STATE OF LOUISIANA
PARISH OF ST.XXXX
ARGICULTURAL LEASE
An agreement of lease made and entered into and effective as of January 1,
1999, by and between:
STERLING SUGARS, INC., A Delaware corporation domiciled in St. Xxxx
Xxxxxx, Louisiana, herein represented by and acting through Xxxxx X.
Xxxxxxxx, its President and Chief Executive Officer whose mailing address
is P. O. Xxx 000 Xxxxxxxx, Xxxxxxxxx 00000, hereinafter referred to as
"Lessor",
and
Xxxx Xxxxxxxx, an individual, domiciled in the Parish of St. Xxxx, State
of Louisiana, herein appearing through and being represented by Xxxx
Xxxxxxxx, and whose mailing address is P. O. Xxx 000, Xxxxxxxx, Xxxxxxxxx
00000, hereinafter referred to as "Lessee".
For the consideration and upon the terms and conditions hereinafter
expressed, Lessor does lease, let and hire unto and in favor of Lessee, the
properties in St. Xxxx Xxxxxx, Louisiana, known as a portion of Sterling
Plantation, described in Exhibit "A" attached hereto and made part hereof.
1. This lease is made for the purpose of Lessee's usage of the leased
premises for the production of sugar cane and related agricultural
endeavors. 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
property.
2. It is understood and agreed that material consideration for this
lease is Lessors confidence in the ability and proficiency of Lessee.
Further, this lease shall terminate upon the adjudication of Lessee
in bankruptcy, the appointment of a receiver for Lessee, or the
filing of a bankruptcy, receivership of respite petition by Lessee or
upon Lessee's supervision, failure or insolvency.
3. During the term of this lease, Lessee shall keep at least two-thirds
(2/3rds) of the cultivable land suitable to sugar cane, in cane, and
in the ratio of not less than 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 Federal or State Governmental agency, and unless
prevented by weather or other conditions beyond the control of Lessee.
4. (A) This lease is made for a period of FIVE (5) years hereafter called
the "primary term", commencing on January 1, 1999 and ending on
December 31, 2004.
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(B) At the end of the primary term hereof, Lessee or Lessor may
terminate the lease by written notice, delivered no less than
ninety (90) days prior to the expiration date of the primary term
or any subsequent term. In the absence of notification for
termination, the lease will automatically be extended under the
same terms and conditions and for the same consideration as during
the primary term, for an additional five year term.
5. (A) 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 rental by
Lessee of:
1) In any year during which the average yield of tons of cane per
acre is less than twenty five (25), except such years as the
reduction in tonnage is caused by freeze or hurricane, the rental
shall be one fifth (1/5th) of all sugar cane harvested and
delivered to xxxxx together with all subsidy, incentive or benefit
payments (excluding Agricultural Conservation Payments) accruing
to the said one fifth (1/5th) share of Lessor from the United
States Government or any of its departments or agencies.
-OR-
2) In any year during which the average yield of tons of cane per
acre is more than or equal to twenty five (25), the rental shall
be one sixth (1/6th) of all sugar cane harvested and delivered to
xxxxx together with all subsidy, incentive or benefit payments
(excluding Agricultural Conservation Payments) accruing to the
said one sixth (1/6th) share of Lessor from the United States
Government or any of its departments or agencies.
(A) As a further consideration of this lease all harvested cane
shall be delivered to Sterling Sugars Inc. for grinding, except
seed cane used in Lessee's operation under this lease.
(B) In the event that crops other than sugar cane are grown on the
leased premises, Lessor shall receive one fifth (1/5th) of any
value received for crops harvested from the property herein leased
together with all subsidy, incentive or benefit payments accruing
to the said one fifth (1/5th) share of Lessors from the United
States Government or any of its departments or agencies.
6. As an additional requirement of this lease, Lessee is required to
submit to Lessor, on or before October 31 of each year, a map showing
all crops by age and variety, all seed used and all land planted. Also
on or before January 31 of each year Lessee is required to submit to
Lessor a written report of acreage harvested, tons of cane produced
and pounds of sugar produced (TRS) on the properties covered by this
lease.
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7. LESSOR AND LESSEE mutually agree that at the inception of this lease,
the cultivable land acreage's for that portion of Sterling Plantation
are broken out as follows:
Fallow Land 9.4 Acres
Plant Sugarcane 78.7 Acres
First Year Stubble Sugarcane 0 Acres
Second Year Stubble Sugarcane 70.6 Acres
Third Year Stubble Sugarcane 69.3 Acres
Total 228.0 Acres
The parties agree that LESSOR is the sole owner of all of the
sugarcane crops growing on the leased premises known as Sterling
Plantation, shown on the 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.
LESSOR will be compensated for, by LESSEE, the full market value for
seed cane at the time of termination, for any deficiencies in return
of seed acres. In the event LESSOR and LESSEE are unable to agree on
the fair market value of seed cane, then both LESSEE and LESSOR will
accept the value as determined by an independent third party as agreed
to by LESSOR and LESSEE.
8. 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, mineral leases,
servitudes, and rights of way upon the leased property, providing that
the lessee or lessees in such oil, gas or minerals lease, 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 or other
minerals, and to do all things incidental to the exercise of its or
their rights under such lease or leases. Lessor herein shall not be
responsible or liable to Lessee for any damage that may result to
Lessor 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 servitude 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; however shall have the right to assert against
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such mineral or servitude lessee or lessees or third parties, a claim
for damages to the crops or leased premises to the extent of Lessee's
interest therein. Lessor further agrees that in the event it grants
any oil, gas or mineral leases, servitudes or rights of way on said
property, that the said lease or leases will contain a provision that
the mineral or servitude lessee will pay for all damages or injury to
growing crops and that the Lessee herein shall be entitled to the
benefit of such provision, to the extent of Lessee's loss. Lessee
shall to the extent possible join with Lessor in the negotiations
relative to any loss so incurred.
9. Lessee shall fully pay, indemnify and hold harmless Lessor from,
against and in connection with any and all loss, damage, liability and
expense of every nature and kind, including court cost and attorney's
fees, however caused or occurring, including injuries or death to
persons and damage to property, either belonging to Lessor or others,
either directly or indirectly arising from and out of any activities
hereunder. Lessee shall maintain workmen's compensation insurance in
the statutory amount and liability insurance coverage in the total
aggregate amount of One Million Dollars ($1,000,000.00) per
occurrence, on which policy Lessor shall be named as an additional
insured. A certificate of insurance shall be furnished Lessor and
provision shall be made that the policy or policies shall not be
canceled without notice to Lessor.
10. 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 approval of Lessor. All buildings and other
improvements constructed on the leased premises during the term of
this lease shall become the property of Lessor, if Lessor so desires
and is willing to purchase same at fair appraised market value. In the
event Lessor is unwilling to purchase buildings or other improvements
constructed by Lessee upon termination of this lease, then Lessee
shall remove same at Lessee's cost and expense, within Ninety (90)
days of termination of this lease, after which same shall become the
property of Lessor.
11. Lessor or its agents shall have the right to enter upon the leased
premises at all times for any and all purposes, except that Lessee's
agricultural operations shall not be interfered with.
12. This lease shall be terminated prior to the expiration of the term
herein provided, at the option of Lessor in the event of 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 action to correct such
default and thereafter diligently proceeded to actually correct such
default.
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13. In the event of an expropriation or of a sale under threat of
expropriation of any portion of the premises (cultivable land) or in
the event of any mineral lease or servitude affecting the premises,
the full amount paid for the land or servitude taken as well as the
full amount paid for severance damages to any remaining land, shall
belong to Lessor. With regard to all other amounts paid for crop
damages, Lessor shall be entitled to one sixth (1/6th) thereof, with
Lessee's claim being against the expropriating authority or lease or
servitude holder for five sixth (5/6ths) of the value of any crop
damaged or destroyed. Lessee reserves and shall have the right to
claim damages from the purchaser of such acreage, whether said
purchase is made by expropriation or under threat of expropriation for
any damages directly related to Lessee's agricultural operations on
the premise, sustained by it through or as a result of such taking or
sale. In the event of any 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 claims damages whatsoever from Lessor. For the purpose of this
paragraph "crop value" is hereby defined as the total value of the
crop including the mill share as well as the xxxxxx'x share.
14. Lessee acknowledges that he will use the aforedescribed property for
agricultural purposes and for this reason, Lessee acknowledges that
there may be on the leased premises what is determined to be by the
Environmental Protection Agency or any other state or governmental
agency regulated hazardous and/or toxic substances. Lessee shall be
responsible for all litigation or claims arising out of its use of
said substances on the leased premises and that Lessee agrees to
indemnify and hold Lessor harmless from any and all losses, costs,
liability and expenses including without limitation, reasonable
attorney's fees incurred in connection with litigation arising out of
its use of the leased premises.
15. It is distinctly agreed and understood that during the period of this
lease, Lessee shall at all times be a member in good standing of the
American Sugar League.
16. All notices herein provided for shall be effective upon placing same
in the mail, addressed to Lessee or Lessor at the above mentioned
addresses unless such addresses be changed in writing.
THUS DONE AND SIGNED at Sterling Sugars Inc., St. Xxxx Xxxxxx, Louisiana,
this 30 day of July, 1999, in the presence of the undersigned competent
witnesses.
WITNESS:
STERLING SUGARS, INC.
/s/ Xxxxxxx Xxxxxxxx Xxxxx X. Xxxxxxxx, President
--------------------
/s/ Xxxxx X. Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxxx ----------------------
---------------------
Xxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
--------------------- /s/ Xxxx Xxxxxxxx
-----------------
IV-11 -36-
