STATE OF LOUISIANA
PARISH OF ST. XXXX
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 Xxxxxxxx, President and CEO, duly
authorized, whose mailing address is P. O. Xxx 000, Xxxxxxxx, Xxxxxxxxx
00000, hereinafter called LESSOR, and
Xxxxxx Bros. Farms, Inc. a Louisiana Corporation domiciled and doing
business in St. Xxxx Xxxxxx, Louisiana, whose mailing address is 0000 Xxxxx
Xxxx Xxxx , Xxxxxxxx, Xxxxxxxxx 00000 represented herein by Xxxxxxx X.
Xxxxxx, duly authorized, 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 St. Xxxx Xxxxxx,
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 man, 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.
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.
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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 one-fifth (1/5th) 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 one-fifth (1/5th) 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.
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
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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 Insuranc
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.
XX-00 -00-
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
LESSEE 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:
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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.
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 LESSEE is also the owner of all of the
sugar cane crop growing on the leased premises known as Oaklawn
West 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 on the leased premises
at the then fair market value, or allow LESSEE to farm off all
cane 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 one-fifth (1/5th) thereof,
and LESSEE shall be entitled to four-fifths (4/5ths) 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 a further consideration, without which this lease would not
have been granted, LESSEE agrees to deliver unto LESSOR's raw
sugar factory at Franklin, Louisiana, for processing into raw
sugar, an amount of sugar cane equal in tonnage to the amount of
all sugar cane grown on the leased premises and not used for
seed, which sugar cane shall be processed by LESSOR at LESSORS'
raw sugar factory on the same basis and for the same
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consideration as is customary for such transactions in the
Louisiana raw sugar industry.
18) All notices herein provided for (except Paragraph 16) shall be
effective upon placing same in the United States Mail addressed
to LESSEE at:
Xxxxxxx X. Xxxxxx
Xxxxxx Bros. Farms, Inc.
0000 Xxx. 00
Xxxxxxxx, XX 00000
and to LESSOR at
Sterling Sugars, Inc.
P. O. Xxx 000
Xxxxxxxx, XX 00000
unless such addresses be changed by notice in writing.
THUS DONE AND SIGNED in duplicate originals at Franklin, St. Xxxx Xxxxxx,
Louisiana, this 4th day of February, 1998 in the presence of the
undersigned witnesses.
WITNESSES: STERLING SUGARS, INC.
/s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxx
------------------------- ---------------------
/s/ Xxxx X. May Xxxxx Xxxxxxxx
------------------------- President and Chief
/s/ Xxxxxxx X. Xxxxxx Executive Officer
-------------------------
/s/ Xxxxxxx X. Xxxxxx Xxxxxx Bros. Farms, Inc.
-------------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Xxxxxxx X. Xxxxxx
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