REAL PROPERTY PURCHASE AND SALE
AGREEMENT, AND JOINT ESCROW INSTRUCTIONS

(NEVADA RANCH)

by and between

SAN JOAQUIN FARMS, LLC,
a Washington limited liability company authorized
to do business in the State of California as
WASHINGTON SAN JOAQUIN FARMS, LLC,

“Seller,”

and

NEVADA RANCH MERCED, LP,
a Delaware limited partnership

or its assignee(s) and/or nominee(s), collectively “Buyer,”

DATED SEPTEMBER 13, 2016

TABLE OF CONTENTS

ARTICLE
PAGE
TABLE OF CONTENTS
i
RECITALS
1
I. THE PRIMARY TERMS
2
II. CONSTRUCTION; DEFINITIONS
5
III. PURCHASE AND SALE OF THE PROPERTY
12
IV. CONDITIONS TO CLOSE OF ESCROW
14
V. COVENANTS, REPRESENTATIONS AND WARRANTIES
18
VI. TITLE, ESCROW AND CLOSING
27
VII. MISCELLANEOUS
30
LIST OF EXHIBITS
39

REAL PROPERTY PURCHASE AND SALE
AGREEMENT, AND JOINT ESCROW INSTRUCTIONS

(NEVADA RANCH)

This REAL PROPERTY PURCHASE AND SALE AGREEMENT, AND JOINT ESCROW INSTRUCTIONS
(this “Agreement”) is dated and effective as of this thirteenth (13th) day of
September, 2016 (the “Effective Date”), between SAN JOAQUIN FARMS, LLC, a
Washington limited liability company authorized to do business in the State of
California as WASHINGTON SAN JOAQUIN FARMS, LLC (“Seller”), and NEVADA RANCH
MERCED, LP, a Delaware limited partnership, or its assignee(s) and/or
nominee(s), (collectively “Buyer”) who agree and contract as described below.
Seller and Buyer are referred to singularly as a “party” and collectively as the
“parties” on a generic basis.

Recitals

This Agreement is made and entered into in reliance on the accuracy of the
following facts and circumstances, which are acknowledged by the parties to be
accurate, complete and true:

A.Seller is the owner in fee of that certain agricultural real property referred
to as the “Nevada Ranch” consisting of approximately one thousand one hundred
twenty-six and eighty hundredths (1,126.80 assessed acs.), located in Merced
County, California, identified as Merced County Assessor’s Parcel Nos.
068-130-028, -029, -031, -032, -033, -034 and -044, and legally described in
Exhibit “A” and incorporated herein by reference as if fully set forth at length
(the “Land”);

B.Seller, as the landlord, leases the Land to OLAM FARMING, INC., a Delaware
corporation authorized to do business in the State of California (“Tenant”)
pursuant to their “Agricultural Lease (Nevada Ranch)” dated August 7, 2012,
which also was memorialized by the “Memorandum of Agricultural Lease (Nevada
Ranch -- Merced County)” between Seller and Tenant dated August 7, 2012, and
recorded as Document No. 2012-027857 in the Merced County Official Records on
August 7, 2012 (the “Lease”);

C.The term “Property” means singularly or collectively, on a generic basis, the
following: (i) the Land; (ii) the Appurtenant Rights (as defined in Section
2.3); (iii) the Lease; (iv) any and all oil, gas, minerals and other hydrocarbon
substances, and minerals, including, without limitation, all coal, metals, ores,
sand, gravel and the like within or underlying the Property, and owned by Seller
and not reserved in prior deeds of record, if any; and, (v) any and all water,
water agreements or contracts, water rights (whether riparian, appropriative,
groundwater, overlying, prescriptive, surface water or otherwise, and whether or
not appurtenant), and water stock in, relating to or concerning the Land, or
within or underlying the Land, and owned by Seller and not reserved or excepted
in prior deeds of record, if any, and which are assignable to and assumable by
Buyer;

D.The Property does not include, and specifically excludes, any tangible
personal property. The Property also does not include, and specifically
excludes, any and all amenities, betterments, buildings, fixtures, structures
and other improvements thereon, whether above-or belowground, if any, including,
without limitation, almond trees, wells, pumps, motors, electrical panels,
electrical hookups, water conveyance and discharge facilities, pipelines and
irrigation systems (the “Excluded Improvements”). The significant Excluded
Improvements are described in Exhibit “B,” attached hereto and incorporated
herein by reference as if fully set forth at length, and for the most part
belong to the respective Tenant of the Property;

E.The Property is primarily planted to almond trees; and,

F.F.    Seller desires to sell the Property to Buyer, and Buyer desires to
purchase the Property from Seller, pursuant to the conditions, covenants,
provisions and terms of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement and of other good and valuable consideration, the receipt and
sufficiency of which they expressly acknowledge, the parties agree and contract
as follows:

The Agreement

ARTICLE I. THE PRIMARY TERMS

   The following terms shall have the meanings specified, when used in this
Agreement:

1.1. PURCHASE PRICE AND ALLOCATION
1.1.1. Purchase Price.  The Purchase Price is the sum of Thirteen Million Two
Hundred Thirty One Thousand Eight Hundred Thirty Two Dollars and No Cents
($13,231,832.00) payable in either cash, cashier’s check, or by wire transfer to
Seller.
1.1.2. Allocation.  The Purchase Price shall be allocated amongst the legal
parcels of the Property pursuant to Section 3.4
1.2. THE DEPOSIT
Buyer shall pay an initial deposit into Escrow in the amount of One
Hundred Forty Thousand Dollars and No Cents ($140,000.00) (the “Deposit”). The
Deposit shall be deposited into an interest bearing account proposed by Title
Company and approved by the parties on or before one (1) business day after the
Effective Date. At Closing, the Deposit shall be applicable to the Purchase
Price. Subject to the terms and provisions of this Agreement, the Deposit shall
be: (i) considered nonrefundable after the expiration of the Due Diligence
Period (as defined in Section 1.3) if Buyer does not terminate this Agreement
within the Due Diligence Period; (ii) returned to Buyer if it terminates this
Agreement within the Due Diligence Period; or, (iii) returned to Buyer in the
event of a Seller default pursuant to Section 7.2. Interest shall inure to the
Buyer.
1.3 DUE DILIGENCE PERIOD
Commencing on the Effective Date and expiring at 5:00 p.m., Pacific Time, on
September 13, 2016 (“Due Diligence Period”).
1.4. TITLE REVIEW PERIOD
Commencing on the Effective Date and expiring at 5:00 p.m., Pacific Time, on
September 13, 2016 (“Title Review Period”).
1.5. CLOSING
The consummation of the transaction contemplated by this Agreement and the
Escrow that shall occur on the Closing Date (as defined in Section 1.6).
1.6. CLOSING DATE
Subject to Section 3.6, if this Agreement is not terminated within the Due
Diligence Period by Buyer, the Closing shall occur on Tuesday, September 13,
2016.
1.7. CLOSING COSTS

Closing costs shall be allocated and paid by the parties as follows:
Cost, Expense or Fee
Responsible Party
The Preliminary Title Report (as defined in Section 2.3).
Fifty percent (50%) by each party.
Premium for the Title Policy (as defined in Section 2.3).
Fifty percent (50%) by each party.
Premium for any costs of Title Policy attributable to ALTA Extended Coverage and
any endorsements desired by Buyer, any inspection fee charged by the Title
Company, tax certificates, municipal and utility lien certificates, and any
other Title Company charges.
Buyer
Premium for any costs of a lender’s policy of title insurance required by any
lender providing financing for Buyer’s purchase of the Property, if any.
Buyer
Costs of Survey and/or any revisions, modifications or re-certifications
thereto.
Buyer
Costs for UCC and other similar judgment or lien searches, if any.
Fifty percent (50%) by each party.
Costs of recording the Grant Deed (as defined in Section 2.3), including
recording fees and documentary transfer taxes, and costs of recording lien
releases or reconveyances releasing Property as collateral for Seller’s debts.
Fifty percent (50%) by each party.
All other recording costs, expenses and fees, provided that each party shall pay
its own attorney’s fees.
Fifty percent (50%) by each party.
Any escrow fee charged by Title Company for holding the Deposit (as defined in
this Article I) or conducting the Closing.
Fifty percent (50%) by each party.
All other closing charges, costs, expenses and fees.
Fifty percent (50%) by each party.
 
1.8. NOTICE ADDRESSES
Seller:   Mr. Neil Jehle
Asset Manager
COTTONWOOD AG MANAGEMENT, LLC
2365 Carillon Point
Kirkland, Washington 98033
Telephone No. (425) 296-5510
Telefax No. (425)803-0459
Email: neilj@cottonwoodag.com

With a copies to:

Scott R. Vokey, Esq.
COTTONWOOD AG MANAGEMENT, LLC
2365 Carillon Point
Kirkland, Washington 98033
      &
P. O. Box 654
Kirkland, WA 98093
Telephone No. (425) 889-7947
Telefax No. (425) 803-0459
Emails: scottv@bmgigroup.com
      juleep@bmgigroup.com
      legal@bmgigroup.com

Charles D. Melton, Esq.
Partner
CLIFFORD & BROWN,
  A PROFESSIONAL CORPORATION
1430 Truxtun Avenue, Suite 900
Bakersfield, California 93301-5230
Telephone No. (661) 322-6023, Ext. 118
Telefax No. (661) 322-3508
Email: cmelton@clifford-brownlaw.com
 
 
Buyer:   Mr. Bill Reiman
Managing Director
GLADSTONE LAND CORPORATION
1521 Westbranch Drive, Suite 100
McLean, Virginia 22102
Telephone No. (805) 263-4778
Email: bill.r@gladstoneland.com

Robert P. McDaniel, Jr.
BASS, BERRY & SIMS, PLC
100 Peabody Place, Suite 1300
Memphis, Tennessee 38103
Telephone No. (901) 543-5946
Telefax No. (888) 765-6437
Email: rmcdaniel@bassberry.com
 
 
Title Co.:   Melodie T. Rochelle
Chicago Title Insurance Company
5516 Falmouth St., Ste. 200
Richmond, VA 23230
Telephone No. (804) 521-5713
Telefax No. (804) 521-5756
Email: melodie.rochelle@fnf.com
 

[REMAINDER OF THOS PAGE INTENTIONALLY LEFT BLANK] 

ARTICLE II. CONSTRUCTION; DEFINITIONS

2.1.    Generally. Unless the provisions or context otherwise require, Article I
and this Article II shall govern the construction and interpretation of this
Agreement and all documents executed and delivered pursuant to it. The captions
of this Agreement’s articles and sections do not define in any manner their
scope, meaning or intent. All exhibits referred to in this Agreement or any
documents executed and delivered pursuant to it are deemed to be incorporated by
reference as if fully set forth at length. The present tense includes the past
and future tenses, and the future tense includes the present tense. The
masculine, feminine or neuter gender are deemed to include the other. The
singular or plural number are deemed to include the other. The words “shall” and
“agrees” are mandatory, and “may” is permissive. The term “person” includes
individuals, corporations, partnerships, trusts and other entities and
associations. The words “include,” “includes” and “including” shall be deemed to
be followed by the phrase “without limitation.” The words “approval,” “consent”
and “notice” shall be deemed to be preceded by the word “written.” Locative
adverbs such as “herein,” “hereto” and “hereunder” shall refer to this Agreement
in its entirety and not to any particular paragraph, provision or section. The
parties acknowledge, understand and agree that their respective agents and
representatives executing this Agreement on behalf of each of the parties are
learned and conversant in the English language, and that the English language
shall control the construction, enforcement, governance, interpretation and
performance of this Agreement. The parties acknowledge that each party and its
counsel, if applicable, have reviewed and revised this Agreement and that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any amendments or exhibits hereto. The time in which any
act under this Agreement is to be done shall be computed by excluding the first
(1st) day and including the last day. If the last day of any time period shall
fall on a Saturday, Sunday or a federal and/or State of California bank holiday,
then the duration of such time period shall be extended so that it shall end on
the next succeeding day which is not a Saturday, Sunday or a federal and/or
State of California bank holiday. Unless preceded by the word “business,” the
word “day” shall mean a “calendar” day. The phrase “business day” shall mean a
day that is not a Saturday, Sunday, or a federal and/or State of California bank
holiday.

2.2.    Opinions and Determinations; Approval in Writing. Where the conditions,
provisions or terms of this Agreement provide for action to be based on the
approval, certification, consent, determination, judgment, opinion or review, of
any party, such conditions, provisions or terms are not intended to be and shall
not be construed as permitting such approval, certification, consent,
determination, judgment, opinion or review to be arbitrary, capricious or
unreasonable, nor shall such approval, certification, consent, determination,
opinion or review be unreasonably conditioned, delayed or withheld except as
expressly set forth in this Agreement. Any document or condition requiring a
party’s approval shall be transmitted in writing to the other party.

2.3.    Definitions. Capitalized terms not otherwise defined below shall have
the meanings provided in Article I.

Agreement. “Agreement” has the meaning defined in the opening paragraph of this
Agreement.

Appurtenant Rights. “Appurtenant Rights” means singularly and collectively on a
generic basis Seller’s interest, right and title, if any, in the following
intangible personal property concerning the Property:

a.
Any existing permits for the Property, including all licenses, building,
conditional use, site plan and other permits, certificates of occupancy and any
other certificates, approvals or authorizations required by law or by any
Governmental Agencies or private persons having jurisdiction over the Property
or any part thereof, for the occupancy, use, operation or ownership thereof, if
any, and only to the extent assignable;

b.
Engineering work, plans, permits and other documentation or intangible personal
property prepared or obtained in anticipation of developing and entitling the
Property;

c.
Architectural and engineering drawings, plans, renderings, specifications,
surveys and studies, and other applications submitted to the Governmental
Agencies (as defined below), including, without limitation, improvements
drawings, plans, renderings and specifications;

d.
Subject to Paragraphs “e” and “f” below, development approvals required or
helpful to develop the Property, including, without limitation, the approvals,
certifications, consents, declarations, easements, entitlements, fee credits,
growth allocations, licenses, maps, permits, plans, reports, rights, rights of
way, studies and zone changes required by any Governmental Agencies or private
persons, all as may be required to develop the Property and construct thereon
and obtain permits for its eventual marketing, construction and occupancy).

e.
Subject to Paragraph “f” below, all fee credits and reimbursements, if any,
applicable to the Property;

f.
All rights of Seller pursuant to any covenants, conditions and restrictions
relating to the Property (including, but not limited to all rights of Seller as
declarant under any such documents;

g.
Appurtenant easements and rights-of-way; and,

h.
Sewer and utility rights connected with the Property.

The Appurtenant Rights do not include, and specifically exclude, any and all
licenses or permits relating to the Crops and/or the Excluded Improvements.

Assignment. “Assignment” means the assignment between Seller, as the assignor,
and Buyer, as the assignee, in substantially the same form attached hereto as
Exhibit “C” and incorporated herein by reference as if fully set forth at
length.

Buyer. “Buyer” has the meaning defined in the opening paragraph of this
Agreement.

Cap. “Cap” has the meaning defined in Section 5.2.3.

C.F.R. “C.F.R.” has the meaning defined in the definition of “Hazardous
Materials” in this Section 2.3.

Closing. “Closing” means the event of the transfer of title to the Property from
Seller to Buyer on or before the Closing Date.

Closing Costs. “Closing Costs” has the meaning defined in Section 1.7.

Closing Date. “Closing Date” has the meaning defined in Section 1.6.

Condemnation Action. “Condemnation Action” has the meaning defined in Section
4.4.2.

Conditions of Title. “Conditions of Title” means the following exceptions to
title to the Property:

a.
The lien for real property taxes and assessments not yet due and payable;

b.
The lien for supplemental taxes, if any, assessed pursuant to the provisions of
Revenue and Taxation Code Sections 75 through 75.80, inclusive, not yet due and
payable;

c.
All easements, licenses, rights of ways and similar agreements, of record as of
the date of execution of this Agreement.

d.
A Land Conservation Contract(s) under the California Land Conservation Act of
1965, as amended, contained at California Government Code Section 51200 et seq.,
commonly referred as the “Williamson Act;”

e.
The Lease;

f.
The Wetlands Matter, as it applies to the Nevada Ranch, as defined in this
Section 2.3;

g.
All applicable zoning Laws and building restrictions now and in effect as of the
Closing;

h.
Any exceptions to title created by Buyer; and,

i.
Any other exceptions to title approved or deemed approved by Buyer pursuant to
Section 4.2(b), or specifically waived in writing by Buyer.

Crops. “Crops” collectively means any and all of Tenant’s right, title and
interest in any and all crops currently growing, harvested, or to be grown upon
the Land under the respective Lease, whether remaining located on the Land or in
storage or other facilities and the proceeds of the sale or other disposition of
the same. The Crops are owned solely and exclusively by Tenant.

Deed. “Deed” means the deed from Seller, as the grantor, to Buyer, as the
grantee, in substantially the same form attached hereto as Exhibit “D” and
incorporated herein by reference as if fully set forth at length.

Deposit. “Deposit” has the meaning defined in Section 1.2, and shall include all
interest accrued thereon.

Due Diligence Period. “Due Diligence Period” has the meaning defined in Section
1.3.

Effective Date. “Effective Date” has the meaning defined in the opening
paragraph of this Agreement.

Environmental Law. “Environmental Law” means any applicable Law (as defined in
this Section 2.3) relating to the control, disposal, exposure to, generation,
handling, regulation of, storage, treatment or transportation of Hazardous
Materials (as defined in this Section 2.3).

Escrow. “Escrow” means the escrow opened at the Title Company to consummate the
transaction contemplated by this Agreement pursuant to Section 6.2.

Escrow Instructions. “Escrow Instructions” collectively means this Agreement and
the Title Company’s standard form escrow instructions consistent with this
Agreement. The parties acknowledge and understand that the Escrow Instructions
may be supplemented at the request of the Title Company. To the extent of any
inconsistency between such standard form escrow instructions and this Agreement,
this Agreement shall control, govern, take precedence and otherwise prevail.

Exchange Documents. “Exchange Documents” has the meaning defined in Section
7.18.

Excluded Improvements. “Excluded Improvements” has the meaning defined in
Paragraph “D” of the “Recitals” portion of this Agreement.

Fax. “Fax” has the meaning defined in Section 7.6(iii).

Governmental Agency; Governmental Agencies. “Governmental Agency” means the
UNITED STATES GOVERNMENT, the STATE OF CALIFORNIA, COUNTY OF MERCED, California
political subdivision, and/or all other applicable courts, governmental
authorities, public and quasi-public agencies, or rulemaking authorities having
jurisdiction over the Property. “Governmental Agencies” is the plural of
Governmental Agency.

Hazardous Materials. “Hazardous Materials” means and refers to any substance,
material or waste which is or becomes: (i) regulated by any Governmental Agency
as a hazardous waste; (ii) is defined as a “solid waste,” “sludge,” “hazardous
waste,” “extremely hazardous waste,” “restricted hazardous waste,” “Non-RCRA
hazardous waste,” “RCRA hazardous waste,” or “recyclable material,” under any
federal, state or local statute, regulation, or ordinance, including, without
limitation, California Health and Safety Code Sections 25115, 25117, 25117.9,
25120.2, 25120.5, 25122.7, 25140 or 25141; (iii) defined as a “Hazardous
Substance” under California Health and Safety Code Section 25316; (iv) defined
as a “Hazardous Material,” “Hazardous Substance” or “Hazardous Waste” under
California Health and Safety Code Section 25501; (v) defined as a “Hazardous
Substance” under California Health and Safety Code Section 25281; (vi) asbestos;
(vii) petroleum products, including, without limitation, petroleum, gasoline,
used oil, crude oil, waste oil, and any fraction thereof, natural gas, natural
gas liquefied, methane gas, natural gas, or synthetic fuels, (viii) materials
defined as hazardous or extremely hazardous pursuant to any other applicable Law
not referenced herein; (ix) pesticides, herbicides and fungicides; (x)
polychlorinated biphenyls; (xi) defined as a “Hazardous Substance” pursuant to
Section 311 of the Federal Water Pollution Control Act (33 United States Code
[“U.S.C.”] Section 1251 et seq.); (xii) defined as a “Hazardous Waste” pursuant
to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq., or 40 Code of Federal Regulations (“C.F.R.”) Section 239
et seq.; (xiii) defined as a “Hazardous Substance” or “Mixed Waste” pursuant to
Section 101 of the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., and regulations promulgated
thereunder; (xiv) defined as a “Hazardous Substance” pursuant to Section 401.15
of the Clean Water Act, 40 C.F.R. Section 116; (xv) defined as an “Extremely
Hazardous Substance” pursuant to Section 302 of the Superfund Amendments and
Reauthorizations Act of 1986, 42 U.S.C. Section 11002 et seq. or 40 C.F.R.
Section 300 et seq.; (xvi) defined as “medical waste” pursuant to California
Health and Safety Code Section 25023.2; (xvii) defined as a “Hazardous Air
Pollutant” pursuant to the Federal Clean Air Act, 42 U.S.C. Section 7401 et
seq.; (xviii) defined as likely to cause “unreasonable adverse effects on the
environment” pursuant to the Federal Insecticide, Fungicide, and Rodenticide
Act, 7 U.S.C. Section 136 et seq.; or, (xix) defined as like to present an
“unreasonable risk of injury to health or the environment” pursuant to Toxic
Substances Control Act of 1976, 15 U.S.C. Section 2601 et seq. For the purposes
of this Agreement, used tires and asphalt shall not be considered Hazardous
Materials.

Improvements. “Improvements” collectively means any and all of the following
equipment, fixtures, improvements and tangible personal property, concerning the
Land:

a.
Permanent irrigation and water distribution system in, on or under the Property,
including, without limitation, the following to the extent applicable:

i.
Permanently installed aboveground and belowground irrigation and water
distribution equipment, including, without limitation, fixed irrigation
equipment (including irrigation and return pumps), casings, risers, water well
structures, culverts, irrigation and water pipelines, motors, pumps, pump house,
utility power lines and valves, including, without limitation, filter stations
and related systems and all related power and control units and systems; and,

ii.
Permanently installed ditches, ponds, lined and unlined reservoirs and weirs;
and,

b.
Amenities, appurtenances, betterments, buildings, fixtures, structures and other
improvements in, on or under, or affixed to the Property, whether above-or
belowground, including, without limitation, such fixtures that would be
considered for a trade, manufacture, ornamental or domestic use pursuant and
subject to California Civil Code Section 1019 including, without limitation,
shops, storage sheds, and fuel and chemical storage tanks.

The Improvements do not include, and specifically exclude, the Crops and/or the
Excluded Improvements.

Independent Contract Consideration. “Independent Contract Consideration” has the
meaning defined in Section 3.5.

Land. “Land” has the meaning defined in Paragraph “A” of the “Recitals” portion
of this Agreement.

Law; Laws. “Laws” collectively shall mean any and all acts, administrative or
judicial precedents or authorities, including the interpretation or
administration thereof by any governmental authority or entity charged with the
enforcement, interpretation or administration thereof, agreements with,
approvals, authorizations, awards, codes, consents, declarations, decrees,
directed duties, directives, guideline documents, guidelines, edicts,
exemptions, injunctions, judgments, laws, licenses, non-contractual restriction,
orders, ordinances, permits, process, regulations, requests, requirements,
rules, rulings, sanctions, standards, statutes, treatises, waivers and/or writs,
now in force or as may be enacted or amended, changed, modified, promulgated,
revised, or supplemented, of any and all Government Agencies. “Law” is the
singular version of Laws.

Lease Assignment. “Lease Assignment” means the “Assignment and Assumption of
Lease” conveying Seller’s interest in the Lease in substantially the same form
attached hereto as Exhibit “E” and incorporated herein by reference as if fully
set forth at length.

Lease. “Lease” has the meaning defined in Paragraph “B” of the “Recitals”
portion of this Agreement.

NRCS. “NRCS” has the meaning defined in the definition of “The Wetlands Matter”
in this Section 2.3.

Notice to Tenant. “Notice to Tenant” has the meaning defined in Section 6.11.

Opening of Escrow. “Opening of Escrow” shall mean the date that both an original
of this Agreement signed by the parties has been deposited into Escrow, and
Buyer has deposited the full amount of the Deposit into Escrow.

Party; Parties. “Party” and “parties” have the meanings defined in the opening
paragraph of this Agreement.

Preliminary Title Report. “Preliminary Title Report” means the preliminary title
report for the Land in an electronic/“ePre” format with hyperlinks to such title
exception documents (collectively the “Title Documents”) and, if applicable, a
colored map(s) with plotted easements issued by the Title Company at Seller’s
sole cost and expense without right of reimbursement from Buyer pursuant to
Section 4.1(c); provided, however, that any additional cost incurred to issue a
preliminary title report precedent to issuance of an ALTA Owner’s Policy of
Title Insurance with extended coverage, if elected by Buyer as provided in the
definition of “Title Policy” in this Section 2.3, shall be borne by Buyer
without right of reimbursement from Seller.

Property. “Property” has the meaning defined in Paragraph “C” of the “Recitals”
portion of this Agreement. “Property” collectively means Seller’s interest in
the following:

a.
The Land;

b.
The Appurtenant Rights

c.
The Improvements;

d.
The Lease;

e.
Any and all oil, gas and other hydrocarbon substances, and minerals, including,
without limitation, all coal, metals, ores, sand, gravel and the like within or
underlying the Land and owned by Seller and not reserved or excepted in prior
deeds of record, if any; and,

f.
Any and all water, water agreements or contracts, water rights (whether
riparian, appropriative, groundwater, overlying, prescriptive, surface water or
otherwise, and whether or not appurtenant), and water stock concerning, or
relating to the Land, or within or underlying the Land and owned by Seller and
not reserved or excepted in prior deeds of record, if any, and that are
assignable by Seller and assumable by Buyer.

The Property does not include, and specifically excludes, the Crop and the
Excluded Improvements.

Property Documents. “Property Documents” has the meaning defined in Section
4.1(a).

Purchase Price. “Purchase Price” has the meaning defined in Section 1.1.1.

Seller. “Seller” has the meaning defined in the opening paragraph of this
Agreement.

Seller Group. “Seller Group” has the meaning defined in Section 5.2.1

Taxes. “Taxes” has the meaning defined in Section 6.6.1.

Tenant. “Tenant” has the meaning defined in Paragraph “B” of the “Recitals”
portion of this Agreement.

Tenant Estoppel Certificate. “Tenant Estoppel Certificate” means the “Tenant
Estoppel Certificate” completed and then executed by Tenant in favor of Buyer in
substantially the same form attached hereto as Exhibit “F” and incorporated
herein by reference as if fully set forth at length.

Title Company. “Title Company” means CHICAGO TITLE INSURANCE COMPANY, a Nebraska
corporation.

Title Defect. “Title Defect” has the meaning defined in Section 4.2(b).

Title Documents. “Title Documents” has the meaning defined in the definition of
“Preliminary Title Report” in this Section 2.3.

Title Policy. “Title Policy” means the respective CLTA Owner’s Policy of Title
Insurance for the Land in the amount of the Purchase Price, issued by the Title
Company that insures that title to the Property is vested in Buyer subject only
to the Conditions of Title. At the election of Buyer, Buyer may obtain an ALTA
Owner’s Policy of Title Insurance with extended coverage, together with any
endorsements thereto as may be requested by Buyer, subject to Buyer’s payment of
the additional premium or cost therefor. Seller agrees to provide an
owner’s/seller’s affidavit or declaration to the Title Company in order to
provide it with the information necessary to comply with commitment
requirements, to provide extended coverage (i.e., for the removal or
modification of the pre-printed exceptions for parties in possession, mechanics’
liens and notice of assessments), or otherwise give facts about ownership or
title aspects of the Property.

Title Review Period. “Title Review Period” has the meaning defined in Section
1.4.

U.S.C. “U.S.C.” has the defined in the definition of “Hazardous Materials” in
this Section 2.3.

The Wetlands Matter. As part of Tenant’s acquisition of Nevada Ranch, as
predecessor in interest to Seller, and prior to selling Nevada Ranch to Seller,
Tenant discovered that there were notices of potential environmental violations
from the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and the UNITED STATES
ARMY CORPS OF ENGINEERS, both federal public agencies; and the NATURAL RESOURCES
CONSERVATION SERVICE, a federal public agency (“NRCS”), concerning the
disturbance or destruction of “wetlands” on Nevada Ranch. Said potential
environmental violations concerning the Nevada Ranch have now been amicably
resolved pursuant to the following documents:

a.
The “Grasslands Mitigation Bank Agreement for Sale of Mitigation Credits”
between WESTERVELT ECOLOGICAL SERVICES, LLC, a Delaware limited liability
company authorized to do business in the State of California, and Tenant dated
November 12, 2015; and,

b.
The “USDA-NRCS Wetland Mitigation Agreement [--] Mitigation Bank” between NRCS,
Seller, HOSTETLER RANCHES, LLC, a California limited liability company, and
Tenant dated November 16, 2015; and,

c.
The “Hostetler-Olam Wetland Mitigation, Certified Wetland Determination” letter
from NRCS to the consultant for, among others, Seller and Tenant dated February
22, 2016.

The term the “Wetlands Matter” collectively refers to the foregoing facts and
circumstances and there settlement.]

ARTICLE III. PURCHASE AND SALE OF THE PROPERTY

3.1.    Purchase and Sale; “AS IS”/”WITH ALL FAULTS” Condition. Seller agrees to
sell the Property to Buyer and Buyer agrees to purchase the Property from Seller
upon and “AS IS”/“WITH ALL FAULTS”/“WHERE IS” basis and upon all other terms,
covenants and conditions set forth in this Agreement. Except for and subject to
Seller’s express warranties and representations made in Section 5.1 or elsewhere
in this Agreement, Buyer acknowledges and agrees that upon Closing, Seller
agrees to sell the Property to Buyer and Buyer agrees to purchase the Property
from Seller upon an “AS IS” / “WITH ALL FAULTS” / “WHERE IS” basis. Except for
Seller’s express warranties and representations made in Section 5.1, the implied
warranties made in the Deed as specified in California Civil Code Section 1113,
or elsewhere in this Agreement, Buyer has not relied and will not rely on, and
Seller has not made and is not liable for or bound by, any other express or
implied warranties, guarantees, statements, representations or information
pertaining to the Property or relating thereto (specifically including, without
limitation, property information packages distributed with respect to the
Property) made or furnished by Seller, agent or third party representing or
purporting to represent Seller, to whomever made or given, directly or
indirectly, orally or in writing, including, without limitation, statements,
documents or other information provided by Tenant. Except for Seller’s express
warranties and representations made in Section 5.1, the implied warranties made
in the Deed as specified in California Civil Code Section 1113 or elsewhere in
this Agreement, Buyer represents that it is a knowledgeable, experienced and
sophisticated purchaser of real estate and that it is relying solely on its own
expertise and that of Buyer’s consultants in purchasing the Property and shall
make an independent verification of the accuracy of any documents and
information provided by Seller. Buyer will conduct such inspections and
investigations of the Property as Buyer deems necessary, including, without
limitation, the physical and environmental conditions thereof, and, subject to
Seller’s express warranties and representations made in Section 5.1, the implied
warranties made in the Deed as specified in California Civil Code Section 1113
or elsewhere in this Agreement, shall rely upon same. Buyer acknowledges that,
if Seller complies with the conditions, provisions and terms of this Agreement,
Seller shall have afforded Buyer a full opportunity to conduct such
investigations of the Property as Buyer deemed necessary to satisfy itself as to
the condition of the Property and the existence or non-existence or curative
action to be taken with respect to any Hazardous Materials on or discharged from
the Property, and will rely solely upon same and not upon any information
provided by or on behalf of Seller or its agents or employees with respect
thereto other than such representations, warranties and covenants of Seller as
are expressly set forth in this Agreement. Buyer also acknowledges that the
Property has been operated as a commercial farm for many years, and that certain
agricultural chemicals, some of which may be considered toxic or hazardous, have
been used and stored thereon. Upon Closing but subject to Seller’s express
warranties and representations made in Section 5.1, the implied warranties made
in the Deed as specified in California Civil Code Section 1113 or elsewhere in
this Agreement, Buyer shall assume the risk that adverse matters, including,
without limitation, adverse physical or construction defects or adverse
environmental, health or safety conditions, may not have been revealed by
Buyer’s inspections and investigations. Buyer hereby represents and warrants to
Seller that Buyer shall have had, by the Closing Date, adequate opportunity to
consult with legal counsel, agricultural, environmental and other advisors and
consultants in connection with the transaction contemplated by this Agreement.
Buyer waives any and all rights or remedies it may have or be entitled to,
deriving from disparity in size or from any significant disparate bargaining
position in relation to Seller. AGAIN, EXCEPT FOR SELLER’S EXPRESS
REPRESENTATIONS AND WARRANTIES MADE IN SECTION 5.1, THE IMPLIED WARRANTIES MADE
IN THE DEED AS SPECIFIED IN CALIFORNIA CIVIL CODE SECTION 1113 OR ELSEWHERE IN
THIS AGREEMENT, BUYER REPRESENTS THAT IT IS PURCHASING THE PROPERTY IN AN “AS
IS”/“WITH ALL FAULTS”/”WHERE IS” CONDITION. AGAIN, EXCEPT FOR SELLER’S EXPRESS
REPRESENTATIONS AND WARRANTIES MADE IN SECTION 5.1, THE IMPLIED WARRANTIES MADE
IN THE DEED AS SPECIFIED IN CALIFORNIA CIVIL CODE SECTION 1113 OR ELSEWHERE IN
THIS AGREEMENT, BUYER DOES HEREBY WAIVE, AND SELLER DOES HEREBY DISCLAIM, ALL
WARRANTIES OF ANY TYPE OF KIND WHATSOEVER WITH RESPECT TO THE PROPERTY, WHETHER
EXPRESS OR IMPLIED, INCLUDING, BY WAY OF DESCRIPTION BUT NOT LIMITATION, THOSE
OF FITNESS FOR A PARTICULAR PURPOSE AND USE, TENANTABILITY OR HABITABILITY.

3.2.    Payment of the Purchase Price. Buyer shall pay the Purchase Price to
Seller on the Closing Date pursuant to Section 6.4.2(a). The Purchase Price
shall be paid as follows:

a.
The Deposit; and

b.
The balance of Thirteen Million Ninety-One Thousand Eight Hundred Thirty-Two
Dollars and No Cents ($13,091,832.00), payable in either cash, cashier’s check,
or by wire transfer to Seller at the Close of Escrow.

As between the legal parcels of Property, the Purchase Price shall be allocated
pursuant to Section 3.4.

3.3.    Deposit. Buyer shall pay into Escrow the Deposit in the amounts, upon
the conditions, provisions’ and terms, and within the time periods specified in
Section 1.2. Upon the expiration of the Due Diligence Period and if Buyer has
not elected to terminate the Agreement and the transaction contemplated
thereunder, and any accrued interest thereon, the Deposit shall be applicable to
the Purchase Price and nonrefundable except as otherwise provided in this
Agreement. The parties agree that the Deposit shall be applied to the Purchase
Price at the Closing pursuant to 6.4.2(a) or, in the event of a default or
breach of this Agreement by Buyer, the Deposit shall constitute liquidated
damages pursuant to Section 7.1. The parties also agree that the Deposit shall
be fully refundable to Buyer in the event Buyer exercises its right to terminate
the Agreement during the Due Diligence Period, pursuant to Section 4.2(a) or in
the event of a default or breach of this Agreement by Seller.

3.4.    Allocation of Purchase Price. Subject to Section 6.9.2, the parties
acknowledge, understand and agree that the Purchase Price shall be allocated
only and solely to the Property. For all purposes, including for real property
like-kind exchange purposes under Section 7.18, the parties also acknowledge,
understand and agree that the Purchase Price shall be allocated amongst the
legal parcels constituting the Property as follows:

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

ASSESSOR’S PARCEL NO.
ASSESSED ACREAGE
PURCHASE PRICE ALLOCATION
068-130-028
157.00

$1,843,626.00

068-130-029
159.00

$1,867,112.00

068-130-031
159.40

$1,871,809.00

068-130-032
163.80

$1,923,477.00

068-130-033
158.90

$1,865,937.00

068-130-034
162.40

$1,907,037.00

068-130-044
166.30

$1,925,834.00

TOTAL
1,126.80

$13,231,832.00

3.5.    Independent Consideration. Contemporaneously with the execution and
delivery of this Agreement and as part of the Deposit, Buyer shall pay to
Seller, and Seller hereby acknowledges the receipt of said payment by its
execution of this Agreement, the amount of One Hundred Dollars and No Cents
($100.00) (the “Independent Contract Consideration”). The Independent Contract
Consideration is independent consideration for Buyer’s right to inspect and
conduct due diligence regarding the Property for the purpose of considering its
purchase from Seller pursuant to this Agreement. The Independent Contract
Consideration is in addition to and independent of any other consideration or
payment provided in this Agreement; provided, however, that it is applicable to
the Purchase Price at the Closing. The Independent Contract Consideration is
non-refundable, is bargained for and fully earned, and shall be retained by
Seller notwithstanding any other condition, provision or term of this Agreement.
Buyer’s duty, obligation and responsibility to deliver the Independent Contract
Consideration shall survive the termination of this Agreement.

3.6.    No Loan Contingency. Buyer obtaining a loan for the purchase of the
Property is not a contingency of this Agreement. If Buyer does not obtain a loan
and as a result Buyer is unable to purchase the Property in accordance with the
terms of this Agreement, Seller shall be entitled to the Deposit and any and all
other legal remedies as provided herein. Notwithstanding the foregoing or
anything herein to the contrary, Buyer shall have the right, one time, to extend
the Closing Date, but not the Due Diligence Period, by fifteen (15) days in
order only to secure financing which right may be exercised by delivering
written notice to Seller prior to the end of the Due Diligence Period.

ARTICLE IV. CONDITIONS TO CLOSE OF ESCROW

4.1.    Conditions. Buyer’s duty, obligation and responsibility to purchase the
Property or otherwise to perform any duty, obligation or responsibility under
this Agreement shall be expressly conditioned upon the fulfillment of each of
the following conditions on or before the expiration of the Due Diligence
Period, unless another time period is specified below:

a.
To the extent that such documents are applicable, exist, are in Seller’s custody
or possession, or are available to Seller, Buyer’s review and approval of the
documents, information and materials concerning or related to the Property
contained in the electronic data room set up by Seller and to which Buyer has
had access prior to the Effective Date (collectively the “Property Documents”).
Under no circumstances shall Seller be obligated to make available to Buyer any
documents protected by attorney-client privilege or attorney work product
protection, tax returns, internal memoranda, appraisals, or other proprietary
documentation and/or information;

b.
Seller shall provide Buyer with the Tenant Estoppel Certificate completed and
then executed by Tenant;

c.
On or before the expiration of the Title Review Period, to review same and
approve or disapprove of the Preliminary Title Report and all exceptions to
title shown therein;

d.
Buyer’s inspection and approval in Buyer’s sole and absolute discretion of any
and all access, economic, endangered plant or animal species or habitat issues
or restrictions, engineering, entitlement, environmental, land use, legal,
permitting, physical, soils, surveying, utility, water and zoning matters
relating to the Property including, without limitation, Buyer’s approval of the
following: (i) the feasibility of the Property for Buyer’s anticipated use of
the Property; (ii) Buyer’s review and approval of a soils report issued at
Buyer’s sole cost and expense by a soils engineer designated by Buyer, and a
Phase 1 environmental site assessment issued at Buyer’s sole cost and expense by
an environmental consultant designated by Buyer; (iii) Buyer’s inspection and
approval of the physical condition of the Property and its appurtenances,
including any water wells and irrigation systems, including current water
volume, historic well pumping records, if any, and equipment condition; and,
(iv) the results of any inspection, test, examination, audit, study, review,
analysis or other review conducted by Buyer, including, without limitation, site
surveys (including an ALTA survey, if any), zoning and land use restrictions,
public and private, present and future access, geological and environmental
testing, drainage conditions, the presence of Hazardous Materials, and any other
condition or circumstance on or relating to the Property which may affect the
Property or Buyer’s anticipated use of the Property; and,

e.
The commitment of the Title Company to issue, subject only to payment of the
normal premium, and the issuance of the Title Policy upon the Closing, and
Seller shall have delivered to the Title Company such documents as are
reasonable and customary in similar transactions, and shall have performed such
other acts, as the Title Company shall reasonably require in order to issue the
Title Policy.

The failure of Buyer to provide written notice to Seller that the Property is
acceptable on or before the expiration of the Due Diligence Period shall be
deemed by the parties as Buyer’s approval of the Property pursuant to Section
4.2(b).

4.2.    Failure of Conditions. Subject to Section 6.4, should Buyer disapprove
any of the conditions set forth in Section 4.1 within the time specified, Buyer
shall have the power, exercisable in its sole and absolute discretion by giving
of written notice to Seller, of either of the following:

a.
To terminate this Agreement and recover any amounts paid on account of the
Purchase Price, including the Deposit, less the Independent Consideration, or
any documents delivered pursuant to the provisions of this Agreement, in which
event the parties shall be relieved and released of any further duties,
obligations and responsibilities hereunder except for Seller’s right to retain
the Independent Contract Consideration as provided in Section 3.5, any
continuing indemnification obligations as set forth in Section 5.4, and subject
to the payment of any escrow and title cancellation fees as provided in Section
6.7; or,

b.
To waive such condition and proceed with the Closing; provided, however, that
Buyer’s failure to so approve or disapprove of any such condition shall be
deemed approval thereof; provided further, however, that should Buyer disapprove
of any exception to title (the “Title Defect”) pursuant to Section 4.1(c) within
the time specified, Buyer shall first give five (5) business days written notice
of the Title Defect which it has disapproved, and Seller shall have an
additional five (5) business days after receiving the notice of Title Defect
thereafter to determine whether it is willing or able to correct such Title
Defect.

Seller shall give written notice to Buyer within such five (5) business day
period whether it is willing or able to correct such Title Defect. If Seller is
unwilling or unable to correct any such Title Defect, Buyer shall have the right
to exercise the remedy contained in Section 4.2(a). If Seller states that it is
willing and able to do so, then Seller shall proceed to correct the Title Defect
as soon as is practicable, and in all events prior to Closing, and if Seller is
thereafter unable to correct the Title Defect prior to the Closing, Buyer shall
continue to have the right to exercise the remedy specified in Section 4.2(a).

No Title Defect may be insured over or removed of record by indemnification or
similar arrangement with the Title Company without Buyer’s prior written
consent, which shall not be unreasonably withheld, conditioned or delayed. No
satisfaction or waiver of any condition by Buyer shall reduce or eliminate the
rights or remedies of Buyer by reason of any breach of any covenant,
representation, or warranty made by Seller in this Agreement. Notwithstanding
anything in this Agreement to the contrary, Seller shall remove any and all
monetary encumbrances, deeds of trust, liens, mortgages, etc., against the
Property at or prior to the Closing at Seller’s sole cost and expense with no
right of reimbursement from Buyer. If Seller is unwilling or unable to remove
such monetary encumbrances, deeds of trust, liens, mortgages, etc., against the
Property at or prior to the Closing, Buyer shall have the right to exercise the
remedy contained in Section 4.2(a).

4.3.    Approval of Conditions; Conditions Precedent to Closing.

4.3.1.    Approval of Conditions. Subject to Sections 4.4 and 5.1, Buyer’s
approval of all the conditions set forth in Section 4.1, or Buyer’s written
waiver of all disapproved and/or unsatisfied conditions set forth in Section 4.2
shall constitute Buyer’s acknowledgment and agreement that Buyer has examined
and approved all matters concerning the Property and all other rights to be
acquired.

4.3.2.    Conditions Precedent to Seller’s Obligation to Close of Escrow. The
following conditions are for Seller’s benefit only to close Escrow/the Closing
and consummate the sale of the Property shall be satisfied as of the Closing
Date:

a.
Buyer shall have deposited with Escrow all duly executed documents required to
be deposited pursuant to Section 6.4.2(b) or any other provision of this
Agreement;

b.
Buyer shall have deposited the Purchase Price minus the Deposit plus any
additional amounts required under Section 6.4.2(a) into Escrow; and,

c.
The representations and warranties made by Buyer in this Agreement shall be
accurate, correct and true as of the Closing Date with the same effect as though
such representations and warranties had been made or given at the Closing, and
Buyer shall have performed and complied in all respects with its duties,
obligations and responsibilities under this Agreement which are to be performed
by Buyer or complied with by Buyer prior to or upon the Closing Date, including,
without limitation, Buyer’s deposit with Title Company of all duly executed
documents set forth in Section 6.4.2.

Each of the conditions specified in this Section 4.3.2 are solely for Seller’s
benefit and may only be waived in writing by Seller.

4.3.3.    Conditions Precedent to Buyer’s Close of Escrow. The following
conditions are for Buyer’s benefit only to close Escrow/the Closing and to
consummate the purchase the Property shall be satisfied as of the Closing Date:

a.
Seller shall have deposited with Escrow all duly executed documents required to
be deposited pursuant to Section 6.4.1 or any other provision of this Agreement;

b.
There shall be no pending or threatened condemnation or taking of any part of
the Property as of the Closing Date;

c.
The commitment of the Title Company to issue, subject only to payment of the
normal premium, and the issuance of the Title Policy upon the Closing Date, and
Seller shall have delivered to the Title Company such documents as are
reasonable and customary in similar transactions, and shall have performed such
other acts, as the Title Company shall reasonably require in order to issue the
Title Policy effective as of the Closing Date;

d.
Subject to the farming and harvesting of the Crops, and the possible
implementation of Laws concerning water, the Property being, in all material
respects, in the same condition on the Closing Date as it was on the Effective
Date;

e.
Seller’s delivery to Buyer upon the Closing Date of fee title to the Property by
delivery of the Deed pursuant to Section 6.1 and the fulfillment of each of the
other conditions and covenants contained in Article VI, including, without
limitation, delivery of possession of the Property pursuant to Section 6.10;

f.
The representations and warranties made by Seller in this Agreement shall be
accurate, correct and true as of the Closing Date with the same effect as though
such representations and warranties had been made or given at the Closing, and
Seller shall have performed and complied in all respects with its duties,
obligations and responsibilities under this Agreement which are to be performed
by Seller or complied with by Seller prior to or upon the Closing Date,
including, without limitation, Seller’s deposit with Title Company of all duly
executed documents set forth in Section 6.4.1;

g.
Seller’s delivery of possession of the Property pursuant to Section 6.10; and,

h.
There shall have been no material adverse change in the financial condition of
the Tenant prior to the end of the Due Diligence Period.

Each of the conditions specified in this Section 4.3.3 are solely for Buyer’s
benefit and may only be waived in writing by Buyer.

4.4.    Damage or Destruction; Eminent Domain or Condemnation; Maintenance of
Property.

4.4.1.    Destruction of the Property. If, prior to the Closing, there shall be
catastrophic damage to or destruction of all or a major portion of the Property,
Buyer shall have the right to terminate this Agreement, in which event the
Deposit shall be returned to Buyer and neither party shall have any further
rights or obligations hereunder. If Buyer does not elect to terminate the
contract pursuant to this Section 4.4.1 at Closing, Buyer and Seller shall
proceed with the Closing (with no change in the amount of the Purchase Price)
and Seller shall assign all insurance proceeds to Buyer received from its
insurance carriers and others as a consequence of such destruction. The
provisions of California Civil Code Section 1662(a) are hereby waived by the
parties, and this Section 4.4.1 shall govern any damage or of such destruction
of the Property.

4.4.2.    Eminent Domain or Condemnation of the Property. If, prior to the
Closing, any of the Property is the subject of any eminent domain or
condemnation proceeding, whether actual or threatened (in writing), temporary or
permanent, partial or total (a “Condemnation Action”), and the Condemnation
Action would, in Buyer’s sole and absolute judgment, adversely affect the use of
the Property or result in the diminution in the value of the Property, Buyer
may, at its option, either: (i) terminate this Agreement as provided in Section
4.2; or, (ii) close the transaction contemplated herein, in which event Seller
shall assign to Buyer all of Seller’s right, title and interest in and to the
Condemnation Action and any awards, damages or other compensation arising from
the Condemnation Action, when such sums are received by Seller or on the
Closing, whichever occurs later. Unless or until Buyer has exercised its right
to terminate this Agreement, Seller shall take no action with respect to the
Condemnation Action without the prior written consent of Buyer.

4.4.3.    Maintenance, Farming and Operation of the Property. Except as
otherwise provided in Sections 4.4.1 and 4.4.2, Seller shall use commercially
reasonable efforts to require Tenant to maintain, farm and operate the Property
until the Closing Date in the same manner as it is being maintained, farmed and
operated as of the Effective Date.

ARTICLE V. COVENANTS, REPRESENTATIONS AND WARRANTIES

5.1.    Covenants, Representations and Warranties. The parties each make the
following covenants, representations and warranties, in addition to any
covenants, representations or warranties specified to be made by Seller or Buyer
elsewhere in this Agreement, each of which representations and warranties only
shall do the following: (i) survive the Closing and the recordation of the Deed
as set forth at the end of this Section 5.1; (ii) be deemed material and being
relied upon by the other; (iii) be true in all respects as of the date each is
made; (iv) the term “to the best of Seller’s knowledge” when used in this
Section 5.1 means the actual knowledge of NEIL JEHLE and GRIFFIN MOAG, without
the imputation of knowledge either from facts which may be disclosed in the
public record or that might have been obtained from diligent inquiry or
investigation; and, (v) be true in all material respects on the Closing:

Covenants, Representations and Warranties

a.
Seller shall grant Buyer and its agents and employees, as of the Effective Date,
the right to enter the Property at any time prior to the Closing Date for the
purpose of inspecting the Property, making such surveys or performing such tests
or studies as it may deem appropriate and performing any other duties,
obligations and/or responsibilities of Buyer under this Agreement, including
satisfaction of any of the conditions set forth in Article IV; provided,
however, that: (i) all such activities shall not include any invasive or
destructive testing or any phase II environmental tests without the prior
written consent of Seller as exercised in its reasonable discretion; (ii) shall
be at Buyer’s sole cost and expense without right of reimbursement from Seller;
(iii) Buyer shall not unreasonably interfere with Seller’s and/or Tenant’s
existing activities on the Property; and, (iv) Buyer shall indemnify, hold
harmless and defend Seller and Tenant from and against any claim, loss, damage
or expense, including, without limitation, any and all reasonable attorneys’
fees, asserted against or suffered by Seller as a result of any such entry
pursuant to Section 5.4.2. Buyer will keep the Property free from mechanic’s and
materialmens’ liens attributable or arising from its activities on the Property.
Buyer shall repair any and all damage to any portion of the Property including,
without limitation, the Crops, arising out of the acts or omissions of Buyer or
its representatives while on the Property or in the conduct of any evaluations
or other activities contemplated by this Agreement. Buyer shall maintain
comprehensive general liability and property damage insurance in an amount not
less than One Million Dollars and No Cents ($1,000,000.00) covering its and its
agents’ advisors and employees’ activities on the Property and naming Seller and
Tenant as additional insured and providing for thirty (30) days’ prior written
notice to Seller of any cancellation thereof and shall, promptly after execution
of this Agreement (and prior to Buyer or any of its representatives going onto
the Property), deliver to Seller proof satisfactory to Seller that such
insurance is in force and effect and that Seller and tenant have been named as
an additional insured;

b.
As of the Effective Date and prior to the Closing, Seller shall not do any of
the following without Buyer’s prior written consent: (i) enter into any
agreement, contract or lease with respect to the Property which will survive the
Closing or otherwise materially affect the use, operation or enjoyment of the
Property after the Closing without Buyer’s prior written consent; or, (ii)
change, modify, supplement, amend or cancel any existing agreement, contract or
lease with respect to the Property, including, without limitation, the Lease,
without Buyer’s prior written consent. Buyer’s failure to approve any request
for consent hereunder within five (5) business days from written request shall
be deemed to be Buyer’s disapproval of same;

c.
To the best of Seller’s knowledge, Seller hereby represents and warrants that
there are no, and Seller has not received any written notice that there are any,
actions, suits, proceedings, judgments, orders, decrees, defaults, delinquencies
or deficiencies existing, pending, noticed, threatened, proposed or
contemplated, against the Property or against Seller or relating to its
business, properties or assets before or by any court, administrative agency or
private party including, without limitation, planned public improvements,
special assessments or condemnation actions, which in any way would affect
Seller’s ability to carry out its duties, obligations and/or responsibilities
under this Agreement or would result in any charge being levied or assessed
against, or will result in the creation of any lien or assessment on or against,
the Property, except as otherwise shown in the Conditions of Title;

d.
To the best of Seller’s knowledge, Seller hereby represents and warrants as
follows: (i) that neither this Agreement, nor anything provided to be done
hereunder, shall violate, cause a breach of or constitute a default under any
written or oral contract, agreement, instrument, indenture, mortgage, deed of
trust, bank loan, credit agreement, note, evidence of indebtedness, lease,
license, undertaking or other agreement or instrument to which Seller is a
party, or which affects the Property; or, (ii) that consummation of the sale,
transfer, assignment and further encumbrance contemplated herein shall not
result in the violation of any applicable Law;

e.
To the best of Seller’s knowledge, Seller hereby represents and warrants that
none of the Property Documents contain or shall intentionally contain any
materially untrue statement of a material fact or omit or shall intentionally
omit to state a material fact, necessary to make the statements of facts
contained therein not misleading. Seller shall promptly notify Buyer of any
change in facts of which Seller actually becomes aware that would make any
representation and warranty of Seller as contained herein materially incorrect.
The parties also understand that such duty, obligation and responsibility to
provide the foregoing notice to Buyer shall in no way relieve Seller of any
liability for a breach by Seller of any of its covenants, representations or
warranties contained in this Agreement, except that Seller shall have no
liability under this Agreement in the event of a change in circumstances that
occurs after the Effective Date. In the event Seller advises Buyer in writing of
a change in circumstances that would render any representation and warranty
materially misleading, Buyer shall have the right to terminate this Agreement by
written notice to Seller within three (3) business days of receipt of said
information, in which event the Deposit shall be returned to Buyer, and except
for the obligations that survive termination, Buyer shall have no further
obligations to Seller nor shall Seller have any further obligation to Buyer.
Should Buyer not so terminate the Agreement and proceed to Closing, Buyer shall
be deemed to have waived any and all rights with respect to the inaccuracy of
any such representation and warranty;

Property Status

f.
Subject to the Conditions of Title, and to the best of Seller’s knowledge and
except as may be set forth in any of the documents provided to Buyer by Seller
under Section 4.1(a), Seller hereby represents and warrants, that Seller has no
knowledge and has not received written notice that: (x) any person or entity has
a right of first refusal, right to purchase, to lease or to possess or occupy
the Property; and, (y) there are no uncured breaches of the easements included
in the Conditions of Title. To the best of Seller’s knowledge, Seller also
hereby represents and warrants the following specifically with regard to the
Lease: (i) any rent or additional rent due, owing and payable under the Lease
has been paid in full and timely by Tenant; (ii) to the best of Seller’s
knowledge, no breach exists on the part of Seller under the Lease; (iii) except
as otherwise set forth in the letter of Seller to Tenant dated June 14, 2016, to
the best of Seller’s knowledge, no breach exists on the part of Tenant under the
Lease; (iv) there are no rights or options whatsoever to purchase or otherwise
acquire the Property or any portion thereof under the Lease; and, (v) no person
or firm other than Seller and Tenant are in possession of the Property. Nothing
contained in the Deed shall limit the foregoing warranty;

g.
To the best of Seller’s knowledge, Seller hereby represents and warrants that
the Property and/or the operations thereon are not in any material violation in
any way of any applicable Law, including, without limitation, any zoning
restriction;

h.
Except for agricultural chemicals and fuel used in agricultural operations, some
of which may be considered toxic or hazardous, that have been, and continue to
be legally used and stored thereon by Seller and/or Tenant, also except as
disclosed in the Property Documents, and additionally subject to the best of
Seller’s knowledge, Seller, hereby represents and warrants as follows: (i) that
there are no underground storage tanks on the Property; (ii) that there are no
Hazardous Materials on the Property, whether on, in or under the soil,
groundwater or otherwise; (iii) that Seller has not stored, deposited, buried or
in any other way left beneath the ground on the Property any materials
whatsoever, whether organic or inorganic, except in accordance with applicable
Laws, including, without limitation, Environmental Laws; (iv) that there are no
and have been no private or governmental claims or judicial or administrative
actions or proceedings pending, or threatened, against Seller relating to
environmental impairment or regulatory requirements in connection with the
Property or any operations thereon; and, (v) that there has been no release of
Hazardous Materials located on or under the Property that would require notice
to Buyer pursuant to California Health and Safety Code Section 25359.7;

i.
With the exception of the Lease, Seller represents and warrants that, as of the
Closing, there shall be no outstanding contracts made by Seller for any
improvements to the Property which have not been fully paid, except for
contracts assigned and assumed by Buyer as provided in this Agreement, or any
unpaid utility charges or employee salaries or other accrued benefits relating
to operations on the Property prior to the Closing Date. Seller shall cause to
be discharged as of the Closing all other encumbrances, liens, bonds and
mechanics’ or materialmen’s liens arising from any labor and material furnished
to the Property prior to the Closing;

Party Status

j.
Seller represents and warrants that it is not a foreign individual, foreign
corporation, foreign limited liability company, foreign partnership or foreign
estate as defined in the Internal Revenue Code and Income Tax Regulations.
Seller shall deliver to the Title Company and Buyer on the Closing a duly
executed Affidavit of Non-Foreign Status for each Seller;

k.
Seller represents and warrants as follows: (i) it is a single-member limited
liability company duly organized under and by virtue of the Laws of the State of
Washington, is active and in good standing, authorized to do business in the
State of California, and disregarded for federal income tax purposes; (ii) it
has the full right and authority to enter into this Agreement, and to consummate
the sale, transfer, assignment and further encumbrance contemplated herein;
(iii) that the person or persons signatory to this Agreement and any documents
executed pursuant hereto on behalf of Seller have full power and authority to
bind Seller and shall duly execute and, if required, acknowledge such documents;
and, (iv) all such authorizations shall remain in full force and effect at all
times necessary to fully consummate the transaction subject to this Agreement;

l.
Buyer represents and warrants as follows: (i) it is a a limited partnership duly
organized under and by virtue of the Laws of the State of Delaware, active and
in good standing, and authorized to do business in the State of California; (ii)
it has the full right and authority to enter into this Agreement, and to
consummate the sale, transfer, assignment and further encumbrance contemplated
herein; (iii) that the person or persons signatory to this Agreement and any
documents executed pursuant hereto on their behalf have full power and authority
to bind them and shall duly execute and, if required, acknowledge such
documents; and, (iv) all such authorizations shall remain in full force and
effect at all times necessary to fully consummate the transaction subject to
this Agreement;

m.
Each party represents and warrants that: (i) it is not acting on behalf of any
person, group, entity, or nation named by any Executive Order or the United
States Treasury Department, through its Office of Foreign Assets Control or
otherwise, as a terrorist, “Specially Designated National,” “Blocked Person,” or
other banned or blocked person, entity, nation, or transaction pursuant to any
Law that is enforced or administered by OFFICE OF FOREIGN ASSETS CONTROL, a
federal public agency, or another federal Governmental Agency; and, (ii) Buyer
is not engaged in this transaction on behalf of, or instigating or facilitating
this transaction on behalf of, any such person, group, entity or nation.
Notwithstanding anything contained in the foregoing to the contrary, Buyer shall
have no duty to investigate or confirm that any stockholders of GLADSTONE LAND
CORPORATION, a Maryland corporation, or unit holders of GLADSTONE LAND LIMITED
PARTNERSHIP, a Delaware limited partnership, are in compliance with the
provisions of this section, and any violation by any such shareholders or unit
holders shall not be a breach or default by Seller hereunder;

n.
Seller represents and warrants that it has not: (i) made a general assignment
for the benefit of creditors; (ii) filed any voluntary petition in bankruptcy or
suffered the filing of an involuntary petition by Seller’s creditors; (iii)
suffered the appointment of a receiver to take possession of all, or
substantially all, of Seller’s assets; (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Seller’s assets; or, (v)
admitted in writing its inability to pay its debts as they come due;

o.
Buyer represents and warrants that it is a knowledgeable, experienced, and
sophisticated buyer of land and property used in agriculture and a developer of
real estate, and that it is relying solely on its own expertise and that of
Buyer’s advisors and consultants in purchasing the Property. Buyer acknowledges
and agrees that it will have the opportunity to conduct such inspections,
investigations and other independent examinations of the Property and related
matters, including, without limitation, the physical and environmental
conditions thereof, during the Due Diligence Period and will rely upon same and
not upon any statements of Seller except as expressly set forth in this
Agreement; and,

p.
Except as otherwise provided in Section 7.5, the parties shall each be liable
for their own attorneys’ fees and disbursements incurred in connection with the
drafting and negotiation of this Agreement and matters related thereto.

This Section 5.1 shall survive the Closing and the recordation of the Deed.
However, upon the expiration of six (6) months following the Closing, the
liability of each party in connection with each representation or warranty made
by it either in this Section 5.1 or elsewhere in this Agreement or in any of the
documents delivered in connection with the Closing shall cease, except as
regards to: (i) the liabilities of the Seller in connection with the implied
warranties made in each Deed as specified in California Civil Code Section 1113;
and, (ii) as regards to the liabilities of Seller and Buyer in connection with
each breach or inaccuracy of any other representation or warranty of which a
party has given written notice to the other party prior to the end of such six
(6) months period. To be effective for such purpose, any such written notice
must identify or refer to with reasonable particularity the circumstance or
state of affairs that constitutes or has resulted in such a breach or inaccuracy
by the party to whom the notice is delivered. The parties acknowledge,
understand and agree that this Section 5.1 is meant to control, govern, take
precedence and prevail over any applicable statute of limitations.

5.2.    General Disclaimer; Release; Limitation of Damages.

5.2.1.    General Disclaimer. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
CONTRARY, AND EXCEPT FOR: (a) SELLER’S EXPRESS REPRESENTATIONS AND WARRANTIES
SET FORTH IN SECTION 5.1; (b) IMPLIED WARRANTIES MADE IN THE DEED AS SPECIFIED
IN CALIFORNIA CIVIL CODE SECTION 1113; AND/OR, (c) ELSEWHERE IN THIS AGREEMENT,
BUYER ACKNOWLEDGES, UNDERSTANDS AND AGREES THAT NEITHER SELLER NOR ITS GENERAL
PARTNER, LIMITED PARTNERS, MEMBERS, MANAGERS, AGENTS, INDEPENDENT CONTRACTORS,
CONSULTANTS (INCLUDING, WITHOUT LIMITATION, ACCOUNTANTS AND ATTORNEYS),
EMPLOYEES AND/OR REPRESENTATIVES, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF
(COLLECTIVELY “SELLER GROUP”), HAS MADE AND IS NOT NOW MAKING, AND BUYER HAS NOT
RELIED UPON AND WILL NOT RELY UPON (DIRECTLY OR INDIRECTLY), ANY GUARANTIES,
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL
OR WRITTEN, PAST, PRESENT OR FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING,
WITHOUT LIMITATION GUARANTIES, REPRESENTATIONS AND/OR WARRANTIES AS TO: (i)
MATTERS OF TITLE; (ii) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR ANY
PORTION THEREOF; (iii) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS,
LIMITATIONS REGARDING THE WITHDRAWAL OF WATER, AND EARTHQUAKE FAULTS AND THE
RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES; (iv) WHETHER, AND TO THE
EXTENT TO WHICH, THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM
(SURFACE OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY
OR SPECIAL FLOOD HAZARD; (v) DRAINAGE; (vi) SOIL CONDITIONS, INCLUDING THE
EXISTENCE OF INSTABILITY, PAST SOIL REPAIRS, SOIL ADDITIONS OR CONDITIONS OF
SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY
UNDERSHORING; (vii) ZONING TO WHICH THE PROPERTY OR ANY PORTION THEREOF MAY BE
SUBJECT; (viii) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION
THEREOF INCLUDING, WITHOUT LIMITATION, ELECTRICITY, GAS, SEWAGE AND WATER; (ix)
USAGES OF ADJOINING PROPERTY; (x) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF;
(xi) THE VALUE, COMPLIANCE WITH THE DESIGNS, DRAWINGS, PLANS AND SPECIFICATIONS,
SIZE, LOCATION, AGE, USE, DESIGN, QUALITY, DESCRIPTIONS, SUITABILITY, STRUCTURAL
INTEGRITY, OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE
PROPERTY OR ANY PORTION THEREOF; (xii) ANY INCOME, EXPENSES, CHARGES, LIENS,
ENCUMBRANCES, RIGHTS OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR
ANY PART THEREOF; (xiii) THE PRESENCE OF HAZARDOUS SUBSTANCES IN OR ON, UNDER OR
IN THE VICINITY OF THE PROPERTY; (xiv) THE CONDITION OR USE OF THE PROPERTY OR
COMPLIANCE OF THE PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE APPLICABLE
LAWS, INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS; (xv) THE EXISTENCE
OR NON-EXISTENCE OF UNDERGROUND STORAGE TANKS; (xvi) ANY OTHER MATTER AFFECTING
THE STABILITY OR INTEGRITY OF THE PROPERTY; (xvii) THE POTENTIAL FOR FURTHER
DEVELOPMENT OF THE PROPERTY; (xviii) THE EXISTENCE OF VESTED LAND USE, ZONING OR
BUILDING ENTITLEMENTS AFFECTING THE PROPERTY; (xix) THE MERCHANTABILITY OF THE
PROPERTY OR FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE, INCLUDING
AGRICULTURE (BUYER AFFIRMING THAT BUYER HAS NOT RELIED ON THE SKILL OR JUDGMENT
OF SELLER OR ANY MEMBER OF SELLER GROUP TO SELECT OR FURNISH THE PROPERTY FOR
ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE PROPERTY IS
FIT FOR ANY PARTICULAR PURPOSE); OR, (xx) TAX CONSEQUENCES (INCLUDING, WITHOUT
LIMITATION THE AMOUNT, USE OR PROVISIONS RELATING TO ANY TAX CREDITS). BUYER
ACKNOWLEDGES, UNDERSTANDS AND AGREES ALSO THAT, SUBJECT TO SECTION 5.1(e), ANY
DOCUMENTATION AND/OR INFORMATION OF ANY TYPE WHICH BUYER HAS RECEIVED OR MAY
RECEIVE FROM SELLER OR ANY MEMBER OF SELLER GROUP, INCLUDING, WITHOUT
LIMITATION, ANY ENVIRONMENTAL ASSESSMENTS, AUDITS, STUDIES AND SURVEYS, IS
FURNISHED ON THE EXPRESS CONDITION THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN,
BUYER SHALL NOT RELY THEREON, BUT SHALL MAKE AN INDEPENDENT VERIFICATION OF THE
ACCURACY OF SUCH INFORMATION, ALL SUCH INFORMATION BEING FURNISHED, EXCEPT AS
SPECIFICALLY SET FORTH HEREIN, WITHOUT ANY REPRESENTATION OR WARRANTY
WHATSOEVER.

/s/ LP     
Buyer’s Initials

5.2.2.    Release. Buyer shall rely solely upon its due diligence upon and
inspection of the Property in determining the Property’s physical condition and
upon the following: (a) Seller’s express representations and warranties set
forth in Section 5.1; and, (b) the implied warranties made in the Deed as
specified in California Civil Code Section 1113 or elsewhere in this Agreement.
Except for the foregoing, Buyer waives, as of the Closing, Buyer’s right to
recover from Seller or any member of Seller Group, any and all damages, losses,
liabilities, costs or expenses whatsoever, and claims therefor, whether direct
or indirect, known or unknown, or foreseen or unforeseen, which may arise from
or be related to: (i) the physical condition of the Property; and, (ii) the
Property’s compliance, or lack of compliance with any applicable Laws,
including, without limitation, Environmental Laws. Buyer expressly waives the
benefits of California Civil Code Section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

In this connection and to the extent permitted by applicable Law, Buyer hereby
agrees, represents and warrants that Buyer realizes and acknowledges that
factual matters now unknown to it may have given or may hereafter give rise to
causes of action, claims, demands, debts, controversies, damages, costs, losses
and expenses which are presently unknown, unanticipated and unsuspected, and
Buyer further agrees, represents and warrants that the waivers and releases
herein have been negotiated and agreed upon in light of that realization and
that Buyer nevertheless hereby intends, subject to Seller’s express
representations and warranties set forth in Section 5.1, and the implied
warranties made in the Deed as specified in California Civil Code Section 1113,
or elsewhere in this agreement, to release, discharge and acquit Seller and each
and every member of Seller Group, from any such unknown causes of action,
claims, demands, debts, controversies, damages, costs, losses and expenses which
might in any way be included as a material portion of the consideration given to
Seller by Buyer in exchange for Seller’s performance hereunder. Seller has given
Buyer material concessions regarding this transaction in exchange for Buyer
agreeing to the provisions of this Section 5.2.2.

Each party has initialed this Section 5.2.2 to further indicate their awareness
and acceptance of each and every provision of this Section 5.2.2.

/s/ AH                /s/ LP    
Seller’s Initials            Buyer’s Initials

5.2.3.    Limitation of Damages; Waiver of Consequential Damages. TO THE MAXIMUM
EXTENT PERMITTED UNDER THE LAWS OF THE STATE OF CALIFORNIA, AND SUBJECT TO THE
PROVISIONS OF SECTION 7.1 BELOW, THE PARTIES AGREE TO LIMIT THE LIABILITY OF
EACH PARTY, WHETHER SINGULARLY, COLLECTIVELY OR IN ANY COMBINATION WHATSOEVER,
TO THE OTHER FOR ANY AND ALL DAMAGES, LOSSES, LIABILITIES, COSTS OR EXPENSES
WHATSOEVER, AND CLAIMS THEREFOR, WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN,
OR FORESEEN OR UNFORESEEN, INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND
DISBURSEMENTS, AND EXPERT WITNESS FEES AND COSTS, SO THAT THE TOTAL AGGREGATE
LIABILITY OF EITHER PARTY TO THE OTHER UNDER THIS AGREEMENT AND THE TRANSACTION
CONTEMPLATED THEREUNDER SHALL NOT EXCEED THE CUMULATIVE SUM OF TWO HUNDRED
EIGHTY-FIVE THOUSAND DOLLARS AND NO CENTS ($285,00,000.00) (THE “CAP”). AGAIN TO
THE MAXIMUM EXTENT PERMITTED UNDER THE LAWS OF THE STATE OF CALIFORNIA AND
SUBJECT TO THE CAP AND THE PROVISIONS OF SECTION 7.1 BELOW, EACH PARTY ALSO
AGREES TO WAIVE THE RIGHTS TO SEEK AND TO BE ENTITLED TO RECOVER FROM THE OTHER
GROUP CONSEQUENTIAL, EXEMPLARY, INCIDENTAL, PUNITIVE AND/OR SPECIAL DAMAGES. THE
LIMITATION OF DAMAGES AND THE WAIVER OF CONSEQUENTIAL, EXEMPLARY, INCIDENTAL,
PUNITIVE AND/OR SPECIAL DAMAGES CONTAINED IN THIS SECTION 5.2.3 SHALL APPLY: (a)
REGARDLESS OF THE CAUSE OF ACTION OR LEGAL THEORY PLED OR ASSERTED EXCEPT FOR
FRAUD; AND, (b) BOTH TO: (i) EACH PARTY’S DUTIES, OBLIGATIONS OR
RESPONSIBILITIES UNDER THIS AGREEMENT; AND, (ii) TO ANY PROPERTY DOCUMENTS
DELIVERED PURSUANT TO THIS AGREEMENT.

/s/ AH                /s/ LP    
Seller’s Initials            Buyer’s Initials

5.3    Effect of Contrary Actual Knowledge on Representations. Seller shall have
no liability to Buyer by reason of any breached or inaccurate representation or
warranty made by either Seller in this Agreement, in any of the Property
Documents, or in any other documents delivered in connection with the applicable
Closing if, prior to such Closing, Buyer has or comes to have (from whatever
source, including, due diligence investigations or inspections, or the written
disclosure by a Seller or its agents or employees) actual knowledge of such
breach or inaccuracy, and Buyer nevertheless consummates the subject Closing.

5.4.    Indemnification.

5.4.1.    By Seller. Subject to Sections 5.4.3 and 5.4.4, Seller shall waive any
claim against Buyer for, and shall indemnify, hold harmless and defend Buyer
against any claim, loss, damage or expense, including, without limitation, any
and all reasonable attorneys’ fees and disbursements, asserted against or
suffered by Buyer resulting from the following: (i) any breach by Seller of this
Agreement; (ii) any liability or obligation of Seller to a third party that
Buyer is not required to assume hereunder or accruing prior to such assumption,
including, without limitation, any personal injury or property damage suffered
in, on or about the Property by a third party or relating thereto occurring
before the Closing (except that attributable to the negligence or intentional
acts of Buyer or its agents, employees or representatives); or, (iii) the breach
of any of the covenants, representations or warranties made by Seller herein,
including, without limitation, breach of the warranty contained in Section 7.22.

5.4.2.    By Buyer. Subject to Sections 5.4.3 and 5.4.4, Buyer shall waive any
claim against Seller for, and shall indemnify, hold harmless and defend Seller
against any claim, loss, damage or expense, including, without limitation, any
and all reasonable attorneys’ fees and disbursements, asserted against or
suffered by Seller resulting from the following: (i) any breach by Buyer of this
Agreement; (ii) any liability or obligation of Buyer which Seller is not
required to assume hereunder or accruing prior to such assumption, including,
without limitation, any personal injury or property damage suffered in, on or
about the Property or relating thereto occurring on or after the Closing (except
that attributable to the negligence or intentional acts of Seller or its agents,
employees or representatives); or, (iii) the breach of any of the covenants,
representations or warranties made by Buyer herein, including, without
limitation, breach of the warranty contained in Section 7.22. Liability of Buyer
to Seller for Buyer’s default or breach of this Agreement resulting in Buyer’s
failure to close the Escrow shall be governed by Section 7.1.

5.4.3.    Notice of Claim or Demand. In the event either Seller or Buyer
receives notice of a claim or demand against which it is entitled to
indemnification pursuant to either Section 5.4.1, or 5.4.2, as applicable, such
party shall promptly give notice thereof to the other party. The party obligated
to defend and indemnify shall, within ten (10) days after receipt of such
notice, take such measures as may be reasonably required to properly and
effectively defend such claim, and may defend same with counsel of its own
choosing approved by the other party (which approval shall not be unreasonably
withheld or delayed). In the event the party obligated to defend and indemnify
refuses to defend such claim or fails to properly and effectively defend such
claim, then the party entitled to a defense and indemnification may defend such
claim with counsel of its own choosing at the expense of the party obligated to
indemnify. Each party and their counsel shall cooperate with the other party in
the defense of any claim and shall keep the party being indemnified reasonably
informed of the status of the claim. The party being indemnified may participate
in (but not control) the defense of such action all at its own expense without
right of reimbursement from the indemnifying party. In such event, the
indemnified party may settle such claim without the consent of the indemnifying
party.

5.4.4.    Remedies to Enforce Indemnification Rights. Subject to Sections 5.1(a)
and 7.2, the parties may enforce such indemnification rights by any legal or
equitable remedies available to them; provided, however, that each party shall
be liable to the other party in any such legal or equitable action solely for
such party’s actual out-of-pocket/compensatory damages but shall not be liable
to such party in any manner for consequential, incidental or punitive damages,
or lost profits.

5.4.5.    Survival. This Section 5.4 shall survive the Closing and the
recordation of the Deed, or the earlier termination of this Agreement, except
that Sections 5.4.1(i) and (ii), and 5.4.2(i), (ii) and (iii) shall not survive
the termination of this Agreement prior to the Closing.

5.5.    Risk of Loss. Risk of loss from all causes except the fault of Buyer
shall remain upon Seller until the Close of Escrow occurs. Seller shall continue
to maintain the insurance, if any, that Seller currently maintains on the
Property until the Closing or the earlier termination of this Agreement. If,
while risk of loss remains on Seller, the Property is damaged, except through
fault of Buyer, in an amount less than twenty-five percent (25%) of the Purchase
Price, Buyer shall elect to either terminate this Agreement (in which event the
provisions of Section 4.2(a) shall apply) or maintain this Agreement in full
force (in which event the provisions of Section 4.4.1, shall apply). Damage in
an amount equal to twenty-five percent (25%) or more of the Purchase Price is
“material,” in which event, either party shall have the right to terminate this
Agreement upon written notice to the other.

ARTICLE VI. TITLE, ESCROW AND CLOSING

6.1.    Conditions of Title; Evidence of Title. Seller shall convey title to the
Property to Buyer by the Assignment, the Deed (subject only to the Conditions of
Title, excluding any Title Defects which Seller is obligated to cure hereunder)
and the Lease Assignment. Delivery of title to the Land shall be evidenced by
the willingness of the Title Company to issue, upon payment of its normal
premium, the Title Policy.

6.2.    Escrow; Closing Date. The parties acknowledge that they shall open the
Escrow with the Title Company within three (3) business days of the Effective
Date. The parties also agree that the parties shall execute, deliver and deposit
the Escrow Instructions, if any, to the Title Company within two (2) business
days after the Title Company prepares and delivers them to the parties. The
parties shall consummate the transaction contemplated by this Agreement for the
Property through the Escrow on or before the Closing Date. Except as set forth
in Sections 7.1 and 7.2, if the Escrow does not close on or before the Closing
Date, then this Agreement shall automatically terminate and the Deposit shall be
retained by Seller, and except for the obligations of either party that survive
termination, the parties shall have no further obligations to one another.

6.3    Conflicting Demands. Should Title Company receive or become aware of
conflicting demands or claims with respect to the Escrow, the rights of any
party, or funds, documents or property deposited with Title Company, Title
Company shall have the right to discontinue any further acts until such conflict
is resolved to its satisfaction, and it shall have the further right to commence
or defend any action for the determination of such conflict. The parties shall,
immediately after demand therefore by Title Company, reimburse Title Company (in
such respective proportions as Title Company shall determine) any reasonable
attorneys’ fees and court costs incurred by Title Company pursuant to this
Section 6.3.

6.4.    Deposit of Documents and Funds.

6.4.1.    By Seller. Seller shall deposit or cause to be deposited into the
Escrow at least one (1) business day before the Closing Date the following
documents executed and, if applicable, acknowledged by Seller as required:

a.
Duplicate originals of the Assignment to each party;

b.
Original of the Deed;

c.
Duplicate originals of the Lease Assignment;

d.
A duly completed and executed affidavit of non-foreign status in compliance with
Internal Revenue Code Section 1445 in the form attached hereto as Exhibit “G”
attached hereto and incorporated herein by reference as if fully set forth at
length;

e.
A duly completed and executed Form 593-C in compliance with California Revenue
and Taxation Code Sections 18805 and 2613 for each Seller; and

f.
Such other documents as the Title Company may reasonably request or as may be
reasonably requested to effect the transaction contemplated by this Agreement or
to facilitate the Closing.

6.4.2.    By Buyer. Buyer shall deposit or cause to be deposited into the Escrow
at least one (1) business day before the Closing Date the following funds and
documents:

a.
Cash, a cashier’s check issued by a federally-insured financial institution or
wire transfer to Title Company in the amount of the Purchase Price (less the
Deposit previously delivered) plus an additional amount sufficient to pay
Buyer’s portion of the closing and escrow charges, costs, expenses and fees
pursuant to Section 6.7 and also plus an additional amount to pay any sums due
and owing to Seller pursuant to Section 6.6.1;

b.
Duplicate originals of the Assignment to each party;

c.
Duplicate originals of the Lease Assignment;

d.
A duly completed respective preliminary change of ownership report in accordance
with Revenue and Taxation Code Section 480.3 for the Land; and

e.
Such other documents as the Title Company may reasonably request or as may be
reasonably requested to effect the transaction contemplated by this Agreement or
to facilitate the Closing.

To the extent not delivered to Buyer as of the Closing Date, all original
Property Documents shall be delivered to Buyer as of the Closing Date outside of
Escrow.

6.5.    Closing. No later than the Closing Date, the Title Company shall
effectuate the Closing when: (i) the requirements of Section 6.4 have been
satisfied; and, (ii) it is in a position to issue the Title Policy. As part of
the Closing, the Title Company shall provide the following documents to the
parties indicated:

a.
Providing an original of the Assignment to each party;

b.
Recording the Deed (marked for return to Buyer) against the Nevada Ranch in the
Merced County Official Records;

c.
Providing a copy of the duly recorded Deed to Seller after its recordation;

d.
Providing an original of the Lease Assignment to each party and a copy of same
to Tenant;

e.
Issuing the Title Policy for the Land to Buyer;

f.
Delivering Seller’s funds after deducting therefrom the amounts necessary to pay
its portion of the Closing Costs, after adjusting for prorations;

g.
Obtaining written confirmation from the parties that they each have satisfied or
waived all conditions outside of the Escrow prior to Closing;

h.
Preparing and delivering to each party a signed copy of the Title Company’s
closing statement showing all receipts and disbursements of the Escrow prior to
Closing; and,

i.
Confirming that all disclosures and notices have been given as required by any
applicable Law or Governmental Agency were given upon or prior to Closing.

6.6.    Prorations.

6.6.1.    Generally. If all general, special, ordinary or extraordinary real and
personal ad valorem taxes and assessments which are Conditions of Title arising
out or, concerning or related in any way to the Property, including, without
limitation, any licenses, fees, commercial rental tax, improvement bonds,
levies, or other taxes (other than inheritance, personal income or estate taxes)
levied or assessed against the Property or levied by any Governmental Agency
(collectively the “Taxes”), for the year of Closing are not known or cannot be
reasonably estimated, and solely to the extent not payable by Tenant under the
Lease, such Taxes, if any, shall be prorated based on Taxes for the year prior
to Closing. Seller shall be responsible for all Taxes that are attributable to
periods on and before the Closing Date. Buyer shall be responsible for all Taxes
that are attributable to periods after the Closing Date. All costs, expenses,
fees, income, payables, receivables, revenues and utilities, of the Property,
including, without limitation, any payments related to the Property from the
FARM SERVICE AGENCY, a federal public agency, and the Lease shall be prorated
between the parties on the basis of the actual number of days in the month as of
12:01 a.m., Pacific Time, on the Closing, with all such credits prior to Closing
attributed to Seller and all such credits attributed to Buyer after the Closing.
If the amount of any proration cannot be determined upon the Closing, the
reconciliation and, if applicable, reimbursement shall be made between the
parties as soon after the Closing as possible. Notwithstanding the foregoing,
all prorations shall be deemed final six (6) months from the Closing.

6.6.2.    Final Adjustment After Closing. If final bills are not available or
cannot be issued prior to Closing for any item being prorated under Section
6.6.1, then the parties agree to allocate such items on a fair and equitable
basis in accordance with Section 6.6.1 as soon as such bills are available,
final adjustment to be made as soon as reasonably possible after the Closing;
provided, however, such final adjustment shall be made by the date which is
sixty (60) days after the Closing. Payments in connection with the final
adjustment shall be due within thirty (30) days of written notice. This Section
6.6.2 shall survive the Closing and the recordation of the Deed.

6.7.    Closing Costs. Closing Costs shall be allocated between the parties as
set forth in Section 1.7. All other costs and expenses of Escrow and Closing
shall be borne by the parties in accordance with custom and usage in the central
San Joaquin Valley, California, and as set forth in the Escrow Instructions. In
the event this Agreement is terminated by either party for failure of a
condition set forth in this Agreement, or either party fails to Close the Escrow
as provided herein, such terminating or defaulting party shall pay all charges,
costs, expenses and fees of the Title Company incurred in connection with this
transaction prior to such termination, including, without limitation, Escrow and
title cancellation fees; provided, however, that in the event Buyer terminates
this Agreement because Seller is unwilling or unable to remove a Title Defect,
Seller shall pay all such costs and charges.

6.8.    Pre-Closing Settlement Statement. At least three (3) business days prior
to the Closing, the parties shall provide to Title Company as much information
as is then available to enable Title Company to prepare a pre-audit settlement
statement setting forth in detail all prorations and adjustments contemplated by
this Agreement, including, without limitation, Sections 6.6 and 6.7, based on
the information available to Title Company. Title Company shall provide such
pre-audit settlement statement to the parties and their respective legal counsel
no later than two (2) business days prior to the Closing and shall include
therewith an indication of any specific information remaining to be provided to
Title Company by the parties to enable Title Company to show all final
prorations and adjustments calculated by the parties, and required by this
Agreement.

6.9.    IRS Real Estate Sales Reporting. The parties hereby appoint Title
Company, and Title Company agrees to act, as “the person responsible for
closing” the transaction contemplated under this Agreement pursuant to Internal
Revenue Code Section 6045(e). Title Company shall prepare and file all
informational returns, including, without limitation, IRS Form 1099-S and shall
otherwise comply with the provisions of Internal Revenue Code Section 6045(e).
Title Company shall indemnify, protect, hold harmless and defend Seller, Buyer
and their respective attorneys for, from and against any and all claims,
actions, costs, loss, liability or expense arising out of or in connection with
the failure of Title Company to comply with the provisions of this Section 6.9.

6.10.    Possession. Right to possession of the Property shall transfer to Buyer
on the Closing, subject only to the Conditions of Title and the Lease. If
applicable, Seller shall transfer to Buyer on the Closing Date, to the extent in
Seller’s control, custody or possession, the originals of all permits and other
documents to be transferred to Buyer under this Agreement which have not yet
been delivered to Buyer, provided that Seller may retain copies of all or any of
the foregoing documents. This Section 6.10 shall survive the Closing and the
recordation of the Deed.

6.11.    Notice to Tenant. Immediately after the Closing, the parties understand
and agree that Buyer shall cause a “Notice to Tenant” to be sent to Tenant,
informing it of the conveyance of title to the Property from Seller to Buyer as
of the Closing in substantially the same form attached hereto as Exhibit “H” and
incorporated herein by reference as if fully set forth at length. This Section
6.11 shall survive the Closing and the recordation of the Deed.

ARTICLE VII. MISCELLANEOUS PROVISIONS

7.1.    Default by Buyer; Liquidated Damages. IF THE CLOSING DOES NOT OCCUR BY
THE CLOSING DATE DUE TO THE DEFAULT OR BREACH BY BUYER UNDER THIS AGREEMENT (AND
THUS NOT AS A RESULT OF THE TIMELY DISAPPROVAL BY BUYER OF ANY CONTINGENCY
CONTAINED HEREIN, OR DUE TO THE DEFAULT OR BREACH BY SELLER), THE PARTIES AGREE
THAT SELLER SHALL BE PAID THE DEPOSIT AND ANY INTEREST ACCRUED THEREON AS
LIQUIDATED DAMAGES, WHICH SUM THE PARTIES AGREE IS A REASONABLE SUM CONSIDERING
ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT,
INCLUDING THE RELATIONSHIP OF THE AMOUNT TO THE RANGE OF HARM TO SELLER THAT
REASONABLY COULD BE ANTICIPATED, AND THE ANTICIPATION THAT PROVING ACTUAL
DAMAGES WOULD BE COSTLY, IMPRACTICABLE AND EXTREMELY DIFFICULT. THE PARTIES
FURTHER AGREE THAT, EXCEPT AS TO BUYER’S OBLIGATION OF INDEMNITY AND DUTY TO
DEFEND IN SECTION 5.1(a), SUCH AMOUNT SHALL BE THE SOLE DAMAGES, AND THE SOLE
AND EXCLUSIVE REMEDY OF SELLER, LEGAL, EQUITABLE OR OTHERWISE, INCLUDING
SPECIFIC PERFORMANCE, DAMAGES AND ALL OTHER LEGAL OR EQUITABLE REMEDIES, AS A
RESULT OF THE CLOSING NOT OCCURRING BY THE CLOSING DATE DUE TO BUYER’S DEFAULT
OR BREACH UNDER THIS AGREEMENT, AND THAT, IN SUCH EVENT, BUYER SHALL HAVE NO
FURTHER RIGHT TO PURCHASE THE PROPERTY OR OTHER RIGHTS UNDER THIS AGREEMENT,
THROUGH SPECIFIC PERFORMANCE OR OTHERWISE. THE PARTIES FURTHER AGREE THAT THIS
SECTION 7.1 SHALL SPECIFICALLY CONSTITUTE A WAIVER OF SELLERS RIGHT TO SPECIFIC
PERFORMANCE, AS SET FORTH IN CALIFORNIA CIVIL CODE SECTIONS 1680 AND 3389 AND
ANY INTERPRETIVE CASE LAW UNDER SUCH SECTIONS, INCLUDING BLEECHER V. CONTE
(1981) 29 CAL.3D 345. THE PARTIES FURTHER AGREE THAT RETENTION OF THE DEPOSIT BY
SELLER AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN
THE MEANING OF CALIFORNIA CIVIL CODE SECTION 3275 OR 3369, BUT INSTEAD IS
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL
CODE SECTIONS 1671, 1676 AND 1677. IN PLACING THEIR INITIALS AT THE PLACES
PROVIDED BELOW, EACH PARTY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE
AND THE FACT THAT EACH PARTY WAS EITHER REPRESENTED BY COUNSEL WHO EXPLAINED THE
CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS
MADE, OR WAS ADVISED TO SEEK INDEPENDENT LEGAL ADVICE REGARDING THE CONSEQUENCES
OF THIS LIQUIDATED DAMAGES PROVISION.

IF THE CLOSING DOES NOT OCCUR BY THE CLOSING DATE DUE SOLELY TO SUCH A DEFAULT
OR BREACH BY BUYER UNDER THIS AGREEMENT (AND THUS NOT AS A RESULT OF THE TIMELY
DISAPPROVAL BY BUYER OF ANY CONTINGENCY CONTAINED HEREIN, OR DUE TO THE DEFAULT
OR BREACH BY SELLER), THEN SELLER MAY COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER
BY MAKING WRITTEN DEMAND ON BUYER AND THE TITLE COMPANY, IF THE DEPOSIT IS BEING
HELD BY THE TITLE COMPANY.

UNDER NO CIRCUMSTANCES SHALL ANY INDIVIDUAL MEMBER, DIRECTOR, MANAGER, OFFICER
OR EMPLOYEE OF BUYER HAVE ANY LIABILITY ARISING FROM OR IN CONNECTION WITH THIS
AGREEMENT.

/s/ AH                /s/ LP    
Seller’s Initials            Buyer’s Initials

7.2.    Default by Seller. In the event the Closing and the consummation of a
transaction contemplated by this Agreement does not occur as a result of any
default by Seller, Buyer’s sole remedies shall be to either: (i) terminate this
Agreement and receive a refund of the Deposit together with reimbursement of
actual third party out of pocket costs incurred by Buyer in connection with its
“due diligence” investigation of the Property in an aggregate sum not to exceed
Ten Thousand Dollars and No Cents ($10,000.00); or, (ii) file an action against
Seller for specific performance of this Agreement. Buyer’s failure to file an
action for specific performance within ninety (90) days of any claimed breach by
Seller shall be deemed to be a waiver of that remedy. In no event shall Buyer be
entitled to or seek any form of monetary damages from Seller, including but not
limited to punitive, compensatory, general, special and/or incidental damages,
except as set forth in this Section 7.2. Under no circumstances shall Seller’s
agents, conservators, directors, employees, guardians, managers, members,
officers, representatives stockholders or trustees, as applicable, have any
liability to Buyer for any claims made by Buyer arising out of or connected to
this Agreement.

7.3.    Limitation of Liability. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY’S GENERAL PARTNERS, LIMITED PARTNERS, MEMBERS,
MANAGERS, AGENTS, INDEPENDENT CONTRACTORS, CONSULTANTS (INCLUDING, WITHOUT
LIMITATION, ACCOUNTANTS AND ATTORNEYS), EMPLOYEES AND/OR REPRESENTATIVES, OR ANY
AFFILIATE OR CONTROLLING PERSON THEREOF, HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE
OF ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
PROPERTY WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.
THE FOREGOING LIMITATION ON LIABILITY SHALL SURVIVE THE CLOSING AND THE
RECORDATION OF THE DEED, OR ANY EARLIER TERMINATION OF THIS AGREEMENT AND SHALL
NOT DIMINISH OR OTHERWISE AFFECT THE PARTY’S WAIVERS AND RELEASES IN ANY OTHER
CONDITION, PROVISION OR TERM OF THIS AGREEMENT.

/s/ AH                /s/ LP    
Seller’s Initials            Buyer’s Initials

7.4.    Remedies Exclusive; Exercise of Remedies. The remedies specified herein
for the enforcement of this Agreement are exclusive; provided, however, nothing
contained herein is intended to abrogate, modify or affect either party’s right
to be indemnified, held harmless and defended as expressly set forth in this
Agreement, it being understood that such obligations of the parties shall
survive termination of this Agreement and, if applicable, the Closing and the
recordation of the Deed. The exercise of any right or remedy by either party
pursuant to this Agreement shall not in any way constitute a cure or waiver of
any default hereunder, invalidate any act done pursuant to any notice of
default, or prejudice either party in the exercise of any of their respective
rights pursuant to this Agreement.

7.5.    Attorneys’ Fees and Disbursements. In the event of any arbitration,
litigation or other dispute between the parties in connection with the
interpretation, performance or enforcement of this Agreement, the prevailing
party in such arbitration, litigation or other dispute shall be entitled, in
addition to equitable relief or damages or both or other relief, to be
reimbursed by the nonprevailing party for all reasonable costs and expenses of
the arbitration, litigation, or other dispute including, without limitation,
arbitration costs, arbitrator’s fees court costs, expert witness fees,
investigation costs and such reasonable attorneys’ fees and disbursements,
incurred therein by such prevailing party or parties and, if such prevailing
party or parties shall recover judgment in any such action or proceedings, such
costs, expenses and attorneys’ fees may be included in and as a part of such
judgment. The prevailing party or parties shall be the party who is entitled to
recover his costs of suit, whether or not the suit proceeds to final judgment.
If no costs of suit are awarded, the arbitrator(s) or court, as applicable,
shall determine the prevailing party. Notwithstanding the foregoing, in the
event the parties agree to mediate a dispute, each party shall pay its own costs
and expenses, including attorney’s fees and disbursements, of mediation.

7.6.    Notices. All notices, demands, or other communications that either party
desires or is required or permitted to give or make to the other party under or
pursuant to this Agreement (collectively referred to as “notices”) shall be made
or given in writing and shall either be: (i) personally served; (ii) sent by
registered or certified mail, postage prepaid, return receipt requested; (iii)
sent by facsimile (“fax”) or electronic mail (“email”); or, (iv) sent by a
nationally recognized commercial delivery service or courier (such as Federal
Express). All notices shall be addressed or faxed to or sent via e-mail to or
personally served on the parties as set forth in Section 1.8. Counsel for a
party may give notice on behalf of that party. Notices given by a party pursuant
to the alternative methods described in this Section 7.6 shall be deemed to have
been delivered to and received by the other party at the following times: (a)
for notices personally served, on the date of hand delivery to the other party
or its duly authorized employee, representative, or agent; (b) for notices given
by registered or certified mail, on the date shown on the return receipt as
having been delivered to and received by the other party or parties; (c) for
notices given by fax or email, on the date the notice is faxed or sent by e-mail
to the other party or parties; provided, however, that notices given by fax or
e-mail, shall not be effective unless either: (i) a duplicate copy of such faxed
notice is promptly given by first-class mail, postage prepaid, or commercial
courier, and addressed as provided above, or (ii), in the case of a fax, the
sending party’s facsimile equipment is capable of providing a written
confirmation of the receiving party’s receipt of such notice; provided further,
however, any notice given by fax or e-mail shall be deemed received on the next
business day if such notice is received after 5:00 p.m. (recipient’s time) or on
a nonbusiness day; or, (d) for notices delivered by commercial courier, on the
day on which same has been delivered by the courier as evidenced by the receipt
provided by such courier to the party giving notice. Each party shall make an
ordinary, good faith effort to ensure that it will accept or receive notices
that are given in accordance with this Section 7.6, and that any person to be
given notice actually receives such notice. A party may change or supplement its
designated agent, address, or fax number given above, or designate additional
agents, addresses or fax numbers for notice purposes, by giving notice to the
other party in the manner set forth in this Section 7.6, provided that any such
address change shall not be effective until five (5) days after the notice is
delivered or received by the other party.

7.7.    Survival of Covenants. Subject to Sections 5.1 and 5.2, each of the
covenants contained in this Agreement shall, to the extent applicable, survive
the performance of the executory provisions of this Agreement, the Closing, and
the recordation of the Deed, which will not effectuate a merger of interests
unless otherwise expressly noted.

7.8.    Further Assurances. The parties shall in good faith cooperate with each
other in satisfying all conditions contained in this Agreement, including,
without limitation, executing any and all documents required to be executed by
Seller as record owner of the Property to accomplish any verifications,
approvals or determinations. Seller specifically shall cooperate in good faith
with Buyer in satisfying all conditions contained in Article IV, including,
without limitation, the execution of any and all documents required to be
executed by Seller as record owner of the Property to accomplish any
verifications, approvals or determinations. Each party shall execute and deliver
any and all additional papers, documents or other assurances and shall perform
any further acts that may be reasonably necessary to carry out the intent of the
parties and the provisions of this Agreement.

7.9.    Binding Effect. Subject to Section 7.10, this Agreement shall inure to
and for the benefit of and be binding upon each party’s respective parent,
subsidiary or affiliated organizations, administrators, agents, attorneys,
beneficiaries, conservators, custodians, directors, employees, executors,
guardians, heirs, independent contractors, joint venturers, members, officers,
partners, predecessors, representatives, servants, stockholders, successors,
trustees and all others acting for, under, or in concert with it, including
associations, corporations, limited liability companies, and general or limited
partnerships, present and future.

7.10.    Assignability. Notwithstanding Section 7.9, except for an Internal
Revenue Code Section 1031 exchange, any assignment by either party of its rights
and duties, obligations and responsibilities under this Agreement shall be
subject to the other party’s prior written consent, exercisable in it’s sole and
absolute discretion, provided that no such assignment shall relieve the
assigning party of its duties, obligations and responsibilities under this
Agreement.

7.11.    No Third Party Beneficiary. This Agreement is made for the sole benefit
of the parties and their respective successors and permitted assigns and no
other person or persons shall have any right of action hereon.

7.12.    No Partnership or Joint Venture Created. The parties’ relationship is
that of seller and buyer and this Agreement is not intended to nor does create a
partnership or joint venture or relationship between the parties.

7.13.    Entire Agreement. This Agreement, including the attached exhibits (all
of which are incorporated by this reference), supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
subject matter hereof and contains all of the covenants and agreements between
the parties with respect to such matter, and each party to this Agreement
acknowledges that no representations, inducements, promises or agreements, oral
or otherwise, have been made by any party, or anyone acting on behalf of any
party, that are not embodied herein, and that no other agreement, statement or
promise not contained in this Agreement, including the attached exhibits, shall
be valid or binding. The exhibits are an integral part of this Agreement.

7.14.    Modification. This Agreement may be modified only by a written document
signed by the parties.

7.15.    Partial Invalidity. If any condition, covenant, provision or term of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the provisions hereof shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
each remaining condition, covenant, provision or term of this Agreement shall be
valid and shall be enforced to the fullest extent permitted by Law it being the
intent of the parties each to receive the material benefit of their bargain.

7.16.    Waiver. Notwithstanding any agreement between the parties, the waiver
by any party of a breach of any provision of this Agreement shall not be deemed
a continuing waiver or waiver of any subsequent breach whether of the same or
another provision thereof.

7.17.    Governing Law; Venue. This Agreement shall be construed and enforced in
accordance with the internal Laws, and not the Law of conflicts, of the State of
California, where it is to be executed, delivered and performed. This Agreement
is entered into and is to be performed in Kern County, California, and
accordingly the only appropriate venue for a dispute under this Agreement is in
the Kern County Superior Court, Metropolitan District. The parties hereby
expressly consent to the jurisdiction by the Kern County Superior Court,
Metropolitan District.

7.18.    Tax-Deferred Exchange. The parties acknowledge that either party may
wish to structure all or a portion of this transaction as a tax deferred
exchange of like-kind property within the meaning of Section 1031 of the
Internal Revenue Code. Each party agrees to reasonably cooperate with the other
party to effect such an exchange; provided, however, that: (i) the cooperating
party shall not be required to acquire or take title to any exchange property;
(ii) the cooperating party shall not be required to incur any expense (excluding
its own attorneys’ fees incurred in reviewing any drafts of Exchange Documents,
as defined below) or liability whatsoever in connection with the exchange,
including, without limitation, any obligation for the payment of any escrow,
title, brokerage or other costs incurred with respect to the exchange; (iii) no
substitution of the effectuating party shall release said party from any of its
obligations, warranties or representations set forth in this Agreement or from
liability for any prior or subsequent default under this Agreement by the
effectuating party, its successors, or assigns, which obligations shall continue
as the obligations of a principal and not of a surety or guarantor; (iv) the
effectuating party shall give the cooperating party at least five (5) business
days prior notice of the proposed changes required to effect such exchange and
the identity of any party to be substituted in the Escrow; (v) the effectuating
party shall be responsible for preparing all additional agreements, documents
and escrow instructions (collectively, the “Exchange Documents”) required by the
exchange, at its sole cost and expense; (vi) the effectuating party shall be
responsible for making all determinations as to the legal sufficiency, tax
considerations and other considerations relating to the proposed exchange, the
Exchange Documents and the transactions contemplated thereby, and the
cooperating party shall in no event be responsible for, or in any way be deemed
to warrant or represent any tax or other consequences of the exchange
transaction arising by reason of the cooperating party’s performance of the acts
required hereby; and, (vii) except as provide in Section 1.6, the Closing shall
not be delayed as a result of a party’s election to structure the transaction as
a tax deferred exchange in accordance with this Section 7.18.

7.19.    No Recordation of Memorandum of Agreement. The parties agree that no
memorandum of this Agreement shall be recorded against the Property in either
the Merced County Official Records. Upon the termination of this Agreement
without consummating the transaction contemplated thereunder, Buyer agrees to
execute and acknowledge and then record quitclaim deeds in favor of Seller in
the Merced County Official Records.

7.20.    Time of the Essence. Time is of the essence under this Agreement.

7.21.    Separate Counterparts; Facsimile & Electronic Signatures. This
Agreement shall be executed in two (2) separate counterparts, each of which,
when so executed, shall be deemed to be an original and to constitute the one
and same contract. This Agreement may be signed and signatures transmitted by
facsimile, and any such facsimile copy shall be equivalent to a binding signed
original for all purposes, and the party transmitting facsimile signatures shall
transmit original “hard copies” of the signature pages as provided in Section
7.6 within twenty-four (24) hours after transmission of such facsimile copy.
This Agreement may also be executed electronically, whether using an electronic
signature and delivery service such as DocuSign or eSignLive, or by use of
electronically copied/saved and transmitted executed documents, such as by
emailing a PDF of the signed document. The Parties expressly agree that the
actual execution and delivery of this Agreement by electronic means shall
specifically be governed by the Electronic Signatures in Global and National
Commerce Act (ESIGN), 15 U.S.C § 7001, and the governing law applicable to the
remainder of the agreement shall be as otherwise stated herein.

7.22.    Warranties of the Parties. Each party understands, acknowledges,
agrees, represents and warrants to the other party that it has received
independent legal advice from its attorneys with respect to the advisability of
entering into this Agreement or has intentionally elected not to seek the advice
of counsel and has carefully reviewed and considered the terms and conditions of
this Agreement, that it is empowered to execute this Agreement, and that its
execution of this Agreement is free and voluntary.

7.23.    Authority of the Parties. Where required in this Agreement or by the
Title Company, the parties shall deliver documentation that authorizes the
transaction contemplated herein and also evidences the authority of the
individuals or officers who are empowered to execute and carry out the terms of
this Agreement.

7.24.    Broker’s Commissions. Each party represents and warrants to the other
parties that there is no broker, finder or intermediary with whom they have
dealt in connection with the transaction contemplated under this Agreement. In
the event of any such claims for brokers’ or finders’ fees or commissions in
connection with the negotiation, execution or consummation of this Agreement,
the party through whom said broker, salesman or other person makes its claim
shall indemnify and hold harmless the other party from said claim and all
liabilities, costs and expenses related thereto, including reasonable attorney’s
fees, that may be incurred by such other party in connection with such claim.
The foregoing indemnity shall survive the Closing and the recordation of the
Deed.

7.25.    Confidentiality. Buyer entered into a non-disclosure agreement with
Seller effective as of March 11, 2016 (“NDA”). The NDA is hereby incorporated by
reference. Prior to Closing, the parties shall hold as confidential and shall
not disclose to any third party either the conditions, covenants, provisions or
terms of this Agreement, the transaction contemplated under this Agreement,
activities and information acquired during the Due Diligence Period related to
Seller, Tenant or the Property and Buyer shall not disclose to any third party
any information received, obtained or discovered relating in any manner to the
Property, Seller and Tenant, unless such disclosure is made to either party’s
financial, legal or tax advisors, partners, members, and investors on a
confidential basis, is required by applicable Law or the other party consents in
writing to the disclosure, without first obtaining the written consent of the
other party.

7.26    Rule 3-14 Audit. Seller agrees to reasonably cooperate, at no cost or
expense to Seller, with Buyer in connection with any SEC Regulation SX Rule 3-14
audit that Buyer may conduct with respect to the Property within one (1) year
after the Closing Date.

[SIGNATURES BEGIN ON THE NEXT PAGE; REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK] 

7.26.    Effectiveness. This Agreement shall become effective as of the
Effective Date upon its execution and delivery by all of the parties.

DATED: September 13, 2016
SAN JOAQUIN FARMS, LLC, a Washington limited liability company authorized to do
business in the State of California as WASHINGTON SAN JOAQUIN FARMS, LLC
(“Seller”)

By:        /s/ Alan Heuberger            
[Print]        Alan Heuberger                
Its:        Authorized Signatory            

DATED: September 13, 2016
NEVADA RANCH MERCED, LP, a Delaware limited partnership (“Buyer”)

By:
GLADSTONE CALIFORNIA FARMLAND GP, LLC, a Delaware limited liability company

Its:
General Partner

By:
GLADSTONE LAND LIMITED PARTNERSHIP, a Delaware limited partnership

Its:    Sole Member

By: GLADSTONE LAND PARTNERS, LLC, a Delaware limited liability company
Its:
General Partner

By:
GLADSTONE LAND CORPORATION, a Maryland corporation

Its:
Manager

By:        /s/ Lewis Parrish    
[Print]:        Lewis Parrish        
Its:        CFO            

[SIGNATURES CONTINUED ON THE NEXT PAGE; REMAINDER OF THIS PAGE INTENTIONALLY
LEFT BLANK] 

ACCEPTANCE BY TITLE COMPANY:

Title Company hereby acknowledges that it has received a fully executed
counterpart of this Agreement and agrees to act as Title Company thereunder and
to be bound by and perform the terms thereof as such terms apply to Title
Company.

DATED: September 13, 2016
CHICAGO TITLE INSURANCE COMPANY, a Nebraska corporation (“Title Company”)

By:        /s/ Melodie Rochelle            
MELODIE T. ROCHELLE
Title:    Vice President, Sr. Commercial Title Officer

118/70980-3/TRANSACTION DOCUMENTS/AGREEMENRT FOR PURCHASE AND SALE – NEVADA
(CLADSTONE) (C&B 090616) 

EXHIBITS

EXHIBIT
NAME OF EXHIBIT
“A”
LEGAL DESCRIPTION OF THE LAND
“B”
THE EXCLUDED IMPROVEMENTS
“C”
THE FORM OF THE ASSIGNMENT
“D”
THE FORM OF THE DEED
“E”
THE FORM OF LEASE ASSIGNMENT
“F”
THE FORM OF THE TENANT ESTOPPEL CERTIFICATE
“G”
THE FORM OF THE FEDERAL FIRPTA CERTIFICATE
“H”
THE FORM OF THE NOTICE TO TENANT

EXHIBIT “A”

Legal Description of the Land

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN AN UNINCORPORATED AREA, COUNTY
OF MERCED, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

PARCEL A:

Parcel 1, as shown on that certain parcel map for First Harvest, filed for
record on December 16, 1976 in Volume 31 of Parcel Maps, Page 42, Merced County
Records, and being portions of Section 35 and Section 36, Township 8 South,
Range 16 East, M.D.B.&M.

Merced County Assessor’s Parcel No. 068-130-029

PARCEL B:

ADJUSTED PARCEL 2 of Property Line Adjustment No. 02034 for Albert Gedrimas
described in Certificate of Compliance recorded February 21, 2003 as Instrument
No. 2003-010215 described as follows:

All that certain real property situate in a portion of Section 36, Township 8
South, Range 16 East, Mount Diablo Base and Meridian, in the County of Merced,
State of California, also being a portion of Parcel 2 and all of Parcel 3 as
shown on that certain Parcel Map for "FIRST HARVEST" filed for record in Volume
31 of Parcel Maps at page 42, Merced County Records, described as follows:

Excepting the following described portion of said Parcel 2:

Commencing at the northwest corner of said Parcel 2, said northwest corner being
a point on the south line of a 60.00 foot wide County Road now known as
"BUCHANAN HOLLOW ROAD"; thence N.89°01'09"E. along the north line of said Parcel
2 and the south line of said road a distance of 612.96 feet, more or less to the
point of intersection with the centerline of an existing creek and the TRUE
POINT OF BEGINNING of this description; thence along the centerline of said
creek the following eleven (11) courses:

1.
S.27°45'41"E. 332.56 feet, more or less

2.
S.38°36'15"E. 255.04 feet, more or less

3.
S.03°52'22"E. 101.54 feet, more or less

4.
S.61°56'12"E. 90.67 feet, more or less

5.
N.49°13'11"E. 124.78 feet, more or less

6.
N.71°13'29"E. 263.05 feet, more or less

7.
N.12°13'24"E. 111.58 feet, more or less

8.
N.59°58'59"W. 113.05 feet, more or less

9.
N.23°50'49"W. 134.24 feet, more or less

10.
N.41°01'12"E. 87.04 feet, more or less

11.
S.82°34'17"E. 210.29 feet, more or less

to a point on the most westerly, east line, of said Parcel 2; thence
N.00°31'14"W. along said line a distance of 159.59 feet to a point on said south
line of Buchanan Hollow Road; thence S.89°01'09"W. along said south line a
distance of 880.24 feet to the point of beginning.

Merced County Assessor’s Parcel No. 068-130-044 and 068-130-031

PARCEL C:

Parcel 4, as shown on that certain parcel map for First Harvest, filed for
record on December 16, 1976 in Volume 31 of Parcel Maps, Page 42, Merced County
Records, and being portions of Section 35 and Section 36, Township 8 South,
Range 16 East, M.D.B.&M.

Merced County Assessor’s Parcel No. 068-130-032

PARCEL D:

Parcel 5, as shown on that certain parcel map for First Harvest, filed for
record on December 16, 1976 in Volume 31 of Parcel Maps, Page 42, Merced County
Records, and being portions of Section 35 and Section 36, Township 8 South,
Range 16 East, M.D.B.&M.

Merced County Assessor’s Parcel No. 068-130-033.

PARCEL E:

Parcel 6, as shown on that certain parcel map for First Harvest, filed for
record on December 16, 1976 in Volume 31 of Parcel Maps, Page 42, Merced County
Records, and being portions of Section 35 and Section 36, Township 8 South,
Range 16 East, M.D.B.&M.

Merced County Assessor’s Parcel No. 068-130-034.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

PARCEL F:

The Northwest quarter of Section 35, Township 8 South, Range 16 East, M.D.B.&M.,
in the County of Merced, State of California, according to the Official Plat
thereof.

Excepting and reserving unto Hazel Ellen Mathews an undivided one-half interest
in all minerals, oil, gas and other hydrocarbons therein and thereunder by deed
recorded December 29, 1976 as Instrument No. 28439 in Volume 2057 of Official
Records, Page 1, Merced County Records.

Merced County Assessor’s Parcel No. 068-130-028

Merced County Assessor’s Parcel Nos. 068-130-028, -029, -031, -032, -033, -034
and -044

EXHIBIT “B”

The Excluded Improvements

EXHIBIT “C”

The Form of the Assignment

EXHIBIT “D”

The Form of the Deed

EXHIBIT “E”

The Form of the Lease Assignment

EXHIBIT “F”

The Form of the Tenant Estoppel Certificate

EXHIBIT “G”

The Form of the Federal FIRPTA Certificate

EXHIBIT “H”

The Form of the Notice to Tenant

19974265.5

[CLIFFORD & BROWN, A PROFESSIONAL CORPORATION – 090616 VERSION]