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2013 Lease - Mission Ranches Company, LLC/Obata (APN 841-30-003)AGRICULTURAL LEASE This Lease, dated as of December 12. 2012, is made by and between the South County Regional Wastewater Authority, a California Joint Exercise of Powers Authority organized and created pursuant to the laws of the State of California ( "Landlord ") and Mission Ranches Company, LLC ( "Tenant ") and is made with reference to the following facts: A. Landlord is the owner of certain real property located in Santa Clara County, California, identified as Santa Clara County Assessor's Parcel No. 841 -30 -003 which real property is depicted on Exhibit `'A" attached hereto (the "Premises "). The Premises contains approximately One Hundred Four and Thirty -Nine One - Hundredths (104.39) acres (approximately Sixty (60) farmable acres) of land. B. Tenant desires to lease from Landlord, the Premises, on the terms and conditions set forth in this Lease. THEREFORE, the parties mutually agree and covenant as follows: 1. Term. Subject to this Section below, the term of this Lease shall commence on — January 1, 2013 (the "Commencement Date "), and shall terminate on December 31, 2015 (the "Expiration Date "), subject to sooner termination as set forth in this Lease. 2. Rent. Tenant shall pay to Landlord for the term stated in Section 1 above, rent in the amount of Eighteen Thousand Dollars ($18,000.00) for the term stated, payable in two installments of $9,000.00 each per year. The first installment of Nine Thousand Dollars ($9,000.00) is due on or before January 1 of each year of the lease. The second installment of Nine Thousand Dollars ($9,000.00) is due on or before July 31 of each year of the lease. Rent shall be paid to Landlord in the form of check or cash, in advance, without deduction, offset, prior notice or demand, at such place as may be designated by Landlord from time to time. 3. Notices. Except as otherwise expressly provided by law, any and all notices or other communications required or permitted by this Lease or by law to be served on or given to either party by the other party shall be in writing and shall be deemed drily served and given when personally delivered to the party to whom they are directed, or in lieu of such personal service when deposited in the United States mail, first -class postage prepaid. To Landlord: South County Regional Wastewater Authority c/o City of Gilroy, Purchasing Coordinator 7351 Rosanna Street Gilroy, California 95020 To Tenant: Mission Ranches Company, LLC, Attn: Sam McKinsey 100 Broadway St. King City, CA 93930 -1- Either party may change its address for the purpose of this paragraph by giving written notice of the change to the other party in the manner provided by this Section. 4. Use. Tenant shall use the Premises only for the planting, growing and harvesting of crops, and for no other purpose. All operations on the Premises shall at all times be conducted in compliance with all applicable statutes, ordinances, laws, rules and regulations, and shall be carried on according to the best agricultural practices in the vicinity, including but not limited to maintenance of the surface of the land to properly maintain the Premises for irrigation and diligent efforts to remove all noxious weeds and rodents and other pests on the Premises. Tenant shall not use or permit the use of the Premises for any unlawful purpose, shall not commit waste thereon, and shall not maintain, commit or permit the maintenance or commission of any nuisance thereon. Tenant shall not apply pesticides, insecticides, fungicides, herbicides or other chemical treatments that will have a residual effect beyond the term of this Lease, except with the prior written consent of Landlord. 5. Maintenance and Repair. Tenant agrees to keep the Premises and all improvements thereon, including but not limited any fences, ditches, wells, pumps, pipes and roadways (to the extent any such improvements exist), on the Premises in good condition, reasonable wear and tear and damage by elements excepted. All repairs necessary to the Premises and said improvements shall be made at Tenant's own expense. If replacement of any wells, pumps, pipelines or other improvements becomes necessary during the term of the Lease, replacement costs will be at Tenant's expense. In no event shall Landlord have any obligation to repair, maintain or replace the Premises or any improvements located thereon. All utility charges, including but not limited to electrical energy and standby charges for the operation of any pumps serving the Premises, shall be paid by Tenant. The procurement of water necessary for the irrigation of the crops to be grown on the Premises shall be Tenant's responsibility. Such water shall be used only on the Premises and in the performance of Tenant's obligations under the Lease. Tenant shall not export this water to other lands without obtaining Landlord's written consent. Landlord assumes no responsibility to Tenant for any utility or water shortage and assumes no responsibility for and does not warrant the quality or quantity of any water supplied to the Premises. Tenant shall not make or permit to be made any additions or alterations of the Premises without first obtaining Landlord's written consent. Additions to or alterations of the Premises, except trade fixtures, shall become at once a part of the realty and belong to the Landlord, except that Landlord may require that Tenant remove all such additions and alterations made by Tenant upon expiration or sooner termination of this Lease, which obligation shall survive expiration or termination of this Lease. Tenant shall keep the Premises free and clear of any and all liens arising out of any work performed or materials furnished at the request of Tenant, or obligations incurred by Tenant. 6. Subletting and Assignment. Tenant agrees not to assign or transfer this Lease or sublet any portion of said Premises, or allow any other person to use the Premises, either voluntarily or involuntarily, without the consent in writing of Landlord, which consent shall not be unreasonably withheld. 7. Default and Termination. It is further agreed between the parties hereto that all covenants and agreements on the part of Tenant herein mentioned and contained are express conditions and that time is of the essence of this Agreement. Should Tenant fail or default in the faithful keeping or performance of any of said conditions during the term of this Lease, or fail to promptly pay the rental when due, or abandon, vacate or surrender said Premises, Landlord shall be entitled to pursue all remedies available to Landlord at law or in equity. Without limiting the remedies available to Landlord at law or in equity, Landlord shall have the option to terminate this Lease, or to elect not to terminate Tenant's right to possession, but continue the Lease in effect and collect rent as it becomes due pursuant to the provisions of section 1951.4 of the California Civil Code. In the event, however, that Landlord elects to terminate the Lease, Landlord may recover those damages set forth in section 1951.2 of the California Civil Code, specifically including, without limitation, the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of rental loss that Tenant proves could be reasonably avoided, as set forth in subparagraph (3) of section 1951.2(a) of the California Civil Code. Tenant agrees to surrender the Premises at the expiration of this Lease, or sooner termination thereof, in good condition and repair, reasonable wear and tear and damage by the elements excepted. Should Tenant holdover after the term with Landlord's consent, such tenancy shall be from month to month only, but otherwise on the same terms and conditions set forth in this Lease. 8. Indemnification and Insurance. Tenant shall defend through counsel approved by Landlord, indemnify and hold harmless Landlord, its officers, representatives, agents and employees against any and all suits, damages, costs, fees, claims, demands, causes of action, losses, liabilities and expenses, including without limitation attorneys' fees, due to any cause, including without limitation bodily injury and property damage, which arises out of or is attributable to the use or occupancy of the Premises or any part thereof, the acts or omissions of Tenant or Tenant's agents, employees, contractors or invitees, Tenant's breach of this Lease, or the use by Tenant of any Hazardous Materials on or about the Premises; except to the extent caused by the willful misconduct or sole negligence of Landlord. Hazardous Materials means any chemical, substance or material which has been or is hereafter determined by any federal, state or local governmental authority to be capable of posing risk of injury to health or safety, including without limitation, pesticides, insecticides, fungicides, herbicides and petroleum. Tenant shall obtain and maintain throughout the Term a policy of Commercial General Liability Insurance in the minimum amount of One Million Dollars ($ 1,000,000), combined single limit for bodily injury and property damage. Such insurance shall specifically insure Tenant's performance of the indemnity, defense and hold harmless agreement contained in this paragraph above, although Tenant's obligations pursuant to this paragraph shall not be limited by the amount of insurance. Such insurance shall be in a company, on forms and with coverage and loss payable clauses satisfactory to Landlord, and a copy of such policies, certified by the insurer to be a true and correct copy of the insurance policy, shall be delivered to Landlord upon execution of this Amendment by Tenant, and a new certified policy shall be delivered at least thirty (30) days before the expiration of the old policy_ Such policy shall not be cancelable except after thirty (30) days' prior notice to Landlord, shall name Landlord as an additional insured, shall be primary insurance as respects Landlord and shall contain a cross- -3- liability endorsement. Such policy shall further provide coverage on an occurrence basis and not on a claim made basis. Tenant shall also obtain and maintain throughout the term Workers' Compensation Insurance as required by law. Tenant shall comply with all requirements of governmental authorities with regard to the Premises and shall not do anything on or about the Premises which results in an increase in any premium on insurance or the cancellation of insurance carried by Landlord, if any. 9. Condemnation. If a part of the Premises is condemned or acquired for a public use and the remaining part is susceptible of occupation by Tenant, this Lease shall terminate as to the part taken on the date title vests in the acquiring agency. The rent payable under this Lease shall be apportioned in the ratio that the area of the cultivable portion of the Premises not taken bears to the cultivable area of the Premises before such taking. If all or part of the Premises are condemned or acquired for public use during the Tenn of this Lease, Tenant shall have no right whatsoever to any compensation for the full or partial termination of this Lease or taking of the land or improvements, either under the terms of this Lease or under the Eminent Domain Law of California, except that Tenant shall be entitled to recover from the condemning authority the value of any crop which cannot be harvested on the portion so taken. If the entire or a part of the leased Premises is taken or condemned so that there does not remain a portion capable of occupation by Tenant, this Lease shall terminate on the date title vests in the condemnor. 10. "As Is "; Flooding and Overflow. Tenant accepts the Premises, as well as the improvements thereon and facilities appurtenant thereto, in their present condition, "As Is ", without representation or warranty of any kind. Tenant agrees with, and represents to Landlord, that the Premises have been inspected by it and that Tenant has been assured by means independent of Landlord or Landlord's agents of the truth of all facts material to this Lease, and that the Premises are being leased by Tenant as a result of its inspection and investigation and not as a result of any representations made by Landlord or Landlord's agents. Tenant acknowledges that the Premises is subject to occasional flooding and overflow of waters, and may be subject to various easements granted to the Santa Clara Valley Water District. Tenant accepts the Premises subject to all such conditions. In no event shall Landlord have any liability to Tenant as a result of any flooding or overflow of waters onto any portion of the Premises or the exercise by the Santa Clara Valley Water District of any easement rights it has to any portion of the Premises. In no case shall such circumstances or exercise of rights affect Tenant's obligations under this Lease. 11. Easements and Other Interests. This lease is subject to (a) all existing easements, servitude, licenses and rights -of -way for canals, ditches, levees, roads and highways, telegraph, telephone and electric power lines, railroads, pipelines and other purposes, whether recorded or not; and (b) the rights of other tenants under any existing or future oil, gas and mineral lease or leases from Landlord affecting the entire or any portion of the Premises, whether recorded or not. -4- 12. Taxes and Assessments. Tenant shall pay, prior to delinquency, all personal property taxes or assessments levied upon Tenant's personal property situated in or about the Premises during the term of this Lease. In connection with California Revenue and Taxation Code section 107.6, Landlord advises Tenant and Tenant acknowledges that by entering into this Lease, a possessory interest subject to taxes may be created. Tenant shall pay any such possessory interest taxes which may be levied in connection with this Lease prior to delinquency. At Landlord's request, Tenant shall execute a memorandum of this Lease in a form requested by Landlord for recordation in the Official Records of Santa Clara County, California. If such memorandum is recorded, upon lease termination Tenant shall execute and deliver to Landlord a quitclaim deed, whereby Tenant quit claims all of its right title and interest in and to the Premises to Landlord. On demand, Tenant shall provide to Landlord satisfactory evidence of payment of taxes. 13. Entry by Landlord. Tenant shall permit Landlord or Landlord's agents, representatives, or employees to enter the Premises at all reasonable times to determine whether Tenant is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect Landlord's interest in the Premises. In addition, Landlord shall have the right to conduct tests and surveys on the Premises, including without limitation installation of stakes and monuments in connection with Landlord's survey activities, and Tenant agrees not to disturb any stakes or monuments placed on the Premises by Landlord. Tenant shall pay, on demand, any costs incurred by Landlord as a result of the disturbance of any stakes or monuments on the Premises during the term of this Lease, including without limitation any replacement costs. 14. Attornevs' Fees. Should any litigation be commenced between the parties to this Lease for the enforcement of any rights of either party against the other pursuant to the provisions of this Lease, to interpret the Lease, or by reason of any alleged breach of any of the provisions of this Agreement, the party prevailing in the litigation shall be entitled to receive from the unsuccessful party all costs incurred in connection with the litigation, including without limitation reasonable attorneys' fees incurred by the prevailing party. 15. Effect on Heirs and Successors. Subject to Section 7 above, this Lease and each of its provisions shall be binding on and shall insure to the benefit of the respective heirs, devisees, legatees, executors, administrators, trustees, successors and assigns of the parties to this Lease. 16. Time of Essence. Time is of the essence of this Lease and of each provision contained within, and each provision is made and declared to be a material, necessary and essential part of this Lease. 17. Amendments to Lease. This Lease may be amended only by a writing signed by the party against whom or against whose successors and assigns enforcement of the change is sought. 18. Effect of Partial Invaliditv. If any term or provision of this Lease or any application thereof shall be held invalid or unenforceable, the remainder of this Lease and any -5- application of the terms and provisions shall not be affected thereby, but shall remain valid and enforceable pursuant to this Lease or California law. 19. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of California. 20. Waiver. The waiver by Landlord of any breach by Tenant of any of the provisions of this Lease shall not constitute a continuing waiver or a waiver of any subsequent breach by Tenant either of the same or of another provision of this Lease. Dated: t I vn I (3 LANDLORD: SOUTH COUNTY REGIONAL WASTEWATER A HORI Y, a California Joint Exercise of P ers Au ority organized and created pursuant to the la o the State of California i Thomas J. Title: Citv Administrator TENANT: Dated: 1 1 `� j Mission Ranches Company, .LL By: _ Sam McKinse Title: President APPROVE FORM: By: Legal Counsel 0 EXHIBIT `'A" [MAP SHOWING PREMISES TO BE ATTACHED] -7- EXEEBTF "A" UA f' Q ft•41 S n t i r �- C K n Co 7 00 c { rr x 3. =w ' 0 4 s UA { to 3' •If SL LLI ZO r f ar t•' �� ro ti � u 3 c 5f *- ^._.•laser_AOwY ... . "" 'r�.►..�•ra, taro •.anl 1 :Gi . `:'dx. =: s Z a a ar« ly tM �: I ly {�. Z (M• ( wb{ Ix `1 '• �' C.il i.i.•Nia- i— wi.lrr�rK .:i� era.s%•� 1=4L-4rt.—Tz�irt.)�y.• »' Mn�ia II]r �rKi» rs .st zcr.l ►l `� ul s �' �3 fC " �'. '— 'L`1ii'eC:.sit "F7'n�lH� 1 Y _ i •,- 18 _ I � f v •• (Y : i � N '' tt I.r I I� i +i _'• Zen +R di._: rvja r.. °".ytA� .v..rc.r f 1. h! •� «•ti iwr N � I �'�' wt «�:Ikxm�i1 �r t 1' i R� CERTIFICATE OF LIABILITY INSURANCE COVERAGES CERTIFICATE Nt)MRFR- ral= Vlclnu A111u QCO. THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD DATE DOCUMENT WITH RESPECT TO 12120OlYYYY) 12/20/12 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Phone: 650 -573 -1111 NAME: CONTACT Andreini & Company-San Mateo Fax: 650-378-4361 PHONE _ FAX License 0208825 INC. No, Extj__ __ -_- — Arc. No __ �L 220 West 20th Ave E -MAIL - San Mateo, CA 94403 ADDRESS_ PRODUCER Marc Andreini CUSTOMER ID #: MISS1-4 INSURER S AFFORDING COVERAGE { NAIC # -- -- INSURED Mission Ranches Company, LLC INSURER A: Praetorian Insurance Company 1137257 Broadway INSURER B: National Union Fire Ins Co PA 119445 King City, CA 93930 _ - - -_ ,.._. -___- INSURER C : I 1,000,00 INSURER D INSURER E : I INSURER F: GENLAGGREGATE LIMIT APPLIES PER t jrJDUCTS COVERAGES CERTIFICATE Nt)MRFR- ral= Vlclnu A111u QCO. THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS Wastewater Authority INSR •. iADDL'8_013— —' - -- ~ _ -- -_ - -_- POLIO LTR I TYPE OF INSURANCE 66 SS POLICY NUMBER I MMlDDfYYYY pOUGY E %P -r IMM /DD/YYY`( _ - --- -... LIMrf -- _._. 1 GENERAL LIABILITY l I P­ {S EA OCCURRENCE 5 1,000,00 A X r IAMERCIAL GENERAL LIABILITY X I }H10C1100133 -01 04101112 � 04/01/13 pRM j SET H 44,04 CI.A 1 S E X I eccurta�D _ — __. _ ;J,OQ AADE QCCUR 11 i I A1ED EXP (Any are r arsmr c f PERSONAL X ADV INJURE 3 1,000,00 LGEPERALAGGPEGATE s 2,000,00 GENLAGGREGATE LIMIT APPLIES PER t jrJDUCTS I g - ('OttP70P A 2,000,04 i X POLICX I PRO- -. LOCI ..- . AUTOMOBILE LIABILITY I i COMBINED SINGLE LIMIT " 1,000,44 i ! A . X 1 ANY AUTO ;H100100133 -01 04/01112 04/41113 (E_ace.der;t) , - - - - -- ( BODILY INJURY (Per person I S ! I Rt Vt + =_L OtD AUTOS ; � �— ._,__ -- BODILY INJURY er aced r S t .....1 SCHEDULEDAUTOS PROPERTY DAMAGE HIRED AUTOS j < {Per c de, !t —1 i i N01,4 OWN AI.((CIS { i I 11 UMBRELLA LIAB t X OCCUR i EACH OCCURRENCE 5,000,00 . EXCESS LIAB `CLAIMS -MADE] A BPUlOO133 -01 04101112 04/01/13 ? AGGREGATE s — -- - - - -- 5,000,00 DEDUCTIBLE f c RETENTION E S = g WORKERS COMPENSATION 11 AND EMPLOYERS X I WC STATU. J 10TH -. Y,T.�1� LIABILITY Y t N ! .. ..... —.. —�. B ANY PROPR;ETORrARTil, R <:CUTIVE OFFICERIMENISER EXCLUDED- ❑11NIA 015684385 01/01/12 01/01/13 EL EACH, ACCIDENT —i 1,000,44 (Mandatory in NH) i !. EL DISEASE - EA EMPLOYEE! S 1,000,00 It yes, describe under - -- - - --- - - -- DESCRIPTION OF OPERATIONS bei_ =n 11 EL. DISEASE -POD ICY LI 1117 5 1,000,04 • Ri -01 04101112 04/01/13 !Limit 504,44 • Cargo iH100100133 H10D100133 -01 04101/12 04/01/13 1Limit 504,40 DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (Attach ACORD 101, Additional Remarks Schedule, It more space Is required) Re: Lease of real property located in Santa Clara County; Parcel No. 841 -30 -003 and 841 -30 -004. The City of Gilroy its officers, officials and C��pployees are included as additional insured for General Liability per Form LCNA50364 attached. CERTIFICATE HOLDER CANCFI 1 ATInN SOUGIL3 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN South County Regional ACCORDANCE WITH THE POLICY PROVISIONS. Wastewater Authority AUTHORIZED REPRESENTATIVE c/o City of Gilroy 7351 Rosana Street Gilroy, CA 95020 1988 -2009 ACORD CORPORATION. All rights reserved. ACORD 255 (2009109) The ACORD name and logo are registered marks of ACORD THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ ITCAREFULLY. This endorsement modries insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART This endorsement changes the policy effective on the inuapdon date of the policy on|oso another date is indicated below. Endorsement Effective: 4/1!--)012 Policy Number: ~%Nhoisaninounad^ (Section ||)in amended x, include asan insured only those categories ofporson(s)ororgani- zation(s) described below in paragraphs A, B and C wbhwhom you are obligated by written contract, cxwritten agreement to provide insurance Such oois afforded by this policy, but only with respect to the Additional |cso'ed's "icaihrus liability for your negligent acts or omissions |n connection therewith and subject to the following: � If thc, Addiionaf ks red isu lessor nf leased equipmarK|his insuna rice does not apply: (1) To any "occurrence' which takes place after the equipment lease expires. If the Additional Insured is the manager o/ lessor o[ premises or land which is leased, rented or loaned toyou, this coverage applies only as respects to liability arising out of the owneohip, main ten arice, or use of that part of the premises or land leased, rented cv loaned \oyou, However this insurance does not apply to: (1) Any "occurrence" which takes place after you cease to be the tenant in or on that premises- (2) Structural alterations, new construction or demolition operations performed by or on behalf of the Addi- tional Insured. C |r the Add/hnna{Insured issn Owner, Lessee or Contractor, this coverage applies only with respect ^oUabiU� caused by operations performed directly by you an�oryou, employees, �nthe Addidona| Insured o!a |ooa- tion desicinated in a written contract or agreement. |/ is further agreed that no coverage is afforded orextended by this endorsement for any claims zhainyout of the ,negligence or willful nnisoondmctcf the Additional Insured. K is further agreed that we will not be responsible for the payment of attorney's fees and costs in the defense Of the Additional Insured that are attributable to claims that do not fall within the coverage of this endorsement, and we have the right to uUocoua the payment of attorneys fees and costs between covered and uncovered claims at any time, including upon accepting the Additional Insured's tender of defense. GL-CN-AS-0364 (09,12004)