EXHIBIT 10.5
AGRICULTURAL LEASE
STATE OF TEXAS ( )
COUNTY OF HOUSTON ( )
This LEASE, between Seven J Stock Farm, Inc., by Xxxx X. Xxxxxx, President,
hereinafter called OWNER, and Xxx Xxxxxx, hereinafter designated OPERATOR,
unless otherwise indicated.
W I T N E S S E T H :
That OWNER, for and in consideration of the agreements hereinafter set
forth, to be kept, performed and observed by OPERATOR, has demised and leased to
OPERATOR the following seven (7) tracts situated in Houston County, Texas,
to-wit:
(1) That certain four hundred sixty (460) acres, more or less, tract or
parcel of land, known as the NORTH XXXXXXX FARM tract;
(2) That certain one hundred thirty-six (136) acres, more or less, tract
or parcel of land known as the ALFALFA FIELD tract;
(3) That certain three hundred two (302) acres, more or less, tract or
parcel of land known as the XXXXXXX FIELD tract;
(4) That certain one hundred ninety (190) acres, more or less, tract or
parcel of land known as the XXXXXXX FARM tract;
(5) That certain one hundred nine (109) acres, more or less, tract or
parcel of land known as the CLOVER FIELD tract;
(6) That certain three hundred eighty-five (385) acres, more or less,
tract or parcel of land known as the PIN OAK FIELD tract; and
(7) That certain one hundred nine (109) acres, more or less, tract or
parcel of land known as the BIG CREEK ACREAGE tract; for the sole purpose of
cultivating and producing cotton and grain crops thereon and therefrom.
TO HAVE AND TO HOLD the above described premises with all the privileges
and appurtenances belonging to same, unto the OPERATOR for the cotton and grain
crop years 2000 through 2002, terminating on the date the 2002 cotton and grain
crops have been harvested.
In consideration for which the OPERATOR agrees and is bound:
(1) To cultivate and farm the said premises in a good and farmerlike
manner and deliver to the OWNER at the cotton gin, as rent for such premises,
one-fourth (1/4th) of all the cotton and cotton seed raised upon such premises
during said term or, alternatively, the OPERATOR, with the consent of OWNER, may
sell the entire cotton production and the purchaser thereof shall immediately
pay directly to OWNER in cash the market value of
page 1
OWNER'S one-fourth (1/4th) entitlement. OWNER agrees to pay his one-fourth
(1/4th) share of the cost of modular hauling, if used.
Furthermore, in addition to the foregoing consideration, OPERATOR does
hereby transfer and assign one-fourth (1/4th) of any and all cash payments
received from any Governmental Agency, State or Federal, to which OPERATOR may
now, or thereafter, be entitled as a consequence of any type of agricultural
program pertaining to cotton provided by any Agency of either the State or
Federal Governments.
(2) To cultivate and farm the said premises in a good and farmerlike
manner and deliver to the OWNER at the granary where said grain is to be sold,
as rent for such premises, thirty percent (30%) of all the grain and related
products raised upon such premises during said term or alternatively, the
OPERATOR, with the consent of OWNER, may sell the entire grain and related
production, and the purchaser thereof shall immediately pay directly to OWNER in
cash the market value of OWNER'S thirty percent (30%) entitlement.
Furthermore, in addition to the foregoing consideration, OPERATOR does
hereby transfer and assign thirty percent (30%) of any and all cash payments
received form any Governmental Agency, State or Federal to which OPERATOR may
now, or hereafter, be entitled as a consequence of any type of agricultural
program relating to grain provided by any Agency of either State or Federal
Governments.
(3) OPERATOR agrees that cotton and/or grain, and no other crop, shall be
planted or cultivated upon the hereinabove-described premises.
(4) OWNER and OPERATOR agree that all work and labor herein provided and
contemplated shall be done and performed by OPERATOR as an INDEPENDENT
CONTRACTOR and under the sole supervision, management, direction and control of
OPERATOR, utilizing his experience and expertise as a cotton and grain xxxxxx;
OWNER to look to OPERATOR for results only, with OWNER to have absolutely no
right at any time or under any circumstances to direct or supervise OPERATOR or
his servants or employees in the performance of such work or as to the manner,
means and method in which the work or labor is performed. Furthermore, OPERATOR
shall be obligated, not only to furnish all labor requirements, but in addition
thereto, OPERATOR shall furnish fuel, lubricants, herbicides, seed, combines,
harvesters, cotton pickers, and all other equipment and requirements necessary
to plant, cultivate and harvest the cotton and grain crops.
Page 2
(5) OWNER agrees to pay, in connection with the cotton crop, one-fourth
(1/4th) of the fertilizer costs, of the cost of insect control chemicals and of
the cost of ginning, provided the invoices for such costs shall be transmitted
directly to OWNER by the person, firm or corporation furnishing the necessary
supplies, preparations and service.
(6) OWNER agrees to pay, in connection with the grain crop, thirty percent
(30%) of the fertilizer costs, of the cost of insect control chemicals and of
the cost of hauling and drying, if any, of the grain crop, provided the invoices
for such costs shall be transmitted directly to OWNER by the person, firm or
corporation furnishing the necessary supplies, preparations and services. OWNER
will in no event pay any of the cost of combining or harvesting of the grain.
(7) OPERATOR agrees, at his sole expense, to maintain and repair all
buildings, if any, fences, gates, water lines and other improvements upon said
premises, or which may at any time during such term be erected thereon.
(8) OPERATOR furthermore agrees to maintain at his expense, the existing
drainage system on the demised premises and every part thereof in as good repair
and condition as the same are now in ordinary wear excepted.
(9) OPERATOR agrees, and shall be obligated, to maintain a neat appearance
on and over the leased premises and agrees to remove all containers and waste
material necessarily resulting from the agricultural operations immediately
after the use thereof.
(10) OPERATOR agrees to hold harmless and unconditionally indemnify OWNER
against and from all liability, costs, expenses, claims and damages which for
any reason may be asserted against OWNER at any time as a consequence of the
application of insect poison or herbicides by OPERATOR, whether applied aerially
or by conventional means or methods.
(11) OPERATOR shall have the right of ingress and egress through and
across OWNER'S property along routes to be designated by OWNER and such right of
ingress and egress shall be limited to OPERATOR, unless otherwise mutually
agreed between OWNER and OPERATOR.
(12) OPERATOR shall not have the right to xxxx, fish or otherwise use the
leased premises except for the specific agricultural use designated herein.
(13) OPERATOR shall not sublet or assign this lease, or any part thereof,
or any rights granted thereunder unless the written consent of the OWNER is
first obtained thereto.
Page 3
(14) OWNER and OPERATOR agree that this lease may be continued on an
annual basis for an additional two (2) year period after the expiration of the
primary term provided herein unless terminated upon written notice by either
party.
(15) OPERATOR agrees and is hereby obligated to deliver peaceably to
OWNER, whenever this lease shall terminate, the said premises and every part
thereof in as good repair and condition as the same are now in, loss by fire,
storm or ordinary wear excepted.
(16) OWNER agrees to pay the cost of transporting its cotton in field
stack to the cotton gin.
(17) OPERATOR agrees to pay to OWNER its proportionate share of levee and
drainage ditch maintenance and the cost of maintaining and operating the two (2)
pumping stations. The proportionate part shall be calculated by dividing
OPERATOR'S cotton acreage by the total number of acres protected by the Levee
system.
(18) OWNER has installed a pivot sprinkler system on a part of the
premises covering approximately 120 acres. OPERATOR shall have the right to use
the irrigation system on the following basis:
a) OPERATOR shall maintain and operate the well, pumping
system, and pivot system during the growing season. The
OPERATOR will leave the system at the end of the growing
system in as good or better condition as he received it at the
beginning of the growing season, normal wear and tear
excepted.
b) The fair rental rate for the irrigation system is
$5,960 per year.
c) All of the costs of operation and maintenance of the
system shall be paid by OPERATOR when due and 25% (for cotton)
to 30% (for grain) shall be charged to OWNER.
d) At harvest time, OPERATOR shall pay to OWNER 75% (for
cotton) or 70% (for grain) of the fair rental rate for the
irrigation system, shown in b) above.
(19) In the event OPERATOR fails to plant a crop for a year, or if the
OPERATOR fails to give OWNER credit for OWNER'S share of the production,
OPERATOR may, in addition to his other remedies declare this lease terminated
and take possession of the land.
Page 4
It is further agreed that the OPERATOR'S obligations under the terms and
provisions of this lease shall be and are hereby secured by a lien upon all the
property that OPERATOR may now or hereafter have upon the premises.
WITNESS our hands in Duplicate Originals, this ________ day of
__________________, 1999.
OWNER: OPERATOR:
SEVEN J STOCK FARM, INC.
By
------------------------- ----------------------------------
Xxxx X. Xxxxxx, President XXX XXXXXX
Page 5
STATE OF TEXAS ( )
COUNTY OF XXXXXX ( )
Before me, the undersigned authority, on this day personally appeared Xxxx
X. Xxxxxx, known to me to be the person whose name is subscribed to the
foregoing instrument, as President of SEVEN J STOCK FARM, INC., and acknowledged
to me that he executed the same for the purposes and consideration therein
expressed and in the capacity therein stated.
Given under my hand and seal of office this ____ day of ______________,
1999.
My Commission Expires: ______________________________
Notary Public in and for
______________________ The State of Texas
STATE OF TEXAS ( )
COUNTY OF _________ ( )
Before me, the undersigned authority, on this day personally appeared Xxx
Xxxxxx, known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed.
Given under my hand and seal of office this ____ day of ______________,
1999
My Commission Expires: ______________________________
Notary Public in and for
______________________ The State of Texas
Page 6
