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REAL ESTATE PURCHASE CONTRACT
Date: Jan 24, 1997 R.E.# 6166
FARMLAND MANAGEMENT SERVICES, hereinafter
referred to as "Buyer", a California corporation, or its nominee, having
its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, hereby offers to purchase from ▇ ▇ ▇▇▇▇▇▇▇▇, Inc.
hereinafter referred to as "Seller", the land identified below, hereinafter
referred to as "Property," for the amount and upon the terms and
conditions set forth herein; and the Addendum attached hereto; Seller
hereby agrees to sell said Property to Buyer upon said terms and
conditions ("Contract").
1. Purchase Price. The purchase price for the Property shall be
Four Million Two Hundred Eight Thousand Six Hundred Twenty-Five
Dollars ($ 4,208,625.00) ("Purchase Price").
2. Close of Escrow. Escrow shall be opened within three
(3) days of receipt of Seller's acceptance of this Contract at the local
office of Chicago Title Company (▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇) ("Escrow Agent"). The
escrow contemplated by this Contract shall close within ninety (90)
days of the opening of escrow, or within thirty (30) days of Buyer's
written approval of all phases of the Environmental Assessment
undertaken pursuant to Section 19 of this Contract, whichever occurs
later ("Close of Escrow"). Close of Escrow shall mean when the deed
to the Property is recorded vesting title in Buyer.
3. Property. The Property which is the subject of this Contract
is that land located in Yolo County, State of
California , more particularly described in Exhibit "A" attached
hereto and be reference made a part hereof, together with all buildings,
improvements, fixtures, personal property, oil, gas and mineral rights
and appurtenances located thereon and all easements in respect thereto
("Property").
4. Payment of Purchase Price. Buyer shall pay the total
amount of the Purchase Price as follows:
A. Forty-Two Thousand Dollars
($42,000.00 ) shall be deposited into escrow within three (3) days of
opening of escrow of this Contract.
B. Should Buyer elect not to cancel this Contract as
provided in Section 5 of this Contract, Buyer shall deposit Forty-Two
Thousand Dollars ($ 42,000.00) into escrow within ten (10)
days after expiration of the Feasibility Period as established in Section
5.
C. The balance of the Purchase Price shall be paid in
cash through escrow upon Close of Escrow.
5. Feasibility Period. Buyer shall have a period of sixty (60)
days from the date of opening of escrow of this Contract during which
Buyer can examine the Property and determine the feasibility of the
Property for Buyer's intended use ("Feasibility Period"). During the
Feasibility Period, Buyer may terminate this Contract without liability
of any kind by notice to Seller and Escrow Agent, and Escrow Agent
shall return any funds deposited by Buyer into escrow to Buyer, less
documented costs of Escrow Agent.
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6. Condition of Title. Said Property is to be conveyed at the
Close of Escrow by a Grant Deed running to Buyer and conveying a
good and clear record and marketable fee-simple title to the property,
free and clear of all liens and encumbrances, except those specifically
approved in writing by Buyer.
7. Evidence of Title. Evidence of title to the Property shall be
by an ATLA Owner's Title Insurance Policy on ALTA Owner's Policy
1970 Form B, with ALTA Endorsement Form 1 coverage and,
otherwise, in form and substance in all respects acceptable to Buyer, in
the amount of the total purchase price issued by Chicago Title Company
("Title Company"). Within fifteen (15) days after the date of opening
escrow, Seller shall deliver to Buyer, at Seller's expense, a Preliminary
Title Report, together with the recorded documents underlying each of
the listed exceptions. Said policy shall insure in Buyer good and clear
record and marketable title in fee simple to the Property, free and clear
from all liens and encumbrances, except those which are approved in
writing by Buyer.
If title to all or part of the property is defective or unmarketable
or if the Property is subject to any liens or encumbrances which are
unacceptable to Buyer, Seller shall have a reasonable time, not to
exceed thirty (30) days after written notice thereof, within which to
remedy or remove any such lien or encumbrance. If seller fails to do
so, this Contract shall, at the option of the Buyer, become null and
void; all consideration, if any, paid by Buyer to Seller and all funds
deposited by Buyer into escrow (less documented expenses of Escrow
Agent) shall be returned to Buyer forthwith; and both parties hereto
shall be relieved of all further liability.
8. Survey. A satisfactory ALTA survey (Class "C"
requirements) of the Property by a registered land surveyor must be
furnished to Buyer before Close of Escrow, at Seller's cost.
9. Expenses. Seller and Buyer, at the Close of Escrow, shall
pay equally all costs and expenses incurred by Seller and Buyer in
connection with the purchase by Buyer, including, but not limited to,
all costs and charges for title examination and title insurance, abstract
continuation, recording and filing fees, and revenue or documentary
stamps. Unless otherwise specified in this Contract, Buyer shall pay all
other expenses reasonably incurred by Buyer in order to evaluate the
Property for the sale.
10. Prorations. Real estate taxes, rents, charges for utility
services and all other
operating costs and expenses which relate directly to the operation of
the Property shall be prorated to the day of Close of Escrow, except as
provided in Section 19 of this contract.
11. Closing. At the Close of Escrow, Seller will deliver to
Buyer:
A. Possession of the Property; and
B. Instruments, in form and substance satisfactory
to Buyer assigning and transferring to Buyer all
of Seller's rights, title, and interest in and to all
tangible personal property upon the Property and
all leases and other instruments affecting the
Property.
12. Risk of Loss. Risk of loss to the Property from fire or
other casualty will be borne by Seller until the Close of Escrow. If the
Property shall be damaged or destroyed by fire or other casualty prior
to Close of Escrow or if, for any reason, the Property is not in at least
as good a condition prior to Close of Escrow as the condition of said
Property at the time of Buyer's inspection thereof, Buyer may:
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A. Elect to proceed with the transaction, in which
event Buyer shall be entitled to all
insurance proceeds payable to Seller under any
and all policies of insurance covering the
Property so damaged or destroyed; or
B. Elect to rescind this Contract, in which event all
parties hereto shall be released from all liability
hereunder and all consideration shall be returned
to Buyer. If Buyer elects to rescind this
Agreement, it shall so notify Seller within thirty
(30) days after Buyer has received written notice
of such fire or destruction or has become aware
of any changes in condition since its last
inspection of the Property.
13. Condemnation. In the event that all, or any portion of, the
Property becomes the subject of any condemnation proceeding, or
threat thereof, by a public or quasi-public authority having the power
of eminent domain, Seller shall immediately notify Buyer thereof, both
orally and in writing; and in such event, Buyer may:
A. Elect to proceed with the transaction, in which
event Buyer shall be entitle to all proceeds of any
award, or payment in lieu thereof, resulting from
such proceedings or threat thereof;
B. Elect to rescind this Contract, in which event all
parties hereto shall be released from all liability
hereunder; and the consideration paid by Buyer
to Seller, if any, and any funds deposited by
Buyer in Escrow, less documented expenses of
Escrow Agent, shall be forthwith returned. If
Buyer elects to rescind this Contract, it shall so
notify Seller within thirty (30) days after Buyer
has received written notice of such proceedings.
14. Assignment. Seller's rights under this Contract shall not be
assignable in any way, by operation of law or otherwise. Seller agrees
to perform and comply with all agreements, conditions, and covenants
required by this Contract to be performed or complied with, provided
that Buyer may expressly waive, in writing, in whole or in part,
Seller's performance or compliance with any of such agreements,
condition, or covenants. In the event of a default by either Seller or
Buyer hereunder, Seller or Buyer, as the case may be, shall have the
right to pursue such remedies at law or in equity as may be afforded to
said party under applicable laws, including, without limitation, specific
performance of provisions hereof.
15. Seller's Warranties.
A. Seller represents and warrants that, to the best of the
Seller's knowledge, the Property is not in violation of any federal,
state, or local law, ordinance or regulation relating to industrial hygiene
or to the environmental conditions on, under, or about the Property or
the improvements, including, but not limited, to soil and groundwater
conditions. Seller further represents and warrants that, to the best of its
knowledge, during the time in which Seller owned the Property neither
Seller nor, to the best of Seller's knowledge, any third party has used,
generated, manufactured, stored, or disposed of on, under, or about the
Property or transported to or from the Property any flammable
explosive, radioactive materials, hazardous wastes, toxic substances or
related materials ("Hazardous Materials"). For the purpose of this
provision, Hazardous Materials shall include, but not be limited to,
substances such as friable asbestos or those defined as "hazardous
substances," "hazardous materials," or "toxic substances" in the
comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, etseq.;
the Resource Conservation and
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Recovery Act, 42 U.S.C. Section
6901 et seq.; those substances defined as "hazardous wastes" in Section
25117 of the California Health and Safety Code or as "hazardous
substances" in Section 25316 of the California Health and Safety Code;
and in the regulations adopted and publications promulgated pursuant
to said laws and any amendments thereto. Seller hereby agrees to
indemnify and hold harmless Buyer, its directors, officers, employees,
and agents against any and all liability, including reasonable attorneys'
fees, resulting directly or indirectly from a breach of the representations
and warranties set forth in this Paragraph.
B. Seller warrants that, to the best of Seller's
knowledge, no zoning, building, or similar law or ordinance is violated
by the maintenance, operation, or use of the Property. Seller has
received no actual notice of any change contemplated in any applicable
laws, ordinances or restriction, or any judicial or administrative action,
or any action by adjacent landowners or natural or artificial conditions
upon the Property which would prevent, impede, limit, or render more
costly Buyer's contemplated use of the Premises.
C. At present and as of the Close of Escrow, to the best
of Seller's knowledge the quality, quantity, adequacy, availability,
reliability, or transferability of surface or well water or water rights for
the Property or the eligibility of the Property or the Buyer to receive
water from any irrigation or water district is sufficient to meet the
intended farm operation of Buyer as described in Agricultural Sublease
between the Buyer and Seller (the "Sublease") for the term of the
Sublease.
D. Prior to the conveyance of the Property, Buyer shall
not, by entering into this Contract or otherwise, acquire or assume any
liability in respect to the Property; and Seller hereby indemnifies and
agrees to hold Buyer harmless from any such liability.
E. For the purpose of this Section, the phrase "to the
best of Seller's knowledge" shall mean that the Seller is unaware of any
facts that would make the representations and warranties untrue, but has
not conducted any independent investigation to verify the accuracy
thereof.
16. Records. Seller shall provide to Buyer any and all records
requested by Buyer, including, but not limited to, production records,
financial data, cultural costs, and water records. Seller further warrants
that said records are accurate and free of any material misrepresentation
or omissions.
17. Waiver. No failure of either party to exercise any power
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms
hereof shall constitute a waiver of either party's rights to demand exact
compliance with the terms hereof.
18. Commissions. Seller warrants and represents to Buyer that
no commissions are or will be payable as a result of the transaction
herein provided for; or if any such commissions are payable, Seller will
pay the same. Seller hereby indemnifies Buyer of, from and against
any and all claims and commissions which may arise as a result of the
transaction herein provided for.
19. Environmental Assessment. Seller shall provide Buyer with
any information Seller may have on toxic or hazardous wastes related
to the Property. Immediately upon acceptance of this Contract, Buyer
will hire an engineer, at Seller's expense, to undertake what is
commonly known in the industry as a "Phase I" Environmental Site
Assessment ("Phase I Report"). Seller will deposit into escrow upon
acceptance of this contract, $5,400 for the cost of the Phase I Report.
Any amount over the $5,400 for the Phase I Report will be paid by
Buyer. Buyer will have 15 working days from the date the Phase I
Report is received to review and undertake one of the following actions,
but this does not restrict the right of the Buyer to terminate this
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Contract during the feasibility period:
(i) give Seller and Escrow Holder written notice of
Buyer's acceptance of the Phase I Report.
(ii) direct engineer to undertake a "Phase II"
environmental site assessment at Seller's cost, if such additional work
is recommended by the engineer in the Phase I Report.
(iii) direct engineer to undertake a "Phase II"
environmental site assessment at Buyer's cost if such additional work
is not recommended by the engineer in the Phase I Report, but Buyer
reasonably believes such work is required in order to fully assess the
environmental integrity of the Property.
20. Authority. Buyer and Seller warrant to each other that it
is fully authorized to enter into this Contract in the capacity indicated
by its signature and agrees to be bound by this Contract as of the day
and year first mentioned above upon the execution of this Contract by
each other party. Further, Seller warrants that it is the sole record
owner of the Property and has the legal right to sell the Property.
21. Access. Seller grants to Buyer, upon the execution of this
Agreement, the right for Buyer, and Buyer's agents and employees, to
enter onto the Premises to make such inspections, surveys, and conduct
such tests, including, but not limited to, the use of a back hoe to inspect
soil conditions, as Buyer, in Buyer's sole discretion, deems necessary
or desirable. Buyer shall indemnify and hold Seller harmless from any
and all costs caused by the entry onto the Property of Buyer, and
Buyer's agents and employees pursuant to this Paragraph. The
inspection by Buyer or the opportunity to inspect by Buyer does not
affect the applicability of the warranties made by the Seller in this
Contract.
22. Lot Line Adjustment. The parties understand that the Seller
must receive approval from the County of Yolo to sever a portion of the
Premises from an existing parcel and to adjust the lot lines of an
existing parcel before the Premises may be conveyed to the Buyer as
contemplated under this Contract. The Seller will use all commercially
reasonable efforts to obtain such consent prior to the date the Close of
Escrow is to take place. If those approvals are not obtained by that
date, Buyer shall have the option exercisable by written notice within
ten (10) days thereafter, to either (i) extend the date for the Close of
Escrow an additional forty five (45) days, or (ii) terminate this Contract
without liability to either party, in which case the Deposit(s) held by the
Escrow Holder shall be returned to the Buyer with interest, less
documented expenses of Escrow Agent. In the event that Buyer elects
to extend the date for the Close of Escrow as provided herein, and the
adjustments to be completed by Seller are still not completed following
the expiration of such forty five (45) day period, Buyer shall have an
additional option exercisable by written notice within ten (10) days after
the expiration of the previously extended date for the Close of Escrow,
to either (i) extend the date for the Close of Escrow an additional forty
five (45) days, or (ii) terminate this Contract without liability to either
party, in which case the Deposit(s) held by the Escrow Holder shall be
returned to the Buyer with interest, less documented expenses of
Escrow Agent. In the event that Buyer elects to extend the date for the
Close of Escrow an additional time and after the expiration of such time
period Seller has still not completed the adjustments, this Contract shall
terminate without liability to either party and the Deposit(s) held by the
Escrow Holder shall be returned to the Buyer with interest, less
documented expenses of Escrow Agent.
23. Additional Improvements. In the spring of 1997,
approximately 80 acres of new vineyard will be planted on ground
previously deep ripped in the northwest portion of the block commonly
called the North ▇▇▇▇▇ Vineyard. The improvements and work is to be
completed by the Seller in accordance with the Buyer's standards and
specifications on or before June 1, 1997. The improvements include
but are not limited to the below and above ground irrigation system in
the form of a drip system; stakes, wire, clips and end posts for
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a complete multi-wire trellis system; varietal vines on hybrid rootstock.
After approval of the completion by the Buyer, Buyer will pay Seller
$1,175,531.
The obligations contained in this section shall survive the Close
of Escrow and the recordation of the grant deed for the property.
Buyer's obligation to make the payment provided herein is subject to
the Seller not being in default of its obligations under that certain
Agricultural Sublease Agreement between Seller and Farmland
Management Services on the date such payment is to be made.
The assignment of this Contract by Buyer to ▇▇▇▇ ▇▇▇▇▇▇▇
Mutual Life Insurance Company on or before the Close of Escrow shall
be a condition precedent to Seller's obligation to perform its obligations
under this Contract.
24. Condition Precedent. As a condition precedent to Buyer's
obligations to Purchase the Property, which are made for the benefit of
Buyer, Seller shall not be in breach of any of the warranties set forth in
this Contract prior to the close of escrow. If Seller is in breach of any
of the warranties set forth in this contract, Buyer shall have the absolute
right to terminate this Contract. Specifically, if the environmental
assessment (s) performed pursuant to Section 19 of this Contract is (are)
not acceptable to Buyer, in Buyer's sole discretion, Buyer shall have the
absolute right to terminate this Contract. Upon termination of this
Contract pursuant to this Section, the Deposit (s) held by Escrow
Holder pursuant to Section 4 of this Contract shall be returned to Buyer
with interest, less documented expenses of Escrow Agent, and all
parties shall be released from liability under this Contract.
25. Miscellaneous.
A. This Contract, together with the Sublease and a
Property Purchase Option Agreement between the parties, constitutes
the entire agreement of the parties hereto; and no modification hereof
shall be binding, except by a written instrument signed by Buyer and
Seller. No representations, inducements, promises or agreements shall
be binding upon any party except as herein stated.
B. Buyer, in the event of any insolvency or bankruptcy
action or proceeding filed by or against Seller, or Seller's nominee,
shall, at Buyer's option, have no obligation to purchase the Property
and any consideration paid or funds deposited in Escrow (less
documented expenses of Escrow Agent) shall be returned to Buyer.
C. Time is of the essence of this Contract and each and
every provision hereof.
D. This Contract and the provisions hereof shall be
governed by and construed in accordance with the laws of the State of
California.
E. This Contract shall be binding upon and shall inure
to the benefit of, and be enforceable by, the heirs, executors,
administrators, successors, and assigns of the parties hereto, subject to
the terms hereof.
F. The terms, condition, warranties, and representations
of this Contract shall survive the Close of Escrow and passage of title
to the Property, and shall not merge with the Deed that affects the
passage of title.
G. Should any litigation commence between the parties
to this Contract concerning the rights
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and duties of any party pursuant
to, related to, or arising from, this Contract, the prevailing party in
such litigation shall be entitled, in addition to such other relief as may
by granted, to a reasonable sum as and for his attorneys' fees and costs
of such litigation as shall be determined by the court in such litigation,
or in a separate action brought for that purpose.
H. This Contract maybe executed simultaneously in one
or more counterparts, each of which shall be an original, but all of
which together shall constitute one and the same document.
I. Except as otherwise expressly provided by law, any
and all notices or other communication required or permitted by this
Contract or by law to be served on or delivered or given to a party by
another party to this Contract shall be in writing, and shall be deemed
duly served, given, or delivered when personally delivered to the party
to whom it is directed or, in lieu of such personal service,(i) two (2)
days after such written notice is deposited in the United States mail,
first class, postage prepaid, addressed to the party at the address
identified for that party in this Contract, or, (ii) upon confirmation of
delivery by delivery service when sent by overnight delivery with
charges prepaid or charged to the sender's account and addressed to the
party at the address identified for that party in this Contract (iii) upon
receipt if sent by fax to the last fax number of the recipient known to
the party giving notice and so long as a duplicate copy of the notice is
promptly sent by United States mail in the manner set forth above,
provided however, a fax received after 5 p.m. shall be deemed received
on the next day. Any party may change their address for the purpose
of this Section by giving notice pursuant to this subsection.
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BUYER: FARMLAND MANAGEMENT SERVICES, a
California corporation
By //s// ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Its President
Address of Buyer:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ By //s// ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Its Secretary
FAX (▇▇▇) ▇▇▇-▇▇▇▇
ACCEPTANCE
Buyer's signature constitutes an offer to Seller to purchase the
Property on the terms and conditions set forth in the Contract above.
This offer shall remain irrevocably open until 5:00 p.m. on January 31
, 19 97. If it is not accepted by Seller by that date, it shall be
considered revoked. If Seller accepts this offer within the time
specified, communication of the acceptance to Buyer shall be satisfied
only upon Buyer's receipt within twenty-four (24) hours of one copy of
this Contract executed by Seller.
The undersigned Seller accepts and agrees to the terms and
conditions of the Real Estate Purchase Contract set forth above.
Dated: January 24, 1997
SELLER:
Address of Seller:
//s// ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇▇ Vineyard
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax#: ▇▇▇-▇▇▇▇
FAX
PCORIG.CON (Rev. 11/07/96)
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ADDENDUM TO REAL ESTATE
PURCHASE CONTRACT #6166
Dated: January 24, 1997
1. At Closing of Escrow, the property will not be encumbered by
any employment agreements or contracts, or equipment leases
or liens that may exist written or verbal.
2. Buyer and Seller agree that concurrent with the closing:
(i) Farmland Management Services and Seller will
enter into and sign that certain Agricultural
Sublease attached hereto as Exhibit 'B';
(ii) Seller will execute and deliver the financing
documents and certificate of insurance
contemplated by the Agricultural Sublease; and
(iii) Buyer and Seller will enter into that certain
Option Agreement attached hereto as Exhibit
'C'.
The signature and delivery of each of these documents as
required by each party is a condition precedent to the
consummation of the purchase and sale by the other party. It is
intended that each of the agreements referred to in this section
be effective immediately following the closing but be of no
force or effect if the closing does not occur.
3. Buyer and Seller will sign a shared well agreement for the ▇▇▇▇▇
on the subject property before the end of the Feasibility Period.
4. Buyer's right of entry on the Property for the purposes of
exploring, prospecting, developing and producing any and all
coal, oil, gas, minerals and mineral rights on or underneath the
surface of the Property shall be limited to one (1) two and one-
half (2 1/2) acre surface area location on the Property, adjacent to
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇. The surface area
location shall be mutually agreed upon by Buyer and Seller prior
to the Close of Escrow of the Property and shall be reflected on
the Buyer's Grant Deed.
"Seller" "Buyer"
Farmland Management Services, a
California corporation
By //s// ▇▇▇▇ ▇▇▇▇▇▇▇▇ By //s// ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Its President
By //s// ▇▇▇▇▇▇ ▇▇▇▇
Its Secretary
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EXHIBIT A
The 371 + acres are located in Yolo County, California.
APN 54-12-02 80 Acres
APN 54-12-03 291 Acres
Seller has proposed lot line adjustments and parcel splits with the
county reflected in the map attached. Before the close of escrow, all
parcel splits and lot line adjustments will be completed substantially as
provided.
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EXHIBIT "B"
AGRICULTURAL SUBLEASE
Date: Jan 24, 1997 R.E.# 6166
1. Parties. This Agricultural Sublease ("Lease") is being
entered into by and between FARMLAND MANAGEMENT
SERVICES, ("Lessor"), and ▇ ▇ ▇▇▇▇▇▇▇▇, Inc. , ("Lessee").
2. Property. Upon and subject to the terms and conditions of
this Lease, Lessor hereby leases to Lessee and Lessee hereby leases
from Lessor that certain real estate located in the County of Yolo
, State of California, together with all improvements
now or hereafter located thereon, as more particularly described in
Exhibit A attached hereto and made a part hereof, (the "Farm"). The
Farm is owned, or operated for the owner, by ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual
Life Insurance Company, its agents, representatives or assigns
("▇▇▇▇▇▇▇") and has been leased to Lessor pursuant to the Master
Lease between Lessor and ▇▇▇▇▇▇▇.
3. Term and Effective Date. The Farm is hereby leased for
the term specified in Paragraph 1 of Exhibit B attached hereto and made
a part hereof. On the first day of the Lease term, Lessee shall be
entitled to possession of the Farm, subject to compliance with the terms
and conditions of this Lease and payment of the rent set forth in
paragraph 4 hereof. The Lease term ends at midnight on the last day
of the term of the Lease unless sooner terminated as provided in this
Lease.
4. Rent. In consideration of the leasing, occupancy and use of
the Farm, Lessee hereby promises and agrees to pay, yield and deliver
the cash and/or crop-share rent in the amount specified and in the
manner specified in paragraph 2 of Exhibit B to Lessor.
5. Irrigation. Lessee shall preserve and protect all irrigation,
drainage, or pumping items and equipment and any and all
appurtenances thereto situated on the Farm and shall properly lubricate,
service and care for same so as to prevent undue wear and tear on the
items or equipment. Lessee shall also be responsible, unless otherwise
provided in this Lease, for all services, maintenance, repairs to and
replacement, if necessary, of the irrigation, drainage and pumping items
and equipment or appurtenances thereto. Lessee shall furnish, at its
sole expense, any irrigation, drainage or pumping items or equipment
not included in the Farm as are necessary to the proper irrigation,
drainage and operation of the Farm. All those items or equipment shall
become a part of the Farm, with the exception of those items brought
onto the Farm to temporarily replace a piece of equipment which has
been removed for repair. Lessee shall not remove any irrigation,
drainage or pumping items, equipment or appurtenances thereto from
the Farm and shall return same to Lessor in good working condition
upon the expiration or earlier termination of this Lease. When the
Farm is used for dry land farming and where no irrigation is in use or
required, all irrigation requirements contained in this Lease shall be
automatically eliminated.
6. Water. Lessor makes no warranty or agreement of any kind
concerning the amount or quality of water or water rights on or
available to the Farm or whether drainage or irrigation of the Farm is
feasible or necessary, and Lessee shall in no way hold Lessor
responsible for any shortage or excess of water for any intended
purposes or for any deficiency in the quality of water on the Farm.
Lessee agrees that water or water rights related to the Farm shall be
preserved and used solely in connection with the operation of the Farm.
Lessee shall not remove any water from the Farm or otherwise dispose
of any water, except in connection with the proper drainage of the
Farm, without the express prior written consent of Lessor.
7. Condition of Farm. Lessee has inspected the Farm and is
fully familiar with the physical
12
condition thereof, has received the same
in good order and condition, and agrees that the Farm complies in all
respects with the requirements of this Lease. Lessor makes no
representation or warranty with respect to the condition of the Farm or
its fitness or availability for any particular use, and Lessor shall not be
liable for any latent or patent defect therein. Lessee shall not do or
permit any act or thing which is contrary to any legal or insurance
requirement, which might impair the value or usefulness of the Farm
or any part thereof, or which constitutes a public or private nuisance or
waste. This Lease shall be subject to any existing rights of others,
including but not limited to easements, rights of way, water rights,
mineral rights, oil and gas leases and restrictions on use of the Farm.
8. Payment of Taxes and Utilities. All real property general
and special taxes and assessments related to the Farm and any
improvements now hereafter located thereon shall be paid by Lessee.
Lessee shall also pay any personal property taxes or assessment related
to the Farm or property located thereon. Utilities, including but not
limited to gas, telephone, electricity and water, rendered to and used in
connection with the Farm shall be paid by Lessee. All costs, charges,
and assessments for irrigation water shall be paid by Lessee. If water
is furnished to the Farm by a water company or public district, Lessor
does NOT warrant that water charges and the total cost for water will
remain the same as in preceding years.
9. Repairs to Farm. Lessee, at its expense, shall repair,
maintain and keep the Farm and all improvements thereon in good
condition. No substitution, alteration of, or addition to the Farm or to
the improvements located thereon may be made without the express,
prior written consent of Lessor, except as provided in paragraph 6
hereof concerning irrigation equipment.
10. Assignment or Sublease. Lessee shall not sublet the Farm
or any part thereof, assign this Lease in whole or in part, or in any way
encumber this Lease or the Farm without Lessor's prior written
consent. Lessor may assign this Lease, in whole or in part, and shall
thereupon be released of all duties and obligations under this Lease.
Upon a termination of Lessor's leasehold interest in the Farm for any
reason, Lessee shall attorn to and accept ▇▇▇▇▇▇▇ or its assignee as the
lessor for the balance of the term remaining under this Lease, subject
to all the terms and conditions of this Lease, on condition that ▇▇▇▇▇▇▇
shall perform all of Lessor's obligations under this Lease from and after
the date of termination of Lessor's leasehold interest in the Farm.
11. Operations and Good Farming and Husbandry
Practices.
11.1. Use of the Farm. Lessee shall use due diligence and
farming practices, consistent with the highest-quality farming practices
in the county where the Farm is located, in all aspects pertaining to the
growing, storing and marketing of the crops and in the general conduct
of operations and use of the Farm. Lessee shall operate and use the
Farm for the sole purpose of conducting an agricultural operation under
the terms and conditions provided in this Lease. Lessee shall, in due
and proper season, perform all work required and essential in a good
and workmanlike manner as will be conducive to the very best results
to be had and obtained by a high-quality system of husbandry and
farming. If this Lease covers permanent crops, Lessee shall care for,
protect and maintain the crops in a good and workmanlike manner
consistent with the highest-quality farming practices in the county
where the Farm is located.
11.2. Equipment, Tools, Seeds, and Labor. Lessee shall use
and furnish, at its sole expense, necessary equipment, tools, seeds and
labor proper or necessary to a top-quality husbandry and farming
operation on the Farm.
11.3. Pests, Diseases, Weeds and Erosion. Lessee shall use
all diligence by the best means known for the controlling and curing of
pests and diseases which hinder and menace growing crops, supply and
use all required means to rid the Farm of same, and keep the Farm and
crops thereon free from all
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13
types of weeds. Lessee agrees to adopt low-
input sustainable agricultural practices with respect to the Farm when
said practices can be implemented without any adverse impact on the
investment returns from the Farm. Lessee shall take reasonable care to
prevent soil erosion by strip-cropping and contouring, as well as by
filling in or otherwise controlling small washes or ditches that may
form on the Farm. Lessee shall keep in good repair all terraces, open
ditches and inlets and outlets of tile drains and shall preserve all
established watercourses or ditches, including grass waterways, situated
or lying on the Farm. Before performing any drainage work, Lessee
agrees to check with the county Soil Conservation Service office in
regard to the wetland status of the area affected and obtain prior
approval for the drainage work to be performed. Lessee shall cut and
remove or spray and destroy all noxious weeds before they revert to
seed and shall cut and spray all other weeds and grasses growing on the
Farm, in the fields, farmstead, roadsides, irrigation ditches and fence
rows; and in all other respects, shall attend to the care and maintenance
of the Farm in a good and prudent manner. Lessee shall obtain any
burning permits necessary in compliance herewith. If the Farm
contains any Highly Erodible Land (HEL) as determined by the local
Soil Conservation Service office, Lessee agrees to farm the Farm in a
manner as to comply with the stated conservation plan.
11.4. Livestock. Lessee is hereby permitted to keep and raise
on the Farm only livestock as has been approved in writing by Lessor.
Lessee shall be responsible for assuring that all livestock remain within
the confines of the Farm. Lessee shall, in the care and maintenance of
livestock, follow good health and sanitation measures and take adequate
and necessary precautions to safeguard the livestock from disease.
Lessee shall prevent trampling or overgrazing of fields by stock and
rooting by hogs to avoid any injury to the Farm which would result
therefrom. Lessee shall be responsible for the immediate removal of
dead livestock. Prior to irrigation of a pasture by Lessee, all livestock
grazing thereon shall be rotated to other fields whenever possible. In
the event of ice formation on the Farm, Lessee shall break up the ice to
allow livestock access to drinking water. Lessee shall not, without the
prior written consent of Lessor:
11.4.A. allow any livestock, other than livestock owned
by Lessee, to roam and graze upon the stock-fields, stubble-fields,
pasture or rangeland situated on the Farm; or
11.4.B. pasture new seedlings of perennial legumes or
grasses in the year in which same are seeded.
11.5. Removal of Crop Residue. Lessee shall not,
without the prior written consent of Lessor, burn or otherwise remove
cornstalks or other crop residue resulting from the conduct of its
farming and agricultural operations on the Farm; but shall, as soon as
practicable, attend to the spreading of all crop residue, manure, straw
and the like upon those fields which have been specified and agreed
upon by Lessor.
11.6. Restrictions on Plowing and Removal of Trees. Lessee
shall not, without the prior written consent of Lessor,:
11.6.A. plow permanent pasture, meadowland or
rangeland comprising the Farm; or
11.6.B. cut any trees growing on the Farm, either for
sale or for personal use, and may remove only dead or unmarketable
timber with the prior approval of Lessor and only for uses approved by
Lessor.
11.7. Approved Crops. Unless otherwise consented to in
writing by the Lessor, only the crops and pasturage and acreage
specified in paragraph 3 of Exhibit B shall be grown, produced, or
raised by Lessee on the Farm.
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14
12. Destruction. In the case of a destruction of all or any
portion of the Farm, there shall be no abatement or reduction of rent.
Lessee waives the provisions of California Civil Code Section 1932(2) and
Civil Code section 1933(4) with respect to any destruction of the Farm.
13. Inspection. Lessor or ▇▇▇▇▇▇▇, or their authorized
representatives or assignees, may enter the Farm at any time for the
purpose of inspecting same or for the purpose of doing any work and
taking any action thereon as may be necessary or appropriate for the
purpose (but nothing contained in this Lease shall create or imply any
duty on the part of Lessor or ▇▇▇▇▇▇▇ or their assignees to make any
inspection or do any work) and for the purpose of showing the Farm to
prospective purchasers. Entry for the purposes specified herein shall not
constitute an eviction of Lessee nor termination of this Lease. At all
times, Lessor shall have access to the Farm and to all reports, records,
and information of the Lessee in respect thereto, for the purposes of
inspecting, determining, and ascertaining that all of the requirements of
the Lease and the Exhibits hereto have been fulfilled; including, without
limitation, the crop-share portions belonging to Lessor, operation and
maintenance procedures, and the public liability insurance
requirements. Lessee shall maintain accurate and complete records of
its operations on the Farm and make them available at any time for
inspection and examination by Lessor. Lessee agrees to provide
information as requested by Lessor with regard to fertilizer used, tillage
practices, acreage reports, chemical usage, and crop yields in a timely
manner.
14. Legal Requirements. Lessee, at its expense, shall
promptly and diligently comply with all legal requirements pertaining
to the operation of the Farm and the farming thereof.
14.1. Permits, Licenses, Franchises, and Other
Authorizations. Lessee, at its expense, shall promptly and diligently
procure, maintain and comply with all permits, licenses, franchises and
other authorizations which are now or at any time hereafter may be
required for the use and operation of the Farm contemplated hereby.
14.2. Compliance with Laws. Lessee, at its expense,
shall promptly and diligently comply strictly and in all respects with
any and all current and future federal, state, and local laws, statutes,
rules, regulations and ordinances, orders, judgments, decrees,
injunctions, authorizations, directions, and requirements of all
governments, departments, commissions, boards, courts, authorities,
agencies, officials and officers as amended and modified from time to
time which are now, or at any time hereafter, may be applicable to the
operation of the Farm and the farming thereof, including but not limited
to full compliance with government A.S.C.S. programs and with
federal, state, and local common law.
15. Condemnation. In the event of a taking by condemnation,
eminent domain or other legal proceedings, of the entire Farm, this
Lease shall terminate as of the date of the taking; and the award shall
be payable to ▇▇▇▇▇▇▇. A partial taking which makes it economically
unfeasible to continue a farming operation on the remaining acreage
shall be considered a total taking and shall be covered by the preceding
sentence. In the event of a partial taking leaving a unit of economical
farming size, this Lease shall continue in full force and effect on the
remaining acreage, with proportionate reduction in rent on a per
farmable acre basis and with any condemnation award to be paid to
▇▇▇▇▇▇▇. If this is a crop-share lease, any award for growing crops
shall be divided between Lessor and Lessee according to the rental
division as provided for in this Lease.
16. Indemnification and Insurance. Lessee shall protect,
indemnify and hold harmless Lessor and ▇▇▇▇▇▇▇ from and against all
liabilities, obligations, claims, damages, penalties, causes of action,
costs and expenses (including, without limitation, attorneys' fees and
expenses) imposed upon, incurred by, or asserted against Lessor,
Hancock, or the Farm by reason of the operations conducted by Lessee
on the Farm or as a result of any failure on the part of Lessee to
perform or comply with any of the terms of
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15
this Lease. The obligations
of Lessee under this section shall survive any termination of this Lease.
Lessee agrees, during the term of this Lease or any renewals thereof,
to carry general liability insurance for personal injury and property
damage liability. The insurance policy shall name Lessor and ▇▇▇▇▇▇▇
(or their assignees) as insureds and be with an insurance carrier
acceptable to Lessor. The insurance shall provide for property damage
liability coverage of not less than one hundred percent (100%) of the
replacement value of the property insured (at least $500,000.00) and
public liability coverage of at least One Million dollars ($1,000,000.00)
for each occurrence. The insurance shall provide protection against any
peril included within the classification "Fire and Extended Coverage"
together with coverage against vandalism and malicious mischief.
Written documentation of the coverage shall be provided by Lessee to
Lessor. The insurance policies shall name ▇▇▇▇▇▇▇ and Lessor (or their
assignees) and Lessee as insureds as their respective interests appear and
shall include an effective waiver by the carrier of all rights of
subrogation against any named insured of the insured's interest in the
Farm or any income derived from the Farm and shall provide that
insurance proceeds shall be payable for the benefit of ▇▇▇▇▇▇▇ and
Lessor (or their assignees), and Lessee as their respective interests may
appear. The insurance policies shall also provide that any losses shall
be payable, notwithstanding any act or failure to act or negligence of
Hancock, Lessor, Lessee, or any other person, corporation or other
business entity and that no cancellation, reduction in amount or material
change in coverage shall be made effective until at least thirty (30) days
after receipt by Lessor and Lessee of written notice thereof. The
insurance shall be issued by insurance carriers approved by Lessor
whose rating is at least Bests "B" and shall either be primary or, if a
blanket policy, provide that the amount of insurance will not be affected
by other policy losses.
17. Waste and Protection of the Farm. Lessee shall not
commit or permit waste or strip, shall supervise the Farm at all times,
and shall exercise every reasonable effort to prevent theft, vandalism
and other damage to the Farm.
18. No Claims Against Lessor, Etc. Nothing contained in this
Lease shall constitute any consent or request by Lessor, express or
implied, for the performance of any labor or services; the furnishing of
any materials or other property in respect of the Farm or any part
thereof; nor as giving Lessee any right, power or authority to contract
for or permit the performance of any labor or services or the furnishing
of any materials or other property in a fashion as would permit the
making of any claim against Lessor, it being understood and agreed that
the relationship between the parties hereunder shall consist solely as that
of landlord and tenant (Lessor and Lessee); and in no event and under
no circumstances shall the relationship be considered or construed as an
agency, partnership, joint venture, or any similar relationship.
19. Defaults, Termination, Repossession and Reletting. If
any Event of Default, as defined below, shall have occurred and be
continuing, Lessor whether or not the Lease term shall have terminated
pursuant to this paragraph 19, may enter upon and repossess the Farm
or any part thereof by summary proceeding, ejection or otherwise, and
may remove Lessee and all other persons and any and all property
therefrom. Lessor shall be under no liability for or by reason of any
entry, repossession or removal. At any time or from time to time after
the repossession of the Farm or any part thereof, whether or not the
Lease term shall have been terminated pursuant to this paragraph 18,
Lessor may (but shall be under no obligation to) relet the Farm or any
part thereof for the account of Lessee, in the name of Lessee or Lessor
or otherwise, without notice to Lessee, for the term or terms and on the
conditions and for the uses as Lessor in its uncontrolled discretion, may
determine and may collect and receive the rents therefor. Lessor shall
not be responsible or liable for any failure to relet the Farm or any part
thereof or for any failure to collect any rent due upon any reletting.
Lessee shall reimburse Lessor for all costs and expenses incurred by or
on behalf of Lessor (including, without limitation, attorneys' fees and
expenses) occasioned by any default by Lessee under this Lease. The
following events ("Events of Default") constitute a default under this
Lease:
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16
19.1. Failure to Pay Rent. Lessee fails to pay any rent
when and as same becomes due and payable;
19.2. Failure to Comply with Other Terms of this
Lease. Lessee fails to perform or comply with any of the other terms
hereof, and the failure continues for more than ten (10) days after
notice thereof from Lessor and Lessee has not within that period
commenced with due diligence and dispatch the curing of the default;
19.3. Insolvency. Lessee either:
19.3.A. makes a general assignment for the
benefit of creditors;
19.3.B. admits in writing the inability to pay
debts as they become due;
19.3.C. files a petition in bankruptcy;
19.3.D. is adjudicated a bankrupt or insolvent;
19.3.E. files a petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation;
19.3.F. files an answer admitting, or fails
seasonably to contest, the material allegations of a petition filed against
Lessee in any bankruptcy or insolvency proceedings;
19.3.G. seeks, consents to, or acquiesces in the
appointment of any trustee, receiver or liquidator of Lessee or any
material part of its properties;
19.4. Commencement of Proceeding Against Lessee.
Within ten (10) days after the commencement of any proceeding against
Lessee seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present
or future statute, law or regulation, the proceeding has not been
dismissed; or within ten (10) days after the appointment, without the
consent or acquiescence of Lessee, or any trustee, receiver or liquidator
of Lessee or of any material part of its properties, the appointment has
not been vacated;
19.5. Entry of Final Judgment Against Lessee.
Within ten (10) days after the entry of a final judgment for the payment
of money is rendered against Lessee, the judgment has not been
discharged or execution thereof stayed pending appeal; or within ten
(10) days after the expiration of any stay, the judgment has not been
discharged then, and in any event, Lessor at any time thereafter may
give a written termination notice to Lessee; and on the date specified in
the notice, this Lease shall terminate and, subject to paragraph 19
hereof, the Lease term shall expire and terminate by limitation; and all
rights of Lessee under this Lease shall cease, unless, before the
specified date:
19.5.A. all arrears of rent and all other sums
payable by Lessee under this Lease together with interest thereon at the
rate specified in paragraph 5 of Exhibit B and all costs and expenses,
including, without limitation, attorneys' fees and expenses, incurred by
or on behalf of Lessor hereunder have been paid by Lessee; and
19.5.B. all other defaults at the time existing
under this Lease shall have been fully remedied to the satisfaction of
Lessor.
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17
20. Survival of Lessee's Obligations; Damages. No
expiration or termination of this Lease or the term thereof pursuant to
paragraph 18 or by operation of law, or otherwise, and no repossession
of the Farm or any part thereof pursuant to paragraph 18, or otherwise,
shall relieve Lessee of its liabilities and obligations hereunder, all of
which shall survive the expiration, termination or repossession. In the
event of any expiration, termination or repossession, Lessee shall pay
to Lessor all rents and other sums required to be paid by Lessee up to
the time of the expiration, termination or repossession; and thereafter
Lessee (until the end of what would have been the full term of this
Lease in the absence of the expiration, termination or repossession and
whether or not the Farm or any part thereof shall have been relet) shall
be liable to Lessor for and shall pay to Lessor as liquidated and agreed
current damages for Lessee's default all rent and other sums which
would be payable under this Lease by Lessee in the absence of the
expiration, termination or repossession LESS all net rents collected by
Lessor from any reletting effected for the account of the Lessee
pursuant to paragraph 18, after deducting from the proceeds all of
Lessor's expenses in connection with the reletting (including, without
limitation, all repossession costs, brokerage commissions, legal and
accounting expenses, attorney's fees and expenses, employees'
expenses, promotional expenses, and expenses of preparation for the
reletting). Lessee shall pay current damages annually on the rent
payment dates applicable in the absence of the expiration, termination
or repossession; and Lessor shall be entitled to recover the same from
Lessee on each applicable date.
21. Performance on Behalf of Lessee. In the event that
Lessee shall fail to make any payment or perform any act required
hereunder to be made or performed by Lessee, then Lessor may, but
shall be under no obligation to, after notice to Lessee as may be
reasonable under the circumstances, make a payment or perform an act
with the same effect as if made or performed by Lessee. Entry by
Lessor upon the Farm for the above purpose shall not waive or release
Lessee from any obligation or default hereunder. Lessee shall
reimburse, with interest at the rate specified in paragraph 5 of Exhibit
B, Lessor for all sums so paid by Lessor and all costs and expenses
incurred by Lessor in connection with the performance of any act which
Lessee fails to perform as required by this Lease.
22. Quiet Enjoyment. Lessor covenants with Lessee that upon
Lessee's entry onto the Farm and Lessee's performance of each of the
terms and conditions of this Lease, Lessee shall have full freedom and
use of the Farm in accordance with the terms hereof.
23. Remedies. Each right, power and remedy of Lessor
provided in this Lease, or now or hereafter existing at law or in equity
or by statute or otherwise, shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in
this Lease, or now or hereafter existing at law or in equity or by statute;
and the exercise or beginning of the exercise by Lessor of any one or
more of the rights, powers, or remedies provided for in this Lease or
now or hereafter existing at law or in equity or by statute or otherwise
shall not preclude the simultaneous or later exercise by Lessor of any
or all other rights, powers or remedies.
24. Waiver. No failure by Lessor or Lessee to insist upon the
strict performance of any term hereof or to exercise any right, power
or remedy consequent upon a default thereof, and no submission by
Lessee or acceptance by Lessor of full or partial rent during the
continuance of any default, shall constitute a waiver of any default or
any term. No waiver of any default shall affect or alter this Lease
which shall continue in full force and effect or affect the respective
rights of Lessor or Lessee with respect to any other then-existing or
subsequent default.
25. Notices. Any notices provided for herein shall be in
writing and sent by registered or certified mail to the Lessor and the
Lessee at the respective address set forth in paragraph 6 of Exhibit B or
to the address as shall be supplied in writing by either party to the
other.
26. Provisions Subject to Applicable Law/Severability. All
rights, powers and remedies
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18
provided herein may be exercised only to
the extent that the exercise thereof does not violate any applicable law
and are intended to be limited to the extent necessary so that they will
not render this Lease invalid or unenforceable. If any term of this
Lease shall be held to be invalid, illegal or unenforceable, the validity
of the other terms of this Lease shall in no way be affected thereby.
This Lease shall be governed by and construed according to the laws of
the state where the Farm is located.
27. Conveyance by Lessor. In case the original or any
successor Lessor shall convey or otherwise dispose of its interest in the
Farm, it shall thereupon be released from all liabilities and obligations
of Lessor under this Lease; and the liabilities and obligations shall be
binding solely on the then Lessor of the Farm.
28. Lessor's Liens. Subject to any specific requirements set
forth in paragraph 7 of Exhibit B, a crop lien is hereby established for
the benefit of Lessor for any unpaid rentals. In connection therewith,
Lessee agrees to execute a security agreement and financing statement
if same is required by Lessor. Lessor shall be entitled to and shall have
a valid claim and lien against Lessee to recover for all money advanced
for employment of labor or otherwise advanced to protect Lessor
against any loss due to Lessee's failure to fulfill and perform or carry
out the conditions and agreements. No lien created by Lessee shall ever
be or become prior to Lessor's claim and lien. Lessor shall have a
valid first lien on the share of crops of Lessee, for the rent and for
damages due Lessor under the terms and conditions of this Lease.
29. Minerals. All coal, oil, gas, minerals and mineral rights
in, on or underneath the surface of the Farm or any part thereof have
been reserved to ▇▇▇▇▇▇▇ or its assignee and are not covered by this
Lease. ▇▇▇▇▇▇▇ or its assignee has the right to enter in and upon the
surface of the Farm to have, use and enjoy so much of the Farm as
shall be required to prospect and explore for, develop and produce from
the Farm or any part thereof within the confines of the 2 1/2 acre area
designated in the Grant Deed, all of which shall be done as a reserved
right and without opposition or hindrance from the Lessee, as fully and
completely as if this Lease had not been made. At the time of the
possession for the above purposes, if the land has been prepared for
crops, or if a crop is growing thereon, then Lessee shall be reimbursed
for any damages resulting to it from the loss of use of the Farm; and the
rent shall be proportionately reduced for any subsequent years
remaining under the term of this Lease. If the Farm has not been
prepared for a crop, then it shall be subject to occupancy as reserved
land under the direction of ▇▇▇▇▇▇▇ or its assignee for its use and
occupancy and, in that event, Lessee shall make no claim for damages
against Lessor or ▇▇▇▇▇▇▇ or their assignees, provided that the rent
shall be proportionately reduced.
30. Conservation Damage or Destruction. Lessee, in the
operation and use of the Farm for the purposes set forth herein, shall
not cause, consent to, or in any way or manner, allow any act or
practice to be perpetrated upon the Farm which would ultimately result
in damage to or destruction of a conservation practice.
31. Hazardous Materials.
31.1. Use of Hazardous Materials and
Indemnification.
31.1.A. Lessee covenants that it shall not cause
or permit any Hazardous Material to be generated, stored, used,
treated, handled, processed, transferred, transported or disposed of or
otherwise released on the Farm by Lessee, its agents, employees, or
contractors without the prior written consent of Lessor. In no event
shall Lessee allow or otherwise authorize discharge or release of any
Hazardous Materials to any sewer, storm water system, stream, or other
unauthorized point, on the Farm.
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31.1.B. If Lessee breaches the obligations stated
in 30.1.A., or if contamination of the Farm by Hazardous Material
occurs as a result of the action or inaction of Lessee, its agents,
employees, or contractors, then Lessee shall indemnify, defend, and
hold Lessor and ▇▇▇▇▇▇▇ and their assignees harmless from any and all
claims, judgments, damages, penalties, fines, costs, liabilities or losses
(including, without limitation, damages and expenses suffered or
incurred by Lessor or ▇▇▇▇▇▇▇, as the owner of the Farm, by virtue of
any assertion of Federal or State lien or claim brought or filed against
Lessor and/or ▇▇▇▇▇▇▇ or their assignees or the Farm, diminution in
value of the Farm, damage arising from any adverse impact on
marketing of the Farm, and sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees) which arise during or
after the Lease term as a result of the contamination.
31.1.C. The indemnification of ▇▇▇▇▇▇▇ and
Lessor and their assignees by Lessee, includes, without limitation, costs
incurred in connection with any investigation of site conditions or any
clean-up or remediation work required by any federal, state or local
governmental agency because of Hazardous Material(s) present in the
soil or groundwater on or under the Farm. In the event of any
contamination of the Farm or release or disposal of any quantity of
Hazardous Material(s) on the Farm, Lessee shall promptly notify
▇▇▇▇▇▇▇ and Lessor, shall comply with all applicable laws, and shall
promptly take all actions, in accordance with the provisions of all
applicable environmental laws, at its sole expense, as are necessary to
return the Farm to the condition existing prior to the presence of any
Hazardous Material(s) on the Farm. Lessee shall receive certification
from the appropriate state environmental agency that the Farm, and any
other affected property, has been cleaned up to the satisfaction of the
agency. The foregoing indemnity shall survive the expiration or earlier
termination of this Lease.
31.1.D. Lessee shall be unconditionally and
absolutely liable for all losses and damages sustained by ▇▇▇▇▇▇▇ and
Lessor and their assignees as a result of any breach of, or the failure by
Lessee to perform under, any environmental representation, warranty,
covenant, obligation and indemnification provided in this Lease.
Lessee shall pay any costs, expenses, claims, damages and attorney's
fees due under this paragraph regardless of whether the amounts occur
pre-petition or post-petition after the filing for any bankruptcy or
reorganization relief under state or federal laws.
31.2. Hazardous Materials Definition. As used
herein, "Hazardous Materials" means:
31.2.A. any hazardous or toxic substance,
material or waste, including, but not limited to, any substance, product,
or other material of any nature whatsoever which is or becomes listed,
regulated or addressed pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601,
et seq. ("CERCLA"); the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq. ("RCRA"); the Toxic Substances
Control Act, 15 U.S.C. Sections 2601 et seq.; the Clean Water Act, 33
U.S.C. Section 1251 et seq., all as amended; or any other federal, state
or local statute, law, ordinance, resolution, code, rule, regulation, order
or decree regulating, relating to, or imposing liability or standards of
conduct concerning, any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect;
31.2.B. any substance, product, waste or other
material of any nature whatsoever which may give rise to liability under
any of the above statutes or under any statutory or common law theory
based on negligence, trespass, intentional tort, nuisance, equitable
indemnity, or strict liability or under any reported decisions of a state
or federal court.
31.3. Disclosure. At the commencement of this Lease
and annually thereafter, Lessee
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covenants to disclose to Lessor the
names and amounts of all Hazardous Materials, or any combination
thereof, which are or will be generated, stored, used or disposed of on
the Farm. Lessee shall promptly provide ▇▇▇▇▇▇▇ and Lessor with all
notices and other communications received from any federal, state, and
local department and/or agency which enforces and administers
environmental laws.
31.4. Inspection. ▇▇▇▇▇▇▇, Lessor and their agents and
assignees shall have the right, but not the duty, to inspect the Farm at
any time to determine whether Lessee is complying with the terms of
this paragraph 31. If ▇▇▇▇▇▇▇ or Lessor or their agents or assignees
determine that Lessee is not in compliance with this paragraph 30,
▇▇▇▇▇▇▇ and Lessor and their agents and assignees may immediately
enter the Farm to remedy, at Lessee's sole expense, any contamination
of Hazardous Material(s) caused by Lessee's failure to comply with
applicable laws and to take any and all other actions ▇▇▇▇▇▇▇ or Lessor
deems necessary to cure the failure of compliance, notwithstanding any
other provision of this Lease. Lessee shall immediately reimburse
Lessor or ▇▇▇▇▇▇▇ or their assignees for any amounts paid by them
together with interest thereon at the maximum rate allowed by
applicable state law from the date of the payment. Entry by ▇▇▇▇▇▇▇
or Lessor or their assignees upon the Farm for the above purpose shall
not waive or release Lessee from any obligations or default hereunder.
31.5. Default. Any default under this paragraph 30
shall be an Event of Default enabling Lessor to exercise any of the
remedies set forth in this Lease. The terms of this paragraph 31 shall
survive the termination of this Lease.
32. Hunting Privileges. ▇▇▇▇▇▇▇ has reserved and retained
any and all hunting and recreational rights and privileges. Hunting and
recreation are prohibited on the Farm, except by Lessee with Lessor
and ▇▇▇▇▇▇▇'▇ prior written consent.
33. Time is of the Essence. Time is of the essence in the
performance by Lessee of the agreements and obligations as provided
by this Lease.
34. End of Lease Term. Upon expiration or other termination
of the terms of this Lease, Lessee shall immediately quit and surrender
to Lessor the Farm in good order and condition, ordinary wear and tear
excepted, and shall remove all of Lessee's equipment. Lessee shall
restore any damage to the Farm caused by the removal of Lessee's
equipment. No holding over shall be permitted without Lessor's prior
written consent. If Lessee should remain in possession of the Farm
after the expiration or earlier termination of the lease such possession
by Lessee shall be deemed to be a month to month tenancy terminable
on thirty (30) days notice given at any time by either party with rent
during such tenancy to be One Hundred Fifty Percent (150%) of the
rental payable during the initial term of this Lease prorated to be paid
on a monthly basis.
35. Payments Are Rent. All sums of money or charges
required to be paid by Lessee under this Lease shall be deemed rental
for the Farm and may be designated as such in any statutory notice to
pay rent or quit the Farm.
36. Miscellaneous. This Lease may be amended, waived,
discharged or terminated only by an instrument in writing, signed by
both parties. This Lease shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and assigns of the
parties hereto. The headings of this Lease are for purposes of reference
only and shall not limit or define the meaning hereof.
THIS LEASE SHALL BECOME EFFECTIVE AND IN
FULL FORCE UPON THE CLOSE OF ESCROW
PERTAINING TO THE PURCHASE OF THE FARM
BY THE LESSOR PURSUANT TO THE TERMS OF
THE REAL ESTATE PURCHASE CONTRACT,
DATED JANUARY 24, 1997, BETWEEN THE
LESSOR AND THE
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LESSEE. IN THE EVENT THAT
THE PURCHASE AND SALE OF THE FARM DOES
NOT OCCUR WITHIN THE PERIOD SPECIFIED IN
SUCH CONTRACT, THIS LEASE SHALL BECOME
NULL AND VOID UNLESS THE PARTIES AGREE
OTHERWISE IN WRITING.
IN WITNESS WHEREOF, the parties hereto, on the date first-
above written, have caused this Lease to be executed in duplicate.
LESSOR: FARMLAND MANAGEMENT SERVICES, a
California corporation
By: //s// ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Its: President
LESSEE: ▇.▇. ▇▇▇▇▇▇▇▇, Inc.
By: //s// ▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Co-CEO
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EXHIBIT A
AGRICULTURAL LEASE
Dated: Jan 24, 1997, by and between:
FARMLAND MANAGEMENT SERVICES, LESSOR
AND
▇ ▇ ▇▇▇▇▇▇▇▇, Inc., LESSEE
Legal Description
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EXHIBIT B
AGRICULTURAL LEASE
Dated: Jan 24, 1997, by and between:
FARMLAND MANAGEMENT SERVICES, LESSOR
AND
▇ ▇ ▇▇▇▇▇▇▇▇, Inc., LESSEE
1. Term and Effective Date. The term of this Lease shall be fifteen
years beginning on close of escrow and
ending on December 31, 2012, unless sooner terminated
as provided in the Lease. The executed Lease shall be delivered, along
with other documents required by the Lease, to Lessor on or before
close of escrow.
2. Rent. The amount of cash and/or crop-share rent due shall be
$645,017 per year beginning January 1, 1999
and shall be paid in the following
manner and at the following times:
$161,254 January 1, April 1, July 1, and October 1 of each year the
lease is enforce.
3. Approved Crops. Only the following crops and pasturage and
acreage thereof shall be grown, produced or raised by Lessee on the
Farm:
Wine Grapes.
4. Production Costs. If this is a crop-share lease, production costs
shall be allocated and paid as follows:
Production Costs:
N/A
Lime:
Application Costs:
Harvesting and Trucking Costs:
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5. Interest. All past due rent and all other sums payable by Lessee
under this Lease shall accrue interest at the lesser of 18 percent per
annum or the maximum rate allowable by law, from the date due or the
date incurred by Lessor, as applicable.
6. Notices. Notices shall be in writing and sent by registered or
certified mail to the Lessor at Farmland Management Services, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and to Lessee at ▇ ▇ ▇▇▇▇▇▇▇▇, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Any notices required to be sent to
▇▇▇▇▇▇▇ under this Lease shall be in writing and sent by registered mail
to ▇▇▇▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company, ▇.▇.
▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
7. Lessor's Liens. In addition to the provisions contained in
paragraph 28 of the Lease, the following provisions shall apply with
regard to Lessor's liens:
8. Exercise of Option. This Sublease will terminate upon the
closing of the purchase and sale of the Farm due to the exercise of the
option held by Lessee to purchase the Farm pursuant to the terms of the
Option Agreement between Lessee and ▇▇▇▇ ▇▇▇▇▇▇▇. Rental for any
partial period due to a termination pursuant to this section shall be
prorated as of such closing date.
LESSOR: FARMLAND MANAGEMENT SERVICES
By //s// ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Its President
LESSEE: ▇.▇. ▇▇▇▇▇▇▇▇, Inc.
By //s// ▇▇▇▇ ▇▇▇▇▇▇▇▇
Its Co-CEO
14
25
EXHIBIT "A"
DESCRIPTION
Page 1 Order No. 1007484 DS
A PORTION OF THE NORTH HALF OF SECTION 17 AND A PORTION OF THE N.W. 1/4 OF
SECTION 16, ALL IN T. 11 N., R. 1 WEST M.D.B. &M., YOLO COUNTY CALIFORNIA,
BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
bEGINNING AT A 2" DIA, BOILER TUBE MONUMENT, MARKING THE NORTHWEST CORNER OF
SAID SECTION 17, AS SAID MONUMENT IS SHOWN ON THAT CERTAIN MAP FILED FOR
RECORD IN BOOK 12 OF MAPS AND SURVEY AT PAGES 99 AND 100, YOLO COUNTY
RECORDS, AND THENCE FROM SAID POINT OF BEGINNING ALONG THE NORTH LINE OF
SAID SECTION 17, S. 89 24' 14" E. 2689.90 FEET; THENCE S. 89 18'03" E.
2689.89 FEET TO THE NORTHEAST CORNER OF SAID SECTION 17, THENCE, ALONG
THE NORTH LINE OF SAID SECTION 16, S. 89 57' 23" E. 1823.02 FEET; THENCE
LEAVING SAID SECTION LINE, S. 00 58'43" EAST 2656.24 FEET TO THE SOUTH
LINE OF SAID N.W. 1/4 OF SECTION 16, SAID POINT ALSO BEING ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇-▇; THENCE ALONG THE ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇.▇. ▇/▇, ▇.
89 59'38" W. 1823.02 FEET TO THE SOUTHWEST CORNER OF SAID N.W. 1/4
OF SECTION 16; THENCE N. 00 58'41" W. 83.70 FEET TO A POINT IN ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇-▇; THENCE FOLLOWING THE CENTERLINE OF SAID COUNTY
ROAD 12-A, THE FOLLOWING COURSES AND DISTANCES; N. 75 15'01" W. 1008.10 FEET;
N. 84 20'18" W. 446.03 FEET; n 81 15'21" W. 1430.41 FEET; N. 76 57'56" W.
615.55 FEET TO A TANGENT POINT; THENCE ALONG A CURVE TO THE LEFT HAVING
A CENTRAL ANGLE OF 75 08'09", A RADIUS OF 97.63 FEET, AND SUBTENDED BY
A CHORD BEARING S. 65 27'59" W. 119.06 FEET TO A POINT INTERSECTING THE
CENTERLINE OF OAT CREEK; THENCE UPSTREAM ALONG THE CENTERLINE OF SAID
OAK CREEK THE FOLLOWING CORSES AND DISTANCES: S. 81 51'25" WEST. 538.48
FEET; N. 54 14'49" W. 183.11 FEET; S. 79 54'52" W. 156.86 FEET; N. 41 59'42"
W. 153.61 FEET; N. 56 18'12" W. 278.32 FEET; N. 28 24'06" W. 146.31 FEET;
N. 65 07'25" W. 258.99 FEET; S. 63 29'42" W. 158.62 FEET; N. 70 25'01"
W. 129.03; S. 88 42'53" W. 89.69 FEET AND N 79 59'59" W. 15.99 FEET TO A
POINT ON THE WEST LINE OF SAID SECTION 17; THENCE ALONG SAID WEST LINE;
N. 01 26'41" W. 1544.43 FEET TO THE POINT OF BEGINNING AS SET FORTH
AND DESCRIBED AS PARCEL 5 IN THAT CERTAIN CERTIFICATE OF COMPLIANCE
RECORDED MAY 2, 1997 SERIES NO. 97-0010480 OFFICIAL RECORDS.
A PORTION OF THE FOLLOWING ASSESSOR'S PARCEL NOS.:
▇▇-▇▇▇-▇▇; ▇▇-▇▇▇-▇▇; ▇▇-▇▇▇-▇▇