FARMING AND HOUSING CONTRACT

Transcription

1 FARMING AND HOUSING CONTRACT This Farming & Rental Contract ( Contract ) is made and entered into this 1 st day of January, 2012 by and between Rancho Arroyo Grande LLC (Owner ), and Todd Ruffoni dba Ruffoni Ranch Management ( Manager ). RECITALS A. Owner holds certain agricultural real property located in the County of San Luis Obispo, State of California, commonly known as Rancho Arroyo Grande LLC. Physical Address of the property is 591 Hi Mountain Rd., Arroyo Grande, CA B. Owner desires to provide land, to Manager, for the purpose of dry farming hay; allow Manager and family to reside in the Ranch Manager House; and allow Manager to use the barn, corrals, arena and holding pasture for Manager s family and guests; as per the general terms as stipulated below and as communicated by Todd Ruffoni per Attachment A, Proposal #1. NOW, THEREFORE, the parties hereto agree as follows: 1. Premises. Owner agrees to allow use of land, for purposes of farming hay, and of Ranch Manager House and of specific buildings and property to Manager for the term and cost, and upon all of the conditions set forth herein. 2. Term. The term of this Contract shall be twelve months, from January 1, 2012 ( Commencement Date ), and ending on December 31, 2012 ( Expiration Date ). The contract will continue beyond its original term, for an additional twelve month period, providing Owner and Manager agree 60 days prior to the original or any subsequent Expiration Date. 3. Stipulations 3.1 Fee. Owner agrees to provide the use of farmland and buildings and facility, in exchange for Manager s provision of Services, as indicated in paragraph 3.2, and a fee of $2,000 per month. 3.2 Services. In addition to payment of Fees, Manager will oversee current vineyard lessee s operation and assist with real estate agents and prospective buyers, as communicated by Todd Ruffoni per Attachment A, Proposal #1 paragraph A, B & C. 3.3 Labor. Manager will hire, employ and/or contract all necessary labor required to perform Manager s farming. Owner will have no liability or responsibility related to Manager s employment of labor or contractual obligations, statutory or otherwise. 3.4 Payment of Real & Personal Property Taxes. Owner agrees to pay all real property taxes and personal property taxes on property owned by Owner. 3.5 Payment of Utilities. Owner agrees to pay all utility billings for which Owner has been responsible prior to the signing of this Contract. Utility expenses such as propane expenses, currently paid by Manager, will continue to be paid by Manager. 3.6 Payment of Other Expenses. Manager will be responsible for all expenses related to farming hay.

2 4. Permitted Uses. 4.1 Compliance With Laws. Manager shall comply with all laws concerning farming on the Property, as well as Manager s use of Property. 4.2 Waste; Nuisance; Damage. Manager shall not use the Property in any way that will constitute waste, nuisance, or unreasonable annoyance to Owners or occupants of Property; or occupants of adjacent properties. Manager shall not do anything on the Property that will cause damage to the Property. 5. Farming Operations 5.1 Operations. All Hay Farming costs shall be performed at the sole cost and expense of Manager. 6. Insurance; Indemnification. 6.1 Liability Insurance. Manager, at its cost, shall obtain and keep in force during the term of this Contract a policy of public liability and property damage insurance with a single combined liability limit of not less than $1,000,000.00, insuring against all liability of Manager arising out of and in connection with Manager s activities on the Property. The policy shall insure performance by Manager of the indemnity provisions of Section 6.4 and shall be deemed to satisfy such indemnity provisions ( Indemnification ). Owner shall be named as an additional insured and be held harmless; and Manager and Manager s policy should agree to defend Owner. 6.2 Risk Of Property Loss. Owner is responsible for risk of loss for all Owner s buildings, fixtures, personal property, autos and equipment, in, on, or about the Property. Manager is responsible for risk of loss for all Manager s personal property, equipment and autos, in, on, or about the Property. 6.3 Policy Form, Content, Insurer. All insurance required under this Contract shall be issued by responsible insurance companies qualified to do business in California and reasonably acceptable to Owner. No later than the Commencement Date, Manager shall deliver to Owner copies of the policies of insurance required, or certificates, evidencing the existence and amounts of such policies. No such policy shall be cancelable or subject to reduction of coverage or other modification except after thirty (30) days prior written notice to Owner. Manager shall, at least ten (10) days prior to the expiration of any such policy, provide Manager with renewals or binders thereof. 6.4 Indemnification. Except as otherwise provided herein Manager shall indemnify and hold harmless Owner from and against any and all claims arising from Manager s performance of its duties under the contract, or use of the Property, or from the conduct of Manager s business or from any activity, work or things done, permitted or suffered by Manager, Manager s family or invitees or contractors in or about the Premises or elsewhere. As to any claim, arising in part or whole out of any act or omission by Owner; or any person, firm or entity prior to inception of this Contract, Owner shall have the exact same duties as Manager hereunder. 6.5 Worker s Compensation Insurance. Manager shall maintain, during the Contract Term, at Manager s sole cost and expense, proper and adequate Worker s Compensation Insurance.

3 7. Assignment and Subletting. Manager shall not be permitted to assign this Contract without the prior written consent of Owner. 8. Default; Remedies. 8.1 Manager s Default. The occurrence of any of the following events shall be a material default and breach of this Contract by Manager: (1) Failure by Manager to pay rent on a timely basis. (2) Failure by Manager to perform any other provisions of this Contract, where such failure continues for thirty (30) days after written notice thereof from Owner to Manager; provided, however, that if such default cannot reasonably be cured within such thirty (30) day period, Manager shall not be deemed to be in default if Manager shall within such period commence such cure and thereafter diligently continue such cure to completion. 8.2 Owner s Remedies. In the event of any default by Manager, Owner shall have all rights provided by law including, but not limited to, the following: (1) Owner may terminate this Contract and Manager s right to possession of the Property, including land and building use and Manager s residence, at any time. (2) Owner may continue this Contract and Manager s right to Property use, either partially or in full. (3) At any time after Manager commits a default of this contract, Owner may cure the default at Manager s cost. 8.3 Owner s Default. The occurrence of any of the following events shall be a material default and breach of this Contract by Owner: (1) Failure by Owner to perform any provisions of this Contract. 8.4 Manager s Remedies. In the event of any default by Owner, Manager shall have all rights provided by law including, but not limited to, the following: (1) Manager may terminate this Contract and Manager s responsibility to fulfill its contractual responsibility. (2) Manager may continue this Contract and Manager s right to continue management services of the Property, 9. Termination Absent Default. Owner or Manager may terminate this Contract, prior to Termination date and absent Default, providing 90 days written notice is delivered. 10. Access. Manager shall have full and unimpaired access to the Property at all times. Owner shall have the right to enter the Premises for the purpose of enjoyment or inspection. In no event shall Manager allow any hunting and/or fishing on Property without Owner s permission.

4 11. Attorneys Fees. If either party commences an action against the other party arising out of or in connection with this Contract, the prevailing party shall be entitled to have and recover from the losing party reasonable costs, expenses, and attorneys fees, as determined by the Court. 12. Notices. Any notice required or permitted to be given under this Contract must be in writing. 13. Miscellaneous Matters This Contract shall be construed and interpreted in accordance with the laws of the State of California. Venue for any action brought to interpret or enforce any provision of this Contract shall be initiated and completed in Arroyo Grande, California This Contract contains all the agreement of the parties with respect to the Property and cannot be amended or modified except by a subsequent written agreement for fresh consideration as required by California law The unenforceability, invalidity, or illegality of any provision shall not render the other provisions unenforceable, invalid, or illegal If Owner elects to sell all or any portion of the Property during the Contract Term, the Contract will be immediately terminated upon transfer of Property. This provision is in effect irrespective of any other termination provisions contained in this Contract Should the Contract be terminated, for any reason, Manager will be entitled to receive the net realizable proceeds from the current year s hay crop. That is, hay sale proceeds less costs to completion. Owner is also entitled to deduct any unpaid Property rental expenses from net realizable proceeds. This Contract will be effect upon the date of execution. IN WITNESS WHEREOF, the undersigned parties to the Contract have executed this Contract the day and year first above written. Owner: Manager: Date: December 6, 2011 Date:, 2011 By: By: Title: Title: Address: Address: Rancho Arroyo Grande LLC Ruffoni Farming & Management 1034 Mill Street 591 Hi Mountain Road San Luis Obispo CA Arroyo Grande, CA 93420

5 Todd Ruffoni Ruffoni Farming and Management 591 Hi Mountain Rd Arroyo Grande, Ca ATTACHMENT A October 5, 2011 The Conways Dear Chris Conway: First I would like to thank you for giving me the opportunity to be involved in developing Rancho Arroyo Grande over the last three years. I am sad to hear of the decisions that have been made involving employees at the ranch and the possible sale. I do understand that it is based solely on economics. As you know I have lived on, and managed the ranch for the last twenty years. I believe it has grown into one of the finest ranches on the central coast. I realize the need to cut cost but I also understand the importance of keeping it a working ranch in good condition to present to prospective buyers. I believe the proposals below will help reduce the financial burden the ranch has become on you, as well as keep it a working ranch with knowledgeable people that have a long history with the ranch. I would be able to handle any issues that may come up from leasers, neighbors, county, realtors, etc, and maintain it in a state that will be desirable to prospective buyers. As we agreed in our phone conversation my family and I will be glad to reside at R.A.G. until it is sold and hopefully long after. Proposal 1 will help with that arrangement. Proposal 2 will reduce the direct cost of R.A.G. and be billed in a predetermined monthly amount. I know I can not change the hard cost such as property taxes, etc but I feel I can reduce your monthly expenses by approximately 31% from the plan that was being put into place on September Please consider these proposals. I would like to discuss this in detail as soon as possible, as I will need to get the hay crop planted, and to answer any questions you may have. Thank You, Todd Ruffoni

6 Proposal 1 I would like to rent the ranch managers house and the 200 acres of dry farm hay ground along with equipment needed to farm hay. Have use of barns, corrals, arena and holding pastures for my family and guest. A- I will continue to work with the vineyard tenets to assure the vineyard is farmed in sound farming practices and deal with all issues that arise with them. B- I will work with any real estate agents and/or prospective buyers. C- I will help with any county issues. D- I will pay R.A.G. $24, per year paid in 12 monthly payments of $ on the 1 st of each month. Proposal 2. I would like to manage R.A.G. under my business Ruffoni Farming and Management for $250, per year which is a monthly cost of $20, A- I will maintain R.A.G. in its current condition. B- I will be responsible for all fuel cost used by Ruffoni Farming & Management used for maintaining RAG. C- I will be responsible for all labor cost used by Ruffoni Farming & Management used for maintaining RAG. D- I will be responsible for maintenance and repairs on all equipment used by Ruffoni Farming & Management for Hay farming, Ranch and Landscape maintenance.. E- I will not be responsible for outside services, supplies, materials or any utilities related to the Main residences, Sound Studio or any other residences at Rancho Arroyo Grande. It is my estimation based on past records that the cost to maintain Rancho Arroyo Grande equal to proposal 2 with the staff chosen on September 26 th 2011 including fuel, labor, auto maintenance and repairs would be $362, per year which is a monthly cost of $30, Also included is Cody s proposal for the Equine Facilities.