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OPTION AGREEMENT
REAL ESTATE
This Option Agreement, dated May 6, 1997, is entered into
by and between Xxxx Xxxxxxx Mutual Life Insurance Company (the
"Owner") and X.X. Xxxxxxxx, Inc. ("X.X. Xxxxxxxx") with respect to the
following facts:
The Owner and X.X. Xxxxxxxx are parties to a Real Estate
Purchase Contract, dated January 24, 1997 (the "Real
Estate Contract"), pursuant to which X.X. Xxxxxxxx will
sell certain real estate to the Owner or its agent. X.X.
Xxxxxxxx is also a party to an Agricultural Sublease, dated
January 24, 1997, pursuant to which X.X. Xxxxxxxx will
then lease and operate such real estate (including all
equipment, improvements and fixtures located on that
real estate) from Farmland Management Services, who
is in turn a lessee of the Owner. A legal description of
such real estate is set forth as Exhibit A to this
Agreement (the "Option Property"). One of the terms of
the Real Estate Contract and the Agricultural Sublease is
that the Owner agrees to grant X.X. Xxxxxxxx an option
to repurchase the Option Property from the Owner in
accordance with the terms of this Agreement.
IN VIEW OF THE FOREGOING FACTS, and the mutual covenants
contained herein, the Owner and X.X. Xxxxxxxx hereby agree as follows:
1. Grant of Option. The Owner hereby grants to X.X. Xxxxxxxx an
option to purchase the Option Property, together with all easements and
other rights appurtenant thereto and any improvements, fixtures or
personal property installed, constructed or situated thereon (the
"Option"). The grant of the Option is in consideration of the
consummation of the transactions described in the Real Estate Purchase
Contract and the Agricultural Sublease and no separate cash
consideration shall be required to maintain this option as irrevocable
until the Option expires or is terminated as provided below.
2. Purchase Price. The purchase price for the Option Property shall
be $8,361,669, subject to adjustment as provided in this Agreement (the
"Purchase Price"). The Purchase Price shall be payable in cash or such
other form as the parties mutually agree in writing. The Purchase Price
will be paid at such time and in such manner as is specified in the
Option Purchase Agreement, attached hereto as Exhibit B.
3. Option Term. X.X. Xxxxxxxx may exercise the Option beginning on
January 1, 2012 and at any time thereafter until June 30, 2012 (the
"Option Period"), after which date the Option will expire. For the
purposes of this Agreement, the Option will be deemed "exercised"
upon the delivery of the Exercise Notice as defined and described in
Section 5 of this Agreement.
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4. Termination of Option. Notwithstanding the period specified in
Section 3, the Option will terminate immediately upon the occurrence
of any of the following events, regardless of whether the Option Period
has expired.
a. If the Agricultural Sublease, as it may be amended from
time to time, or any successor agreement concerning the lease and
operation of the Option Property between X.X. Xxxxxxxx and the lessor
of the Option Property at that time, has been terminated by the lessor
due to a breach of such agreement by X.X. Xxxxxxxx, which breach has
not been cured by X.X. Xxxxxxxx within the time specified in the
Agricultural Sublease;
b. If X.X. Xxxxxxxx commits a material breach of the Option
Purchase Agreement, which breach has not been cured within the
period set forth in the Option Purchase Agreement; or
c. Upon the sale, assignment or transfer of this Option by X.X.
Xxxxxxxx in violation of this Agreement.
5. Manner of Exercise. X.X. Xxxxxxxx may exercise the Option by
delivering to the Owner a written notice of its intention to exercise the
Option (the "Exercise Notice"). The Purchase Date shall be December
31, 2012 or, if that day is a weekend day or legal holiday, on the
following business day thereafter. Together with the Exercise Notice,
X.X. Xxxxxxxx shall deliver to the Owner an executed Option Purchase
Agreement with the blanks in that document completed. No later than
10 days after delivery of the Exercise Notice is made to the Owner, the
Owner shall execute and return the Option Purchase Agreement. The
purchase and sale of the Option Property shall thereafter take place in
accordance with the Option Purchase Agreement.
6. No Default. X.X. Xxxxxxxx may only exercise the Option and
purchase the Option Property if it is not in default of any obligation
under the Agricultural Sublease as of the time that the Option is
exercised or at the time at which X.X. Xxxxxxxx is to close the purchase
of the Option Property.
7. No Liens or Encumbrances. At the Close of Escrow, the Owner
shall convey the Option Property free and clear of all liens and
encumbrances with the exception of: (i) liens and encumbrances set
forth in the policy of title insurance issued to the Owner at the time the
Property was conveyed to the Owner or the Owner's agent by X.X.
Xxxxxxxx; (ii) liens and encumbrances resulting from actions or omissions
of X.X. Xxxxxxxx in the operation of the Option Property; (iii) liens and
encumbrances resulting from the failure of X.X. Xxxxxxxx to pay
property taxes in accordance with the Agricultural Sublease or from
other violations of the Agricultural Sublease by X.X. Xxxxxxxx; (iv)
easements, covenants and encumbrances of a non-monetary nature
created in good faith by the Owner which do not materially and
adversely impair X.X. Xxxxxxxx'x intended use of the Option Property;
and (v) such liens and encumbrances consented to by X.X. Xxxxxxxx in
writing.
8. Assignment by X.X. Xxxxxxxx. X.X. Xxxxxxxx may not sell, assign or
otherwise transfer the Option without the prior written consent of the
Owner, which consent may be withheld in the Owner's sole discretion.
X.X. Xxxxxxxx may not hypothecate, pledge or encumber the Option
without the prior
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written consent of the Owner, which consent shall not
be unreasonably withheld. Nothing in this Section 8 shall prohibit any
transfer of rights by operation of law or in connection with the sale by
X.X. Xxxxxxxx of substantially all of its assets, provided that the
transferee, by operation of law or by express agreement, assumes all of
the liabilities and obligations of X.X. Xxxxxxxx under this Agreement and
the Agricultural Sublease.
9. Assignment by the Owner. The Owner may sell, transfer or assign
its rights under this Agreement in connection with the sale or other
transfer of its ownership interest in the Option Property. The parties
understand that the covenants, obligations and liabilities of the Owner
under this Agreement shall attach to and run with the Option Property
and shall be binding upon any purchaser or transferee of the Option
Property from the Owner.
10. Purchase of Less than All Property. The Option granted to X.X.
Xxxxxxxx under this Agreement shall apply to the purchase of the entire
Option Property only and nothing in this Agreement shall provide X.X.
Xxxxxxxx with the right to purchase only a portion of the Option Property
without the prior written consent of the Owner. The foregoing sentence
notwithstanding, in the event that a portion of the Option Property is
taken due to eminent domain, X.X. Xxxxxxxx may purchase the
remaining portion of the Option Property. If X.X. Xxxxxxxx purchases
less than all of the Option Property, the Purchase Price shall be
proportionately reduced to reflect the reduction in the size of the Option
Property being purchased.
11. Exercise at Discretion of X.X. Xxxxxxxx. X.X. Xxxxxxxx shall have
the sole and exclusive right to determine whether to exercise the
Option. Nothing in this Agreement shall limit in any way the right of
X.X. Xxxxxxxx to make the decision as to whether it will or will not
exercise the Option in its sole discretion. However, if X.X. Xxxxxxxx
does exercise the Option, X.X. Xxxxxxxx will be legally obligated to
purchase the Property in accordance with and subject to the provisions
of this Agreement and the Option Purchase Agreement.
12. Recordation of Memorandum of Agreement. Upon the execution
of this Agreement, the parties shall execute, acknowledge and cause to
be recorded in the Official Records of Yolo County a Memorandum of
Option, substantially in the form of Exhibit C to this Agreement,
sufficient to give notice of the Option, the term of the Option and the
rights of X.X. Xxxxxxxx hereunder. If X.X. Xxxxxxxx fails to exercise the
Option or the Option terminates prior to its exercise, X.X. Xxxxxxxx shall
execute, acknowledge and deliver to the Owner, no later than three
days after the termination of the Option, a quitclaim deed or other
reasonable documentation in recordable form to verify the termination
or expiration of the Option.
13. Notices. All notices under this Agreement shall be in writing and
delivered personally, by nationally recognized overnight courier service
(delivery charges paid by sender) or by first class mail, postage
prepaid, to the following addresses:
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If to the Owner:
Xxxxxxx Agricultural Invest.
Group
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Managing Director
With a copy to:
Farmland Management Services
000 Xxxxx Xxxxxx, Xxxxx X
Xxxxxxx, XX 00000
Attention: President
If to X.X. Xxxxxxxx:
X.X. Xxxxxxxx, Inc.
00000 Xxxxxx Xxxx 00X
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
For the purposes of this Agreement, notices will be deemed
delivered upon receipt if delivered personally, on the next business day
following deposit with an overnight courier if delivered by overnight
courier or on the third business day following deposit with the U.S.
Postal Service if sent via first class mail.
14. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
excluding that state's conflicts of laws principles. This Agreement,
together with the Sublease, the Real Estate Purchase Contract and all
attachments and exhibits hereto and thereto, constitute the entire
agreement between the parties with respect to the subject matter hereof
and supersede all prior or contemporaneous agreements, whether oral
or written, of the parties pertaining to that subject matter. This
Agreement may not be amended except in the form of a writing signed
by both parties to this Agreement. No right of either party under this
Agreement shall be waived unless that waiver is in a written document
signed by the party who has waived that right. No waiver of any right
in any specific instance will be deemed a waiver of that right in any
subsequent instance or any other right. This Agreement may be
executed in one or more counterparts, which together shall constitute
one original.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
XXXX XXXXXXX MUTUAL X.X. Xxxxxxxx, Inc.
LIFE INSURANCE
COMPANY
By: Xxxxxxx Natural Resource By: //s// Xxxxxx X. Xxxxx
Group, Inc. Title: CFO
By: /S/ Xxxxxxx X. Xxxxxx
Title: Vice President
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
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 XXX XXXXXXXXXX
XX XXXXXX XXXX 00-X; THENCE ALONG THE XXXXX XXXX XX XXXX X.X. 0/0, X.
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 XXX XXXXXXXXXX
XX XXXX XXXXXX XXXX 00-X; 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.:
00-000-00; 00-000-00; 00-000-00
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EXHIBIT C
When Recorded Mail to:
Xxxxxxxxx X. Xxxxxx,
Attorney at Law
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Reserved for
Recorder's Use
MEMORANDUM OF OPTION AGREEMENT
This Memorandum of Option Agreement is executed in
connection and concurrently with a certain Real Estate Purchase Option
Agreement, dated January 24, 1997, (the "Option Agreement") between
Xxxx Xxxxxxx Mutual Life Insurance Company (the "Owner") and X.X.
Xxxxxxxx, Inc. ("X.X. Xxxxxxxx") relating to certain real property located
in the County of Yolo, State of California, a legal description of which
is set forth in Exhibit A to this Memorandum (the "Property").
18. Option. The Owner hereby grants to X.X. Xxxxxxxx the right to
purchase all right, title and interest in and to the Property, together with
all easements and other rights appurtenant thereto and any
improvements, fixtures or personal property installed, constructed or
situated thereon, free from any encumbrances or rights of others except
for those specifically provided for under the Option Agreement (the
"Option"). The grant of the Option is in consideration for the sale of
the Property by X.X. Xxxxxxxx to the Owner or the Owner's nominee
pursuant to the terms of a Real Estate Purchase Contract, dated January
24, 1997, and an Agricultural Sublease, dated January 24, 1997,
pertaining to the Property and no additional consideration shall be
necessary to make the Option irrevocable.
19. Term of Option. X.X. Xxxxxxxx may exercise the Option beginning
on January 1, 2012 and at any time thereafter until June 30, 2012, after
which date the Option will expire. If X.X. Xxxxxxxx exercises the
Option, the purchase of the Property shall take place on December 31,
2012 or, if that day is a weekend day or holiday, on the next business
day thereafter.
20. Price, Manner of Exercise. The manner in which the Option may
be exercised, the purchase price for the Property and the other terms
and conditions governing the Option are set forth in the Option
Agreement.
Date: May 6, 1997 XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By: Xxxxxxx Natural Resource Group, Inc.
By: //s// Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Title: Vice President
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ACKNOWLEDGMENT
State of California )
County of Suffolk )
)
On May 6, 1997, before
me, Xxxxxxxxx X. Xxxxxx, personally appeared
Xxxxxxx X. Xxxxxx, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his
signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal,
Signature: //s// Xxxxxxxxx X. Xxxxxx (Seal)
Xxxxxxxxx X. Xxxxxx
Notary Public
My Comm. Expires Aug. 14, 2003
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
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 XXX XXXXXXXXXX
XX XXXXXX XXXX 00-X; THENCE ALONG THE XXXXX XXXX XX XXXX X.X. 0/0, X.
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 XXX XXXXXXXXXX
XX XXXX XXXXXX XXXX 00-X; 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.:
00-000-00; 00-000-00; 00-000-00
