Exhibit 10.26

 

REAL ESTATE PURCHASE AGREEMENT

JUSTICE FARMS

 

THIS REAL ESTATE PURCHASE AGREEMENT (the “Agreement”) is made and entered into
as of November 13,  2014 (the “Effective Date”), by and between James C. Justice
Companies, Inc. and Ten Mile Bay, LLC, with principal offices at 302 S Jefferson
Street, Roanoke, VA 24011 (collectively, the “Seller”), and FPI Colorado LLC, a
Delaware limited liability company with principal offices at 8670 Wolff Court,
Suite 240, Westminster, CO 80031,  or assigns (the “Buyer”).

 

W I T N E S S E T H:

 

WHEREAS, the Seller has, subject to the terms and conditions enumerated herein,
agreed to sell, and the Buyer has agreed to purchase, approximately 6,819 acres
of farmland real estate, of which 5,109 acres are tillable, in Marion County,
Lee County, Clarendon County, and Sumter County, all of which are in South
Carolina. The seven farms are more particularly described in Exhibit A attached
hereto (the “Real Estate”) and the Additional Interests, as defined below.

 

NOW THEREFORE, in consideration of the covenants and agreements herein contained
and other valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, the parties hereto, intending to be legally bound, covenant and
agree as follows:

 

1.

SALE AND PURCHASE.  Seller does hereby covenant and agree to sell and convey the
Real Estate,  together with all improvements, including but not limited to, all
buildings, scales, pivots, electric irrigation motors, pumps, gearheads,
submersible pumps, generators, underground pipes and all other related
irrigation equipment, all water rights,  all mineral rights, all timber rights
(with the exception of the current Maidendown timber contract harvested prior to
closing),  all development rights, all conservation easements, all leases,
appurtenances and hereditaments, as well as title and interest to easements and
rights-of-way, now located thereon or attached thereto (collectively, the
“Additional Interests” and, hereafter, the Real Estate and the Additional
Interests shall be referred to as the “Property”) by good and sufficient general
warranty deed, to Buyer, or to such entity as Buyer may designate provided that
such entity is owned by Buyer or Buyer’s parent company and provided further
that Buyer shall not be released from any of Buyer’s agreements and undertakings
as set forth herein; and Buyer covenants and agrees to purchase and accept
Property on the terms provided for herein.

 

2.

PRICE.  The price at which Seller will sell, and Buyer will purchase, the
Property shall be $28,000,000 (the “Purchase Price”), payable by wire
transfer at Closing (as defined below).

 

3.

EARNEST MONEY.  Earnest money shall be $250,000 (the “Earnest Money”).  The
Earnest Money shall be deposited within five (5) business days of the Effective
Date with, and shall be held by  Warren Curtis of Curtis & Croft, LLC, with
principal offices at 325 W Calhoun Street, Sumter, SC 29150,  as escrow agent
hereunder (the “Escrow Agent”), for delivery to Seller at the time of closing or
as otherwise provided for in this Agreement.

 

4.

TITLE TO PROPERTY.    Seller shall convey good, marketable and insurable fee
simple title to the Property (with the exception of the mineral rights, which
shall be conveyed via general warranty deed) to Buyer free and clear of all
liens and encumbrances, subject only to Permitted Title Exceptions (as defined
below).  Within twenty-one (21) days after the Effective Date, Seller shall, at
Buyer’s expense, furnish to Buyer a commitment to issue an ALTA title insurance
policy in the amount of the Purchase Price prepared by a fully insured and
bonded title company regularly doing business in the State of South
Carolina (the “Title Company”).  Permissible exceptions to title shall include
only those that are acceptable to Buyer.  If title evidence discloses exceptions
not acceptable to Buyer,  Buyer shall give

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written notice of such exceptions to Seller within ten (10) days from Buyer’s
receipt of the title commitment (the “Title Objections”). Seller shall have
until the time set for the Closing to remove the Title Objections from the title
commitment. If Seller is unable to cure any such Title Objection(s), then Buyer
shall have the option to terminate this Agreement by delivering written notice
to Seller by the time set for the Closing, in which case neither party shall
have any further obligation or liability under this Agreement.  If Buyer closes
on the purchase of the Property and not all Title Objections have been removed
from the title commitment at the Closing, then said unremoved Title Objections,
collectively with any additional exceptions listed on Schedule B-2 of the title
commitment and/or any other exceptions to the coverage described on the title
commitment shall be deemed to be have been accepted by Buyer (collectively said
unremoved Title Objections and additional exceptions are hereafter referred to
as the “Permitted Title Exceptions”).

 

5.

INSPECTION PERIOD CANCELLATION.  Buyer shall have the right to inspect the
Property in all respects and perform its general due diligence responsibilities
for thirty-nine (39) days after the Effective Date (the “Inspection
Period”).  If such inspection and examination of the Property and related
issues, including but not limited to, farm leases, survey, title work,
environmental issues, soil tests and borings, is not satisfactory to Buyer,
 Buyer may, in its sole discretion, cancel this Agreement upon written notice to
Seller within the Inspection Period, and in such event the Earnest Money shall
be returned to Buyer and neither party will have any further obligation or
liability under this Agreement.  If Buyer fails to notify Seller of its election
to terminate this Agreement on or before the expiration of the Inspection
Period, Buyer shall be deemed conclusively to have waived its right to terminate
this Agreement pursuant to this Section 5.  Seller agrees to cooperate
reasonably with any such investigations, inspections or studies made by or at
Buyer’s direction.  Buyer agrees to defend, indemnify and hold harmless Seller
from any damage (including crop damage) or injury to persons or property that
arise from Buyer’s inspections, and Buyer agrees to repair and/or reimburse, at
its sole cost and expense, any damage (including crop damage) to the Property
caused by such entry.

 

6.

APPRAISAL CONTINGENCY.  This Agreement is contingent upon Buyer obtaining from
an reputable farmland appraiser, certified in the state where the Real Estate is
located, experienced in farmland appraisals  according to the Federal
Agricultural Mortgage Corporation’s requirements, and acceptable to Buyer, an
appraisal (the “Appraisal”) valuing the Real Estate at no less than the Purchase
Price. If Buyer has been unable to obtain such an Appraisal,  and Buyer serves
written notice of such circumstance to Seller within the Inspection
Period, Buyer shall have the right to unilaterally terminate this Agreement by
serving written notice to Seller within the Inspection Period. In case of
termination of the Agreement pursuant to this Section 6,  the Earnest Money
shall be returned to Buyer and neither party shall have any further obligation
or liability under this Agreement. Seller shall provide copies of any appraisals
on the Real Estate prepared in the last 12 months.

 

7.

CONDITIONS PRECEDENT.  In addition to other conditions set forth in this
Agreement, including those related to inspection of the Property, Buyer’s
obligation to purchase the Property shall be subject to and contingent upon the
following conditions precedent, any or all of which Buyer may waive by written
notice only:

 

(a)

No Adverse Conditions.  There shall be no material adverse change in the
condition of, or affecting, the Property or Seller not caused by Buyer between
the Effective Date and Closing. 

(b)

Representations and Warranties.  Seller’s representations and warranties
contained herein are ongoing through the date of and shall be true and correct
as of the date of Closing.  Seller shall immediately notify Buyer of any change
whatsoever in said representations and warranties and, upon such notice, Buyer
may terminate this agreement by delivering written notice to Seller within ten
(10) business days of Buyer’s receipt of such notice; if no such

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termination notice is provided to Seller, then Buyer shall be deemed to have
waived its termination right with respect to the condition(s) identified in such
notice.

(c)

Government Documents.  Seller agrees to provide, within ten  (10) days of the
Effective Date, or as soon as practicable after Buyer’s request in the case of
documents requested by Buyer pursuant to (iv) below, the following documentation
relating to the Property to the extent that such documentation is in Seller’s
possession or within its reasonable control to obtain: (i) Farm Service Agency
maps and Abbreviated 156 Farm Records, (ii) well permits,  (iii) real property
tax invoices, (iv) any surveys of the Real Estate available to Seller, and (v)
any other relevant business, governmental or regulatory documents that Buyer
requests during the Inspection Period. Seller shall also execute all relevant
releases, which would allow Buyer to obtain any reasonable information which is
not within the reasonable control of Seller.

(d)

Easements/Access.    Buyer shall be satisfied that all easements necessary, if
any, to serve the Property, including, but not limited to, satisfactory ingress
and egress, are in existence.  Buyer shall be deemed to have waived this
contingency if Buyer does not terminate this Agreement within the Inspection
Period.

(e)

Rental Agreement.    Seller agrees to enter into the lease agreement attached as
Exhibit B (the “Turbeville Lease”). The Turbeville Lease will provide for an
annual payment of $746,147 for 2015, 2016 and 2017, but can be terminated
earlier by the Buyer. The executed Turbeville Lease, together with any payments
provided for therein as due upon execution of the Turbeville Lease, shall be
delivered by Seller and signed by Buyer five (5) days after the Effective Date.

(f)

Cancellation.  If any of the foregoing conditions precedent is not satisfied or
waived in writing by Buyer,  Buyer may, but shall not be obligated to, elect, at
its option, by written notice to Seller prior to the earlier of the time set for
Closing or the specific deadline (as applicable) described within this Section
7, to terminate this Agreement, in which event the Earnest Money shall be
returned to Buyer and the parties hereto shall have no further obligation or
liability hereunder.

 

8.

DATE AND PLACE OF CLOSING.  Closing shall take place upon Buyer’s notification
to Seller that all conditions enumerated in this Agreement have been satisfied
or waived by Buyer (the “Closing”).  Subject to the aforesaid notification,
Closing shall take place on or before December 22, 2014 at 11:00 o’clock A.M.,
 Eastern Time, at the office of Warren Curtis, located at 325 W Calhoun St,
Sumter, SC 29150,  or at such other time and place as otherwise agreed to by
Seller and Buyer.

 

9.

REAL ESTATE COMMISSION.    Any real estate commission attributable to, or
associated with, the sale of the Property herein incurred by Seller shall be
paid by Seller at closing.    Any real estate commission attributable to, or
associated with, the sale of the Property herein incurred by Buyer shall be paid
by Buyer at closing.  Seller to pay 1.0% commission to Mason and Morse Ranch
Company,  Percival Land & Timber Consultants, Inc., and K. A. Richardson
Company.  Seller and Buyer shall indemnify and hold harmless the other from any
and all other claims for real estate fees or brokerage commissions arising from
sale of the Property.

 

10.

CLOSING EXPENSES AND PRORATIONS.

 

(a)

Seller shall pay for the cost of the title commitment for the amount of the
Purchase Price issued pursuant to said title commitment on the Property, all
transfer taxes, escrow/closing fees charged by the Title Company, the cost of
releasing any mortgages or encumbrances on the Property, including the recording
of the releases of all such mortgages and encumbrances, and Seller’s attorney’s
fees and expenses (including preparation of the warranty deed and all other
transfer documents).

(b)

Buyer shall pay for the Buyer’s attorney’s fees and expenses.

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(c)

All real estate taxes (including special district levies and fees) accruing
through the date of Closing shall be prorated as of Closing and shall be paid by
Seller, either as a credit to Buyer or as a cash payment to Buyer.  All real
estate taxes accruing after the date of Closing shall be the responsibility of
Buyer, except as provided by the Lease Agreement.

(d)

All other costs of the Closing shall be paid by the party that incurs the
expense.

 

11.

REPRESENTATIONS, WARRANTIES, COVENANTS AND STIPULATIONS OF SELLER.

 

(a)

Authority.  Seller covenants and warrants to Buyer, its successors and assigns,
that Seller has full right and lawful authority to enter into this Agreement and
no other parties have any right or ownership in or to the Property; provided,
however, that Seller makes no representations or warranties with respect to any
ownership rights to mineral, oil, and/or gas rights other than it has not sold,
leased or otherwise transferred or committed to transfer any such rights.

(b)

Possession.  At Closing, possession of the Property will be delivered to Buyer,
free of all contracts, except for Permitted Title Exceptions and the Lease
Agreement.

(c)

No New Encumbrances.  From and after the Effective Date until Closing, Seller
shall not convey any portion of the Property or any rights therein, or enter
into any lease, license, conveyance, security document, easement or other
agreement, or amend any lease or existing agreement granting to a third party
(i.e., a non-affiliate) any rights with respect to the Property or any part
thereof, or any interest whatsoever therein, without Buyer’s prior written
consent.

(d)

No Rights to Third Parties.    With the exception of Permitted Exceptions and
the lease agreement attached as Exhibit B hereto, no person or entity, other
than Buyer, has any right, agreement, commitment, option, right of first refusal
or any other agreement, whether oral or written, with respect to the sale,
assignment or transfer of all or any portion of the Property.  Furthermore, from
the Effective Date until Closing or the termination of this Agreement, Seller
shall neither enter into nor solicit from or negotiate with any third party with
respect to the sale, assignment or transfer of all or any portion of the
Property.

(e)

Environmental. To the knowledge of the Seller, there are no pending or
threatened actions relating to any environmental law, there are no events or
circumstances that would require clean-up or remediation, and there are no
underground storage tanks situated upon the Property, except as set forth on the
attached Schedule 11(e), which is hereby incorporated into and made a part of
this Agreement.  The foregoing representations and warranties shall survive the
Closing for a period of five (5) years and shall not merge in the deed of
conveyance.

(f)

Foreign Person.    Seller is not a foreign person within the meaning of Section
1445(f)(3) of the Internal Revenue Code, and no portion of the purchase price is
required to be withheld by Buyer pursuant to Section 1445 of such Code and the
regulations promulgated.  Upon Buyer’s request, Seller shall provide Buyer with
written verification and certification that payments to Seller are not subject
to withholding by Buyer.

 

12.

REPRESENTATIONS, WARRANTIES AND CONVENANTS OF BUYER.  Buyer warrants and
represents to Seller that it has, and at Closing will have, all requisite power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated herein pursuant to the terms and conditions of this
Agreement.

 

13.

DEFAULT AND REMEDIES.  In the event any party hereto shall fail to pay, perform
or observe any of the covenants and conditions undertaken by it herein to be
paid, performed or observed, then such party shall be deemed to be in default
with respect hereto.  In the event of a default by Seller, Buyer shall have the
right, following ten (10) days prior written notice to Seller during which
period Seller has failed to cure such default, in addition to other remedies
available at law or in equity, to:  (a) require Seller to

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perform all of its obligations hereunder including specifically its obligation
to convey the Property to Buyer, (b) recover all Earnest Money if Buyer does not
elect to pursue the remedy of specific performance, and (c) recover damages,
including expenses incurred by Buyer, as a result of the default.  In the event
of a default by Buyer, Seller shall have the right to declare this Agreement
canceled and, upon such election Seller shall retain the Earnest Money as
liquidated damages as its sole remedy.

 

14.

TAX-DEFERRED EXCHANGE. In the event Buyer or Seller desires to effect a
tax-deferred  exchange  in connection with the conveyance  of the Property,
Buyer and Seller agree to cooperate  in effecting such
exchange;  provided,  however, that the exchanging party shall be
responsible  for all additional  costs associated  with such exchange,  and
provided  further, that a non-exchanging party shall not assume  any
additional  liability  with respect  to such tax-deferred  exchange.  Buyer and
Seller shall execute such additional documents, including assignment of this
contract in connection therewith, at no cost to the non-exchanging party, as
shall be required to give effect to this provision.

 

15.

POSSESSION. Possession will be granted at closing. Possession, including all
means of access to the Property (keys, codes, garage door openers, etc.), shall
be delivered upon Closing.

 

16.

HUNTING LEASES. All hunting leases are to be terminated prior to closing.

 

17.

Mineral Rights, Timber Rights, Water Rights, Development Rights, Conservation
Easements and Leases. This is a “Fee Simple” offer to include all of the
Seller’s right, title and interest in and to the improvements and modifications,
additions, restorations, repairs and replacements thereof; and all right, title,
and interest of the Seller in and to all appurtenances, easements, rights of
way, roads, appurtenances, subsurface and surface mineral rights to include
mineral leases, timber, timber rights, water rights, development rights and
leases. This property must be free of all conservation easements, except for 264
acres on the Turbeville Farm. 

 

18.

NOTICES.  All notices, demands, requests, consents, certificates and waivers
from either party to the other shall be in writing and sent by United States
registered mail, return receipt requested, postage prepaid, or via e-mail,
 addressed as follows:

 

If to Seller:

James C. Justice Companies, Inc.

 

attn. James Justice

 

302 S Jefferson Street

 

Roanoke,  VA 24011

 

 

If to Buyer:

FPI Colorado LLC 

 

attn. Luca Fabbri

 

8670 Wolff Court, Suite 240

 

Westminster, CO 80031

 

luca@farmlandpartners.com

 

or to such other address or email address as the party to receive the notice,
demand, request, consent, certificate or waiver may hereafter designate in
writing to the other.  All notices, demands, requests, consents, certificates
and waivers shall be deemed to be given when sent via email, or on the third
business day after being deposited in the United States mail as aforesaid,
whichever occurs first.

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19.

MISCELLANEOUS.

 

(a)

No Waiver.  No waiver of any covenant or condition contained in this Agreement
or of any breach of any such covenant or condition shall constitute a waiver of
any subsequent breach of such covenant or condition by either party, or justify
or authorize the nonobservance on any other occasion of the same or any other
covenant or condition hereof of either party, nor shall any forbearance by
either party to seek a remedy for any breach constitute a waiver with respect to
such or any subsequent breach.

(b)

Successors.  Except as otherwise provided in this Agreement, the covenants,
conditions and agreement contained herein shall bind and insure to the benefit
of Seller and Buyer and their respective heirs, personal representatives,
successors and assigns.

(c)

Captions.  The captions in this Agreement are for convenience only and are not a
part of this Agreement and do not in any way define, limit or describe or
amplify the terms and provisions or the scope or intent hereof.

(d)

Entire Agreement Interpretation.  This Agreement represents the entire agreement
between the parties hereto and there are no collateral or oral agreements or
understandings.  The masculine (or neuter) pronoun shall include the masculine,
feminine and neuter genders, and the singular number shall include the plural
number and vice versa.

(e)

Amendment.  This Agreement shall not be amended or modified in any manner except
by an instrument in writing executed by the parties.

(f)

Governing Law.  This instrument shall be governed by and constructed in
accordance with the laws of the State of South Carolina.

(g)

Attorneys’ Fees/Expenses.  In the event any dispute between the parties results
in litigation or either party is required to retain legal counsel to enforce the
provisions hereof, then the prevailing party shall be entitled to recover from
the other any and all attorneys’ fees and expenses resulting therefrom.

(h)

Time of the Essence.  Time shall be of the essence in this Agreement.

(i)

Effective Date.  This contract shall be effective on the Effective Date.

(j)

Counterparts and Copies.  This Agreement may be executed in one or more
counterpart signature pages (including via email in PDF format or other
electronic counterpart signature pages), each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.

(k)

Construction.  The language used in this Agreement shall be deemed to be the
language approved by all parties to this Agreement to express their mutual
intent, and no rule of strict construction shall be applied against any party.

(l)

Severability.  Each party agrees that it will perform its obligations hereunder
in accordance with all applicable laws, rules and regulations now or hereafter
in effect.  If any term or provision of this Agreement shall be found to be
wholly illegal or unenforceable, the remainder of this Agreement shall be given
full effect as if such provision were stricken.  In the event any term or
provision of this Agreement shall be held overbroad in any respect, then such
term or provision shall be narrowed, modified or limited by a court only to the
extent necessary to make such provision or term enforceable while effectuating
the intent of the parties herein expressed.

(m)

Access to Information.  Up to and following Closing, Seller shall provide Buyer
with reasonable access to such business records specific to the Property and to
the financial condition of the Seller and Seller’s parent company and shall
perform such actions pertaining to the Property when requested by Buyer,
including but not limited to, any records or actions reasonably requested by
Buyer (1) to satisfy its obligations with respect to the Farm Service Agency,
(2) to assist with filings with the United States Securities and Exchange
Commission, including any cooperation required by Buyer’s auditors and counsel
in relation

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to and with such filings, and (3) to fulfill any inquiry or inquiries which
Buyer in its reasonable discretion deems necessary hereunder.

(n)

Houses on Turbeville and Ten Mile Bay Tracts. Seller will terminate agreements
with tenants in the houses on the Turbeville tract and Ten Mile Bay tracts and
have the respective tenants accept termination before closing. Tenants of the
Turberville and Ten Mile Bay houses will have until January 31st to vacate the
premises.

 

20.

ADDITIONAL PROVISIONS.

 

(a)

Repurchase Option Deadline. On the third anniversary of this Agreement (the
"Repurchase Option Deadline") Seller shall have the option to repurchase the
Property (the "Repurchase Option") for a total consideration (the "Repurchase
Price") equal to the sum of: (a) Purchase Price x 1.157625; (b) the price paid
by Buyer for any improvements x 1.10; and (c) a sum equal to 15 times the annual
rental income in excess of $1,400,000. Failure of the Seller to comply with any
term of this Agreement or the Turbeville Lease will immediately terminate the
Repurchase Option.

 

The decision to exercise the Repurchase Option shall be communicated to Buyer no
later than six months prior to the Repurchase Option Deadline. Buyer shall then
have 30 days to give Seller an estimate of the Repurchase Price, after which
notification within ten (10) days Seller shall make a non-refundable down
payment equal to 15% of the estimated Repurchase Price.

 

Failure by Buyer to comply with any of the terms of this Section 20 shall be
deemed a failure to exercise the Repurchase Option.

 

(b)

Expiration of Offer. Offer outstanding until November 13, 2014 at 5:00 o’clock
P.M., Eastern Time.

 

(c)

Board Approval. This Agreement is subject to the approval of the Board of
Directors of Buyer's parent company, Farmland Partners Inc. If such approval is
not obtained within three (3) business days of the Effective Date this Agreement
shall be deemed null and void.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first written above:

 

 

 

 

 

 

 

BUYER:

    

SELLER:

 

 

 

FPI Colorado LLC 

 

James C. Justice Companies, Inc.

 

 

 

 

 

By:

/s/ Paul A. Pittman

 

By:

/s/ James C. Justice

 

 

 

 

 

Date:

November 13, 2014

 

Date:

November 13, 2014

 

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