submission.
The mediator will be appointed in accordance with the rules of AAA, but the
mediator must have experience in the area involving the Dispute and must not
have any conflict of interest. The mediation proceedings will be completely
confidential and not discoverable. The mediation procedure as set forth in this
subparagraph is deemed to be completed with respect to a Dispute if:
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(1) the mediation is completed and an agreement to resolve the Dispute is
entered into between the parties, or (2) mediation is completed and the Dispute
is not resolved within five (5) days thereafter. If a party submits a Dispute to
mediation and the other party fails to appear or participate in good faith in
the mediation within (30) days after having received written notice of the
submission of the Dispute, then the party submitting the Dispute may consider
the mediation procedure to be completed.
B. Arbitration. If any Dispute remains between the parties
after completion of the mediation process set forth in Subparagraph (A) above,
then the parties shall promptly submit the Dispute to final and binding
arbitration (without appeal or review) in Napa, administered by and in
accordance with the rules of AAA. The judgment and any award rendered by the
arbitrator may be enforced under applicable judicial procedures, including
procedures for entry and enforcement of arbitration awards by any state court
having jurisdiction over such matters.
C. Compensation of Mediator or Arbitrator. The parties agree
to share equally the costs, including fees, of any mediator or arbitrator
selected or appointed hereunder. As soon as practicable after selection of the
mediator or arbitrator, the mediator or arbitrator or his or her designated
representative shall determine a reasonable estimate of anticipated fees and
costs, and render a statement to each party setting forth that party's equal
share of the fees and costs. Thereafter, each party shall, within ten (10) days
after receipt of such statement, deposit the required sum with the mediator or
arbitrator. Failure of a party to make such a deposit shall result in a
forfeiture by that party to the right to prosecute or defend the claim that is
the subject of the proceeding, and the other party may prosecute any arbitration
proceeding to judgment and execution.
D. Expenses. The prevailing party in any arbitration, suit or
other action arising out of or related to this Lease is entitled to recover its
reasonable fees, costs and expenses relating to the action or the Dispute,
including reasonable, judicial, and extra-judicial attorneys' fees, expenses and
disbursements, and fees, costs and expenses relating to any mediation or
arbitration.
E. Survival. The provisions of this Paragraph shall survive
the termination of this Lease for any reason, regardless of whether a Dispute
arises before or after termination of this Agreement, and regardless of whether
the related arbitration proceedings occur before or after termination of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this lease as of
the date first above written.
LANDLORD: TENANT:
VINIFERA INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇ Its: President
▇▇▇▇▇ ▇▇▇▇
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OUTLINE
OF
PREMISES
Exhibit "A"
[Exhibit A - map of property]
LIST OF
PERSONAL PROPERTY
Exhibit "B
EXHIBIT B
1 - COMPRESSOR - 8-HP - FRONT BUILDING - SERIAL #95F14449
1 - UTILITY SHED - 10x16
▇ - ▇▇▇▇ - ▇▇▇ ▇▇▇ - ▇▇▇▇▇ - ▇▇▇▇▇▇▇
2 - 200 GALLON GAS TANKS
1 - 500 GALLON FUEL TANK
1 - FERTILIZER INJECTOR PROMINENT HM-10-5ac AND CONTROL EQUIPMENT
▇ - ▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇ - ▇▇▇▇ ▇▇▇▇▇▇ RETURN WATER TANK
1 - RIGID 535 PIPE THREAD MACHINE
1 - AUTO ARC WELDER - APC 3026
1 - DRILL PRESS
1 - TOOL RACK
2 - BINS FOR FITTINGS, NUTS AND BOLTS
2 - GRADING MACHINES
1 - 80' X 2' CONVEYER BELT
7 - TABLES 10' X 4'
1 - UTILITY CART
1 - UTILITY CART - 12 X 4
2 - COMPRESSORS - BACK ICE BOX
2 - FANS - BACK ICE BOX
OPTION AGREEMENT
Exhibit "C"
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") is made as of February 1, 1996,
by and between ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ (hereinafter "Optionor" without regard
to number or gender) and Vinifera Inc. ("Optionee").
ARTICLE I
RECITALS
This Agreement is entered into with reference to the following facts:
A. Optionor is the owner of all that certain real property commonly
known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Property"), as
depicted in EXHIBIT "1" attached hereto and incorporated herein by this
reference.
B. Optionee is currently in possession of the Property under a
month-to-month lease agreement dated November 30, 1995 and desires to obtain a
lease for a five (5) year term ("the Lease") with an option to purchase the
Property from Optionor on the terms and conditions set forth herein, and
Optionor is willing to grant such lease and option to Optionee.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES
OF THE PARTIES HERETO, AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT
AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO AGREE AS
FOLLOWS:
1.1 GRANT OF OPTION TO PURCHASE. Optionor grants to Optionee an option
to purchase (the "Option") the Property from Optionor upon all of the terms,
covenants and conditions hereinafter set forth.
1.2 OPTION CONSIDERATION. As consideration for this Option, Optionee
has entered into the Lease of the Property. In the event the Option is not
exercised, all sums paid and services rendered to Optionor by Optionee under the
Lease shall be retained by Optionor in consideration of the granting of this
Option. Further, as additional consideration for this Option, in the event the
Option is not exercised, all inspection and environmental reports, studies,
drawings, and other documents generated during the due diligence period as
hereinafter provided shall be given to Optionor at the expiration of this Option
at no cost to Optionor.
1.3 MEMORANDUM OF OPTION TO PURCHASE. Optionor has duly executed,
acknowledged and delivered to Optionee a Memorandum of Option to Purchase in the
form attached hereto as EXHIBIT "2" and agrees that Optionee may cause such
Memorandum of Option to Purchase to be recorded. Optionee agrees to execute,
acknowledge and deliver to Optionor a
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Quitclaim Deed to the Property promptly at the request of Optionor if Optionee
does not exercise the Option hereunder if such is necessary to clear Optionor's
title. Optionor shall bear any expense of recording such instrument.
1.4 TERM OF OPTION AND EXERCISE. The term of this Option shall commence
upon February 1, 1996, and expire at midnight on January 31, 1999. If not
exercised during the term of this Option, this Option shall automatically and
without further notice, act or documentation by any party expire on the
aforementioned date. Optionee may exercise this Option at any time during the
time of this Option by giving Optionor written notice, as set forth in Paragraph
3.1 below, of its intention to exercise the Option. As soon as reasonably
practicable after exercise of the Option, the parties hereto shall execute and
cause to be recorded in the Sonoma County Recorder's Office a Notice of Exercise
of Option, in the form attached hereto as EXHIBIT "3."
1.5 PURCHASE PRICE. The purchase price (the "Price") which Optionee
agrees to pay for the Property upon the exercise of the Option is the sum of One
Million, Three Hundred Thousand and No/100 Dollars ($1,300,000.00). Said Price
payable as follows:
(a) The Price will be paid pursuant to the Purchase and Sale
Agreement and Escrow Instructions (the "Purchase and Sale
Agreement") attached hereto as EXHIBIT "4" and incorporated
herein.
1.6 ESCROW. See the Purchase and Sale Agreement attached hereto as
EXHIBIT "4" at Paragraphs 1.2 and 1.3.
1.7 CONDITION OF TITLE UPON CLOSING DATE. See the Purchase and Sale
Agreement attached hereto as EXHIBIT "4" at Paragraphs 2.2 and 2.3.
1.8 DAMAGE OR DESTRUCTION. Except for any damage or destruction
attributable to the activities of Optionee or Optionee's agents, employees, or
contractors, in the event that prior to the Closing Date, as set forth in the
Purchase and Sale Agreement attached hereto as EXHIBIT "4" at Paragraph 7.2, the
Property or any improvements thereon are destroyed or materially damaged,
Optionor shall bear the risk of loss therefor, and Optionee may elect to cancel
this Agreement or may purchase the Property at the Price set forth herein less
the amount by which such damage or destruction has decreased the fair market
value of the Property.
1.9 CONDEMNATION. If, before the Closing Date, as set forth in the
Purchase and Sale Agreement attached hereto as EXHIBIT "4" at Paragraph 1.3,
either Optionor or Optionee receives notice of any condemnation or eminent
domain proceeding, the party receiving the notice shall promptly notify the
other party of that fact. Optionee may elect either to proceed with the purchase
contemplated by the Option or to terminate the Option within ten (10) days after
the date such notice is received. If Optionee proceeds with the Purchase in
accordance with all the
- 2 -
terms of the Option, all condemnation proceedings shall be paid to Optionee (or
assigned to Optionee if not then yet collected).
1.10 TIME OF ESSENCE; FAILURE TO EXERCISE OPTION. Time is of the
essence with regard to the Agreement. If the Option is not exercised in the
manner as set forth in Paragraph 1.4 above, Optionee shall have no interest
whatsoever in the Property and the Option may not be revived by any subsequent
payment or any further action by Optionee.
1.11 OPTIONOR'S ADDRESS FOR NOTICE. The term "Optionor's Address for
Notice" shall mean:
(a) For ▇▇▇▇▇▇ ▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) For ▇▇▇▇▇ ▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARTICLE II
DUE DILIGENCE BY OPTIONEE
2.1 INSPECTION OF PROPERTY. At any time prior to the earlier of the
exercise of the Option or termination of the Option, Optionee is hereby granted
the right, but not the obligation, at Optionee's expense, to inspect the
physical condition of the Property, to conduct such examinations, investigations
and analyses as Optionee deems reasonable or necessary, and to prepare or have
prepared any reports Optionee deems reasonable or necessary relating to, among
other things, the following:
(a) PHYSICAL INSPECTION. Optionee shall have the right to
retain, at its expense, licensed experts including but not limited to engineers,
geologists, architects, contractors, and specialty contractors, including
structural pest control operators, to inspect the property for any structural
and nonstructural conditions, including but not limited to matters concerning
roofing, electrical, plumbing, heating, cooling, electrical appliances, well,
sewer, septic system, pool, survey geological and environmental hazards, toxic
substances including but not limited to asbestos, formaldehyde, radon gas, and
lead-based paint. Optionee shall furnish Optionor, at no cost, copies of all
written inspection reports obtained. Optionee shall approve or disapprove in
writing all inspection reports obtained within 15 days of receipt of each such
report. In the event of Optionee's disapproval, Optionee may elect to not
exercise the Option. Optionee shall pay for all such tests and studies, keep the
Property free and clear of any liens, repair all damage to the Property and
indemnify and hold Optionor harmless from and against all liability, claims,
demands, damages, or costs of any kind whatsoever arising from or connected with
the inspections, tests, surveys or studies, except that Optionee shall have no
liability or
- 3 -
obligation to indemnify Optionor for any remediation or clean-up required by any
governmental authority.
(b) SURVEY. Optionee shall have the right to survey the Property at its
cost and expense, such survey to be satisfactory to the Title Company as a basis
for an ALTA Policy. In the event Optionee does not exercise the Option, any
survey obtained by Optionee shall be given to Optionor. Optionor will provide
Optionee with any survey of the Property that Optionor may have.
(c) ZONING. Optionee shall determine at its sole cost that the present
zoning of the Property and any other governmentally or quasi-governmentally
imposed restriction relating to the ownership or use of the Property would not
prohibit or adversely impact upon or restrict the use of the Property by
Optionee for any of its intended purposes.
(d) HAZARDOUS AND/OR TOXIC WASTES. Optionee shall have the right to
have the Property inspected to determine whether there are hazardous or toxic
wastes, underground storage tanks, substances, chemicals, solvents, asbestos,
PCB's or any environmental conditions on or under the Property of any type,
quantity or nature whatsoever which violate or may violate in any way any local,
state or federal law, ordinance, rule or regulation for the protection of the
environment or otherwise, or which would require further environmental testing
or remediation by Optionor. Such inspection shall be limited to one (1) Phase I
environmental site assessment of the Property in order to determine whether or
not any toxic materials or hazardous wastes are present on or about the
Property, and that any additional environmental testing or any testing which may
exceed the scope of a Phase I assessment shall be subject to Optionor's prior
written consent, which consent shall not be unreasonably withheld. Optionee
shall rely on advice of its environmental consultants and counsel for such
determination.
(e) SPECIAL STUDIES ZONE. Optionee shall determine whether the Property
is situated in a Special Studies Zone as designated under Sections 2621-2625,
inclusive, of the California Public Resources Code and, as such, construction or
development of any structure for human occupancy may require the submission of a
favorable geological report by a registered geologist, unless such report is
waived by the City or County under the terms of the act. No representatives on
the subject are made by Optionor. Optionee may make further independent
inquiries at appropriate governmental agencies concerning the use of the
Property under the terms of the Special Studies Zone Act. Optionee shall notify
Optionor in writing of satisfaction of said inquiries prior to exercise of the
Option.
2.2 OTHER CONTRACTS. Prior to the earlier of the exercise or
termination of the Option, Optionor, at Optionee's request, shall provide
Optionee with all license agreements, contracts to provide goods or services for
the Property, maintenance agreements, equipment and furniture leases, and copies
of all warranties relating to the building fixtures and personal property, if
any. Optionee shall approve of same in writing prior to exercise of the Option.
- 4 -
ARTICLE III
ATTORNEYS' FEES; COSTS OF SUIT
3.1 ATTORNEYS' FEES. If either Optionor or Optionee shall commence any
action or other proceeding against the other arising out of, or relating to,
this Agreement, the prevailing party shall be entitled to recover from the
losing party, in addition to any other relief, its actual Attorneys' Fees
irrespective of whether or not the action or other proceeding is prosecuted to
judgment and irrespective of any court schedule of reasonable attorneys' fees.
3.2 INDEMNIFICATION.. Should Optionor be made a party to any litigation
instituted by Optionee against a party other than Optionor, or by a third party
against Optionee, Optionee shall indemnify, hold harmless and defend Optionor
against any and all loss, cost, liability, damage or expense incurred by
Optionor, including attorneys' fees, in connection with the litigation.
ARTICLE IV
NOTICE
4.1 NOTICE OF EXERCISE OF OPTION. Notice to Optionor of exercise of
Option by Optionee may be served, as an alternative to personal service, by
mailing the same by registered or certified mail, postage prepaid, addressed to
Optionor at the address for Optionor as set forth in Paragraph 1.11 above, or
addressed to such other address or addresses as Optionor may from time to time
designate to Optionee in writing. ANY NOTICE SHALL BE DEEMED TO HAVE BEEN SERVED
AT THE TIME THE SAME WAS POSTED.
ARTICLE V
MISCELLANEOUS
5.1 ENTIRE AGREEMENT. This Agreement contains all of the agreements and
understandings relating to the exercise of the Option and the obligations of the
Optionor and Optionee in connection with such exercise. Optionor has not made,
and Optionee is not relying upon, any warranties, or representations, promises
or statements made by Optionor or any agent of Optionor, except as expressly set
forth in the Agreement. This Agreement supersedes any and all prior agreements
and understandings between Optionor and Optionee and alone expresses the
agreement of the parties.
5.2 AMENDMENTS. This Agreement shall not be amended, changed or
modified in any way unless in writing executed by Optionor and Optionee.
Optionor shall not have waived or released any of its rights hereunder unless in
writing and executed by Optionor.
- 5 -
5.3 SUCCESSORS. Except as expressly provided herein, this Agreement and
the obligations of Optionor and Optionee contained herein shall bind and benefit
the successors and assigns of the parties hereto.
5.4 FORCE MAJEURE. Optionor shall incur no liability to Optionee with
respect to, and shall not be responsible for any failure to perform, any of
Optionor's obligations hereunder if such failure is caused by reason of strike,
other labor trouble, detrimental rule, regulations, ordinance, statute, or
interpretation, or by fire, earthquake, civil commotion, or failure or
disruption of utility services, or any and all other causes reasonably beyond
control of Optionor. The amount of time for Optionor to perform any of
Optionor's obligations shall be extended by the amount of time Optionor is
delayed in performing such obligation by reason of such force majeure
occurrence.
5.5 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California.
5.6 CAPTIONS. All captions, headings, titles, numerical references and
computer highlighting are for convenience only and shall have no effect on the
interpretation of this Agreement.
5.7 INTERPRETATION. Optionor and Optionee acknowledge that they have
read and reviewed this Agreement and that they have had the opportunity to
confer with counsel in negotiation of this Agreement. Accordingly, this
Agreement shall be construed neither for nor against Optionor or Optionee, but
shall be given a fair and reasonable interpretation in accordance with the
meaning of its terms and intent of the parties.
5.8 NUMBER AND GENDER. All terms and words used in this Agreement,
regardless of the number and gender in which they are used, shall be deemed to
include the appropriate number and gender, as the context may require.
5.9 EXHIBITS. EXHIBIT "1" (Property Description)
EXHIBIT "2" (Memorandum of Option to Purchase)
EXHIBIT "3" (Notice of Exercise of Option)
EXHIBIT "4" (Purchase and Sale Agreement)
are incorporated in this Agreement by reference and made a part hereof.
- 6 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
OPTIONOR: OPTIONEE:
VINIFERA INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ Its: President
- 7 -
PARCEL ONE:
COMMENCING AT A POINT ON THE COUNTY HIGHWAY LEADING FROM PETALUMA TO BLOOMFIELD,
SAID POINT BEING THE MOST SOUTHEASTERLY CORNER OF THE LANDS DESCRIBED IN VOLUME
232 OF DEEDS AT PAGE 56, SONOMA COUNTY RECORDS; RUNNING THENCE DUE NORTH 800.43
FEET TO THE POINT OF COMMENCEMENT; THENCE RUNNING FROM SAID POINT OF
COMMENCEMENT DUE NORTH 452 FEET; THENCE RUNNING NORTH 89o 26' 10" WEST 385 FEET;
THENCE RUNNING SOUTH 0o 3' 30" EAST 452 FEET; THENCE RUNNING SOUTH 89o 26' 10"
EAST 384 FEET TO THE POINT OF COMMENCEMENT.
PARCEL TWO:
COMMENCING AT THE SOUTHEAST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS. RUNNING THENCE FROM SAID POINT OF BEGINNING
ALONG THE EASTERLY BOUNDARY OF SAID LANDS NORTH 800.43 FEET; THENCE NORTH 89o
26' 10" WEST 192.13 FEET; THENCE SOUTH 690.21 FEET AND THENCE SOUTH 59o 42' 20"
EAST 222.25 FEET TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL:
BEGINNING AT THE SOUTHEAST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS. FROM SAID POINT OF BEGINNING RUNNING NORTH
326.23 FEET; THENCE NORTH 89o 26' 10" WEST 192.13 FEET; THENCE SOUTH 216.01
FEET; THENCE SOUTH 59o 42' 20" EAST 222.25 FEET TO THE POINT OF BEGINNING.
PARCEL THREE:
COMMENCING AT THE SOUTHWEST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS; RUNNING THENCE FROM SAID POINT OF BEGINNING
ALONG ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 03' 30" WEST 580 FEET; THENCE
SOUTH 89o 26' 10" EAST 192.13 FEET; THENCE SOUTH 690.21 FEET; THENCE NORTH 59o
42' 20" WEST 222.25 FEET TO THE POINT OF BEGINNING.
EXHIBIT "1"
RECORDING REQUESTED BY:
▇▇▇▇ & ▇▇▇▇▇▇▇▇
WHEN RECORDED RETURN TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MAIL TAX STATEMENTS TO:
Vinifera Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE
MEMORANDUM OF OPTION TO PURCHASE
This Memorandum of Option ("Memorandum") is made as of February 1,
1996, by and between ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ (hereinafter "Optionor" without
regard to number or gender) and Vinifera Inc. ("Optionee").
1. Optionor hereby grants to Optionee an option to purchase (the
"Option") all of that certain real property commonly known as ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Property"), as depicted in EXHIBIT "A"
attached hereto and incorporated herein.
2. The specific terms and conditions of Optionee's Option are set forth
in the Option Agreement (The "Agreement") dated December 1, 1995. All of the
terms and conditions of the Agreement are incorporated herein by this reference.
3. The term of the Option expires at midnight on January 31, 1999.
4. Any party who is interested in acquiring an interest in the Property
should contact the Optionor and Optionee. Optionor's address is:
EXHIBIT "2"
a. For ▇▇▇▇▇▇ ▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
b. For ▇▇▇▇▇ ▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Optionee's address is:
Vinifera Inc., ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum as
of the date first above written.
OPTIONOR: OPTIONEE:
/s/ ▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇ Its: President
▇▇▇▇▇ ▇▇▇▇
STATE OF CALIFORNIA )
) ss
COUNTY OF )
On this ---- day of ------------, ------, before me, a Notary Public,
State of California, duly commissioned and sworn, personally appeared:
------------------------ known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument, and acknowledged that he/she executed the same.
Official Seal: ------------------------------------
Notary Public
My Commission Expires:--------------
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Sonoma
On April 24, 1996 before me, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Notary Public,
DATE NAME, TITLE OF OFFICER - E.G.,
"▇▇▇▇ ▇▇▇, NOTARY PUBLIC"
personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
NAME(S) OF SIGNER(S)
[ ] personally known to me - OR - [X] proved to me on the basis of satisfactory
evidence to be the person whose name is
subscribed to the within instrument and
acknowledged to me that he executed the
same in his authorized capacity, and that
by his signature on the instrument the
person, or the entity upon behalf of
which the person acted, executed the
instrument.
OFFICIAL SEAL - 1011744
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ NOTARY PUBLIC - CALIF
COUNTY OF SONOMA
My Comm. Exp. Dec. 26, 1997
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SIGNATURE OF NOTARY
-------------------------------OPTIONAL------------------------------
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
[ ] INDIVIDUAL
[X] CORPORATE OFFICER
President
TITLE(S)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER:----------------------
----------------------------
----------------------------
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
Vinifera, Inc.
--------------------------------
DESCRIPTION OF ATTACHED DOCUMENT
Option Agreement
TITLE OR TYPE OF DOCUMENT
10
NUMBER OF PAGES
2/1/96
DATE OF DOCUMENT
yes
SIGNER(S) OTHER THAN NAMED ABOVE
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Sonoma
On April 24, 1996 before me, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Notary Public,
DATE NAME, TITLE OF OFFICER - E.G.,
"▇▇▇▇ ▇▇▇, NOTARY PUBLIC"
personally appeared ▇▇▇▇▇▇ ▇▇▇▇
NAME(S) OF SIGNERS
[ ] personally known to me - OR - [X] proved to me on the basis of satisfactory
evidence to be the person whose name is
subscribed to the within instrument and
acknowledged to me that he executed the
same in his authorized capacity, and that
by his signature on the instrument the
person, or the entity upon behalf of
which the person acted, executed the
instrument.
OFFICIAL SEAL - 1011744
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
NOTARY PUBLIC - CALIF
COUNTY OF SONOMA
My Comm. Exp. Dec. 26, 1997
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SIGNATURE OF NOTARY
-------------------------------OPTIONAL------------------------------
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
[X] INDIVIDUAL
[ ] CORPORATE OFFICER
----------------------------
TITLE(S)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER:----------------------
----------------------------
----------------------------
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
--------------------------------
DESCRIPTION OF ATTACHED DOCUMENT
Option Agreement
TITLE OR TYPE OF DOCUMENT
10
NUMBER OF PAGES
2/1/96
DATE OF DOCUMENT
yes
SIGNER(S) OTHER THAN NAMED ABOVE
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Sonoma
On 4/24/96 before me, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Notary Public,
DATE NAME, TITLE OF OFFICER - E.G., "▇▇▇▇ ▇▇▇, NOTARY PUBLIC"
personally appeared ▇▇▇▇▇ ▇▇▇▇
NAME(S) OF SIGNERS
[ ] personally known to me - OR - [X] proved to me on the basis of satisfactory
evidence to be the person whose name is
subscribed to the within instrument and
acknowledged to me that she executed the
same in her authorized capacity, and that
by her signature on the instrument the
person, or the entity upon behalf of
which the person acted, executed the
instrument.
OFFICIAL SEAL - 1011744
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
NOTARY PUBLIC - CALIF
COUNTY OF SONOMA
My Comm. Exp. Dec. 26, 1997
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SIGNATURE OF NOTARY
-------------------------------OPTIONAL------------------------------
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
[X] INDIVIDUAL
[ ] CORPORATE OFFICER
--------------------------------
TITLE(S)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER:----------------------
----------------------------
----------------------------
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
--------------------------------
--------------------------------
DESCRIPTION OF ATTACHED DOCUMENT
Option Agreement
TITLE OR TYPE OF DOCUMENT
10
NUMBER OF PAGES
2/1/96
DATE OF DOCUMENT
yes
SIGNER(S) OTHER THAN NAMED ABOVE
PARCEL ONE:
COMMENCING AT A POINT ON THE COUNTY HIGHWAY LEADING FROM PETALUMA TO BLOOMFIELD,
SAID POINT BEING THE MOST SOUTHEASTERLY CORNER OF THE LANDS DESCRIBED IN VOLUME
232 OF DEEDS AT PAGE 56, SONOMA COUNTY RECORDS; RUNNING THENCE DUE NORTH 800.43
FEET TO THE POINT OF COMMENCEMENT; THENCE RUNNING FROM SAID POINT OF
COMMENCEMENT DUE NORTH 452 FEET; THENCE RUNNING NORTH 89o 26' 10" WEST 385 FEET;
THENCE RUNNING SOUTH 0o 3' 30" EAST 452 FEET; THENCE RUNNING SOUTH 89o 26' 10"
EAST 384 FEET TO THE POINT OF COMMENCEMENT.
PARCEL TWO:
COMMENCING AT THE SOUTHEAST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS. RUNNING THENCE FROM SAID POINT OF BEGINNING
ALONG THE EASTERLY BOUNDARY OF SAID LANDS NORTH 800.43 FEET; THENCE NORTH 89o
26' 10" WEST 192.13 FEET; THENCE SOUTH 690.21 FEET AND THENCE SOUTH 59o 42' 20"
EAST 222.25 FEET TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL:
BEGINNING AT THE SOUTHEAST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS. FROM SAID POINT OF BEGINNING RUNNING NORTH
326.23 FEET; THENCE NORTH 89o 26' 10" WEST 192.13 FEET; THENCE SOUTH 216.01
FEET; THENCE SOUTH 59o 42' 20" EAST 222.25 FEET TO THE POINT OF BEGINNING.
PARCEL THREE:
COMMENCING AT THE SOUTHWEST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS; RUNNING THENCE FROM SAID POINT OF BEGINNING
ALONG ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 03' 30" WEST 580 FEET; THENCE
SOUTH 89o 26' 10" EAST 192.13 FEET; THENCE SOUTH 690.21 FEET; THENCE NORTH 59o
42' 20" WEST 222.25 FEET TO THE POINT OF BEGINNING.
EXHIBIT "A"
NOTICE OF EXERCISE OF OPTION
THIS NOTICE OF EXERCISE OF OPTION (the "Notice") serves to notify
▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ (hereinafter "Optionor" without regard to number or
gender) of Vinifera Inc.'s ("Optionee") exercise of the option to purchase (the
"Option") all that certain real property commonly known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (94952) (the "Property"), as depicted in EXHIBIT "A"
attached hereto and incorporated herein.
1. The specific terms and conditons of Optionee's Option are set forth
in the Option Agreement (the "Agreement") dated February 1, 1996. All of the
terms and conditions of the Agreement are incorporated herein by this reference.
2. This Notice may be served by Optionee as set forth in Paragraph 3.1
of the Agreement.
DATED:--------------------------
VINIFERA INC.
By:-----------------------------
Its:----------------------------
EXHIBIT "3"
PARCEL ONE:
COMMENCING AT A POINT ON THE COUNTY HIGHWAY LEADING FROM PETALUMA TO BLOOMFIELD,
SAID POINT BEING THE MOST SOUTHEASTERLY CORNER OF THE LANDS DESCRIBED IN VOLUME
232 OF DEEDS AT PAGE 56, SONOMA COUNTY RECORDS; RUNNING THENCE DUE NORTH 800.43
FEET TO THE POINT OF COMMENCEMENT; THENCE RUNNING FROM SAID POINT OF
COMMENCEMENT DUE NORTH 452 FEET; THENCE RUNNING NORTH 89o 26' 10" WEST 385 FEET;
THENCE RUNNING SOUTH 0o 3' 30" EAST 452 FEET; THENCE RUNNING SOUTH 89o 26' 10"
EAST 384 FEET TO THE POINT OF COMMENCEMENT.
PARCEL TWO:
COMMENCING AT THE SOUTHEAST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS. RUNNING THENCE FROM SAID POINT OF BEGINNING
ALONG THE EASTERLY BOUNDARY OF SAID LANDS NORTH 800.43 FEET; THENCE NORTH 89o
26' 10" WEST 192.13 FEET; THENCE SOUTH 690.21 FEET AND THENCE SOUTH 59o 42' 20"
EAST 222.25 FEET TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL:
BEGINNING AT THE SOUTHEAST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS. FROM SAID POINT OF BEGINNING RUNNING NORTH
326.23 FEET; THENCE NORTH 89o 26' 10" WEST 192.13 FEET; THENCE SOUTH 216.01
FEET; THENCE SOUTH 59o 42' 20" EAST 222.25 FEET TO THE POINT OF BEGINNING.
PARCEL THREE:
COMMENCING AT THE SOUTHWEST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS; RUNNING THENCE FROM SAID POINT OF BEGINNING
ALONG ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 03' 30" WEST 580 FEET; THENCE
SOUTH 89o 26' 10" EAST 192.13 FEET; THENCE SOUTH 690.21 FEET; THENCE NORTH 59o
42' 20" WEST 222.25 FEET TO THE POINT OF BEGINNING.
EXHIBIT "A"
PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (the
"Agreement") is made as of February 1, 1996, by and between ▇▇▇▇▇▇ ▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇ (hereinafter "Seller" without regard to number or gender) and
Vinifera Inc. ("Buyer").
ARTICLE I
RECITALS
This Agreement is entered into with reference to facts as follows:
A. Buyer agrees to purchase from Seller and Seller agrees to sell to
Buyer that certain real property commonly known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as described in EXHIBIT "A" attached hereto and incorporated
herein, including all tangible and intangible personal property now or hereafter
located on or about the property or used in connection with the property,
including, without limitation, all governmental permits, approvals,
authorizations, declarations and applications therefor obtained or filed in
connection with the property, all agreements, understandings, reports, plans,
maps, bonds, deposits, fees, studies, notices and other materials prepared,
given, filed, or used, or to be used in connection with the property and all
contracts, if any, entered into by Seller and approved by Buyer, which shall
affect directly or indirectly the property (the "Property").
B. This Agreement is entered into as a result of the exercise by Buyer
of an option to purchase the Property as provided in the Option Agreement dated
February 1, 1996, between Seller and Buyer ("the Option").
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES
OF THE PARTIES HERETO, AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT
AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO AGREE AS
FOLLOWS:
1.1 PURCHASE PRICE. The purchase price (the "Price") for the
Property is One Million, Three Hundred Thousand and No/100 Dollars
($1,300,000.00) payable by Buyer at the close of escrow.
1.2 ESCROW. Within five (5) business days after the exercise of
the Option, an escrow (the" Escrow") shall be opened with Chicago Title Company,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Chicago Title") (the "Escrow
Holder"). This Agreement shall
EXHIBIT "4"
constitute escrow instructions to the Escrow Holder. Seller and Buyer shall
execute such additional escrow instructions as may be reasonably required by
Escrow Holder.
1.3 TERM OF ESCROW. Escrow shall close within ninety (90) days of
the exercise of the Option. The close of Escrow ("Close of Escrow") shall mean
the date upon which the grant deed from Seller to Buyer is recorded in the
Sonoma County Recorder's Office.
ARTICLE II
CONDITIONS TO BUYER'S OBLIGATION
Buyer's obligations hereunder shall be contingent upon satisfaction of
all of the matters listed as follows:
2.1 TITLE. Chicago Title's issuance of an ALTA Extended Owner's
Coverage Form Policy of Title Insurance with endorsements selected by Buyer (the
"ALTA Policy"), with liability in the amount of the Price, showing title to the
Property vested in Buyer, subject only to those exceptions approved by Buyer
within thirty (30) days after the delivery to Buyer through Escrow of the
Preliminary Report and legible copies of the exceptions of record; and also
subject to those exceptions approved by Buyer within ten (10) days after Buyer's
receipt of any ALTA supplemental title report. Escrow Holder is instructed to
order immediately the Preliminary Report together with legible copies of all
documents referred to therein. Seller agrees to convey title to the Property to
the Buyer at close of Escrow free and clear of all monetary liens and
encumbrances, excluding those items approved by Buyer. If Seller does not remove
one or more such monetary encumbrances, liens or claims, in addition to all
other remedies Buyer may have at law or in equity, Buyer may close Escrow on the
scheduled closing date and offset dollar for dollar against the Price an amount
equal to such monetary encumbrances, liens or claims. Seller shall convey title
to the Property subject only to: 1) real estate taxes not yet due, and 2)
covenants, conditions, restrictions, rights of way, and easements of record, if
any, which do not materially affect the value or intended use of the Property.
2.2. HAZARDOUS AND/OR TOXIC WASTES. Buyer shall have during the
due diligence period provided in the Option the right, but not the obligation,
to determine at its sole cost that there are no hazardous or toxic wastes,
underground storage tanks, substances, chemicals, solvents, asbestos, PCB's or
any environmental conditions on or under the Property of any type, quantity or
nature whatsoever which violate or may violate in any way any local, state or
federal law, ordinance, rule or regulation for the protection of the environment
or otherwise, or which would require further environmental testing or
remediation by Seller. These provisions shall be liberally construed for the
benefit of Buyer, and Buyer may rely on advice of its environmental consultants
and counsel to determine whether or not it can satisfy this environmental
contingency and condition of Close of Escrow. If Buyer determines that the
2
foregoing environmental contingency and condition of Close of Escrow requires
remediation, Buyer shall provide written notice thereof to Seller and Seller
shall, at its sole cost up to and including the sum of One Hundred Thousand and
No/100 Dollars ($100,000), so remediate. If the cost of said remediation exceeds
One Hundred Thousand and No/100 Dollars ($100,000), then Seller has no
obligation to so remediate, and Buyer may, at Buyer's sole election: (1)
continue with the purchase of the Property and receive a credit from Seller
against the Purchase Price in the amount of One Hundred Thousand and No/100
Dollars ($100,000); or (2) terminate this Agreement without any further
liability on the part of Buyer. If any remediation is undertaken pursuant to
this Paragraph 2.2, Close of Escrow shall be delayed until certificates of
compliance regarding such remediation have been issued from all appropriate
government agency(ies).
2.3 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller's
representations and warranties as set forth in Article 5 herein shall be true
and correct as of the Close of Escrow. All conditions to the Close of Escrow, or
to Buyer's obligations hereunder, are for Buyer's benefit only, and Buyer may
waive all or any part of such rights by written notice to Seller and Escrow
Holder.
ARTICLE III
CLOSING
3.1 DOCUMENTS TO BE DELIVERED. At the Close of Escrow, Seller
shall deliver to Buyer through Escrow original documents, which shall be in a
form satisfactory to Buyer's counsel, as follows:
(A) A grant deed (the "Grant Deed") conveying the Property to
Buyer;
(B) An assignment of all guaranties and warranties relating
to the Property, and a ▇▇▇▇ of sale (the "▇▇▇▇ of Sale") of the equipment and
fixtures therein, if any; and
(C) All contracts affecting the Property, if any.
At the Close of Escrow, the Escrow Holder shall cause the Grant
Deed to be recorded in the Official Records of the Sonoma County Recorder's
Office, and shall cause the ▇▇▇▇ of Sale and the ALTA Policy to be delivered to
Buyer.
3.2 CLOSING COSTS AND PRORATIONS. Buyer shall be credited and
Seller charged with security deposits or advance rentals made by tenant under
the lease, dated as of February 1, 1996, by and between ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇, of the one hand, and Vinifera Inc., on the other hand (the "Lease").
Escrow holder shall prorate the following between the
parties as of the Close of Escrow: (a) real estate taxes and personal property
taxes for the year in which the sale closes; (b) rent payments under the Lease;
(c) charges and fees paid or payable under service contracts which are assigned
to Buyer; (d) premiums payable under insurance assigned to Buyer at Buyer's
request.; (e) and all other items which are customarily prorated. All prorations
shall be based on a thirty (30) day month. Escrow Holder is to assume that all
rents have been collected unless otherwise advised by Seller. Rent under the
Lease which is more than thirty (30) days in arrears shall not be prorated.
3.3 UTILITIES. Seller shall have all meters read and final bills
rendered for all utilities servicing the Property, including, without
limitation, water, sewer, gas and electricity, for the period to and including
the day preceding the Close of Escrow, and Seller shall pay such bills. Buyer
shall arrange for utility service to the Property after the Close of Escrow.
3.4 POSSESSION. Possession of the Property shall be given to Buyer
at Close of Escrow.
ARTICLE IV
EXPENSES
4.1 EXPENSES OF SELLER. Seller shall pay: (a) the documentary
transfer tax applicable to this transaction; (b) the premium for a CLTA owner's
title insurance policy; (c) one-half the Escrow fees; (d) expenses of clearing
title; and (e) other costs or expenses not expressly provided for herein which
are customarily paid by the seller in similar transactions.
4.2 EXPENSES OF BUYER. Buyer shall pay: (a) all recording charges
on any document recorded pursuant to this Agreement; (b) the difference between
the premium for the ALTA Policy and the premium for a CLTA owner's title
insurance policy; (c) the cost of any title endorsements requested by Buyer; (d)
any costs associated with obtaining the consent of the holder of the existing
loan to the transfer of the Property without accelerating or modifying the loan
or the costs of obtaining a new loan and (e) one-half the Escrow fees.
ARTICLE V
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents, warrants and covenants, each of which shall be
true in all respects as of the date of this Agreement and as of the date of
Close of Escrow and shall survive the Close of Escrow and shall not merge with
any deed, as follows:
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5.1 FIXTURES AND PERSONAL PROPERTY. Seller shall not remove any
fixtures or personal property from the Property.
5.2 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. To the best of
Seller's knowledge:
(A) Throughout the period of ownership of the Property by
Seller, there have been no notices, directives, violation reports or actions by
any local, state or federal department or agency concerning environmental law or
regulations, and the Property is in compliance with all California and federal
environmental laws;
(B) All underground storage tanks (the "USTs") will be removed
from the Property prior to Close of Escrow by Seller at Seller's sole cost and
expense and certificates of compliance as to removal of all the USTs from the
appropriate governmental agency(ies) will be issued to Buyer;
(C) There are no soil or geological conditions which might
impair or adversely affect the current use or future plans for use of the
Property;
(D) None of the Property is located in an area identified by
an agency or department of federal, state or local governments, or identified by
Seller, as having special flood or mudslide hazards or wetlands;
(E) The business and operations of Seller have at all times
been conducted in compliance in all material respects with all applicable local,
state, federal and/or foreign laws, ordinances, regulations, orders and other
requirements of governmental authorities in matters relating to the environment;
(F) There has been no spill, discharge, release, cleanup or
contamination of or by any hazardous or toxic waste or substance used,
generated, treated, stored, disposed of or handled by the Seller at the
Property;
(G) No hazardous or toxic substances or wastes are located at,
or have been removed from the Property; and
(H) There are no writs, injunctions, decrees, orders or
judgments outstanding, or any actions, suits, claims, proceedings or
investigations pending or, to Seller's knowledge, threatened, relating to
compliance with or liability under any Environmental Law affecting the Property.
5.3 DOCUMENTS. Seller shall deliver true, accurate and complete
copies of contracts, surveys, drawings, plans and specifications describing the
Property and known by Seller to exist. No documents supplied to Buyer by Seller
contains any untrue statement of material fact or fails to state any fact, which
would be necessary, considering the circumstances, to make the documents
supplied not misleading.
5.4 EXPENSES. At Close of Escrow, there will be no outstanding
expenses not fully paid, except those expenses previously approved by Buyer in
writing.
5.5 CLAIM AGAINST THE PROPERTY. Seller has no knowledge of any
pending or threatened claim or litigation against the Property and Seller has
not received any notice from any governmental authority of defects in the
Property or noncompliance with any applicable law, code or regulation.
5.6 AUTHORIZATION FOR EXECUTION OF THE AGREEMENT. The persons
executing this Agreement are authorized by the Seller to enter into the
transaction described herein.
5.7 EXECUTION OF FURTHER CONTRACTS. During the Escrow period,
Seller shall not enter into any new lease, option to lease or extension of an
existing lease or any other contract or agreement pertaining to the Property
unless Seller shall first send to Buyer for approval a copy of the document it
proposes to sign. Buyer shall have three (3) business days after receipt of the
document to object in writing to Seller's signing of the document. Any such
objection shall, in the case of any lease, lease option or lease extension, not
be unreasonable. Buyer's failure to respond shall be deemed approval.
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION. Seller and Seller's officers and directors
agree to protect, indemnify, hold harmless and defend Buyer and any mortgagee,
and each of their respective partners, directors, officers, agents and
employees, successors and assigns, from and against:
(A) Any and all loss, cost, damage, liability or expense as
incurred (including but not limited to attorneys' fees and legal costs) arising
out of or related to any claim, suit or judgment brought by or in favor of any
person or persons for damage, loss or expense due to, but not limited to, bodily
injury, including death, or property damage sustained by such person or persons
which arises out of, is occasioned by or is in any way attributable to the use
or occupancy of the Property by Seller or the acts or omissions of Seller or its
agents, employees, contractors, clients, invitees or subtenants except that
caused by the sole active negligence of Buyer or its agents or employees. Such
loss or damage shall include,
but not be limited to, any injury or damage to, or death of, Buyer's employees
or agents or damage to the Property.
(B) Any and all environmental damages which arise from: (i)
the handling of any hazardous and/or toxic wastes by Seller, as referred to in
Paragraph 2.2 herein, or (ii) the breach of any of the provisions in this
Agreement. For the purpose of this Agreement, "environmental damages" shall mean
(a) all claims, judgments, damages, penalties, fines, costs, liabilities, and
losses (including without limitation, diminution in the value of the Property,
damages for the loss of or restriction on use of rentable or usable space or of
any amenity of the Property; (b) all reasonable sums paid for settlement of
claims, attorneys' fees, consultants' fees and experts' fees; and (c) all costs
incurred by Buyer in connection with investigation or remediation relating to
the handling of any hazardous and/or toxic wastes by Seller, as referred to in
Paragraph 2.2 herein, whether or not required by any environmental laws,
necessary for Buyer to make full economic use of the Property, or otherwise
required under this Agreement. To the extent that Buyer is strictly liable under
any environmental laws, Seller's obligation to Buyer and the other indemnities
under the foregoing indemnification shall likewise be without regard to fault on
Seller's part with respect to the violation of any environmental law which
results in liability to the indemnitee. Seller's obligations and liabilities
pursuant to this Section 6.1 shall survive the expiration or earlier termination
of this Agreement and the Close of Escrow.
ARTICLE VII
MISCELLANEOUS
7.1 BROKER'S COMMISSION. Buyer and Seller acknowledge that, except
as set forth herein, no broker's commission or finder's fee is payable in
connection with this transaction; and each ("indemnitor") agrees to indemnify
and hold the other harmless from and against all liability, claims, demands,
damages or costs of any kind whatsoever arising from or connected with any
broker's or finder's fee, commission or charge claimed to be due any person
arising from the indemnitor's conduct with respect to this transaction, other
than the commissions authorized as set forth in Paragraph 6.1 herein.
7.2 DAMAGE OR DESTRUCTION. If the Property is damaged before Close
of Escrow by an insured casualty which would cost Seven Hundred Fifty Thousand
Dollars ($750,000) or more to repair, Buyer may terminate this Agreement by
written notice to Seller, given within twenty (20) days after Seller notifies
Buyer of such event, or at Close of Escrow, whichever is earlier. If Buyer does
not terminate, or if the damage would cost less than Seven Hundred Fifty
Thousand Dollars ($750,000) to repair, the Close of Escrow shall take place as
provided herein, and Seller shall assign to Buyer at Close of Escrow Seller's
insurance proceeds payable on account of such damage and shall pay to Buyer the
amount of any deductible under
Seller's insurance. If an uninsured casualty occurs which would cost more than
Fifty Thousand Dollars ($50,000) to repair, either party may terminate this
Agreement at any time before Close of Escrow. If this Agreement is not
terminated, Buyer shall receive a credit against the Price in an amount equal to
the cost of repairing the damage in question up to the sum of Fifty Thousand
Dollars ($50,000). If Seller elects to terminate this Agreement, Buyer may
override such termination by choosing to bear the cost of repairing the damage
and receive a credit at Close of Escrow of Fifty Thousand Dollars ($50,000).
Seller shall bear the risk and expense of any uninsured loss of Fifty Thousand
Dollars ($50,000) or less.
7.3 ASSIGNMENT. Buyer may assign its rights under this Agreement,
to any other person, firm or entity.
7.4 NOTICES. All notices, demands and requests which may be given
by either party to the other, or to Escrow Holder, shall be in writing and shall
be deemed served upon personal delivery or, alternatively, by mailing the same
by registered or certified mail, postage prepaid, addressed to the party to be
notified at the address as set forth in Paragraphs7.25 and 7.26 herein, or
addressed to such other address or addresses as either party may from time to
time designate to the other in writing or, if addressed to Escrow Holder, at the
address in Paragraph 1.2 herein. All notices to Escrow Holder shall make
specific reference to the escrow number of the Escrow. ANY NOTICE SHALL BE
DEEMED TO HAVE BEEN SERVED AT THE TIME THE SAME WAS POSTED.
7.5 INTENTIONALLY OMITTED.
7.6 ARBITRATION OF DISPUTES. ANY CONTROVERSY ARISING FROM THIS
AGREEMENT OR ITS BREACH SHALL BE DETERMINED BY ONE (1) ARBITRATOR APPOINTED AS
SET FORTH AS FOLLOWS:
WITHIN TEN (10) DAYS AFTER A NOTICE BY EITHER PARTY TO THE OTHER
REQUESTING ARBITRATION AND STATING THE BASIS OF THE PARTY'S CLAIM, THE
REQUESTING PARTY SHALL COMMENCE AN ARBITRATION PROCEEDING EITHER UNDER THE
AUSPICES OF THE AMERICAN ARBITRATION ASSOCIATION (AAA) OR JUDICIAL ARBITRATION &
MEDIATION SERVICES, INC. (JAMS). THE ARBITRATION SHALL BE CONDUCTED UNDER THE
RULES OF THE ORGANIZATION SELECTED AND CODE OF CIVIL PROCEDURE SECTIONS 1280
THROUGH 1294.2, INCLUDING THE RIGHT TO DISCOVERY. ALL NOTICES, INCLUDING NOTICES
UNDER CODE OF CIVIL PROCEDURE SECTION 1290.4, SHALL BE GIVEN AS PROVIDED IN
PARAGRAPH 6.4 HEREIN.
NOTICE: BY INITIALING IN THE SPACE BELOW, YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED
BY CALIFORNIA LAW, AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE
THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE
BELOW, YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS
SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION
IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL ARBITRATION.
SELLER'S INITIALS BUYER'S INITIALS
-------- --------
7.7 FEDERAL REPORTING REQUIREMENTS. Buyer and Seller acknowledge
that IRC Section 6045(e) requires that the amount of gross proceeds from a real
estate transaction be reported to the IRS. Buyer and Seller hereby instruct
Escrow Holder to comply with IRC Section 6045(e) and make said report. Seller
hereby instructs Escrow Holder to report the gross proceeds of this sale to the
IRS on Form 1099-B or W-9 or any subsequently approved IRS form.
7.8 FEDERAL WITHHOLDING. So that Buyer may comply with the Foreign
Investment in Real Property Tax Act ("FIRPTA"), Seller hereby declares under
penalty of perjury that he/she is not a foreign person or non-resident alien as
defined in FIRPTA. Seller shall provide Buyer with such additional information
and affidavits as may be necessary for Buyer to comply with FIRPTA.
7.9 STATE WITHHOLDING. California Revenue and Taxation Code
Sections 18805 and 26131 require a buyer of real property to withhold California
income taxes from escrow funds if all of the following conditions are met:
(a) The buyer has received a standard notification of the
withholding requirements established by the Act;
(b) The selling price is greater than One Hundred Thousand and
No/100 Dollars ($100,000.00);
(c) The seller has not received a California Homeowner's
Property Tax Exemption during the year of the sale; and
(d) The funds from the transaction are to be disbursed to
either:
(i) A seller with a last known street address outside
of California, or
(ii) A financial intermediary of the seller if the
seller is a nonresident of California.
The withholding rate is three and one-half percent (3 1/2%) of the
selling price. Seller may request a waiver by contacting:
Franchise Tax Board
Withholding at Source ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
7.10 PRELIMINARY CHANGE OF OWNERSHIP REPORT. Buyer is aware that
any person acquiring an interest in real property must file a Preliminary Change
of Ownership Report with the County Recorder or Tax Assessor upon recording any
documents effecting a change of ownership unless the document is accompanied by
an affidavit that the transferee is not a resident of California. Failure to
file may result in an additional recording fee for the Buyer.
7.11 REASSESSMENT. Property will be reassessed upon a change of
ownership. This will affect the taxes to be paid. A supplemental tax ▇▇▇▇ may be
issued, which shall be paid as follows: (a) for periods after the Close of
Escrow, by Buyer, and (b) for periods before the Close of Escrow by Seller. Tax
bills issued after the Close of Escrow shall be handled directly between Buyer
and Seller.
7.12 WAIVER. The waiver of any provision of this Agreement shall
be invalid unless evidenced by a writing signed by the party to be charged
therewith. The waiver of, or failure to enforce, any provision of this Agreement
shall not be a waiver of any further breach of such provision or of any other
provision hereof. The waiver by either or both parties of the time for
performing an act shall not be a waiver of the time for performing any other act
or acts required hereunder.
7.13 MODIFICATIONS. No change or addition to this Agreement or any
part hereof shall be valid unless in writing and signed by each of the parties
hereto.
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7.14 SUCCESSORS AND ASSIGNS. Except as expressly provided herein,
this Agreement and the obligations of Seller and Buyer contained herein shall
bind and benefit the successors and assigns of the parties hereto.
7.15 GOVERNING LAW. This Agreement shall be governed by California
law.
7.16 HEADINGS. The headings in this Agreement are for convenience
only and shall not be used to interpret this Agreement.
7.17 FURTHER ACTS. Each party agrees to take such further action
and to execute and deliver such further documents as may be necessary to carry
out the purposes of this Agreement.
7.18 ATTORNEYS' FEES AND COSTS. If either party incurs attorneys'
fees and/or costs to enforce this Agreement or because of a breach of this
Agreement by the other party, the prevailing party shall be entitled to recover
from the losing party, in addition to any other relief, its actual attorneys'
fees and costs irrespective of whether or not the action or other proceeding is
prosecuted to judgment and irrespective of any court schedule of reasonable
attorneys' fees.
7.19 TIME. Time is of the essence of this Agreement.
7.20 EXCHANGE TRANSACTION. Seller agrees upon the request of Buyer
to cooperate with Buyer in closing this transaction as an exchange pursuant to
IRC Section 1031, provided Seller shall incur no additional expense or liability
in connection therewith and is not required to take title to any property in
connection with such exchange.
7.21 ENTIRE AGREEMENT. This Agreement contains all of the
agreement and understandings relating to the purchase of the Property and the
obligations of Seller and Buyer in connection therewith. Seller has not made,
and Buyer is not relying upon, any warranties, representations, promises or
statements made by Seller, or any agent of Seller, except as expressly set forth
herein. This Agreement supersedes any and all prior agreements and
understandings between Seller and Buyer and alone expresses the agreement of the
parties.
7.22 FORCE MAJEURE. The parties shall incur no liability to the
other with respect to, and shall not be responsible for, any failure to perform
any of the obligations hereunder if such failure is caused by reason of strike,
other labor trouble, governmental rule, regulations, ordinance, statute or
interpretation, or by fire, earthquake, civil commotion, or failure or
disruption of utility services, or any and all other causes reasonably beyond
control of the parties. The amount of time for the parties to perform any of the
obligations hereunder shall be extended by the amount of time the party is
delayed in performing such obligation by reason of such force majeure
occurrence.
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7.23 INTERPRETATION. Seller and Buyer acknowledge that they have
read and reviewed this Agreement and that they have had the opportunity to
confer with counsel in negotiation of this Agreement. Accordingly, this
Agreement shall be construed neither for nor against Seller or Buyer, but shall
be given a fair and reasonable interpretation in accordance with the meaning of
its terms and intent of the parties.
7.24 NUMBER AND GENDER. All terms and words used in this
Agreement, regardless of the number and gender in which they are used, shall be
deemed to include the appropriate number and gender, as the contacts may
require.
7.25 SELLER'S ADDRESS FOR NOTICES. The term "Seller's Address for
Notice" shall mean:
(a) For ▇▇▇▇▇▇ ▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) For ▇▇▇▇▇ ▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7.26 BUYER'S ADDRESS FOR NOTICES. The term "Buyer's Address for
Notices" shall mean:
7.27 EXHIBITS. EXHIBIT "A" (Property Description) are incorporated
in this Agreement by reference and made a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
SELLER: BUYER:
VINIFERA INC.
-------------------------------- BY:---------------------------------
▇▇▇▇▇▇ ▇▇▇▇
-------------------------------- ITS:--------------------------------
▇▇▇▇▇ ▇▇▇▇
PARCEL ONE.
COMMENCING AT A POINT ON THE COUNTY HIGHWAY LEADING FROM PETALUMA TO BLOOMFIELD,
SAID POINT BEING THE MOST SOUTHEASTERLY CORNER OF THE LANDS DESCRIBED IN VOLUME
232 OF DEEDS AT PAGE 56, SONOMA COUNTY RECORDS; RUNNING THENCE DUE NORTH 800.43
FEET TO THE POINT OF COMMENCEMENT; THENCE RUNNING FROM SAID POINT OF
COMMENCEMENT DUE NORTH 452 FEET; THENCE RUNNING NORTH 89o 26' 10" WEST 385 FEET;
THENCE RUNNING SOUTH 0o 3' 30" EAST 452 FEET; THENCE RUNNING SOUTH 89o 26' 10"
EAST 384 FEET TO THE POINT OF COMMENCEMENT.
PARCEL TWO:
COMMENCING AT THE SOUTHEAST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS. RUNNING THENCE FROM SAID POINT OF BEGINNING
ALONG THE EASTERLY BOUNDARY OF SAID LANDS NORTH 800.43 FEET; THENCE NORTH 89o
26' 10" WEST 192.13 FEET; THENCE SOUTH 690.21 FEET AND THENCE SOUTH 59o 42' 20"
EAST 222.25 FEET TO THE POINT OF BEGINNING.
EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCEL:
BEGINNING AT THE SOUTHEAST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS. FROM SAID POINT OF BEGINNING RUNNING NORTH
326.23 FEET; THENCE NORTH 89o 26' 10" WEST 192.13 FEET; THENCE SOUTH 216.01
FEET; THENCE SOUTH 59o 42' 20" EAST 222.25 FEET TO THE POINT OF BEGINNING.
PARCEL THREE:
COMMENCING AT THE SOUTHWEST CORNER OF THE LANDS DESCRIBED IN VOLUME 232 OF DEEDS
AT PAGE 56, SONOMA COUNTY RECORDS; RUNNING THENCE FROM SAID POINT OF BEGINNING
ALONG ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ 03' 30" WEST 580 FEET; THENCE
SOUTH 89o 26' 10" EAST 192.13 FEET; THENCE SOUTH 690.21 FEET; THENCE NORTH 59o
42' 20" WEST 222.25 FEET TO THE POINT OF BEGINNING.
EXHIBIT "A"