LAND LEASE
ARTICLE I
CONCURRENT CONTRACT OF SALE
This lease is executed concurrently with a CONTRACT OF SALE described more
particularly in Exhibit "A" attached hereto and incorporated herein and made a
part of this Land Lease.
ARTICLE II
DEFINITIONS
Reference in this lease to any of the following terms shall be construed to
incorporate the definition for that term as set forth in this Article I.
2.1 LESSOR. Xxxxxxx XxXxxxx Xxxxx, a married man dealing with a
separate property. Hereinafter called "Lessor".
2.2 LESSEE. Monterey Farming Corporation, a corporation.
2.3 LEASED PREMISES. All that real and personal property located in
the County of Monterey, State of California, and described more particularly' as
Parcels I & II in Exhibit "A" attached hereto and incorporated herein by
reference, and all easements, licenses and rights appurtenant thereto.
1
ARTICLE III
PREMISES, USE, TERM AND RENT
3.1 PREMISES. Lessor hereby leases to Lessee the leased premises
subject to and with the benefits of the provisions of this lease.
3.2 USE.
(a) The leased premises shall be used for vineyards and any
other agricultural use Lessee may choose. In connection with Lessee's use,
Lessee may construct on the leased premises residences, offices, warehouses,
storage buildings, utilities, roads, irrigation facilities and any other related
items. Lessee shall be entitled to withdraw for use on the leased premises and
any other premises owned or occupied by the Lessee unlimited water from the
leased premises.
(b) In addition to taking water from the leased premises, Lessee
may use any and all existing xxxxx on the property and further, Lessee may
construct new xxxxx on any portion of the property and extract water there from
for use on the leased and any other premises owned or occupied by the
Lessee. Lessor hereby grants Lessee unlimited rights of access, and all
necessary easements, and licenses, to the property for said purpose.
3.3 TERM. The term of this lease shall be for thirty (30) years
commencing on November 1, 1973, or such earlier date as the present tenant
relinquishes his leasehold, and ending on the 31st day of October, 2002. The
Lessee shall have the
2
option to renew this lease for two (2) consecutive ten (10) year periods
following the expiration of the original lease term at rentals determined in
accordance with Section 3.4.
3.4 RENT.
(a) Lessee shall pay semiannually in advance, on or before the
15th day of July of each year, and on or before the 15th day of January of each
year, and a pro rata portion of said sum for any fraction of a semi-annual
period at the beginning and the end of the lease term, rental at the rate of
$85.00 per acre per year, based on the area of the leased premises. For
purposes of rental the total acreage is agreed to be 351 acres and the lease
rental is $29,835. This acreage and the total rent due is subject to increase
or decrease on the basis of a survey and certification of acreage by a licensed
surveyor, to be made at Lessee's option and expense. When such survey is made
and certificate received, the rent shall be adjusted to the nearest whole acre
prospectively from the date of the surveyor's certificate, a copy of which
Lessee shall furnish to Lessor. The rent per acre is further subject to
adjustment under paragraph 3.4(b) below.
(b) The annual rental due here under shall be adjusted at the
end of the fifth (5th) year of this lease, and at the end of each successive
5-year period during the period of this lease.
The rent adjustment shall be made to reflect any increase or decrease in
the Consumer Price Index as published by the Bureau
3
of Labor Statistics of the United State Government or such other index as the
Lessor and Lessee may agree if the Consumer Price Index is no longer published.
Any rent adjustments shall be proportioned to changes in the Index from a
beginning date of December 31, 1972. If Lessor and Lessee have not agreed on
the adjusted rent amount within thirty (30) days of the end of any said 5-year
period, both parties agree the adjusted rent shall be resolved by a board of
three (3) impartial arbitrators, acting in accordance with the rules of the
American Arbitration Association, except they shall be selected as follows:
Within sixty (60) days after the termination of said 5-year period, each
party shall select a qualified arbitrator and shall give written notice of
such selection to the other party. In the event of failure of either party
to select a qualified arbitrator within said sixty (60) days, such
arbitrator shall be selected by the presiding judge of the Superior Court
of the County of Monterey, acting in his individual capacity and not his
judicial capacity. upon application of the party which has selected a
qualified administrator, made after ten (10) days' written notice to the
other party, of the time and place of such application. The two
arbitrators thus appointed (by either method) shall select and appoint a
third qualified arbitrator and shall give written notice thereto to the
parties. In the event that two qualified arbitrators so appointed in
either matter shall fail to appoint a third qualified arbitrator within
4
fifteen (15) days after the second qualified arbitrator shall be selected
by said presiding judge upon application of either party made after ten
(10) days' written notice to the other party of the time and place of said
application. The question of whether or not any person selected hereunder
is qualified to act as an arbitrator shall be determined by said presiding
judge upon the application of either party made after ten (10) day's
written notice to the other party of the time and place of such
application. When duly selected, the three arbitrators shall meet to settle
the dispute between the parties on the basis of the terms of this contract,
and the decision of any two of them shall be final, conclusive and binding
upon both parties. Upon the failure of any two of said arbitrators to
agree upon the settlement of the dispute within sixty (60) days after the
appointment of the third arbitrator, the dispute shall be settled by a
newly constituted board selected in the manner set forth above. This
process shall be repeated until a determination is finally reached by any
two of the arbitrators. The cost of such arbitration shall be split equally
by the parties hereto.
The rent adjustment shall be effective as of the commencement of the appropriate
5-year period. Until said value is determined, Lessee shall pay the rent
applicable in the immediately preceding 5-year period, provided that if the
adjustment has not been determined in time for the first rental payment of the
subject 5-
5
year period, Lessee shall at the time of the first rental payment after
determination of the adjusted rent add or subtract (as the case-may be) an
amount equal to the difference between the rent for the period starting with
the commencement of the subject 5-year period and ending with the first
payment of the adjusted rent.
ARTICLE IV
TAXES
(a) During the term hereof lessee shall pay and discharge as and
when they shall become due all real estate and personal property and similar
taxes and assessments of any type whatsoever upon the leased premises or any
portion thereof, including the improvements on the leased premises.
(b) Lessee shall have the right to contest any taxes, assessment
or government imposition levied or assessed against the leased premises or
against any buildings, improvements, fixtures or equipment now or hereafter
existing thereon during the term of this lease. In connection with any such
contest Lessor shall cooperate with Lessee by signing any claims, complaints,
etc. that are reasonably necessary for the orderly process of Lessee's contest.
ARTICLE V
EMINENT DOMAIN
(a) If title to all or any part of the leased premises is taken
for any public or quasi-public use or under any
6
statute or by right of eminent domain or by private purchase in lieu of eminent
domain, with the result that the remaining property or portion of the leased
premises is not reasonably suitable for Lessee's continued use and occupancy in
a manner consistent with the use and occupancy of said premises prior to the
taking, then Lessee may, at its option, terminate this lease on the date that
the possession of the leased premises or part thereof which is taken occurs. In
such event, and if Lessee continues under its option to occupy the remaining
portion of the leased premises, the rent of the remaining portion shall be
reduced in accordance with the number of conveniently useable acres remaining.
(b) In the event the leased premises or any portion thereof are
taken by condemnation, the condemnation award shall be divided as follows:
(i)Lessee shall receive the value of its leasehold
estate;
(ii)Lessee shall receive the value of any improvements
added by Lessee including grapevines, crops, buildings and irrigation
systems; and
(iii)The remainder of the award shall belong to Lessor.
(c) Lessor agrees immediately upon service of process or other
type, of notice in connection with any appropriation or taking to give Lessee
notice in writing thereof. Each party agrees to execute and deliver to the
other all
7
instruments that may be required to effectuate the provisions of this paragraph.
ARTICLE VI
MAINTENANCE AND CONDITION OF LEASED PREMISES
(a) Lessor agrees to place the leased premises in good operating
condition at the commencement of the term hereof. Lessor shall have in good
operating condition all pumps, fittings, pipelines, xxxxx, reservoirs and other
irrigation facilities on the leased premises and serving the leased premises.
Lessor further agrees that all roads and roadways shall be placed in serviceable
condition appropriate to the type of roadway surface that is in place, and that
all drains, drainage ditches, and above-ground and underground drainage lines
shall be clear and clean and in serviceable condition.
(b) Lessee shall, during the term hereof, keep and maintain at
its own cost, in a manner sufficient for Lessee's own use, all reservoirs,
pumps, xxxxx, casings, pipelines, fittings and related irrigation facilities.
ARTICLE VII
LESSOR COVENANTS
Lessor covenants that:
(a) there is good and sufficient access to the leased premises
from a public highway;
8
(b) all reservoirs, pumps, xxxxx, casings, pipes, fittings, and
related facilities in connection with the irrigation system are in good working
condition;
(c) Lessor shall not during the term of this lease take water by
pumping or any other means from the property or from beneath the property, or
pursuant to any riparian or other rights of Lessor in or to the Xxxxxxx River,
nor grant the right so to do to any other person.
(d) Lessor has the right to make this lease and Lessee, on
paying the rent and performing all its obligations in this lease shall
peacefully and quietly have, hold and enjoy the leased premises throughout the
lease term or unless sooner terminated as provided herein.
(e) Lessor's title to the leased premises is such that Lessee
will be able to obtain at standard rates a California Land Title Association
Standard Coverage Form of title insurance policy on its leasehold interest
showing as exceptions a lien for taxes not due, and exceptions as may be
approved in writing by Lessee.
(f) Lessor shall not during the term hereof sell or agree to
sell, any part or all of the leased premises except according to the terms of
this agreement.
(g) The leased premises and the adjacent property are the
subject of that certain Land Conservation Agreement between Lessor and the
County of Monterey, dated February 26, 1968 and recorded February 29, 1968,
in Reel 545 page 861 of the official
9
records of the County of Monterey (hereinafter called the Conservation
Agreement). Lessor covenants and agrees to make no "Notice of Nonrenewal" or
any request for cancellation as provided in paragraphs ___ and ___ of the
Conservation Agreement, nor to do any other act or fail to do any act when to do
so or fail to do so would result in the termination of the Conservation
Agreement or alteration of any of the terms or conditions thereof, unless the
consent in writing of Lessee is first had and obtained.
ARTICLE VIII
LEASEHOLD IMPROVEMENTS
All improvements of any type whatsoever, whether real or personal property,
and including agricultural plantings, additional pipes, pumps, fittings;
buildings, barns, sheds, machinery, tractors, and fixtures, etc., that are
installed or placed upon or about the premises by Lessee shall remain the sole
property of Lessee and may be removed by Lessee at any time during the term of
the lease or at the termination of the lease. Lessee shall be entitled to place
or construct any of the foregoing improvements at any time and at any location
on the leased premises without obtaining the approval of Lessor. All
improvements upon the leased premises at the commencement of the lease and not
installed by Lessee are and shall remain the property of Lessor.
10
ARTICLE IX
ASSIGNMENT AND RIGHT OF FIRST REFUSAL
9.1 RIGHT TO ASSIGN. Lessee shall have the right to assign or sublet
all or any part of the leased premises to any person or for any use not
inconsistent with Lessee's permitted use without obtaining the consent of
Lessor. This right of assignment or subletting shall include the right to
mortgage any of the crops or other improvements Lessee produces upon the leased
premises.
9.2 SUCCESSORS. The covenants and conditions herein contained shall
apply to and bind the grantees, transferees, assigns, heirs, successors,
executors, and administrators of all the parties hereto, and all the parties
hereto shall be jointly and severally liable hereunder.
9.3 RIGHT OF FIRST REFUSAL. Lessees shall have during the term of
this lease a Right of First Refusal to purchase the leased premises at any time
Lessor determines to sell the premises or receives a bona fide offer from an
unrelated person to buy the premises.
ARTICLE X
AGREEMENT TO PURCHASE AND AGREEMENT TO SUBORDINATE
10.1 Lessee agrees to purchase and Lessor agrees to sell the leased
premises at a price which is the higher of $1,950 per acre or fair market value
for farmland in the Greenfield, California vicinity within 120 days of the death
of Xxxxxxx
11
XxXxxxx Xxxxx. This obligation to purchase and sell shall be binding upon all
heirs, assigns, nominees, successors, executors, grantees and transferees of the
Lessor and the Lessee.
10.2 Whereas Lessee proposes to develop the leased premises to a
vineyard and expects to incur indebtedness to finance such development, Lessor
shall execute an Agreement of Subordination or similar instrument subordinating
the Lessor's interests to the institution or institutions providing the
financing of the Lessee's development (Lender) and Lessor agrees; if requested
in writing by the Lessee, to execute a Deed of Trust in favor of such Lender
provided such Lender has assets in excess of $500,000,000 (five hundred million
dollars). The subordination shall be only to such indebtedness in the ratio of
$55 of debt to $45 of equity invested in the premises by the Lessee for the
purpose of developing vineyards.
ARTICLE XI
DEFAULTS
(a) If default is made by Lessee in payment of any rental or any
monies due here under or in the performance of any term, covenant or condition
hereof, and such default shall not be made good within thirty (30) days after
written notice by Lessor of the existence thereof, Lessor may, at its option,
re-enter the leased premises, take possession of the same, and terminate this
lease or, as an alternative, Lessor may re-enter the leased premises without
terminating this lease and rent the
12
premises to a third party for the account of Lessee. All covenants of Lessee
herein contained are expressly made conditions, for the failure to perform which
the right of re-entry is hereby given. Waiver by Lessor of any default
hereunder shall not constitute a waiver of any other or subsequent default. All
rights and remedies of Lessor expressed herein are cumulative and in addition to
any other remedies of law or equity.
(b) Upon Lessor's failure to perform any of the obligations
herein contained, including maintenance, repair, placing the leased premises in
the required condition at the commencement of the term hereof, or any other
obligation, Lessee may, at its option cure or have cured such default hereunder
and deduct from future rent payment due hereunder any sums expended or costs
incurred in connection therewith. Lessee shall not be in default hereunder for
failure to pay rent if Lessee makes any such deduction from rent otherwise due.
ARTICLE XII
MISCELLANEOUS
12.1 HOLDING OVER. In the event of any holding over with the consent
of Lessor beyond the end of the term of any extension thereof, this lease shall
be deemed a monthly tenancy upon the covenants and conditions herein contained
and upon one-twelfth of the annual rental as provided herein.
12.2 COMPLIANCE WITH LAWS. Lessee and Lessor shall both promptly
comply with all laws, ordinances, rules and
13
regulations of all federal, state and municipal governments now in force or that
may be enacted hereafter, and, applicable to the leased premises.
12.3 NOTICES. Notices required to be given hereunder shall be in
writing and shall be sent by United States Mail, Postage Prepaid to the Lessee
as follows: Monterey Farming Corporation, 0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, and to Lessor as follows: Xxxxxxx XxXxxxx Xxxxx, Xxxxx 0, Xxx
0, Xxxxxxxxxx, Xxxxxxxxxx 00000.
12.4 CHANGE OF OWNERSHIP. No change of ownership of the leased
premises or assignment of this lease or of the rental provided for herein shall
be binding upon Lessee for any purpose whatever, until Lessee has been furnished
with notice thereof by Lessor.
12.5 COMPLETE AGREEMENT. It is expressly agreed that this lease
together with Exhibits "A" and "B" which are a part hereof, contains all terms,
conditions, warranties and agreements of the parties relating in any manner to
the rental, use and occupancy of the leased premises, and that no prior
agreement or understanding pertaining to the same shall be valid or of any force
or effect and that the terms, covenants, conditions and provisions of the lease
cannot be altered, changed, modified or added to except in writing signed by the
parties hereto.
12.6 TIME. Time is of the essence hereof.
12.7 SHORT FORM LEASE. The parties agree to execute and have
acknowledged a short form lease for purposes of
14
recording, in Monterey County, which said short form shall describe the leased
premises as being subject to the rights, covenants, and restrictions herein
contained. With respect to the adjacent property, the short form of lease shall
comply with California Civil Code, Section 1469 as necessary to create a
covenant running with the land and binding on assignees and transferees of
Lessor.
12.8 CAPTIONS. The captions of the paragraphs and parts of this lease
are for convenience only and shall not be considered or referred to in resolving
questions of interpretation or construction.
IN WITNESS WHEREOF, the parties hereto have executed this lease on the
day and year set opposite their signatures below.
Lessor Lessee
------ ------
/s/ Xxxxxxx XxXxxxx Xxxxx /s/ Xxxxxxx Xxxxxx
------------------------- -------------------------
Xxxxxxx XxXxxxx Xxxxx Monterey Farming Corporation
15
ADDENDUM TO LAND LEASE
The parties to that certain Land Lease (the "Lease") by and between Xxxxxxx
XxXxxxx Xxxxx ("Lessor") and Monterey Farming Corporation ("Lessee"), as
evidenced by that certain Short Form of Lease executed by Lessor and Lessee on
August 18, 1972, and recorded in Monterey County, California, relating to all
that real and personal property located in Monterey County, California, and
described more particularly as Parcels I and II in Exhibit "A" hereto, hereby
amend the Lease as follows:
Article X of the Lease which presently reads as follows:
"ARTICLE X
"Agreement to Purchase
AND AGREEMENT TO SUBORDINATE
"10.1 Lessee agrees to purchase and Lessor agrees to sell the
leased premises at a price which is the higher of $1,950 per acre or
fair market value for farmland in the Greenfield, California vicinity
within 120 days of the death of Xxxxxxx XxXxxxx Xxxxx. This
obligation to purchase and sell shall be binding upon all heirs,
assigns, nominees, successors, executors, grantees and transferees of
the Lessor and the Lessee.
"10.2 Whereas Lessee proposes to develop the leased premises to a
vineyard and expects to incur indebtedness to finance such
development, Lessor shall execute an Agreement of Subordination or
similar instrument subordinating the Lessor's interests to the
institution or institutions providing the financing of the Lessee's
development (Lender) and Lessor agrees, if requested in writing by the
Lessee, to execute a Deed of Trust in favor of such Lender provided
such Lender has assets in excess of $500,000,000 (five hundred million
dollars). The subordination shall be only to such indebtedness in the
ratio of $55 of debt to $45 or
16
equity invested in the premises by the Lessee for the purpose of developing
vineyards."
is hereby amended to read in its entirety as follows:
"ARTICLE X
"AGREEMENT TO SUBORDINATE
"10.1 Whereas Lessee,proposes to develop the leased premises to a
vineyard and expects to incur indebtedness to finance such
development, Lessor shall execute an Agreement of Subordination or
similar instrument subordinating the Lessor's interests to the
institution or institutions providing the financing of the Lessee's
development (Lender) and Lessor agrees, if requested in writing by the
Lessee, to execute a Deed of Trust in favor of such Lender provided
such Lender has assets in excess of $500,000,000 (five hundred million
dollars). The subordination shall be only to such indebtedness to the
ratio of $55 of debt to $45 of equity invested in the premises by the
Lessee for the purpose of developing vineyards."
IN WITNESS WHEREOF, the parties hereto have executed this Addendum of Land
Lease this 26th day of September, 1973.
Lessor Lessee
------ ------
MONTEREY FARMING CORPORATION
/s/ Xxxxxxx XxXxxxx Xxxxx By /s/ E. Xxxxxxx Xxxxxx
------------------------- ------------------------
Xxxxxxx XxXxxxx Xxxxx E. Xxxxxxx Xxxxxx
Vice President
17
DESCRIPTION OF PROPERTY
The land referred to in this report is situated in
the State of California, County of Monterey, and
is described as follows:
PARCEL I:
A part of Rancho Poso de Los Ositos, being a part of that certain Lot 8,
allotted to Xxxxxxxxx Sspinosa (by Geo. X. Xxxxx, Xx. Trustee) in Action No.
7106 in the Superior Court of the State of California, in and for the County of
Monterey, and shown on Partition Map Accompanying Report of Referees filed July
10, 1926, in Volume 2 of Surveys, at page 30, records of Monterey County,
particularly described as follows: BEGINNING at and underground Granite
Monument marked 1,7,8, at the most westerly corner of said Lot 8, and in the
center line of a Road Right of Way "B" (40 feet wide) from which a 6" x 6" post
marked R/W B,7,1, bears N. 46DEG. 38' W., 20.4 feet distant, and a pile of
rocks bears N. 53DEG. 12' E., 599.5 feet distant, and a pile of rocks bears S.
46DEG. 08' E., 370.0 feet distant; thence along the line between Lots 1 and 8,
(1) S. 46DEG. 38' E., 2033.8 feet, at 20.4 feet at a 6" x 6" post marked
R/W.B,8,1, standing in southeasterly line of Right of Way B, 2033.8 feet to a 6"
x 6" post marked 1,8,9, standing at the corner of Lots 8 and 9; thence along the
line between Lots 8 and 9;
(2) N. 55DEG. 23' 45" E., 2932.1 feet, at 1060.3 feet a 4" x 4" post marked
LINE, 8,9, in fence, 2932.1 feet to a 4" x 4" post marked SE5; thence leave line
of Lots 8 and 9;
(3) N. 22DEG. 34 1/2' W., 2033.8 feet at 53.5 feet'a 4" x 4" post marked SE4,
at 2013.4 feet, a 4" x 4" post marked SE,2, in southeasterly line of said Right
of Way B, 2033.8 feet to a point in the center line of said Road Right of Way B;
thence along said center line;
(4) S. 55DEG. 23' 45" W., 3780.2 feet, to the place of beginning.
PARCEL II:
A portion of Rancho Poso de Los Ositos, beginning at a 6" x 6" post marked
R/W,B1,8, standing at the most northwesterly corner of Lot 8 of the Partition of
said Rancho, as indicated in the Final Decree of Partition filed February 8th,
1926 in Volume 78 of Official Records at page 1, Records of Monterey County;
thence South 46DEG. 38' East along the boundary line of Lot 1 of said
partition, at 2013.4 feet a 6" x 6" white post marked 1,8,9, at the common
corner of Lots 8 and 9 of said partition, 2363.4 feet to a 4" x 4" white post
marked 1,9, standing in the line of a fence; thence along said fence, South
55DEG. 27' 37 1/2" West 3793.9 feet to a 6" x 6" white post marked X0, XX,XXX,
standing at a fence corner; thence North 46DEG. 24' 30" West along a fence line
2357.0 feet to a fence post marked SSC, WEB; thence North 55DEG. 23' 45" East
3783.6 feet to the place of beginning.
00
XXXXXXXXXXXXXXX
XXXXX XX XXXXXXXXXX )
) ss.
COUNTY OF LAKE )
On this 24th day of September, 1973, before me, Xxxx Xxxxxx, a Notary
Public for said county and state, personally appeared XXXXXXX XxXXXXX XXXXX,
known to me to be the same person who executed the foregoing instrument, and
acknowleged the execution thereof for the purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
[NOTARIAL SEAL] /s/ Xxxx Xxxxxx
------------------------------------ -------------------------
[SEAL] OFFICIAL SEAL Notary Public in and for
XXXX XXXXXX said County and State
NOTARY PUBLIC - CALIFORNIA
PRINCIPAL OFFICE IN
LAKE COUNTY
My Commission Expires Mar. 18, 1977
------------------------------------
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On this 26th day of September, 1973, before me, Xxxxxx X. Xxxx, a
Notary Public for said county and state, personally appeared B. XXXXXXX
XXXXXX, known personally to me to be the Vice President of Monterey Farming
Corporation, and that he, as such officer, being authorized to do so,
executed the foregoing instrument for the purposes therein set forth, by
signing the name of the corporation by him as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
[NOTARIAL SEAL] /s/ Xxxxxx X. Xxxx
-------------------------------------- -------------------------
[SEAL] OFFICIAL SEAL Notary Public in and for
XXXXXX X. XXXX said County and State
NOTARY PUBLIC - CALIFORNIA
PRINCIPAL OFFICE IN
LOS ANGELES COUNTY
My Commission Expires November 2, 1976
--------------------------------------
0000 Xxxxxxx Xxxx Xxxx, Xxx. 0000, X.X., Xx. 00000
