gladstonelandsutterav1eb






    CERTAIN INFORMATION IDENTIFIED BY BRACKETED ASTERISKS ([*****]) HAS   BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND   WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.                                                                                                           AGREEMENT OF PURCHASE AND SALE                   (Sutter Avenue Coalinga CA – West Parcels/Phase 2)           THIS AGREEMENT (the “Agreement”)  is made as of the 19th day of April 2019 (the   “Effective Date”), between RTS Orchards, LLC, a California limited liability company (the   “Seller”) and Gladstone Land Corporation, a Maryland corporation (the “Purchaser”).            WHEREAS, Seller has agreed to sell and Purchaser has agreed to purchase the Property   (as hereinafter defined);         NOW, THEREFORE, in consideration of the agreements contained herein and other   good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,   the parties agree as follows:          1.    Certain Definitions. For purposes of this Agreement, the following terms shall   have the following definitions:          “Broker” shall mean London Properties, Ltd. , its agents and officers.            “Broker’s Address” shall mean:                  London Properties Ltd. a California corporation (BRE #00463722)                  Greg Squires, Broker               Cameron Kay, Agent (BRE #01932246))               Ken Neufeld, Agent (BRE #00788084)              (559) 577-2062 (Cameron Kay)               Email: ckay@londonproperties.com (Cameron Kay)               6442 N. Maroa Ave.               Fresno, CA 93704                  “Broker Disclosures” means the statutory disclosures attached hereto as Exhibit “G”.                   “Closing Date” shall mean [*****], or such earlier date as the parties may agree.           “Contracts” shall mean, collectively, any and all leases, service, maintenance,  management or other contracts or agreements with third parties relating to or affecting the  Property.          “Crop Year” shall mean the twelve (12) month period beginning on November 1 and   ending on October 31 of the next calendar year.                                         -1-     





 






          “Due Diligence Materials” shall mean those materials and information more particularly   described on Exhibit C attached hereto and incorporated by reference herein.            “Earnest Money” shall mean the sum of Two Hundred Fifty Thousand and NO/100  Dollars ($250,000.00), together with all interest accrued thereon.          “GAP” shall mean good agricultural practices.          “Government Payments” shall mean all federal, state and local government payments,  benefits and entitlements associated with or applicable to the Property or any crops grown  thereon, including without limitation any applicable direct payments or counter-cyclical  payments under the Farm Security and Rural Investment Act of 2002, as amended.          “Inspection Period” shall mean the period beginning on the Effective Date and ending on  [*****].          “Improvements” shall mean all buildings, structures, gates, fences, roads, levees, ditches,  grain bins, silos, other storage bins, together with all other appurtenances or other facilities  currently existing on the Property, including without limitation all Irrigation Equipment.          “Irrigation Equipment” shall mean all below ground, surface and above ground irrigation  equipment at the Property, including without limitation water wells, structures, pumps, motors,  casings, risers, above and below ground pipes and pipelines, culverts, overhead or drip irrigation  equipment, and pivot irrigation equipment, and all related power and control units and systems,  as applicable. All the Irrigation Equipment shall be deemed to be part of the Improvements to be  conveyed to Purchaser.           “Land” shall mean shall mean that certain real property located in Fresno County, State   of California, comprising approximately 1,098.07 gross acres with such estimated acreage   derived from Fresno County Assessor’s records (including, without limitation, approximately   1,040.20 acres planted in pistachios), all as more particularly described on Exhibit A attached   hereto and incorporated herein by reference, together with trees located thereon and all other   rights (including without limitation mineral rights, timber rights and development rights),   easements, hereditaments and appurtenances thereunto belonging.            “Lease” shall mean an agricultural lease to be entered into by Purchaser, or its assignee,   and Tenant, in substantially the form attached hereto as Exhibit F.             “Personal Property” shall mean any personal property used by Seller in conducting   farming operations at the Property that will be conveyed to Purchaser as part of this transaction,   if any, that is described on Exhibit B attached hereto and incorporated by reference herein.            “Phase 1 Agreement” shall mean contract between Seller and Purchaser entitled   “Agreement of Purchase and Sale (Sutter Avenue Coalinga CA – East Parcels/Phase 1)” of even   date herewith.                                         -2-     





 






          “[*****]Membership Interest” shall mean 53% (measured as of the Effective Date) of   Seller’s membership interest in [*****]Water Conveyance Partners, LLC, a California limited   liability company which owns certain irrigation pipelines used from time to time to convey   irrigation water to the Property. Without limiting the foregoing in the event that Seller has  conveyed 47% (measured as of the Effective Date) of its membership interest in such LLC to  Purchaser in connection with the closing of the Phase 1 Agreement, the interest to be conveyed  hereunder shall be the full balance of Seller’s membership interest in the LLC.          “Property” shall mean the Land, Improvements, and any Personal Property, specifically  including without limitation all Water Rights and the [*****]Membership Interest.  Notwithstanding the foregoing or anything herein to the contrary, the parties acknowledge and  agree that the crop currently growing on the Land is not a part of the Property to be conveyed at  Closing, and the owner thereof, RTS AGRI BUSINESS, LLC a California limited liability  company (“RTSAB, LLC”) shall be entitled to retain such current crop of pistachios and all   revenue generated from the sale of the same. In addition, notwithstanding the foregoing or   anything herein to the contrary, the parties acknowledge and agree that the Solar Improvements   (defined below) are not a part of the property to be conveyed at Closing and shall be retained by   RTSAB, LLC, provided however that the Lease shall contain a provision for the transfer of the   Solar Improvements by RTSAB, LLC to Purchaser (as landlord under the Lease) on the sixth   (6th) anniversary of the commencement of the Lease.            “Purchase Price” shall mean the total amount of Thirty Seven Million and NO/100   dollars ($37,000,000.00), subject to adjustment as set forth in this Agreement.            “Purchaser’s Address” shall mean:                  Gladstone Land Corporation               Attention: Bill Reiman               1521 Westbranch Drive, Suite 200               McLean, VA 22102               (805) 377-7701 (T)               Email: bill.r@gladstoneland.com                               With copy to:                              Gladstone Land Corporation               Attn: Joseph Van Wingerden               1521 Westbranch Drive, Suite 200               McLean, VA 22102               (703) 287-5914 (T)               (703) 287-5915 (F)               Email: joe.v@gladstoneland.com                               With additional copy to:                                                        -3-     





 






            Bass Berry & Sims PLC              Attention: Robert P. McDaniel, Jr.              100 Peabody Place, Suite 900              Memphis, TN 38103              (901) 543-5946 (T)              (888) 765-6437 (F)              Email: rmcdaniel@bassberry.com          “Seller’s Address” shall mean:                RTS Orchards, LLC              Attention: Rod Stiefvater              4831 Calloway Drive, Suite 102              Bakersfield, CA 93312              Phone: (661) 829-5109              Email: rod@rtsag.com                            With a copy to:                            Hal H. Bolen II              Bolen Fransen Sawyers LLP              7405 N. First Street              Fresno, CA 93720              Phone: 559-226-8177              Fax: 559-227-4971              Email: hhb@bolenfransen.com          “Solar Improvements” shall mean the items of solar equipment and related material  described on Exhibit E attached hereto and incorporated herein by reference.           “Tenant” shall mean RTSAB, LLC and CANOAS CREEK     PISTACHIOS, LLC, a  California limited liability company (a wholly owned subsidiary of RTSAB, LLC), jointly and  severally as tenant under the Lease.                     “Title Company” shall mean:                          Chicago Title Insurance Company              Attn: Melodie T. Rochelle              2701 Emerywood Parkway, Suite 200             Richmond, Virginia 23294             (804) 521-5713 (T)              (804) 521-5756 (F)              Email: melodie.rochelle@fnf.com          “Water Rights” shall mean to the extent they are owned by Seller and appurtenant to the  Property, all groundwater rights (whether overlying, appropriative, prescriptive or equitable), all                                        -4-    





 






 rights or entitlements afforded to the Property under the Sustainable Groundwater Management   Act, and the right to any water made available by the Pleasant Valley Water District as a district-  wide water supply to any portion of the Property located within such district. “Water Rights”   shall not include any separate contractor rights to use or acquire water supplies held by Seller   which are not tied to the Land.            2.    Property. Seller hereby agrees to sell and Purchaser, or its designee, hereby agrees   to purchase from Seller the Property.          3.    Earnest Money. Within three (3) business days after Effective Date, Purchaser   shall deposit the Earnest Money with the Title Company by wire transfer or certified or cashier’s   check. The Earnest Money shall be refundable to Purchaser in accordance with the terms,   provisions and conditions of this Agreement or released to Seller as Liquidated Damages in the   event of Purchaser’s default as provided in Section 19 below.           4.    Purchase Price. At the Closing, defined below, all Earnest Money shall be applied   to the Purchase Price, and the balance of the Purchase Price, subject to adjustments for credits   and debits as set forth in this Agreement, shall be deposited by Purchaser in good funds by wire   transfer to the Title Company.          5.    Inspection Period; Refund of Earnest Money; Due Diligence Materials.               (a)    Purchaser shall have until the expiration of the Inspection Period to make   such determinations with respect to the Property as Purchaser deems appropriate and to elect to   either continue or terminate this Agreement, in Purchaser’s sole and absolute discretion, for any   reason or no reason. Purchaser may terminate this Agreement, and receive a full refund of the  Earnest Money, less $10.00 to be retained by Seller as consideration for entering into this  Agreement, by delivering written termination notice to Seller at any time prior to expiration of  the Inspection Period. If Purchaser does not so terminate this Agreement, the Earnest Money  shall thereafter be refundable to Purchaser only as expressly otherwise set forth in this  Agreement, and this Agreement shall remain in effect.               (b)   Within five (5) days after the Effective Date, Seller shall deliver to  Purchaser at Seller’s sole expense the Due Diligence Materials. If Purchaser fails to purchase the  Property for any reason, it will return all of the Due Diligence Materials and all copies thereof.   Purchaser will keep the Due Diligence Materials confidential and disclose them only to such   attorneys, accountants, lenders and advisors as shall be necessary, in Purchaser’s reasonable   discretion, to properly evaluate them Seller shall also promptly provide any other documents or   information in Seller’s possession or control relating to the Property or any Contract, that is   reasonably requested by Purchaser.          6.    Costs and Prorations.               (a)    Purchaser shall pay the costs of any Survey obtained by Purchaser  pursuant to Section 9 hereof, and the costs of any Phase I environmental report and all other   inspections and work performed or obtained by or for Purchaser in connection with its inspection   of the Property. Seller shall pay for preparation of the grant deed, all documentary or transfer                                         -5-     





 






 taxes, and recording costs applicable to the grant deed, the premium for Purchaser’s CLTA Title   Policy, defined below, and any costs of production of the title search or abstract for the Property.   Purchaser shall pay all expenses incident to any financing obtained for the purchase of the   Property, including but not limited to any endorsement to the Title Policy or a separate lender’s   policy of title insurance required by Purchaser’s lender, the premium for all endorsements to the   Title Policy that Purchaser desires to obtain, and, notwithstanding the foregoing or anything   herein to the contrary, the increase in the premium for the Title Policy resulting from Purchaser’s   election to obtain a 2006 ALTA form policy rather than a CLTA form policy. All other closing   costs shall be borne in accordance with the custom in Fresno County, California.               (b)    The following shall be prorated between the parties as of the Closing Date:   (i) ad valorem property taxes constituting a lien against the Property for the year in which the   Closing occurs and all other unpaid assessments with respect thereto, and (ii) utilities, and   operating expenses for the Property for the calendar month (or other applicable period if such   rents or other tenant charges are not paid monthly) in which Closing occurs. In the event such   proration is based upon a previous year’s taxes or assessment, after Closing, at such time as any   of the taxes or assessments are capable of exact determination, the party having the information   permitting the exact determination shall send to the other party a detailed report of the exact   determination so made. Within thirty (30) days after both Seller and Purchaser shall have   received such report, Seller and Purchaser shall adjust the amounts apportioned pursuant to the   estimates made at Closing to reflect the exact determinations contained in the report, and Seller   or Purchaser, as the case may be, shall pay to the other whatever amount shall be necessary to  compensate for the difference. Notwithstanding the foregoing, the Lease is intended to “pass  through” all of the foregoing costs and expenses to Tenant, which is a wholly owned subsidiary   of RTSAB, LLC under the Lease, after Closing.           7.    Conditions Precedent to Purchaser’s Obligations. Seller acknowledges that as a   condition precedent to Purchaser’s obligations hereunder, the following shall occur on or before   the Closing Date (or any earlier date indicated below), any of which conditions may be waived  by Purchaser in its sole discretion:                (a)   Purchaser shall have received a current Phase I environmental assessment   satisfactory to Purchaser prepared by a competent licensed environmental engineer satisfactory   to Purchaser.                (b)   There shall have been no material adverse change to the financial   condition of Tenant from the Effective Date to Closing.                (c)   At or prior to Closing, the Tenant shall have executed and delivered the   Lease to Purchaser, and such Lease shall be in full force and effect in accordance with its terms   and conditions.               (d)    The Title Company shall be irrevocably committed to issue upon Closing   a 2006 ALTA form Owner’s Policy of Title Insurance (the “Title Policy”), as evidenced by a   “marked up” Title Commitment, defined below, insuring Purchaser as owner of fee simple title   to the Property subject only to Permitted Exceptions, in the amount of the Purchase Price, and   containing such endorsements as Purchaser shall have requested.                                         -6-     





 






            (e)    Subject to Sections 14 and 15 below, there shall have been no material   adverse change in the condition of any of the Property (including without limitation any   Improvements) after expiration of the Inspection Period and prior to the Closing Date.               (f)    Each of the other members of the [*****]Pipeline Partnership, LLC shall   have waived its right of first refusal to purchase the [*****]Membership Interest.              (g)    Each and every representation and warranty of Seller set forth in   Section 11 shall be true and correct in all material respects, and Seller shall not be in default   under any of its other obligations under this Agreement, as of Closing.                 7.1   Conditions Precedent to Seller’s Obligations. Purchaser acknowledges that   as a condition precedent to Seller’s obligations hereunder, the following shall occur on or before   the Closing Date (or any earlier date indicated below), any of which conditions may be waived   by Seller in its sole discretion:                (a)   Purchaser has performed all of its obligations under this Agreement,   including delivering the Earnest Money Deposit and the balance of the Purchase Price into   Escrow as herein provided.                  (b)   Purchaser is not in default under the material terms of this Agreement.                            (c)   At or prior to Closing, the Purchaser as Landlord shall have executed and   delivered the Lease to Seller and Tenant, and such Lease shall be in full force and effect in   accordance with its terms and conditions.                  (d)    Each of the other members of the [*****]Pipeline Partnership, LLC shall   have waived its right of first refusal to purchase the [*****]Membership Interest.                 (e)    Each and every representation and warranty of Purchaser set forth in   Section 11.1 shall be true and correct in all material respects,                   (f)   The transaction between Seller and Purchaser evidenced by the Phase 1  Agreement shall have closed, and Purchaser shall have paid the Purchase Price (as therein  defined) and acquired title to the Property defined therein as well.                (g)   The tenant under the Cell Tower Lease (as defined in Section 11 (a)   below), shall have waived or failed to timely exercise any right of first refusal to purchase the   affected portion of the Property that it may have under the Cell Tower Lease.            8.    Closing; Deed.               (a)    Subject to all preconditions set forth herein, the closing or settlement   (“Closing”) of the transaction contemplated hereby, unless terminated in accordance with this   Agreement or as otherwise agreed upon by Purchaser and Seller, shall be held via the mails,   through the Title Company at 10:00 a.m. on the Closing Date or such other place and time as the   parties may agree in writing.                                         -7-     





 






            (b)    At Closing, Seller shall convey to Purchaser good, marketable and   insurable title to the Property by grant deed acceptable to Purchaser and the Title Company (the  “Deed”), subject to (i) standard exceptions for real property taxes not yet due and payable, and   (ii) any other matters which are waived by, or acceptable to, Purchaser pursuant to Section 10   below (the “Permitted Exceptions”). The Land description in the Deed shall be the property   description from Seller’s vesting deed(s); and further provided, that if Purchaser obtains a Survey   of the Property, Seller also agrees to execute and deliver a recordable Quit Claim Deed to   Purchaser at Closing using the Survey description.          9.    Survey. During the Inspection Period, Purchaser, at Purchaser’s expense, may   cause a survey of the Property to be prepared by a surveyor selected by Purchaser (“Survey”).          10.   Title. During the Inspection Period, Purchaser shall procure a title insurance   commitment in the amount of the Purchase Price covering the Property issued by the Title   Company (the “Title Commitment”) and furnish a copy thereof to Seller. Purchaser shall have   until the expiration of the Inspection Period to object to any matters shown on the Title   Commitment or Survey by written notice to Seller (“Title Objection Notice”). Purchaser may   also object to any new matters thereafter revealed by a title update by subsequent Title Objection   Notice(s) to Seller. Within five (5) business days after receipt of a Purchaser’s Title Objection   Notice, Seller shall either (i) deliver written notice to Purchaser of any title or Survey objections   which Seller elects not to cure, or (ii) cure or satisfy such objections (or commence to cure or   satisfy such objections as long as Seller reasonably believes such objections may be cured or   satisfied at least two (2) business days prior to Closing). In the event that Seller does not deliver   written notice to Purchaser of any title or Survey objections which Seller elects not to cure within   such five (5) day period, Seller shall be deemed to have elected to not cure all such objections.   Within five (5) business days after receipt of Seller’s written notification that Seller elects not to   cure a title or Survey objection, Purchaser may terminate this Agreement and receive a full   refund of the Earnest Money by delivering written notice thereof to Seller. If Purchaser does not   so terminate this Agreement, then any such title or Survey objection which Seller elects not to   cure shall be deemed waived by Purchaser and shall be an additional Permitted Exception. If any   objection which Seller elects to cure is not satisfied by Seller at least two (2) business days   before the scheduled date of Closing, Purchaser shall have the right to terminate this Agreement,   in which case the Earnest Money shall be returned to Purchaser and neither party shall have any   further rights, obligations or duties under this Agreement. If Seller does cure or satisfy the   objections at least two (2) business days prior to Closing, then this Agreement shall continue in  effect. Any exception to or defect in title which Purchaser shall elect to waive, or which is  otherwise acceptable to Purchaser, shall be deemed an additional Permitted Exception to title at  Closing. Seller covenants and agrees not to alter or encumber in any way Seller’s title to the  Property after the date hereof. Notwithstanding anything in this Agreement to the contrary, Seller  shall cause any deed of trust, mortgage, deed to secure debt, judgment or other lien for a  liquidated sum encumbering the Property to be released at or before Closing provided that, any  such obligations actually satisfied and released by application of Purchaser’s funds at the Closing  will be deemed to have been cured by Seller at least two (2) business days prior to Closing and  shall not be a justification for Purchaser to terminate this Agreement.                                             -8-     





 






       Purchaser acknowledges that the Permitted Exceptions will include a gas line easement   (“Gas Line Easement”) that Seller has agreed to grant to relocate an existing gas line around the  periphery of the Property at a precise location that will be disclosed during the Inspection Period.            11.   Seller’s Representations and Warranties. As of the date hereof and as of the   Closing Date (as evidenced by Seller’s date down certificate to be provided at Closing), Seller   represents, warrants and covenants to Purchaser that:               (a)    Other than (i) the Lease, and (ii) a cell tower lease with Fresno MSA   Limited Partnership dated August 8, 2007 which contains a right of first refusal and affects   Assessor’s Parcel Number 085-020-08S (the “Cell Tower Lease”), there will be no parties in   possession of any portion of the Property as lessees, sub-lessees or otherwise, and no other party   has been granted an oral or written license, lease, option, purchase agreement or other right   pertaining to the use, purchase or possession of any portion of the Property. A true, complete and  correct copy of any Contracts affecting the Property and any amendments thereto have been or  will be furnished to Purchaser within five (5) days after the Effective Date as part of the Due  Diligence Materials, and there are no Contracts which encumber or bind the Property or Seller  which will be binding on Purchaser, or which Purchaser will be required to assume at Closing, or  which will encumber or bind the Property at or after Closing. There are no leasing brokerage  agreements, leasing commission agreements or other agreements providing for the payment of  any amounts, and no commissions due, for leasing activities with respect to the Property.               (b)    Seller shall cause Tenant to execute and deliver the Lease at or prior to   Closing.                (c)    Seller shall use a commercially reasonable good faith effort to obtain a   waiver of any right of first refusal in favor of the Tenant under the Cell Tower Lease, and  provide written confirmation of the same to Purchaser and to Title Company, as soon as  reasonably practical after the Effective Date.               (d)   The Seller has not received notice of any default (and Seller has no  knowledge of any default) under any note, mortgage or deed of trust or other security interest or  loan document or indebtedness related to or secured by the Property. The execution and delivery  of this Agreement, the consummation of the transaction herein contemplated and the compliance  with the terms and provisions hereof will not conflict with or (with or without notice or the  passage of time or both) result in a breach of any of the terms or provisions of, or constitute a  default under, any indenture, mortgage, loan agreement or instrument to which the Seller is a  party or by which the Seller or the Property is bound, any applicable regulation or any judgment,  order or decree of any court having jurisdiction over the Seller or the Property.               (e)   The Seller has not received any notice, nor does Seller have knowledge of  any material violation of any ordinance, regulation, law, statute, rule or restriction relating to the  Property.               (f)   There are no attachments, executions, assignments for the benefit of  creditors, or voluntary or involuntary proceedings in bankruptcy or under any applicable debtor                                          -9-     





 






 relief laws or any other litigation contemplated by or pending or to Seller’s knowledge,   threatened against the Seller or the Property.               (g)    Seller has been duly organized and is validly existing under the laws of the   State of California. Seller has the full right and authority to enter into this Agreement and to   transfer all of the Property to be conveyed by Seller pursuant hereto and to consummate or cause   to be consummated the transactions contemplated herein to be made by Seller. The person   signing this Agreement on behalf of Seller is authorized to do so. No other signatures or   approvals are required to make this Agreement fully enforceable by the Purchaser with respect to   the Seller or the Property. This Agreement constitutes, and all agreements and documents   contemplated hereby (when executed and delivered pursuant hereto) will constitute, the valid and   legally binding obligations of Seller, enforceable in accordance with their respective terms.               (h)   The Seller has and will convey to the Purchaser good, marketable and  indefeasible title in fee simple to the Property, subject only to the Permitted Exceptions.               (i)   Seller has no knowledge of any pending condemnation or similar   proceeding or assessment affecting the Property or any part thereof, nor to the knowledge of the   Seller is any such proceeding or assessment contemplated or threatened by any governmental   authority. There will be no claim against the Property or Purchaser for or on account of work   done, materials furnished, and utilities supplied to the Property prior to the Closing Date by or at   the request of Seller. To the best of Seller’s knowledge, there are no public plans or proposals for   changes in road grade, access, or other municipal improvements which would adversely affect   the Property or result in any assessment; and no ordinance authorizing improvements, the cost of   which might be assessed against Purchaser or the Property, is pending.                (j)    Except as disclosed in the Due Diligence Materials or the Natural Hazards   disclosures, no Improvements on the Land are located within the area determined to be within   any flood hazard areas, including the 100-year flood plain on the Flood Insurance Rate Map   published by the Federal Emergency Management Agency and/or by the United States Army   Corps of Engineers and/or Fresno County and/or the State of California.               (k)    Seller has not entered into any agreement to dispose of its interest in the   Property or any part thereof, except for this Agreement.               (l)    Seller is not a party to any litigation which is still pending, and has no   knowledge of any threatened litigation, affecting or relating to the Property.               (m)    Neither the Seller, nor to Seller’s knowledge, any other party has ever   caused or permitted any “hazardous material” (as hereinafter defined) to be placed, held, located,   or disposed of on, under, or at the Property or any part thereof in forms or concentrations which   violate applicable laws and regulations, and, to Seller’s knowledge, neither the Property nor any   part thereof has ever been used as a dump or storage site (whether permanent or temporary) for   any hazardous material. As used herein, “hazardous material” means and includes any   hazardous, toxic, or dangerous waste, substance, or material defined as such in, or for purposes   of, the Comprehensive Environmental Response, Compensation Liability Act (42 U.S.C. Section   9601, et seq., as amended) or any other “super fund” or “super lien” law or any other Federal,                                         -10-     





 






 State, or local statute, or law, ordinance, code, rule, regulation, order or decree regulating,   relating to, or imposing liability for standards of conduct concerning any substance or material,   as presently in effect. To Seller’s knowledge, the Property does not currently contain any   underground or above ground storage tanks, and to Seller’s knowledge, any storage tanks   previously located on the Property (whether above ground or below ground) have been removed   in accordance with the requirements of all applicable laws. Without limiting the other provisions   of this Section 11(k), Seller has no knowledge of any release or spill of oil, fuel or any other   substance stored in storage tanks of any kind on the Property that required reporting or formal   cleanup under applicable law.                 (n)    Seller shall use a commercially reasonable good faith effort to obtain a   waiver of the right of first refusal to purchase the [*****]Membership Interest by all of the other   members of the [*****]Pipeline Partnership, LLC, and provide written confirmation of the same   to Purchaser and to Title Company, as soon as reasonably practical after the Effective Date.          Seller hereby indemnifies and holds harmless Purchaser from and against any and all   loss, expense (including without limitation reasonable attorney fees), liability, cost, claim,   demand, action, cause of action and suit arising out of or in any way related to any breach of any   representation, warranty, covenant or agreement of Seller in this Agreement.          For purposes of this Agreement, “Seller’s knowledge” or “knowledge of the Seller”   means the current actual knowledge without duty of investigation of Rodney T. Stiefvater.          11.1  Purchaser’s Representations and Warranties. As of the date hereof and as of the   Closing Date (as evidenced by Purchaser’s date down certificate to be provided at Closing),   Purchaser represents, warrants and covenants to Seller that:          (a)   Purchaser has been duly organized and is validly existing under the laws of the   State of Maryland and is authorized to transact business in the State of California. Purchaser has   the full right and authority to enter into this Agreement and, at or prior to Closing shall have   obtained all other approvals necessary to acquire all of the Property to be conveyed by Seller   pursuant hereto and to consummate or cause to be consummated the transactions contemplated   herein to be made by Purchaser. The person signing this Agreement on behalf of Purchaser is   authorized to do so. No other signatures or approvals are required to make this Agreement fully   enforceable against the Seller with respect to the Purchaser or the Property. This Agreement  constitutes, and all agreements and documents contemplated hereby (when executed and  delivered pursuant hereto) will constitute, the valid and legally binding obligations of Purchaser,  enforceable in accordance with their respective terms.          12.   Broker, Broker’s Commission and Broker’s Agency Election. Purchaser and   Seller each represent and warrant to the other that, with the exception of the Broker set forth in   this Section 12 engaged by Seller, such party has not incurred an obligation to any other broker   or agent in connection with the transaction contemplated hereby. Seller shall pay Broker   pursuant to a separate agreement by and between Seller and Broker and covenants and agrees to   defend, indemnify and hold harmless the other party against and from any and all loss, expense,   liability, cost, claim, demand, damage, action, cause of action and suit arising out of or in any   manner relating to the alleged employment or use by such party of any real estate broker or agent                                         -11-     





 






 in connection Seller’s agreement with Broker. In addition, each party hereby covenants and   agrees to defend, indemnify and hold harmless the other party against and from any and all loss,   expense, liability, cost, claim, demand, damage, action, cause of action and suit arising out of or   in any manner relating to the alleged employment or use by such party of any other real estate   broker or agent in connection with this transaction. The provisions of this Section 12 shall   survive the Closing of this transaction.          Purchaser and Seller hereby acknowledge that Broker has provided Purchaser and Seller   each a Disclosure Regarding Real Estate Agency Relationship form (CAR form A.D.) and a   Confirmation of Real Estate Agency Relationships as required by California Civil Code. These   forms include the provisions of Civil Code sections 2079.13 to 2079.24. Purchaser and Seller   each hereby acknowledge and confirm that Broker has elected to represent the Seller exclusively   in this transaction. Purchaser and Seller are hereby advised that A REAL ESTATE BROKER IS   NOT  QUALIFIED TO ADVISE ON REAL ESTATE. IF BUYER OR SELLER DESIRE   LEGAL ADVICE, CONSULT AN ATTORNEY. Purchaser in this transaction is and has been  and will continue to be represented by independent legal counsel who has prepared and approved  this Agreement.                                                                                                  Seller’s Initials                   Purchaser’s Initials            13.   Survey and Inspection; Condition of the Property; Release. Purchaser and   Purchaser’s agents, employees and independent contractors shall have the right and privilege to   enter upon the Property during the Inspection Period to survey and inspect the Property and to   conduct soil borings, environmental assessment and toxic waste studies and other geological,   engineering, water or landscaping tests or studies or building inspections, all at Purchaser’s sole   cost and expense. Purchaser hereby covenants and agrees to indemnify and hold harmless Seller   from any and all loss, liability, cost, claim, demand, damage, action, cause of action and suit   arising out of or in any manner related to the exercise by Purchaser of Purchaser’s rights under   this section (but not the existence of any condition discovered in the course of Purchaser’s   inspections and testing).                Purchaser shall: (a) keep the Land free and clear of all liens arising out of the   activities of Purchaser and/or Purchaser’s Agents at or on the Land; (b) repair any and all   damage to the Land caused by Purchaser or any Purchaser’s Agent or by any tests or   investigations conducted by, on behalf of, or at the direction of Purchaser; and (c) protect, defend   with counsel reasonably acceptable to Seller, indemnify and hold Seller, its affiliates and their   partners, managers, members, employees, shareholders, agents, officers, directors and  representatives, harmless from and against any and all actions, liabilities, claims, damages,  losses, costs, and expenses arising out of or in any way related to: (A) entry onto the Land or any  activity thereon or with respect thereto by Purchaser or Purchaser’s Agents; and (B) any breach   by Purchaser or Purchaser’s Agents of the provisions of this Section 13.                               Purchaser shall, at all times during its activities on the Land, both during the   Inspection Period and until the Closing, obtain and keep in full force and effect the insurance   described below. In accordance with the following paragraph, prior to any entry onto the Land  under this Agreement, and as evidence of specified insurance coverage, Purchaser shall deliver                                         -12-     





 






 to Seller certificates of such insurance or, at the request of Seller, copies of such insurance   policies.                               Purchaser shall, at its sole cost and expense, maintain in full force and effect   during the term of this Agreement, with companies acceptable to Seller, which acceptance shall   not be unreasonably withheld, the following insurance: (i) Workers Compensation Insurance (at   the minimum limit required by law) for all persons Purchaser hires as employees of Purchaser in   carrying out its activities on the Land; and (ii) Commercial General Liability Insurance on an   “occurrence” basis, covering the activities of Purchaser and its agents, employees, contractors   and Purchaser’s Agents on the Land and any and all resulting injury to persons and damage to   the Land, with a combined single limit for bodily injury and property damage of not less than   One Million Dollars ($1,000,000) per occurrence. Such Commercial General Liability Insurance   policy shall include contractual indemnity coverage for the indemnities of Purchaser given to   Seller under this Section 13. Seller shall be included as an additional insured under the coverage   specified above.                              Each insurance policy required under this Agreement shall: (i) be issued by   insurance carriers licensed and approved to do business in California, having a general  policyholders rating of not less than “A-” and financial rating of not less than “VII” in the most  current Best’s Insurance Report; (ii) contain a provision that the policy shall not be subject to  material alteration to the detriment of Seller or Purchaser or cancellation without at least thirty  (30) days’ prior written notice being given to Seller by registered mail; (iii) provide that such  policy or policies and the coverage evidenced thereby are primary and any insurance maintained  by the additional insureds is noncontributing with such primary coverage; and (iv) contain  severability of interest and cross liability clauses.                 In the event that before the end of the Inspection Period, Purchaser elects not  to pursue this transaction, (i) at Seller’s request all due diligence materials provided to   Purchaser by Seller shall be returned to Seller or destroyed by Purchaser, and (ii) Purchaser  shall provide Seller with copies of all third party reports (excluding appraisals ordered by a  prospective lender) or surveys prepared in connection with the Property, provided that Seller   reimburses Purchaser for the cost of the same.  In the event any Inspection discloses any   actual or potential finding which may require reporting under any regulations or statute, then, to   fullest extent permitted by law, and unless Purchaser believes, in its sole discretion, that   Purchaser has an obligation to report, the Parties agree that Seller alone shall determine the   necessity and manner of such reporting, if any, and Seller will defend, indemnify and hold   Purchaser harmless form any liability, damage or penalty resulting from Seller's reporting   activities or failure to timely, fully or accurately report as required.            In addition to the foregoing, Seller will deliver to Purchaser within ten (10) business  days of the Effective Date, a Natural Hazards Disclosure Statement (the “Natural Hazards   Disclosure”) with respect to the Property. Prior to the Close of Escrow, Purchaser shall   acknowledge receipt of the Natural Hazards Disclosure.            (b)   PURCHASER   ACKNOWLEDGES      THAT  THE PROPERTY    HAS BEEN   AN   ACTIVE   WORKING FARM       FOR  MANY    YEARS.   PURCHASER     SPECIFICALLY                                         -13-     





 






 ACKNOWLEDGES THAT VARIOUS PETROLEUM PRODUCTS, FUEL, GASOLINE AND   CHEMICALS,    INCLUDING     FERTILIZERS,    HERBICIDES AND        PESTICIDES,   CUSTOMARILY    USED  IN  FARMING, SOME    OF  WHICH  MAY,   AS  OF THE  DATE   HEREOF, BE CONSIDERED TO BE HAZARDOUS OR TOXIC, MAY HAVE BEEN USED,   STORED,  MIXED   AND  APPLIED TO    THE  PROPERTY IN    THE  COURSE   OF  THE   FARMING   OR RANCHING    ACTIVITIES CONDUCTED THEREON       OR ON  ADJACENT   PROPERTY.     PURCHASER     FURTHER    ACKNOWLEDGES      THAT,   EXCEPT    AS   EXPRESSLY SET   FORTH  IN  THIS AGREEMENT AND     IN ANY   OTHER  DOCUMENT   PROVIDED   FOR OR CONTEMPLATED HEREUNDER,             SELLER,   ITS  AGENTS,   OFFICERS, DIRECTORS,   EMPLOYEES   AND OTHER    PERSONS  ACTING   ON  BEHALF   OF SELLER  HAVE  MADE NO REPRESENTATION OR       WARRANTY OF ANY KIND AS   TO  THE  PRECISE  NUMBER    OF  ACRES   OF  THE   LAND,  THE   DEVELOPMENT   POTENTIAL   OF  THE  PROPERTY,   THE CONDITION    OF  THE PROPERTY    OR  THE    SOIL, DRAINAGE CAPACITY,     THE QUALITY,    QUANTITY, VARIETY,    VALUE OR   MARKETABILITY OF ANY PERMANENT         PLANTINGS   OR  GROWING CROPS,     THE   EXISTENCE, TRANSFERABILITY     OR  VALUE  OF  ANY  MINERAL   RIGHTS,  OR  THE   CONDITION OF   ANY  IMPROVEMENTS,    FIXTURES   OR  EQUIPMENT    LOCATED   ON   THE  LAND  ON WHICH    PURCHASER   HAS  RELIED  OR  WILL RELY, DIRECTLY    OR   INDIRECTLY FOR ANY PURPOSE.            PURCHASER     FURTHER      ACKNOWLEDGES THAT           PURCHASER      IS   PURCHASING    THE PROPERTY    SOLELY   IN  RELIANCE   ON  PURCHASER'S    OWN   INVESTIGATION, AND     THAT EXCEPT     AS  EXPRESSLY    SET  FORTH   IN  THIS   AGREEMENT,     NO   REPRESENTATIONS OR        WARRANTIES     OF   ANY   KIND   WHATSOEVER, EXPRESS OR IMPLIED, HAVE BEEN MADE BY SELLER, OR SELLER'S   AGENTS.   PURCHASER     WILL   ACQUIRE    THE   PROPERTY INCLUDING       ANY   IMPROVEMENTS, EQUIPMENT,          FIXTURES,    AND    PERSONAL PROPERTY   CONVEYED    BY   SELLER   “AS   IS”  AND   WITHOUT    EXPRESS    OR  IMPLIED   WARRANTY OF CONDITION, MERCHANTABILITY OR FITNESS.            EXCEPT   FOR SELLER'S    REPRESENTATIONS,     WARRANTIES,    PROMISES,  COVENANTS,     AGREEMENTS    AND   GUARANTEES     EXPRESSLY   STATED   IN  THE   AGREEMENT     AND IN ANY OTHER DOCUMENT PROVIDED FOR OR   CONTEMPLATED HEREUNDER: (A)       SELLER  HAS  NOT  MADE,   DOES  NOT  MAKE,   AND   SPECIFICALLY    NEGATES    AND    DISCLAIMS   ANY REPRESENTATIONS,   WARRANTIES,   PROMISES, COVENANTS,    AGREEMENTS,    OR GUARANTIES    OF ANY   KIND OR  CHARACTER    WHATSOEVER,     WHETHER    EXPRESS   OR  IMPLIED, ORAL   OR WRITTEN,   PAST, PRESENT,  OR  FUTURE,  OF, AS TO, CONCERNING,    OR WITH   RESPECT  TO THE  PROPERTY,   INCLUDING WITHOUT LIMITATION WITH RESPECT   TO THE CONDITION    AND SUITABILITY OF   PERMANENT    PLANTINGS,   SOILS AND   DRAINAGE FOR   THE  GROWING OF    AGRICULTURAL CROPS OR      OTHER  USES,  OR   THE  QUANTITY   OR  QUALITY   OF  WATER   AVAILABLE    TO  THE  PROPERTY,   IF   ANY; (B) TO  THE  MAXIMUM    EXTENT   PERMITTED   BYLAW,   THE  SALE  OF  THE   PROPERTY (INCLUDING THE PERSONAL PROPERTY), AS         PROVIDED FOR   HEREIN   IS MADE  ON  AN “AS IS, WHERE   IS” CONDITION  AND BASIS   WITH  ALL FAULTS,  AND    SELLER   HAS  NO   OBLIGATION    TO  MAKE    REPAIRS,  REPLACEMENTS,   ALTERATIONS   OR IMPROVEMENTS       TO THE  PROPERTY;    (C) EXCEPT  AS  MAY                                         -14-     





 






 OTHERWISE    BE  EXPRESSLY    STATED   IN  THIS  AGREEMENT,     SUCH   “AS-IS”   CONDITION  INCLUDES, WITHOUT LIMITATION,      THE PRESENCE   OR ABSENCE    OF   HAZARDOUS    MATERIALS,   TOXIC  SUBSTANCES,   WASTE   MATERIALS OR OTHER   SIMILARLY  DESIGNATED    SUBSTANCES    OR MATERIALS    (INCLUDING,  WITHOUT   LIMITATION,  OIL  AND  OTHER   PETROLEUM     PRODUCTS),   AT, ON, UNDER    OR   ADJACENT     TO  THE  PROPERTY;   (D)  PURCHASER    ASSUMES THE      RISK  OF   ADVERSE   PHYSICAL    CONDITIONS    AFFECTING   THE PROPERTY     AND/OR    ITS   DEVELOPMENT,      INCLUDING,    WITHOUT      LIMITATION,    ENVIRONMENTAL   CONDITIONS,  WHICH   PURCHASER   DISCOVERED    OR FAILED   TO DISCOVER   AS A   RESULT  OF ITS INVESTIGATIONS. PURCHASER     FURTHER   ACKNOWLEDGES      AND   AGREES   THAT SUCH    “AS-IS” CONDITION EXTENDS TO LATENT AND         PATENT   DEFECTS  AND   CONDITIONS;  AND   (V) TO THE  MAXIMUM    EXTENT   PERMITTED   BY LAW,  PURCHASER    WAIVES   ANY   AND  ALL  STATUTORY    RIGHTS   FOR  THE   BENEFIT  OF  PURCHASER WITH     RESPECT TO    LATENT   AND  PATENT DEFECTS   AND CONDITIONS    AFFECTING THE LAND.            Seller and Purchaser have each initialed this Section 13(b) to further indicate their   awareness and acceptance of each and every provision hereof.                                  Purchaser Initials       Seller Initials            (c)   Except as to claims for breach or default by Seller of its obligations,   representations, warranties, promises, covenants, agreements and guaranties under this   Agreement, Purchaser, on its own behalf, and on behalf of anyone claiming by, through, or   under Purchaser, hereby waives its right to recover from and fully and irrevocably releases  Seller and each of its constituent members, and its and their managers and affiliates and all   of their respective trustees, managers, officers, agents, representatives,  employees and all of  their respective successors and assigns (“Released Parties”) from any and all claims that it   may now  have or thereafter acquire against any of the Released Parties for any claims,   costs, losses, liabilities, damages, expenses, demands, actions or causes of action arising from  or in any way related to any property defects, errors, omissions or other conditions, latent or   otherwise (including, without limitation, environmental contamination, risks, conditions and   matters), related to or affecting the Property (or any portion thereof) and/or any improvements   located on or serving the Property (or any portion thereof).  This release includes claims of   which Purchaser is presently unaware or which Purchaser does not presently suspect to exist   which, if known by Purchaser, would materially affect Purchaser's release to Seller. Purchaser   specifically waives the provision of California Civil Code section 1542, which provides as  follows:                  “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE         CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST         IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND         THAT IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS         OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY                                         -15-     





 






                In this connection and to the extent permitted by law, Purchaser hereby agrees,  represents, and warrants that Purchaser 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, liabilities and expenses which are presently  unknown,  unanticipated and unsuspected, and Purchaser further agrees, represents and  warrants that the waivers and releases herein have been negotiated and agreed upon in light  of that realization and that Purchaser nevertheless hereby intends to release, discharge, and  acquit the Released Parties from any such unknown causes of action, claims, demands, debts,  controversies, damages, costs, losses, liabilities and expenses which might in any way be  included as a material portion of the consideration given to Seller by Purchaser in exchange for  Seller's performance hereunder.                 Purchaser has initialed this paragraph to further indicate its awareness and acceptance of   each and every provision hereof.                                           _______________                                  Purchaser Initials            14.   Eminent Domain. If, after the Effective Date and prior to Closing, Seller shall   receive notice of the commencement or threatened commencement of eminent domain or other   like proceedings against the Property or any portion thereof, Seller shall immediately notify  Purchaser in writing, and Purchaser shall elect within thirty (30) days from and after such notice,  by written notice to Seller, one of the following: (a) not to close the transaction contemplated  hereby, in which event all Earnest Money shall be refunded to Purchaser and this Agreement   shall be void and of no further force and effect; or (b) to close the purchase of the Property   contemplated hereby in accordance with its terms but subject to such proceedings, in which   event the Purchase Price shall remain the same and Seller shall transfer and assign to Purchaser   at Closing all condemnation proceeds and rights to additional condemnation proceeds, if any. If   Purchaser elects to purchase after receipt of such a notice, all actions taken by Seller with regard   to such eminent domain proceedings, including but not limited to, negotiations, litigation,   settlement, appraisals and appeals, shall be subject to the approval of Purchaser, which approval   shall not be unreasonably withheld. If Purchaser does not make such election within the   aforesaid time period, Purchaser shall be deemed to have elected to close the transactions   contemplated hereby in accordance with clause (b) above.          15.   Property Damage. If, after the Effective Date and prior to Closing, the Property   shall suffer significant damage as the result of fire or other casualty, Seller shall immediately   notify Purchaser in writing. In the event said damage results in damage of the improvements   situated on the Property in the amount of One Hundred Thousand and No/100 Dollars   ($100,000.00) or greater, Purchaser shall have the right to elect within fifteen (15) days from and   after such notice, by written notice, one of the following: (a) not to close the transaction   contemplated hereby, in which event all Earnest Money shall be refunded to Purchaser and this   Agreement shall be void and of no further force and effect; or (b) to close the purchase of the   Property contemplated hereby in accordance with its terms but subject to such damage, in which   event the Purchase Price shall remain the same and Seller shall transfer and assign to Purchaser                                         -16-     





 






 at Closing all insurance proceeds received or to be received as a result of such damage, and   Purchaser shall receive a credit against the Purchase Price for any insurance deductible or   uninsured loss. If Purchaser does not make such election within the aforesaid time period,   Purchaser shall be deemed to have elected to close the transactions contemplated hereby in   accordance with clause (b) above. In the event less than One Hundred Thousand and No/100   Dollars ($100,000.00) of damage to the improvements situated on the Property exists, this   Agreement shall remain in full force and effect, but, at Closing, Seller shall transfer and assign to   Purchaser all insurance proceeds received or to be received as a result of such damage, and   Purchaser shall receive a credit against the Purchase Price for any insurance deductible or   uninsured loss.          16.   Condition of Property. Subsequent to the Effective Date and prior to Closing,   Seller shall maintain the Property in accordance with its past practices and ordinary maintenance,   but shall not be required to provide any extraordinary maintenance.          17.   Operations. After the Effective Date and prior to the Closing Date, Seller shall   neither enter into any new, nor terminate, modify, extend, amend or renew any existing, lease or   service, management, maintenance, repair, employment, union, construction, leasing or other   contract or agreement affecting the Property unless Purchaser has approved the same in writing.   Seller shall cause any Contracts which Purchaser elects in its discretion not to assume to be   cancelled at or before Closing.          18.   Notice. Notices provided for in this Agreement must be (i) delivered personally,   (ii) sent by registered or certified mail, postage prepaid, return receipt requested, (iii) sent via a   reputable express courier, or (iv) sent by electronic mail during normal business hours with a   confirmation copy delivered by another method permitted by this Section 18 other than   facsimile, addressed as set forth below. Notice sent by U.S. mail is deemed delivered three days  after deposit with the U.S. Postal Service. Notice sent by a reputable express carrier is deemed  received on the day receipted for by the express carrier or its agent. Notice sent via electronic  mail is deemed delivered upon the entrance of such electronic mail into the information  processing system designated by the recipient’s electronic mail address set forth below. The  addresses of the parties to which notices are to be sent shall be Purchaser’s Address or Seller’s  Address, as applicable, as set forth in Section 1 above. Any party shall have the right from time   to time to change the address to which notices to it shall be sent to another address, and to   specify two additional addresses to which copies of notices to it shall be mailed, by giving to the   other party at least ten (10) days prior notice of the changed address or additional addresses.          19.   Remedies. IF THIS TRANSACTION FAILS TO CLOSE BY REASON OF   PURCHASER’S WRONGFUL FAILURE TO PERFORM ITS OBLIGATIONS UNDER   THIS AGREEMENT, THE EARNEST MONEY SHALL BE RETAINED BY SELLER AS   LIQUIDATED DAMAGES, THE PARTIES HEREBY ACKNOWLEDGING THAT   SELLER’S ACTUAL DAMAGES IN SUCH CIRCUMSTANCES WOULD BE   DIFFICULT, IF NOT IMPOSSIBLE, TO DETERMINE, AND THAT THIS   LIQUIDATED DAMAGES PROVISION IS NOT UNREASONABLE UNDER THE   CIRCUMSTANCES EXISTING AS OF THE EFFECTIVE DATE.                      SELLER   EXPRESSLY ACKNOWLEDGES AND AGREES THAT RETENTION OF THE   EARNEST MONEY AS PROVIDED FOR HEREIN SHALL BE SELLER’S SOLE AND                                         -17-     





 






 EXCLUSIVE REMEDY IN THE EVENT OF PURCHASER’S FAILURE TO PERFORM   ITS OBLIGATIONS HEREUNDER.       BY THEIR INITIALS HERETO, SELLER AND  PURCHASER      SPECIFICALLY ACKNOWLEDGE THEIR ACCEPTANCE AND  APPROVAL OF THE FOREGOING LIQUIDATED DAMAGES PROVISION.                __________________            __________________                  Seller                        Purchaser                      IF THIS TRANSACTION FAILS TO CLOSE FOR ANY REASON OTHER  THAN PURCHASER’S WRONGFUL FAILURE TO PERFORM ITS OBLIGATIONS  HEREUNDER, THE EARNEST MONEY SHALL PROMPTLY BE REFUNDED TO  PURCHASER.    IN  THE EVENT SELLER FAILS OR REFUSES TO CONVEY THE  PROPERTY IN ACCORDANCE WITH THE TERMS HEREOF OR OTHERWISE  FAILS TO PERFORM ITS OBLIGATIONS HEREUNDER, PURCHASER                   SHALL  HAVE THE RIGHT TO A REFUND OF ALL EARNEST MONEY, SPECIFIC  PERFORMANCE AND ALL OTHER RIGHTS             AND REMEDIES AVAILABLE AT   LAW OR IN EQUITY FOR SELLER’S BREACH, ALL OF WHICH ARE RESERVED,   CUMULATIVE, AND NONEXCLUSIVE. SELLER WAIVES THE RIGHT TO ASSERT  THE DEFENSE OF THE LACK OF MUTUALITY IN ANY SUIT FOR SPECIFIC  PERFORMANCE INSTITUTED BY PURCHASER.                NOTWITHSTANDING       THE  FOREGOING, PURCHASER SHALL ALSO BE ENTITLED TO OBTAIN ITS  ATTORNEYS’ FEES AND COSTS IN CONNECTION WITH ENFORCING ITS  RIGHTS AND REMEDIES UNDER THIS AGREEMENT.          20.   Time of Essence. Time is of the essence of this Agreement.          21.   Closing Documents. At or prior to Closing, each party shall deliver to the other   party appropriate evidence to establish the authority of such party to enter into and close the   transaction contemplated hereby.          Seller also shall execute and deliver to the Title Company at Closing, for it to hold in   escrow pending Purchaser’s payment of the Purchase Price and other required deliveries to   escrow as described below in this Section 21: (i) the Deed; (ii) a certificate with respect to   Section 1445 of the Internal Revenue Code stating, among other things, that Seller is not a   foreign corporation as defined in the Internal Revenue Code and I.R.S. Regulations; (iii) the   General Assignment substantially in the form attached hereto as Exhibit D; (iv) Seller’s   representation and warranty date down certificate under Section 11; (v) the Lease; (vi) an   assignment of the [*****]Membership Interest, and (vii) such other documents reasonably   necessary or appropriate to complete and evidence the transaction contemplated hereby, as  reasonably requested by the Purchaser or Title Company, including without limitation a standard  title company owner’s affidavit.          22.   Entire Agreement. This Agreement constitutes the entire agreement of the parties   and may not be amended except by written instrument executed by Purchaser and Seller. All  prior understandings and agreements between the parties are deemed merged herein.                                          -18-     





 






       23.   Headings. The section headings are inserted for convenience only and are in no   way intended to describe, interpret, define or limit the scope or content of this Agreement or any   provision hereof.          24.   Possession. Seller shall deliver actual possession of the Property at Closing.          25.   Applicable Law. This Agreement shall be construed and interpreted in accordance   with the laws of the State of California.          26.   Successors and Assigns. This Agreement shall be binding upon and inure to the   benefit of the parties hereto and their respective heirs, successors and permitted assigns as the   case may be, and Purchaser shall have the right to assign its rights hereunder and thereafter be   released from any further liability hereunder.          27.   Surviving Clauses. The provisions of this Agreement relating to Purchaser’s   indemnification with respect to its entering upon the Property as set forth in Section 13 prior to   Closing, Seller’s representations, covenants, and warranties in Section 11, Purchaser’s   representations, covenants, and warranties in Section 11.1, Seller’s agreement to cooperate with   a Rule 3-14 audit, Seller’s covenant not to encumber the Property subsequent to the date hereof,   and the mutual covenants of Seller and Purchaser to indemnify each other, as the case may be, as   set forth in Section 12, shall not merge into the Deed but instead shall survive any Closing   pursuant to this Agreement. Except as set forth in the preceding sentence or as otherwise   expressly set forth herein, no other provision of this Agreement shall survive the Closing of this   transaction provided, however, that any action, suit or proceeding with respect to the truth,   accuracy or completeness of any such representations and warranties shall be commenced, if at  all, on or before the date which is eighteen (18) months after the date of the Closing and, if not  commenced on or before such date, thereafter will be void and of no force or effect.          28.   Tax Deferred Exchange. Either party may structure the purchase or sale of the   Property as a like kind exchange under Internal Revenue Code Section 1031, at the exchanging   party’s sole cost and expense. The non-exchanging party shall reasonably cooperate therein,   provided that the non-exchanging party shall incur no material costs, expenses or liabilities in  connection with the exchanging party’s exchange, and the non-exchanging party shall not be   required to take title to or contract for purchase of any other property. If the exchanging party  uses a qualified intermediary to effectuate the exchange, any assignment of the rights or  obligations of the exchanging party hereunder shall not relieve, release or absolve the  exchanging party of its obligations to the non-exchanging party hereunder. The exchanging party  shall reimburse the non-exchanging party for all reasonable out-of-pocket expenses, if any,  incurred by the non-exchanging party in effectuating the exchanging party’s exchange.          29.   Non-Solicitation. From and after the Effective Date, Seller shall not market the   Property for sale, or solicit or accept any back-up offers with respect to the sale of the Property.          30.   Rule 3-14 Audit. Seller agrees to reasonably cooperate, at no liability, cost or   expense to Seller, with Purchaser in connection with any Rule 3-14 audit that Purchaser may   conduct with respect to the Property within one year after the Closing Date.                                          -19-     





 






       31.   Calculation of Time Periods. Unless otherwise specified, in computing any period   of time described herein, the day of the act or event after which the designated period of time   begins to run is not to be included and the last day of the period so computed is to be included,   unless such last day is a Saturday, Sunday or legal holiday for national banks in the location  where the Property is located, in which event the period shall run until the end of the next day  which is neither a Saturday, Sunday, or legal holiday. Unless otherwise specified, the last day of  any period of time described herein shall be deemed to end at 5:00 p.m. local time in the state in  which the Property is located.          32.   Counterparts. This Agreement may be executed in one or more counterparts and   such counterparts taken together shall constitute one and the same document. For purposes of  this Agreement a facsimile or electronic signature shall be deemed as valid and enforceable as an  original.            33.   Attorney’s Fees; Pre-litigation Dispute Resolution. Each Party shall pay the fees   and expenses of its own attorneys in connection with the preparation, negotiation and execution   of this Agreement.             If a dispute arises out of or relates to this Agreement, or the breach thereof, and if the   dispute cannot be settled through negotiation, the Parties agree first to try in good faith to settle   the dispute by mediation administered by the American Arbitration Association under its   Commercial Mediation Procedures before resorting to arbitration, litigation, or some other   dispute resolution procedure.            If the Parties are unsuccessful in resolving the dispute by mediation and either Party   institutes an arbitration, state court action, federal court action or other proceeding arising out of   or relating to this Agreement, the prevailing Party, as designated by the arbitration panel, court or   tribunal, shall be entitled to recover from the other Party all costs and expenses (expressly  including, but not limited to, reasonable attorneys’ fees and expert witness fees), incurred by the  prevailing Party in connection with such arbitration, action or proceeding.                      [COUNTERPART SIGNATURE PAGE(S) TO FOLLOW]                                             -20-     





 






      IN WITNESS WHEREOF, this Agreement has been duly executed on the day and year  first above written.                                            PURCHASER:                                                                                  GLADSTONE LAND CORPORATION,                                         a Maryland corporation                                                                                                                           By:                                                                                                             Name:                                                                                                           Title:                                                                                                                                                   SELLER:                                                                                  RTS ORCHARDS, LLC,                                         a California limited liability company                                                                                                                           By:                                                                                                             Name:                                                                                                           Title:                                                                                                                                                                                                                                                                                 -21-    





 






                                  EXHIBIT A                                        LAND                                 West Parcels/Phase 2         PARCEL 3: APN: 085-070-17s      The West one-half of the Northwest quarter of Section 22, Township 21 South, Range 16 East,   Mount Diablo Base and Meridian in the unincorporated area of the County of Fresno, State of   California according to the Official Plat thereof.   EXCEPTING THEREFROM, all minerals including oil, gas and other hydrocarbon substances   contained therein, TOGETHER WITH, the right of ingress and egress to and from said land for  the purpose of drilling, exploring and in every way operating for such minerals and removing  same, as reserved by Crescent Meat Company, a corporation in the Deed and Agreement   recorded December 2, 1953 in Book 3375, Page 677 of Official Records, as Document No.   65159.      PARCEL 4: APN: 085-070-33S      Parcel B of PLA 07-49, according to the Certificated of Compliance recorded September 12,   2013, as Document No. 2013-0129764, of Official Records, described as follows:   The Northwest Quarter of the Southwest Quarter and the West Three-Quarters of the South One-   Half of the Southwest Quarter of Section 22, Township 21 South, Range 16 East, Mount Diablo   Base and Meridian in the unincorporated area of the County of Fresno, State of California   according to the Official Plat thereof.   EXCEPTING THEREFROM, the East 25.00 acres of the West Three-Quarters of the South One-  Half of the Southwest Quarter of Section 22.   ALSO EXCEPTING THEREFROM, the following described parcel:   BEGINNING, at the Southwest comer of said Section 22;   Thence, North 00°0742" East along the West line of said Section 22 a distance of 613.00 feet;   Thence, leaving said West line North 89°39'48" East a distance of 1157.53 feet to a point on the   West line of the East 25.0 acres of the West three-quarters of the South half of the Southwest   quarter of said Section 22; Thence, South 00°18'05" West along the said West line a distance of   613.00 feet to a point on the South line of said Section 22; Thence, South 89°39'45" West along   the said South line of Section 22 a distance of 1155.68 feet to the said Southwest corner of   Section 22 and POINT OF BEGINNING.      EXCEPTING THEREFROM, all oil, gas and casinghead gas, and other hydrocarbon substances,   TOGETHER WITH, any and all other minerals of every kind and character, now contained or   hereafter deposited in, through or under said land, which are expressly reserved from the   operation of this grant, TOGETHER WITH, the right of entry for the purpose of exploring,   mining and operating for oil, gas and casinghead gas, and other hydrocarbon substances,   TOGETHER WITH, any and all other minerals, and of taking, storing and removing said   products, TOGETHER WITH, the further right to build tanks, power houses, stations, houses for   employees and such other structures (except refinery)as may be necessary or convenient in said   operations, TOGETHER WITH, rights of way, easements and servitude for pipe lines, power   lines and telephone lines, with the right of removing any and all improvements placed or erected   upon said land, including casing, TOGETHER WITH, the full right to sell, lease, deal with, or      





 






 otherwise dispose of the interest and rights hereby excepted and reserved from said grant, upon   the terms and conditions contained therein, all as reserved by Helen C. Lillis, an unmarried   woman, in the Deed recorded December 2, 1940 in Volume 1867, Page 123 of Official Records,   as Document No. 35550.    PARCEL 5: APN: 085-020-08S      All of Fractional Section 5, Township 21 South, Range 16 East, Mount Diablo Base and   Meridian in the unincorporated area of the County of Fresno, State of California according to the   Official Plat thereof.   EXCEPTING THEREFROM, all oil, gas and other hydrocarbons; non-hydrocarbon gasses or   gaseous substances; all other minerals of whatsoever nature, without regard to similarity to the   above-mentioned substances; and all substances that may be produced therewith from said real   property, as reserved, ALSO EXCEPTING THEREFROM, all geothermal resources, embracing  indigenous steam, hot water and hot brines; steam and other gases, hot water and hot brines  resulting from water, gas or other fluids artificially introduced into subsurface formations; heat  or the associated energy found beneath the surface of the earth; and by-products of any of the  foregoing such as minerals (exclusive of oil or hydrocarbon gas that can be separately produced)  which are found in solution or association with or derived from any of the foregoing. ALSO  EXCEPTING THEREFROM, the sole and exclusive right from time to time to drill and maintain  wells or other works into or through said real property and the adjoining streets, roads and  highways from the purpose of exploring for and producing energy resources; the right to  produce, inject, store, and remove from and through such wells or works, oil, gas, water and  other substances of whatever nature, including the right to perform any and all operations  deemed by Grantor necessary or convenient for the exercise of such rights, including but not  limited to the right to conduct seismic testing and construct, maintain and operate pipeline,  valves, catholic protection facilities, and appurtenances, upon the terms and conditions contained  therein, as reserved by Chevron U.S.A. Inc., a Pennsylvania corporation, in the Deed recorded  August 21,1997 as Document No. 97106609.    PARCEL 6: APN: 085-060-13s      The South half of Section 16, Township 21 South, Range 16 East, Mount Diablo Base and   Meridian, in the unincorporated area of the County of Fresno, State of California according to  the Official Plat thereof.  EXCEPTING THEREFROM all oil, gas and casinghead gas and other hydrocarbon substances,     TOGETHER WITH, any and all other minerals of every kind and character, now contained or  hereafter deposited in, through or under said land, which are expressly reserved for the operation  of this grant;    TOGETHER WITH, the right of entry for the purpose of exploring, mining and operating for oil,  gas and casinghead gas and other hydrocarbon substances, TOGETHER WITH, any and all other  minerals, and of taking, storing and removing said products, TOGETHER WITH, the further  right to build tanks, power houses, stations, houses for employees and such other structures  (except refinery) as may be necessary or convenient in said operations TOGETHER WITH,  rights of way, easements and servitude for pipe lines, power lines and telephone lines, with the  right of removing any and all improvements placed or erected upon said land, including casing,  TOGETHER WITH, the full right to sell, lease, deal with, or otherwise dispose of the interest  and rights hereby excepted and reserved, subject to the terms and conditions contained therein, as  reserved by Helen C. Lillis, an unmarried woman and Lyle J. Christie, an unmarried man, in the  Deed recorded December 2, 1940 in Book 1867, Page 122 of Official Records, as Document No.  35548.      





 






      EXHIBIT B   PERSONAL PROPERTY                                          NONE                                                             





 






                                  EXHIBIT C                            DUE DILIGENCE MATERIALS          (a)   Plans, drawings, specifications and engineering and architectural studies and work  (including “as built” plans and drawings, if any) with regard to the Property that are in Seller’s  possession;          (b)   Any title commitments, title policies, appraisals and surveys of the Property  obtained during the period during which Seller has owned the Property or otherwise in Seller’s  possession;          (c)   Operating budgets for the Property for the two (2) most recent complete calendar  years and the current year;          (d)   Income and expense statements for the Property for the two (2) most recent  complete calendar years and the current year-to-date;          (e)   Copies of all correspondence in Seller’s possession relating to any lease or  Government Payments with respect to the Property;           (f)   Real estate tax bills and statements for the current year and the previous two (2)   years with respect to the Property;           (g)   Utility bills for the Property for the two (2) most recent complete calendar years   and the current year-to-date;           (h)   Copies of insurance certificates with respect to the Property;           (i)   Copies of all of the Contracts and any amendments or proposed amendments   thereto with respect to the Property;           (j)   Copies of any soil boring or other similar engineering reports with respect to the   Property obtained during the period during which Seller has owned the Property; SELLER HAS   NONE IN ITS POSSESSION OR UNDER ITS CONTROL          (k)   Any environmental assessment report or study with respect to the Property in   Seller’s possession; SELLER HAS NONE IN ITS POSSESSION OR UNDER ITS   CONTROL          (l)   Copies of any warranties relating to any Improvements or Personal Property   (including without limitation Irrigation Equipment) included in the Property which are in Seller’s   possession; SELLER HAS NONE IN ITS POSSESSION OR UNDER ITS CONTROL          (m)   Any information in Seller’s possession or control from any governmental agency   or authority regarding the Property or adjacent properties; SELLER HAS NONE IN ITS   POSSESSION OR UNDER ITS CONTROL                                              





 






       (n)   Copies of all notices and correspondence received from any governmental agency   of authority regarding the Property or adjacent properties; SELLER HAS NONE IN ITS   POSSESSION OR UNDER ITS CONTROL          (o)   Copies of all notices and correspondence received from third-parties claiming an   interest or right in and to the Property, or any portion thereof; SELLER HAS NONE IN ITS  POSSESSION OR UNDER ITS CONTROL         (p)   Copies of all certificates, applications, permits or other documents related to or   evidencing Water Rights associated with the Property or any portion thereof; SELLER HAS  NONE IN ITS POSSESSION OR UNDER ITS CONTROL         (q)   Copies of any well, pump and water quality tests done over the past three (3)   years with respect to the Property;          (r)   An inventory of all wells and pumps located on the Property, together with the   location, age, and output of each;          (s)   All available documentation or information related to the Gas Line Easement; and          (t)   Copies of all company records and organizational documents of [*****]Water   Conveyance Partners, LLC, and thereafter such other information related to the assets, liabilities,   rights, obligations and business of such LLC as Purchaser may request from time to time.                                                                                                





 






                                  EXHIBIT D                               GENERAL ASSIGNMENT            THIS GENERAL ASSIGNMENT (this “Assignment”) is entered into as of the ____ of   ____________, 2019, between RTS Orchards, LLC, a California limited liability company   (“Assignor”), and ________________________, a Delaware limited partnership (“Assignee”).            1.    Purchase Agreement; Defined Terms. This Assignment is being executed and   delivered pursuant to that certain Agreement of Purchase and Sale between Gladstone Land   Corporation, a Maryland corporation, as assigned to Assignee as Purchaser, and Assignor, as Seller,  dated as of _______________, 2019 (as modified and amended from time to time, the “Purchase   Agreement”). Any capitalized term used but not otherwise defined herein shall have the meaning set   forth in the Purchase Agreement.            2.    Assignment and Conveyance. For good and valuable consideration received by   Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby bargains,   sells, conveys, grants, transfers and assigns to Assignee the entire right, title and interest of Assignor   in and to the following in accordance with the terms and conditions of the Purchase Agreement:                      i.  All Personal Property;                              ii. All warranties, guarantees, bonds, licenses, building permits, certificates of                 occupancy, zoning certificates, and other governmental permits and licenses to                 and in connection with the construction, development, ownership, use, operation                 or maintenance of the Property or any part thereof, to the extent the same are                 assignable; and                             iii. All Water Rights.                          3.    Indemnity. Assignor agrees to indemnify, defend and hold Assignee harmless from   and against any and all claims, damages, demands, causes of action, liabilities, judgments, losses,   costs and expenses (including but not limited to reasonable attorneys’ fees) asserted against or  incurred by Assignee caused by the failure of Assignor to perform any obligation under any of the  Contracts.                  4.    Power and Authority. Assignor represents and warrants to Assignee that it is fully   empowered and authorized to execute and deliver this Assignment, and the individual signing this   Assignment on behalf of Assignor represents and warrants to Assignee that he or she is fully   empowered and authorized to do so.            5.    Attorneys’ Fees. If either Assignee or Assignor or their respective successors or   assigns file suit to enforce the obligations of the other party under this Assignment, the prevailing   party shall be entitled to recover the reasonable fees and expenses of its attorneys.            6.    Successors and Assigns. This Assignment shall be binding upon and inure to the   benefit of Assignor and Assignee and their respective successors and assigns.                                                 





 






       7.    Counterparts. This Agreement may be executed in any number of identical   counterparts, any or all of which may contain the signatures of fewer than all of the parties but all of  which shall be taken together as a single instrument.            8.    Governing Law. This Agreement shall be governed and interpreted in accordance   with the laws of the State of California.            IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this   Assignment the day and year first above written.      ASSIGNOR      ____________________________________   ____________________________________      By:                                    Title:                                       ASSIGNEE      _____________________________________   _____________________________________                                              





 






                                              EXHIBIT E                                                                               SOLAR IMPROVEMENTS                                                                                                                        Solar Installation – Data Sheet and Description         Site                  Size             Module  Inverter Inverter Module  Num      Name         APN      (kW    Module    Quantit Type     Quantit  s per   ber of Other                        _DC)    Type     y                y        Table   table  Hardware                                                                           s                              Boviet-            Huawei-Sun                       Tracker Racking;             085-020-08S      BVM66129-          2000/36                          Pad Mounted  C-5                   866              2664    KTL-US   20       18      148                              330W                                                Meter/Switch                                                                                  Gear                              Boviet-            Huawei-Sun                       Tracker                                                 2000/36  C-16       085-060-   109   BVM6612P   3312    KTL-US   25       18      184    Racking; Pad             13S        3     -330W                                               Mounted                                                                                  Meter/Switc                                                                                 h Gear                                                                                            





 






                                    EXHIBIT F                                                                     AGRICULTURAL LEASE      26248477.7                                                   





 






                                   EXHIBIT G                                                           DISCLOSURE OF BROKER RELATIONSHIPS      26248477.7