AGRICULTURAL LEASE - XXXXXXXX FARMS, INC.
STATE OF LOUISIANA
PARISH OF LAFOURCHE
AGRICULTURAL LEASE
AN AGREEMENT OF LEASE made and entered into and effective as of
January 1, 1998 between:
STERLING SUGARS, INC., a Delaware corporation authorized to do and
doing business in the State of Louisiana, Parish of St. Xxxx, appearing
herein through and being represented by Xxxxx X. Xxxxxxxx, President and
CEO, duly authorized, whose mailing address is P. O. Xxx 000, Xxxxxxxx,
Xxxxxxxxx 00000,
hereinafter called LESSOR, and
Xxxxxxxx Farms, Inc., a Louisiana corporation authorized to do and doing
business in the State of Louisiana, Parish of Lafourche, appearing herein
through and being represented by Xxxxxxx X. Xxxxxxxx, III, President, and
Xxxxxx Xxxxxxxx, Secretary-Treasurer, duly authorized, whose mailing
address is Box 000 Xxxxxxx 00, Xxxxx, Xxxxxxxxx 00000,
hereinafter referred to as LESSEE,
FOR AND IN CONSIDERATION and upon the terms and conditions hereinafter
expressed, LESSOR does lease, and hire unto and in favor of LESSEE, all of
the properties now in sugar cane cultivation in Lafourche Parish, Louisiana
described on tract or parcel of land on the sketch of property attached
hereto as Exhibit "1A".
1) This lease is made for the purpose of LESSEE'S operation of the
leased premises as a plantation for the growing of sugar cane. LESSEE
agrees neither to commit nor permit others to commit waste upon the property
leased, to operate the premises as a good and prudent husband, and to
properly care for and cultivate the fields. LESSEE shall have no right to
assign this lease or sublease the whole or any part of the leased premises.
2) During the term of the lease, LESSEE shall keep approximately
two-thirds (2/3rds) of the cultivable land in sugar cane, in the ratio of
approximately one-third (1/3rd) of said two-thirds (2/3rds) in plant cane
and the balance in stubble cane, subject to quota or other regulations of
the United States Department of Agriculture or other governmental agency,
Federal or State, and unless prevented by weather or other conditions
beyond the control of LESSEE.
3) Cultivated but fallow lands not used for cane shall be plowed or
otherwise treated for control of Xxxxxxx and other undesirable weeds and
grasses or planted in legumes.
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4) This lease is made for a period of five (5) years, commencing as
of the date hereof and ending with the 31st day of December, 2002. LESSEE
shall have the right and option to renew this lease for an additional five
(5) years on the same terms and conditions as set out herein. LESSEE shall
notify LESSOR by certified mail, on or before sixty (60) days, prior to the
expiration of the primary term of LESSEE's desire to exercise its right to
extend the lease.
5) This lease is made in consideration of the stipulations and
agreements herein expressed, all of which are material and without which
the same would not be made, and the payment of a rental by LESSEE of 18% of
the net proceeds from all sugar cane harvested and delivered to xxxxx, less
any and all mill processing fees which are the custom of trade in the
Louisiana sugar industry, together with all subsidy, incentive or benefit
payments (excluding Agricultural Conversation Payments) accruing to the
said 18% share of LESSOR from the United States Government or any of its
departments or agencies, for each of the crop years during which this lease
shall be in force and effect. LESSEE shall have the right to harvest sugar
cane from the leased premises for planting sugar cane on the leased
premises for which LESSEE shall owe no rent.
6) This lease is made and accepted by LESSEE subject to all mineral
leases, and servitudes now existing on the leased premises, and all other
valid and existing servitudes and rights of way, recorded or unrecorded,
apparent or non-apparent. LESSOR shall have the right hereafter to grant
other and further oil, gas and mineral leases, servitudes and rights of way
upon the leased property providing that the leases, servitudes and rights
of way upon the leased property provide that the lessee(s) or grantee(s) in
such oil, gas or mineral leases, servitudes and rights of way shall have
the right to enter upon the premises for the purpose of prospecting and
exploring for oil, gas and other minerals and to construct, maintain and
operate thereon all buildings, derricks, machinery, equipment, pipelines,
storage tanks and facilities for the purpose of housing their employees and
any equipment of any nature or description necessary in drilling for,
producing, storing, treating and transporting oil, gas and other minerals,
and to do all things incidental to the exercise of its or their rights
under such lease or leases. LESSOR shall not be responsible or liable to
LESSEE herein for any damage that may result to LESSEE herein from any use
of or operation on the leased property by owner or any of its mineral and
servitude lessees for any of the purposes referred to in this paragraph,
LESSEE hereby expressly waiving and renouncing any and all rights to claim
damages from LESSOR herein on account of actions of any mineral or
servitudes lessee of the property for the destruction of or injury to
growing crops on said property, or damage to the leased premises, which
injury or destruction shall have been caused by the operations of such
mineral or servitude lessee. LESSEE specifically reserves the right to
claim reasonable damages from any mineral lessee, pipeline owner, grantee,
condemnor, or expropriator of the Premises for the destruction of or damage
to LESSEE's farming operations or to destruction of crop rows, headlands,
drainage, land level or growing crops or to the value of this sublease
caused by the operations of any such person or by the taking of any
right-of-way.
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7) During the entire term of this lease, LESSEE shall procure and
maintain, at its own expense, public liability, property damage, xxxxxxx'x
compensation in the statutory amount and liability coverage in the total
aggregate amount of $1,000,000.00. LESSEE shall provide for coverage for
personal injury to/or death of any one person or for personal injury to/or
death of more than one person along with coverage for property damage
liability of not less than $250,000.00. The aforesaid insurance shall be
obtained from a company satisfactory to LESSOR and licensed to do business
in the State of Louisiana. Such insurance policy or policies shall name
LESSOR as an additional insured and provide for at least 30 days written
notice to LESSOR prior to cancellation, termination, modification or change
of any policy. All insurance policies owned by LESSEE shall contain a
provision waiving all rights of subrogation against LESSEE. Certificates of
Insurance shall be provided to LESSEE.
8) LESSEE recognizes that LESSOR intends for the use and operation of
the leased premises to be in full compliance with all environmental laws,
rules and regulations. LESSEE agrees not to bury or burn on the leased
premises any solid waste or hazardous waste including, but not limited to,
containers, drums and/or cartons used for farm chemicals, fertilizer or
petroleum products. LESSEE further agrees to clean up any and all spills
and/or leakage of chemicals, fertilizer or petroleum products which are
placed on the premises by LESSEE from the leased premises and to dispose of
said clean-up residue off the leased premises. Additionally, LESSEE will
use its best efforts to prevent any dumping of solid waste, hazardous
waste, hazardous substances, toxic substances, contaminants or pollutants
on the leased premises by third parties.
9) LESSEE assumes all risks and responsibilities of accidents,
injuries, or death resulting from such injuries or damages to person or
property occurring in, on or about the Leased Premises, and agrees to
indemnify and hold harmless LESSOR and LESSOR's employees, agents and
assigns from any and all claims, liabilities, losses, costs and expenses
(including attorney's fees) arising from, or in connection with the
condition, use or control of the Leased Premises, including the improvements
and equipment thereon, during the term of this lease. LESSEE shall be
liable to LESSOR for any damages to the Leased Premises, including the
improvements and equipment thereon, and for any act done by LESSEE or any
employee or agent of LESSEE or any invitee or license of LESSEE, except
LESSOR, its agents or employees. Nothing contained herein shall require
LESSEE to indemnify LESSOR or release or waive claims LESSEE may have
against LESSOR for the negligence of LESSOR and/or its agents and assigns.
LESSEE shall indemnify, defend and hold harmless LESSOR from all costs,
losses, liabilities, claims, penalties, or expenses (including attorney's
fees), imposed upon or incurred by or asserted against LESSOR by reason of:
(i) any failure on the part of LESSEE to perform or comply with any of the
terms of this Lease; (ii) any enforcement or remedial action taken by
LESSOR in the event of a failure to perform or comply with the terms of
this Lease; or (iii) any litigation, negotiation or transaction in which
LESSOR becomes involved or concerned (without LESSOR's fault) respecting
this Lease, the Leased Premises or the use or occupancy thereof by LESSEE.
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00) XXXXXX shall make all repairs necessary to maintain the leased
premises in good order during the term of this lease, and the leased
premises, including all buildings and improvements covered by the lease,
shall be returned at the termination of this lease in the same condition as
received, excluding normal wear and tear. This obligation to repair shall
apply particularly, but without limitation, to any buildings, roads, drains,
canals and levees now or hereafter constructed on the property. Without
limiting LESSEE's obligation to make repairs, it is understood that LESSOR
shall have the right to make such improvements to the leased premises,
including buildings, as LESSOR may deem desirable, so long as the
construction and existence of such improvements do not reasonably interfere
with LESSEE's operations under this lease. In the event the leased
premises have irrigation systems installed thereon, LESSEE agrees
to keep and maintain them in good condition and repair, maintain them in
accordance with manufacturer's servicing recommendations when applicable
and operate the irrigation systems located on the leased premises so as to
maximize crop production. The LESSEE shall be responsible for the expense
of fuel filters and oil filters for the irrigation power units, and for all
replacement parts for irrigation equipment. In the event major repairs or
overhauls are necessary to the irrigation system, the first $1,000 shall be
paid by Raceland Raw Sugar Corporation and the cost in excess of $1,000
shall be paid for by LESSOR. Major repairs are those which exceed $1,000
in any one instance. LESSEE shall provide all labor for routine repairs
and maintenance of the irrigation systems. The term "irrigation systems"
as used herein shall include the following: drainage pumps, power units,
underground pipes, underground electrical wire, water distribution
equipment, and all other structures, equipment and materials used to
provide drainage or irrigation water to the leased premises. In the event
of major repairs, LESSEE shall be responsible for securing such repairs
from reputable equipment dealers in the area. The LESSOR may require the
solicitation of written bids for major repairs which exceed $2,500 with
LESSEE reserving the right to approve payment for low bidders, only.
LESSOR does not agree to pay any costs toward making any housing unit
habitable. LESSOR may, in its sole discretion, pay for improvements or
repairs to barns, shop buildings, living quarters, and other improvements.
11) LESSEE shall have the right to construct such buildings and
improvements on the leased premises at LESSEE's sole expense, as may be
necessary or desirable in connection with LESSEE's agricultural operations,
subject to written approval of LESSOR.
12) LESSOR or its agents shall have the right to enter upon the
leased premises at all times for any and all purposes, except that there
shall be no interference with LESSEE's agricultural operations.
13) This lease shall be terminated prior to the expiration of the
term herein provided, at the option of LESSOR:
a) In the event voluntary bankruptcy proceedings be instituted
by LESSEE, or, in proceedings instituted by anyone else
LESSEE be adjudged bankrupt, or if LESSEE makes an
assignment for the benefit of creditors.
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b) In the event of substantial default upon the part of LESSEE
in keeping or performing any of the obligations of LESSEE
under this lease for thirty (30) days after notice in
writing from LESSOR to LESSEE specifying such default,
provided LESSEE has not commenced within said thirty (30)
day period to correct such default and thereafter diligently
proceeds to completion.
14) Should an option to terminate accrue to LESSOR prior to the
expiration of the term of this lease, LESSOR shall have a period of thirty
(30) days thereafter in which to exercise such option by written notice to
vacate the leased premises within five (5) days from date of delivery of
the notice to LESSEE.
15) The parties agree that LESSOR is also the owner of all of the
sugar cane crops growing on the leased premises known as Upper Ten
Plantation, as shown on exhibit "A" and colored yellow. At the expiration
or termination of this lease, in whole or in part, for any cause, LESSOR,
at its option, shall either purchase from LESSEE all cane remaining in
excess of lessors ownership on the leased premises at the then fair market
value, or allow LESSEE to farm off all cane in excess of lessors ownership
through its second year stubble growth.
16) In the event of an expropriation or of a sale under threat of
expropriation of any portion of the premises (cultivable land) or of any
servitude affecting the premises, the full amount paid for the land or
servitude taken as well as the full amount paid for any severance damages
to any remaining land, shall belong to LESSOR. With regard to amounts paid
for damages to growing crops, LESSOR shall be entitled to 18% thereof, and
LESSEE shall be entitled to 82% thereof. In the event of any such sale,
LESSOR shall not be responsible or liable to LESSEE for any damages that
LESSEE may sustain as a result thereof and LESSEE expressly waives and
renounces any and all rights to claim damage whatsoever from LESSOR.
LESSEE specifically reserves the right to claim reasonable damages from any
grantee, condemnor, or expropriator of the premises, whether said
acquisition is made by expropriation or under the threat of expropriation,
for the destruction of or damage to LESSEE's farming operations or to
damages arising from the destruction of crop rows, headlands, drainage,
land level or growing crops or to the value of this lease caused by the
operations of any such person or by the taking of any right-of-way.
17) As an additional consideration for this lease, without which
same would not be granted, LESSEE agrees to ship all sugar cane grown by
it, including all sugar cane grown on the premises leased herein and all
sugar cane grown by LESSEE, to the sugar mill owned and operated by
Raceland Raw Sugar Corp. in Raceland, Louisiana.
18) All notices herein provided for (except Paragraph 16) shall be
effective upon placing same in the United States Mail addressed to LESSEE
at:
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Xxxxxxx X. Xxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxxxxx Farms, Inc.
Box 000 Xxxxxxx 00
Xxxxx, Xxxxxxxxx 00000
and to LESSOR at
Sterling Sugars, Inc.
P. O. Xxx 000
Xxxxxxxx, Xxxxxxxxx 00000
unless such addresses be changed by notice in writing.
THUS DONE AND SIGNED in duplicate originals at Franklin, St. Xxxx Xxxxxx,
Louisiana, this 13th day of July, 1998 in the presence of the undersigned
witnesses.
WITNESSES: STERLING SUGARS, INC.
/s/ Xxxxxx Xxxxxxx BY:/s/ Xxxxx X. Xxxxxxxx
---------------------------- ---------------------------
/s/ Xxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxxx
---------------------------- President and CEO
/s/ Xxxxxx Xxxxxxx XXXXXXXX FARMS, INC.
----------------------------
/s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx, III
---------------------------- ----------------------------
Xxxxxxx X. Xxxxxxxx, III
President
/s/ Xxxxxx Xxxxxxx XXXXXXXX FARMS, INC.
----------------------------
/s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxxxx Xxxxxxxx
---------------------------- ---------------------------
Xxxxxx Xxxxxxxx
Secretary-Treasurer
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