gladstonelandsutteravenu






 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 – East Parcels/Phase 1)            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 the date that is ten (10) days following the expiration of the  Inspection Period, 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 at  5:00 p.m. local time at the Property on [*****] after the Effective Date.  Notwithstanding the   foregoing, Purchaser may extend the Inspection Period by [*****] additional days by written   notice to Seller prior to expiration of the initial Inspection Period.            “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 1,004.82 gross acres with such acreage derived from   Fresno County Assessor’s records (including, without limitation, approximately 911.02 acres   planted to 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.                                             -2-     





 






       “Phase 2 Agreement” shall mean the transaction between Seller and Purchaser evidenced   by that Agreement entitled “Agreement of Purchase and Sale (Sutter Avenue Coalinga CA –   West Parcels/Phase 2)” of even date herewith.            “[*****] Membership Interest” shall mean 47% (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.              “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 Three Million and NO/100 dollars   ($33,000,000.00), 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                                                          -3-     





 






             With additional copy to:                              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 (in formation as 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                                            -4-     





 






       “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   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                                         -5-     





 






 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   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                                         -6-     





 






 to the Property subject only to Permitted Exceptions, in the amount of the Purchase Price, and   containing such endorsements as Purchaser shall have requested.               (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,             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.               (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                                         -7-     





 






 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.          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 the Lease, and an unrecorded lease to RTSAB, LLC which will  not survive the closing of the Phase 2 Agreement, 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                                         -8-     





 






 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)   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.               (d)   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.               (e)   There are no attachments, executions, assignments for the benefit of  creditors, or voluntary or involuntary proceedings in bankruptcy or under any applicable debtor  relief laws or any other litigation contemplated by or pending or to Seller’s knowledge,  threatened against the Seller or the Property.               (f)   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.               (g)   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.               (h)   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                                         -9-     





 






 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.                 (i)   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.               (j)   Seller has not entered into any agreement to dispose of its interest in the  Property or any part thereof, except for this Agreement.               (k)   Seller is not a party to any litigation which is still pending, and Seller has  no knowledge of any threatened litigation, affecting or relating to the Property.               (l)    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,  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 currently contains three (3) above   ground fuel storage tanks which shall be retained by the owner thereof, and to Seller’s   knowledge, any other 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.                 (m)    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,                                          -10-     





 






 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   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.                                         -11-     





 






                                                                                                 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   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.                                                       -12-     





 






             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   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                                         -13-     





 






 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   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.                                            -14-     





 






       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.”                  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.                                                    -15-     





 






                                _______________                                  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   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                                         -16-     





 






 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   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,                                         -17-     





 






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.         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, 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, and Seller’s covenant not to encumber the Property subsequent to the date                                        -18-    





 






 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.          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.                                              -19-     





 






       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                                  East Parcels/Phase 1       PARCEL 1: APN: 085-070-10S   All of Section 23, 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   September 23,1997 as Document No. 97125175.      PARCEL 2: APN: 085-070-11s AND 31s      Parcel A of PLA 07-49, according to the Certificated of Compliance recorded September 12,   2013, as Document No. 2013-0129763, of Official Records, described as follows:   The East Half 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.   TOGETHER WITH, that portion lying within the East Half of the Northwest Quarter and the   Northeast Quarter of the Southwest Quarter of said Section 22, being more particularly described   as follows:      BEGINNING, at the Northeast corner of said Northwest Quarter;   Thence, South 00°21 '33" West along the East line of said Northwest Quarter a distance of   3954.33 feet to the Southeast corner of said Northeast Quarter of the Southwest Quarter;  Thence, South 89°42'43" West along the south line of said Northeast Quarter of the Southwest  Quarter a distance of 107.32 feet;  Thence, leaving said South line North 03°20'58" West a distance of 1381.87 feet;      





 






Thence, North 10°06'43" West a distance of 411.19 feet;  Thence, North 39°30'59" West a distance of 255.02 feet;  Thence, North 23°39'06" West a distance of 307.26 feet;  Thence, North 36°17'20" West a distance of 664.79 feet;  Thence, North 17°32'10" East a distance of 345.94 feet;  Thence, North 17°07'36" West a distance of 342.89 feet;  Thence, North 12°4T52" East a distance of 237.25 feet;  Thence, North 11 °41 '19" West a distance of 266.97 feet to a point on the North line of said  Northwest Quarter of Section 22;  Thence, North 89°38'30" East along the said north line of the Northwest Quarter a distance of  962.73 feet to the said Northeast corner of the Northwest Quarter of Section 22 and POINT OF  BEGINNING.    EXCEPTING FROM, the East half of said Section 22, all of the oil, gas and other minerals in  and under and that may be produced from said land, as conveyed to Viola K. and Clarence R.  Van Dyke, as Joint tenants, in the Mineral Deed recorded October 29, 1954 in Book 3511, Page  589 of Official Records, as Document No. 66555.  EXCEPTING FROM, the East half of the West half of said Section 22, all of the oil, gas and  other minerals lying in and under or that may be produced from said land, as conveyed to Mrs.  Betty Jane Milhoan, Mrs. Marilyn G. Smith and Mr. James F. Griffin, in the Quitclaim Mineral  Deed recorded May 29, 1991 as Document No. 91062604, of Official Records.                                                                                          





 






                                          EXHIBIT B                                     PERSONAL PROPERTY1                                                    NONE                                                                     1 NTD:  Parties to confirm any personal property to be listed.                                                        





 






                            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; and         (s)   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 1                                                                                                                 Site                  Size                     Module                   Inverter  Modules  Number                 APN                   Module Type             Inverter Type                                     Other  Hardware    Name                 (kW_DC)                    Quantity                Quantity  per Table of tables                                                                                                                                                Boviet-               Huawei Sun-                                Fixed Tilt Racking; Pad Mounted     C-22   085-070-31 s                              1520                      16       20        76                           494     BVM6612P-325W            2000/25 KTL-US                                    Meter/Switch Gear                                            1 NTD:  Seller to provide list of Solar Improvements located on the East Parcels/Phase 1 property.                                                              





 






                                    EXHIBIT F                                                                     AGRICULTURAL LEASE      26248436.8                                                





 






                                  EXHIBIT G                                                              DISCLOSURE OF BROKER RELATIONSHIPS      26248436.8