L E A S E
THIS LEASE is made and entered into on December 31, 1998, between
XXXXXXX XXXXXXX, Trustee of the Xxxx Xxxxxxxx Trust, hereinafter called
Landlord, and CHALONE WINE GROUP, LTD., a California Corporation, hereinafter
called Tenant.
Landlord does hereby lease to Tenant, and Tenant does hereby lease from
Landlord the real property commonly known as Napa County APN 00-000-000,
together with all improvements thereon, in the County of Napa, State of
California, described in Exhibit "A" attached hereto, which is hereinafter
called "the premises".
THIS LEASE is made upon the following terms and conditions:
1. Term. The term of said Lease shall be for a period of twenty-five
(25) years, commencing on January 1, 1999, and ending on December 31, 2023. Each
"lease year" shall run from January 1 through the succeeding December 31.
2. Purpose and Negation of Partnership. Tenant shall use or occupy the
premises for the purpose of planting, maintaining and operating wine grape
vineyards, and no other use shall be made by Tenant without Landlord's prior
written consent. Landlord shall not become or be deemed to be a partner or a
joint venturer with Tenant by reason of the provisions of this Lease.
3. Rent.
A. Base Annual Rent. For the first two (2) lease years, Tenant shall
pay a base annual rental for the premises of $74,250, payable in advance in
semi-annual installments of $37,125 each on December 31, 1998, July 1, 1999,
December 31, 1999 and July 1, 2000. For the third (3rd) through tenth (10th)
lease years, Tenant shall pay a base annual rental of $99,000, payable in
advance in semi-annual installments of $49,500 each on December 31 and July 1 of
each year, commencing on December 31, 2000. For the eleventh (11th) through
twenty-fifth (25th) lease years, Tenant shall pay a base annual rental of
$113,850, payable in advance in semi-annual installments of $56,925 each on
December 31 and July 1 of each year, commencing on December 31, 2008, together
with the adjustments provided in Subparagraph B.
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B. Adjustment of Base Annual Rent. The base annual rental shall be
subject to adjustment commencing on January 1, 2010, and on January 1 every
lease year thereafter, by multiplying the preceding year's annual rental by
1.03. For example, the adjustments for the twelfth (12th) and thirteenth (13th)
lease years shall be as follows:
Effective on Jan. 1, 2010: 113,850 x 1.03 = $117,265.50/annum
Effective on Jan. 1, 2011: 117,265.50 x 1.03 = $120,783.46/annum
C. All rent shall be paid to Landlord or Landlord's designee at
World Savings Bank, Account No. 00000000-8, 0000 Xxxxxx Xxxxxx, Xxxx, Xxxxxxxxxx
00000, or any other address specified by Landlord in writing. Rent not paid when
due shall bear interest from the date due at the rate of 10% per annum.
4. Taxes.
A. Personal Property Taxes: Tenant shall pay before delinquency all
taxes, assessments, license fees and other charges that are levied and assessed
against Tenant's personal property installed or located in or on the premises
and that become payable during the term. On demand by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of such payments.
B. Real Property Taxes: Tenant shall pay all real property taxes and
general and special assessments (including all taxes imposed upon or measured by
gross rentals which are hereinafter enacted to supplement or replace any portion
of State, County, City, School District or other local governmental real
property taxes or assessments) which are levied and assessed against the
premises for all land and improvements and for all assessments against the
premises resulting from the inclusion of any valuation placed upon Tenant's
personal property.
Each year Landlord shall furnish Tenant a copy of the tax bills within
twenty (20) days after Landlord's receipt of said bills. Tenant shall pay said
taxes directly to the Napa County Tax Collector or other authorized taxing
authority semi-annually not later than two (2) days preceding the taxing
authority's delinquency date. The 1998-1999 taxes and the taxes for the final
fiscal tax year of the lease term shall be prorated.
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5. Improvements. Tenant shall plant wine grape vineyards on any
unplanted usable areas, which shall be planted, maintained and operated
according to the reasonable and customary standards practiced in Napa County.
Tenant may remove from the usable unplanted portions of the premises any
vegetation or improvements which are not useful in or are harmful to the
planting, maintenance and operation of vineyards. Tenant may construct such
improvements (including drainage facilities, water xxxxx, irrigation facilities,
frost control systems, roads and fences, but excluding any buildings) as are
reasonably necessary for the maintenance and operation of the vineyards. No
underground storage tanks for fuels, chemicals, hazardous or toxic substances
shall be installed or maintained by Tenant on the premises.
All planting, maintenance, farming and replacements of vineyards and
installation of related improvements on the premises shall be at Tenant's
expense. The varieties and spacing of the vines planted, the methods of budding
and trellising the plants, and all other farming decisions shall be within the
discretion of the Tenant, provided that Tenant conforms to reasonable and
customary standards in Napa County.
All improvements planted, constructed or installed on the premises by
Tenant shall be owned by Tenant until the termination of the Lease. All
improvements on the premises at the expiration or termination of the Lease term
shall, without compensation to Tenant, then become Landlord's property free and
clear of all claims to or against them by Tenant, subject to the provisions of
Paragraph 13.
6. Removal of Existing House and Maintenance and Replacement of Other
Improvements.
A. Prior to the commencement of the term, Landlord shall remove the
existing residence and shed from the premises at Landlord's cost. Other than
said removal of the house and shed by Landlord, Tenant accepts the premises in
"AS IS" condition, and Landlord shall not be required to furnish any services,
perform any corrective work, or to make any repairs or replacements of any kind
in or upon the premises and the improvements thereon.
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B. Throughout the Lease term, the Tenant at its sole cost shall
diligently maintain, repair and replace the premises and all improvements
thereon in good condition and repair and in conformance with all applicable
laws, rules, ordinances, orders and regulations of all governmental agencies
having jurisdiction. Tenant may determine the manner in which the vineyard
improvements are maintained, repaired, replaced and operated in its reasonable
discretion, provided that Tenant shall conform with all reasonable and customary
standards then in effect in Napa County. Tenant shall promptly and diligently
replant all missing, diseased or dead vines. If the Tenant determines in its
sole discretion that it can no longer continue to replant missing vines and to
farm the vineyards with an economic return satisfactory to Tenant, the Tenant
may terminate this Lease. Upon such termination, Landlord in its sole discretion
shall instruct Tenant to either leave all vineyard improvements in their
existing condition or to remove any portions or all of the vineyard improvements
which Landlord designates, and Tenant shall at its sole cost diligently perform
Landlord's instructions.
7. Compliance with Laws. Tenant at its sole cost shall comply with all
laws applicable to the premises or Tenant's use of the premises and shall alter,
repair, or restore the premises as required to comply with such laws. Tenant
shall not cause or permit to be stored, used or disposed upon the premises any
toxic or hazardous substances as such substances are defined under any federal,
state or local laws or regulations. Notwithstanding the foregoing, Tenant may
utilize all reasonable and ordinary farm chemicals, pesticides and fertilizers
for the vineyards planted, farmed and maintained on the premises, whether or not
said chemicals are toxic, provided that said chemicals are utilized only in
reasonable amounts and in conformity with all laws and regulations existing from
time to time regarding the use of such materials and are not stored on the
premises. Tenant shall indemnify and hold Landlord harmless against any claims,
damages, losses, fines, liabilities and required remediation costs for any
contamination resulting from Tenant's causing or allowing the storage, use or
dispensing of any hazardous or toxic substances on or about the premises.
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8. No Warranties or Representations By Landlord; Tenant's Prior
Inspection.
A. Landlord makes no warranties, either express or implied,
concerning the condition of the premises or any improvements thereon, the
dimensions, boundaries or acreage, either gross or net plantable, the
possibilities that any encroachments or prescriptive use rights of other parties
might exist, the zoning or potential uses, the suitability of the premises and
any improvements thereon for any uses Tenant may intend to make of the same, the
soil types, conditions or percolation rates, the sufficiency of or availability
of water sources or public utilities services, the surface waters drainage onto
and off of the premises, the possibilities that hazardous substances have
contaminated any portion of the premises, or any other material facts whatsoever
concerning the premises.
B. Tenant acknowledges that Landlord and its attorneys and other
representatives have made no representations of facts nor warranties, express or
implied, concerning the premises, nor has Tenant relied upon Landlord and such
representatives to make any disclosures of material facts nor provide any
relevant information. Tenant owns property adjacent to the premises and has
better knowledge than Landlord of the conditions of the property which are
relevant to Tenant.
C. Prior to signing this Lease, Tenant conducted an initial
inspection of the premises and all improvements thereon. Within 90 days after
signing this Lease, Tenant shall complete its inspection of the premises and all
improvements thereon and of all public regulations and land use planning matters
relating to the same and of all facts material to Tenant relating to the
premises, including, but not limited to, the matters described above concerning
which Landlord has disclaimed any warranties. If Tenant is dissatisfied with any
matters discovered from Tenant's inspection for any reasons whatsoever in
Tenant's sole and unrestricted discretion, Tenant shall give written notice to
Landlord on or before March 31, 1999 that this Lease is terminated, and all
rights and obligations of all parties to this Lease shall thereupon terminate,
and Landlord shall refund both the $37,125 rental payment and the $12,375 option
payment to Tenant on or before May 31, 1999 with no interest charged. If Tenant
does not so terminate, Tenant shall be deemed to have thoroughly examined and to
have approved all conditions of the premises and to have accepted the premises
in their "AS IS" condition.
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9. Inspection. Landlord or its agents may enter the premises at all
reasonable times after giving Tenant reasonable prior notice to examine the
premises and for all other lawful purposes.
10. Destruction. If, during the term, the premises or Tenant's vineyard
improvements on the premises are totally or partially damaged or destroyed by
fire, flood, earthquake, disease, blight, infestation, or any other casualty
(whether or not covered by insurance) rendering the premises totally or
partially unusable, unproductive or inaccessible, Tenant shall restore the
premises to substantially the same condition as they were in immediately before
such damage or destruction. Tenant may elect to terminate this lease if
substantial damage or destruction occurs any time which is not caused by
Tenant's negligence, breach or failure to farm or maintain the vineyards in
conformance with customary standards. If Tenant terminates the lease, Tenant
shall at Tenant's sole cost remove the damaged or destroyed improvements in
compliance with Landlord's reasonable instructions. If Tenant does not terminate
the lease, there shall be no abatement or reduction of rent.
11. Condemnation. Condemnation actions are unlikely against the
premises, which are located in an agricultural portion of Napa County. If a
portion of the premises is condemned by a condemning authority taking possession
of said portion pursuant to an order for immediate possession, judgment or other
order in a condemnation action, the Lease shall continue with respect to the
remaining portion of the premises not condemned until expiration of the lease
term. The parties agree that the Base Annual Rent, as adjusted pursuant to
Paragraph 3.B, shall be proportionately reduced to adjust for the number of
actual plantable acres taken by such condemnation, but no other rent abatement
shall be allowed.
The entire amount of any condemnation award shall belong to and be paid
solely to Landlord, except Tenant shall receive from the award that portion
awarded to compensate Tenant for the vineyards and other leasehold improvements
constructed by Tenant and for Tenant's reasonable removal and relocation
expenses for relocatable personal property and equipment. Tenant shall not
receive any portion of said award as compensation for Tenant's business good
will, the value to Tenant of this Lease, or any other intangible property
interests of Tenant.
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12. Indemnification and Insurance Provided by Tenant.
Tenant shall indemnify Landlord and save Landlord harmless in every way from any
and all loss and liability for damage to property or injury to life that may
arise by reason of Tenant's occupation or use of the premises, including all
offsite roadways which are used by Tenant for access to and from the premises,
other than by Landlord's gross negligence or willful misconduct. Tenant shall
also reimburse Landlord for all costs, charges and expenses (including
reasonable attorneys' fees) incurred by Landlord as a result of any such damage
to property or injury to person, including, but not limited to, persons who are
employed or are performing labor or services upon the premises. In this
connection, Tenant shall, at its own expense, provide and maintain public
liability and property damage insurance with a single combined liability limit
of TWO MILLION DOLLARS ($2,000,000) for each occurrence, which shall protect
Tenant as named insured and Landlord as an additional insured. Said insurance
shall be with companies and in form reasonably satisfactory to Landlord, and
duplicate policies and certificates of insurance shall be furnished to Landlord,
with Landlord guaranteed advance written notice of cancellation.
Tenant waives all claims against Landlord for injury to life and damage
to goods, wares, merchandise or other property in or upon the said premises,
whether belonging to Tenant or third persons, resulting from any cause
whatsoever, other than by gross negligence or willful misconduct of Landlord.
Tenant shall indemnify Landlord and save Landlord harmless in every way
from any and all loss and liability from mechanics' and materialmen's liens and
from any and all other liens, judgments or encumbrances created or suffered by
Tenant and shall reimburse Landlord for all costs, charges and expenses
(including reasonable attorneys' fees) incurred by Landlord as a result of any
such liens, judgments and encumbrances so created.
Tenant, at its cost, may maintain a tenant's policy of standard and
extended coverage insurance, with any vandalism and special form endorsements
desired by Tenant, on its vineyards and other improvements, equipment and
personal property. Said insurance shall contain provisions in form reasonably
satisfactory to Landlord waiving all rights of subrogation against Landlord with
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respect to losses payable by said insurance, other than losses caused by
Landlord's gross negligence or willful misconduct.
Tenant shall maintain at its own cost and expense during the term of
this Lease all workmen's compensation insurance coverage required by the State
of California, and shall require all parties hired by Tenant as independent
contractors who perform labor or services upon the premises to procure the
workmen's compensation insurance required by the State of California prior to
commencing any labor or services upon the premises and to maintain such
insurance coverage at all times during the performance of labor or services upon
the premises.
13. Termination Upon Default. If Tenant defaults in the payment of the
rent, or any part thereof, or if Tenant shall at any time fail or neglect to
perform or observe any of the covenants, conditions and agreements herein
contained, and said default shall continue for a period of thirty (30) days
after Landlord has given Tenant written notice of such default, or if Tenant
abandons, vacates or surrenders the premises, then Landlord may, at Landlord's
election: (a) immediately terminate this Lease, and Landlord, or Landlord's
agents, may thereupon demand possession of and enter upon the premises, or (b)
without terminating this Lease, re-let the premises or any part thereof for the
account of Tenant at such rent and for such time and upon such terms as Landlord
may see fit, and Tenant shall pay any deficiency by which said rental falls
short of satisfying all rent provided in Paragraphs 3.A and 3.B. In the event of
a re-entry by Landlord as herein provided, Landlord may harvest all crops and
remove all property on the premises, whether belonging to Tenant or third
persons, and may store the same in any public warehouse or elsewhere and may
sell all harvested crops at the cost and for the account of Tenant.
The waiver by Landlord of any breach of any term, covenant or condition
of this Lease shall not be deemed a waiver of such term, covenant or condition
or of any subsequent breach of the same or any other term, covenant or
condition. Acceptance of rental by Landlord subsequent to any breach hereof
shall not be deemed a waiver of any preceding breach other than the failure to
pay the particular rental so accepted, regardless of Landlord's knowledge of any
breach at the time of such acceptance of rental. Landlord shall not be deemed to
have waived any term, covenant or condition unless Landlord gives Tenant written
notice of such waiver.
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Landlord is not limited to the remedies herein enumerated, but may
likewise assert any other or additional remedies available to Landlord at law or
in equity.
14. Obligation of Tenant Upon Termination. Tenant agrees to deliver up
the premises with all improvements to Landlord without demand or notice at the
expiration of the term of this Lease, or upon the sooner termination thereof.
Should Tenant hold over after the expiration of this Lease or any extension or
renewals thereof, Tenant shall be deemed to hold the premises as a tenant from
year to year under the same terms and conditions as in this Lease set forth,
except all rents provided in Paragraphs 3.A and 3.B shall be increased by
twenty-five percent (25%).
15. Notices. Notices and demands by either of the parties hereto may be
given by hand delivery, facsimile transmission, or certified, registered or
express mail, postage prepaid, addressed to the other party at the addresses
hereinafter set forth. Notices given by hand delivery shall be effective upon
receipt. Notice sent by facsimile shall be effective one (1) day after the
sender receives confirmation that the facsimile has been received by the
recipient. Notices sent by certified, registered or express mail shall be
effective three (3) days after the date mailed, provided, however, that if
return receipt is requested, the notice shall be effective when the return
receipt is signed by the recipient. Either of the parties may from time to time
designate other addresses and facsimile numbers by notice in writing to the
other. The addresses and facsimile numbers are:
Landlord: Xxxxxxx Xxxxxxx, Trustee of the
Xxxx Xxxxxxxx Revocable Trust
dated January 9, 1991
000 X. Xxxxxx Xxxxxx
Xxxx, Xxxxxxxxxx 00000
Facsimile: c/o Xxxx Xxxxxxx
(000) 000-0000
Tenant: Chalone Wine Group, Ltd.
Attention: W. Xxxxxxx Xxxxxxxx
000 Xxxxxxx Xxxx
Xxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
16. Landlord's Sale, Assignment or Transfer. Subject to the provisions
of Paragraph 22, if Landlord sells, conveys, assigns or transfers this Lease or
the real property and improvements which comprise the premises, Landlord shall
be released and discharged from any liabilities
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thereafter accruing under this Lease, including any obligations with respect to
Tenant's prepaid rent, if Landlord's successor in right, title or interest has
assumed in writing, for the benefit of Tenant, all obligations of Landlord under
this Lease and the option provided in Paragraph 21.
17. Tenant's Assignment. Tenant shall not assign this Lease, nor any
interest therein, nor sublet the premises or any part thereof, either
voluntarily or by operation of law, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed. Upon any
such assignment or subletting, Tenant shall remain jointly and severally liable
for all obligations of the Tenant set forth in this Lease. Notwithstanding this
limitation, Tenant may assign, transfer or convey this Lease or any partial
interest therein to any joint-venture, partnership, corporation, or limited
liability company in which Tenant maintains at least one-half (1/2) ownership as
a joint-venturer, partner, shareholder, or member.
18. Subordination and Estoppel Certificate. This Lease is and shall be
subordinate to any deed of trust or other encumbrance executed and recorded by
Landlord after the date of this Lease affecting the premises securing loans with
an aggregate total not exceeding $500,000 (collectively the "Deed of Trust"),
provided that each such loan shall be limited to those sums which are reasonably
necessary for the care and benefit of Xxxx Xxxxxxxx or the payment of estate
taxes due after her death.
Each subordination agreement shall contain the following provisions:
(a) If the Deed of Trust beneficiary (the "Beneficiary") or any other
transferee (collectively the "Successor") acquires the title or interests of the
Landlord in the Lease or the premises by foreclosure sale under such deed of
trust or by deed in lieu of foreclosure (collectively the "foreclosure"), the
Lease and all rights of Tenant thereunder shall remain in full force and effect
and shall not be terminated nor shall Tenant's rights to possession of the
premises be disturbed by the Successor, so long as Tenant fully performs all
provisions of the Lease and is not in default under any provision beyond any
grace or cure period therein.
(b) Beneficiary shall not be bound by any modifications or amendments
to the Lease made without Beneficiary's written consent.
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(c) Beneficiary shall give Tenant prompt written notice of the
recordation of the encumbrance so that Tenant may record a request for notice of
default and notice of sale pursuant to Civil Code Section 2924b, or any
amendments to or recodifications of Section 2924b,
(d) If Beneficiary gives Tenant written notice that Landlord is in
default under the Deed of Trust or the note secured thereby and demands that
Tenant pay rent, taxes or other sums due under the Lease to Beneficiary, Tenant
shall pay such sums directly to Beneficiary,
(e) Tenant shall attorn to any Successor upon foreclosure under the
Deed of Trust.
(f) Successor shall not be subject to any claims, defenses or offsets
which Tenant might have against Landlord under the Lease which accrue prior to
foreclosure, nor be bound by any prepaid rent paid more than thirty (30) days
preceding the payment date provided in the Lease for such rent.
(g) Successor shall assume and perform all duties of the Landlord under
the Lease accruing after the date of foreclosure.
The loan terms and documents for each loan secured by a Deed of Trust
shall be subject to Tenant's prior review to determine that such terms and
documents are commercially reasonable and to Tenant's prior written consent,
which consent shall not be unreasonably withheld. Tenant shall cooperate with
Landlord and shall reasonably approve and execute any subordination agreement or
any modification to the non-disturbance provisions herein which are required by
a Beneficiary as a condition of making a secured loan to Landlord, provided that
such subordination agreement and modifications are reasonable and provide Tenant
comparable protection to the provisions herein.
Tenant may encumber or grant a security interest in this lease or the
crops grown on the premises for any period, but not extending beyond the term of
this lease.
Tenant and Landlord shall, within ten (10) days after receiving a
written request from the other, execute and deliver to the requesting party an
estoppel certificate stating that this Lease is unmodified and in full force and
effect, or in full force and effect as modified, and stating the modifications.
The estoppel certificate also shall state the amount of the current base annual
and
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any adjustment pursuant to Paragraph 3.B, the dates to which the rents have been
paid, and the amount of any security deposit or prepaid rent.
19. No Security Deposit. No security deposit shall be required from
Tenant as a security for the performance by Tenant of the provisions of this
Lease.
20. Miscellaneous.
A. Time shall be of the essence of this agreement and the
performance of all the terms thereof.
B. This agreement shall be binding upon and inure to the benefit of
all successors in right, title or interest and all permitted assignees or
subtenants of the parties hereto.
C. The obligations of all of the parties hereto are joint and
several.
D. This agreement shall be interpreted and enforced according to the
laws of the State of California.
21. Tenant's Option To Purchase.
X. Xxxxx Of Option. Landlord hereby grants to Tenant an option to
purchase from Landlord, for the purchase price specified in subparagraph D, the
real property and improvements thereon described as the "premises" on Page 1 and
in Exhibit "A" attached hereto, which is called the "Option Property" for the
purposes of this Paragraph 21.
B. Option Consideration. The total option consideration is the sum
of $49,500, which shall be paid in four installments of $12,375 each payable on
December 31, 1998, July 1, 1999, December 31, 1999 and July 1, 2000. None of the
option consideration payments shall be credited against the purchase price
provided in subparagraph E.
C. Term Of Option. The term of this option shall commence on the
first day of the thirty-sixth (36th) month following the month of the death of
Xxxx Xxxxxxxx or on the first day of the one hundred twentieth (120th) month of
the lease term, whichever first occurs, and shall
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terminate at 5:00 p.m. on the Thirtieth (30th) calendar day following the date
of commencement of the option term. This option may not be extended by Tenant
for any successive option term whatsoever. Landlord shall give Tenant written
notice of the date of death of Xxxx Xxxxxxxx within thirty (30) days after her
death.
D. Exercise Of Option. Tenant may exercise this option by giving
Landlord written notice of exercise of this option at any time after
commencement of the option term and on or before 5:00 p.m. on the thirtieth
(30th) day following the commencement of the option term. Paragraph 22 below
provides Tenant additional rights to exercise the Option.
E. Purchase Price. Upon exercise by Tenant of this option, the total
purchase price of the Option Property described in subparagraph A shall be the
sum of $1,100,000.00, with no credit given for any part of the option and rental
payments. The purchase price shall be reduced by the principal amount (excluding
all costs, attorney's fees, interest and other non-principal amounts) of any
condemnation award paid to Landlord as described in Paragraph 11.
F. Escrow.
(1) Tenant has obtained a preliminary title report from First
American Title Company of Napa for the option property and has approved all
title matters disclosed by said preliminary title report. Title to the Option
Property shall be free of encumbrances, easements, restrictions, rights and
conditions of record or caused by Landlord, other than such items as existed on
the date of the commencement of the term of this Lease and the lien for current
real property taxes and assessments which are not due at the time of close of
escrow.
(2) Landlord shall furnish Tenant, at Tenant's expense, a
standard California Land Title Association policy insuring title in Tenant to
the Option Property subject only to the liens, encumbrances, easements,
restrictions, rights and conditions as described in subparagraph (1) above.
(3) Subject to the provisions of subparagraph H below, escrow
instructions signed by Landlord and Tenant shall be delivered to First American
Title Company of Napa, or another escrow company of Tenant's choice, which shall
provide for the closing of escrow thirty
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(30) calendar days after Tenant's exercise of this option. The rental accruing
pursuant to this Lease shall be prorated as of the date of close of escrow.
Tenant is responsible for all real property taxes accrued but unpaid through the
date of close of escrow. Tenant shall pay all costs of escrow, including the
County of Napa and any other applicable transfer taxes. The entire purchase
price shall be paid in cash on close of escrow.
(4) Landlord and Tenant shall cooperate with each other in
accomplishing a tax deferred exchange by the other, provided that the party for
whose benefit the exchange is accomplished shall pay all additional fees and
costs resulting from their exchange, and such exchange shall not delay the close
of escrow.
G. Risk Of Loss From Partial Or Total Destruction of Premises. If
Tenant exercises this option, Tenant shall bear the entire risk of all damages
or losses from any partial or total destruction of the Option Property from any
and all causes which have already accrued prior to or which occur after the
exercise of the option, but Tenant may rescind its exercise of the option in the
event that substantial uninsured casualty losses occur before the close of
escrow.
H. Noticed Foreclosure Proceedings. If Landlord's title or interests
in the Option Property are at any time subject to a noticed foreclosure sale
pursuant to any encumbrance executed or suffered by Landlord, Tenant shall have
the option, but shall not be required, to pay off the full amount of the
encumbrance required to be paid to cancel any such foreclosure sale which has
been noticed and to credit said payment in full against the purchase price
specified in subparagraph E, in which event the term of the option described in
subparagraph C shall be modified to commence upon the date of such payment by
Tenant to cancel such sale, and the time within which Tenant may exercise the
modified option pursuant to subparagraph D shall expire on the thirtieth (30th)
day following such payment by Tenant.
I. Quitclaim Deed. If Tenant fails to exercise this option within
the time required by subparagraph C or G or fails to tender into escrow complete
performance of all provisions of this Paragraph 24 required to be performed on
Tenant's part within the 30 day escrow closing period required by subparagraph
F(3), this option shall fully and finally terminate, and Tenant shall promptly
execute and record a quitclaim deed of the Option Property to Landlord.
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22. Right of First Offer. If Landlord makes the decision to sell all or
any part of Landlord's interests in the premises, Landlord shall first give
written notice to Tenant of Landlord's decision to sell, and Tenant shall have
thirty (30) days after receipt of such notice from Landlord to exercise its
Option to purchase the entire premises by giving Landlord written notice of
exercise as provided in Paragraph 21.D. If Tenant fails to exercise its option
to purchase within said thirty (30) day period, Tenant's option shall continue
as provided in Paragraph 21, and Landlord may offer and sell any part or all of
such interests to any other parties upon any terms Landlord in its sole
discretion determines are acceptable to Landlord, subject however to this Lease
and Tenant's option rights under Paragraph 21.
23. Arbitration and Attorneys Fees.
A. All Claims and causes of action to enforce the provisions or to
recover damages or other relief for breach of the Lease shall be resolved by
binding arbitration conducted pursuant to the Commercial Arbitration Rules and
all applicable procedures of the American Arbitration Association then in effect
with a single arbitrator who is an attorney with substantial real estate
practice experience. The arbitrator shall have the same powers as a Superior
Court Judge to order in the award all injunctive, declaratory or other relief or
remedies which could be entered in an action filed in the Napa County Superior
Court upon the same causes of action, and the arbitrator may retain continuing
jurisdiction when appropriate to make further determinations or to enforce the
award. If the American Arbitration Association ceases to exist or its
arbitration services become unavailable within 50 miles of the City of Napa, a
comparable arbitration service and its procedural rules shall be utilized.
B. The prevailing party in any such arbitration proceedings to
enforce the provisions of this Lease or to recover damages for any breach
thereof and any court action to enforce any arbitration award or order or for
other relief shall be awarded their reasonable attorneys fees and costs
incurred, with the reasonable amount thereof to be fixed by the arbitrator or
Court rendering the award, order, determination or judgment.
NOTICE: BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE
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"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 INITIALLING IN THE SPACE BELOW
YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE
RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTE" 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 PROVISIONS 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.
/s/ FG /s/ WPW
------------ ------------
Landlord Tenant
24. Trustee's Warranty of Authority. Without modifying or waiving any
provisions of Xxxxxxxxx 0, Xxxxxxx Xxxxxxx warrants to Tenant that she is the
sole qualified and acting trustee of the Xxxx Xxxxxxxx Revocable Trust dated
January 9, 1991, as set forth in the Certificate of Trust attached hereto as
Exhibit "B", which remains in effect unmodified through this date, and as such
Trustee has the power and authority to execute this Lease on behalf of said
trust and has not caused the Trust to enter into any agreement or other
obligation and has no knowledge of any obligation of the Trust that is
inconsistent with the rights granted to Tenant hereunder.
25. Integration. Landlord and Tenant agree that this Lease supersedes
all of their prior oral and written agreements and negotiations, including those
of their respective agents, attorneys, accountants, employees or other
representatives concerning this lease, that this written Lease shall constitute
the sole and only agreement between them, that no other oral or written
agreements concerning this Lease shall remain or exist, and that no
modifications or amendments to this Lease
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shall be enforceable unless and until the same are reduced to a written
amendment signed by both Landlord and Tenant.
DATED: December 30, 1998 LANDLORD:
/s/ Xxxxxxx Xxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxx, Trustee of the Xxxx Xxxxxxxx
Revocable Trust dated January 9, 1991
DATED: December 31, 1998 TENANT:
----------- -------
CHALONE WINE GROUP, LTD.,
A California corporation
By: /s/ W. Xxxxxx Xxxxxxxx
------------------------------------
Its: Chairmain
-----------------------------------
Attest: /s/ Xxxxxx X. Xxxx
--------------------------------
Xxxxxx X. Xxxx, Secretary
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